Document_and_Entity_Informatio
Document and Entity Information (USD $) | 3 Months Ended | ||
Mar. 22, 2014 | Apr. 22, 2014 | Jun. 15, 2013 | |
Document And Entity Information [Abstract] | ' | ' | ' |
Entity Registrant Name | 'YUM BRANDS INC | ' | ' |
Entity Central Index Key | '0001041061 | ' | ' |
Current Fiscal Year End Date | '--03-22 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $31,700,000,000 |
Entity Common Stock, Shares Outstanding | ' | 441,380,366 | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q1 | ' | ' |
Document Type | '10-Q | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 22-Mar-14 | ' | ' |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 |
Revenues | ' | ' |
Company sales | $2,292 | $2,099 |
Franchise and license fees and income | 432 | 436 |
Total revenues | 2,724 | 2,535 |
Costs and Expenses, Net | ' | ' |
Food and paper | 725 | 680 |
Payroll and employee benefits | 493 | 490 |
Occupancy and other operating expenses | 633 | 596 |
Company restaurant expenses | 1,851 | 1,766 |
General and administrative expenses | 271 | 273 |
Franchise and license expenses | 33 | 30 |
Closures and impairment (income) expenses | 3 | 4 |
Refranchising (gain) loss | -3 | -17 |
Other (income) expense | -2 | -8 |
Total costs and expenses, net | 2,153 | 2,048 |
Operating Profit | 571 | 487 |
Interest expense, net | 33 | 31 |
Income Before Income Taxes | 538 | 456 |
Income tax provision | 139 | 120 |
Net Income – including noncontrolling interests | 399 | 336 |
Net Income (loss) - noncontrolling interests | 0 | -1 |
Net Income - YUM! Brands, Inc. | $399 | $337 |
Basic Earnings Per Common Share | $0.89 | $0.74 |
Diluted Earnings Per Common Share | $0.87 | $0.72 |
Dividends Declared Per Common Share | $0.37 | $0.34 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 |
Net Income - including noncontrolling interests | $399 | $336 |
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature | ' | ' |
Adjustments and gains (losses) arising during the year | -37 | -5 |
Reclassification of currency translation adjustments into Net income | 0 | 0 |
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature, before tax | -37 | -5 |
Tax (expense) benefit | -2 | 7 |
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature, net of tax | -39 | 2 |
Changes in pension and post-retirement benefits | ' | ' |
Unrealized gains (losses) arising during the year | -6 | -8 |
Reclassification of (gains) losses into Net Income | 8 | 25 |
Changes in pension and post-retirement benefits, before tax | 2 | 17 |
Tax (expense) benefit | -1 | -8 |
Changes in pension and post-retirement benefits, net of tax | 1 | 9 |
Changes in derivative instruments | ' | ' |
Unrealized gains (losses) arising during the year | 5 | 1 |
Reclassification of (gains) losses into Net Income | -4 | 0 |
Changes in derivative instruments, before tax | 1 | 1 |
Tax (expense) benefit | 0 | 0 |
Changes in derivative instruments, net of tax | 1 | 1 |
Other comprehensive income (loss), net of tax | -37 | 12 |
Comprehensive Income - including noncontrolling interests | 362 | 348 |
Comprehensive Income (loss) - noncontrolling interests | 0 | -1 |
Comprehensive Income - YUM! Brands, Inc. | $362 | $349 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 |
Cash Flows - Operating Activities | ' | ' |
Net Income - including noncontrolling interests | $399 | $336 |
Depreciation and amortization | 140 | 130 |
Closures and impairment (income) expenses | 3 | 4 |
Refranchising (gain) loss | -3 | -17 |
Deferred income taxes | -11 | -6 |
Equity income from investments in unconsolidated affiliates | -13 | -7 |
Excess tax benefits from share-based compensation | -13 | -11 |
Share-based compensation expense | 12 | 9 |
Changes in accounts and notes receivable | 23 | 9 |
Changes in inventories | 33 | 26 |
Changes in prepaid expenses and other current assets | -2 | -8 |
Changes in accounts payable and other current liabilities | -20 | -81 |
Changes in income taxes payable | 53 | 18 |
Other, net | -31 | -1 |
Net Cash Provided by Operating Activities | 570 | 401 |
Cash Flows - Investing Activities | ' | ' |
Capital spending | -172 | -237 |
Proceeds from refranchising of restaurants | 2 | 81 |
Acquisitions | -2 | 0 |
Other, net | 4 | 3 |
Net Cash Used in Investing Activities | -168 | -153 |
Cash Flows - Financing Activities | ' | ' |
Repayments of long-term debt | -2 | -1 |
Short-term borrowings by original maturity | ' | ' |
More than three months - proceeds | 0 | 9 |
More than three months - payments | 0 | 0 |
Three months or less, net | 0 | 0 |
Revolving credit facilities, three months or less, net | 35 | 0 |
Repurchase shares of Common Stock | -124 | -98 |
Excess tax benefits from share-based compensation | 13 | 11 |
Employee stock option proceeds | 11 | 5 |
Dividends paid on Common Stock | -164 | -151 |
Other, net | -6 | -34 |
Net Cash Used in Financing Activities | -237 | -259 |
Effect of Exchange Rates on Cash and Cash Equivalents | -4 | -3 |
Net Increase (Decrease) in Cash and Cash Equivalents | 161 | -14 |
Cash and Cash Equivalents - Beginning of Period | 573 | 776 |
Cash and Cash Equivalents - End of Period | $734 | $762 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 22, 2014 | Dec. 28, 2013 |
In Millions, except Per Share data, unless otherwise specified | ||
Current Assets | ' | ' |
Cash and cash equivalents | $734 | $573 |
Accounts and notes receivable, net | 354 | 319 |
Inventories | 258 | 294 |
Prepaid expenses and other current assets | 238 | 286 |
Deferred income taxes | 127 | 123 |
Advertising cooperative assets, restricted | 98 | 96 |
Total Current Assets | 1,809 | 1,691 |
Property, plant and equipment, net | 4,378 | 4,459 |
Goodwill | 881 | 889 |
Intangible assets, net | 633 | 638 |
Investments in unconsolidated affiliates | 40 | 53 |
Other assets | 563 | 566 |
Deferred income taxes | 401 | 399 |
Total Assets | 8,705 | 8,695 |
Current Liabilities | ' | ' |
Accounts payable and other current liabilities | 1,825 | 1,929 |
Income taxes payable | 157 | 169 |
Short-term borrowings | 70 | 71 |
Advertising cooperative liabilities | 98 | 96 |
Total Current Liabilities | 2,150 | 2,265 |
Long-term debt | 2,949 | 2,918 |
Other liabilities and deferred credits | 1,233 | 1,244 |
Total Liabilities | 6,332 | 6,427 |
Redeemable noncontrolling interest | 38 | 39 |
Shareholders' Equity | ' | ' |
Common stock, no par value, 750 shares authorized; 442 and 443 shares issued in 2014 and 2013, respectively | 0 | 0 |
Common Stock, No Par Value | $0 | $0 |
Common Stock, Shares Authorized | 750 | 750 |
Common Stock, Shares, Issued | 442 | 443 |
Retained earnings | 2,248 | 2,102 |
Accumulated other comprehensive income (loss) | 27 | 64 |
Total Shareholders' Equity - YUM! Brands, Inc. | 2,275 | 2,166 |
Noncontrolling interests | 60 | 63 |
Total Shareholders' Equity | 2,335 | 2,229 |
Total Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity | $8,705 | $8,695 |
Financial_Statement_Presentati
Financial Statement Presentation | 3 Months Ended | |
Mar. 22, 2014 | ||
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 28, 2013 (“2013 Form 10-K”). Except as disclosed herein, there has been no material change in the information disclosed in our Consolidated Financial Statements included in the 2013 Form 10-K. | ||
YUM! Brands, Inc. and Subsidiaries (collectively referred to herein as “YUM” or the “Company”) comprises primarily the worldwide operations of KFC, Pizza Hut and Taco Bell (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.” | ||
YUM now consists of five reporting segments: | ||
• | YUM China (“China” or “China Division”) includes all operations in mainland China. | |
• | YUM India ("India" or "India Division") includes our operations in India, Bangladesh, Nepal and Sri Lanka. | |
• | The KFC Division includes all operations of the KFC concept outside of China Division and India Division. | |
