Yum! Brands (YUM) 10-Q 13 Oct 09 2009 Q3 Quarterly report Financial data

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	Sep. 05, 2009	Dec. 27, 2008
Current Assets
Cash and cash equivalents	$424	$216
Accounts and notes receivable, net	241	229
Inventories	116	143
Prepaid expenses and other current assets	287	172
Deferred income taxes	54	81
Advertising cooperative assets, restricted	84	110
Total Current Assets	1,206	951
Property plant and equipment, net	3,844	3,710
Goodwill	686	605
Intangible assets, net	447	335
Investments in unconsolidated affiliates	98	65
Other assets	549	561
Deferred income taxes	291	300
Total Assets	7,121	6,527
Current Liabilities
Accounts payable and other current liabilities	1,388	1,473
Income taxes payable	27	114
Short term borrowings	35	25
Advertising cooperative liabilities	84	110
Total Current Liabilities	1,534	1,722
Long-term debt	3,258	3,564
Other liabilities and deferred credits	1,340	1,335
Total Liabilities	6,132	6,621
Shareholders' Equity (Deficit)
Common stock, no par value, 750 shares authorized; 468 shares and 459 shares issued in 2009 and 2008, respectively	202	7
Retained earnings	979	303
Accumulated other comprehensive income (loss)	(279)	(418)
Total Shareholders' Equity (Deficit) - YUM! Brands, Inc.	902	(108)
Noncontrolling Interest	87	14
Total Shareholders' Equity (Deficit)	989	(94)
Total Liabilities and Shareholders' Equity (Deficit)	$7,121	$6,527

PARENTHETICAL DATA FOR CONSENSE

PARENTHETICAL DATA FOR CONSENSED CONSOLIDATED BALANCE SHEET (USD $)
Share data in Millions	Sep. 05, 2009	Dec. 27, 2008
Shareholders' Equity (Deficit)
Common Stock, no par value	0	0
Common Stock, shares authorized	750	750
Common Stock, shares issued	468	459

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Millions, except Per Share data	3 Months Ended Sep. 05, 2009	3 Months Ended Sep. 06, 2008	9 Months Ended Sep. 05, 2009	9 Months Ended Sep. 06, 2008
Revenues
Company sales	$2,432	$2,482	$6,502	$6,899
Franchise and license fees and income	346	360	969	1,015
Total revenues	2,778	2,842	7,471	7,914
Company restaurants
Food and paper	777	830	2,081	2,265
Payroll and employee benefits	523	575	1,485	1,682
Occupancy and other operating expenses	707	719	1,879	1,975
Company restaurant expenses	2,007	2,124	5,445	5,922
General and administrative expenses	276	305	812	898
Franchise and license expenses	29	25	74	63
Closures and impairment (income) expenses	5	3	31	9
Refranchising (gain) loss	4	(8)	(9)	16
Other (income) expense	(13)	(18)	(97)	(148)
Total costs and expenses, net	2,308	2,431	6,256	6,760
Operating Profit	470	411	1,215	1,154
Interest expense, net	42	47	138	152
Income before income taxes	428	364	1,077	1,002
Income tax provision	88	79	212	236
Net Income - including noncontrolling interest	340	285	865	766
Net Income - noncontrolling interest	6	3	10	6
Net Income - YUM! Brands, Inc.	$334	$282	$855	$760
Basic Earnings Per Common Share	0.71	0.6	1.82	1.59
Diluted Earnings Per Common Share	0.69	0.58	1.77	1.53
Dividends Declared Per Common Share	$0	$0	0.38	0.34

