UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D. C. 20549 |
[] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES | |
EXCHANGE ACT OF 1934 for the quarterly period ended September 30, 2017 | ||
OR | ||
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
North Carolina | 13-3951308 | ||
(State or other jurisdiction of | (I.R.S. Employer | ||
incorporation or organization) | Identification No.) | ||
1441 Gardiner Lane, Louisville, Kentucky | 40213 | ||
(Address of principal executive offices) | (Zip Code) | ||
Registrant’s telephone number, including area code: (502) 874-8300 |
Large accelerated filer: | [ü] | Accelerated filer: | [ ] | |
Non-accelerated filer: | [ ] | (Do not check if a smaller reporting company) | Smaller reporting company: | [ ] |
Emerging growth company: | [ ] |
Page | ||
No. | ||
Part I. | Financial Information | |
Item 1 - Financial Statements | ||
Condensed Consolidated Statements of Income | ||
Condensed Consolidated Statements of Comprehensive Income | ||
Condensed Consolidated Statements of Cash Flows | ||
Condensed Consolidated Balance Sheets | ||
Notes to Condensed Consolidated Financial Statements | ||
Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||
Item 3 - Quantitative and Qualitative Disclosures about Market Risk | ||
Item 4 – Controls and Procedures | ||
Report of Independent Registered Public Accounting Firm | ||
Part II. | Other Information and Signatures | |
Item 1 – Legal Proceedings | ||
Item 1A – Risk Factors | ||
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds | ||
Item 6 – Exhibits | ||
Signatures |
Item 1. | Financial Statements |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | |||||||||||||||
YUM! BRANDS, INC. AND SUBSIDIARIES | |||||||||||||||
(in millions, except per share data) | |||||||||||||||
Quarter ended | Year to date | ||||||||||||||
Revenues | 9/30/2017 | 9/30/2016 (As Restated) | 9/30/2017 | 9/30/2016 (As Restated) | |||||||||||
Company sales | $ | $ | $ | $ | |||||||||||
Franchise and license fees and income | |||||||||||||||
Total revenues | |||||||||||||||
Costs and Expenses, Net | |||||||||||||||
Company restaurant expenses | |||||||||||||||
Food and paper | |||||||||||||||
Payroll and employee benefits | |||||||||||||||
Occupancy and other operating expenses | |||||||||||||||
Company restaurant expenses | |||||||||||||||
General and administrative expenses | |||||||||||||||
Franchise and license expenses | |||||||||||||||
Closures and impairment (income) expenses | |||||||||||||||
Refranchising (gain) loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other (income) expense | ( | ) | ( | ) | |||||||||||
Total costs and expenses, net | |||||||||||||||
Operating Profit | |||||||||||||||
Other pension (income) expense | ( | ) | ( | ) | |||||||||||
Interest expense, net | |||||||||||||||
Income from continuing operations before income taxes | |||||||||||||||
Income tax provision | |||||||||||||||
Income from continuing operations | |||||||||||||||
Income from discontinued operations, net of tax | |||||||||||||||
Net Income | $ | $ | $ | $ | |||||||||||
Basic Earnings per Common Share from continuing operations | $ | $ | $ | $ | |||||||||||
Basic Earnings per Common Share from discontinued operations | N/A | $ | N/A | $ | |||||||||||
Basic Earnings Per Common Share | $ | $ | $ | $ | |||||||||||
Diluted Earnings per Common Share from continuing operations | $ | $ | $ | $ | |||||||||||
Diluted Earnings per Common Share from discontinued operations | N/A | $ | N/A | $ | |||||||||||
Diluted Earnings Per Common Share | $ | $ | $ | $ | |||||||||||
Dividends Declared Per Common Share | $ | $ | $ | $ | |||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements. |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) | |||||||||||||||
YUM! BRANDS, INC. AND SUBSIDIARIES | |||||||||||||||
(in millions) | |||||||||||||||
Quarter ended | Year to date | ||||||||||||||
9/30/2017 | 9/30/2016 (As Restated) | 9/30/2017 | 9/30/2016 (As Restated) | ||||||||||||
Net Income - YUM! Brands, Inc. | $ | $ | $ | $ | |||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature | |||||||||||||||
Adjustments and gains (losses) arising during the period | ( | ) | ( | ) | |||||||||||
Reclassification of adjustments and (gains) losses into Net Income | |||||||||||||||
( | ) | ( | ) | ||||||||||||
Tax (expense) benefit | ( | ) | ( | ) | |||||||||||
( | ) | ( | ) | ||||||||||||
Changes in pension and post-retirement benefits | |||||||||||||||
Unrealized gains (losses) arising during the period | ( | ) | ( | ) | |||||||||||
Reclassification of (gains) losses into Net Income | |||||||||||||||
Tax (expense) benefit | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Changes in derivative instruments | |||||||||||||||
Unrealized gains (losses) arising during the period | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Reclassification of (gains) losses into Net Income | |||||||||||||||
( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Tax (expense) benefit | |||||||||||||||
( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other comprehensive income (loss), net of tax | ( | ) | ( | ) | |||||||||||
Comprehensive Income | $ | $ | $ | $ | |||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements. |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | |||||||
YUM! BRANDS, INC. AND SUBSIDIARIES | |||||||
(in millions) | |||||||
Year to date | |||||||
9/30/2017 | 9/30/2016 (As Restated) | ||||||
Cash Flows – Operating Activities from Continuing Operations | |||||||
Net Income | $ | $ | |||||
Income from discontinued operations, net of tax | ( | ) | |||||
Depreciation and amortization | |||||||
Closures and impairment (income) expenses | |||||||
Refranchising (gain) loss | ( | ) | ( | ) | |||
Contributions to defined benefit pension plans | ( | ) | ( | ) | |||
Deferred income taxes | |||||||
Share-based compensation expense | |||||||
Changes in accounts and notes receivable | |||||||
Changes in inventories | |||||||
Changes in prepaid expenses and other current assets | ( | ) | |||||
Changes in accounts payable and other current liabilities | ( | ) | ( | ) | |||
Changes in income taxes payable | ( | ) | |||||
Other, net | ( | ) | |||||
Net Cash Provided by Operating Activities from Continuing Operations | |||||||
Cash Flows – Investing Activities from Continuing Operations | |||||||
Capital spending | ( | ) | ( | ) | |||
Proceeds from refranchising of restaurants | |||||||
Other, net | |||||||
Net Cash Provided by (Used in) Investing Activities from Continuing Operations | ( | ) | |||||
Cash Flows – Financing Activities from Continuing Operations | |||||||
Proceeds from long-term debt | |||||||
Repayments of long-term debt | ( | ) | ( | ) | |||
Revolving credit facilities, three months or less, net | ( | ) | |||||
Short-term borrowings by original maturity | |||||||
More than three months - proceeds | |||||||
More than three months - payments | ( | ) | |||||
Three months or less, net | |||||||
Repurchase shares of Common Stock | ( | ) | ( | ) | |||
Dividends paid on Common Stock | ( | ) | ( | ) | |||
Debt issuance costs | ( | ) | ( | ) | |||
Net transfers from discontinued operations | |||||||
Other, net | ( | ) | ( | ) | |||
Net Cash Provided by (Used in) Financing Activities from Continuing Operations | ( | ) | |||||
Effect of Exchange Rates on Cash and Cash Equivalents | ( | ) | |||||
Net Increase in Cash and Cash Equivalents, Restricted Cash and Restricted Cash Equivalents - Continuing Operations | |||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents - Beginning of Period | |||||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents - End of Period | $ | $ | |||||
Cash Provided by Operating Activities from Discontinued Operations | $ | $ | |||||
Cash Used in Investing Activities from Discontinued Operations | ( | ) | |||||
Cash Used in Financing Activities from Discontinued Operations | ( | ) | |||||
See accompanying Notes to Condensed Consolidated Financial Statements. |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
YUM! BRANDS, INC. AND SUBSIDIARIES | |||||||
(in millions) | |||||||
9/30/2017 | 12/31/2016 (As Restated) | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts and notes receivable, net | |||||||
Inventories | |||||||
Prepaid expenses and other current assets | |||||||
Advertising cooperative assets, restricted | |||||||
Total Current Assets | |||||||
Property, plant and equipment, net | |||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Other assets | |||||||
Deferred income taxes | |||||||
Total Assets | $ | $ | |||||
LIABILITIES AND SHAREHOLDERS’ DEFICIT | |||||||
Current Liabilities | |||||||
Accounts payable and other current liabilities | $ | $ | |||||
Income taxes payable | |||||||
Short-term borrowings | |||||||
Advertising cooperative liabilities | |||||||
Total Current Liabilities | |||||||
Long-term debt | |||||||
Other liabilities and deferred credits | |||||||
Total Liabilities | |||||||
Shareholders’ Deficit | |||||||
Common Stock, no par value, 750 shares authorized; 339 and 355 shares issued in 2017 and 2016, respectively | |||||||
Accumulated deficit | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Total Shareholders’ Deficit | ( | ) | ( | ) | |||
Total Liabilities and Shareholders’ Deficit | $ | $ | |||||
See accompanying Notes to Condensed Consolidated Financial Statements. |
• | The KFC Division which includes our worldwide operations of the KFC concept |
• | The Pizza Hut Division which includes our worldwide operations of the Pizza Hut concept |
• | The Taco Bell Division which includes our worldwide operations of the Taco Bell concept |
Quarter ended | Year to date | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Income from continuing operations | $ | $ | $ | $ | ||||||||||||
Income from discontinued operations | ||||||||||||||||
Net Income | $ | $ | $ | $ | ||||||||||||
Weighted-average common shares outstanding (for basic calculation) | ||||||||||||||||
Effect of dilutive share-based employee compensation | ||||||||||||||||
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) | ||||||||||||||||
Basic EPS from continuing operations | $ | $ | $ | $ | ||||||||||||
Basic EPS from discontinued operations | N/A | N/A | ||||||||||||||
Basic EPS | $ | $ | $ | $ | ||||||||||||
Diluted EPS from continuing operations | $ | $ | $ | $ | ||||||||||||
Diluted EPS from discontinued operations | N/A | N/A | ||||||||||||||
Diluted EPS | $ | $ | $ | $ | ||||||||||||
Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation(a) |
(a) |
Shares Repurchased (thousands) | Dollar Value of Shares Repurchased | Remaining Dollar Value of Shares that may be Repurchased | |||||||||||||||||||||||
Authorization Date | 2017 | 2016 | 2017 | 2016 | 2017 | ||||||||||||||||||||
December 2015 | $ | $ | $ | ||||||||||||||||||||||
March 2016 | |||||||||||||||||||||||||
May 2016 | |||||||||||||||||||||||||
November 2016 | |||||||||||||||||||||||||
Total | (a) | (b) | $ | (a) | $ | (b) | $ | ||||||||||||||||||
(a) |
Translation Adjustments and Gains (Losses) From Intra-Entity Transactions of a Long-Term Nature | Pension and Post-Retirement Benefits | Derivative Instruments | Total | |||||||||||||
Balance at December 31, 2016, net of tax | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||
Gains (losses) arising during the period classified into accumulated OCI, net of tax | ( | ) | ( | ) | ||||||||||||
(Gains) losses reclassified from accumulated OCI, net of tax | ||||||||||||||||
OCI, net of tax | ( | ) | ||||||||||||||
Balance at September 30, 2017, net of tax | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) |
Quarter ended | Year to date | ||||||||
2016(a) | 2016(b) | ||||||||
Company sales | $ | $ | |||||||
Franchise and license fees and income | |||||||||
Company restaurant expenses | ( | ) | ( | ) | |||||
G&A expenses | ( | ) | ( | ) | |||||
Franchise and license expenses | ( | ) | ( | ) | |||||
Closure and impairment expenses | ( | ) | ( | ) | |||||
Refranchising gain | |||||||||
Other income | |||||||||
Interest income, net | |||||||||
Income from discontinued operations before income taxes(c) | |||||||||
Income tax benefit (provision)(d) | |||||||||
Income from discontinued operations - including noncontrolling interests | |||||||||
(Income) loss from discontinued operations - noncontrolling interests | ( | ) | ( | ) | |||||
Income from discontinued operations - YUM! Brands, Inc. | $ | $ |
(a) |
(b) |
(c) |
(d) |
Quarter ended | Year to date | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
KFC Division(a) | $ | ( | ) | $ | ( | ) | ||||||||||
Pizza Hut Division(b) | ( | ) | ( | ) | ||||||||||||
Taco Bell Division(c) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Worldwide | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(a) |
(b) |
(c) |
Quarter ended September 30, 2016 | |||||||||||||
As Previously Reported | Adjustments | After Change in Reporting Calendar | |||||||||||
Total Revenues | $ | $ | $ | ||||||||||
Operating profit | (a) | ||||||||||||
Net Income from continuing operations | |||||||||||||
Income from discontinued operations, net of tax | |||||||||||||
Net Income | $ | $ | $ | ||||||||||
Diluted EPS from continuing operations | $ | $ | $ | ||||||||||
Diluted EPS from discontinued operations | |||||||||||||
Diluted EPS | $ | $ | $ |
Year to date ended September 30, 2016 | |||||||||||||
As Previously Reported | Adjustments | After Change in Reporting Calendar | |||||||||||
Total Revenues | $ | $ | $ | ||||||||||
Operating profit | (a) | ||||||||||||
Net Income from continuing operations | |||||||||||||
Income from discontinued operations, net of tax | ( | ) | |||||||||||
Net Income | $ | $ | ( | ) | $ | ||||||||
Diluted EPS from continuing operations | $ | $ | $ | ||||||||||
Diluted EPS from discontinued operations | ( | ) | |||||||||||
Diluted EPS | $ | $ | ( | ) | $ |
(a) |
9/30/2017 | 12/31/2016 | ||||||
Accounts and notes receivable, gross | $ | $ | |||||
Allowance for doubtful accounts | ( | ) | ( | ) | |||
Accounts and notes receivable, net | $ | $ |
9/30/2017 | 12/31/2016 | ||||||
Property, plant and equipment, gross | $ | $ | |||||
Accumulated depreciation and amortization | ( | ) | ( | ) | |||
Property, plant and equipment, net | $ | $ |
9/30/2017 | 12/31/2016 | ||||||
Cash and cash equivalents as presented in Condensed Consolidated Balance Sheets | $ | $ | |||||
Restricted cash included in Prepaid expenses and other current assets(a) | |||||||
Restricted cash included in Other assets(b) | |||||||
Cash, Cash Equivalents and Restricted Cash as presented in Condensed Consolidated Statements of Cash Flows | $ | $ |
(a) |
(b) |
Quarter ended | Year to date | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income tax provision | $ | $ | $ | $ | |||||||||||
Effective tax rate | % | % | % | % |
Quarter ended | Year to date | ||||||||||||||
Revenues | 2017 | 2016 | 2017 | 2016 | |||||||||||
KFC Division | $ | $ | $ | $ | |||||||||||
Pizza Hut Division | |||||||||||||||