• | The Pizza Hut Division includes all operations of the Pizza Hut concept outside of China Division and India Division. | |
• | The Taco Bell Division includes all operations of the Taco Bell concept outside of India Division. | |
Previously, our reporting segments consisted of YUM Restaurants International, the United States, China and India. In the first quarter of 2014 we changed our management reporting structure to align our global operations outside of China and India by brand. As a result, our YUM Restaurants International and United States reporting segments were combined, and we began reporting this information by three new reporting segments: KFC Division, Pizza Hut Division and Taco Bell Division. China and India remain separate reporting segments. This new structure is designed to drive greater global brand focus, enabling us to more effectively share know-how and accelerate growth. While our consolidated results have not been impacted, we have restated our comparable segment information for consistent presentation. | ||
YUM’s fiscal year ends on the last Saturday in December. The first three quarters of each fiscal year consist of 12 weeks and the fourth quarter consists of 16 weeks. Our subsidiaries operate on similar fiscal calendars except that China, India and certain other 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. International businesses within our KFC, Pizza Hut and Taco Bell divisions close approximately one month earlier to facilitate consolidated reporting. | ||
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 2013 Form 10-K, our financial position as of March 22, 2014, and the results of our operations, comprehensive income and cash flows for the quarters ended March 22, 2014 and March 23, 2013. 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. | ||
We have reclassified certain items in the Financial Statements for the prior periods to be comparable with the classification for the quarter ended March 22, 2014. These reclassifications had no effect on previously reported Net Income - YUM! Brands, Inc. |
Earnings_Per_Common_Share_EPS
Earnings Per Common Share ("EPS") | 3 Months Ended | |||||||||
Mar. 22, 2014 | ||||||||||
Earnings Per Share [Abstract] | ' | |||||||||
Earnings Per Common Share (EPS) | ' | |||||||||
Earnings Per Common Share (“EPS”) | ||||||||||
Quarter ended | ||||||||||
2014 | 2013 | |||||||||
Net Income – YUM! Brands, Inc. | $ | 399 | $ | 337 | ||||||
Weighted-average common shares outstanding (for basic calculation) | 447 | 455 | ||||||||
Effect of dilutive share-based employee compensation | 9 | 10 | ||||||||
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) | 456 | 465 | ||||||||
Basic EPS | $ | 0.89 | $ | 0.74 | ||||||
Diluted EPS | $ | 0.87 | $ | 0.72 | ||||||
Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation(a) | 6.1 | 4.5 | ||||||||
(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. 22, 2014 | |||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||||||||||
Shareholders' Equity | ' | ||||||||||||||||||||||||
Shareholders’ Equity | |||||||||||||||||||||||||
Under the authority of our Board of Directors, we repurchased shares of our Common Stock during the quarters ended as indicated below. All amounts exclude applicable transaction fees. | |||||||||||||||||||||||||
Shares Repurchased (thousands) | Dollar Value of Shares Repurchased | Remaining Dollar Value of Shares that may be Repurchased | |||||||||||||||||||||||
Authorization Date | 2014 | 2013 | 2014 | 2013 | 2014 | ||||||||||||||||||||
Nov-12 | 1,696 | 1,198 | $ | 124 | $ | 78 | $ | 79 | |||||||||||||||||
Nov-13 | — | — | — | — | 750 | ||||||||||||||||||||
Total | 1,696 | 1,198 | (a) | $ | 124 | $ | 78 | (a) | $ | 829 | |||||||||||||||
(a) | Amount excludes the effect of $20 million in share repurchases (0.3 million shares) with trade dates prior to 2013 and cash settlement dates during 2013. | ||||||||||||||||||||||||
Changes in accumulated other comprehensive income ("OCI") are presented below. | |||||||||||||||||||||||||
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 28, 2013, net of tax | $ | 170 | $ | (97 | ) | $ | (9 | ) | $ | 64 | |||||||||||||||
Current year gains (losses) classified into accumulated OCI, net of tax | (39 | ) | (4 | ) | 3 | (40 | ) | ||||||||||||||||||
(Gains) losses reclassified from accumulated OCI, net of tax | — | 5 | (2 | ) | 3 | ||||||||||||||||||||
OCI, net of tax | (39 | ) | 1 | 1 | (37 | ) | |||||||||||||||||||
Balance at March 22, 2014, net of tax | $ | 131 | $ | (96 | ) | $ | (8 | ) | $ | 27 | |||||||||||||||
Other_Income_Expense
Other (Income) Expense | 3 Months Ended | ||||||||
Mar. 22, 2014 | |||||||||
Other Income and Expenses [Abstract] | ' | ||||||||
Other (Income) Expense | ' | ||||||||
Other (Income) Expense | |||||||||
Quarter ended | |||||||||
2014 | 2013 | ||||||||
Equity (income) loss from investments in unconsolidated affiliates | $ | (13 | ) | $ | (7 | ) | |||
Foreign exchange net (gain) loss and other | 11 | (1 | ) | ||||||
Other (income) expense | $ | (2 | ) | $ | (8 | ) |
Supplemental_Balance_Sheet_Inf
Supplemental Balance Sheet Information | 3 Months Ended | |||||||
Mar. 22, 2014 | ||||||||
Supplemental Balance Sheet Information Disclosure [Abstract] | ' | |||||||
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 and licensees as a result of royalty and lease agreements. Trade receivables consisting of royalties from franchisees and licensees 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. | ||||||||
3/22/14 | 12/28/13 | |||||||
Accounts and notes receivable | $ | 368 | $ | 330 | ||||
Allowance for doubtful accounts | (14 | ) | (11 | ) | ||||
Accounts and notes receivable, net | $ | 354 | $ | 319 | ||||
Property, Plant and Equipment, net | ||||||||
3/22/14 | 12/28/13 | |||||||
Property, plant and equipment, gross | $ | 7,850 | $ | 7,850 | ||||
Accumulated depreciation and amortization | (3,472 | ) | (3,391 | ) | ||||
Property, plant and equipment, net | $ | 4,378 | $ | 4,459 | ||||
Assets held for sale at March 22, 2014 and December 28, 2013 total $13 million and $16 million, respectively, and are included in Prepaid expenses and other current assets on our Condensed Consolidated Balance Sheets. | ||||||||
Noncontrolling Interests | ||||||||
Noncontrolling interests primarily include the ownership interests of minority shareholders of the entities that operate the KFCs in Beijing and Shanghai, China. The redeemable noncontrolling interest comprises the 7% ownership interest in Little Sheep that continues to be held by the Little Sheep founding shareholders, and is classified outside of permanent equity on our Condensed Consolidated Balance Sheets due to redemption rights held by the founding Little Sheep shareholders. A reconciliation of the beginning and ending carrying amount of the equity attributable to noncontrolling interests is as follows: | ||||||||
Noncontrolling Interests | Reedemable Noncontrolling Interest | |||||||
Balance at December 28, 2013 | $ | 63 | $ | 39 | ||||
Net Income (loss) – noncontrolling interests | 1 | (1 | ) | |||||
Dividends declared | (4 | ) | — | |||||
Balance at March 22, 2014 | $ | 60 | $ | 38 | ||||
Income_Taxes
Income Taxes | 3 Months Ended | |||||||
Mar. 22, 2014 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Income Taxes | ' | |||||||
Income Taxes | ||||||||
Quarter ended | ||||||||
2014 | 2013 | |||||||
Income taxes | $ | 139 | $ | 120 | ||||
Effective tax rate | 25.9 | % | 26.4 | % | ||||
Our effective tax rate was 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 effective tax rate for the quarter ended March 22, 2014 was lower than the prior year primarily due to the favorable impact of tax law changes in certain jurisdictions. | ||||||||
