Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2019shares | |
Cover page. | |
Document Quarterly Report | true |
Entity Incorporation, State or Country Code | NC |
Entity Tax Identification Number | 13-3951308 |
Trading Symbol | YUM |
Security Exchange Name | NYSE |
Entity Address, Address Line One | 1441 Gardiner Lane, |
Entity Address, City or Town | Louisville, |
Entity Address, State or Province | KY |
Entity Address, Postal Zip Code | 40213 |
City Area Code | (502) |
Local Phone Number | 874-8300 |
Document Transition Report | false |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Entity Registrant Name | YUM! BRANDS, INC. |
Entity Central Index Key | 0001041061 |
Current Fiscal Year End Date | --12-31 |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | Common Stock, no par value |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2019 |
Entity File Number | 1-13163 |
Entity Interactive Data Current | Yes |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 304,285,740 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Total Revenues | $ 1,310 | $ 1,368 | $ 2,564 | $ 2,739 |
Costs and Expenses, Net | ||||
Cost of Goods and Services Sold | 286 | 421 | 558 | 859 |
Franchisor Costs | 38 | 40 | 81 | 87 |
General and Administrative Expense | 198 | 208 | 409 | 427 |
Cooperative Advertising Expense | 315 | 274 | 616 | 546 |
Refranchising (gain) loss | (4) | (29) | (10) | (185) |
Other (income) expense | 6 | 5 | 6 | 3 |
Total costs and expenses, net | 839 | 919 | 1,660 | 1,737 |
Operating Profit | 471 | 449 | 904 | 1,002 |
Other investment (income) expense, net | (25) | (23) | (9) | (89) |
Other pension (income) expense | 0 | 3 | 3 | 6 |
Interest expense, net | 119 | 112 | 234 | 219 |
Income Before Income Taxes | 377 | 357 | 676 | 866 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 377 | 357 | 676 | 866 |
Income tax provision | 88 | 36 | 125 | 112 |
Net Income | $ 289 | $ 321 | $ 551 | $ 754 |
Earnings Per Share, Basic | $ 0.94 | $ 0.99 | $ 1.79 | $ 2.30 |
Diluted Earnings Per Common Share | 0.92 | 0.97 | 1.75 | 2.25 |
Dividends Declared Per Common Share | $ 0.42 | $ 0.36 | $ 0.84 | $ 0.72 |
Product [Member] | ||||
Revenues | ||||
Revenues | $ 359 | $ 512 | $ 692 | $ 1,024 |
Franchise [Member] | ||||
Revenues | ||||
Revenues | 633 | 584 | 1,245 | 1,168 |
Advertising [Member] | ||||
Revenues | ||||
Revenues | $ 318 | $ 272 | $ 627 | $ 547 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax, Portion Attributable to Parent | $ (43) | $ (1) | $ (74) | $ 12 |
Net Income (Loss) Attributable to Parent | 289 | 321 | 551 | 754 |
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature | ||||
Adjustments and gains (losses) arising during the period | (29) | (76) | 5 | (30) |
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature, before tax | (29) | (76) | 5 | (30) |
Tax (expense) benefit | 4 | 6 | 0 | 0 |
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature, net of tax | (25) | (70) | 5 | (30) |
Changes in pension and post-retirement benefits | ||||
Reclassification of (gains) losses into Net Income | 1 | 5 | 5 | 11 |
Changes in pension and post-retirement benefits, before tax | 1 | 5 | 5 | 11 |
Tax (expense) benefit | 0 | (2) | (1) | (3) |
Changes in pension and post-retirement benefits, net of tax | 1 | 3 | 4 | 8 |
Unrealized gains (losses) arising during the period | (44) | 25 | (60) | 27 |
Changes in derivative instruments | ||||
Reclassification of (gains) losses into Net Income | 1 | (26) | (14) | (15) |
Tax (expense) benefit | 11 | 1 | 19 | (3) |
Changes in derivative instruments, net of tax | (32) | 0 | (55) | 9 |
Other comprehensive income (loss), net of tax | (56) | (67) | (46) | (13) |
Comprehensive Income - YUM! Brands, Inc. | $ 233 | $ 254 | $ 505 | $ 741 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash Flows - Operating Activities | ||
Net Income (Loss) Attributable to Parent | $ 551 | $ 754 |
Depreciation and amortization | 54 | 71 |
Refranchising (gain) loss | (10) | (185) |
Other investment (income) expense, net | (9) | (89) |
Contributions to defined benefit pension plans | (11) | (5) |
Deferred income taxes | 0 | (23) |
Share-based compensation expense | 31 | 27 |
Changes in accounts and notes receivable | 7 | (15) |
Changes in prepaid expenses and other current assets | (24) | 4 |
Changes in accounts payable and other current liabilities | (171) | (160) |
Changes in income taxes payable | (36) | (15) |
Other, net | 79 | 17 |
Net Cash Provided by Operating Activities | 461 | 381 |
Cash Flows - Investing Activities | ||
Capital spending | (76) | (85) |
Investment in Grubhub Inc. common stock | 0 | (200) |
Proceeds from refranchising of restaurants | 25 | 252 |
Other, net | (1) | (9) |
Net Cash Used in Investing Activities | (52) | (42) |
Cash Flows - Financing Activities | ||
Proceeds from long-term debt | 0 | 106 |
Repayments of long-term debt | (40) | (449) |
Revolving credit facilities, three months or less, net | 157 | 202 |
Short-term borrowings by original maturity | ||
More than three months - proceeds | 48 | 51 |
More than three months - payments | (44) | (43) |
Three months or less, net | 0 | 0 |
Repurchase shares of Common Stock | (305) | (1,168) |
Dividends paid on Common Stock | (257) | (236) |
Other, net | (51) | (42) |
Net Cash Provided by (Used in) Financing Activities | (492) | (1,579) |
Effect of Exchange Rates on Cash and Cash Equivalents | (2) | (19) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | (85) | (1,259) |
Cash and Cash Equivalents - End of Period | 252 | |
Cash, Cash Equivalents and Restricted Cash as presented in the Consolidated Statement of Cash Flows | $ 389 | $ 409 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 252 | $ 292 |
Accounts and notes receivable, net | 535 | 561 |
Prepaid expenses and other current assets | 335 | 354 |
Total Current Assets | 1,122 | 1,207 |
Property, plant and equipment, net | 1,193 | 1,237 |
Goodwill | 526 | 525 |
Intangible assets, net | 243 | 242 |
Other assets | 1,378 | 724 |
Deferred income taxes | 212 | 195 |
Total Assets | 4,674 | 4,130 |
Current Liabilities | ||
Accounts payable and other current liabilities | 798 | 911 |
Income taxes payable | 63 | 69 |
Short-term borrowings | 325 | 321 |
Total Current Liabilities | 1,186 | 1,301 |
Long-term debt | 9,869 | 9,751 |
Other liabilities and deferred credits | 1,613 | 1,004 |