Taco Bell Division | |||||||||||||||
Unallocated | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
$ | $ | $ | $ |
Quarter ended | Year to date | ||||||||||||||
Operating Profit | 2017 | 2016 | 2017 | 2016 | |||||||||||
KFC Division | $ | $ | $ | $ | |||||||||||
Pizza Hut Division | |||||||||||||||
Taco Bell Division | |||||||||||||||
Unallocated restaurant costs(a) | |||||||||||||||
Unallocated Franchise and license fees and income(b) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Unallocated Franchise and license expenses(b) | ( | ) | ( | ) | ( | ) | |||||||||
Unallocated and General and administrative expenses(c) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Unallocated Refranchising gain (loss) (See Note 5) | |||||||||||||||
Unallocated Other income (expense) | ( | ) | |||||||||||||
Operating Profit | $ | $ | $ | $ | |||||||||||
Other pension income (expense) (See Note 10) | ( | ) | ( | ) | |||||||||||
Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income from continuing operations before income taxes | $ | $ | $ | $ |
(a) |
(b) |
(c) |
Quarter ended | Year to date | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||
Interest cost | |||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Amortization of net loss | |||||||||||||||
Amortization of prior service cost | |||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ | |||||||||||
Additional loss recognized due to settlements(a) | $ | $ | $ | $ | |||||||||||
Pension data adjustment(b) | $ | $ | $ | $ | |||||||||||
Special termination benefits | $ | $ | $ | $ |
(a) |
(b) |
Short-term Borrowings | 9/30/2017 | 12/31/2016 | ||||||
Current maturities of long-term debt | $ | $ | ||||||
Other | ||||||||
$ | $ | |||||||
Less current portion of debt issuance costs and discounts | ( | ) | ( | ) | ||||
Short-term borrowings | $ | $ | ||||||
Long-term Debt | ||||||||
Securitization Notes | $ | $ | ||||||
Subsidiary Senior Unsecured Notes | ||||||||
Revolving Facility | ||||||||
Term Loan A Facility | ||||||||
Term Loan B Facility | ||||||||
YUM Senior Unsecured Notes | ||||||||
Capital lease obligations | ||||||||
$ | $ | |||||||
Less debt issuance costs and discounts | ( | ) | ( | ) | ||||
Less current maturities of long-term debt | ( | ) | ( | ) | ||||
Long-term debt | $ | $ |
Quarter ended | Year to date | ||||||||||||||||||||||||||||||
Gains/(Losses) Recognized in OCI | (Gains)/Losses Reclassified from AOCI into Net Income | Gains/(Losses) Recognized in OCI | (Gains)/Losses Reclassified from AOCI into Net Income | ||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Interest rate swaps | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||
Foreign currency contracts | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
Income tax benefit/(expense) | ( | ) | ( | ) |
9/30/2017 | 12/31/2016 | ||||||||||||||||||
Carrying Value | Fair Value (Level 2) | Carrying Value | Fair Value (Level 2) | ||||||||||||||||
Securitization Notes(a) | $ | $ | $ | $ | |||||||||||||||
Subsidiary Senior Unsecured Notes(b) | |||||||||||||||||||
Term Loan A Facility(b) | |||||||||||||||||||
Term Loan B Facility(b) | |||||||||||||||||||
YUM Senior Unsecured Notes(b) | |||||||||||||||||||
(a) |
(b) |
Fair Value | ||||||||||||
Level | 9/30/2017 | 12/31/2016 | Condensed Consolidated Balance Sheet | |||||||||
Interest Rate Swaps - Liability | 2 | $ | $ | Accounts payable and other current liabilities | ||||||||
Interest Rate Swaps - Asset | 2 | Prepaid expenses and other current assets | ||||||||||
Interest Rate Swaps - Asset | 2 | Other assets | ||||||||||
Foreign Currency Contracts - Liability | 2 | Other liabilities and deferred credits | ||||||||||
Foreign Currency Contracts - Asset | 2 | Prepaid expenses and other current assets | ||||||||||
Foreign Currency Contracts - Asset | 2 | Other assets | ||||||||||
Other Investments | 1 | Other assets |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | The KFC Division which includes our worldwide operations of the KFC concept |
• | The Pizza Hut Division which includes our worldwide operations of the Pizza Hut concept |
• | The Taco Bell Division which includes our worldwide operations of the Taco Bell concept |
• | More Focused. Four growth drivers will form the basis of YUM’s strategic plans and repeatable business model to accelerate same-store sales growth and net-new restaurant development at KFC, Pizza Hut and Taco Bell around the world over the long term. The Company will focus on becoming best-in-class in: |
• | Building Distinctive, Relevant and Easy Brands |
• | Developing Unmatched Franchise Operating Capability |
• | Driving Bold Restaurant Development |
• | Growing Unrivaled Culture and Talent |
• | More Franchised. YUM intends to increase franchise restaurant ownership to at least 98% by the end of 2018. |
• | More Efficient. The Company intends to revamp its financial profile, improving the efficiency of its organization and cost structure globally, by: |
• | Reducing annual capital expenditures to approximately $100 million in 2019; |
• | Reducing 2015 General and administrative ("G&A") expenses by a cumulative ~$300 million by 2019; and |
• | Maintaining an optimized capital structure of ~5.0x Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) leverage. |
• | The Company provides certain percentage changes excluding the impact of foreign currency translation (“FX” or “Forex”). 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. |
• | System sales and system sales growth include 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 and license fees for the Company at a rate of 3% to 6% of sales. Franchise restaurant sales are not included in Company sales on the Condensed Consolidated Statements of Income; however, the franchise and license fees are included in the Company’s revenues. We believe system sales and system sales growth are useful to investors as significant indicators of the overall strength of our business as they incorporate all of our revenue drivers, Company and franchise same-store sales as well as net unit growth. |
• | Same-store sales growth is the estimated percentage change in sales of all restaurants that have been open and in the YUM system one year or more. |
• | Net new units represents new unit openings, offset by store closures. |
• | Company restaurant profit ("Restaurant profit") is defined as Company sales less expenses incurred directly by our Company-owned restaurants in generating Company sales. Company restaurant margin as a percentage of sales is defined as Restaurant profit divided by Company sales. Within the Company Sales and Restaurant Profit sections of this MD&A, Store Portfolio Actions represent the net impact of new unit openings, acquisitions, refranchising and store closures, and Other primarily represents the impact of same-store sales as well as the impact of changes in costs such as inflation/deflation. |
• | Operating margin is Operating Profit divided by Total revenues. |
• | In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") , the Company has provided non-GAAP measurements which present Diluted Earnings Per Share from Continuing Operations excluding Special Items, our Effective Tax Rate excluding Special Items, System Sales and Core Operating Profit. Core Operating Profit excludes Special Items and FX and we use Core Operating Profit for the purposes of evaluating performance internally. Special Items are not included in any of our Division segment results, and we believe the elimination of the FX impact from Core Operating Profit provides better year-to-year comparability without the distortion of foreign currency fluctuations. These non-GAAP measurements are not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of Diluted Earnings Per Share from Continuing Operations excluding Special Items, our Effective Tax Rate excluding Special Items, System Sales and Core Operating Profit, provide additional information to investors to facilitate the comparison of past and present operations, excluding items that the Company does not believe are indicative of our ongoing operations due to their size and/or nature. |
% Change | |||||
System Sales, ex FX | Same-Store Sales | Net New Units | GAAP Operating Profit | Core Operating Profit | |
KFC Division | +7 | +4 | +4 | +14 | +13 |
Pizza Hut Division | +3 | +1 | +2 | (1) | Even |
Taco Bell Division | +6 | +3 | +3 | +3 | +3 |
Worldwide | +6 | +3 | +3 | +61 | +11 |
% Change | |||||
System Sales, ex FX | Same-Store Sales | Net New Units | GAAP Operating Profit | Core Operating Profit | |
KFC Division | +6 | +3 | +4 | +15 | +16 |
Pizza Hut Division | +2 | (1) | +2 | (2) | Even |
Taco Bell Division | +8 | +5 | +3 | +10 | +10 |
Worldwide | +5 | +2 | +3 | +33 | +13 |
• | During the quarter, we opened 362 net new units and, year to date, we opened 677 net new units for 3% net new unit growth. |
• | During the quarter, we refranchised 209 restaurants, including 72 KFC, 46 Pizza Hut and 91 Taco Bell units, for proceeds of $395 million. We recorded refranchising gains of $201 million in Special Items. During the year to date, we refranchised 574 restaurants, including 143 KFC, 245 Pizza Hut and 186 Taco Bell units, for proceeds of $716 million. We recorded refranchising gains of $331 million in Special Items. |
• | During the quarter, we repurchased 6.6 million shares totaling $501 million at an average price of $75. During the year to date we repurchased 19.1 million shares totaling $1.3 billion at an average share price of $69. As of quarter end, there was $588 million remaining in share repurchase authorization through year end 2017. |
• | Foreign currency translation impacted divisional operating profit favorably for the quarter by $2 million and negatively year to date by $9 million. |
Quarter ended | Year to date | ||||||||||||||||||||||
2017 | 2016 | % B/(W) | 2017 | 2016 | % B/(W) | ||||||||||||||||||
Company sales | $ | 871 | $ | 992 | (12 | ) | $ | 2,682 | $ | 2,951 | (9 | ) | |||||||||||
Franchise and license fees and income | 565 | 526 | 7 | 1,619 | 1,519 | 7 | |||||||||||||||||
Total revenues | $ | 1,436 | $ | 1,518 | (5 | ) | $ | 4,301 | $ | 4,470 | (4 | ) | |||||||||||
Restaurant profit | $ | 154 | $ | 161 | (4 | ) | $ | 459 | $ | 476 | (4 | ) | |||||||||||
Restaurant margin % | 17.7 | % | 16.2 | % | 1.5 | ppts. | 17.1 | % | 16.1 | % | 1.0 | ppts. | |||||||||||
G&A expenses | $ | 215 | $ | 270 | 20 | $ | 699 | $ | 767 | 9 | |||||||||||||
Franchise and license expenses | 61 | 40 | (53 | ) | 161 | 145 | (12 | ) | |||||||||||||||
Closures and impairment (income) expenses | 1 | 1 | 74 | 3 | 10 | 77 | |||||||||||||||||
Refranchising (gain) loss | (201 | ) | (21 | ) | NM | (331 | ) | (75 | ) | NM | |||||||||||||
Other (income) expense | — | (1 | ) | NM | — | (14 | ) | NM | |||||||||||||||
Operating Profit | $ | 643 | $ | 398 | 61 | $ | 1,546 | $ | 1,162 | 33 | |||||||||||||
Other pension (income) expense | $ | 10 | $ | (1 | ) | NM | $ | 42 | $ | (2 | ) | NM | |||||||||||
Interest expense, net | 109 | 98 | (11 | ) | 322 | 191 | (69 | ) | |||||||||||||||
Income tax provision | 106 | 83 | (28 | ) | 278 | 263 | (6 | ) | |||||||||||||||
Income from continuing operations | $ | 418 | $ | 218 | 92 | $ | 904 | $ | 710 | 27 | |||||||||||||
Income from discontinued operations, net of tax | — | 422 | NM | — | 630 | NM | |||||||||||||||||
Net Income | $ | 418 | $ | 640 | (35 | ) | $ | 904 | $ | 1,340 | (33 | ) | |||||||||||
Diluted EPS(a) from continuing operations | $ | 1.18 | $ | 0.55 | 115 | $ | 2.52 | $ | 1.73 | 46 | |||||||||||||
Diluted EPS(a) from discontinued operations | N/A | 1.07 | NM | N/A | 1.54 | NM | |||||||||||||||||
Diluted EPS(a) | $ | 1.18 | $ | 1.62 | (27 | ) | $ | 2.52 | $ | 3.27 | (23 | ) | |||||||||||
Effective tax rate - continuing operations | 20.2 | % | 27.5 | % | 7.3 | ppts. | 23.5 | % | 27.0 | % | 3.5 | ppts. |
(a) | See Note 2 for the number of shares used in this calculation. |
Unit Count | 9/30/2017 | 9/30/2016 | % Increase (Decrease) | ||||||||
Franchise | 42,017 | 39,970 | 5 | ||||||||
Company-owned | 2,335 | 3,044 | (23 | ) | |||||||
44,352 | 43,014 | 3 |
Quarter ended | Year to date | ||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
System Sales Growth, reported | 6 | % | 2 | % | 5 | % | 1 | % | |||
System Sales Growth, excluding FX | 6 | % | 4 | % | 5 | % | 4 | % | |||
Same-store Sales Growth | 3 | % | 1 | % | 2 | % | 1 | % | |||
Non-GAAP Items | |||||||||||
Core Operating Profit Growth | 11 | % | 13 | % | |||||||
Diluted EPS Growth from Continuing Operations, excluding Special Items | 22 | % | 20 | % |
Quarter ended | Year to date | |||||||||||||||
Detail of Special Items | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Refranchising gain (loss) (See Note 5) | $ | 201 | $ | 21 | $ | 331 | $ | 75 | ||||||||
YUM's Strategic Transformation Initiatives (See Note 5) | (4 | ) | (30 | ) | (15 | ) | (34 | ) | ||||||||
Costs associated with Pizza Hut U.S. Transformation Agreement (See Note 5) | (8 | ) | — | (20 | ) | — | ||||||||||
Costs associated with KFC U.S. Acceleration Agreement (See Note 5) | (4 | ) | — | (12 | ) | (17 | ) | |||||||||
Non-cash charges associated with share-based compensation (See Note 5) | — | — | (18 | ) | — | |||||||||||
Other Special Items Income (Expense)(b) | 5 | (1 | ) | 3 | (3 | ) | ||||||||||
Special Items Income (Expense) - Operating Profit | 190 | (10 | ) | 269 | 21 | |||||||||||
Special Items - Other Pension Income (Expense) (See Note 5) | (1 | ) | — | (23 | ) | — | ||||||||||
Special Items Income (Expense) from Continuing Operations before Income Taxes | 189 | (10 | ) | 246 | 21 | |||||||||||
Tax Benefit (Expense) on Special Items( c) | (13 | ) | 5 | (64 | ) | — | ||||||||||
Special Items Income (Expense), net of tax | $ | 176 | $ | (5 | ) | $ | 182 | $ | 21 | |||||||
Average diluted shares outstanding | 353 | 395 | 358 | 410 | ||||||||||||
Special Items diluted EPS | $ | 0.50 | $ | (0.01 | ) | $ | 0.51 | $ | 0.05 | |||||||
Reconciliation of GAAP Operating Profit to Core Operating Profit | ||||||||||||||||
Consolidated | ||||||||||||||||
GAAP Operating Profit | $ | 643 | $ | 398 | $ | 1,546 | $ | 1,162 | ||||||||
Special Items Income (Expense) | 190 | (10 | ) | 269 | 21 | |||||||||||
Foreign Currency Impact on GAAP Operating Profit(a) | 2 | N/A | (9 | ) | N/A | |||||||||||
Core Operating Profit | $ | 451 | $ | 408 | $ | 1,286 | $ | 1,141 | ||||||||
KFC Division | ||||||||||||||||
GAAP Operating Profit | $ | 260 | $ | 230 | $ | 710 | $ | 618 | ||||||||
Foreign Currency Impact on GAAP Operating Profit(a) | 2 | N/A | (5 | ) | N/A | |||||||||||
Core Operating Profit | $ | 258 | $ | 230 | $ | 715 | $ | 618 | ||||||||
Pizza Hut Division | ||||||||||||||||
GAAP Operating Profit | $ | 82 | $ | 84 | $ | 250 | $ | 256 | ||||||||
Foreign Currency Impact on GAAP Operating Profit(a) | — | N/A | (4 | ) | N/A | |||||||||||
Core Operating Profit | $ | 82 | $ | 84 | $ | 254 | $ | 256 | ||||||||
Taco Bell Division | ||||||||||||||||