On June 23, 2010, the Company received a Revenue Agent Report ("RAR") from the Internal Revenue Service ("IRS") relating to its examination of our U.S. federal income tax returns for fiscal years 2004 through 2006. The IRS has proposed an adjustment to increase the taxable value of rights to intangibles used outside the U.S. that YUM transferred to certain of its foreign subsidiaries. The proposed adjustment would result in approximately $700 million of additional taxes plus net interest to date of approximately $265 million for fiscal years 2004-2006. On January 9, 2013, the Company received an RAR from the IRS for fiscal years 2007 and 2008. As expected, the IRS proposed an adjustment similar to their proposal for 2004-2006 that would result in approximately $270 million of additional taxes plus net interest to date of approximately $45 million for fiscal years 2007 and 2008. Furthermore, the Company expects the IRS to make similar claims for years subsequent to fiscal 2008. The potential additional taxes for 2009 through 2013, computed on a similar basis to the 2004-2008 additional taxes, would be approximately $140 million plus net interest to date of approximately $10 million. | ||||||||
We believe we have properly reported our taxable income and paid taxes consistent with all applicable laws and intend to vigorously defend our position, including through litigation, if we are unable to settle with the IRS through administrative proceedings. Based on discussions with the IRS subsequent to the Company’s quarter end of March 22, 2014, the Company now believes it is reasonably possible that it will reach a settlement with the IRS on this issue during 2014. The Company may record additional reserves related to this issue as these settlement discussions continue. However, the Company continues to believe that its full year effective tax rate will be within the previously communicated range of 26%-28%, inclusive of any additional reserves that might be recorded as a result of these settlement discussions. | ||||||||
While settlement discussions with the IRS continue, the final resolution of the proposed adjustments remains uncertain and there can be no assurance that a settlement will be reached. If a settlement is not reached and increases to our reserves are deemed necessary in future years due to developments related to this issue, such increases could have a material adverse effect on our operating results as they are recorded. Final resolution of this matter through either current settlement discussions or other means could require us to make significant cash payments. |
Reportable_Operating_Segments
Reportable Operating Segments | 3 Months Ended | ||||||||
Mar. 22, 2014 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Reportable Operating Segments | ' | ||||||||
Reportable Operating Segments | |||||||||
We identify our operating segments based on management responsibility, which has changed beginning the first quarter of 2014. See Note 1. We have restated our comparable segment information for consistent presentation. The following tables summarize Revenues, Operating Profit and Identifiable Assets for each of our reportable operating segments: | |||||||||
Quarter ended | |||||||||
Revenues | 2014 | 2013 | |||||||
China | $ | 1,379 | $ | 1,151 | |||||
KFC Division | 664 | 659 | |||||||
Pizza Hut Division | 267 | 267 | |||||||
Taco Bell Division | 391 | 438 | |||||||
India | 23 | 20 | |||||||
$ | 2,724 | $ | 2,535 | ||||||
Quarter ended | |||||||||
Operating Profit (loss) | 2014 | 2013 | |||||||
China(a) | $ | 285 | $ | 154 | |||||
KFC Division | 163 | 165 | |||||||
Pizza Hut Division | 84 | 99 | |||||||
Taco Bell Division | 84 | 100 | |||||||
India | (3 | ) | (2 | ) | |||||
Corporate and Other unallocated(b) | (42 | ) | (29 | ) | |||||
Operating Profit | $ | 571 | $ | 487 | |||||
Interest expense, net | (33 | ) | (31 | ) | |||||
Income Before Income Taxes | $ | 538 | $ | 456 | |||||
3/22/14 | 12/28/13 | ||||||||
Identifiable Assets | |||||||||
China(c) | $ | 3,827 | $ | 3,720 | |||||
KFC Division | 2,307 | 2,301 | |||||||
Pizza Hut Division | 732 | 723 | |||||||
Taco Bell Division | 1,010 | 1,017 | |||||||
India | 101 | 99 | |||||||
Corporate and unallocated(d) | 728 | 835 | |||||||
$ | 8,705 | $ | 8,695 | ||||||
(a) | Includes equity income from investments in unconsolidated affiliates. See Note 4. | ||||||||
(b) | Includes refranchising gains and (losses). | ||||||||
(c) | China includes investments in 4 unconsolidated affiliates totaling $40 million and $53 million as of 2014 and 2013, respectively. | ||||||||
(d) | Primarily includes cash, deferred tax assets and property, plant and equipment, net, related to our office facilities. |
Pension_Benefits
Pension Benefits | 3 Months Ended | |||||||||||||||
Mar. 22, 2014 | ||||||||||||||||
Compensation and Retirement Disclosure [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, is funded. We fund our other U.S. plans as benefits are paid. The YUM Retirement Plan and our most significant non-qualified plan are closed to new salaried participants. We also sponsor various defined benefit pension plans covering certain of our non-U.S. employees, the most significant of which are in the UK. During 2013, our Pizza Hut UK plan was frozen such that existing participants can no longer earn future service credits. Our KFC UK plan was frozen to future service credits in 2011. | ||||||||||||||||
The components of net periodic benefit cost associated with our significant U.S. pension plans and significant international pension plans are as follows: | ||||||||||||||||
U.S. Pension Plans | International Pension Plans | |||||||||||||||
Quarter ended | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 4 | $ | 5 | $ | — | $ | — | ||||||||
Interest cost | 12 | 13 | 2 | 2 | ||||||||||||
Expected return on plan assets | (13 | ) | (14 | ) | (3 | ) | (3 | ) | ||||||||
Amortization of net loss | 4 | 14 | — | 1 | ||||||||||||
Net periodic benefit cost | $ | 7 | $ | 18 | $ | (1 | ) | $ | — | |||||||
Additional loss (gain) recognized due to: | ||||||||||||||||
Settlement (a) | $ | 3 | $ | 10 | $ | — | $ | — | ||||||||
Curtailment (b) | $ | — | $ | — | $ | — | $ | (5 | ) | |||||||
(a) | Losses are a result of settlement transactions from a non-funded plan which exceeded the sum of annual service and interest costs for that plan. These losses were recorded in General and administrative ("G&A") expenses. | |||||||||||||||
(b) | During 2013, our Pizza Hut UK Plan recorded a curtailment gain within G&A expenses as a result of terminating future service credits for all participants. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 22, 2014 | |
Fair Value Disclosures [Abstract] | ' |
Fair Value Measurements | ' |
Fair Value Measurements | |
At March 22, 2014 the carrying values of cash and cash equivalents, short-term investments, 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 Company’s debt obligations, excluding capital leases, were estimated to have a fair value of $3.1 billion (Level 2), compared to their carrying value of $2.8 billion. We estimated the fair value of debt using market quotes and calculations based on market rates. | |
The Company has interest rate swaps, foreign currency forwards and other investments that are required to be measured at fair value on a recurring basis. Interest rate swaps are used to reduce our exposure to interest rate risk and lower interest expense for a portion of our fixed-rate debt, and foreign currency forwards are used to reduce our exposure to cash flow volatility arising from foreign currency fluctuations associated with certain foreign currency denominated intercompany short-term receivables and payables. The fair value of these swaps, forwards and other investments were not material at March 22, 2014 or December 28, 2013. In addition certain of the Company’s assets, such as property, plant and equipment, goodwill and intangible assets, are measured at fair value on a non-recurring basis if determined to be impaired. During the quarter ended March 22, 2014, there were no significant assets or liabilities subject to non-recurring fair value measurements. |