1_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions	9 Months Ended Sep. 05, 2009	9 Months Ended Sep. 06, 2008
Cash Flows - Operating Activities
Net Income - including noncontrolling interest	$865	$766
Depreciation and amortization	385	389
Closures and impairment (income) expenses	31	9
Refranchising (gain) loss	(9)	16
Contributions to defined benefit pension plans	(96)	(7)
Gain upon consolidation of a former unconsolidated affiliate in China	(68)	0
Gain on sale of interest in Japan unconsolidated affiliate	0	(100)
Deferred income taxes	59	(13)
Equity income from investments in unconsolidated affiliates	(29)	(33)
Distributions of income received from unconsolidated affiliates	29	40
Excess tax benefit from share-based compensation	(48)	(32)
Share-based compensation expense	39	44
Changes in accounts and notes receivable	1	(18)
Changes in inventories	34	(16)
Changes in prepaid expenses and other current assets	(26)	(27)
Changes in accounts payable and other current liabilities	2	23
Changes in income taxes payable	(87)	24
Other non-cash charges and credits, net	53	82
Net Cash Provided by Operating Activities	1,135	1,147
Cash Flows - Investing Activities
Capital spending	(505)	(583)
Proceeds from refranchising of restaurants	91	142
Acquisition of restaurants from franchisees	(24)	(9)
Acquisitions and investments	(75)	0
Sales of property, plant and equipment	16	58
Other, net	(8)	(8)
Net Cash Used in Investing Activities	(505)	(400)
Cash Flows - Financing Activities
Proceeds from long-term debt	499	375
Repayments of long-term debt	(522)	(260)
Revolving credit facilities, three months or less, net	(289)	305
Short-term borrowings by original maturity
More than three months - proceeds	0	0
More than three months - payments	0	0
Three months or less, net	5	(15)
Repurchase shares of Common Stock	0	(1,513)
Excess tax benefit from share-based compensation	48	32
Employee stock option proceeds	91	51
Dividends paid on Common Stock	(263)	(234)
Other, net	(8)	0
Net Cash Used in Financing Activities	(439)	(1,259)
Effect of Exchange Rates on Cash and Cash Equivalents	0	0
Net Increase (Decrease) in Cash and Cash Equivalents	191	(512)
Change in Cash and Cash Equivalents due to consolidation of entities in China	17	17
Cash and Cash Equivalents - Beginning of Period	216	789
Cash and Cash Equivalents - End of Period	$424	$294

Financial Statement Presentatio

Financial Statement Presentation
	9 Months Ended Sep. 05, 2009 USD / shares
Financial Statement Presentation [Abstract]
Financial Statement Presentation	Note 1 - 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 United States (U.S.) generally accepted accounting principles for complete financial statements.Therefore, we suggest that the accompanying Financial Statements be read in conjunction with the Consolidated Financial Statements and Notes thereto included in our annual report on Form 10-K for the fiscal year ended December 27, 2008 (2008 Form 10-K).Except as disclosed herein, there has been no material change in the information disclosed in the Notes to our Consolidated Financial Statements included in the 2008 Form 10-K. YUM! Brands, Inc. and Subsidiaries (collectively referred to as YUM or the Company) comprise the worldwide operations of KFC, Pizza Hut, Taco Bell, Long John Silvers (LJS) and AW All-American Food Restaurants (AW) (collectively the Concepts).References to YUM throughout these Notes to our Financial Statements are made using the first person notations of we, us or our. YUMs business consists of three reporting segments:United States, YUM Restaurants International (YRI or International Division) and YUM Restaurants China (China Division).The China Division includes mainland China (China), Thailand, and KFC Taiwan, and YRI includes the remainder of our international operations. Our fiscal year ends on the last Saturday in December and, as a result, a 53rd week is added every five or six years.The first three quarters of each fiscal year consist of 12 weeks and the fourth quarter consists of 16 weeks in fiscal years with 52 weeks and 17 weeks in fiscal years with 53 weeks.Our subsidiaries operate on similar fiscal calendars except that certain international subsidiaries operate on a monthly calendar, with two months in the first quarter, three months in the second and third quarters and four months in the fourth quarter.All of our international businesses except China close one period or one month earlier to facilitate consolidated reporting. In 2008, we began consolidating an entity in which we have a majority ownership interest and that operates the KFCs in Beijing, China.Additionally, as discussed in Note 4, in the quarter ended June 13, 2009 we began consolidating the entity that operates the KFCs in Shanghai, China.The increases in cash related to the consolidation of these entities cash balances ($17 million in both instances) are presented as a single line item on our Condensed Consolidated Statement of Cash Flows. Our preparation of the accompanying Financial Statements in conformity with generally accepted accounting principles in the United States of America 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