GAAP Operating Profit | $ | 147 | $ | 143 | $ | 440 | $ | 400 | ||||||||
Foreign Currency Impact on GAAP Operating Profit(a) | — | N/A | — | N/A | ||||||||||||
Core Operating Profit | $ | 147 | $ | 143 | $ | 440 | $ | 400 | ||||||||
Reconciliation of Diluted EPS from Continuing Operations to Diluted EPS from Continuing Operations excluding Special Items | ||||||||||||||||
Diluted EPS from Continuing Operations | $ | 1.18 | $ | 0.55 | $ | 2.52 | $ | 1.73 | ||||||||
Special Items Diluted EPS | 0.50 | (0.01 | ) | 0.51 | 0.05 | |||||||||||
Diluted EPS from Continuing Operations excluding Special Items | $ | 0.68 | $ | 0.56 | $ | 2.01 | $ | 1.68 | ||||||||
Reconciliation of GAAP Effective Tax Rate to Effective Tax Rate excluding Special Items | ||||||||||||||||
GAAP Effective Tax Rate | 20.2 | % | 27.5 | % | 23.5 | % | 27.0 | % | ||||||||
Impact on Tax Rate as a result of Special Items(c) | (7.6 | )% | (0.5 | )% | 0.7 | % | (0.6 | )% | ||||||||
Effective Tax Rate excluding Special Items | 27.8 | % | 28.0 | % | 22.8 | % | 27.6 | % | ||||||||
Reconciliation of Company Sales to System Sales | ||||||||||||||||
Consolidated | ||||||||||||||||
Company Sales(d) | $ | 871 | $ | 992 | $ | 2,682 | $ | 2,951 | ||||||||
Franchise sales | 10,800 | 10,018 | 30,729 | 29,019 | ||||||||||||
System sales | $ | 11,671 | $ | 11,010 | $ | 33,411 | $ | 31,970 | ||||||||
KFC Division | ||||||||||||||||
Company Sales(d) | $ | 498 | $ | 520 | $ | 1,465 | $ | 1,541 | ||||||||
Franchise sales | 5,784 | 5,313 | 16,223 | 15,277 | ||||||||||||
System sales | $ | 6,282 | $ | 5,833 | $ | 17,688 | $ | 16,818 | ||||||||
Pizza Hut Division | ||||||||||||||||
Company Sales(d) | $ | 55 | $ | 106 | $ | 226 | $ | 366 | ||||||||
Franchise sales | 2,911 | 2,778 | 8,439 | 8,263 | ||||||||||||
System sales | $ | 2,966 | $ | 2,884 | $ | 8,665 | $ | 8,629 | ||||||||
Taco Bell Division | ||||||||||||||||
Company Sales(d) | $ | 318 | $ | 366 | $ | 991 | $ | 1,044 | ||||||||
Franchise sales | 2,105 | 1,927 | 6,067 | 5,479 | ||||||||||||
System sales | $ | 2,423 | $ | 2,293 | $ | 7,058 | $ | 6,523 |
(a) | The foreign currency impact on reported Operating Profit is presented in relation only to the immediately preceding year presented. When determining applicable Core Operating Profit growth percentages, the Core Operating Profit for the current year should be compared to the prior GAAP Operating Profit adjusted only for the prior year Special Items Income (Expense). |
(b) | In 2017, Other Special Items Income (Expense) primarily includes depreciation reductions arising from KFC restaurants classified as held-for-sale. See Note 5. |
(c) | The tax benefit (expense) was determined based upon the impact of the nature, as well as the jurisdiction of the respective individual components within Special Items. We are utilizing an approach in which we recompute our estimated annual Effective Tax Rate and year to date income tax expense excluding Special Items, which allows us to determine the incremental tax impact of Special Items. |
(d) | Company Sales represents sales from our Company-operated stores as presented on our Condensed Consolidated Statements of Income. |
Quarter ended | Year to date | |||||||||||||||||||||||||||||||
% B/(W) | % B/(W) | |||||||||||||||||||||||||||||||
2017 | 2016 | Reported | Ex FX | 2017 | 2016 | Reported | Ex FX | |||||||||||||||||||||||||
System Sales | $ | 6,282 | $ | 5,833 | 8 | 7 | $ | 17,688 | $ | 16,818 | 5 | 6 | ||||||||||||||||||||
Same-Store Sales Growth | 4 | N/A | 3 | N/A | ||||||||||||||||||||||||||||
Company sales | $ | 498 | $ | 520 | (4 | ) | (6 | ) | $ | 1,465 | $ | 1,541 | (5 | ) | (5 | ) | ||||||||||||||||
Franchise and license fees and income | 296 | 267 | 11 | 11 | 831 | 761 | 9 | 10 | ||||||||||||||||||||||||
Total revenues | $ | 794 | $ | 787 | 1 | (1 | ) | $ | 2,296 | $ | 2,302 | — | — | |||||||||||||||||||
Restaurant profit | $ | 79 | $ | 78 | 2 | (1 | ) | $ | 221 | $ | 221 | — | — | |||||||||||||||||||
Restaurant margin % | 15.9 | % | 15.0 | % | 0.9 | ppts. | 0.8 | ppts. | 15.1 | % | 14.4 | % | 0.7 | ppts. | 0.7 | ppts. | ||||||||||||||||
G&A expenses | $ | 85 | $ | 89 | 5 | 6 | $ | 259 | $ | 276 | 6 | 6 | ||||||||||||||||||||
Operating Profit | $ | 260 | $ | 230 | 14 | 13 | $ | 710 | $ | 618 | 15 | 16 |
% Increase (Decrease) | ||||||||||||
Unit Count | 9/30/2017 | 9/30/2016 | ||||||||||
Franchise | 19,745 | 18,778 | 5 | |||||||||
Company-owned | 1,318 | 1,506 | (12 | ) | ||||||||
21,063 | 20,284 | 4 |
Quarter ended | |||||||||||||||||||
Income / (Expense) | 2016 | Store Portfolio Actions | Other | FX | 2017 | ||||||||||||||
Company sales | $ | 520 | $ | (48 | ) | $ | 16 | $ | 10 | $ | 498 | ||||||||
Cost of sales | (178 | ) | 17 | (7 | ) | (4 | ) | (172 | ) | ||||||||||
Cost of labor | (120 | ) | 13 | (5 | ) | (2 | ) | (114 | ) | ||||||||||
Occupancy and other | (144 | ) | 14 | (1 | ) | (2 | ) | (133 | ) | ||||||||||
Company restaurant expenses | $ | (442 | ) | $ | 44 | $ | (13 | ) | $ | (8 | ) | $ | (419 | ) | |||||
Restaurant profit | $ | 78 | $ | (4 | ) | $ | 3 | $ | 2 | $ | 79 | ||||||||
Year to date | |||||||||||||||||||
Income / (Expense) | 2016 | Store Portfolio Actions | Other | FX | 2017 | ||||||||||||||
Company sales | $ | 1,541 | $ | (124 | ) | $ | 42 | $ | 6 | $ | 1,465 | ||||||||
Cost of sales | (526 | ) | 42 | (15 | ) | (5 | ) | (504 | ) | ||||||||||
Cost of labor | (362 | ) | 29 | (13 | ) | 1 | (345 | ) | |||||||||||
Occupancy and other | (432 | ) | 41 | (3 | ) | (1 | ) | (395 | ) | ||||||||||
Company restaurant expenses | $ | (1,320 | ) | $ | 112 | $ | (31 | ) | $ | (5 | ) | $ | (1,244 | ) | |||||
Restaurant profit | $ | 221 | $ | (12 | ) | $ | 11 | $ | 1 | $ | 221 |
Quarter ended | Year to date | |||||||||||||||||||||||||||||||
% B/(W) | % B/(W) | |||||||||||||||||||||||||||||||
2017 | 2016 | Reported | Ex FX | 2017 | 2016 | Reported | Ex FX | |||||||||||||||||||||||||
System Sales | $ | 2,966 | $ | 2,884 | 3 | 3 | $ | 8,665 | $ | 8,629 | — | 2 | ||||||||||||||||||||
Same-Store Sales Growth (Decline) | 1 | N/A | (1 | ) | N/A | |||||||||||||||||||||||||||
Company sales | $ | 55 | $ | 106 | (47 | ) | (47 | ) | $ | 226 | $ | 366 | (38 | ) | (38 | ) | ||||||||||||||||
Franchise and license fees and income | 148 | 145 | 2 | 2 | 433 | 433 | — | 1 | ||||||||||||||||||||||||
Total revenues | $ | 203 | $ | 251 | (19 | ) | (18 | ) | $ | 659 | $ | 799 | (17 | ) | (17 | ) | ||||||||||||||||
Restaurant profit | $ | 1 | $ | 4 | (71 | ) | (71 | ) | $ | 14 | $ | 29 | (53 | ) | (52 | ) | ||||||||||||||||
Restaurant margin % | 1.9 | % | 3.5 | % | (1.6 | ) | ppts. | (1.6 | ) | ppts. | 6.0 | % | 7.9 | % | (1.9 | ) | ppts. | (1.9 | ) | ppts. | ||||||||||||
G&A expenses | $ | 44 | $ | 55 | 21 | 21 | $ | 151 | $ | 170 | 12 | 11 | ||||||||||||||||||||
Operating Profit | $ | 82 | $ | 84 | (1 | ) | — | $ | 250 | $ | 256 | (2 | ) | — |
% Increase (Decrease) | ||||||||||||
Unit Count | 9/30/2017 | 9/30/2016 | ||||||||||
Franchise | 16,245 | 15,578 | 4 | |||||||||
Company-owned | 306 | 637 | (52 | ) | ||||||||
16,551 | 16,215 | 2 |
Quarter ended | |||||||||||||||||||
Income / (Expense) | 2016 | Store Portfolio Actions | Other | FX | 2017 | ||||||||||||||
Company sales | $ | 106 | $ | (50 | ) | $ | (1 | ) | $ | — | $ | 55 | |||||||
Cost of sales | (29 | ) | 14 | (1 | ) | — | (16 | ) | |||||||||||
Cost of labor | (35 | ) | 15 | 1 | — | (19 | ) | ||||||||||||
Occupancy and other | (38 | ) | 17 | 2 | — | (19 | ) | ||||||||||||
Company restaurant expenses | $ | (102 | ) | $ | 46 | $ | 2 | $ | — | $ | (54 | ) | |||||||
Restaurant profit | $ | 4 | $ | (4 | ) | $ | 1 | $ | — | $ | 1 | ||||||||
Year to date | |||||||||||||||||||
Income / (Expense) | 2016 | Store Portfolio Actions | Other | FX | 2017 | ||||||||||||||
Company sales | $ | 366 | $ | (135 | ) | $ | (3 | ) | $ | (2 | ) | $ | 226 | ||||||
Cost of sales | (101 | ) | 38 | (2 | ) | — | (65 | ) | |||||||||||
Cost of labor | (116 | ) | 43 | (2 | ) | 1 | (74 | ) | |||||||||||
Occupancy and other | (120 | ) | 42 | 5 | — | (73 | ) | ||||||||||||
Company restaurant expenses | $ | (337 | ) | $ | 123 | $ | 1 | $ | 1 | $ | (212 | ) | |||||||
Restaurant profit | $ | 29 | $ | (12 | ) | $ | (2 | ) | $ | (1 | ) | $ | 14 |
Quarter ended | Year to date | |||||||||||||||||||||||||||||||
% B/(W) | % B/(W) | |||||||||||||||||||||||||||||||
2017 | 2016 | Reported | Ex FX | 2017 | 2016 | Reported | Ex FX | |||||||||||||||||||||||||
System Sales | $ | 2,423 | $ | 2,293 | 6 | 6 | $ | 7,058 | $ | 6,523 | 8 | 8 | ||||||||||||||||||||
Same-Store Sales Growth | 3 | N/A | 5 | N/A | ||||||||||||||||||||||||||||
Company sales | $ | 318 | $ | 366 | (13 | ) | (13 | ) | $ | 991 | $ | 1,044 | (5 | ) | (5 | ) | ||||||||||||||||
Franchise and license fees and income | 124 | 115 | 7 | 7 | 358 | 327 | 9 | 9 | ||||||||||||||||||||||||
Total revenues | $ | 442 | $ | 481 | (8 | ) | (8 | ) | $ | 1,349 | $ | 1,371 | (2 | ) | (2 | ) | ||||||||||||||||
Restaurant profit | $ | 69 | $ | 79 | (12 | ) | (12 | ) | $ | 219 | $ | 226 | (3 | ) | (3 | ) | ||||||||||||||||
Restaurant margin % | 21.9 | % | 21.7 | % | 0.2 | ppts. | 0.2 | ppts. | 22.1 | % | 21.7 | % | 0.4 | ppts. | 0.4 | ppts. | ||||||||||||||||
G&A expenses | $ | 41 | $ | 48 | 15 | 15 | $ | 122 | $ | 141 | 14 | 14 | ||||||||||||||||||||
Operating Profit | $ | 147 | $ | 143 | 3 | 3 | $ | 440 | $ | 400 | 10 | 10 |
% Increase (Decrease) | ||||||||||||
Unit Count | 9/30/2017 | 9/30/2016 | ||||||||||
Franchise | 6,027 | 5,614 | 7 | |||||||||
Company-owned | 711 | 901 | (21 | ) | ||||||||
6,738 | 6,515 | 3 |
Quarter ended | |||||||||||||||
Income / (Expense) | 2016 | Store Portfolio Actions | Other | 2017 | |||||||||||
Company sales | $ | 366 | $ | (53 | ) | $ | 5 | $ | 318 | ||||||
Cost of sales | (96 | ) | 13 | (4 | ) | (87 | ) | ||||||||
Cost of labor | (105 | ) | 14 | — | (91 | ) | |||||||||
Occupancy and other | (86 | ) | 12 | 3 | (71 | ) | |||||||||
Company restaurant expense | $ | (287 | ) | $ | 39 | $ | (1 | ) | $ | (249 | ) | ||||
Restaurant profit | $ | 79 | $ | (14 | ) | $ | 4 | $ | 69 | ||||||
Year to date | |||||||||||||||
Income / (Expense) | 2016 | Store Portfolio Actions | Other | 2017 | |||||||||||
Company sales | $ | 1,044 | $ | (91 | ) | $ | 38 | $ | 991 | ||||||
Cost of sales | (270 | ) | 23 | (15 | ) | (262 | ) | ||||||||
Cost of labor | (302 | ) | 25 | (11 | ) | (288 | ) | ||||||||
Occupancy and other | (246 | ) | 21 | 3 | (222 | ) | |||||||||
Company restaurant expense | $ | (818 | ) | $ | 69 | $ | (23 | ) | $ | (772 | ) | ||||
Restaurant profit | $ | 226 | $ | (22 | ) | $ | 15 | $ | 219 |
Quarter ended | Year to date | |||||||||||||||||||||||
(Expense) / Income | 2017 | 2016 | % B/(W) | 2017 | 2016 | % B/(W) | ||||||||||||||||||
Corporate and unallocated G&A expenses | $ | (45 | ) | $ | (78 | ) | 42 | $ | (167 | ) | $ | (180 | ) | 7 | ||||||||||
Unallocated restaurant costs | 5 | — | NM | 5 | — | NM | ||||||||||||||||||
Unallocated Franchise and license fees and income | (3 | ) | (1 | ) | NM | (3 | ) | (2 | ) | NM | ||||||||||||||
Unallocated Franchise and license expenses | (5 | ) | 1 | NM | (21 | ) | (15 | ) | (34 | ) | ||||||||||||||
Refranchising gain (loss) (See Note 5) | 201 | 21 | NM | 331 | 75 | NM | ||||||||||||||||||
Unallocated Other income (expense) | 1 | (2 | ) | NM | 1 | 10 | (88 | ) | ||||||||||||||||
Other pension income (expense) (See Note 10) | (10 | ) | 1 | NM | (42 | ) | 2 | NM | ||||||||||||||||
Interest expense, net | (109 | ) | (98 | ) | (11 | ) | (322 | ) | (191 | ) | (69 | ) | ||||||||||||
Income tax provision (See Note 8) | (106 | ) | (83 | ) | (28 | ) | (278 | ) | (263 | ) | (6 | ) | ||||||||||||
Effective tax rate (See Note 8) | 20.2 | % | 27.5 | % | 7.3 | ppts. | 23.5 | % | 27.0 | % | 3.5 | ppts. |
Quarter ended | Year to date | |||||||
2016(a) | 2016(b) | |||||||
Total revenues | $ | 1,883 | $ | 4,774 | ||||
Total income from discontinued operations before income taxes(c) | 289 | 564 | ||||||
Income tax provision (benefit)(d) | (143 | ) | (76 | ) | ||||
Income from discontinued operations, net of tax | 422 | 630 |
(a) | Includes historical Yum China financial results from June 1, 2016 to August 31, 2016. |
(b) | Includes historical Yum China financial results from January 1, 2016 to August 31, 2016, plus an additional month of expense associated with the license fee paid to YUM to conform to the new YUM reporting calendar. |
(c) | Includes costs incurred to execute the Separation of $7 million and $25 million for the quarter and year to date ended September 30, 2016, respectively. Such costs primarily related to transaction advisors, legal and other consulting fees. |
(d) | Includes a tax benefit of $233 million recognized in the third quarter of 2016 related to previously recorded losses associated with our former Little Sheep business. The tax benefit associated with these losses was able to be recognized as a result of legal entity restructuring in anticipation of the Separation. |
Fiscal Periods | Total number of shares purchased (thousands) | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs (thousands) | Approximate dollar value of shares that may yet be purchased under the plans or programs (millions) | ||||
7/1/17-7/31/17 | 1,351 | $74.04 | 1,351 | $989 | ||||
8/1/17-8/31/17 | 2,718 | $75.75 | 2,718 | $783 | ||||
9/1/17-9/30/17 | 2,579 | $75.62 | 2,579 | $588 | ||||
Total | 6,648 | $75.35 | 6,648 | $588 |
(a) | Exhibit Index | |||||||||||
Incorporated by Reference | ||||||||||||
Exhibit No. | Exhibit Description | Form | File No. | Date of Filing | Exhibit Number | |||||||
15 | — | — | — | — | ||||||||
31.1 | — | — | — | — | ||||||||
31.2 | — | — | — | — | ||||||||
32.1 | — | — | — | — | ||||||||
32.2 | — | — | — | — | ||||||||
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101.SCH | XBRL Taxonomy Extension Schema Document | — | — | — | — | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | — | — | — | — | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | — | — | — | — | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | — | — | — | — | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | — | — | — | — | |||||||
YUM! BRANDS, INC. | |
(Registrant) |
Date: | November 8, 2017 | /s/ David E. Russell |
Senior Vice President, Finance and Corporate Controller | ||
(Principal Accounting Officer) |
Description | Registration Statement Number |
Form S-3 | |
Yum! Direct Stock Purchase Program | 333-46242 |
Debt Securities | 333-188216 |
Form S-8 | |
Restaurant Deferred Compensation Program | 333-36877, 333-32050 |
Executive Income Deferral Program | 333-36955 |
SharePower Stock Option Plan | 333-36961 |
YUM! Brands 401 (k) Plan | 333-36893, 333-32048, 333-109300 |
YUM! Brands, Inc. Restaurant General Manager Stock Option Plan | 333-64547 |
YUM! Brands, Inc. Long-Term Incentive Plan | 333-32052, 333-109299, 333-170929 |
1. | I have reviewed this report on Form 10-Q of YUM! Brands, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report. |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 8, 2017 | /s/ Greg Creed |
Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of YUM! Brands, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report. |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 8, 2017 | /s/ David Gibbs |
President and Chief Financial Officer |
1. | the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | November 8, 2017 | /s/ Greg Creed |
Chief Executive Officer |
1. | the Periodic Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | November 8, 2017 | /s/ David Gibbs |
President and Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
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Sep. 30, 2017 |
Nov. 01, 2017 |
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Document And Entity Information [Abstract] | ||
Entity Registrant Name | YUM BRANDS INC | |
Entity Central Index Key | 0001041061 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 336,993,674 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||||
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Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Revenues | ||||||||||||
Total Revenues | $ 1,436 | $ 1,518 | $ 4,301 | $ 4,470 | ||||||||
Costs and Expenses, Net | ||||||||||||
Closures and impairment (income) expenses | 3 | 10 | ||||||||||
Refranchising (gain) loss | (201) | (21) | (331) | (75) | ||||||||
Operating Profit | 643 | 398 | 1,546 | 1,162 | ||||||||
Other pension (income) expense | 10 | (1) | 42 | (2) | ||||||||
Interest expense, net | 109 | 98 | 322 | 191 | ||||||||
Income Before Income Taxes | 524 | 301 | 1,182 | 973 | ||||||||
Income from continuing operations | 218 | 710 | ||||||||||
Income from discontinued operations, net of tax | 422 | 630 | ||||||||||
Net Income | $ 418 | $ 640 | $ 904 | $ 1,340 | ||||||||
Basic Earnings Per Common Share | $ 1.21 | $ 1.65 | $ 2.58 | $ 3.32 | ||||||||
Diluted Earnings Per Common Share | 1.18 | 1.62 | 2.52 | 3.27 | ||||||||
Dividends Declared Per Common Share | $ 0 | $ 0.51 | $ 0.60 | $ 1.43 | ||||||||
Continuing Operations [Member] | ||||||||||||
Revenues | ||||||||||||
Company sales | $ 871 | $ 992 | $ 2,682 | $ 2,951 | ||||||||
Franchise and license fees and income | 565 | 526 | 1,619 | 1,519 | ||||||||
Total Revenues | 1,436 | 1,518 | 4,301 | 4,470 | ||||||||
Costs and Expenses, Net | ||||||||||||
Food and paper | 275 | 303 | 831 | 897 | ||||||||
Payroll and employee benefits | 224 | 260 | 707 | 780 | ||||||||
Occupancy and other operating expenses | 218 | 268 | 685 | 798 | ||||||||
Company restaurant expenses | 717 | 831 | 2,223 | 2,475 | ||||||||
General and Administrative Expense | 215 | 270 | 699 | 767 | ||||||||
Franchise and license expenses | 61 | 40 | 161 | 145 | ||||||||
Closures and impairment (income) expenses | 1 | 1 | 3 | 10 | ||||||||
Refranchising (gain) loss | (201) | (21) | (331) | (75) | ||||||||
Other (income) expense | 0 | (1) | 0 | (14) | ||||||||
Total costs and expenses, net | 793 | 1,120 | 2,755 | 3,308 | ||||||||
Operating Profit | 643 | 398 | 1,546 | 1,162 | ||||||||
Other pension (income) expense | 10 | (1) | 42 | (2) | ||||||||
Interest expense, net | 109 | 98 | 322 | 191 | ||||||||
Income Before Income Taxes | 524 | 301 | 1,182 | 973 | ||||||||
Income tax provision | 106 | 83 | 278 | 263 | ||||||||
Income from continuing operations | $ 418 | $ 218 | $ 904 | $ 710 | ||||||||
Basic Earnings Per Common Share | $ 1.21 | $ 0.56 | $ 2.58 | $ 1.76 | ||||||||
Diluted Earnings Per Common Share | $ 1.18 | $ 0.55 | $ 2.52 | $ 1.73 | ||||||||
Discontinued Operations [Member] | ||||||||||||
Revenues | ||||||||||||
Company sales | $ 1,848 | [1] | $ 4,684 | [2] | ||||||||
Franchise and license fees and income | 35 | [1] | 90 | [2] | ||||||||
Costs and Expenses, Net | ||||||||||||
Company restaurant expenses | 1,488 | [1] | 3,896 | [2] | ||||||||
General and Administrative Expense | 111 | [1] | 297 | [2] | ||||||||
Franchise and license expenses | 15 | [1] | 40 | [2] | ||||||||
Closures and impairment (income) expenses | 5 | [1] | 36 | [2] | ||||||||
Refranchising (gain) loss | (3) | [1] | (8) | [2] | ||||||||
Interest expense, net | (4) | [1] | (7) | [2] | ||||||||
Income tax provision | [3] | (143) | [1] | (76) | [2] | |||||||
Income from discontinued operations, net of tax | $ 0 | $ 422 | [1] | $ 0 | $ 630 | [2] | ||||||
Basic Earnings Per Common Share | $ 1.09 | $ 1.56 | ||||||||||
Diluted Earnings Per Common Share | $ 1.07 | $ 1.54 | ||||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
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Current Assets | ||
Cash and cash equivalents | $ 980 | $ 725 |
Accounts and notes receivable, net | 358 | 370 |
Inventories | 15 | 37 |
Prepaid expenses and other current assets | 465 | 236 |
Advertising cooperative assets, restricted | 181 | 137 |
Total Current Assets | 1,999 | 1,505 |
Property, plant and equipment, net | 1,861 | 2,113 |
Goodwill | 525 | 536 |
Intangible assets, net | 116 | 151 |
Other assets | 304 | 376 |
Deferred income taxes | 649 | 772 |
Total Assets | 5,454 | 5,453 |
Current Liabilities | ||
Accounts payable and other current liabilities | 823 | 1,067 |
Income taxes payable | 27 | 32 |
Short-term borrowings | 372 | 66 |
Advertising cooperative liabilities | 181 | 137 |
Total Current Liabilities | 1,403 | 1,302 |
Long-term debt | 9,479 | 9,059 |
Other liabilities and deferred credits | 693 | 704 |
Total Liabilities | 11,575 | 11,065 |
Shareholders' Equity | ||
Common Stock, no par value, 750 shares authorized; 339 and 355 shares issued in 2017 and 2016, respectively | 0 | 0 |
Retained earnings (Accumulated deficit) | (5,817) | (5,158) |
Accumulated other comprehensive income (loss) | (304) | (454) |
Total Shareholders' Deficit | (6,121) | (5,612) |
Total Liabilities and Shareholders' Deficit | $ 5,454 | $ 5,453 |
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) shares in Millions, $ in Millions |
Sep. 30, 2017 |
Dec. 31, 2016 |
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Statement of Financial Position [Abstract] | ||
Total Liabilities and Shareholders’ Deficit | $ 5,454 | $ 5,453 |
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 750 | 750 |
Common Stock, Shares, Issued | 339 | 355 |
Financial Statement Presentation |
9 Months Ended | ||||||||||||
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Sep. 30, 2017 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Financial Statement Presentation | Financial Statement Presentation We have prepared our accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by Generally Accepted Accounting Principles in the United States (“GAAP”) for complete financial statements. Therefore, we suggest that the accompanying Financial Statements be read in conjunction with the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (“2016 Form 10-K”). YUM! Brands, Inc. and its Subsidiaries (collectively referred to herein as “YUM” or the “Company”) comprise the worldwide operations of KFC, Pizza Hut and Taco Bell (collectively the “Concepts”). YUM has over 44,000 units, of which 59% are located outside the U.S., in 137 countries and territories. YUM was created as an independent, publicly-owned company on October 6, 1997 via a tax-free distribution by our former parent, PepsiCo, Inc., of our Common Stock to its shareholders. References to YUM throughout these Financial Statements are made using the first person notations of “we,” “us” or “our.” As of September 30, 2017, YUM consisted of three operating segments:
On October 31, 2016 (the “Distribution Date”), we completed the spin-off of our China business (the "Separation") into an independent, publicly-traded company under the name of Yum China Holdings, Inc. (“Yum China”). Concurrent with the Separation, a subsidiary of the Company entered into a Master License Agreement with a subsidiary of Yum China for the exclusive right to use and sublicense the use of intellectual property owned by YUM and its affiliates for the development and operation of KFC, Pizza Hut and Taco Bell restaurants in China. Prior to the Separation, our operations in mainland China were reported in our former China Division segment results. As a result of the Separation, the results of operations and cash flows of the separated business are presented as discontinued operations in our Condensed Consolidated Statements of Income and Condensed Consolidated Statements of Cash Flows for periods presented prior to the Separation. See additional information related to the impact of the Separation in Note 4. Our fiscal year has historically ended on the last Saturday in December and, as a result, a 53rd week was added every five or six years. The first three quarters of each fiscal year consisted of 12 weeks and the fourth quarter consisted of 16 weeks in fiscal years with 52 weeks and 17 weeks in fiscal years with 53 weeks. Our U.S. subsidiaries and certain international subsidiaries operated on similar fiscal calendars. Our remaining international subsidiaries operated on a monthly calendar, and thus never had a 53rd week, with two months in the first quarter, three months in the second and third quarters and four months in the fourth quarter. Certain international subsidiaries within our KFC, Pizza Hut and Taco Bell divisions have historically closed approximately one month or one period earlier to facilitate consolidated reporting. On January 27, 2017, YUM’s Board of Directors approved a change in the Company's fiscal year from a year ending on the last Saturday of December to a year beginning on January 1 and ending December 31 of each year, commencing with the year ending December 31, 2017. In connection with this change, the Company moved from a 52-week periodic fiscal calendar with three 12-week interim quarters and a 16-week fourth quarter to a monthly reporting calendar with each quarter comprised of three months. Our U.S. subsidiaries continue to report on a period calendar as described above. Concurrent with the change in the Company's fiscal year, we also eliminated the one month or one period reporting lags of our international subsidiaries. As a result of removing these reporting lags, each international subsidiary operates either on a monthly calendar consistent with the Company’s new calendar or on a periodic calendar consistent with our U.S. subsidiaries. We believe this change in our international subsidiary reporting calendars and the resulting elimination of reporting lags is preferable because a more current reporting calendar allows the Financial Statements to more consistently and more timely reflect the impact of current events, economic conditions and global trends. The change to the Company’s fiscal year and removal of the international reporting lags is effective in 2017. We have applied this change in accounting principle retrospectively to all prior financial periods presented and the impact of this change is summarized in Note 5. The impact of the change in accounting principle on the current period financial statements is similar to the impact on the prior period results discussed in Note 5. Our preparation of the accompanying Financial Statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The accompanying Financial Statements include all normal and recurring adjustments considered necessary to present fairly, when read in conjunction with our 2016 Form 10-K, our financial position as of September 30, 2017, our cash flows for the years to date ended September 30, 2017 and 2016, and the results of our operations and comprehensive income for the quarters and years to date ended September 30, 2017 and 2016. Our results of operations, comprehensive income and cash flows for these interim periods are not necessarily indicative of the results to be expected for the full year. Our significant interim accounting policies include the recognition of certain advertising and marketing costs, generally in proportion to revenue, and the recognition of income taxes using an estimated annual effective tax rate. In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance related to stock-based compensation which is intended to simplify several aspects of the accounting for employee share-based payment transactions, including their income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. We adopted this standard beginning with the quarter ended March 31, 2017. The impact of adoption included the recognition of excess tax benefits within our income tax provision for share-based payments made of approximately $40 million and $100 million during the quarter and year to date ended September 30, 2017, respectively. Additionally, the standard requires these excess tax benefits be reported as operating activities in the Condensed Consolidated Statements of Cash Flows as opposed to within financing activities as they have been historically reported. We elected retrospective presentation of excess tax benefits as operating cash flows for prior years. As a result, approximately $70 million of excess tax benefits previously presented as a financing activity have been reclassified to operating activities for the year to date ended September 30, 2016, in our Condensed Consolidated Statements of Cash Flows. No other provisions of this standard had a material impact on the Company's Financial Statements or disclosures. In March 2017, the FASB issued guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost (collectively, "Benefit Costs"). The standard does not change the requirement that an employer report the service cost component of these Benefit Costs in the same line item or items as other compensation costs arising from services rendered by employees during the period. However, the standard requires that the non-service components of these Benefit Costs be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. We early adopted the standard beginning with the quarter ended March 31, 2017, on a retrospective basis. As a result, we have reclassified amounts related to non-service components of Benefit Costs from their prior Financial Statement captions (Payroll and employee benefits and General and administrative "G&A" expenses) into a new Financial Statement caption titled Other pension (income) expense in our Condensed Consolidated Statements of Income. The adoption of this standard does not impact Net Income. |
Earnings Per Common Share ("EPS") |
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Earnings Per Common Share (EPS) | Earnings Per Common Share (“EPS”)
(a) These unexercised employee stock options and stock appreciation rights were not included in the computation of diluted EPS because to do so would have been antidilutive for the periods presented.
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Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Deficit Under the authority of our Board of Directors, we repurchased shares of our Common Stock during the years to date ended September 30, 2017 and 2016 as indicated below. All amounts exclude applicable transaction fees.
Changes in accumulated other comprehensive income (loss) ("OCI") are presented below.
