YUM » Topics » Operating Profit

This excerpt taken from the YUM 10-Q filed Oct 12, 2005.

Operating Profit

Quarter
Year to date
9/3/05
9/4/04
% B/(W)
9/3/05
9/4/04
% B/(W)
United States   $ 189   $ 196   (4 ) $ 541   $ 567   (5 )
International Division  89   79   12   273   241   14  
China Division  85   64   32   163   141   15  
Unallocated and corporate expenses  (52 ) (48 ) (7 ) (155 ) (140 ) (10 )
Unallocated other income (expense)  (1 ) (1 ) NM   15   (4 ) NM  
Unallocated facility actions  10   1   NM   21   (10 ) NM  
Wrench litigation  2   -   NM   2   -   NM  
AmeriServe and other (charges) 
 credits  -   -   NM   -   14   NM  
 
 
     
 
Operating profit  $ 322   $ 291   11   $ 860   $ 809   6  
 
 
     
 

Unallocated and corporate expenses comprise general and administrative expenses and unallocated facility actions comprise refranchising gains (losses), neither of which are allocated to the U.S., International Division or China Division segments for performance reporting purposes. Unallocated other income (expense) in the year to date ended September 3, 2005 primarily comprises the $17 million gain on the sale of our investment in our Poland/Czech Republic unconsolidated affiliate which we did not allocate to the International Division for performance reporting purposes.

Quarter

The decrease in U.S. operating profit was primarily driven by higher facility actions expense associated with store closures, partially offset by the impact of same store sales growth on franchise and license fees. The impact of same store sales growth on restaurant profit was largely offset by higher occupancy and other costs.

Excluding the favorable impact from foreign currency translation, International Division operating profit increased 9%. The increase in International Division operating profit was driven by lower general and administrative costs and the impact of new unit development on franchise and license fees. The increase was partially offset by the impact on operating profit of refranchising our restaurants in Puerto Rico. The impact of same store sales growth on restaurant profit was largely offset by higher labor costs and higher occupancy and other costs.

Excluding the favorable impact from foreign currency translation, China Division operating profit increased 31%. The increase in China Division operating profit was driven by a financial recovery from a supplier (see Note 7) and the impact on restaurant profit of new unit development and lower food and paper costs (principally due to supply chain savings initiatives), partially offset by same store sales declines.

Year to date

The decrease in U.S. operating profit was primarily driven by higher facility actions expense and higher general and administrative expense, partially offset by the impact of same store sales growth on franchise and license fees. The impact of same store sales growth on restaurant profit was largely offset by higher occupancy and other costs and higher food and paper costs.

Excluding the favorable impact from foreign currency translation, International Division operating profit increased 9%. The increase in International Division operating profit was driven by the impact of new unit development on franchise and license fees and restaurant profit and the impact of same store sales growth on franchise and license fees. The increase was partially offset by the impact on operating profit of refranchising our restaurants in Puerto Rico. The impact of same store sales growth on restaurant profit was largely offset by higher occupancy and other costs and higher labor costs.




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Excluding the favorable impact from foreign currency translation, China Division operating profit increased 14%. The increase in China Division operating profit was driven by the impact on restaurant profit of new unit development and a financial recovery from a supplier (see Note 7). These increases were partially offset by increased general and administrative expense and the impact on restaurant profit of same store sales declines.

This excerpt taken from the YUM 10-Q filed Jul 19, 2005.