Total Liabilities | 12,668 | 12,056 |
Shareholders' Equity | ||
Common Stock, no par value, 750 shares authorized; 313 and 332 shares issued in 2018 and 2017, respectively | 0 | 0 |
Accumulated deficit | (7,614) | (7,592) |
Accumulated other comprehensive income (loss) | (380) | (334) |
Total Shareholders' Deficit | (7,994) | (7,926) |
Total Liabilities and Shareholders' Deficit | $ 4,674 | $ 4,130 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) shares in Millions, $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Other assets | $ 1,378 | $ 724 |
Total Liabilities and Shareholders’ Deficit | $ 4,674 | $ 4,130 |
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 750 | 750 |
Common Stock, Shares, Issued | 304 | 306 |
CONDENSED STATEMENT OF SHAREHOL
CONDENSED STATEMENT OF SHAREHOLDERS EQUITY Statement - USD ($) shares in Thousands, $ in Millions | Total | Including Noncontrolling Interest [Member] | AOCI Attributable to Parent [Member] | Common Stock [Member] | Retained Earnings [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Retained Earnings [Member]Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ (271) | $ (6,334) | $ 0 | $ (6,063) | ||||
Shares, Issued | 332,000 | |||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | 2 | |||||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | 36 | $ 36 | ||||||
Employee Stock Option and SARs Exercises, Value | (33) | $ (29) | (4) | |||||
Employee Stock Option and SARs Exercises, Shares | 1,000 | |||||||
Stock Repurchased During Period, Value | $ (1,171) | [1] | (1,171) | $ 7 | (1,164) | |||
Stock Repurchased During Period, Shares | (14,147) | [1] | (14,000) | |||||
Dividends, Common Stock | (237) | (237) | ||||||
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | 741 | |||||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | $ 9 | 9 | $ 9 | |||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 8 | 8 | 8 | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | (30) | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | (30) | |||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 754 | |||||||
Net Income (Loss) Attributable to Parent | 754 | 754 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (215) | (6,754) | $ 0 | (6,539) | ||||
Shares, Issued | 327,000 | |||||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | 13 | $ 13 | ||||||
Employee Stock Option and SARs Exercises, Value | (6) | $ (6) | ||||||
Employee Stock Option and SARs Exercises, Shares | (1,000) | |||||||
Stock Repurchased During Period, Value | (643) | $ 7 | (636) | |||||
Stock Repurchased During Period, Shares | (7,000) | |||||||
Dividends, Common Stock | (116) | (116) | ||||||
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | 254 | |||||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | 0 | |||||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 3 | 3 | 3 | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | (70) | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | (70) | |||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 321 | |||||||
Net Income (Loss) Attributable to Parent | 321 | 321 | ||||||
Stockholders' Equity Attributable to Parent | $ 5 | |||||||
Accumulated deficit | $ (251) | |||||||
Accumulated deficit | Adjustments for New Accounting Pronouncement [Member] | $ 5 | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (282) | (7,247) | $ 0 | (6,965) | ||||
Shares, Issued | 319,000 | |||||||
Stockholders' Equity Attributable to Parent | (7,926) | |||||||
Accumulated deficit | 7,592 | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (334) | (7,926) | $ 0 | (7,592) | ||||
Shares, Issued | 306,000 | |||||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | ||||||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | 39 | $ 39 | ||||||
Employee Stock Option and SARs Exercises, Value | (51) | $ (38) | (13) | |||||
Employee Stock Option and SARs Exercises, Shares | 1,000 | |||||||
Stock Repurchased During Period, Value | $ (302) | [2] | (302) | $ 1 | (301) | |||
Stock Repurchased During Period, Shares | (3,018) | [2] | (3,000) | |||||
Dividends, Common Stock | (257) | (257) | ||||||
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | 505 | |||||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | $ (55) | (55) | (55) | |||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 4 | 4 | 4 | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | 5 | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | 5 | |||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 551 | |||||||
Net Income (Loss) Attributable to Parent | 551 | 551 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | (324) | (7,904) | $ 0 | (7,580) | ||||
Shares, Issued | 306,000 | |||||||
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | 14 | $ 14 | ||||||
Employee Stock Option and SARs Exercises, Value | (13) | (13) | ||||||
Stock Repurchased During Period, Value | (196) | $ 1 | (195) | |||||
Stock Repurchased During Period, Shares | (2,000) | |||||||
Dividends, Common Stock | (128) | (128) | ||||||
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | 233 | |||||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax | (32) | (32) | (32) | |||||
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 1 | 1 | 1 | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss) Arising During Period, Net of Tax | (25) | |||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | $ (25) | |||||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 289 | |||||||
Net Income (Loss) Attributable to Parent | 289 | 289 | ||||||
Stockholders' Equity Attributable to Parent | (7,994) | |||||||
Accumulated deficit | 7,614 | |||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ (380) | $ (7,994) | $ 0 | $ (7,614) | ||||
Shares, Issued | 304,000 | |||||||
[1] | Includes the effect of $3 million in share repurchases ( 0.03 million shares) with trade dates prior to June 30, 2018, but cash settlement dates subsequent to June 30, 2018. | |||||||
[2] | Includes the effect of $2 million in share repurchases ( 0.02 million shares) with trade dates prior to June 30, 2019, but cash settlement dates subsequent to June 30, 2019 and excludes the effect of $5 million in share repurchases ( 0.05 million shares) with trade dates on, or prior to, December 31, 2018, but cash settlement dates subsequent to December 31, 2018. |