Recently_Adopted_Accounting_Pr
Recently Adopted Accounting Pronouncements | 3 Months Ended |
Mar. 22, 2014 | |
Accounting Changes and Error Corrections [Abstract] | ' |
Recently Adopted Accounting Pronouncements | ' |
Recently Adopted Accounting Pronouncements | |
In March 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") No. 2013-05, Foreign Currency Matters, (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (ASU 2013-05), to resolve a diversity in accounting for the cumulative translation adjustment of foreign currency upon derecognition of a foreign subsidiary or group of assets. ASU 2013-05 requires the parent to apply the guidance in Subtopic 830-30 to release any related cumulative translation adjustment into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. Further, ASU 2013-05 clarified that the parent should apply the guidance in Subtopic 810-10 if there is a sale of an investment in a foreign entity, including both (1) events that result in the loss of a controlling financial interest in a foreign entity and (2) events that result in an acquirer obtaining control of an acquiree in which it held an equity interest immediately before the acquisition date. Accordingly, the cumulative translation adjustment should be released into net income upon the occurrence of those events. ASU 2013-05 was effective for the Company during the quarter ended March 22, 2014. The adoption of this standard did not have a significant impact on our Condensed Consolidated Financial Statements. | |
In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (ASU 2013-11), to require that in certain cases, an unrecognized tax benefit, or portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward when such items exist in the same taxing jurisdiction. ASU 2013-11 was effective for the Company during the quarter ended March 22, 2014. The adoption of this standard did not have a significant impact on our Condensed Consolidated Financial Statements. |
Guarantees_Commitments_and_Con
Guarantees, Commitments and Contingencies | 3 Months Ended |
Mar. 22, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Guarantees, Commitments and Contingencies | ' |
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 2066. As of March 22, 2014, the potential amount of undiscounted payments we could be required to make in the event of non-payment by the primary lessees was approximately $700 million. The present value of these potential payments discounted at our pre-tax cost of debt at March 22, 2014 was approximately $600 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 22, 2014 was not material. | |
Other Franchise Guarantees | |
We have agreed to provide guarantees of $44 million on behalf of franchisees for several financing programs related to specific initiatives. The total loans outstanding under these financing programs were approximately $75 million at March 22, 2014. | |
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. | |
In early 2013, four putative class action complaints were filed in the U.S. District Court for the Central District of California against the Company and certain executive officers alleging claims under sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Plaintiffs alleged that defendants made false and misleading statements concerning the Company’s current and future business and financial condition. The four complaints were subsequently consolidated and transferred to the U.S. District Court for the Western District of Kentucky. On August 5, 2013, lead plaintiff, Frankfurt Trust Investment GmbH, filed a Consolidated Class Action Complaint (“Amended Complaint”) on behalf of a putative class of all persons who purchased the Company’s stock between February 6, 2012 and February 4, 2013 (the “Class Period”). The Amended Complaint no longer includes allegations relating to misstatements regarding the Company’s business or financial condition and instead alleges that, during the Class Period, defendants purportedly omitted information about the Company’s supply chain in China, thereby inflating the prices at which the Company’s securities traded. On October 4, 2013, the Company and individual defendants filed a motion to dismiss the Amended Complaint. Briefing on the motion to dismiss is now complete. The Company denies liability and intends to vigorously defend against all claims in the Amended Complaint. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. | |
On January 24, 2013, Bert Bauman, a purported shareholder of the Company, submitted a letter demanding that the Board of Directors initiate an investigation of alleged breaches of fiduciary duties by directors, officers and employees of the Company. The breaches of fiduciary duties are alleged to have arisen primarily as a result of the failure to implement proper controls in connection with the Company’s purchases of poultry from suppliers to the Company’s China operations. Subsequently, similar demand letters by other purported shareholders were submitted. Those letters were referred to a special committee of the Board of Directors (the “Special Committee”) for consideration. The Special Committee, upon conclusion of an independent inquiry of the matters described in the letters, unanimously determined that it is not in the best interests of the Company to pursue the claims described in the letters and, accordingly, rejected each shareholder’s demand. | |
On May 9, 2013, Mr. Bauman filed a putative derivative action in Jefferson Circuit Court, Commonwealth of Kentucky against certain current and former officers and directors of the Company asserting breach of fiduciary duty, waste of corporate assets and unjust enrichment in connection with an alleged failure to implement proper controls in the Company’s purchases of poultry from suppliers to the Company’s China operations and with an alleged scheme to mislead investors about the Company’s growth prospects in China. By agreement of the parties, the matter is temporarily stayed pending the outcome of the motion to dismiss the securities class action. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. | |
On February 14, 2013, Jennifer Zona, another purported shareholder of the Company, submitted a demand letter similar to the demand letters described above. On May 21, 2013, Ms. Zona filed a putative derivative action in the U.S. District Court for the Western District of Kentucky against certain officers and directors of the Company asserting claims similar to those asserted by Mr. Bauman. The case was subsequently reassigned to the same judge that the securities class action is before. On October 14, 2013, the Company filed a motion to dismiss on the basis of the Special Committee’s findings. By agreement of the parties, the matter is temporarily stayed pending the outcome of the motion to dismiss the securities class action. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. | |
On May 17, 2013, Sandra Wollman, another purported shareholder of the Company, submitted a demand letter similar to the demand letters described above. On December 9, 2013, Ms. Wollman filed a putative derivative action in the U.S. District Court for the Western District of Kentucky against certain current and former officers and directors of the Company asserting claims similar to those asserted by Mr. Bauman and Ms. Zona. By agreement of the parties, the matter was consolidated with the Zona action and is temporarily stayed pending the outcome of the motion to dismiss the securities class action. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. | |
