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Yum! Brands Announces Full-Year 2012 EPS Growth Of 13%, Or $3.25 Per Share, Excluding Special Items; Opens A Record 1,976 New International Restaurants; Adverse Publicity Regarding Poultry Supply Continues To Significantly Impact China KFC Sales

Yum! Brands, Inc., based in Louisville, Kentucky, is the world’s largest restaurant company in terms of system restaurants with over 39,000 restaurants in more than 120 countries and territories. Yum! is ranked #213 on the Fortune 500 List with revenues of more than $12 billion in 2011. The Company’s restaurant brands - KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican-style food categories. Outside the United States, the Yum! Brands system opened approximately five new restaurants each day of the year, making it a leader in international retail development.

               

YUM! Brands, Inc.

Consolidated Summary of Results

(amounts in millions, except per share amounts)

(unaudited)

 
Quarter % Change Year % Change
12/29/12     12/31/11 B/(W) 12/29/12     12/31/11 B/(W)
 
Company sales $ 3,585 $ 3,557 1 $ 11,833 $ 10,893 9
Franchise and license fees and income 568   554   2 1,800   1,733   4
Total revenues 4,153   4,111   1 13,633   12,626   8
 
Company restaurant expenses, net
Food and paper 1,162 1,209 4 3,874 3,633 (7)
Payroll and employee benefits 834 809 (3) 2,620 2,418 (8)
Occupancy and other operating expenses 1,070   1,026   (4) 3,358   3,089   (9)
Company restaurant expenses 3,066 3,044 (1) 9,852 9,140 (8)
 
General and administrative expenses 560 499 (12) 1,510 1,372 (10)
Franchise and license expenses 49 41 (21) 133 145 8
Closures and impairment (income) expenses 28 22 (23) 37 135 73
Refranchising (gain) loss (37 ) 3 NM (78 ) 72 NM
Other (income) expense (18 ) (5 ) NM (115 ) (53 ) NM
Total costs and expenses, net 3,648   3,604   (1) 11,339   10,811   (5)
 
Operating Profit 505 507 (1) 2,294 1,815 26
Interest expense, net 42   46   11 149   156   5
Income before income taxes 463 461 2,145 1,659 29
Income tax provision 127   104   (22) 537   324   (66)
Net income - including noncontrolling interests 336 357 (6) 1,608 1,335 20
Net income - noncontrolling interests (1 ) 1   NM 11   16   35
Net income - YUM! Brands, Inc. $ 337   $ 356   (5) $ 1,597   $ 1,319   21
 

Effective tax rate

27.5 % 22.6 % (4.9 ppts.) 25.0 % 19.5 % (5.5 ppts.)
 

Effective tax rate before special items

26.4 % 26.7 % 0.3 ppts. 25.8 % 24.2 % (1.6 ppts.)
 

Basic EPS Data

EPS $ 0.74   $ 0.77   (4) $ 3.46   $ 2.81   23
Average shares outstanding 457   465   2 461   469   2
 

Diluted EPS Data

EPS $ 0.72   $ 0.75   (3) $ 3.38   $ 2.74   23
Average shares outstanding 468   477   2 473   481   2
 
Dividends declared per common share $ 0.67   $ 0.57   $ 1.24   $ 1.07  
 
See accompanying notes.
 
Percentages may not recompute due to rounding.
               

YUM! Brands, Inc.

CHINA DIVISION Operating Results

(amounts in millions)

(unaudited)

 
Quarter % Change Year % Change
12/29/12     12/31/11 B/(W) 12/29/12     12/31/11 B/(W)
 
Company sales $ 2,105 $ 1,853 14 $ 6,797 $ 5,487 24
Franchise and license fees and income 31   27   16 101   79   29
Total revenues 2,136   1,880   14 6,898   5,566   24
 
Company restaurant expenses, net
Food and paper 701 673 (4) 2,312 1,947 (19)
Payroll and employee benefits 444 334 (33) 1,259 890 (41)
Occupancy and other operating expenses 668   553   (21) 1,993   1,568   (27)
1,813 1,560 (16) 5,564 4,405 (26)
General and administrative expenses 121 104 (15) 334 275 (21)
Franchise and license expenses 3 1 (81) 9 4 NM
Closures and impairment (income) expenses 5 9 46 9 12 23
Other (income) expense (9 ) (4 ) 72 (33 ) (38 ) (15)
1,933   1,670   (16) 5,883   4,658   (26)
Operating Profit $ 203   $ 210   (3) $ 1,015   $ 908   12
 
