Yum! Brands (YUM) 10-Q 21 Apr 10 2010 Q1 Quarterly report Financial data

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	Mar. 20, 2010	Dec. 26, 2009
Current Assets
Cash and cash equivalents	$444	$353
Accounts and notes receivable, net	303	239
Inventories	113	122
Prepaid expenses and other current assets	303	314
Deferred income taxes	145	81
Advertising cooperative assets, restricted	96	99
Total Current Assets	1,404	1,208
Property, plant and equipment, net	3,766	3,899
Goodwill	623	640
Intangible assets, net	453	462
Investments in unconsolidated affiliates	124	144
Other assets	539	544
Deferred income taxes	232	251
Total Assets	7,141	7,148
Current Liabilities
Accounts payable and other current liabilities	1,363	1,413
Income taxes payable	81	82
Short-term borrowings	56	59
Advertising cooperative liabilities	96	99
Total Current Liabilities	1,596	1,653
Long-term debt	3,219	3,207
Other liabilities and deferred credits	1,209	1,174
Total Liabilities	6,024	6,034
Shareholders' Equity
Common stock, no par value, 750 shares authorized; 467 shares and 469 shares issued in 2010 and 2009, respectively	154	253
Retained earnings	1,138	996
Accumulated other comprehensive income (loss)	(249)	(224)
Total Shareholders' Equity - YUM! Brands, Inc.	1,043	1,025
Noncontrolling interest	74	89
Total Shareholders' Equity	1,117	1,114
Total Liabilities and Shareholders' Equity	$7,141	$7,148

PARENTHETICAL DATA FOR CONDENSE

PARENTHETICAL DATA FOR CONDENSED CONSOLIDATED BALANCE SHEETS
Share data in Millions	Mar. 20, 2010	Dec. 26, 2009
Shareholders' Equity (Deficit)
Common Stock, no par value	0	0
Common Stock, shares authorized	750	750
Common Stock, shares issued	467	469

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 20, 2010	3 Months Ended Mar. 21, 2009
Revenues
Company sales	$1,996	$1,918
Franchise and license fees and income	349	299
Total revenues	2,345	2,217
Company restaurants
Food and paper	625	611
Payroll and employee benefits	461	457
Occupancy and other operating expenses	570	542
Company restaurant expenses	1,656	1,610
General and administrative expenses	245	255
Franchise and license expenses	23	20
Closures and impairment (income) expenses	4	4
Refranchising (gain) loss	63	(14)
Other (income) expense	(10)	(9)
Total costs and expenses, net	1,981	1,866
Operating Profit	364	351
Interest expense, net	41	53
Income before income taxes	323	298
Income tax provision	78	79
Net Income - including noncontrolling interest	245	219
Net Income - noncontrolling interest	4	1
Net Income - YUM! Brands, Inc.	$241	$218
Basic Earnings Per Common Share	0.51	0.47
Diluted Earnings Per Common Share	0.5	0.46
Dividends Declared Per Common Share	0.21	$0

1_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions	3 Months Ended Mar. 20, 2010	3 Months Ended Mar. 21, 2009
Cash Flows - Operating Activities
Net Income - including noncontrolling interest	$245	$219
Depreciation and amortization	119	117
Closures and impairment (income) expenses	4	4
Refranchising (gain) loss	63	(14)
Contributions to defined benefit pension plans	(10)	(6)
Deferred income taxes	(74)	(5)
Equity income from investments in unconsolidated affiliates	(12)	(10)
Excess tax benefit from share-based compensation	(9)	(8)
Share-based compensation expense	13	13
Changes in accounts and notes receivable	(7)	18
Changes in inventories	5	19
Changes in prepaid expenses and other current assets	1	(1)
Changes in accounts payable and other current liabilities	(8)	(75)
Changes in income taxes payable	26	(1)
Other, net	36	27
Net Cash Provided by Operating Activities	392	297
Cash Flows - Investing Activities
Capital spending	(163)	(143)
Proceeds from refranchising of restaurants	42	36
Acquisition of restaurants from franchisees	0	(20)
Sales of property, plant and equipment	9	1
Other, net	(4)	(2)
Net Cash Used in Investing Activities	(116)	(128)
Cash Flows - Financing Activities
Repayments of long-term debt	(3)	(2)
Revolving credit facilities, three months or less, net	23	(43)
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	(3)	4
Repurchase shares of Common Stock	(132)	0
Excess tax benefit from share-based compensation	9	8
Employee stock option proceeds	17	21
Dividends paid on Common Stock	(99)	(87)
Other, net	(2)	0
Net Cash Used in Financing Activities	(190)	(99)
Effect of Exchange Rates on Cash and Cash Equivalents	5	3
Net Increase in Cash and Cash Equivalents	91	73
Cash and Cash Equivalents - Beginning of Period	353	216
Cash and Cash Equivalents - End of Period	$444	$289