Earnings Per Common Share

Earnings Per Common Share ("EPS")
	9 Months Ended Sep. 05, 2009 USD / shares
Earnings Per Common Share (EPS) [Abstract]
Earnings Per Common Share (EPS)	Note 2 - Earnings Per Common Share (EPS) Quarter ended Year to date 9/5/09 9/6/08 9/5/09 9/6/08 Net Income YUM! Brands, Inc. $ 334 $ 282 $ 855 $ 760 Weighted-average common shares outstanding (for basic calculation) 472 470 469 479 Effect of dilutive share-based employee compensation 13 17 13 17 Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) 485 487 482 496 Basic EPS $ 0.71 $ 0.60 $ 1.82 $ 1.59 Diluted EPS $ 0.69 $ 0.58 $ 1.77 $ 1.53 Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation(a) 12.3 6.5 13.8 5.8 (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.

Shareholders' Equity

Shareholders' Equity
	9 Months Ended Sep. 05, 2009 USD / shares
Shareholders' Equity [Abstract]
Shareholders' Equity	Note 3 - Shareholders Equity Under the authority of our Board of Directors, we repurchased shares of our Common Stock during the year to date ended September 6, 2008, as indicated below.All amounts exclude applicable transaction fees.We had no share repurchases in the year to date ended September 5, 2009. Shares Repurchased (thousands) Dollar Value of Shares Repurchased Authorization Date 2009 2008 2009 2008 January 2008 19,584 $ $ 687 October 2007 22,875 813 Total 42,459 $ $ 1,500 (a) (a) Amount excludes the effect of $13 million in share repurchases (0.4 million shares) with trade dates prior to the 2007 fiscal year end but cash settlement dates subsequent to the 2007 fiscal year end. On September 30, 2009, our Board of Directors authorized share repurchases through September 30, 2010 of up to $300 million (excluding applicable transaction fees) of our outstanding Common Stock. Comprehensive income was as follows: Quarter ended Year to date 9/5/09 9/6/08 9/5/09 9/6/08 Net Income YUM! Brands, Inc. $ 334 $ 282 $ 855 $ 760 Foreign currency translation adjustment arising during the period 61 (18 ) 126 10 Foreign currency translation adjustment included in Net Income (25 ) Changes in fair value of derivatives, net of tax (15 ) 2 (10 ) 12 Reclassification of derivative (gains) losses to Net Income, net of tax 12 (4 ) 15 (13 ) Reclassification of pension actuarial losses to Net Income, net of tax 3 1 8 4 Total comprehensive income $ 395 $ 263 $ 994 $ 748