Company sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and paper 33.3 36.3 3.0 ppts. 34.1 35.5 1.4 ppts.
Payroll and employee benefits 21.1 18.1 (3.0 ppts.) 18.5 16.2 (2.3 ppts.)
Occupancy and other operating expenses 31.7   29.8   (1.9 ppts.) 29.3   28.6   (0.7 ppts.)
Restaurant margin 13.9 % 15.8 % (1.9 ppts.) 18.1 % 19.7 % (1.6 ppts.)
 
Operating margin 9.5 % 11.2 % (1.7 ppts.) 14.7 % 16.3 % (1.6 ppts.)
 
See accompanying notes.
 
Percentages may not recompute due to rounding.
               

YUM! Brands, Inc.

YUM! RESTAURANTS INTERNATIONAL DIVISION Operating Results

(amounts in millions)

(unaudited)

 
Quarter % Change Year % Change
12/29/12     12/31/11 B/(W) 12/29/12     12/31/11 B/(W)
 
Company sales $ 751 $ 757 (1) $ 2,402 $ 2,341 3
Franchise and license fees and income 283   268   5 879   851   3
Total revenues 1,034   1,025   1 3,281   3,192   3
 
Company restaurant expenses, net
Food and paper 246 245 (1) 787 743 (6)
Payroll and employee benefits 184 195 6 599 608 2
Occupancy and other operating expenses 215   228   5 705   700   (1)
645 668 3 2,091 2,051 (2)
General and administrative expenses 139 137 (1) 414 400 (3)
Franchise and license expenses 16 15 (23) 50 51
Closures and impairment (income) expenses 17 4 NM 19 22 15
Other (income) expense (7 ) (5 ) 46 (8 ) (5 ) 55
810   819   1 2,566   2,519   (2)
Operating Profit $ 224   $ 206   8 $ 715   $ 673   6
 
Company sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and paper 32.7 32.2 (0.5 ppts.) 32.8 31.7 (1.1 ppts.)
Payroll and employee benefits 24.5 25.8 1.3 ppts. 24.9 26.0 1.1 ppts.
Occupancy and other operating expenses 28.7   30.1   1.4 ppts. 29.4   29.9   0.5 ppts.
Restaurant margin 14.1 % 11.9 % 2.2 ppts. 12.9 % 12.4 % 0.5 ppts.
 
Operating margin 21.6 % 20.3 % 1.3 ppts. 21.8 % 21.1 % 0.7 ppts.
 
See accompanying notes.
 
Percentages may not recompute due to rounding.
               

YUM! Brands, Inc.

UNITED STATES DIVISION Operating Results

(amounts in millions)

(unaudited)

 
Quarter % Change Year % Change
12/29/12     12/31/11 B/(W) 12/29/12     12/31/11 B/(W)
 
Company sales $ 700 $ 925 (24) $ 2,550 $ 3,000 (15)
Franchise and license fees and income 247   252   (2) 802   786   2
Total revenues 947   1,177   (20) 3,352   3,786   (11)
 
Company restaurant expenses, net
Food and paper 203 283 28 740 917 19
Payroll and employee benefits 202 277 27 751 912 18
Occupancy and other operating expenses 179   242   26 643   809   21
584 802 27 2,134 2,638 19
General and administrative expenses 145 148 2 467 450 (4)
Franchise and license expenses 30 26 (14) 74 92 20
Closures and impairment (income) expenses 6 11 47 9 21 58
Other (income) expense 2   (1 ) NM 2   (4 ) NM
767   986   22 2,686   3,197   16
Operating Profit $ 180   $ 191   (5) $ 666   $ 589   13
 
Company sales 100.0 % 100.0 % 100.0 % 100.0 %
Food and paper 29.0 30.5 1.5 ppts. 29.0 30.5 1.5 ppts.
Payroll and employee benefits 28.9 29.9 1.0 ppts. 29.5 30.4 0.9 ppts.
Occupancy and other operating expenses 25.4   26.2   0.8 ppts. 25.2   27.0   1.8 ppts.
16.7 % 13.4 % 3.3 ppts. 16.3 % 12.1 % 4.2 ppts.
 