Financial Statement Presentatio

Financial Statement Presentation
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [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 Generally Accepted Accounting Principles (GAAP) in the United States (U.S.) 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 26, 2009 (2009 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 2009 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:YUM Restaurants China (China Division), YUM Restaurants International (YRI or International Division) and United States.The China Division includes mainland China (China) and YRI includes the remainder of our international operations. In 2010 we began reporting information for our Thailand and KFC Taiwan businesses within our International Division as a result of changes to our management reporting structure.These businesses now report to the President of YRI, whereas previously, they reported to the President of the China Division.While this reporting change did not impact our consolidated results, segment information for previous periods has been restated to be consistent with the current period presentation throughout the Financial Statements and Notes thereto.For the quarter ended March 21, 2009 this restatement resulted in a decrease of $47 million and $3 million in Company sales and Operating Profit, respectively, for the China Division, with the offsetting increases to the International Division. 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. As discussed in Note 4, in the quarter ended June 13, 2009 we began consolidating the entity that operates the KFCs in Shanghai, China. Our preparation of the accom

Earnings Per Common Share

Earnings Per Common Share ("EPS")
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [Abstract]
Earnings Per Common Share (EPS)	Note 2 - Earnings Per Common Share (EPS) Quarter ended 3/20/10 3/21/09 Net Income YUM! Brands, Inc. $ 241 $ 218 Weighted-average common shares outstanding (for basiccalculation) 474 466 Effect of dilutive share-based employee compensation 11 13 Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) 485 479 Basic EPS $ 0.51 $ 0.47 Diluted EPS $ 0.50 $ 0.46 Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation(a) 8.5 15.3 (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
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [Abstract]
Shareholders' Equity	Note 3 - Shareholders Equity Under the authority of our Board of Directors, we repurchased shares of our Common Stock during the quarter ended March 20, 2010, as indicated below.All amounts exclude applicable transaction fees.We had no share repurchases in the quarter ended March 21, 2009. Shares Repurchased (thousands) Dollar Value of Shares Repurchased Authorization Date 2010 2010 September 2009 4,009 $ 137 March 2010 Total 4,009 $ 137 (a) (a) Amount includes the effect of $5 million in share repurchases (0.1 million shares) with trade dates prior to March 20, 2010 but with settlement dates subsequent to March 20, 2010. As of March 20, 2010, we have $163 million available (excluding applicable transaction fees) for future purchases of our outstanding Common Stock through September 2010 under our September 2009 share repurchase authorization. During March 2010, our Board of Directors authorized additional share repurchases through March 2011 of up to $300 million (excluding applicable transaction fees) of our outstanding Common Stock.No share repurchases were made pursuant to this authorization through March 20, 2010. Comprehensive income was as follows: Quarter ended 3/20/10 3/21/09 Net Income YUM! Brands, Inc. $ 241 $ 218 Foreign currency translation adjustment (31 ) (8 ) Changes in fair value of derivatives, net of tax 12 14 Reclassification of derivative (gains) losses to Net Income, net of tax (10 ) (6 ) Reclassification of pension actuarial losses to Net Income, net of tax 4 2 Total comprehensive income $ 216 $ 220 A reconciliation of the beginning and ending carrying amount of the equity attributable to noncontrolling interests is as follows: Noncontrolling interest as of December 26, 2009 $ 89 Net Income noncontrolling interest 4 Dividends declared (19 ) Noncontrolling interest as of March 20, 2010 $ 74