Financial Statement Presentatio
Financial Statement Presentation | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financial Statement Presentation | Financial Statement Presentation We have prepared our accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by Generally Accepted Accounting Principles in the United States (“GAAP”) for complete financial statements. Therefore, we suggest that the accompanying Financial Statements be read in conjunction with the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (“ 2018 Form 10-K”). YUM! Brands, Inc. and its Subsidiaries (collectively referred to herein as the “Company,” “YUM,” “we,” “us” or “our”) franchises or operates a system of over 48,000 quick service restaurants in more than 145 countries and territories. At June 30, 2019, 98% of these restaurants were owned and operated by franchisees. The Company’s KFC, Pizza Hut and Taco Bell brands (collectively the “Concepts”) are global leaders of the chicken, pizza and Mexican-style food categories. As of June 30, 2019 , YUM consisted of three operating segments: • The KFC Division which includes our worldwide operations of the KFC concept • The Pizza Hut Division which includes our worldwide operations of the Pizza Hut concept • The Taco Bell Division which includes our worldwide operations of the Taco Bell concept YUM's fiscal year begins on January 1 and ends December 31 of each year, with each quarter comprised of three months. Our U.S. subsidiaries and certain international subsidiaries operate on a weekly periodic calendar where the first three quarters of each fiscal year consists 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. For our subsidiaries that operate on this weekly periodic calendar, 2019 will include a 53rd week. Our remaining international subsidiaries operate on a monthly calendar similar to that on which YUM operates. 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 2018 Form 10-K, the results of the interim periods presented. Our results of operations, comprehensive income, cash flows and changes in shareholders' deficit 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 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 other items in the Financial Statements for the prior periods to be comparable with the classification for the quarter and year to date ended June 30, 2019 . These reclassifications had no effect on previously reported Net Income. |
Note 2. Lease Accounting Policy
Note 2. Lease Accounting Policy (Notes) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases [Text Block] | Lease Accounting Starting in February 2016 and continuing into 2019, the Financial Accounting Standards Board ("FASB") issued standards on the recognition and measurement of leases ("Topic 842"). We adopted these standards beginning with the quarter ended March 31, 2019, using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of 2019 and have not recast the comparative periods presented in the Condensed Consolidated Financial Statements. The standards provide a number of optional practical expedients and policy elections in transition. We elected the ‘package of practical expedients’ under which we did not reassess under the standards our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements. Refer to Note 5 for information regarding the adjustments recorded to our Condensed Consolidated Balance Sheet as of the beginning of the quarter ended March 31, 2019 to reflect the adoption of Topic 842. Below is information about the nature of our leases, accounting policies and assumptions subsequent to adopting Topic 842 and other required disclosures. In certain instances, we lease or sublease certain restaurants to franchisees. Our lessor and sublease portfolio primarily consists of stores that have been leased to franchisees subsequent to refranchising transactions. Our most significant leases with lease and non-lease components are leases with our franchisees that include both the right to use a restaurant as well as a license of the intellectual property associated with our Concepts’ brands. For these leases, which are primarily classified as operating leases, we account for the lease and non-lease components separately. Revenues from rental agreements with franchisees are presented within Franchise and property revenues in our Condensed Consolidated Statements of Income and related expenses (e.g. depreciation and rent expense) are presented within Franchise and property expenses. The impact of adopting Topic 842 on the accounting for our lessor and sublease portfolio was not significant. We lease land, buildings or both for certain of our restaurants and restaurant support centers worldwide. Rental expense for leased restaurants is presented in our Condensed Consolidated Statements of Income as Company restaurant expenses and rental expense for restaurant support centers is presented as General and administrative expenses. The length of our lease terms, which vary by country and often include renewal options, are an important factor in determining the appropriate accounting for leases including the initial classification of the lease as finance (referred to as “capital” leases prior to the adoption of Topic 842) or operating as well as the timing of recognition of rent expense over the duration of the lease. We include renewal option periods in determining the term of our leases when failure to renew the lease would impose a penalty on the Company in such an amount that a renewal appears to be reasonably certain at the commencement of the lease. The primary penalty to which we are subject is the economic detriment associated with the existence of leasehold improvements that might be impaired if we choose not to continue the use of the leased property. Our leasing activity for other assets, including equipment, is not significant. Prior to the adoption of Topic 842 (“Legacy GAAP”) liabilities for future rental payments under operating leases were not recognized on the balance sheet of the Company except when recognizing a liability was necessary to reflect the impact of recognizing rent expense on a straight-line basis. Upon the adoption of Topic 842, right-of-use assets and liabilities are recognized upon lease commencement for operating leases based on the present value of lease payments over the lease term. Such assets and liabilities have historically been recorded for finance leases. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Subsequent amortization of the right-of-use asset and accretion of the lease liability for an operating lease is recognized as a single lease cost, on a straight-line basis, over the lease term. For finance leases, the right-of-use asset is depreciated on a straight-line basis over the lesser of the useful life of the leased asset or lease term. Interest on each finance lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. As most of our leases do not provide an implicit discount rate, we use our incremental secured borrowing rate based on the information available at commencement date, including the lease term and currency, in determining the present value of lease payments for both operating and finance leases. Leases with an initial term of 12 months or less are not recorded in the Condensed Consolidated Balance Sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Right-of-use assets are assessed for impairment in accordance with our long-lived asset impairment policy, which is performed annually or whenever events or changes in circumstances indicate that the carrying amount of a restaurant may not be recoverable. We reassess lease classification and remeasure right-of-use assets and lease liabilities when a lease is modified and that modification is not accounted for as a separate new lease or upon certain other events that require reassessment in accordance with Topic 842. The difference between operating lease rental expense recognized in our Condensed Consolidated Statements of Income and cash payments for operating leases is recognized within Other, net within Net Cash Provided by Operating Activities in our Condensed Consolidated Statements of Cash Flows. The components of lease expense were as follows: Quarter Ended 6/30/2019 Year to date 6/30/2019 Operating lease cost $ 27 $ 56 Finance lease cost Amortization of right-of-use assets 1 2 Interest on lease liabilities — 1 Total finance lease cost 1 3 Sublease income (16 ) (34 ) Supplemental cash flow information related to leases was as follows: Year to date 6/30/2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 53 Operating cash flows from finance leases 1 Financing cash flows from finance leases 2 Right-of-use assets obtained in exchange for lease obligations Operating leases 29 Finance leases 3 Supplemental balance sheet information related to leases was as follows: 6/30/2019 Condensed Consolidated Balance Sheet Assets Operating lease right-of-use assets $ 663 Other assets Finance lease right-of-use assets 34 Property, plant and equipment, net Total right-of-use assets (a) $ 697 Liabilities Current Operating $ 74 Accounts payable and other current liabilities Finance 6 Short-term borrowings Non-current Operating 653 Other liabilities and deferred credits Finance 63 Long-term debt Total lease liabilities (a) $ 796 Weighted-average Remaining Lease Term (in years) Operating leases 12.1 Finance leases 11.9 Weighted-average Discount Rate Operating leases 5.5 % Finance leases 5.7 % (a) U.S. operating lease right-of-use assets and liabilities totaled $282 million and $333 million , respectively, as of June 30, 2019 and primarily related to Taco Bell U.S. Future minimum lease payments as of June 30, 2019, including rental payments for lease renewal options we are reasonably certain to exercise were as follows: Commitments Finance Operating Less than 1 year $ 10 $ 112 1-2 years 9 103 2-3 years 9 94 3-4 years 8 85 4-5 years 7 79 Thereafter 53 548 Total lease payments 96 1,021 Less imputed interest (27 ) (294 ) Total lease liabilities $ 69 $ 727 Future minimum lease payments under the non-cancellable term of leases as of December 31, 2018 as required to be disclosed under Legacy GAAP were as follows: Commitments Capital Operating 2019 $ 10 $ 103 2020 10 89 2021 9 78 2022 8 71 2023 8 61 Thereafter 58 384 Total lease payments $ 103 $ 786 |
Earnings Per Common Share ("EPS
Earnings Per Common Share ("EPS") | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share (EPS) | Earnings Per Common Share (“EPS”) Quarter ended Year to date 2019 2018 2019 2018 Net Income $ 289 $ 321 $ 551 $ 754 Weighted-average common shares outstanding (for basic calculation) 307 324 307 328 Effect of dilutive share-based employee compensation 7 7 7 8 Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) 314 331 314 336 Basic EPS $ 0.94 $ 0.99 $ 1.79 $ 2.30 Diluted EPS $ 0.92 $ 0.97 $ 1.75 $ 2.25 Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation (a) 2.3 2.3 1.8 1.8 (a) These unexercised employee stock options and stock appreciation rights were not included in the computation of diluted EPS because to do so would have been antidilutive for the periods presented. |
Shareholders' Deficit
Shareholders' Deficit | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Deficit Under the authority of our Board of Directors, we repurchased shares of our Common Stock during the years to date ended June 30, 2019 and 2018 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 2019 2018 2019 2018 2019 November 2017 Authorization — 14,147 $ — $ 1,171 $ — August 2018 Authorization 3,018 — 302 — 804 Total 3,018 (a) 14,147 (b) $ 302 (a) $ 1,171 (b) $ 804 (a) Includes the effect of $2 million in share repurchases ( 0.02 million shares) with trade dates prior to June 30, 2019, but cash settlement dates subsequent to June 30, 2019 and excludes the effect of $5 million in share repurchases ( 0.05 million shares) with trade dates on, or prior to, December 31, 2018, but cash settlement dates subsequent to December 31, 2018. (b) Includes the effect of $3 million in share repurchases ( 0.03 million shares) with trade dates prior to June 30, 2018, but cash settlement dates subsequent to June 30, 2018. Changes in Accumulated other comprehensive loss ("AOCI") 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 March 31, 2019, net of tax $ (215 ) $ (79 ) $ (30 ) $ (324 ) OCI, net of tax Gains (losses) arising during the period classified into AOCI, net of tax (25 ) — (33 ) (58 ) (Gains) losses reclassified from AOCI, net of tax — 1 1 2 (25 ) 1 (32 ) (56 ) Balance at June 30, 2019, net of tax $ (240 ) $ (78 ) $ (62 ) $ (380 ) Balance at December 31, 2018, net of tax $ (245 ) $ (82 ) $ (7 ) $ (334 ) OCI, net of tax Gains (losses) arising during the period classified into AOCI, net of tax 5 — (44 ) (39 ) (Gains) losses reclassified from AOCI, net of tax — 4 (11 ) (7 ) 5 4 (55 ) (46 ) Balance at June 30, 2019, net of tax $ (240 ) $ (78 ) $ (62 ) $ (380 ) |