Operating margin 19.0 % 16.1 % 2.9 ppts. 19.9 % 15.5 % 4.4 ppts.
 
See accompanying notes.
 
Percentages may not recompute due to rounding.
 

YUM! Brands, Inc.

Consolidated Balance Sheets

(amounts in millions)

 
    (unaudited)    
12/29/12 12/31/11
ASSETS
Current Assets
Cash and cash equivalents $ 776 $ 1,198
Accounts and notes receivable, less allowance: $12 in 2012 and $22 in 2011 301 286
Inventories 313 273
Prepaid expenses and other current assets 272 338
Deferred income taxes 111 112
Advertising cooperative assets, restricted 136   114  
Total Current Assets 1,909 2,321
 

Property, plant and equipment, net of accumulated depreciation and amortization of $3,139 in 2012 and $3,225 in 2011

4,250 4,042
Goodwill

1,034

681
Intangible assets, net 690 299
Investments in unconsolidated affiliates 72 167
Restricted cash 300
Other assets

575

475
Deferred income taxes 481   549  
Total Assets $

9,011

  $ 8,834  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and other current liabilities $ 1,945 $ 1,874
Income taxes payable 97 142
Short-term borrowings 10 320
Advertising cooperative liabilities 136   114  
Total Current Liabilities 2,188 2,450
 
Long-term debt 2,932 2,997
Other liabilities and deferred credits

1,579

  1,471  
Total Liabilities

6,699

  6,918  
 
Redeemable noncontrolling interest

59

   
 
Shareholders' Equity
Common stock, no par value, 750 shares authorized; 451 shares and 460 shares issued in 2012 and 2011, respectively 18
Retained earnings 2,286 2,052
Accumulated other comprehensive income (loss) (132 ) (247 )
Total Shareholders' Equity - YUM! Brands, Inc. 2,154 1,823
Noncontrolling interests 99   93  
Total Shareholders' Equity 2,253   1,916  
Total Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity $

9,011

  $ 8,834  
 

 

 See accompanying notes.

   

 

YUM! Brands, Inc.

Consolidated Statements of Cash Flows

(amounts in millions)

(unaudited)

 
Year
12/29/2012     12/31/2011
Cash Flows - Operating Activities
Net income - including noncontrolling interests $ 1,608 $ 1,335
Depreciation and amortization 645 628
Closures and impairment (income) expenses 37 135
Refranchising (gain) loss (78 ) 72
Contributions to defined benefit pension plans (119 ) (63 )
YUM Retirement Plan settlement charge 84
Gain upon acquisition of Little Sheep (74 )
Deferred income taxes 28 (137 )
Equity income from investments in unconsolidated affiliates (47 ) (47 )
Distributions of income received from unconsolidated affiliates 41 39
Excess tax benefit from share-based compensation

(98

) (66 )
Share-based compensation expense 50 59
Changes in accounts and notes receivable (18 ) (39 )
Changes in inventories 9 (75 )
Changes in prepaid expenses and other current assets (14 ) (25 )
Changes in accounts payable and other current liabilities 9 144
Changes in income taxes payable 126 109
Other, net 105   101  
Net Cash Provided by Operating Activities

2,294

  2,170  
 
Cash Flows - Investing Activities
Capital spending (1,099 ) (940 )
Proceeds from refranchising of restaurants 364 246
Acquisitions

(543

) (81 )
Changes in restricted cash 300 (300 )
Other, net (27 ) 69  
Net Cash Used in Investing Activities

(1,005

) (1,006 )
 
Cash Flows - Financing Activities
Proceeds from long-term debt 404
Repayments of long-term debt (282 ) (666 )
Short-term borrowings, three months or less, net
Revolving credit facilities, three months or less, net
Repurchase shares of Common Stock (965 ) (752 )
Excess tax benefit from share-based compensation

98

66
Employee stock option proceeds

62

59
Dividends paid on Common Stock (544 ) (481 )
Other, net

(85

) (43 )
Net Cash Used in Financing Activities

(1,716

) (1,413 )
Effect of Exchange Rate on Cash and Cash Equivalents 5   21  
Net Decrease in Cash and Cash Equivalents (422 ) (228 )
Cash and Cash Equivalents - Beginning of Year 1,198   1,426  
Cash and Cash Equivalents - End of Year $ 776   $ 1,198  
 

See accompanying notes.