Items Affecting Comparability o

Items Affecting Comparability of Net Income and Cash Flows
	9 Months Ended Sep. 05, 2009 USD / shares
Items Affecting Comparability of Net Income and Cash Flows [Abstract]
Items Affecting Comparability of Net Income and Cash Flows	Note 4 - Items Affecting Comparability of Net Income and Cash Flows U.S. Business Transformation As part of our plan to transform our U.S. business we took several measures in 2008 and are taking similar measures in 2009 (the U.S. business transformation measures).These measures include: expansion of our U.S. refranchising; charges relating to General and Administrative (GA) productivity initiatives and realignment of resources (primarily severance and early retirement costs); and investments in our U.S. Brands made on behalf of our franchisees such as equipment purchases. In the quarter and year to date ended September 5, 2009, we recorded pre-tax gains of $8 million and $23 million, respectively, from refranchising in the U.S.In the quarter and year to date ended September 6, 2008, we recorded a pre-tax gain of $3 million and a pre-tax loss of $22 million, respectively, from refranchising in the U.S.The refranchising losses recorded for the year to date ended September 6, 2008 were primarily due to our refranchising of stores or groups of stores, principally at Long John Silvers, for prices less than their recorded carrying value. In connection with our GA productivity initiatives and realignment of resources we recorded no charges in the quarter ended September 5, 2009 and a pre-tax charge of $1 million in the quarter ended September 6, 2008, and pre-tax charges of $9 million and $8 million in the years to date ended September 5, 2009 and September 6, 2008, respectively.The unpaid current liability for the severance portion of these charges was $8 million as of September 5, 2009.Severance payments in the quarter and year to date ended September 5, 2009 totaled approximately $6 million and $22 million, respectively. Additionally, the Company recognized a reduction to Franchise and license fees and income of $1 million and $32 million, pre-tax, in the quarter and year to date ended September 5, 2009, respectively, related to investments in our U.S. Brands.These investments reflect our reimbursements to KFC franchisees for installation costs of ovens for the national launch of Kentucky Grilled Chicken.This reduction to Franchise and license fees and income was recorded in accordance with Emerging Issues Task Force (EITF) Issue No. 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendors Products).In the quarter and year to date ended September 6, 2008, the Company recognized pre-tax expense of $2 million and $5 million, respectively, related to investments in our U.S. Brands. We are not including the impacts of these U.S. business transformation measures in our U.S. segment for performance reporting purposes as we do not believe they are indicative of our ongoing operations. Acquisition of Interest in Little Sheep On March 24, 2009, our China Division paid approximately $44 million to purchase 14% of the outstanding common shares of Little Sheep Group Limited (Little Sheep).On June 2, 2009, we purchased an additional 6% of Little Sheep for $19 million and obtained Board of Directors representation.Accordingly, in the quarter ended September 5, 2009 we began reporting

Recently Adopted Accounting Pro

Recently Adopted Accounting Pronouncements
	9 Months Ended Sep. 05, 2009 USD / shares
Recently Adopted Accounting Pronouncements [Abstract]
Recently Adopted Accounting Pronouncements	Note 5 - Recently Adopted Accounting Pronouncements In February 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. 157-2, Effective Date of FASB Statement No. 157 which permitted a one-year deferral for the implementation of SFAS No. 157, Fair Value Measurements (SFAS 157) with regard to non-financial assets and liabilities that are not recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).We adopted SFAS 157 at the beginning of 2009 for such non-financial assets and liabilities, which, for the Company, primarily includes long-lived assets, goodwill and intangibles.The fair values of such non-financial assets and liabilities measured at fair value during 2009and remaining on our Condensed Consolidated Balance Sheet at September 5, 2009 are included in the required disclosures in Note 12.The full adoption of SFAS 157 did not materially impact the measurement of these disclosed amounts. In December 2007, the FASB issued SFAS 141R.SFAS 141R, which is broader in scope than SFAS 141, applies to all transactions or other events in which an entity obtains control of one or more businesses, and requires that the acquisition method be used for such transactions or events.SFAS 141R, with limited exceptions, will require an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date.This will result in acquisition related costs and anticipated restructuring costs related to the acquisition being recognized separately from the business combination.The Company adopted SFAS 141R on December 28, 2008.Adoption of SFAS 141R did not significantly impact the accounting for the Companys acquisitions of franchise restaurants in the quarter or year to date ended September 5, 2009.SFAS 141R did require that our existing equity interest in the entity that operates the KFCs in Shanghai, China be remeasured at its fair value upon our acquisition of additional ownership in and consolidation of the entity (See Note 4). In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements (SFAS 160).SFAS 160 amends Accounting Research Bulletin No. 51, Consolidated Financial Statements, and changed the accounting and reporting for noncontrolling interests, which are the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent.SFAS 160 was effective for the quarter ended March 21, 2009 for the Company and requires retroactive adoption of its presentation and disclosure requirements.SFAS 160 requires us to report net income attributable to the noncontrolling interests separately on the face of our Condensed Consolidated Statements of Income.Additionally, SFAS 160 requires that the portion of equity in the entity not attributable to the Company be reported within equity, separately from the Companys equity on the Condensed Consolidated Balance Sheets. In 2008, the Company consolidated one entity for which a third party owned a noncontrolling interest.This entity operates t