Items Affecting Comparability o

Items Affecting Comparability of Net Income and Cash Flows
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [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 2010 and 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 quarters ended March 20, 2010 and March 21, 2009, we recorded a pre-tax refranchising loss of $56 million and a pre-tax refranchising gain of $14 million, respectively, in the U.S.The loss recorded in the quarter ended March 20, 2010 is the net result of gains from 46 restaurants sold in the quarter and non-cash impairment charges related to our offers to refranchise restaurants in the U.S., principally a substantial portion of our Company operated KFC restaurants.See the Facility Actions section for further detail. In connection with our GA productivity initiatives and realignment of resources we recorded a pretax charge of $3 million and $4 million in the quarters ended March 20, 2010 and March 21, 2009, respectively.The unpaid current liability for the severance portion of these charges was $4 million as of March 20, 2010.Severance payments in the quarter ended March 20, 2010 totaled approximately $2 million. Additionally, the Company recognized a reduction to Franchise and license fees and income of $27 million pre-tax, in the quarter ended March 21, 2009, 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.The reimbursements were recorded as a reduction to franchise and license fees and income as we would not have provided the reimbursements absent the ongoing franchise relationship. 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. Consolidation of a Former Unconsolidated Affiliate in China On May 4, 2009 we acquired an additional 7% ownership in the entity that operates more than 200 KFCs in Shanghai, China for $12 million, increasing our ownership to 58%.The acquisition was driven by our desire to increase our management control over the entity and further integrate the business with the remainder of our KFC operations in China.Prior to our acquisition of this additional interest this entity was accounted for as an unconsolidated affiliate under the equity method of accounting due to the effective participation of our partners in the significant decisions of the entity that were made in the ordinary course of business.Concurrent with the acquisition we received additional rights in the governance of the entity, and thus we began consolidating the entity upon acquisition. Under the equity method of accounting, we previously reported our 51% share of the net income of the unconsolidated

New Accounting Pronouncements N

New Accounting Pronouncements Not Yet Adopted
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [Abstract]
New Accounting Pronouncemets Not Yet Adopted	Note 5 - Recently Adopted Accounting Pronouncements In January 2010, the Financial Accounting Standards Board (FASB) issued new guidance and clarifications for improving disclosures about fair value measurements.This guidance requires enhanced disclosures regarding transfers in and out of the levels within the fair value hierarchy.Separate disclosures are required for transfers in and out of Level 1 and 2 fair value measurements, and the reasons for the transfers must be disclosed.The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009. In June 2009, the FASB issued guidance on transfers and servicing of financial assets, requiring more information about transfers of financial assets, eliminating the qualifying special purpose entity concept, changing the requirements for derecognizing financial assets and requiring additional disclosures.The FASB also issued guidance for determining whether an entity is a variable interest entity, that modifies the methods allowed for determining the primary beneficiary of a variable interest entity, that requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity and that requires enhanced disclosures related to an enterprises involvement in a variable interest entity.The adoption of this guidance did not impact the Companys Condensed Consolidated Financial Statements for the quarter ended March 20, 2010.See Note 13 for additional information on an entity that operates a lending program on behalf of the Companys franchisees.

Other

Other (Income) Expense
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [Abstract]
Other (Income) Expense	Note 6 - Other (Income) Expense Quarter ended 3/20/10 3/21/09 Equity income from investments in unconsolidated affiliates $ (12 ) $ (10 ) Foreign exchange net (gain) loss and other 2 1 Other (income) expense $ (10 ) $ (9 )