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Discontinued Operations |
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Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued Operations As discussed in Note 1, on October 31, 2016, the Company completed the separation of our China business. As a result of the Separation, all royalty revenues earned by us under the Master License Agreement with Yum China that were previously eliminated in consolidation are now reflected as Franchise and license fees and income in our Condensed Consolidated Statements of Income. For the quarter and year to date ended September 30, 2016, the combined KFC and Pizza Hut Divisions' Franchise and license fees and income, as a result of the Separation, increased by $64 million and $189 million, respectively. The value added tax associated with this royalty revenue increased Franchise and license expenses for the combined KFC and Pizza Hut Divisions by $4 million and $12 million for the quarter and year to date ended September 30, 2016, respectively. The net increases in the KFC and Pizza Hut Divisions' Operating Profit were offset with a corresponding reduction in Income from discontinued operations such that there was no impact from the Separation on total Net income. The financial results of Yum China presented in discontinued operations reflect the results of the former China Division, which was an operating segment of the Company until the Separation, adjusted for the transactions discussed above and the inclusion of certain G&A expenses, non-cash impairment charges, refranchising gains, interest and taxes that were previously not allocated to but were related to the former China Division's historical results of operations. The following table presents the financial results of the Company’s discontinued operations:
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Items Affecting Comparability of Net Income and Cash Flows [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Comparability of Prior Year Financial Data | Items Affecting Comparability of Net Income and Cash Flows Refranchising (Gain) Loss The Refranchising (gain) loss by reportable segment is presented below. Given the size and volatility of refranchising initiatives, our chief operating decision maker ("CODM") does not consider the impact of Refranchising (gain) loss when assessing segment performance. As such, we do not allocate such gains and losses to our segments for performance reporting purposes. During the quarter ended September 30, 2017, we refranchised 209 restaurants. We received $395 million in gross proceeds and recorded $201 million of net, pre-tax refranchising gains related to these transactions. During the year to date ended September 30, 2017, we refranchised 574 restaurants. We received $716 million in gross proceeds and recorded $331 million of net, pre-tax refranchising gains related to these transactions. A summary of refranchising (gains) losses is as follows:
In connection with our refranchising initiatives, approximately 520 KFC restaurants in Thailand, Turkey, the U.S. and France have met the criteria and were classified as held-for-sale at the end of the third quarter. As a result of classifying these assets as held-for-sale and recording any related write-downs to fair value, depreciation expense was reduced versus what would have otherwise been recorded by $5 million during the quarter ended September 30, 2017. These depreciation reductions were not allocated to the division segments resulting in depreciation expense continuing to be recorded within our Divisional results at the rate at which it was prior to the held-for-sale classification. Our CODM does not consider the impact of these depreciation reductions when assessing segment performance. KFC U.S. Acceleration Agreement During 2015, we reached an agreement with our KFC U.S. franchisees that gave us brand marketing control as well as an accelerated path to expanded menu offerings, improved assets and enhanced customer experience. In connection with this agreement we are investing approximately $120 million from 2015 through 2018 primarily to fund new back-of-house equipment for franchisees and to provide incentives to accelerate franchisee store remodels. We recorded pre-tax charges of $4 million and less than $1 million for the quarters ended September 30, 2017 and 2016, respectively, for these investments. We recorded pre-tax charges of $12 million and $17 million for the years to date ended September 30, 2017 and 2016, respectively. These amounts were recorded primarily as Franchise and license expenses. We recorded total pre-tax charges of $98 million during the two year period ended December 31, 2016, and we currently expect a total pre-tax charge of approximately $15 million in 2017 for these investments. Due to their size and unique and long-term brand building nature, our CODM does not consider the impact of these investments when assessing segment performance. As such, these charges are not being allocated to the KFC Division segment operating results. In addition to the investments above, we agreed to fund $60 million of incremental system advertising from 2015 through 2018. During both of the quarters ended September 30, 2017 and 2016, we incurred $5 million in incremental system advertising expense. During both the years to date ended September 30, 2017 and 2016, we incurred $14 million in incremental system advertising expense. We funded approximately $30 million of such advertising during the two year period ended December 31, 2016. We currently expect to fund approximately $20 million of such advertising in 2017 and $10 million in 2018. All of these advertising amounts were recorded primarily in Franchise and license expenses and are included in the KFC Division segment operating results. YUM's Strategic Transformation Initiatives In October 2016, we announced our strategic transformation plans to drive global expansion of the KFC, Pizza Hut and Taco Bell brands ("YUM's Strategic Transformation Initiatives") following the then anticipated separation of our China business on October 31, 2016. Major features of the Company’s growth and transformation strategy involve being more focused on the development of our three brands, increasing our franchise ownership and creating a leaner, more efficient cost structure. During the quarters ended September 30, 2017 and 2016, we recognized pre-tax charges of $4 million and $30 million, respectively, related to these initiatives. During the years to date ended September 30, 2017 and 2016, we recognized pre-tax charges of $15 million and $34 million, respectively. These costs primarily related to severance and relocation costs that were recorded within G&A expenses. Due to the scope of the initiatives as well as their significance, our CODM does not consider the impact of these initiatives when assessing segment performance. As such, costs associated with the initiatives are not being allocated to any segment for performance reporting purposes. Pizza Hut U.S. Transformation Agreement In May 2017, we reached an agreement with Pizza Hut U.S. franchisees that will improve brand marketing alignment, accelerate enhancements in operations and technology and includes a permanent commitment to incremental advertising and digital and technology contributions by franchisees. In connection with this agreement, we anticipate investing approximately $90 million to upgrade restaurant equipment to improve operations, fund improvements in restaurant technology and enhance digital and e-commerce capabilities. We currently expect the majority of this investment will be split between 2017 and 2018. During the quarter and year to date ended September 30, 2017, we recorded pre-tax charges of $8 million and $20 million, respectively, within Franchise and license expenses or G&A expenses and capitalized $4 million of costs primarily related to digital and e-commerce initiatives. Due to their unique and long-term brand-building nature, our CODM does not consider the impact of these investments when assessing segment performance. As such, these investments are not being allocated to the Pizza Hut Division segment operating results. In addition to the investments above, we have agreed to fund incremental system advertising dollars of approximately $25 million in the second half of 2017 and $12.5 million in 2018. During the quarter ended September 30, 2017, we incurred $10 million in related incremental system advertising expense. These advertising amounts were recorded primarily in Franchise and license expenses and are included in Pizza Hut's segment operating results. Modifications of Share-based Compensation Awards In connection with the Separation, we modified certain share-based compensation awards held as part of our Executive Income Deferral ("EID") Plan in phantom shares of YUM Common Stock to provide one phantom Yum China share-based award for each outstanding phantom YUM share-based award. These Yum China awards may now be settled in cash, as opposed to stock, which requires recognition of the fair value of these awards each quarter within G&A expenses in our Condensed Consolidated Income Statement. During the quarter and year to date ended September 30, 2017, we recorded pre-tax charges related to these awards of less than $1 million and $18 million, respectively, due to appreciation in the market price of Yum China's stock. Given these charges were a direct result of the Separation, our CODM does not consider their impact when assessing segment performance. As such, these costs are not being allocated to any of our segment operating results. Impact of Change in Reporting Calendar As discussed in Note 1, we have changed our fiscal year from a year ending on the last Saturday of December to a year beginning on January 1 and ending on December 31 of each year commencing with the year ending December 31, 2017. We also removed the monthly or period reporting lags certain of our international subsidiaries historically used to report results. The impacts on our Financial Statements of retrospectively applying these changes are included below:
Except for a decrease in cash provided by financing activities of $674 million primarily attributable to the repurchase of Common Stock, the impacts to the Condensed Consolidated Statement of Cash Flows and Condensed Consolidated Balance Sheet as a result of the change in reporting calendar were not significant. Non-cash Pension Adjustment |
Other (Income) Expense |
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Other Income and Expenses [Abstract] | |
Other (Income) Expense | Other (Income) Expense |
Supplemental Balance Sheet Information |
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Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Accounts and Notes Receivable, net The Company’s receivables are primarily generated as a result of ongoing business relationships with our franchisees as a result of franchise and lease agreements. Trade receivables consisting of royalties from franchisees are generally due within 30 days of the period in which the corresponding sales occur and are classified as Accounts and notes receivable on our Condensed Consolidated Balance Sheets.
Property, Plant and Equipment, net
Assets held-for-sale at September 30, 2017 and December 31, 2016 total $160 million and $57 million, respectively, and are included in Prepaid expenses and other current assets on our Condensed Consolidated Balance Sheets. 2017 amounts include approximately 520 KFC restaurants in Thailand, Turkey, the U.S. and France. See Note 5. Reconciliation of Cash and cash equivalents for Condensed Consolidated Statements of Cash Flows
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes
Our effective tax rate is lower than the U.S. federal statutory rate of 35% primarily due to the majority of our income being earned outside the U.S. where tax rates are generally lower than the U.S. rate. |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Operating Segments | Reportable Operating Segments We identify our operating segments based on management responsibility. The following tables summarize Revenues and Operating Profit for each of our reportable operating segments:
(c) Amounts include charges associated with YUM's Strategic Transformation Initiatives of $4 million and $15 million for the quarter and year to date ended September 30, 2017, respectively, and $30 million and $34 million, respectively, for the quarter and year to date ended September 30, 2016. Year to date 2017 amounts also include non-cash charges associated with share-based compensation of $18 million. See Note 5.
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Benefits | Pension Benefits We sponsor qualified and supplemental (non-qualified) noncontributory defined benefit pension plans covering certain full-time salaried and hourly U.S. employees. The most significant of these plans, the YUM Retirement Plan (the "Plan"), is funded. We fund our other U.S. plans as benefits are paid. The Plan and our most significant non-qualified plan in the U.S. are closed to new salaried participants. The components of net periodic benefit cost associated with our significant U.S. pension plans are as follows:
(b) Reflects a non-cash, out-of-year charge related to the adjustment of certain historical deferred vested liability balances in the Plan during the first quarter of 2017 recorded in Other pension (income) expense. See Note 5.
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-term Borrowings and Long-term Debt | Short-term Borrowings and Long-term Debt
On March 21, 2017, KFC Holding Co., Pizza Hut Holdings, LLC, a limited liability company, and Taco Bell of America, LLC, a limited liability company, each of which is a wholly-owned subsidiary of the Company, as co-borrowers (the “Borrowers”) completed the repricing of the then existing $1.99 billion under the Term Loan B Facility pursuant to an amendment to the Credit Agreement (as defined in our 2016 Form 10-K). The amendment reduces the interest rate applicable to the Term Loan B Facility by 75 basis points to LIBOR plus 2.00%, with an additional rate stepdown to LIBOR plus 1.75% in the event the secured net leverage ratio (as defined in the Credit Agreement) is less than 1 to 1. As a result of repricing the Term Loan B Facility, $192 million in principal was assigned to new lenders or existing lenders electing to increase their holdings in the loan. The maturity date and all other material provisions under the Credit Agreement remained unchanged as a result of this amendment. On June 7, 2017, the Borrowers completed the repricing of the existing $500 million under the Term Loan A Facility and $1 billion under the Revolving Facility pursuant to an amendment to the Credit Agreement. The amendment reduced the interest rate applicable to the Term Loan A Facility and for borrowings under the Revolving Facility by 75 basis points. Subsequent to the repricing the interest rate ranges from 1.25% to 1.75% plus LIBOR or from 0.25% to 0.75% plus the Base Rate, at the Borrower’s election, based upon the total net leverage ratio of the Borrowers and the Specified Guarantors (as defined in the Credit Agreement). As a result of repricing the Term Loan A Facility, $146 million in principal was assigned to new lenders or existing lenders electing to increase their holdings in the loan. There was no change in lender participation in the Revolving Facility. The maturity date for the Term Loan A Facility and the Revolving Facility has been extended to June 7, 2022. Amortization payments on the Term Loan A Facility will begin one full fiscal quarter after the first anniversary of the amendment effective date, which delays the original amortization schedule by approximately one year. All other material provisions under the Credit Agreement remained unchanged. As a result of these repricing transactions, $23 million of fees were capitalized as debt issuance costs and are included primarily within Long-term debt on our Condensed Consolidated Balance Sheet as of September 30, 2017. During the year to date ended September 30, 2017, $8 million of fees and unamortized debt issuance costs were recognized within Interest expense, net due to these repricings. On June 15, 2017, the Borrowers issued $750 million aggregate principal amount of 4.75% Senior Notes due June 1, 2027 (the “2027 Notes”). Interest on the 2027 Notes is payable semi-annually in arrears on June 1 and December 1, beginning on December 1, 2017. The 2027 Notes are guaranteed on a senior unsecured basis by (i) the Company, (ii) the Specified Guarantors and (iii) by each of the Borrower’s and the Specified Guarantors’ domestic subsidiaries that guarantee the Borrower’s obligations under the Credit Agreement, except for any of the Company’s foreign subsidiaries. The indenture governing the Notes contains covenants and events of default that are customary for debt securities of this type. In connection with the issuance of the 2027 Notes, the Company paid debt issuance costs of $9 million. These issuance costs are primarily recorded as a reduction in Long-term debt on our Condensed Consolidated Balance Sheet. Subsequent to the quarter end, on October 16, 2017 Taco Bell Funding, LLC terminated the revolving financing facility of Series 2016-1 Senior Notes, Class A-1, which allowed for the borrowing of up to $100 million including the issuance of up to $50 million in letters of credit. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments We use derivative instruments to manage certain of our market risks related to fluctuations in interest rates and foreign currency exchange rates. Interest Rate Swaps We enter into interest rate swaps with the objective of reducing our exposure to interest rate risk for a portion of our variable-rate debt interest payments. At September 30, 2017 and December 31, 2016, our interest rate swaps outstanding had notional amounts of $1.55 billion. These interest rate swaps will expire in July 2021 and are designated cash flow hedges as the changes in the future cash flows of the swaps are expected to offset changes in expected future interest payments on the related variable-rate debt. There were no other interest rate swaps outstanding as of September 30, 2017. The effective portion of gains or losses on the interest rate swaps is reported as a component of Accumulated OCI ("AOCI") and reclassified into Interest expense, net in our Condensed Consolidated Statements of Income in the same period or periods during which the related hedged interest payments affect earnings. Gains or losses on the swaps representing hedge ineffectiveness are recognized in current earnings. Through September 30, 2017, the swaps were highly effective cash flow hedges and no ineffectiveness has been recorded. Foreign Currency Contracts We enter into foreign currency forward and swap contracts with the objective of reducing our exposure to earnings volatility arising from foreign currency fluctuations associated with certain foreign currency denominated intercompany receivables and payables. The notional amount, maturity date, and currency of these contracts match those of the underlying intercompany receivables or payables. These foreign currency contracts are designated cash flow hedges as the future cash flows of the contracts are expected to offset changes in intercompany receivables and payables due to foreign currency exchange rate fluctuations. The effective portion of gains or losses on the foreign currency contracts is reported as a component of AOCI. Amounts are reclassified from AOCI each quarter to offset foreign currency transaction gains or losses recorded within Other (income) expense when the related intercompany receivables and payables affect earnings due to their functional currency remeasurements. Gains or losses on the foreign currency contracts representing hedge ineffectiveness are recognized in current earnings. Through September 30, 2017, all foreign currency forward and swap contracts related to intercompany receivables and payables were highly effective cash flow hedges and no ineffectiveness has been recorded. As of September 30, 2017, and December 31, 2016, foreign currency forward and swap contracts outstanding related to intercompany receivables and payables had total notional amounts of $452 million and $437 million, respectively. As of September 30, 2017 these foreign currency forward and swap contracts have durations expiring as early as 2017 and as late as 2020. During the quarter ended September 30, 2017, we entered into foreign currency forward contracts with U.S. dollar notional amounts of $319 million to reduce the volatility of certain expected Thai Baht denominated proceeds related to our refranchising of KFC Thailand. These forward contracts are designated as a net investment hedge of our foreign operations to the extent that we have foreign currency denominated net assets. The mark-to-market adjustments associated with the portion of the forward contracts designated as a net investment hedge are recorded as a cumulative translation adjustment within AOCI. Forward contracts related to expected proceeds that exceed our net foreign investment do not qualify for hedge accounting. The mark-to-market adjustments associated with the portion of the forward contracts which exceeds our net foreign investment are recorded as Refranchising (gain) loss as the objective of the forwards are to provide an economic hedge related to expected foreign currency refranchising proceeds. These foreign currency forward contracts did not have a material impact on our Condensed Consolidated Financial Statements for the quarter ended September 30, 2017, and will mature in December 2017. As a result of the use of derivative instruments, the Company is exposed to risk that the counterparties will fail to meet their contractual obligations. To mitigate the counterparty credit risk, we only enter into contracts with carefully selected major financial institutions based upon their credit ratings and other factors, and continually assess the creditworthiness of counterparties. At September 30, 2017, all of the counterparties to our interest rate swaps and foreign currency contracts had investment grade ratings according to the three major ratings agencies. All counterparties have performed in accordance with their contractual obligations as of September 30, 2017. Gains and losses on derivative instruments designated as cash flow and net investment hedges recognized in OCI and reclassifications from AOCI into Net Income:
As of September 30, 2017, the estimated net gain included in AOCI related to our cash flow hedges that will be reclassified into earnings in the next 12 months is $5 million, based on current LIBOR interest rates. |
Fair Value Disclosures |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Disclosures As of September 30, 2017, the carrying values of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, short-term borrowings, accounts payable and borrowings under our Revolving Facility approximated their fair values because of the short-term nature of these instruments. The fair value of notes receivable net of allowances and lease guarantees less subsequent amortization approximates their carrying value. The following table presents the carrying value and estimated fair value of the Company’s debt obligations:
Recurring Fair Value Measurements The Company has interest rate swaps, foreign currency contracts and other investments, all of which are required to be measured at fair value on a recurring basis (See Note 12 for discussion regarding derivative instruments). The following table presents fair values for those assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the measurements fall. No transfers among the levels within the fair value hierarchy occurred during the quarter and year to date ended September 30, 2017.