New Accounting Pronouncements N

New Accounting Pronouncements Not Yet Adopted
	9 Months Ended Sep. 05, 2009 USD / shares
New Accounting Pronouncements Not Yet Adopted [Abstract]
New Accounting Pronouncemets Not Yet Adopted	Note 6 - New Accounting Pronouncements Not Yet Adopted In December 2008, the FASB issued FSP No. FAS 132(R)-1 (FSP FAS 132(R)-1), Employers Disclosures about Postretirement Benefit Plan Assets, which expands the disclosure requirements about plan assets for defined benefit pension plans and postretirement plans.FSP FAS 132(R)-1 is effective for financial statements issued for fiscal years ending after December 15, 2009, the year ending December 26, 2009 for the Company. In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets an amendment of FASB Statement No. 140 (SFAS 166) and SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (SFAS 167).SFAS 166 will require more information about transfers of financial assets, eliminates the qualifying special purpose entity (QSPE) concept, changes the requirements for derecognizing financial assets and requires additional disclosures.SFAS 167 amends FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities regarding certain guidance for determining whether an entity is a variable interest entity and modifies the methods allowed for determining the primary beneficiary of a variable interest entity.In addition, SFAS 167 requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity and enhanced disclosures related to an enterprises involvement in a variable interest entity.We are evaluating whether the adoption of SFAS 166 and SFAS 167 will require the Company to consolidate an entity that provides loans used primarily to assist franchisees in the development of new restaurants and, to a lesser extent, in connection with the Companys historical refranchising programs.If required, the consolidation of this entity would increase the Companys long-term debt by approximately $52 million with a corresponding increase to receivables.See Note 13 for additional information regarding this franchisee loan program.SFAS 166 and SFAS 167 are effective for the first annual reporting period that begins after November 15, 2009, our fiscal 2010. In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162 (SFAS 168).SFAS 168 provides for the FASB Accounting Standards CodificationTM (the Codification) to become the single official source of authoritative, nongovernmental U.S. generally accepted accounting principles (GAAP).The Codification did not change GAAP but reorganizes the literature.SFAS 168 is effective for interim and annual periods ending after September 15, 2009, the year ending December 26, 2009 for the Company.

Other

Other (Income) Expense
	9 Months Ended Sep. 05, 2009 USD / shares
Other (Income) Expense [Abstract]
Other (Income) Expense	Note 7 - Other (Income) Expense Quarter ended Year to date 9/5/09 9/6/08 9/5/09 9/6/08 Equity income from investments in unconsolidated affiliates $ (12 ) $ (13 ) $ (29 ) $ (33 ) Gain upon consolidation of former unconsolidated affiliate in China(a) (68 ) Gain upon sale of investment in unconsolidated affiliate(b) (100 ) Foreign exchange net (gain) loss and other (1 ) (5 ) (15 ) Other (income) expense $ (13 ) $ (18 ) $ (97 ) $ (148 ) (a) See Note 4 for further discussion of the consolidation of a former unconsolidated affiliate in China. (b) Reflects the gain recognized on the sale of our interest in our unconsolidated affiliate in Japan. See our 2008 Form 10-K for further discussion of this transaction.

Supplemental Balance Sheet Info

Supplemental Balance Sheet Information Accounts and Notes Receivable
	9 Months Ended Sep. 05, 2009 USD / shares
Supplemental Balance Sheet Information - Accounts and Notes Receivable [Abstract]
Supplemental Balance Sheet Information - Accounts and Notes Receivable	Note 8A Supplemental Balance Sheet Information 9/5/09 12/27/08 Accounts and notes receivable $ 271 $ 252 Allowance for doubtful accounts (30 ) (23 ) Accounts and notes receivable, net $ 241 $ 229

2_Supplemental Balance Sheet In

Supplemental Balance Sheet Information Property, Plant and Equipment
	9 Months Ended Sep. 05, 2009 USD / shares
Supplemental Balance Sheet Information - Property, Plant and Equipment [Abstract]
Supplemental Balance Sheet Information - Property, Plant and Equipment	Note 8B Supplemental Balance Sheet Information 9/5/09 12/27/08 Property, plant and equipment, gross $ 7,213 $ 6,897 Accumulated depreciation and amortization (3,369 ) (3,187 ) Property, plant and equipment, net $ 3,844 $ 3,710