Items Affecting Comparability o
Items Affecting Comparability of Net Income, Financial Position and Cash Flows | 6 Months Ended |
Jun. 30, 2019 | |
Items Affecting Comparability of Net Income and Cash Flows [Abstract] | |
Comparability of Prior Year Financial Data | Items Affecting Comparability of Net Income, Financial Position and Cash Flows Refranchising (Gain) Loss The Refranchising (gain) loss by our Divisional reportable segments is presented below. Given the size and volatility of refranchising initiatives, our chief operating decision maker ("CODM") does not consider the impact of Refranchising (gain) loss when assessing Divisional segment performance. As such, we do not allocate such gains and losses to our Divisional segments for performance reporting purposes. During the quarter and year to date ended June 30, 2019 , we sold certain restaurant assets associated with existing franchise restaurants to the franchisee. Additionally, we refranchised 6 restaurants in the first quarter of 2019. Pre-tax proceeds related to these sales totaled $11 million and $25 million for the quarter and year to date ended June 30, 2019, respectively. During the quarter and year to date ended June 30, 2018 , we refranchised 51 restaurants and 195 restaurants, respectively, and received $47 million and $252 million , respectively, in pre-tax proceeds. A summary of Refranchising (gain) loss is as follows: Quarter ended Year to date 2019 2018 2019 2018 KFC Division $ (4 ) $ (42 ) $ (6 ) $ (99 ) Pizza Hut Division — 13 — 11 Taco Bell Division — — (4 ) (97 ) Worldwide $ (4 ) $ (29 ) $ (10 ) $ (185 ) Pizza Hut U.S. Transformation Agreement In May 2017, we reached an agreement with Pizza Hut U.S. franchisees that will improve brand marketing alignment, accelerate enhancements in operations and technology and that included a permanent commitment to incremental advertising as well as digital and technology contributions by franchisees (the “Transformation Agreement”). In connection with the Transformation Agreement we anticipate investing approximately $90 million from 2017 to 2019 to upgrade restaurant equipment to improve operations, fund improvements in restaurant technology and enhance digital and e-commerce capabilities. As of June 30, 2019, we have invested $82 million since the inception of the agreement. We have invested $5 million and $13 million in the quarter and year to date ended June 30, 2019, respectively, and $4 million and $11 million in the quarter and year to date ended June 30, 2018, respectively, related to the Transformation Agreement. These amounts primarily consisted of capital investments and franchisee incentive payments that were capitalized. Also included are operating investments of $1 million and $2 million in both the quarters and years to date ended June 30, 2019 and 2018, respectively. Due to their unique and long-term brand-building nature as well as their non-recurring impact on Pizza Hut’s Division results, the financial impact of operating investments that are part of the Transformation Agreement are not being considered by our CODM when assessing segment performance. As such, these operating investments are not being allocated to the Pizza Hut Division operating segment results for performance reporting purposes. Depreciation on capital investments made as part of the Transformation Agreement is being allocated to Pizza Hut segment results as the expense is recurring and is not expected to significantly impact the comparability of results in any given period. For the same reasons, the amortization related to capitalized franchisee incentive payments is being allocated to Pizza Hut Division operating segment results. In addition to the investments above, we funded $37.5 million of incremental system advertising from the second half of 2017 through 2018, including $2 million and $5 million we incurred during the quarter and year to date ended June 30, 2018, respectively. These advertising amounts were recorded primarily in Franchise and property expenses and were included in the Pizza Hut Division segment operating results. KFC U.S. Acceleration Agreement During 2015, we reached an agreement with our KFC U.S. franchisees that gave us control of brand marketing execution as well as an accelerated path to expanded menu offerings, improved assets and enhanced customer experience. In connection with this agreement we are investing approximately $130 million from 2015 through 2019 primarily to fund new back-of-house equipment for franchisees and to provide incentives to accelerate franchisee store remodels. We invested $1 million and $2 million in the quarters ended June 30, 2019 and 2018, respectively, and $2 million and $3 million in the years to date ended June 30, 2019 and 2018, respectively. We have invested approximately $125 million since the inception of the agreement. In addition to the investments above, we funded $60 million of incremental system advertising from 2015 through 2018, including $3 million and $5 million incurred during the quarter and year to date ended June 30, 2018, respectively. These advertising amounts were recorded primarily in Franchise and property expenses and were included in the KFC Division segment operating results. Turkey Acquisition Contingent Consideration During the quarter ended June 30, 2019 we recorded charges of $8 million and $2 million to Other (income) expense and Interest expense, net, respectively, related to cash payments in excess of our recorded liability to settle contingent consideration associated with our 2013 acquisition of the KFC Turkey and Pizza Hut Turkey businesses. Consistent with prior adjustments to the recorded contingent consideration, our CODM does not consider this charge when assessing segment performance due to the nature of these costs. As such, these costs are not being allocated to any of our segment operating results for performance reporting purposes. Investment in Grubhub, Inc. ("Grubhub") On February 7, 2018, certain of our subsidiaries entered into a master services agreement with a subsidiary of Grubhub, the leading online and