Operating Profit

Quarter
Year to date
6/11/05
6/12/04
% B/(W)
6/11/05
6/12/04
% B/(W)
United States   $ 190   $ 199   (4 ) $ 352   $ 371   (5 )
International Division  90   74   22   184   162   14  
China Division  25   35   (30 ) 78   77   -  
Unallocated and corporate expenses  (61 ) (44 ) (38 ) (103 ) (92 ) (12 )
Unallocated other income (expense)  17   -   NM   16   (3 ) NM  
Unallocated facility actions  13   (3 ) NM   11   (11 ) NM  
Wrench litigation  -   -   -   -   -   -  
AmeriServe and other (charges) 
 credits  -   14   NM   -   14   NM  




Operating profit  $ 274   $ 275   -   $ 538   $ 518   4  





Unallocated and corporate expenses comprise general and administrative expenses and unallocated facility actions comprise refranchising gains (losses), neither of which are allocated to the U.S., International Division or China Division segments for performance reporting purposes. Unallocated other income (expense) in the quarter and year to date ended June 11, 2005 primarily comprises the gain on the sale of our investment in our Poland/Czech Republic unconsolidated affiliate which we did not allocate to the International Division for performance reporting purposes.




36





Quarter

The decrease in U.S. operating profit was driven by higher impairment charges related to our long-lived assets and higher general and administrative costs. The impact of same store sales growth on restaurant profit was largely offset by higher occupancy and other costs as well as higher food and paper costs.

Excluding the favorable impact from foreign currency translation, International Division operating profit increased 16%. The increase in International Division operating profit was driven by the impact of same store sales growth on restaurant profit and the impact of new unit development on franchise fees and restaurant profit. The increase was partially offset by the impact on restaurant profit of higher occupancy and other costs and the impact on operating profit of refranchising our restaurants in Puerto Rico.

Excluding the favorable impact from foreign currency translation, China Division operating profit decreased 31%. The decrease in China Division operating profit was driven by the impact on operating profit of the mainland China supplier ingredient issue and higher general and administrative costs. The decrease was partially offset by the impact on restaurant profit of same store sales growth related primarily to KFC Taiwan and the impact on restaurant profit of new unit development.

Year to date

The decrease in U.S. operating profit was driven by higher impairment charges related to our long-lived assets. The impact of same store sales growth on restaurant profit was largely offset by higher commodity costs as well as higher occupancy and other costs.

Excluding the favorable impact from foreign currency translation, International Division operating profit increased 9%. The increase in International Division operating profit was driven by the impact of same store sales growth on restaurant profit and franchise and license fees as well as the impact of new unit development on franchise and license fees and restaurant profit. The increase was partially offset by the impact on restaurant profit of higher occupancy and other costs and the impact on operating profit of refranchising our restaurants in Puerto Rico.

China Division operating profit was basically flat as the impact of new unit development on restaurant profit and franchise and license fees was offset by the impact on operating profit of the mainland China ingredient issue.

This excerpt taken from the YUM 10-Q filed Apr 25, 2005.

Operating Profit

Quarter
3/19/05
3/20/04
% B/(W)
United States   $ 162   $ 172   (6 )
International Division  94   88   8  
China Division  53   42   25  
Unallocated and corporate expenses  (42 ) (48 ) 11  
Unallocated other income (expense)  (1 ) (3 ) NM  
Unallocated facility actions  (2 ) (8 ) NM  
Wrench litigation  -   -   -  
AmeriServe and other (charges) credits  -   -   -  


 
Operating profit  $ 264   $ 243   8  


 

The decrease in U.S. operating profit was driven by the impact on restaurant profit of higher commodity costs (principally meats and cheese), higher expenses related to restaurant closures and higher franchise and license expenses, partially offset by the impact of same store sales growth on restaurant profit and franchise and license fees.

Excluding the favorable impact from foreign currency translation, International Division operating profit increased 4%. The increase in International Division operating profit was driven by the impact of same store sales growth and new unit development on franchise and license fees and restaurant margin, partially offset by higher general and administrative costs and the impact on operating profit of refranchising our restaurants in Puerto Rico.

The increase in China Division operating profit was driven by new unit development and the impact of same store sales increases on restaurant margin, partially offset by higher general and administrative costs.

Unallocated and corporate expenses comprise general and administrative expenses and unallocated facility actions comprise refranchising gains (losses), neither of which are allocated to the U.S., International Division or China Division segments for performance reporting purposes.

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