The fair value of the Company’s foreign currency contracts and interest rate swaps were determined based on the present value of expected future cash flows considering the risks involved, including nonperformance risk, and using discount rates appropriate for the duration based upon observable inputs. The other investments include investments in mutual funds, which are used to offset fluctuations in deferred compensation liabilities that employees have chosen to invest in phantom shares of a stock index fund or bond index fund. The other investments' fair value is determined based on the closing market prices of the respective mutual funds as of September 30, 2017 and December 31, 2016. Non-Recurring Fair Value Measurements |
Guarantees, Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees, Commitments and Contingencies | Contingencies Lease Guarantees As a result of having assigned our interest in obligations under real estate leases as a condition to the refranchising of certain Company restaurants and guaranteeing certain other leases, we are frequently contingently liable on lease agreements. These leases have varying terms, the latest of which expires in 2065. As of September 30, 2017, the potential amount of undiscounted payments we could be required to make in the event of non-payment by the primary lessees was approximately $550 million. The present value of these potential payments discounted at our pre-tax cost of debt at September 30, 2017, was approximately $470 million. Our franchisees are the primary lessees under the vast majority of these leases. We generally have cross-default provisions with these franchisees that would put them in default of their franchise agreements in the event of non-payment under the leases. We believe these cross-default provisions significantly reduce the risk that we will be required to make payments under these leases. Accordingly, the liability recorded for our probable exposure under such leases as of September 30, 2017, was not material. Franchise Loan Pool and Equipment Guarantees We have agreed to provide financial support, if required, to a variable interest entity that operates a franchisee lending program used primarily to assist franchisees in the development of new restaurants or the upgrade of existing restaurants and, to a lesser extent, in connection with the Company’s refranchising programs in the U.S. We have determined that we are not required to consolidate this entity as we share the power to direct this entity’s lending activity with other parties. We have provided guarantees of 20% of the outstanding loans of the franchisee loan program. As such, at September 30, 2017, our guarantee exposure under this program is approximately $3 million based on total loans outstanding of $17 million. In addition to the guarantees described above, we have provided guarantees of up to approximately $43 million on behalf of franchisees for several financing programs related to specific initiatives. At September 30, 2017, our guarantee exposure under these financing programs is approximately $7 million based on total loans outstanding under these financing programs of $13 million. Legal Proceedings We are subject to various claims and contingencies related to lawsuits, real estate, environmental and other matters arising in the normal course of business. An accrual is recorded with respect to claims or contingencies for which a loss is determined to be probable and reasonably estimable. |
Earnings Per Common Share ("EPS") (Tables) |
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Earnings Per Common Share Table |
(a) These unexercised employee stock options and stock appreciation rights were not included in the computation of diluted EPS because to do so would have been antidilutive for the periods presented.
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Shareholders' Equity (Tables) |
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Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) ("OCI") are presented below.
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Repurchase Of Shares Of Common Stock | Under the authority of our Board of Directors, we repurchased shares of our Common Stock during the years to date ended September 30, 2017 and 2016 as indicated below. All amounts exclude applicable transaction fees.
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Note 4. Discontinued Operations Discontinued Operations (Tables) |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Balance Sheet [Table Text Block] | The following table presents the financial results of the Company’s discontinued operations:
(d) Includes a tax benefit of $233 million recognized in the third quarter of 2016 related to previously recorded losses associated with our former Little Sheep business. The tax benefit associated with these losses was able to be recognized as a result of legal entity restructuring in anticipation of the Separation.
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Items Affecting Comparability of Net Income and Cash Flows (Tables) |
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Sep. 30, 2017 |
Sep. 30, 2016 |
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Items Affecting Comparability of Net Income and Cash Flows [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of Change in Reporting Calendar [Table Text Block] | The impacts on our Financial Statements of retrospectively applying these changes are included below:
(a) Amount does not reconcile to our Condensed Consolidated Statements of Income for the quarter and year to date ended September 30, 2016 due to the impact of retrospectively adopting a new accounting standard on Benefit Costs of $1 million and $2 million, respectively. See Note 1.
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Facility Actions | A summary of refranchising (gains) losses is as follows:
(c) Net refranchising gains for Taco Bell Division for both the quarter and year to date ended September 30, 2017, relate to refranchising Taco Bell restaurants in the U.S.
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Supplemental Balance Sheet Information (Tables) |
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Supplemental Balance Sheet Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents [Table Text Block] |
(b) Primarily trust accounts related to our self-insurance program and cash balances required, to the extent necessary, to meet statutory minimum net worth requirements for legal entities which enter into U.S. franchise agreements.
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Accounts and Notes Receivable |
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Property, Plant and Equipment |
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Income Taxes (Tables) |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax And Effective Tax Rate |
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Reportable Operating Segments (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following tables summarize Revenues and Operating Profit for each of our reportable operating segments:
(c) Amounts include charges associated with YUM's Strategic Transformation Initiatives of $4 million and $15 million for the quarter and year to date ended September 30, 2017, respectively, and $30 million and $34 million, respectively, for the quarter and year to date ended September 30, 2016. Year to date 2017 amounts also include non-cash charges associated with share-based compensation of $18 million. See Note 5.
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Pension Benefits (Tables) |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost associated with our significant U.S. pension plans are as follows:
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Short-term Borrowings and Long-term Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-term Borrowings and Long-term Debt |
(b) We estimated the fair value of the YUM and Subsidiary Senior Unsecured Notes, Term Loan A Facility, and Term Loan B Facility using market quotes and calculations based on market rates.
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Derivative Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gains and losses on derivative instruments designated as cash flow hedges recognized in other comprehensive income and reclassifications from AOCI to earnings | Gains and losses on derivative instruments designated as cash flow and net investment hedges recognized in OCI and reclassifications from AOCI into Net Income:
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Fair Value Disclosures (Tables) |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis |
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Financial Statement Presentation (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Oct. 31, 2016 |
Sep. 30, 2017
USD ($)
restaurants
countries_and_territiories
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Sep. 30, 2016
USD ($)
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Sep. 30, 2017
USD ($)
restaurants
weeks
countries_and_territiories
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Sep. 30, 2016
USD ($)
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Number of Countries in which Entity Operates | countries_and_territiories | 137 | 137 | |||
Record date for distribution of Yum China common stock | Oct. 31, 2016 | ||||
Number of Stores | restaurants | 44,000 | 44,000 | |||
Percent Of System Units Located Outside United States | 59.00% | 59.00% | |||
Total Revenues | $ 1,436 | $ 1,518 | $ 4,301 | $ 4,470 | |
Operating Profit | 643 | 398 | $ 1,546 | 1,162 | |
Fiscal Period Weeks Standard - Historical Calendar | weeks | 12 | ||||
Fiscal Period Weeks Standard Fourth Quarter - Historical Calendar | weeks | 16 | ||||
Number of weeks in a standard year | weeks | 52 | ||||
Fiscal Period Weeks Standard Fourth Quarter of a Leap Year - Historical Calendar | weeks | 17 | ||||
Number of weeks in a leap year | weeks | 53 | ||||
KFC Global Division [Member] | |||||
Total Revenues | 794 | 787 | $ 2,296 | 2,302 | |
Operating Profit | 260 | 230 | 710 | 618 | |
Pizza Hut Global Division [Member] | |||||
Total Revenues | 203 | 251 | 659 | 799 | |
Operating Profit | 82 | 84 | 250 | 256 | |
Taco Bell Global Division [Member] | |||||
Total Revenues | 442 | 481 | 1,349 | 1,371 | |
Operating Profit | $ 147 | $ 143 | $ 440 | $ 400 |
Financial Statement Presentation (Details 2) |
9 Months Ended | 12 Months Ended |
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Sep. 30, 2017
operating_segments
weeks
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Dec. 31, 2016
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Fiscal Period Weeks Standard - Historical Calendar | weeks | 12 | |
Number of periods or months in advance that certain of our international businesses close their books | 1 | |
Fiscal Period Weeks Standard Fourth Quarter - Historical Calendar | weeks | 16 | |
Number of Reportable Segments | operating_segments | 3 | |
Fiscal period months standard first quarter | 2 | |
Fiscal period months standard second and third quarters | 3 | |
Fiscal period months standard fourth quarter | 4 |
Financial Statement Presentation (Details 3) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ 40 | $ 100 | |
Accounting Standards Update 2016-09 [Member] | |||
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ 40 | $ 100 | |
Excess Tax Benefit from Share-based Compensation, Operating Activities | $ 70 |
Earnings Per Common Share ("EPS") (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | $ 218 | $ 710 | ||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 422 | 630 | ||||||||||
Net Income - YUM! Brands, Inc. | $ 418 | $ 640 | $ 904 | $ 1,340 | ||||||||
Weighted-average common shares outstanding (for basic calculation) | 345,000,000 | 388,000,000 | 351,000,000 | 404,000,000 | ||||||||
Effect of dilutive share-based employee compensation | 8,000,000 | 7,000,000 | 7,000,000 | 6,000,000 | ||||||||
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) | 353,000,000 | 395,000,000 | 358,000,000 | 410,000,000 | ||||||||
Basic EPS | $ 1.21 | $ 1.65 | $ 2.58 | $ 3.32 | ||||||||
Diluted EPS | $ 1.18 | $ 1.62 | $ 2.52 | $ 3.27 | ||||||||
Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation | [1] | 1,900,000 | 1,700,000 | 2,300,000 | 6,000,000.0 | |||||||
Continuing Operations [Member] | ||||||||||||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | $ 418 | $ 218 | $ 904 | $ 710 | ||||||||
Basic EPS | $ 1.21 | $ 0.56 | $ 2.58 | $ 1.76 | ||||||||
Diluted EPS | $ 1.18 | $ 0.55 | $ 2.52 | $ 1.73 | ||||||||
Discontinued Operations [Member] | ||||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | $ 0 | $ 422 | [2] | $ 0 | $ 630 | [3] | ||||||
Basic EPS | $ 1.09 | $ 1.56 | ||||||||||
Diluted EPS | $ 1.07 | $ 1.54 | ||||||||||
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Shareholders' Equity (Details) - USD ($) shares in Thousands, $ in Millions |
9 Months Ended | |||||||
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Sep. 30, 2017 |
Sep. 30, 2016 |
|||||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||||||
Shares Repurchased | 19,110 | [1] | 53,768 | [2] | ||||
Dollar Value of Shares Repurchased | $ 1,327 | [1] | $ 4,421 | [2] | ||||
Remaining Dollar Value of Shares that may be Repurchased | 588 | |||||||
Value of share repurchases with trade dates prior to current reporting date but with settlement dates subsequent to the current reporting date. | $ 24 | $ 105 | ||||||
Number of shares repurchased with trade dates prior to current reporting date but with settlement dates subsequent to the current reporting date. | 300 | 1,200 | ||||||
Value of shares repurchased with trade dates prior to the current reporting quarter, but settlement dates in the current quarter | $ 45 | |||||||
Number of shares repurchased with trade dates prior to the current reporting quarter, but settlement dates in the current quarter | 700 | |||||||
December 2015 [Member] | ||||||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||||||
Shares Repurchased | 0 | 13,369 | ||||||
Dollar Value of Shares Repurchased | $ 0 | $ 933 | ||||||
Remaining Dollar Value of Shares that may be Repurchased | $ 0 | |||||||
March 2016 [Member] | ||||||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||||||
Shares Repurchased | 0 | 2,823 | ||||||
Dollar Value of Shares Repurchased | $ 0 | $ 228 | ||||||
Remaining Dollar Value of Shares that may be Repurchased | $ 0 | |||||||
May 2016 [Member] | ||||||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||||||
Shares Repurchased | 0 | 37,576 | ||||||
Dollar Value of Shares Repurchased | $ 0 | $ 3,260 | ||||||
Remaining Dollar Value of Shares that may be Repurchased | $ 0 | |||||||
November 2016 [Member] | ||||||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||||||
Shares Repurchased | 19,110 | 0 | ||||||
Dollar Value of Shares Repurchased | $ 1,327 | $ 0 | ||||||
Remaining Dollar Value of Shares that may be Repurchased | $ 588 | |||||||
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Shareholders' Equity (Details 2) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (454) | |||
Gains (losses) arising during the year classified into accumulated OCI, net of tax | 35 | |||
(Gains) losses reclassified from accumulated OCI, net of tax | 115 | |||
Other comprehensive income (loss), net of tax | $ 88 | $ (53) | 150 | $ (69) |
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | (304) | (304) | ||
Translation Adjustments and Gains (Losses) From Intra-Entity Transactions of a Long-Term Nature | ||||
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | (332) | |||
Gains (losses) arising during the year classified into accumulated OCI, net of tax | 90 | |||
(Gains) losses reclassified from accumulated OCI, net of tax | 37 | |||
Other comprehensive income (loss), net of tax | 127 | |||
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | (205) | (205) | ||
Pension and Post-Retirement Benefits | ||||
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | (127) | |||
Gains (losses) arising during the year classified into accumulated OCI, net of tax | (3) | |||
(Gains) losses reclassified from accumulated OCI, net of tax | 29 | |||
Other comprehensive income (loss), net of tax | 26 | |||