Taco Bell was named as a defendant in a number of putative class action suits filed in 2007, 2008, 2009 and 2010 alleging violations of California labor laws including unpaid overtime, failure to timely pay wages on termination, failure to pay accrued vacation wages, failure to pay minimum wage, denial of meal and rest breaks, improper wage statements, unpaid business expenses, wrongful termination, discrimination, conversion and unfair or unlawful business practices in violation of California Business & Professions Code §17200. Some plaintiffs also seek penalties for alleged violations of California’s Labor Code under California’s Private Attorneys General Act as well as statutory “waiting time” penalties and allege violations of California’s Unfair Business Practices Act. Plaintiffs seek to represent a California state-wide class of hourly employees. | |
These matters were consolidated, and the consolidated case is styled In Re Taco Bell Wage and Hour Actions. The In Re Taco Bell Wage and Hour Actions plaintiffs filed a consolidated complaint in June 2009, and in March 2010 the court approved the parties’ stipulation to dismiss the Company from the action. Plaintiffs filed their motion for class certification on the vacation and final pay claims in December 2010, and on September 26, 2011 the court issued its order denying the certification of the vacation and final pay claims. Plaintiffs then sought to certify four separate meal and rest break classes. On January 2, 2013, the District Court rejected three of the proposed classes but granted certification with respect to the late meal break class. The parties thereafter agreed on a list of putative class members, and the class notice and opportunity to opt out of the litigation were mailed on January 21, 2014. | |
Taco Bell denies liability and intends to vigorously defend against all claims in this lawsuit. We have provided for a reasonable estimate of the possible loss relating to this lawsuit. However, in view of the inherent uncertainties of litigation, there can be no assurance that this lawsuit will not result in losses in excess of those currently provided for in our Condensed Consolidated Financial Statements. A reasonable estimate of the amount of any possible loss or range of loss in excess of that currently provided for in our Condensed Consolidated Financial Statements cannot be made at this time. | |
On May 16, 2013, a putative class action styled Bernardina Rodriguez v. Taco Bell Corp. was filed in California Superior Court. The plaintiff seeks to represent a class of current and former California hourly restaurant employees alleging various violations of California labor laws including failure to provide meal and rest periods, failure to pay hourly wages, failure to provide accurate written wage statements, failure to timely pay all final wages, and unfair or unlawful business practices in violation of California Business & Professions Code §17200. This case appears to be duplicative of the In Re Taco Bell Wage and Hour Actions case described above. Taco Bell removed the case to federal court and, on June 25, 2013, plaintiff filed a first amended complaint to include a claim seeking penalties for alleged violations of California’s Labor Code under California’s Private Attorneys General Act. Taco Bell's motion to dismiss or stay the action in light of the In Re Taco Bell Wage and Hour Actions case was denied on October 30, 2013. In April 2014 the parties stipulated to address the sufficiency of plaintiff’s legal theory as to her meal break claim before conducting full discovery. On April 23, 2014, the court approved the stipulation and set a hearing for cross-summary judgment motions on September 10, 2014. | |
Taco Bell denies liability and intends to vigorously defend against all claims in this lawsuit. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. | |
In December 2002, Taco Bell was named as the defendant in a class action lawsuit filed in the U.S. District Court for the Northern District of California styled Moeller, et al. v. Taco Bell Corp. In August 2003, plaintiffs filed an amended complaint alleging, among other things, that Taco Bell has discriminated against the class of people who use wheelchairs or scooters for mobility by failing to make its restaurants in California accessible to the class. Plaintiffs contend that queue rails and other architectural and structural elements of the Taco Bell restaurants relating to the path of travel and use of the facilities by persons with mobility-related disabilities do not comply with the U.S. Americans with Disabilities Act (the “ADA”), the Unruh Civil Rights Act (the “Unruh Act”), and the California Disabled Persons Act (the “CDPA”). Plaintiffs have requested: (a) an injunction from the District Court ordering Taco Bell to comply with the ADA and its implementing regulations; (b) that the District Court declare Taco Bell in violation of the ADA, the Unruh Act, and the CDPA; and (c) monetary relief under the Unruh Act or CDPA. Plaintiffs, on behalf of the class, are seeking the minimum statutory damages per offense of either $4,000 under the Unruh Act or $1,000 under the CDPA for each aggrieved member of the class. Plaintiffs contend that there may be in excess of 100,000 individuals in the class. In February 2004, the District Court granted plaintiffs’ motion for class certification. The class included claims for injunctive relief and minimum statutory damages. | |
In May 2007, a hearing was held on plaintiffs’ Motion for Partial Summary Judgment seeking judicial declaration that Taco Bell was in violation of accessibility laws as to three specific issues: indoor seating, queue rails and door opening force. In August 2007, the court granted plaintiffs’ motion in part with regard to dining room seating. In addition, the court granted plaintiffs’ motion in part with regard to door opening force at some restaurants (but not all) and denied the motion with regard to queue lines. | |
In December 2009, the court denied Taco Bell’s motion for summary judgment on the ADA claims and ordered plaintiffs to select one restaurant to be the subject of a trial. Following the trial, the court issued Findings of Fact and Conclusions of Law in October 2011 ruling that plaintiffs established that classwide injunctive relief was warranted with regard to maintaining compliance as to corporate Taco Bell restaurants in California. The court declined to order injunctive relief at the time. The court also found that twelve specific items at the exemplar store were once out of compliance with applicable state and/or federal accessibility standards. | |
Taco Bell filed a motion to decertify the class in August 2011, and in July 2012, the court granted Taco Bell’s motion to decertify the previously certified state law damages class but denied Taco Bell’s motion to decertify the ADA injunctive relief class. In September 2012, the court set a discovery and briefing schedule concerning the trials of the four individual plaintiffs’ state law damages claims, which the court stated will be tried before holding further proceedings regarding the possible issuance of an injunction. The court subsequently issued an order modifying its October 2011 Findings of Facts and Conclusions of Law deleting the statement that an injunction was warranted. Plaintiffs appealed that order, and on June 24, 2013 the Ninth Circuit Court of Appeals dismissed plaintiff’s appeal. On January 15, 2014, plaintiffs filed a motion seeking issuance of a classwide injunction, and Taco Bell filed a motion to dismiss both the individual and class ADA claims based on a lack of jurisdiction. | |
On April 24, 2014, the parties agreed to settle this matter. The parties are in the process of submitting the settlement to the court for approval. If the settlement is approved by the court, the associated cash payments will not be material. | |