   
Reconciliation of Non-GAAP Measurements to GAAP Results
(amounts in millions, except per share amounts)
(unaudited)
 

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") throughout this document, the Company has provided non-GAAP measurements which present operating results in 2012 and 2011 on a basis before Special Items. Included in Special Items are the U.S. refranchising gain (loss), the YUM Retirement Plan settlement charge, the gain on the acquisition of Little Sheep, losses associated with the refranchising of the Pizza Hut UK dine-in business and the losses, other costs and tax benefits in 2011 relating to our divestiture of the Long John Silver's ("LJS") and A&W All-American Food Restaurants ("A&W") brands. These amounts are described in (d), (e), (f), (g) and (h) in the accompanying notes. Other Special Items include the depreciation reductions from Pizza Hut UK and KFC U.S. restaurants impaired upon our decision or offer to refranchise that remained Company stores for some or all of the periods presented, gains from sales of real estate related to our previously refranchised Mexico business and charges relating to U.S. General and Administrative ("G&A") productivity initiatives and realignment of resources.

 

The Company uses earnings before Special Items as a key performance measure of results of operations for the purpose of evaluating performance internally and Special Items are not included in any of our segment results. This non-GAAP measurement is not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of earnings before Special Items provides additional information to investors to facilitate the comparison of past and present operations, excluding items in 2012 and 2011 that the Company does not believe are indicative of our ongoing operations due to their size and/or nature.

 
Quarter Year
12/29/12   12/31/11 12/29/12   12/31/11
Detail of Special Items
U.S. Refranchising gain (loss) (d) $ 69 $ (14 ) $ 122 $ (17 )
YUM Retirement Plan settlement charge (e) (84 ) (84 )
Gain upon acquisition of Little Sheep (f) 74
Loss associated with the refranchising of the Pizza Hut UK dine-in business (g) (46 ) (70 ) (76 )
Losses and other costs relating to the LJS and A&W divestitures (h) (86 )

Other Special Items Income (Expense)

1   (14 ) 16   (8 )
Total Special Items Income (Expense) (60 ) (28 ) 58 (187 )
Tax Benefit (Expense) on Special Items 10   27   1   123  
Special Items Income (Expense), net of tax $ (50 ) $ (1 ) $ 59   $ (64 )
Average diluted shares outstanding 468   477   473   481  
Special Items diluted EPS $ (0.11 ) $   $ 0.13   $ (0.13 )
 
Reconciliation of Operating Profit Before Special Items to Reported Operating Profit
Operating Profit Before Special Items $ 565 $ 535 $ 2,236 $ 2,002
Special Items Income (Expense) (60 ) (28 ) 58   (187 )
Reported Operating Profit $ 505   $ 507   $ 2,294   $ 1,815  
 
Reconciliation of EPS Before Special Items to Reported EPS
Diluted EPS Before Special Items $ 0.83 $ 0.75 $ 3.25 $ 2.87
Special Items EPS (0.11 )   0.13   (0.13 )
Reported EPS $ 0.72   $ 0.75   $ 3.38   $ 2.74  
 
Reconciliation of Effective Tax Rate Before Special Items to Reported Effective Tax Rate
Effective Tax Rate Before Special Items 26.4 % 26.7 % 25.8 % 24.2 %
Impact on Tax Rate as a result of Special Items 1.1 % (4.1 )% (0.8 )% (4.7 )%
Reported Effective Tax Rate 27.5 % 22.6 % 25.0 % 19.5 %
                       

YUM! Brands, Inc.

