| Reportable Operating Segments |
Reportable Operating Segments
We are principally engaged in developing, operating, franchising and licensing the worldwide KFC, Pizza Hut and Taco Bell concepts. KFC, Pizza Hut and Taco Bell operate in 118, 91, and 21 countries and territories, respectively. Our five largest international markets based on Operating Profit in 2013 are China, Asia Franchise, United Kingdom, Australia and Latin America Franchise.
We identify our operating segments based on management responsibility. The China Division includes mainland China and the India Division includes India, Bangladesh, Mauritius, Nepal and Sri Lanka. YRI includes the remainder of our international operations. We consider our KFC, Pizza Hut and Taco Bell operating segments in the U.S. to be similar and therefore have aggregated them into a single reportable operating segment. Our U.S. and YRI segment results also include the operating results of our LJS and A&W businesses prior to our disposal of those businesses in December 2011.
| | | | | | | | | | | | | | | | Revenues | | | 2013 | | 2012 | | 2011 | China | | $ | 6,905 |
|
| $ | 6,898 |
|
| $ | 5,566 |
| YRI | | 3,099 |
|
| 3,281 |
|
| 3,192 |
| U.S. | | 2,953 |
|
| 3,352 |
|
| 3,786 |
| India | | 127 |
| | 102 |
| | 82 |
| | | $ | 13,084 |
|
| $ | 13,633 |
|
| $ | 12,626 |
|
| | | | | | | | | | | | | | | | Operating Profit; Interest Expense, Net; and Income Before Income Taxes | | | 2013 | | 2012 | | 2011 | China (b) | | $ | 777 |
|
| $ | 1,015 |
|
| $ | 908 |
| YRI | | 760 |
|
| 715 |
|
| 673 |
| U.S. | | 684 |
|
| 666 |
|
| 589 |
| India | | (15 | ) |
| (1 | ) |
| — |
| Unallocated Occupancy and other(a)(c) | | — |
|
| 16 |
|
| 14 |
| Unallocated and corporate expenses(a)(d) | | (207 | ) |
| (271 | ) |
| (223 | ) | Unallocated Closures and impairment expense(a)(e) | | (295 | ) |
| — |
|
| (80 | ) | Unallocated Other income (expense)(a)(f) | | (6 | ) |
| 76 |
|
| 6 |
| Unallocated Refranchising gain (loss)(a)(g) | | 100 |
|
| 78 |
|
| (72 | ) | Operating Profit | | 1,798 |
|
| 2,294 |
|
| 1,815 |
| Interest expense, net(h) | | (247 | ) |
| (149 | ) |
| (156 | ) | Income Before Income Taxes | | $ | 1,551 |
|
| $ | 2,145 |
|
| $ | 1,659 |
|
| | | | | | | | | | | | | | | | Depreciation and Amortization | | | 2013 | | 2012 | | 2011 | China | | $ | 394 |
| | $ | 337 |
| | $ | 258 |
| YRI | | 175 |
| | 167 |
| | 183 |
| U.S. | | 135 |
| | 147 |
| | 179 |
| India | | 9 |
| | 6 |
| | 5 |
| Corporate(c) | | 8 |
| | 8 |
| | 12 |
| | | $ | 721 |
| | $ | 665 |
| | $ | 637 |
|
| | | | | | | | | | | | | | | | Capital Spending | | | 2013 | | 2012 | | 2011 | China | | $ | 568 |
| | $ | 655 |
| | $ | 405 |
| YRI | | 289 |
| | 251 |
| | 240 |
| U.S. | | 157 |
| | 173 |
| | 256 |
| India | | 31 |
| | 18 |
| | 16 |
| Corporate | | 4 |
| | 2 |
| | 23 |
| | | $ | 1,049 |
| | $ | 1,099 |
| | $ | 940 |
|
| | | | | | | | | | | | | | | | Identifiable Assets | | | 2013 | | 2012 | | 2011 | China (i) | | $ | 3,720 |
| | $ | 3,752 |
| | $ | 2,527 |
| YRI | | 2,618 |
| | 2,663 |
| | 2,847 |
| U.S. | | 1,705 |
| | 1,844 |
| | 2,070 |
| India | | 99 |
| | 68 |
| | 52 |
| Corporate(j) | | 553 |
| | 686 |
| | 1,338 |
| | | $ | 8,695 |
| | $ | 9,013 |
| | $ | 8,834 |
|
| | | | | | | | | | | | | | | | Long-Lived Assets(k) | | | 2013 | | 2012 | | 2011 | China | | $ | 2,667 |
| | $ | 2,779 |
| | $ | 1,546 |
| YRI | | 1,732 |
| | 1,561 |
| | 1,600 |
| U.S. | | 1,489 |
| | 1,555 |
| | 1,805 |
| India | | 66 |
| | 47 |
| | 35 |
| Corporate | | 32 |
| | 32 |
| | 36 |
| | | $ | 5,986 |
| | $ | 5,974 |
| | $ | 5,022 |
|
| | (a) | Amounts have not been allocated to any segment for performance reporting purposes. |
| | (b) | Includes equity income from investments in unconsolidated affiliates of $26 million, $47 million and $47 million in 2013, 2012 and 2011, respectively, for China. |
| | (c) | 2012 and 2011 include depreciation reductions arising from the impairments of Pizza Hut UK restaurants we sold in 2012 of $13 million and $3 million, respectively. 2012 and 2011 include depreciation reductions arising from the impairment of KFC restaurants we offered to sell of $3 million and $10 million, respectively. See Note 4. |
| | (d) | 2013 and 2012 include pension settlement charges of $22 million and $87 million, respectively. 2013, 2012 and 2011 include approximately $5 million, $5 million and $21 million, respectively, of charges relating to U.S. G&A productivity initiatives and realignment of resources. See Note 4. |
| | (e) | 2013 represents impairment loss related to Little Sheep. 2011 represents net losses resulting from the LJS and A&W divestitures. See Note 4. |
| | (f) | 2012 includes gain upon acquisition of Little Sheep of $74 million. See Note 4. |
| | (g) | See Note 4 for further discussion of Refranchising gain (loss). |
| | (h) | Includes $118 million of premiums and other costs related to the extinguishment of debt. See Losses Related to the Extinguishment of Debt section of Note 4. |
| | (i) | China includes investments in 4 unconsolidated affiliates totaling $53 million, $72 million and $167 million for 2013, 2012 and 2011, respectively. |
| | (j) | Primarily includes cash, deferred tax assets and property, plant and equipment, net, related to our office facilities. 2011 includes $300 million of restricted cash related to the 2012 Little Sheep acquisition. |
| | (k) | Includes property, plant and equipment, net, goodwill, and intangible assets, net. |
See Note 4 for additional operating segment disclosures related to impairment and store closure (income) costs. |