In July 2009, a putative class action styled Mark Smith v. Pizza Hut, Inc. was filed in the U.S. District Court for the District of Colorado. The complaint alleged that Pizza Hut did not properly reimburse its delivery drivers for various automobile costs, uniforms costs, and other job-related expenses and seeks to represent a class of delivery drivers nationwide under the Fair Labor Standards Act (FLSA) and Colorado state law. In January 2010, plaintiffs filed a motion for conditional certification of a nationwide class of current and former Pizza Hut, Inc. delivery drivers. However, in March 2010, the court granted Pizza Hut’s pending motion to dismiss for failure to state a claim, with leave to amend. Plaintiffs subsequently filed an amended complaint, which dropped the uniform claims but, in addition to the federal FLSA claims, asserted state-law class action claims under the laws of sixteen different states. Pizza Hut filed a motion to dismiss the amended complaint, and plaintiffs sought leave to amend their complaint a second time. In August 2010, the court granted plaintiffs’ motion to amend. Pizza Hut filed another motion to dismiss the Second Amended Complaint. In July 2011, the Court granted Pizza Hut’s motion with respect to plaintiffs’ state law claims but allowed the FLSA claims to go forward. Plaintiffs filed their Motion for Conditional Certification in August 2011, and the Court granted plaintiffs’ motion in April 2012. The opt-in period closed on August 23, 2012, and 6,049 individuals opted in. On February 28, 2014, Pizza Hut filed a motion to decertify the collective action, along with a motion for partial summary judgment seeking an order from the Court that the FLSA does not require Pizza Hut to reimburse certain fixed costs that delivery drivers would have incurred regardless of their employment with Pizza Hut. | |
Pizza Hut denies liability and intends to vigorously defend against all claims in this lawsuit. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. | |
We are engaged in various other legal proceedings and have certain unresolved claims pending, the ultimate liability for which, if any, cannot be determined at this time. However, based upon current information and consultation with legal counsel, we expect that the final disposition of such proceedings and claims will not have a material adverse effect, individually or in the aggregate, on our Condensed Consolidated Financial Statements. |
Earnings_Per_Common_Share_EPS_
Earnings Per Common Share ("EPS") (Tables) | 3 Months Ended | |||||||||
Mar. 22, 2014 | ||||||||||
Earnings Per Share [Abstract] | ' | |||||||||
Earnings Per Common Share Table | ' | |||||||||
Quarter ended | ||||||||||
2014 | 2013 | |||||||||
Net Income – YUM! Brands, Inc. | $ | 399 | $ | 337 | ||||||
Weighted-average common shares outstanding (for basic calculation) | 447 | 455 | ||||||||
Effect of dilutive share-based employee compensation | 9 | 10 | ||||||||
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) | 456 | 465 | ||||||||
Basic EPS | $ | 0.89 | $ | 0.74 | ||||||
Diluted EPS | $ | 0.87 | $ | 0.72 | ||||||
Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation(a) | 6.1 | 4.5 | ||||||||
(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_Tables
Shareholders' Equity (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 22, 2014 | |||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||||||||||||||||||
Repurchase of Shares of the Company's Common Stock | ' | ||||||||||||||||||||||||
Shares Repurchased (thousands) | Dollar Value of Shares Repurchased | Remaining Dollar Value of Shares that may be Repurchased | |||||||||||||||||||||||
Authorization Date | 2014 | 2013 | 2014 | 2013 | 2014 | ||||||||||||||||||||
Nov-12 | 1,696 | 1,198 | $ | 124 | $ | 78 | $ | 79 | |||||||||||||||||
Nov-13 | — | — | — | — | 750 | ||||||||||||||||||||
Total | 1,696 | 1,198 | (a) | $ | 124 | $ | 78 | (a) | $ | 829 | |||||||||||||||
(a) | Amount excludes the effect of $20 million in share repurchases (0.3 million shares) with trade dates prior to 2013 and cash settlement dates during 2013. | ||||||||||||||||||||||||
Schedule of changes in accumulated other comprehensive income | ' | ||||||||||||||||||||||||
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 28, 2013, net of tax | $ | 170 | $ | (97 | ) | $ | (9 | ) | $ | 64 | |||||||||||||||
Current year gains (losses) classified into accumulated OCI, net of tax | (39 | ) | (4 | ) | 3 | (40 | ) | ||||||||||||||||||
(Gains) losses reclassified from accumulated OCI, net of tax | — | 5 | (2 | ) | 3 | ||||||||||||||||||||
OCI, net of tax | (39 | ) | 1 | 1 | (37 | ) | |||||||||||||||||||
Balance at March 22, 2014, net of tax | $ | 131 | $ | (96 | ) | $ | (8 | ) | $ | 27 | |||||||||||||||
Other_Income_Expense_Tables
Other (Income) Expense (Tables) | 3 Months Ended | ||||||||
Mar. 22, 2014 | |||||||||
Other Income and Expenses [Abstract] | ' | ||||||||
Other (Income) Expense Table | ' | ||||||||
Quarter ended | |||||||||
2014 | 2013 | ||||||||
Equity (income) loss from investments in unconsolidated affiliates | $ | (13 | ) | $ | (7 | ) | |||
Foreign exchange net (gain) loss and other | 11 | (1 | ) | ||||||
Other (income) expense | $ | (2 | ) | $ | (8 | ) |
Supplemental_Balance_Sheet_Inf1
Supplemental Balance Sheet Information (Tables) | 3 Months Ended | |||||||
Mar. 22, 2014 | ||||||||
Supplemental Balance Sheet Information Disclosure [Abstract] | ' | |||||||
Accounts and Notes Receivable | ' | |||||||
3/22/14 | 12/28/13 | |||||||
Accounts and notes receivable | $ | 368 | $ | 330 | ||||
Allowance for doubtful accounts | (14 | ) | (11 | ) | ||||
Accounts and notes receivable, net | $ | 354 | $ | 319 | ||||
Property, Plant and Equipment | ' | |||||||
3/22/14 | 12/28/13 | |||||||
Property, plant and equipment, gross | $ | 7,850 | $ | 7,850 | ||||
Accumulated depreciation and amortization | (3,472 | ) | (3,391 | ) | ||||
Property, plant and equipment, net | $ | 4,378 | $ | 4,459 | ||||
Equity attributable to noncontrolling interests, rollforward | ' | |||||||
Noncontrolling Interests | Reedemable Noncontrolling Interest | |||||||
Balance at December 28, 2013 | $ | 63 | $ | 39 | ||||
Net Income (loss) – noncontrolling interests | 1 | (1 | ) | |||||
Dividends declared | (4 | ) | — | |||||
Balance at March 22, 2014 | $ | 60 | $ | 38 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 3 Months Ended | |||||||
Mar. 22, 2014 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Income Tax And Effective Tax Rate | ' | |||||||
Quarter ended | ||||||||
2014 | 2013 | |||||||
Income taxes | $ | 139 | $ | 120 | ||||
Effective tax rate | 25.9 | % | 26.4 | % |
Reportable_Operating_Segments_
Reportable Operating Segments (Tables) | 3 Months Ended | ||||||||
Mar. 22, 2014 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Schedule of Segment Reporting Information, by Segment | ' | ||||||||
Quarter ended | |||||||||
Revenues | 2014 | 2013 | |||||||
China | $ | 1,379 | $ | 1,151 | |||||
KFC Division | 664 | 659 | |||||||
Pizza Hut Division | 267 | 267 | |||||||
Taco Bell Division | 391 | 438 | |||||||
India | 23 | 20 | |||||||
$ | 2,724 | $ | 2,535 | ||||||
Quarter ended | |||||||||
Operating Profit (loss) | 2014 | 2013 | |||||||
China(a) | $ | 285 | $ | 154 | |||||
KFC Division | 163 | 165 | |||||||
Pizza Hut Division | 84 | 99 | |||||||
Taco Bell Division | 84 | 100 | |||||||
India | (3 | ) | (2 | ) | |||||
Corporate and Other unallocated(b) | (42 | ) | (29 | ) | |||||
Operating Profit | $ | 571 | $ | 487 | |||||
Interest expense, net | (33 | ) | (31 | ) | |||||
Income Before Income Taxes | $ | 538 | $ | 456 | |||||
3/22/14 | 12/28/13 | ||||||||
Identifiable Assets | |||||||||
China(c) | $ | 3,827 | $ | 3,720 | |||||
KFC Division | 2,307 | 2,301 | |||||||
Pizza Hut Division | 732 | 723 | |||||||
Taco Bell Division | 1,010 | 1,017 | |||||||
India | 101 | 99 | |||||||
Corporate and unallocated(d) | 728 | 835 | |||||||
$ | 8,705 | $ | 8,695 | ||||||
(a) | Includes equity income from investments in unconsolidated affiliates. See Note 4. | ||||||||
(b) | Includes refranchising gains and (losses). | ||||||||