Reportable Operating Segments

Reportable Operating Segments
	9 Months Ended Sep. 05, 2009 USD / shares
Reportable Operating Segments [Abstract]
Reportable Operating Segments	Note 9 - Reportable Operating Segments In connection with our U.S. business transformation measures our reported segment results began reflecting increased allocations of certain expenses in 2009 that were previously reported in Unallocated and corporate expenses.While our consolidated results were not impacted, we believe the revised allocation better aligns costs with accountability of our segment managers.These revised allocations are being used by our Chairman and Chief Executive Officer, in his role as chief operating decision maker, in his assessment of operating performance.We have restated segment information for the quarter and year to date ended September 6, 2008 to be consistent with the current period presentation.This resulted in a $13 million decrease in Unallocated and corporate expense and increases in U.S. and YRI GA expense of $12 million and $1 million, respectively, for the quarter ended September 6, 2008, and a $40 million decrease in Unallocated and corporate GA expense and increases in U.S. and YRI GA expense of $36 million and $4 million, respectively, for the year to date ended September 6, 2008. The following tables summarize revenue and operating profit for each of our reportable operating segments: Quarter ended Year to date Revenues 9/5/09 9/6/08 9/5/09 9/6/08 United States $ 1,055 $ 1,215 $ 3,200 $ 3,633 YRI(a) 661 753 1,830 2,184 China Division (b) 1,063 874 2,473 2,097 Unallocated Franchise and license fees and income(c)(f) (1 ) (32 ) $ 2,778 $ 2,842 $ 7,471 $ 7,914 Quarter ended Year to date Operating Profit 9/5/09 9/6/08 9/5/09 9/6/08 United States $ 171 $ 146 $ 497 $ 447 YRI 119 137 342 393 China Division (d) 217 165 453 360 Unallocated Franchise and license fees and income(c)(f) (1 ) (32 ) Unallocated and corporate expenses(f) (33 ) (50 ) (122 ) (145 ) Unallocated Other income (expense)(e)(f) 1 5 68 115 Unallocated Refranchising gain (loss)(f) (4 ) 8 9 (16 ) Operating Profit 470 411 1,215 1,154 Interest expense, net (42 ) (47 ) (138 ) (152 ) Income Before Income Taxes $ 428 $ 364 $ 1,077 $ 1,002 (a) Includes revenues of $268 million and $300 million for the quarters ended September 5, 2009 and September 6, 2008, respectively, and $737 million and $891 million for the years to date ended September 5, 2009 and September 6, 2008, respectively, for entities in the United Kingdom. (b) Includes revenues of approximately $994 million and $803 million for th

Pension Benefits

Pension Benefits
	9 Months Ended Sep. 05, 2009 USD / shares
Pension Benefits [Abstract]
Pension Benefits	Note 10 - Pension Benefits We sponsor 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 while benefits from the other U.S. plan are paid by the Company as incurred.During 2001, the plans covering our U.S. salaried employees were amended such that any salaried employee hired or rehired by YUM after September 30, 2001 is not eligible to participate in those plans.We also sponsor various defined benefit pension plans covering certain of our non-U.S. employees, the most significant of which are in the United Kingdom (U.K.).Our plans in the U.K. have previously been amended such that new employees are not eligible to participate in these plans. The components of net periodic benefit cost associated with our U.S. pension plans and significant International pension plans are as follows: U.S. Pension Plans International Pension Plans Quarter ended Quarter ended 9/5/09 9/6/08 9/5/09 9/6/08 Service cost $ 6 $ 7 $ 2 $ 2 Interest cost 13 13 2 2 Expected return on plan assets (13 ) (12 ) (1 ) (2 ) Amortization of net loss 3 1 Net periodic benefit cost $ 9 $ 9 $ 3 $ 2 U.S. Pension Plans International Pension Plans Year to date Year to date 9/5/09 9/6/08 9/5/09 9/6/08 Service cost $ 18 $ 21 $ 4 $ 6 Interest cost 40 37 5 6 Expected return on plan assets (40 ) (36 ) (4 ) (7 ) Amortization of net loss 9 4 1 Net periodic benefit cost $ 27 $ 26 $ 6 $ 5 We made contributions of $84 million and $8 million to the Plan and our U.K. plans, respectively, during the year to date ended September 5, 2009.We anticipate making additional discretionary contributions of $150 to $200 million to our pension plans during the fourth quarter of 2009.