Supplemental Balance Sheet Info

Supplemental Balance Sheet Information
	3 Months Ended Mar. 20, 2010
Supplemental Balance Sheet Information
Supplemental Balance Sheet Information - Accounts and Notes Receivable	Note 7A Supplemental Balance Sheet Information 3/20/10 12/26/09 Accounts and notes receivable $ 336 $ 274 Allowance for doubtful accounts (33 ) (35 ) Accounts and notes receivable, net $ 303 $ 239 Accounts and notes receivable consist primarily of amounts due from franchisees and licensees, including initial and continuing fees.The financial condition of these franchisees and licensees is largely dependent upon the underlying business trends of our concepts.This concentration of credit risk is mitigated, in part, by the large number of franchisees and licensees of each concept and the short-term nature of the franchisee and licensee fee receivables.
Supplemental Balance Sheet Information - Property, Plant and Equipment	Note 7B Supplemental Balance Sheet Information 3/20/10 12/26/09 Property, plant and equipment, gross $ 7,127 $ 7,247 Accumulated depreciation and amortization (3,361 ) (3,348 ) Property, plant and equipment, net $ 3,766 $ 3,899

Income Taxes

Income Taxes
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [Abstract]
Income Taxes	Note 8 Income Taxes Quarter ended 3/20/10 3/21/09 Income taxes $ 78 $ 79 Effective tax rate 24.1 % 26.5 % Our first quarter 2010 and 2009 effective tax rates were lower than the expected U.S. federal statutory rate of 35% primarily due to the majority of our income being earned outside of the U.S. where tax rates are generally lower than the U.S. rate. Our first quarter 2010 rate was lower than the prior year primarily due to the favorable impact of foreign and U.S. tax effects attributable to ongoing foreign operations, including a recent foreign law change.This favorability was partially offset by lapping 2009 adjustments to prior year foreign tax credit balances.

Reportable Operating Segments

Reportable Operating Segments
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [Abstract]
Reportable Operating Segments	Note 9 - Reportable Operating Segments We identify our operating segments based on management responsibility.The China Division includes mainland China and YRI includes the remainder of our international operations.See Note 1 regarding a 2010 change in segments impacting the China Division and YRI.In the U.S., we consider LJS and AW to be a single operating segment.We consider our KFC-U.S., Pizza Hut-U.S., Taco Bell-U.S. and LJS/AW-U.S. operating segments to be similar and therefore have aggregated them into a single reportable operating segment. The following tables summarize revenue and operating profit for each of our reportable operating segments: Quarter ended Revenues 3/20/10 3/21/09 China Division $ 708 $ 569 YRI(a) 704 629 U.S. 933 1,046 Unallocated Franchise and license fees and income(b)(c) (27 ) $ 2,345 $ 2,217 Quarter ended Operating Profit 3/20/10 3/21/09 China Division (d) $ 176 $ 128 YRI 141 126 United States 143 157 Unallocated Franchise and license fees and income(b)(c) (27 ) Unallocated and corporate expenses(c) (33 ) (46 ) Unallocated Other income (expense)(c) (1 ) Unallocated Refranchising gain (loss)(c) (63 ) 14 Operating Profit 364 351 Interest expense, net (41 ) (53 ) Income Before Income Taxes $ 323 $ 298 (a) Includes revenues of $257 million and $233 million for the quarters ended March 20, 2010 and March 21, 2009, respectively, for entities in the United Kingdom. (b) Amount consists of reimbursements to KFC franchisees for installation costs of ovens for the national launch of Kentucky Grilled Chicken (See Note 4). (c) Amounts have not been allocated to the China Division, YRI or U.S. segments for performance reporting purposes. (d) Includes equity income from investments in unconsolidated affiliates of $12 million and $10 million for the quarters ended March 20, 2010 and March 21, 2009, respectively.

Pension Benefits

Pension Benefits
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [Abstract]
Pension and Postretirement Medical 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 3/20/10 3/21/09 3/20/10 3/21/09 Service cost $ 6 $ 6 $ 1 $ 1 Interest cost 14 13 2 2 Expected return on plan assets (16 ) (13 ) (2 ) (1 ) Amortization of net loss 5 3 Net periodic benefit cost $ 9 $ 9 $ 1 $ 2 We made no contributions to the Plan during the quarter ended March 20, 2010 and no contributions to the Plan are anticipated in 2010.We made contributions of $9 million to our U.K. Plans during the quarter ended March 20, 2010.