(c) | China includes investments in 4 unconsolidated affiliates totaling $40 million and $53 million as of 2014 and 2013, respectively. | ||||||||
(d) | Primarily includes cash, deferred tax assets and property, plant and equipment, net, related to our office facilities. |
Pension_Benefits_Tables
Pension Benefits (Tables) | 3 Months Ended | |||||||||||||||
Mar. 22, 2014 | ||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ' | |||||||||||||||
Components of Net Periodic Benefit Cost | ' | |||||||||||||||
U.S. Pension Plans | International Pension Plans | |||||||||||||||
Quarter ended | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Service cost | $ | 4 | $ | 5 | $ | — | $ | — | ||||||||
Interest cost | 12 | 13 | 2 | 2 | ||||||||||||
Expected return on plan assets | (13 | ) | (14 | ) | (3 | ) | (3 | ) | ||||||||
Amortization of net loss | 4 | 14 | — | 1 | ||||||||||||
Net periodic benefit cost | $ | 7 | $ | 18 | $ | (1 | ) | $ | — | |||||||
Additional loss (gain) recognized due to: | ||||||||||||||||
Settlement (a) | $ | 3 | $ | 10 | $ | — | $ | — | ||||||||
Curtailment (b) | $ | — | $ | — | $ | — | $ | (5 | ) | |||||||
(a) | Losses are a result of settlement transactions from a non-funded plan which exceeded the sum of annual service and interest costs for that plan. These losses were recorded in General and administrative ("G&A") expenses. | |||||||||||||||
(b) | During 2013, our Pizza Hut UK Plan recorded a curtailment gain within G&A expenses as a result of terminating future service credits for all participants. |
Financial_Statement_Presentati1
Financial Statement Presentation (Details) | 3 Months Ended |
Mar. 22, 2014 | |
Months | |
weeks | |
operating_segments | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Number of Reporting Segments | 5 |
Number of weeks in each of the first three quarters of each fiscal year | 12 |
Number of weeks in the fourth quarter of each fiscal year with 52 weeks | 16 |
Number of months in the first quarter for certain international subsidiaries that operate on monthly calendars | 2 |
Number of months in the second and third quarters for certain international subsidiaries that operate on monthly calendars | 3 |
Number of months in the fourth quarter for certain international subsidiaries that operate on monthly calendars | 4 |
Number of periods or months in advance that certain of our international businesses close their books | 1 |
Earnings_Per_Common_Share_EPS_1
Earnings Per Common Share ("EPS") (Details) (USD $) | 3 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 | ||
Earnings Per Share [Abstract] | ' | ' | ||
Net Income - YUM! Brands, Inc. | $399 | $337 | ||
Weighted-average common shares outstanding (for basic calculation) | 447 | 455 | ||
Effect of dilutive share-based employee compensation | 9 | 10 | ||
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) | 456 | 465 | ||
Basic EPS | $0.89 | $0.74 | ||
Diluted EPS | $0.87 | $0.72 | ||
Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation | 6.1 | [1] | 4.5 | [1] |
[1] | 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_Details
Shareholders' Equity (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 | Dec. 28, 2013 | |
Repurchase Of Shares Of Common Stock [Line Items] | ' | ' | ' | |
Dollar Value of Shares Repurchased | $124 | $78 | [1] | ' |
Remaining dollar value of shares that may be repurchased | 829 | ' | ' | |
Shares Repurchased | 1,696,000 | 1,198,000 | [1] | ' |
Value Of Share Repurchases In Current Fiscal Quarter But With Settlement Dates In Subsequent Fiscal Quarter | ' | ' | 20 | |
Share Repurchases In Current Fiscal Quarter But With Settlement Dates In Subsequent Fiscal Quarter | ' | ' | 300,000 | |
November 2012 [Member] | ' | ' | ' | |
Repurchase Of Shares Of Common Stock [Line Items] | ' | ' | ' | |
Dollar Value of Shares Repurchased | 124 | 78 | ' | |
Remaining dollar value of shares that may be repurchased | 79 | ' | ' | |
Shares Repurchased | 1,696,000 | 1,198,000 | ' | |
November 2013 [Member] | ' | ' | ' | |
Repurchase Of Shares Of Common Stock [Line Items] | ' | ' | ' | |
Dollar Value of Shares Repurchased | 0 | 0 | ' | |
Remaining dollar value of shares that may be repurchased | $750 | ' | ' | |
Shares Repurchased | 0 | 0 | ' | |
[1] | Amount excludes the effect of $20 million in share repurchases (0.3 million shares) with trade dates prior to 2013 and cash settlement dates during 2013. |
Shareholders_Equity_Details_2
Shareholders' Equity (Details 2) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 |
Schedule of changes in accumulated other comprehensive income [Line Items] | ' | ' |
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | $64 | ' |
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | 27 | ' |
OCI, net of tax | -37 | 12 |
Translation Adjustments and Gains (Losses) From Intra-Entity Transactions of a Long-Term Nature | ' | ' |
Schedule of changes in accumulated other comprehensive income [Line Items] | ' | ' |
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | 170 | ' |
Current year gains (losses) classified into accumulated OCI, net of tax | -39 | ' |
(Gains) losses reclassified from accumulated OCI, net of tax | 0 | ' |
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | 131 | ' |
OCI, net of tax | -39 | ' |
Pension and Post-Retirement Benefits | ' | ' |
Schedule of changes in accumulated other comprehensive income [Line Items] | ' | ' |
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | -97 | ' |
Current year gains (losses) classified into accumulated OCI, net of tax | -4 | ' |
(Gains) losses reclassified from accumulated OCI, net of tax | 5 | ' |
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | -96 | ' |
OCI, net of tax | 1 | ' |
Derivative Instruments | ' | ' |
Schedule of changes in accumulated other comprehensive income [Line Items] | ' | ' |
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | -9 | ' |
Current year gains (losses) classified into accumulated OCI, net of tax | 3 | ' |
(Gains) losses reclassified from accumulated OCI, net of tax | -2 | ' |
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | -8 | ' |
OCI, net of tax | 1 | ' |
Total | ' | ' |
Schedule of changes in accumulated other comprehensive income [Line Items] | ' | ' |
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | 64 | ' |
Current year gains (losses) classified into accumulated OCI, net of tax | -40 | ' |
(Gains) losses reclassified from accumulated OCI, net of tax | 3 | ' |
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | 27 | ' |
OCI, net of tax | ($37) | ' |
Other_Income_Expense_Details
Other (Income) Expense (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 |
Other Income and Expenses [Line Items] | ' | ' |
Equity (income) loss from investments in unconsolidated affiliates | ($13) | ($7) |
Foreign exchange net (gain) loss and other | 11 | -1 |
Other (income) expense | ($2) | ($8) |
Supplemental_Balance_Sheet_Inf2
Supplemental Balance Sheet Information (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 | Mar. 22, 2014 | Dec. 28, 2013 |
days | ||||
Accounts and Notes Receivable [Abstract] | ' | ' | ' | ' |
Number of days from the period in which the corresponding sales occur that trade receivables are generally due | 30 | ' | ' | ' |
Accounts and notes receivable | $368 | ' | ' | $330 |
Allowance for doubtful accounts | -14 | ' | ' | -11 |
Accounts and notes receivable, net | 354 | ' | ' | 319 |
Property, Plant and Equipment [Abstract] | ' | ' | ' | ' |
Property, plant and equipment, gross | 7,850 | ' | ' | 7,850 |
Accumulated depreciation and amortization | -3,472 | ' | ' | -3,391 |
Property, plant and equipment, net | 4,378 | ' | ' | 4,459 |
Assets Held-for-sale, Current | 13 | ' | ' | 16 |
Noncontrolling Interest [Line Items] | ' | ' | ' | ' |
Noncontrolling interests, beginning of period | 63 | ' | ' | ' |
Redeemable noncontrolling interest, Beginning of Period | 39 | ' | 38 | ' |