mobile takeout food-ordering company in the U.S., which is intended to provide dedicated support for the KFC and Taco Bell branded online delivery channels in the U.S. through Grubhub’s online ordering platform, logistics and last-mile support for delivery orders, as well as point-of-sale integration to streamline operations. Concurrently with the master services agreement, one of our subsidiaries entered into an investment agreement with Grubhub to invest $200 million in exchange for approximately 2.8 million shares of Grubhub common stock, subject to customary closing conditions. In April 2018, all necessary regulatory approvals were obtained and the purchase of Grubhub shares was consummated. Shares acquired as part of this purchase are restricted from being transferred until the earlier of the two-year anniversary of closing the investment agreement or 30 days following the termination of our master services agreement with Grubhub. In the quarter and year to date ended June 30, 2019 we recognized pre-tax income of $24 million and $4 million , respectively, related to the mark-to-market of these shares, which includes the appreciation in the market price of Grubhub common stock less valuation adjustments related to the transfer restrictions. In the quarter and year to date ended June 30, 2018, we recognized pre-tax income of $25 million and $91 million , respectively, which included the appreciation in the market price of Grubhub common stock since entering into the agreement less valuation adjustments related to the transfer restrictions. The $25 million recognized in the quarter ended June 30, 2018 also included the reversal of the valuation adjustment that was established in the first quarter of 2018 regarding the then likelihood of obtaining the necessary regulatory approvals to close the investment agreement. Changes in the fair value of our investment in Grubhub common stock are presented as Investment (income) expense, net within our Condensed Consolidated Statements of Income. Impact of Adopting New Lease Standards As discussed in Note 2, we adopted Topic 842 beginning with the quarter ended March 31, 2019, using a modified retrospective method. Topic 842 was applied to all leases existing at, or entered into after, the beginning of 2019. As a result of adopting Topic 842, the following adjustments were made to the Condensed Consolidated Balance Sheet as of the beginning of the quarter ended March 31, 2019: CONDENSED CONSOLIDATED BALANCE SHEET As Reported 12/31/2018 Adjustments Balances with Adoption of Topic 842 1/1/2019 ASSETS Current Assets Cash and cash equivalents $ 292 $ — $ 292 Accounts and notes receivable, net 561 — 561 Prepaid expenses and other current assets 354 (10 ) 344 Total Current Assets 1,207 (10 ) 1,197 Property, plant and equipment, net 1,237 — 1,237 Goodwill 525 — 525 Intangible assets, net 242 — 242 Other assets 724 689 1,413 Deferred income taxes 195 — 195 Total Assets $ 4,130 $ 679 $ 4,809 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current Liabilities Accounts payable and other current liabilities $ 911 $ 76 $ 987 Income taxes payable 69 — 69 Short-term borrowings 321 — 321 Total Current Liabilities 1,301 76 1,377 Long-term debt 9,751 — 9,751 Other liabilities and deferred credits 1,004 605 1,609 Total Liabilities 12,056 681 12,737 Shareholders’ Deficit Accumulated deficit (7,592 ) (2 ) (7,594 ) Accumulated other comprehensive loss (334 ) — (334 ) Total Shareholders’ Deficit (7,926 ) (2 ) (7,928 ) Total Liabilities and Shareholders’ Deficit $ 4,130 $ 679 $ 4,809 We recorded lease liabilities within Accounts payable and other current liabilities and Other liabilities and deferred credits of $83 million and $661 million , respectively, related to the present value of the remaining operating lease payments. These adjustments were partially offset by reductions to Accounts payable and other current liabilities and Other liabilities and deferred credits of $7 million and $56 million , respectively, primarily related to the write offs of liabilities previously recorded to reflect the impact of recognizing rent expense on a straight-line basis when lease payments were escalating under Legacy GAAP. Additionally, lease liabilities recognized upon adoption were offset by the write-off of prepaid rent of $11 million that was recorded under Legacy GAAP resulting in a decrease within Prepaid expenses and other current assets and Other assets of $10 million and $1 million , respectively. We recorded a corresponding right-of-use asset within Other Assets of $690 million . This right-of-use asset reflected a $2 million |
Other (Income) Expense
Other (Income) Expense | 6 Months Ended |
Jun. 30, 2019 | |
Other Income and Expenses [Abstract] | |
Other (Income) Expense | Other (Income) Expense Other (income) expense primarily includes settlement of contingent consideration associated with our 2013 acquisition of the KFC Turkey and Pizza Hut Turkey businesses (See Note 5) and net foreign exchange (gains) losses for the quarter and year to date ended June 30, 2019. For the quarter and year to date ended June 30, 2018, Other (income) expense primarily includes net foreign exchange (gains) losses and store closure and impairment expenses. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 6 Months Ended |
Jun. 30, 2019 | |
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 as a result of franchise and lease agreements. Trade receivables consisting of royalties from franchisees are generally due within 30 days of the period in which the corresponding sales occur and are classified as Accounts and notes receivable, net in our Condensed Consolidated Balance Sheets. Accounts and notes receivable, net also includes receivables generated from advertising cooperatives that we consolidate. 