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | (101) | (101) | ||
Derivative Instruments | ||||
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | 5 | |||
Gains (losses) arising during the year classified into accumulated OCI, net of tax | (52) | |||
(Gains) losses reclassified from accumulated OCI, net of tax | 49 | |||
Other comprehensive income (loss), net of tax | (3) | |||
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | $ 2 | $ 2 |
Note 4. Discontinued Operations Discontinued Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Closures and impairment (income) expenses | $ (3) | $ (10) | |||||||||||||
Gain (Loss) on Disposition of Assets | $ 201 | $ 21 | 331 | 75 | |||||||||||
Interest Income (Expense), Net | (109) | (98) | (322) | (191) | |||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 422 | 630 | |||||||||||||
Discontinued Operations [Member] | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Costs associated with the spin-off of the China business | 7 | 25 | |||||||||||||
Company sales | 1,848 | [1] | 4,684 | [2] | |||||||||||
Franchise Revenue | 35 | [1] | 90 | [2] | |||||||||||
Cost of Goods Sold | (1,488) | [1] | (3,896) | [2] | |||||||||||
General and Administrative Expense | (111) | [1] | (297) | [2] | |||||||||||
Franchise Costs | (15) | [1] | (40) | [2] | |||||||||||
Closures and impairment (income) expenses | (5) | [1] | (36) | [2] | |||||||||||
Gain (Loss) on Disposition of Assets | 3 | [1] | 8 | [2] | |||||||||||
Other Income | 18 | [1] | 44 | [2] | |||||||||||
Interest Income (Expense), Net | 4 | [1] | 7 | [2] | |||||||||||
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | [3] | 289 | [1] | 564 | [2] | ||||||||||
Income tax provision | [4] | 143 | [1] | 76 | [2] | ||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 432 | [1] | 640 | [2] | |||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Noncontrolling Interest | (10) | [1] | (10) | [2] | |||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 0 | 422 | [1] | 0 | 630 | [2] | |||||||||
Continuing Operations [Member] | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Company sales | 871 | 992 | 2,682 | 2,951 | |||||||||||
Franchise Revenue | 565 | 526 | 1,619 | 1,519 | |||||||||||
Cost of Goods Sold | (717) | (831) | (2,223) | (2,475) | |||||||||||
General and Administrative Expense | (215) | (270) | (699) | (767) | |||||||||||
Franchise Costs | (61) | (40) | (161) | (145) | |||||||||||
Closures and impairment (income) expenses | (1) | (1) | (3) | (10) | |||||||||||
Gain (Loss) on Disposition of Assets | 201 | 21 | 331 | 75 | |||||||||||
Interest Income (Expense), Net | (109) | (98) | (322) | (191) | |||||||||||
Income tax provision | (106) | (83) | (278) | (263) | |||||||||||
CHINA | Continuing Operations [Member] | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Discontinued Operation, Amount of Continuing Cash Flows after Disposal | $ 63 | $ 167 | |||||||||||||
Restatement Adjustment [Member] | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 4 | (13) | |||||||||||||
Restatement Adjustment [Member] | CHINA | Continuing Operations [Member] | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Franchise Revenue | 64 | 189 | |||||||||||||
Value Added Tax | 4 | 12 | |||||||||||||
Little Sheep Group Limited [Member] | Discontinued Operations [Member] | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||
Income tax provision | $ (233) | $ (233) | |||||||||||||
|
Items Affecting Comparability of Net Income and Cash Flows (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
restaurants
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
restaurants
|
Sep. 30, 2016
USD ($)
|
||||||||||||||||||||||||||
Proceeds from refranchising of restaurants | $ 395 | $ 716 | $ 147 | ||||||||||||||||||||||||||
Refranchising (gain) loss | (201) | $ (21) | (331) | (75) | |||||||||||||||||||||||||
Interest Income (Expense), Net | (109) | (98) | (322) | (191) | |||||||||||||||||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 422 | 630 | |||||||||||||||||||||||||||
KFC Global Division [Member] | |||||||||||||||||||||||||||||
Refranchising (gain) loss | (50) | [1] | 2 | (8) | [1] | 3 | |||||||||||||||||||||||
Unallocated [Member] | |||||||||||||||||||||||||||||
Franchise Revenue | [2] | (3) | (1) | (3) | (2) | ||||||||||||||||||||||||
Refranchising (gain) loss | (201) | (21) | (331) | (75) | |||||||||||||||||||||||||
Cost of Goods Sold | [3] | 5 | 0 | 5 | 0 | ||||||||||||||||||||||||
General and Administrative Expense | [4] | (45) | (78) | (167) | (180) | ||||||||||||||||||||||||
Franchise Costs | [2] | (5) | 1 | (21) | (15) | ||||||||||||||||||||||||
Pizza Hut Global Division [Member] | |||||||||||||||||||||||||||||
Refranchising (gain) loss | 27 | [5] | (9) | 40 | [5] | (63) | |||||||||||||||||||||||
Taco Bell Global Division [Member] | |||||||||||||||||||||||||||||
Refranchising (gain) loss | (178) | [6] | (14) | $ (363) | [6] | (15) | |||||||||||||||||||||||
TURKEY | KFC Global Division [Member] | |||||||||||||||||||||||||||||
Refranchising (gain) loss | 51 | 51 | |||||||||||||||||||||||||||
KOREA, REPUBLIC OF | Pizza Hut Global Division [Member] | |||||||||||||||||||||||||||||
Refranchising (gain) loss | $ 25 | 25 | |||||||||||||||||||||||||||
Refranchising (gain) loss | |||||||||||||||||||||||||||||
Number of Restaurants Refranchised | restaurants | 209 | 574 | |||||||||||||||||||||||||||
Continuing Operations [Member] | |||||||||||||||||||||||||||||
Company sales | $ 871 | 992 | $ 2,682 | 2,951 | |||||||||||||||||||||||||
Franchise Revenue | 565 | 526 | 1,619 | 1,519 | |||||||||||||||||||||||||
Refranchising (gain) loss | (201) | (21) | (331) | (75) | |||||||||||||||||||||||||
Cost of Goods Sold | (717) | (831) | (2,223) | (2,475) | |||||||||||||||||||||||||
General and Administrative Expense | (215) | (270) | (699) | (767) | |||||||||||||||||||||||||
Franchise Costs | (61) | (40) | (161) | (145) | |||||||||||||||||||||||||
Interest Income (Expense), Net | (109) | (98) | (322) | (191) | |||||||||||||||||||||||||
Income Tax Expense (Benefit) | 106 | 83 | 278 | 263 | |||||||||||||||||||||||||
Continuing Operations [Member] | CHINA | |||||||||||||||||||||||||||||
Discontinued Operation, Amount of Continuing Cash Flows after Disposal | 63 | 167 | |||||||||||||||||||||||||||
Discontinued Operations [Member] | |||||||||||||||||||||||||||||
Company sales | 1,848 | [7] | 4,684 | [8] | |||||||||||||||||||||||||
Franchise Revenue | 35 | [7] | 90 | [8] | |||||||||||||||||||||||||
Refranchising (gain) loss | (3) | [7] | (8) | [8] | |||||||||||||||||||||||||
Cost of Goods Sold | (1,488) | [7] | (3,896) | [8] | |||||||||||||||||||||||||
General and Administrative Expense | (111) | [7] | (297) | [8] | |||||||||||||||||||||||||
Franchise Costs | (15) | [7] | (40) | [8] | |||||||||||||||||||||||||
Other Income | 18 | [7] | 44 | [8] | |||||||||||||||||||||||||
Interest Income (Expense), Net | 4 | [7] | 7 | [8] | |||||||||||||||||||||||||
Discontinued Operation, Income (Loss) from Discontinued Operation, before Income Tax | [9] | 289 | [7] | 564 | [8] | ||||||||||||||||||||||||
Income Tax Expense (Benefit) | [10] | (143) | [7] | (76) | [8] | ||||||||||||||||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | 432 | [7] | 640 | [8] | |||||||||||||||||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Noncontrolling Interest | (10) | [7] | (10) | [8] | |||||||||||||||||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | $ 0 | 422 | [7] | $ 0 | 630 | [8] | |||||||||||||||||||||||
Restatement Adjustment [Member] | |||||||||||||||||||||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 4 | (13) | |||||||||||||||||||||||||||
Restatement Adjustment [Member] | Continuing Operations [Member] | CHINA | |||||||||||||||||||||||||||||
Franchise Revenue | 64 | 189 | |||||||||||||||||||||||||||
Value Added Tax | $ 4 | 12 | |||||||||||||||||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | KFC Global Division [Member] | |||||||||||||||||||||||||||||
Number of Restaurants Held For Sale | restaurants | 520 | ||||||||||||||||||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Unallocated [Member] | |||||||||||||||||||||||||||||
Depreciation | $ 5 | 5 | |||||||||||||||||||||||||||
Other Comprehensive Income (Loss) [Member] | KOREA, REPUBLIC OF | Pizza Hut Global Division [Member] | |||||||||||||||||||||||||||||
Refranchising (gain) loss | $ 12 | $ 12 | |||||||||||||||||||||||||||
|
Items Affecting Comparability of Net Income and Cash Flows (Details 2) $ in Millions |
3 Months Ended | 9 Months Ended | 24 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
restaurants
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
|||||||
Gain (Loss) on Disposition of Assets | $ (201.0) | $ (21.0) | $ (331.0) | $ (75.0) | |||||||
KFC Global Division [Member] | |||||||||||
Gain (Loss) on Disposition of Assets | (50.0) | [1] | 2.0 | (8.0) | [1] | 3.0 | |||||
Unallocated [Member] | |||||||||||
Gain (Loss) on Disposition of Assets | (201.0) | (21.0) | (331.0) | (75.0) | |||||||
Pizza Hut Global Division [Member] | |||||||||||
Gain (Loss) on Disposition of Assets | 27.0 | [2] | (9.0) | 40.0 | [2] | (63.0) | |||||
General and Administrative Expense [Member] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | 1.0 | 18.0 | |||||||||
General and Administrative Expense [Member] | Unallocated [Member] | |||||||||||
Costs Associated with strategic initiatives | 4.0 | 30.0 | 15.0 | 34.0 | |||||||
Franchise and license expenses [Member] | Unallocated and General and administrative expenses [Domain] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | 4.0 | 1.0 | 12.0 | 17.0 | $ 98.0 | ||||||
Costs associated with PH U.S. Acceleration Agreement | 8.0 | 20.0 | |||||||||
Franchise and license expenses [Member] | 2015 to 2018 [Domain] | Unallocated and General and administrative expenses [Domain] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | 120.0 | ||||||||||
Franchise and license expenses [Member] | 2017 [Domain] | Unallocated and General and administrative expenses [Domain] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | 15.0 | ||||||||||
Franchise and license expenses [Member] | 2017 to 2018 [Domain] | Unallocated and General and administrative expenses [Domain] | |||||||||||
Costs associated with PH U.S. Acceleration Agreement | 90.0 | ||||||||||
Incremental Advertising [Domain] | KFC Global Division [Member] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | 5.0 | $ 5.0 | 14.0 | $ 30.0 | |||||||
Advertising [Domain] | 2015 to 2018 [Domain] | KFC Global Division [Member] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | 60.0 | ||||||||||
Advertising [Domain] | 2017 [Domain] | KFC Global Division [Member] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | 20.0 | ||||||||||
Advertising [Domain] | 2018 [Member] | KFC Global Division [Member] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | 10.0 | ||||||||||
Incremental Advertising [Domain] | Franchise and license expenses [Member] | Pizza Hut Global Division [Member] | |||||||||||
Costs associated with PH U.S. Acceleration Agreement | $ 10.0 | ||||||||||
Advertising [Domain] | 2017 [Domain] | Pizza Hut Global Division [Member] | |||||||||||
Costs associated with PH U.S. Acceleration Agreement | 25.0 | ||||||||||
Advertising [Domain] | 2018 [Member] | Pizza Hut Global Division [Member] | |||||||||||
Costs associated with PH U.S. Acceleration Agreement | 12.5 | ||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | KFC Global Division [Member] | |||||||||||
Number of Restaurants Held For Sale | restaurants | 520 | ||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Unallocated [Member] | |||||||||||
Depreciation | $ 5.0 | 5.0 | |||||||||
Property, Plant and Equipment [Member] | |||||||||||
Costs associated with PH U.S. Acceleration Agreement | $ 4.0 | ||||||||||
KOREA, REPUBLIC OF | Pizza Hut Global Division [Member] | |||||||||||
Gain (Loss) on Disposition of Assets | 25.0 | 25.0 | |||||||||
TURKEY | KFC Global Division [Member] | |||||||||||
Gain (Loss) on Disposition of Assets | 51.0 | 51.0 | |||||||||
Other Comprehensive Income (Loss) [Member] | KOREA, REPUBLIC OF | Pizza Hut Global Division [Member] | |||||||||||
Gain (Loss) on Disposition of Assets | $ 12.0 | $ 12.0 | |||||||||
|
Items Affecting Comparability of Net Income and Cash Flows (Details 3) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|||||||||
Total Revenues | $ 1,436 | $ 1,518 | $ 4,301 | $ 4,470 | ||||||||
Impact of retrospectively adopting new accounting guidance on Benefit Costs | 1 | 2 | ||||||||||
Operating Profit | 643 | 398 | 1,546 | 1,162 | ||||||||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | 218 | 710 | ||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 422 | 630 | ||||||||||
Net Income (Loss) Attributable to Parent | $ 418 | $ 640 | $ 904 | $ 1,340 | ||||||||
Diluted Earnings Per Common Share | $ 1.18 | $ 1.62 | $ 2.52 | $ 3.27 | ||||||||
Unallocated [Member] | ||||||||||||
Total Revenues | $ (3) | $ (1) | $ (3) | $ (2) | ||||||||
General and Administrative Expense [Member] | Unallocated [Member] | ||||||||||||
Costs Associated with strategic initiatives | 4 | 30 | 15 | 34 | ||||||||
Impact of change in reporting calendar [Member] | ||||||||||||
Net Cash Provided by (Used in) Financing Activities | 674 | |||||||||||
Discontinued Operations [Member] | ||||||||||||
Net Cash Provided by Operating Activities | 0 | 761 | ||||||||||
Net Cash Provided by (Used in) Investing Activities | 0 | (231) | ||||||||||
Net Cash Provided by (Used in) Financing Activities | 0 | (186) | ||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 0 | $ 422 | [1] | 0 | $ 630 | [2] | ||||||
Diluted Earnings Per Common Share | $ 1.07 | $ 1.54 | ||||||||||
Continuing Operations [Member] | ||||||||||||
Total Revenues | 1,436 | $ 1,518 | 4,301 | $ 4,470 | ||||||||
Net Cash Provided by Operating Activities | 718 | 936 | ||||||||||
Net Cash Provided by (Used in) Investing Activities | 489 | (127) | ||||||||||
Net Cash Provided by (Used in) Financing Activities | (1,029) | 442 | ||||||||||
Operating Profit | 643 | 398 | 1,546 | 1,162 | ||||||||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | $ 418 | $ 218 | $ 904 | $ 710 | ||||||||
Diluted Earnings Per Common Share | $ 1.18 | $ 0.55 | $ 2.52 | $ 1.73 | ||||||||
Excluding the impact of retrospectively adopting new accounting guidance [Member] | ||||||||||||
Operating Profit | [3] | $ 397 | $ 1,160 | |||||||||
Restatement Adjustment [Member] | ||||||||||||
Total Revenues | 17 | 128 | ||||||||||
Operating Profit | 25 | 24 | ||||||||||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | 14 | 1 | ||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 4 | (13) | ||||||||||
Net Income (Loss) Attributable to Parent | $ 18 | $ (12) | ||||||||||
Diluted Earnings Per Common Share | $ 0.06 | $ (0.01) | ||||||||||
Restatement Adjustment [Member] | Discontinued Operations [Member] | ||||||||||||
Diluted Earnings Per Common Share | 0.02 | (0.02) | ||||||||||
Restatement Adjustment [Member] | Continuing Operations [Member] | ||||||||||||
Diluted Earnings Per Common Share | $ 0.04 | $ 0.01 | ||||||||||
Scenario, Previously Reported [Member] | ||||||||||||
Total Revenues | $ 1,501 | $ 4,342 | ||||||||||
Operating Profit | 372 | 1,136 | ||||||||||
Income (Loss) from Continuing Operations, Net of Tax, Attributable to Parent | 204 | 709 | ||||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent | 418 | 643 | ||||||||||
Net Income (Loss) Attributable to Parent | $ 622 | $ 1,352 | ||||||||||
Diluted Earnings Per Common Share | $ 1.56 | $ 3.28 | ||||||||||
Scenario, Previously Reported [Member] | Discontinued Operations [Member] | ||||||||||||
Diluted Earnings Per Common Share | 1.05 | 1.56 | ||||||||||
Scenario, Previously Reported [Member] | Continuing Operations [Member] | ||||||||||||
Diluted Earnings Per Common Share | $ 0.51 | $ 1.72 | ||||||||||
|
Supplemental Balance Sheet Information (Details) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017
USD ($)
days
|
Dec. 31, 2016
USD ($)
|
|
Accounts and Notes Receivable [Abstract] | ||
Number of days from the period in which the corresponding sales occur that trade receivables are generally due | days | 30 | |
Accounts and notes receivable, gross | $ 378 | $ 384 |
Allowance for doubtful accounts | (20) | (14) |