Net Income (loss) - noncontrolling interests | 0 | -1 | ' | ' |
Net Income (Loss) - Redeemable noncontrolling interest | -1 | ' | ' | ' |
Noncontrolling interest, end of period | 60 | ' | ' | ' |
Redeemable noncontrolling interest, End of Period | 38 | ' | ' | ' |
Noncontrolling Interest [Member] | ' | ' | ' | ' |
Noncontrolling Interest [Line Items] | ' | ' | ' | ' |
Noncontrolling interests, beginning of period | 63 | ' | ' | ' |
Net Income (loss) - noncontrolling interests | 1 | ' | ' | ' |
Dividends declared | -4 | ' | ' | ' |
Noncontrolling interest, end of period | 60 | ' | ' | ' |
Redeemable Noncontrolling Interest | ' | ' | ' | ' |
Noncontrolling Interest [Line Items] | ' | ' | ' | ' |
Dividends declared | $0 | ' | ' | ' |
Little Sheep founding shareholders' ownership percentage in Little Sheep | 7.00% | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 | Dec. 27, 2014 |
Expected full year tax effect, low range | ' | ' | 26.00% |
Income Tax And Effective Tax Rate [Abstract] | ' | ' | ' |
Income taxes | $139 | $120 | ' |
Expected full year tax effect, high range | ' | ' | 28.00% |
Effective tax rate | 25.90% | 26.40% | ' |
Fiscal years 2004-2006 [Member] | Income Tax Expense (Benefit) [Member] | Internal Revenue Service (IRS) [Member] | ' | ' | ' |
Income Tax Examination, Estimate of Possible Loss | 700 | ' | ' |
Fiscal years 2004-2006 [Member] | Interest Expense [Member] | Internal Revenue Service (IRS) [Member] | ' | ' | ' |
Income Tax Examination, Estimate of Possible Loss | 265 | ' | ' |
Fiscal years 2007-2008 [Member] | Income Tax Expense (Benefit) [Member] | Internal Revenue Service (IRS) [Member] | ' | ' | ' |
Income Tax Examination, Estimate of Possible Loss | 270 | ' | ' |
Fiscal years 2007-2008 [Member] | Interest Expense [Member] | Internal Revenue Service (IRS) [Member] | ' | ' | ' |
Income Tax Examination, Estimate of Possible Loss | 45 | ' | ' |
Fiscal years 2009-2012 [Member] | Income Tax Expense (Benefit) [Member] | Internal Revenue Service (IRS) [Member] | ' | ' | ' |
Income Tax Examination, Estimate of Possible Loss | 140 | ' | ' |
Fiscal years 2009-2012 [Member] | Interest Expense [Member] | Internal Revenue Service (IRS) [Member] | ' | ' | ' |
Income Tax Examination, Estimate of Possible Loss | $10 | ' | ' |
Reportable_Operating_Segments_1
Reportable Operating Segments (Details) (USD $) | 3 Months Ended | |||||
In Millions, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 | Dec. 28, 2013 | |||
Segment Reporting Information [Line Items] | ' | ' | ' | |||
Total revenues | $2,724 | $2,535 | ' | |||
Operating Profit (loss) | 571 | 487 | ' | |||
Assets | 8,705 | ' | 8,695 | |||
Interest expense, net | 33 | 31 | ' | |||
Income Before Income Taxes | 538 | 456 | ' | |||
Investments in unconsolidated affiliates | 40 | ' | 53 | |||
China | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | |||
Total revenues | 1,379 | 1,151 | ' | |||
Operating Profit (loss) | 285 | [1] | 154 | [1] | ' | |
Assets | 3,827 | [2] | ' | 3,720 | [2] | |
Investments in unconsolidated affiliates | 40 | ' | 53 | |||
KFC Division | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | |||
Total revenues | 664 | 659 | ' | |||
Operating Profit (loss) | 163 | 165 | ' | |||
Assets | 2,307 | ' | 2,301 | |||
Pizza Hut Division | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | |||
Total revenues | 267 | 267 | ' | |||
Operating Profit (loss) | 84 | 99 | ' | |||
Assets | 732 | ' | 723 | |||
Taco Bell Division | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | |||
Total revenues | 391 | 438 | ' | |||
Operating Profit (loss) | 84 | 100 | ' | |||
Assets | 1,010 | ' | 1,017 | |||
India | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | |||
Total revenues | 23 | 20 | ' | |||
Operating Profit (loss) | -3 | -2 | ' | |||
Assets | 101 | ' | 99 | |||
Corporate and Other unallocated | ' | ' | ' | |||
Segment Reporting Information [Line Items] | ' | ' | ' | |||
Operating Profit (loss) | -42 | [3] | -29 | [3] | ' | |
Assets | $728 | [4] | ' | $835 | [4] | |
[1] | Includes equity income from investments in unconsolidated affiliates. See Note 4. | |||||
[2] | China includes investments in 4 unconsolidated affiliates totaling $40 million and $53 million as of 2014 and 2013, respectively. | |||||
[3] | Includes refranchising gains and (losses). | |||||
[4] | Primarily includes cash, deferred tax assets and property, plant and equipment, net, related to our office facilities. |
Pension_Benefits_Details
Pension Benefits (Details) (USD $) | 3 Months Ended | |||
In Millions, unless otherwise specified | Mar. 22, 2014 | Mar. 23, 2013 | ||
U.S. Pension Plans | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ||
Service cost | $4 | $5 | ||
Interest cost | 12 | 13 | ||
Expected return on plan assets | -13 | -14 | ||
Amortization of net loss | 4 | 14 | ||
Net periodic benefit cost | 7 | 18 | ||
Settlement | 3 | [1] | 10 | [1] |
Curtailment | 0 | 0 | ||
International Pension Plans | ' | ' | ||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ||
Service cost | 0 | 0 | ||
Interest cost | 2 | 2 | ||
Expected return on plan assets | -3 | -3 | ||
Amortization of net loss | 0 | 1 | ||
Net periodic benefit cost | -1 | 0 | ||
Settlement | 0 | 0 | ||
Curtailment | $0 | ($5) | [2] | |
[1] | Losses are a result of settlement transactions from a non-funded plan which exceeded the sum of annual service and interest costs for that plan. These losses were recorded in General and administrative ("G&A") expenses. | |||
[2] | During 2013, our Pizza Hut UK Plan recorded a curtailment gain within G&A expenses as a result of terminating future service credits for all participants. |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 22, 2014 |
In Billions, unless otherwise specified | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Debt obligations, excluding capital leases, carrying amount | $2.80 |
Fair Value, Inputs, Level 2 [Member] | ' |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' |
Debt obligations, excluding capital leases, estimate of fair value | $3.10 |
Guarantees_Commitments_and_Con1
Guarantees, Commitments and Contingencies (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 22, 2014 |
Franchise lending program guarantee | ' |
Guarantor Obligations [Line Items] | ' |
Loss contingency, amount of guarantee | $44 |
Total loans outstanding | 75 |
Property Lease Guarantee [Member] | ' |
Guarantor Obligations [Line Items] | ' |
Year longest lease expires | '2066 |
Potential amount of undiscounted payments we could be required to make in the event of non-payment by the primary lessee | 700 |
Present value of potential payments we could be required to make in the event of non-payment by the primary lessee | $600 |
Guarantees_Commitments_and_Con2
Guarantees, Commitments and Contingencies (Details 2) (USD $) | 3 Months Ended |
Mar. 22, 2014 | |
violations | |
restaurants | |
States | |
plaintiffs | |
cases | |
Loss Contingencies [Line Items] | ' |
Number of class actions filed in the United States District Court for the Central District of California against the company and certain of its executive officers | 4 |
Taco Bell Wage and Hour Actions - Number of proposed classes concerning meals and rest breaks at Taco Bell which were rejected by the District Court | 4 |
Minimum Statutory Damages Per Offense Under Unruh Act | $4,000 |
Minimum Statutory Damages Per Offense Under California Disabled Persons Act | $1,000 |
Loss Contingency, Number of Plaintiffs | 100,000 |
Number of accessibility laws that Taco Bell was in violation of | 3 |
Number Of Restaurant To Be Subject Of Trial On ADA Claims | 1 |
Number Of Alleged Violations Of ADA And State Law Tried | 12 |
Moeller v. Taco Bell, Number of individual plaintiffs' state law damages claims | 4 |
Number of states that assert state-law class action claims | 16 |
Mark Smith v. Pizza Hut, Inc. - final number of opt-ins | 6,049 |