Derivative Instruments

Derivative Instruments
	9 Months Ended Sep. 05, 2009 USD / shares
Derivative Instruments [Abstract]
Derivative Instruments	Note 11 - Derivative Instruments The Company is exposed to certain market risks relating to its ongoing business operations.The primary market risks managed by using derivative instruments are interest rate risk and cash flow volatility arising from foreign currency fluctuations. We enter into interest rate swaps with the objective of reducing our exposure to interest rate risk and lowering interest expense for a portion of our fixed-rate debt.At September 5, 2009, our interest rate derivative instruments outstanding had notional amounts of $775 million.These swaps have reset dates and floating rate indices which match those of our underlying fixed-rate debt and have been designated as fair value hedges of a portion of that debt.As the swaps qualify for the short-cut method under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, no ineffectiveness has been recorded. We enter into foreign currency forward contracts with the objective of reducing our exposure to cash flow volatility arising from foreign currency fluctuations associated with certain foreign currency denominated intercompany short-term receivables and payables.The notional amount, maturity date, and currency of these contracts match those of the underlying receivables or payables.For those foreign currency exchange forward contracts that we have designated as cash flow hedges, we measure ineffectiveness by comparing the cumulative change in the forward contract with the cumulative change in the hedged item.At September 5, 2009, foreign currency forward contracts outstanding had a total notional amount of $505 million. The fair values of derivatives designated as hedging instruments under SFAS 133 at the quarter ended September 5, 2009 were: Fair Value Condensed Consolidated Balance Sheet Location Interest Rate Swaps $ 46 Other assets Foreign Currency Forwards Asset 10 Prepaid expenses and other current assets Foreign Currency Forwards Liability (16) Accounts payable and other current liabilities Total $ 40 The unrealized gains associated with our interest rate swaps that hedge the interest rate risk for a portion of our debt have been reported as an addition of $41 million to long-term debt at September 5, 2009.During the quarter and year to date ended September 5, 2009, Interest expense, net was reduced by $5 million and $23 million, respectively, for recognized gains on these interest rate swaps, including $13 million in the year to date ended September 5, 2009 related to the settlement of interest rate swaps that were hedging the 2012 Senior Unsecured Notes that were extinguished (See Note 4). For our foreign currency forward contracts the following effective portions of gains and losses were recognized into Other Comprehensive Income (OCI) and reclassified into income from OCI in the quarter and year to date ended September 5, 2009. Quarter ended Year to date Gains (losses) recognized into OCI, net of tax $ (15) $ (10) Gains (losses) reclassified from Accumulated OCI into income, net of tax