6/30/2019 12/31/2018 Accounts and notes receivable, gross $ 580 $ 592 Allowance for doubtful accounts (45 ) (31 ) Accounts and notes receivable, net $ 535 $ 561 Property, Plant and Equipment, net 6/30/2019 12/31/2018 Property, plant and equipment, gross $ 2,328 $ 2,353 Accumulated depreciation and amortization (1,135 ) (1,116 ) Property, plant and equipment, net $ 1,193 $ 1,237 Assets held-for-sale totaled $24 million as of both June 30, 2019 and December 31, 2018 and are included in Prepaid expenses and other current assets in our Condensed Consolidated Balance Sheets. Reconciliation of Cash and Cash Equivalents for Condensed Consolidated Statements of Cash Flows 6/30/2019 12/31/2018 Cash and cash equivalents as presented in Condensed Consolidated Balance Sheets $ 252 $ 292 Restricted cash included in Prepaid expenses and other current assets (a) 112 151 Restricted cash and restricted cash equivalents included in Other assets (b) 25 31 Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents as presented in Condensed Consolidated Statements of Cash Flows $ 389 $ 474 (a) Restricted cash within Prepaid expenses and other current assets reflects Taco Bell Securitization interest reserves and the cash related to advertising cooperatives that we consolidate that can only be used to settle obligations of the respective cooperatives. (b) Primarily trust accounts related to our self-insurance program. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Quarter ended Year to date 2019 2018 2019 2018 Income tax provision $ 88 $ 36 $ 125 $ 112 Effective tax rate 23.3 % 9.9 % 18.5 % 12.9 % Our second quarter and year to date effective tax rate was higher than prior year primarily due to the unfavorable impact of lapping a prior year decrease to the provisional tax expense recorded in the fourth quarter of 2017 associated with the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), the unfavorable impact of the global intangible low-taxed income provisions of the Tax Act in the current year, and lapping the favorable impact attributable to prior year refranchising transactions. These items were partially offset by lapping $19 million in expense recorded in the prior year to correct an error associated with the tax recorded on a prior year divestiture. |
Revenue Recognition Accounting
Revenue Recognition Accounting Policy | 6 Months Ended |
Jun. 30, 2019 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Total Revenues The following tables disaggregate revenue by Concept, for our two most significant markets based on Operating Profit and for all other markets. We believe this disaggregation best reflects the extent to which the nature, amount, timing and uncertainty of our revenues and cash flows are impacted by economic factors. Quarter ended 6/30/2019 KFC Division Pizza Hut Division Taco Bell Division Total U.S. Company sales $ 18 $ 5 $ 212 $ 235 Franchise revenues 41 67 140 248 Property revenues 5 1 11 17 Franchise contributions for advertising and other services 3 78 109 190 China Franchise revenues 52 15 — 67 Other Company sales 117 6 1 124 Franchise revenues 218 60 7 285 Property revenues 16 — — 16 Franchise contributions for advertising and other services 114 14 — 128 $ 584 $ 246 $ 480 $ 1,310 Quarter ended 6/30/2018 KFC Division Pizza Hut Division Taco Bell Division Total U.S. Company sales $ 16 $ 11 $ 252 $ 279 Franchise revenues 40 63 123 226 Property revenues 5 1 6 12 Franchise contributions for advertising and other services 2 60 97 159 China Franchise revenues 49 15 — 64 Other Company sales 225 7 1 233 Franchise revenues 198 61 5 264 Property revenues 18 — — 18 Franchise contributions for advertising and other services 98 15 — 113 $ 651 $ 233 $ 484 $ 1,368 Year to date ended 6/30/2019 KFC Division Pizza Hut Division Taco Bell Division Total U.S. Company sales $ 34 $ 10 $ 408 $ 452 Franchise revenues 79 134 268 481 Property revenues 11 3 21 35 Franchise contributions for advertising and other services 5 152 213 370 China Franchise revenues 108 30 — 138 Other Company sales 226 12 2 240 Franchise revenues 423 120 13 556 Property revenues 34 1 — 35 Franchise contributions for advertising and other services 230 27 — 257 $ 1,150 $ 489 925 $ 2,564 Year to date ended 6/30/2018 KFC Division Pizza Hut Division Taco Bell Division Total U.S. Company sales $ 33 $ 25 $ 494 552 Franchise revenues 78 132 240 450 Property revenues 11 2 11 24 Franchise contributions for advertising and other services 4 125 188 317 China Franchise revenues 103 31 — 134 Other Company sales 453 17 2 472 Franchise revenues 388 123 11 522 Property revenues 37 1 — 38 Franchise contributions for advertising and other services 202 28 — 230 $ 1,309 $ 484 $ 946 $ 2,739 Contract Liabilities Our contract liabilities are comprised of unamortized upfront fees received from franchisees. A summary of significant changes to the contract liability balance during 2019 is presented below. Deferred Franchise Fees Balance at December 31, 2018 $ 414 Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period (33 ) Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period 38 Balance at June 30, 2019 $ 419 We expect to recognize contract liabilities as revenue over the remaining term of the associated franchise agreement as follows: Less than 1 year $ 61 1 - 2 years 57 2 - 3 years 52 3 - 4 years 48 4 - 5 years 43 Thereafter 158 Total $ 419 |
Reportable Operating Segments
Reportable Operating Segments | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Reportable Operating Segments | Reportable Operating Segments We identify our operating segments based on management responsibility. The following tables summarize Revenues and Operating Profit for each of our reportable operating segments: Quarter ended Year to date Revenues 2019 2018 2019 2018 KFC Division $ 584 $ 651 $ 1,150 $ 1,309 Pizza Hut Division 246 233 489 484 Taco Bell Division 480 484 925 946 $ 1,310 $ 1,368 $ 2,564 $ 2,739 Quarter ended Year to date Operating Profit 2019 2018 2019 2018 KFC Division $ 261 $ 235 $ 497 $ 456 Pizza Hut Division 96 81 193 169 Taco Bell Division 159 149 297 281 Corporate and unallocated G&A expenses (38 ) (40 ) (81 ) (84 ) Unallocated Company restaurant expenses — 1 — 1 Unallocated Franchise and property expenses (a) (2 ) (1 ) (3 ) (2 ) Unallocated Refranchising gain (loss) (See Note 5) 4 29 10 185 Unallocated Other income (expense) (b) (9 ) (5 ) (9 ) (4 ) Operating Profit $ 471 $ 449 $ 904 $ 1,002 Investment income (expense), net (See Note 5) 25 23 9 89 Other pension income (expense) (See Note 11) — (3 ) (3 ) (6 ) Interest expense, net (119 ) (112 ) (234 ) (219 ) Income before income taxes $ 377 $ 357 $ 676 $ 866 (a) Represents costs associated with the KFC U.S. Acceleration Agreement and Pizza Hut U.S. Transformation Agreement. See Note 5. (b) Includes settlement of contingent consideration associated with our 2013 acquisition of the KFC Turkey and Pizza Hut Turkey businesses. See Note 5. |