Derivative Instruments

Derivative Instruments
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [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 March 20, 2010, our interest rate derivative instruments outstanding had notional amounts of $850 million and have been designated as fair value hedges of a portion of our debt.The critical terms of these swaps, including reset dates and floating rate indices match those of our underlying fixed-rate debt and 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 March 20, 2010, foreign currency forward contracts outstanding had a total notional amount of $319 million. The fair values of derivatives designated as hedging instruments as of March 20, 2010 and December 26, 2009 were: 3/20/10 12/26/09 Condensed Consolidated Balance Sheet Location Interest Rate Swaps - Asset $ 45 $ 44 Other assets Foreign Currency Forwards Asset 20 6 Prepaid expenses and other current assets Foreign Currency Forwards Liability (3) Accounts payable and other current liabilities Total $ 65 $ 47 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 $36 million to long-term debt at March 20, 2010.During the quarters ended March 20, 2010 and March 21, 2009, Interest expense, net was reduced by $7 million and $3 million, respectively, for recognized gains on these interest rate swaps. 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: Quarter ended 3/20/10 3/21/09 Gains (losses) recognized into OCI, net of tax $ 12 $ 14 Gains (losses) reclassified from Accumulated OCI into income, net of tax $ 10 $ 6 The gains/losses reclassified from Accumulated OCI into income were recognized as Other income (expense) in our Condensed Consolidated Statement of Income, largely offsetting foreign currency transaction losses/gains recorded when the related intercompany receivables and payables were adjusted for foreign currency fluctuations.Changes in fair values of the foreign

Fair Value Disclosures

Fair Value Disclosures
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [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 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 ended March 20, 2010. Fair Value Level 3/20/10 12/26/09 Foreign Currency Forwards, net 2 $ 20 $ 3 Interest Rate Swaps, net 2 45 44 Other Investments 1 13 13 Total $ 78 $ 60 The fair value of the Companys foreign currency forwards 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 are classified as trading securities and their fair value is determined based on the closing market prices of the respective mutual funds as of March 20, 2010 and December 26, 2009. As a result of our offers to refranchise groups of restaurants, we recorded non-cash impairment charges in the quarter ended March 20, 2010 to write down assets associated with these restaurants to their estimated fair values.The long-lived assets of these restaurant groups, consisting of approximately 650 restaurants, were deemed impaired on a held for use basis.The fair value measurements, which resulted in impairment charges of $77 million, were made using significant unobservable inputs (Level 3) and were an estimate of the sales prices we would anticipate receiving from a franchisee for the restaurant groups.These fair value determinations considered current market conditions, real estate values, trends in the U.S. business, prices for similar transactions in the restaurant industry and preliminary offers for the restaurant group to date. At March 20, 2010 the carrying values of cash and cash equivalents, accounts receivable and accounts payable 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 Companys debt obligations, excluding capital leases, were estimated to have a fair value of $3.3 billion, compared to their carrying value of $3 billion.We estimated the fair value of debt using market quotes and calculations based on market rates.

Guarantees, Commitments and Con

Guarantees, Commitments and Contingencies
	3 Months Ended Mar. 20, 2010
Notes to Financial Statements [Abstract]
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 2026.As of March 20, 2010, the potential amount of undiscounted payments we could be required to make in the event of non-payment by the primary lessee was approximately $500 million.The present value of these potential payments discounted at our pre-tax cost of debt at March 20, 2010 was approximately $425 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 March 20, 2010 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 and, to a lesser extent, in connection with the Companys historical refranchising programs.As part of this agreement, we have provided a partial guarantee of approximately $15 million and two letters of credit totaling approximately $23 million in support of the franchisee loan program at March 20, 2010.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 $61 million at March 20, 2010.We have determined that we are not required to consolidate this entity as we share the power to direct this entitys lending activity with other parties. In addition to the guarantee described above, YUM has provided guarantees of $39 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 $47 million at March 20, 2010. 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, product liabilityand 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 o

Document Information

Document Information
	3 Months Ended Mar. 20, 2010
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-20

Entity Information

Entity Information
	3 Months Ended Mar. 20, 2010	Apr. 15, 2010
Entity [Text Block]
Entity Registrant Name	YUM BRANDS INC
Entity Central Index Key	0001041061
Current Fiscal Year End Date	--12-25
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		467,439,483
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1