Accounts and notes receivable, net | $ 358 | $ 370 |
Supplemental Balance Sheet Information (Details 2) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
restaurants
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
||||||
Cash and Cash Equivalents, at Carrying Value | $ 980 | $ 725 | |||||||
Property, plant and equipment, gross | 3,622 | 4,108 | |||||||
Accumulated depreciation and amortization | (1,761) | (1,995) | |||||||
Property, plant and equipment, net | 1,861 | 2,113 | |||||||
Prepaid expenses and other current assets [Member] | |||||||||
Restricted Cash and Cash Equivalents | [1] | 54 | 55 | ||||||
Assets held for sale | 160 | 57 | |||||||
Other Current Assets [Member] | |||||||||
Restricted Cash and Cash Equivalents | [2] | 17 | 51 | ||||||
Continuing Operations [Member] | |||||||||
Cash, Cash Equivalents and Restricted Cash as presented in the Consolidated Statement of Cash Flows | $ 1,051 | $ 1,594 | $ 831 | $ 351 | |||||
KFC Global Division [Member] | Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | |||||||||
Number of Restaurants Held For Sale | restaurants | 520 | ||||||||
Unallocated [Member] | Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | |||||||||
Depreciation | $ (5) | $ (5) | |||||||
|
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
US Federal Statutory Rate | 35.00% | 35.00% | ||
Income Tax And Effective Tax Rate [Abstract] | ||||
Effective tax rate | 20.20% | 27.50% | 23.50% | 27.00% |
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense | $ 40 | $ 100 |
Reportable Operating Segments (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Total Revenues | $ 1,436 | $ 1,518 | $ 4,301 | $ 4,470 | |||||||||||||||
Operating Profit | 643 | 398 | 1,546 | 1,162 | |||||||||||||||
Refranchising (gain) loss | (201) | (21) | (331) | (75) | |||||||||||||||
Other pension income (expense) | (10) | 1 | (42) | 2 | |||||||||||||||
Interest Income (Expense), Net | (109) | (98) | (322) | (191) | |||||||||||||||
Income Before Income Taxes | 524 | 301 | 1,182 | 973 | |||||||||||||||
KFC Global Division [Member] | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Total Revenues | 794 | 787 | 2,296 | 2,302 | |||||||||||||||
Operating Profit | 260 | 230 | 710 | 618 | |||||||||||||||
Refranchising (gain) loss | (50) | [1] | 2 | (8) | [1] | 3 | |||||||||||||
Pizza Hut Global Division [Member] | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Total Revenues | 203 | 251 | 659 | 799 | |||||||||||||||
Operating Profit | 82 | 84 | 250 | 256 | |||||||||||||||
Refranchising (gain) loss | 27 | [2] | (9) | 40 | [2] | (63) | |||||||||||||
Taco Bell Global Division [Member] | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Total Revenues | 442 | 481 | 1,349 | 1,371 | |||||||||||||||
Operating Profit | 147 | 143 | 440 | 400 | |||||||||||||||
Refranchising (gain) loss | (178) | [3] | (14) | (363) | [3] | (15) | |||||||||||||
Unallocated [Member] | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Total Revenues | (3) | (1) | (3) | (2) | |||||||||||||||
Cost of Goods Sold | [4] | (5) | 0 | (5) | 0 | ||||||||||||||
Refranchising (gain) loss | (201) | (21) | (331) | (75) | |||||||||||||||
Franchise Revenue | [5] | (3) | (1) | (3) | (2) | ||||||||||||||
Other Nonoperating Income (Expense) | 1 | (2) | 1 | 10 | |||||||||||||||
Franchise Costs | [5] | (5) | 1 | (21) | (15) | ||||||||||||||
General and Administrative Expense | [6] | 45 | 78 | 167 | 180 | ||||||||||||||
General and Administrative Expense [Member] | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | 1 | 18 | |||||||||||||||||
General and Administrative Expense [Member] | Unallocated [Member] | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Costs Associated with strategic initiatives | 4 | $ 30 | $ 15 | 34 | |||||||||||||||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Unallocated [Member] | |||||||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||||||
Depreciation | $ (5) | $ (5) | |||||||||||||||||
|
Pension Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Mar. 31, 2017 |
[2] | Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||
Payment for Pension Benefits | $ 47 | $ 7 | |||||||||
UNITED STATES | |||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||
Net periodic benefit cost | $ 4 | $ 4 | 12 | 12 | |||||||
Defined Benefit Plan, Cost of Providing Special and Contractual Termination Benefits | 2 | 0 | 2 | 0 | |||||||
UNITED STATES | General and Administrative Expense [Member] | |||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||
Service cost | 2 | 4 | 8 | 12 | |||||||
UNITED STATES | Other pension (income) expense [Member] | |||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||
Interest cost | 9 | 12 | 29 | 37 | |||||||
Expected return on plan assets | (10) | (15) | (33) | (45) | |||||||
Amortization of net loss | 1 | 1 | 4 | 4 | |||||||
Amortization of prior service cost | 2 | 2 | 4 | 4 | |||||||
Additional loss (gain) recognized due to settlements | [1] | 8 | (1) | (16) | (1) | ||||||
Pension data adjustment | $ 0 | $ 22 | $ 0 | $ 22 | [2] | $ 0 | |||||
|
Short-term Borrowings and Long-term Debt (Details) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017
USD ($)
Rate
|
Mar. 31, 2017
USD ($)
Rate
|
Sep. 30, 2016
USD ($)
|
Sep. 30, 2017
USD ($)
Rate
|
Sep. 30, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
|||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Capital lease obligations | $ 119 | $ 119 | $ 120 | |||||||||||
Long-term debt and capital less obligations, including current maturities and debt issuance costs | 9,961 | 9,961 | 9,204 | |||||||||||
Less Debt Issuance Costs, Noncurrent, Net | (99) | (99) | (79) | |||||||||||
Less current maturities of long-term debt | (383) | (383) | (66) | |||||||||||
Long-term debt | 9,479 | 9,479 | 9,059 | |||||||||||
Other | 0 | 0 | 8 | |||||||||||
Short-term Debt, including debt issuance costs | 383 | 383 | 74 | |||||||||||
Short-term borrowings | 372 | 372 | 66 | |||||||||||
Less current portion of debt issuance costs and discounts | (11) | (11) | (8) | |||||||||||
Interest Income (Expense), Net | (109) | $ (98) | (322) | $ (191) | ||||||||||
Interest Paid | 275 | $ 150 | ||||||||||||
Variable Funding Notes [Member] | Line of Credit [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 100 | 100 | ||||||||||||
Variable Funding Notes [Member] | Letter of Credit [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 50 | 50 | ||||||||||||
Unsecured Debt [Member] | Existing [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Senior Notes | 2,200 | 2,200 | 2,200 | |||||||||||
Unsecured Debt [Member] | Subsidiary Senior Unsecured Notes [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Senior Notes | [1] | $ 2,850 | 2,850 | 2,100 | ||||||||||
Unsecured Debt [Member] | Subsidiary Senior Unsecured Notes due 2027 [Domain] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Proceeds from Issuance of Debt | $ 750 | |||||||||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | Rate | 4.75% | 4.75% | ||||||||||||
Debt Instrument, Maturity Date | Jun. 15, 2027 | |||||||||||||
Debt Instrument, Frequency of Periodic Payment | semi-annually | |||||||||||||
Debt Issuance Costs, Gross | $ 9 | $ 9 | ||||||||||||
Secured Debt [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Senior Notes | 2,277 | 2,277 | 2,294 | |||||||||||
Secured Debt [Member] | Securitization Notes [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Senior Notes | [2] | 2,277 | 2,277 | 2,294 | ||||||||||
Secured Debt [Member] | Term Loan A Facility [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Long-term Debt | [1] | 500 | 500 | 500 | ||||||||||
Principal assigned to new lenders or existing lenders | 146 | |||||||||||||
Secured Debt [Member] | Term Loan A and B Facilities and Revolving Facility [Domain] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Debt Issuance Costs, Net | 23 | 23 | ||||||||||||
Secured Debt [Member] | Revolving Credit Facility [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Long-term Line of Credit | 35 | 35 | 0 | |||||||||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,000 | 1,000 | ||||||||||||
Secured Debt [Member] | Term Loan B Facility [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Long-term Debt | $ 1,980 | [1] | $ 1,990 | 1,980 | [1] | $ 1,990 | [1] | |||||||
Amount of basis points Term Loan B interest rate reduced by due to repricing | 75 | |||||||||||||
Principal assigned to new lenders or existing lenders | $ 192 | |||||||||||||
Interest Income (Expense), Net | $ 8 | |||||||||||||
Secured Debt [Member] | Term Loan A Facility and Revolving Facility [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Amount of basis points Term Loan A and Revolving Facility interest rate reduced by due to repricing | 75 | |||||||||||||
Debt Instrument, Maturity Date | Jun. 07, 2022 | |||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Secured Debt [Member] | Term Loan B Facility [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | Rate | 2.00% | |||||||||||||
Debt Instrument, Basis Spread on Variable Rate, Stepdown | Rate | 1.75% | |||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | Secured Debt [Member] | Term Loan A Facility and Revolving Facility [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | Rate | 1.25% | |||||||||||||
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | Secured Debt [Member] | Term Loan A Facility and Revolving Facility [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | Rate | 1.75% | |||||||||||||
Base Rate [Member] | Minimum [Member] | Secured Debt [Member] | Term Loan A Facility and Revolving Facility [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | Rate | 0.25% | |||||||||||||
Base Rate [Member] | Maximum [Member] | Secured Debt [Member] | Term Loan A Facility and Revolving Facility [Member] | ||||||||||||||
Short-term Borrowings and Long-term Debt [Line Items] | ||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | Rate | 0.75% | |||||||||||||
|
Derivative Instruments (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
||||||
Secured Debt [Member] | Term Loan B Facility [Member] | |||||||||
Long-term Debt | $ 1,980 | [1] | $ 1,980 | [1] | $ 1,990 | $ 1,990 | [1] | ||
Cash Flow Hedging [Member] | |||||||||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | 5 | ||||||||
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | |||||||||
Derivative, Maturity Date | Jul. 27, 2021 | ||||||||
Derivative, Notional Amount | $ 1,550 | 1,550 | |||||||
Gain (Loss) on Cash Flow Hedge Ineffectiveness, Net | 0 | ||||||||
Minimum [Member] | Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | |||||||||
Derivative, Maturity Date | Nov. 21, 2017 | ||||||||
Maximum [Member] | Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | |||||||||
Derivative, Maturity Date | Jun. 12, 2020 | ||||||||
THAILAND | Foreign Exchange Contract [Member] | |||||||||
Derivative, Maturity Date | Dec. 01, 2017 | ||||||||
Net Assets, Geographic Area [Member] | THAILAND | Foreign Exchange Contract [Member] | |||||||||
Derivative, Notional Amount | $ 319 | 319 | |||||||
Intercompany receivables and payables [Domain] | Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | |||||||||
Derivative, Notional Amount | $ 452 | $ 452 | $ 437 | ||||||
|
Derivative Instruments (Details 2) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ (17) | $ (14) | $ (57) | $ (20) |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 15 | 5 | 52 | 11 |
Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | (2) | 0 | (3) | 0 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | 2 | 1 | 5 | 1 |
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | 0 | (9) | (8) | (9) |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 0 | 0 | 2 | 0 |
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | (17) | (5) | (49) | (11) |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ 15 | $ 5 | $ 50 | $ 11 |
Fair Value Disclosures (Details) - USD ($) $ in Millions |
Sep. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
|||||||
---|---|---|---|---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Assets Held-for-sale, Long Lived, Fair Value Disclosure | $ 76 | |||||||||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | 0 | |||||||||
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | |||||||||
Unsecured Debt [Member] | Subsidiary Senior Unsecured Notes [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Senior Notes, Noncurrent | [1] | 2,850 | $ 2,100 | |||||||
Unsecured Debt [Member] | Subsidiary Senior Unsecured Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Long-term Debt, Fair Value | [1] | 3,045 | 2,175 | |||||||
Unsecured Debt [Member] | YUM Senior Unsecured Notes [Member] [Domain] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Senior Notes, Noncurrent | [1] | 2,200 | 2,200 | |||||||
Unsecured Debt [Member] | YUM Senior Unsecured Notes [Member] [Domain] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Long-term Debt, Fair Value | [1] | 2,290 | 2,216 | |||||||
Secured Debt [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Senior Notes, Noncurrent | 2,277 | 2,294 | ||||||||
Secured Debt [Member] | Securitization Notes [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Senior Notes, Noncurrent | [2] | 2,277 | 2,294 | |||||||
Secured Debt [Member] | Securitization Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Long-term Debt, Fair Value | [2] | 2,385 | 2,315 | |||||||
Secured Debt [Member] | Term Loan A Facility [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Debt obligations, excluding capital leases, carrying amount | [1] | 500 | 500 | |||||||
Secured Debt [Member] | Term Loan A Facility [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Long-term Debt, Fair Value | [1] | 502 | 501 | |||||||
Secured Debt [Member] | Term Loan B Facility [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Debt obligations, excluding capital leases, carrying amount | 1,980 | [1] | $ 1,990 | 1,990 | [1] | |||||
Secured Debt [Member] | Term Loan B Facility [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Long-term Debt, Fair Value | [1] | 1,996 | 2,016 | |||||||
Accounts Payable and Accrued Liabilities [Member] | Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Derivative Liability, Fair Value, Gross Liability | 0 | 3 | ||||||||
Other Assets [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Investments, Fair Value Disclosure | 27 | 24 | ||||||||
Other Assets [Member] | Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Derivative Liability, Fair Value, Gross Asset | 33 | 47 | ||||||||
Other Assets [Member] | Foreign Exchange Forward [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Derivative Liability, Fair Value, Gross Asset | 0 | 10 | ||||||||
Other Liabilities [Member] | Foreign Exchange Forward [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Derivative Liability, Fair Value, Gross Liability | 33 | 0 | ||||||||
Prepaid Expenses and Other Current Assets [Member] | Interest Rate Swap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Derivative Liability, Fair Value, Gross Asset | 4 | 0 | ||||||||
Prepaid Expenses and Other Current Assets [Member] | Foreign Exchange Forward [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||||
Derivative Liability, Fair Value, Gross Asset | $ 2 | $ 6 | ||||||||
|
Guarantees, Commitments and Contingencies (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2017
USD ($)
| |
Guarantor Obligations [Line Items] | |
Guarantor Exposure as percent of outstanding loans | 20.00% |
Franchise lending program guarantee | |
Guarantor Obligations [Line Items] | |
Guarantor Obligations, Maximum Exposure | $ 43 |
Total loans outstanding | 13 |
Guarantee of Indebtedness of Others [Member] | |
Guarantor Obligations [Line Items] | |
Guarantor Obligations, Current Exposure | $ 7 |
Property Lease Guarantee [Member] | |
Guarantor Obligations [Line Items] | |
Year longest lease expires | 2065 |
Guarantor Obligations, Maximum Exposure | $ 550 |
Guarantee Obligations Maximum Exposure At Present Value | 470 |
Franchise Loan Pool Guarantees [Member] | Guarantee of Indebtedness of Others [Member] | |
Guarantor Obligations [Line Items] | |
Guarantor Obligations, Current Exposure | 3 |
Total loans outstanding | $ 17 |
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