Yum! Brands
Q2 2022 Earnings Call
Aug 03, 2022, 8:15 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Hello, everyone, and welcome to the Yum! Brands 2022 second quarter earnings call. My name is Ced, and I'll be the operator of your call today. [Operator instructions] I will now hand the floor over to Jodi Dyer, VP investor relations.
Jodi Dyer -- Vice President, Investor Relations
Thanks, operator. Good morning, everyone, and thank you for joining us. On our call today are David Gibbs, our CEO; Chris Turner, our CFO; and Dave Russell, our senior vice president and corporate controller. Following remarks from David and Chris, we'll open the call to questions.
Before we get started, I would like to remind you that this conference call includes forward-looking statements that are subject to future events and uncertainties that could cause our actual results to differ materially from these statements. All forward-looking statements are made only as of the date of this announcement and should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC. In addition, please refer to our earnings releases and relevant sections of our filings with the SEC to find disclosures and definitions of non-GAAP financial measures and other metrics that may be used on today's call, as well as reconciliations of non-GAAP financial measures. Please note that during today's call, all systems sales and operating profit results exclude the impact of foreign currency.
Next, I'll provide an update on the financial reporting treatment related to the exit of our Russia business. During the second quarter, we completed the transfer of the Pizza Hut business to a local operator, who initiated the process of rebranding to a non-Yum! concept. Given the transfer of Pizza Hut and our progress toward a full exit from Russia for KFC, we have elected to remove the Russia business from key performance metrics. Specifically 1,165 units in Russia and their associated systems were removed from our total unit count and total system sales, respectively, as of the beginning of the second quarter.
This negatively impacted our reported second quarter unit growth by two percentage points and our reported system sales growth, excluding foreign currency, by two percentage points. Additionally, these units were removed from our same-store sales calculations and thus, do not impact our same-store sales results for the second quarter. However, we continue to include Russia in GAAP measures and the second quarter for Pizza Hut prior to the date of transfer and for KFC for the entire second quarter, including royalty revenue and all expenses to support the business and one time expenses related to the transfer of ownership of the business. As a result of our decision to exit the Russia business, we have reclassed net operating profit from the operating segment subsequent to the start of the conflict to our corporate and unallocated segment and reflected as a special item within the other income and expense line.