Fair Value Measurements

Fair Value Measurements
	9 Months Ended Sep. 05, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 12 - Fair Value Disclosures The following table presents the fair values for those assets and liabilities measured at fair value on a recurring basis as of September 5, 2009: Fair Value Measurements at September 5, 2009 Description Total Level 1(a) Level 2(b) Level 3(c) Foreign Currency Forwards, net $ (6 ) $ $ (6 ) $ Interest Rate Swaps, net 46 46 Other Investments(d) 12 12 Total $ 52 $ 12 $ 40 $ The following table presents the fair values for those assets and liabilities measured at fair value during 2009 on a non-recurring basis, and remaining on our Condensed Consolidated Balance Sheet as of September 5, 2009.Total losses include lossesrecognized from allnon-recurring fair value measurements during the quarter and year to date ended September 5, 2009: Fair Value Measurements Using Total Losses Description As of September 5, 2009 Level 1(a) Level 2(b) Level 3(c) Quarter ended Year to date Long-lived assets held for use $ 31 $ $ $ 31 $ 10 $ 34 (a) Inputs based upon quoted prices in active markets for identical assets. (b) Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. (c) Inputs that are unobservable for the asset. (d) 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. Long-lived assets (primarily property, plant and equipment and allocated intangible assets subject to amortization) ofrestaurants or groups of restaurants that are currently operating and have not been offered for refranchise are reviewed for impairment semi-annually or whenever events or changes in circumstances indicate that the carrying amount of the restaurants assets may not be recoverable. Additionally, we test for impairment when we have offered to refranchise a restaurant or groups of restaurants for a price less than their carrying value but do not believe the restaurants have met the criteria to be classified as held for sale.Any such impairment is recorded at the offer date and is classified as refranchising loss.Our impairment of long-lived assets policy is fully described in our 2008 Form 10-K. Long-lived assets held for use presented in the table above include restaurants or groups of restaurants that were impaired as a result of our semi-annual impairment review or restaurants not meeting held for sale criteria that have been offered for sale at a price less than their carrying value during the quarter and year to date ended September 5, 2009.All $10 million in impairment charges shown in the table above for the quarter ended September 5, 2009 was included in Refranchising (gain) loss in the Condensed Consolidated Statements of Income.For

Guarantees, Commitments and Con

Guarantees, Commitments and Contingencies
	9 Months Ended Sep. 05, 2009 USD / shares
Guarantees, Commitments and Contingencies [Abstract]
Guarantees, Commitments and Contingencies	Note 13 - Guarantees, Commitments and Contingencies Lease Guarantees As a result of (a) assigning our interest in obligations under real estate leases as a condition to the refranchising of certain Company restaurants; (b) contributing certain Company restaurants to unconsolidated affiliates; and (c) guaranteeing certain other leases, we are frequently contingently liable on lease agreements.These leases have varying terms, the latest of which expires in 2031.As of September 5, 2009, the potential amount of undiscounted payments we could be required to make in the event of non-payment by the primary lessee was approximately $450 million.The present value of these potential payments discounted at our pre-tax cost of debt at September 5, 2009 was approximately $375 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 agreement in the event of non-payment under the lease.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 at September 5, 2009 was not material. Franchise Loan Pool and Equipment Guarantees We have provided a partial guarantee of approximately $15 million of a franchisee loan program used primarily to assist franchisees in the development of new restaurants and, to a lesser extent, in connection with the Companys historical refranchising programs at September 5, 2009.We have also provided two letters of credit totaling approximately $23 million in support of the franchisee loan program.One such letter of credit could be used if we fail to meet our obligations under our guarantee.The other letter of credit could be used, in certain circumstances, to fund our participation in the funding of the franchisee loan program.The total loans outstanding under the loan pool were approximately $52 million at September 5, 2009. In addition to the guarantee described above, YUM has provided guarantees of approximately $42 million on behalf of franchisees for several equipment financing programs related to specific initiatives, the most significant of which was the purchase of ovens by KFC franchisees for the launch of Kentucky Grilled Chicken.The total loans outstanding under these equipment financing programs were approximately $56 million at September 5, 2009. Insurance Programs We are self-insured for a substantial portion of our current and prior years coverage including workers compensation, employment practices liability, general liability, automobile liability and property losses (collectively, property and casualty losses).To mitigate the cost of our exposures for certain property and casualty losses, we make annual decisions to self-insure the risks of loss up to defined maximum per occurrence retentions on a line by line basis or to combine certain lines of coverage into one loss pool with a single self-insured aggregate retention.The Company then purchases insurance coverage, up to a certain limit, for

Document Information

Document Information
	9 Months Ended Sep. 05, 2009 USD / shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-05

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 05, 2009	Jun. 14, 2008
Entity Information [Line Items]
Entity Registrant Name	YUM BRANDS INC
Entity Central Index Key	0001041061
Current Fiscal Year End Date	--12-26
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		$17,938,014,271
Entity Common Stock, Shares Outstanding	467,702,275