Basic earnings per common share from continuing operations
2.52
2.15
2.27
2.04
1.91
Basic earnings per common share from discontinued operations
1.59
0.82
0.10
0.37
1.55
Basic earnings per common share
4.11
2.97
2.37
2.41
3.46
Diluted earnings per common share from continuing operations
2.48
2.11
2.22
2.00
1.87
Diluted earnings per common share from discontinued operations
1.56
0.81
0.10
0.36
1.51
Diluted earnings per common share
4.04
2.92
2.32
2.36
3.38
Diluted earnings per common share from continuing operations excluding Special Items(c)
2.45
2.33
2.20
2.04
1.90
Cash Flow Data
Provided by operating activities
$
1,204
$
1,213
$
1,217
$
1,289
$
1,373
Capital spending
422
461
508
481
444
Proceeds from refranchising of restaurants
346
219
83
250
337
Repurchase shares of Common Stock
5,402
1,200
820
770
965
Dividends paid on Common Stock
744
730
669
615
544
Balance Sheet Data
Total assets
$
5,478
$
4,916
$
5,132
$
4,975
$
5,262
Long-term debt
9,061
3,007
3,042
2,888
2,905
Total debt
9,127
3,928
3,308
2,958
2,914
Other Data
Number of stores at year end
Company
2,859
3,159
3,247
3,071
2,997
Franchise
40,758
39,263
37,984
36,746
35,461
System
43,617
42,422
41,231
39,817
38,458
KFC Division system sales growth(d)
Reported
2
%
(3
)%
1
%
(2
)%
6
%
Local currency(e)
7
%
5
%
4
%
—
%
8
%
Pizza Hut Division system sales growth(d)
Reported
—
%
(1
)%
1
%
3
%
5
%
Local currency(e)
2
%
3
%
2
%
4
%
7
%
Taco Bell Division system sales growth(d)
Reported
6
%
8
%
4
%
4
%
7
%
Local currency(e)
6
%
8
%
4
%
4
%
9
%
Shares outstanding at year end
355
420
434
443
451
Cash dividends declared per Common Share
$
1.73
$
1.74
$
1.56
$
1.41
$
1.24
Market price per share at year end(g)
$
63.33
$
74.00
$
73.14
$
73.87
$
64.72
(a)
Financial data for prior years has been recast to present the results of the Separation as discontinued operations and reflects amounts related to continuing operations unless otherwise noted. Store count data for prior years has been recast to exclude the Little Sheep and East Dawning stores operated by our former China Division and reflect all other former China Division Company operated stores as franchise units within the KFC and Pizza Hut Divisions. KFC Division, Pizza Hut Division and Taco Bell Division system sales growth has been recast to reflect the integration of the former India and China Divisions. See Note 4 regarding details of the Separation.
(b)
See Note 5 for discussion of Refranchising gain (loss) for fiscal years 2016, 2015 and 2014. Fiscal year 2013 primarily reflects net gains from refranchising Taco Bell restaurants in the U.S. Fiscal year 2012 included $122 million in net gains from refranchising restaurants in the U.S., primarily Taco Bells, and $70 million in losses related to the refranchising of our then remaining Company-owned Pizza Hut UK dine-in restaurants.
(c)
In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”),the Company provides non-GAAP measurements which present operating results from continuing operations on a basis excluding Special Items. The Company uses earnings from continuing operations excluding 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 from continuing operations excluding Special Items provides additional information to investors to facilitate the comparison of past and present results, excluding items that the Company does not believe are indicative of our ongoing operations due to their size and/or nature.
2016, 2015 and 2014 Special Items are described in further detail within our Management's Discussion and Analysis of Financial Condition and Results of Operations. Special Items in 2013 positively impacted Operating Profit by $73 million, primarily due to refranchising gains on the sale of restaurants in the U.S. (primarily Taco Bells), partially offset by $10 million in pension settlement charges and $5 million of expense related to U.S. productivity initiatives and realignment of resources. Additionally, in 2013, we incurred $118 million of premiums paid and other costs related to the extinguishment of debt that were considered Special Items and were recorded in Interest expense, net. Special Items in 2012 negatively impacted Operating Profit by $16 million, primarily due to $84 million in pension settlement charges and $70 million of losses associated with the refranchising of the Pizza Hut UK dine-in business, partially offset by $122 million in U.S. refranchising net gains. Special Items resulted in cumulative net tax benefits of $23 million and $1 million in 2013 and 2012, respectively.
(d)
System sales growth includes the results of all restaurants regardless of ownership, including company-owned and franchise restaurants that operate our Concepts. Sales of franchise restaurants typically generate ongoing franchise fees for the Company at a rate of 3% to 6% of sales. Franchise restaurant sales are not included in Company sales on the Consolidated Statements of Income; however, the franchise fees are included in the Company’s revenues. We believe system sales growth is useful to investors as a significant indicator of the overall strength of our business as it incorporates all of our revenue drivers, Company and franchise same-store sales as well as net unit growth.
(e)
Local currency represents the percentage change excluding the impact of foreign currency translation. These amounts are derived by translating current year results at prior year average exchange rates. We believe the elimination of the foreign currency translation impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.
(f)
Fiscal years 2015, 2014, 2013 and 2012 include 52 weeks and fiscal year 2016 includes 53 weeks. The estimated impacts of the 53rd week on Company sales, Franchise and license fees and income and Operating Profit in 2016 were increases of $55 million, $21 million and $27 million, respectively. The 53rd week positively impacted Division system sales growth by 1%, 1% and 2% for KFC, Pizza Hut and Taco Bell, respectively. Refer to Note 2 for additional details related to our fiscal calendar.
(g)
Historical stock prices prior to November 1, 2016, do not reflect any adjustment for the impact of the Separation.
The selected financial data should be read in conjunction with the Consolidated Financial Statements.
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