Segment Results

(amounts in millions)

(unaudited)

 
Quarter Ended 12/29/12 China YRI United

States

India

Corporate

and

Unallocated

Consolidated
Total revenues $ 2,136   $ 1,034   $ 947   $ 36   $   $ 4,153  
 
Company restaurant expenses 1,813 645 584 28 (4 ) 3,066
General and administrative expenses 121 139 145 8 147 560
Franchise and license expenses 3 16 30 49
Closures and impairment (income) expenses 5 17 6 28
Refranchising (gain) loss (37 ) (37 )
Other (income) expense (9 ) (7 ) 2     (4 ) (18 )
1,933   810   767   36   102   3,648  
Operating Profit (loss) $ 203   $ 224   $ 180   $   $ (102 ) $ 505  
 
Quarter Ended 12/31/11 China YRI United

States

India

Corporate

and

Unallocated

Consolidated
Total revenues $ 1,880   $ 1,025   $ 1,177   $ 29   $   $ 4,111  
 
Company restaurant expenses 1,560 668 802 20 (6 ) 3,044
General and administrative expenses 104 137 148 8 102 499
Franchise and license expenses 1 15 26 (1 ) 41
Closures and impairment (income) expenses 9 4 11 (2 ) 22
Refranchising (gain) loss 3 3
Other (income) expense (4 ) (5 ) (1 )   5   (5 )
1,670   819   986   28   101   3,604  
Operating Profit (loss) $ 210   $ 206   $ 191   $ 1   $ (101 ) $ 507  
 
The above tables reconcile segment information, which is based on management responsibility, with our Consolidated Summary of Results. Corporate and unallocated expenses comprise items that are not allocated to segments for performance reporting purposes.
 
The Corporate and Unallocated column in the above tables includes, among other amounts, all amounts that we have deemed Special Items. See Reconciliation of Non-GAAP Measurements to GAAP Results.
                       

YUM! Brands, Inc.

Segment Results

(amounts in millions)

(unaudited)

 
Year Ended 12/31/12 China YRI United

States

India

Corporate

and

Unallocated

Consolidated
Total revenues $ 6,898   $ 3,281   $ 3,352   $ 102   $   $ 13,633  
 
Company restaurant expenses 5,564 2,091 2,134 79 (16 ) 9,852
General and administrative expenses 334 414 467 24 271 1,510
Franchise and license expenses 9 50 74 133
Closures and impairment (income) expenses 9 19 9 37
Refranchising (gain) loss (78 ) (78 )
Other (income) expense (33 ) (8 ) 2     (76 ) (115 )
5,883   2,566   2,686   103   101   11,339  
Operating Profit (loss) $ 1,015   $ 715   $ 666   $ (1 ) $ (101 ) $ 2,294  
 
Year Ended 12/31/11 China YRI United

States

India

Corporate

and

Unallocated

Consolidated
Total revenues $ 5,566   $ 3,192   $ 3,786   $ 82   $   $ 12,626  
 
Company restaurant expenses 4,405 2,051 2,638 60 (14 ) 9,140
General and administrative expenses 275 400 450 22 225 1,372
Franchise and license expenses 4 51 92 (2 ) 145
Closures and impairment (income) expenses 12 22 21 80 135
Refranchising (gain) loss 72 72
Other (income) expense (38 ) (5 ) (4 )   (6 ) (53 )
4,658   2,519   3,197   82   355   10,811  
Operating Profit (loss) $ 908   $ 673   $ 589   $   $ (355 ) $ 1,815  
 
 
The above tables reconcile segment information, which is based on management responsibility, with our Consolidated Summary of Results. Corporate and unallocated expenses comprise items that are not allocated to segments for performance reporting purposes.
 
The Corporate and Unallocated column in the above tables includes, among other amounts, all amounts that we have deemed Special Items. See Reconciliation of Non-GAAP Measurements to GAAP Results.
 

Notes to the Consolidated Summary of Results, Consolidated Balance Sheets

and Consolidated Statements of Cash Flows

(amounts in millions, except per share amounts)

(unaudited)

 
(a)   Amounts presented as of and for the quarter and year ended December 29, 2012 are preliminary.
 
(b)

Other (income) expense for the China Division primarily consists of equity income from investments in unconsolidated affiliates. The year ended December 29, 2012 also includes costs related to the acquisition of Little Sheep Group Limited ("Little Sheep").

 

(c) Beginning the first quarter of 2012, our India Division is being reported as a standalone reporting segment separate from YRI as a result of changes to our management reporting structure. While our consolidated results are not impacted, our historical segment information has been restated to be consistent with the current period presentation. This new segment also includes the franchise businesses in the neighboring countries of Bangladesh, Mauritius, Nepal and Sri Lanka.
 
(d) As part of our plan to transform our U.S. business we took certain measures ("the U.S. business transformation measures") in 2012 and 2011 which includes the continuation of our U.S. refranchising, potentially reducing our Company ownership in the U.S. to less than 10%, including a reduction of Taco Bell Company ownership to 16%. During the quarter and year ended December 28, 2012, we recorded gains of $69 million and $122 million, respectively, related to refranchising in the U.S., primarily at Taco Bell. We have traditionally not allocated refranchising (gains) losses for segment reporting purposes. Additionally, U.S. refranchising (gains) losses have been reflected as Special Items for certain performance measures (see accompanying reconciliation to reported results).
 
(e)

During the quarter ended December 29, 2012, the Company allowed certain former employees with deferred vested balances in the YUM Retirement Plan an opportunity to voluntarily elect an early payout of their pension benefits. These payouts were funded from existing pension plan assets. The Company recorded a pre-tax settlement charge of $84 million as a result of these payouts in the quarter ended December 29, 2012. This charge was recorded in General and administrative expenses, was not allocated for segment reporting purposes and is reflected as a Special Item for certain performance measures (see accompanying reconciliation to reported results).

 
(f)

On February 1, 2012 we acquired an additional 66% interest in Little Sheep for $540 million, net of cash acquired of $44 million, increasing our ownership to 93%. The acquisition was driven by our strategy to build leading brands across China in every significant category. Prior to our acquisition of this additional interest, our 27% interest in Little Sheep was accounted for under the equity method of accounting. As a result of the acquisition we obtained voting control of Little Sheep, and thus we began consolidating Little Sheep upon acquisition. As required by GAAP, we remeasured our previously held 27% ownership in Little Sheep, which had a recorded value of $107 million at the date of acquisition, at fair value and recognized a non-cash gain of $74 million. This gain, which resulted in no related income tax expense, was recorded in Other (income) expense on our Consolidated Statement of Income during the year ended December 29, 2012, was not allocated for segment reporting purposes and is reflected as a Special Item for certain performance measures (see accompanying reconciliation to reported results).

 

Consolidated Little Sheep results are included in the China Division from the beginning of the second quarter of 2012. Little Sheep impacted China Division revenues by 4% and 3% for the quarter and year ended December 29, 2012, respectively. Other than the $74 million gain discussed above, Little Sheep did not have a significant impact on China Division's Operating Profit or Net Income - YUM! Brands, Inc. for the quarter and year ended December 29, 2012. China Division and Worldwide system sales include sales from Little Sheep's company-owned restaurants but exclude sales from Little Sheep's franchise restaurants. Our Consolidated Balance Sheet at December 29, 2012 reflects the consolidation of this entity, including $376 million of goodwill, $421 million of other intangible assets and a $59 million redeemable noncontrolling interest. Also, in the year ended December 29, 2012, we released from escrow $300 million of cash that was deemed restricted prior to our acquisition of Little Sheep.

 
(g) During the quarter ended December 29, 2012, we refranchised our remaining 331 Pizza Hut UK dine-in restaurants and recorded a loss of $46 million to Refranchising (gain) loss. During the quarter ended March 24, 2012, we recorded pre-tax losses of $24 million to Refranchising (gain) loss primarily to adjust the carrying amount of the asset group to its then estimated fair value. We had previously recorded $76 million of pre-tax losses to Refranchising (gain) loss in 2011 primarily to reduce the carrying amount of the asset group to its then estimated fair value upon our initial decision to sell the Pizza Hut dine-in business. These charges were not allocated for segment reporting purposes and were reflected as Special Items for certain performance measures (see accompanying reconciliation to reported results).
 
(h) In 2011 we sold the Long John Silver's and A&W All American Food Restaurants brands to key franchise leaders and strategic investors in separate transactions. During 2011, we recognized $86 million of pre-tax losses and other costs primarily in Closures and impairment (income) expenses and $104 million of tax benefits as a result of these sales. These amounts were not allocated for segment reporting purposes and were reflected as Special Items for certain performance measures (see accompanying reconciliation to reported results).




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