Pension Benefits
Pension Benefits | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Pension Benefits | Pension Benefits We sponsor qualified and supplemental (non-qualified) noncontributory defined benefit pension plans covering certain full-time salaried and hourly U.S. employees. The most significant of these plans, the YUM Retirement Plan (the "Plan"), is funded. We fund our other U.S. plans as benefits are paid. The Plan and our most significant non-qualified plan in the U.S. are closed to new salaried participants. The components of net periodic benefit cost associated with our significant U.S. pension plans are as follows: Quarter ended Year to date 2019 2018 2019 2018 Service cost $ 1 $ 2 $ 3 $ 4 Interest cost 10 9 20 18 Expected return on plan assets (11 ) (11 ) (22 ) (21 ) Amortization of net loss 1 3 1 7 Amortization of prior service cost 1 2 2 3 Net periodic benefit cost $ 2 $ 5 $ 4 $ 11 Additional loss recognized due to settlements (a) $ — $ — $ 2 $ — (a) Loss is a result of settlement transactions which exceeded the sum of annual service and interest costs for the applicable plan. These losses were recorded in Other pension (income) expense. |
Short-term Borrowings and Long-
Short-term Borrowings and Long-term Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Short-term Borrowings and Long-term Debt | Short-term Borrowings and Long-term Debt Short-term Borrowings 6/30/2019 12/31/2018 Current maturities of long-term debt $ 331 $ 331 Other 4 — 335 331 Less current portion of debt issuance costs and discounts (10 ) (10 ) Short-term borrowings $ 325 $ 321 Long-term Debt Securitization Notes $ 2,913 $ 2,928 Subsidiary Senior Unsecured Notes 2,850 2,850 Revolving Facility 157 — Term Loan A Facility 475 488 Term Loan B Facility 1,945 1,955 YUM Senior Unsecured Notes 1,875 1,875 Finance lease obligations 69 71 $ 10,284 $ 10,167 Less debt issuance costs and discounts (84 ) (85 ) Less current maturities of long-term debt (331 ) (331 ) Long-term debt $ 9,869 $ 9,751 Details of our short-term borrowings and long-term debt as of December 31, 2018 can be found within our 2018 Form 10-K. Cash paid for interest during the years to date ended June 30, 2019 and 2018 was $253 million and $236 million , respectively. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments We use derivative instruments to manage certain of our market risks related to fluctuations in interest rates and foreign currency exchange rates. Interest Rate Swaps We have entered into interest rate swaps with the objective of reducing our exposure to interest rate risk for a portion of our variable-rate debt interest payments. At both June 30, 2019 and December 31, 2018, our interest rate swaps expiring in July 2021 had notional amounts of $1.55 billion and our interest rate swaps expiring in March 2025 had notional amounts of $1.5 billion . These interest rate swaps are designated cash flow hedges as the changes in the future cash flows of the swaps are expected to offset changes in expected future interest payments on the related variable-rate debt. There were no other interest rate swaps outstanding as of June 30, 2019 or December 31, 2018. Gains or losses on the interest rate swaps are reported as a component of AOCI and reclassified into Interest expense, net in our Condensed Consolidated Statements of Income in the same period or periods during which the related hedged interest payments affect earnings. Through June 30, 2019 , the swaps were highly effective cash flow hedges. Foreign Currency Contracts We have entered into foreign currency forward and swap contracts with the objective of reducing our exposure to earnings volatility arising from foreign currency fluctuations associated with certain foreign currency denominated intercompany receivables and payables. The notional amount, maturity date, and currency of these contracts match those of the underlying intercompany receivables or payables. Our foreign currency contracts are designated cash flow hedges as the future cash flows of the contracts are expected to offset changes in intercompany receivables and payables due to foreign currency exchange rate fluctuations. Gains or losses on the foreign currency contracts are reported as a component of AOCI. Amounts are reclassified from AOCI each quarter to offset foreign currency transaction gains or losses recorded within Other (income) expense when the related intercompany receivables and payables affect earnings due to their functional currency remeasurements. Through June 30, 2019 , all foreign currency forward and swap contracts related to intercompany receivables and payables were highly effective cash flow hedges. As of both June 30, 2019 and December 31, 2018, foreign currency forward and swap contracts outstanding related to intercompany receivables and payables had total notional amounts of $456 million . As of June 30, 2019 these foreign currency forward and swap contracts have durations that expire in 2019 or 2020. As a result of the use of interest rate swaps and foreign currency contracts, the Company is exposed to risk that the counterparties will fail to meet their contractual obligations. To mitigate the counterparty credit risk, we only enter into contracts with major financial institutions carefully selected based upon their credit ratings and other factors, and continually assess the creditworthiness of counterparties. At June 30, 2019 , all of the counterparties to our interest rate swaps and foreign currency contracts had investment grade ratings according to the three major ratings agencies. To date, all counterparties have performed in accordance with their contractual obligations. Gains and losses on derivative instruments designated as cash flow hedges recognized in OCI and reclassifications from AOCI into Net Income: Quarter ended Year to date Gains/(Losses) Recognized in OCI (Gains)/Losses Reclassified from AOCI into Net Income Gains/(Losses) Recognized in OCI (Gains)/Losses Reclassified from AOCI into Net Income 2019 2018 2019 2018 2019 2018 2019 2018 Interest rate swaps $ (43 ) $ (2 ) $ (5 ) $ (2 ) $ (70 ) $ 16 $ (10 ) $ (3 ) Foreign currency contracts (1 ) 27 6 (24 ) 10 11 (4 ) (12 ) Income tax benefit/(expense) 11 (1 ) — 2 16 (5 ) 3 2 As of June 30, 2019 , the estimated net gain included in AOCI related to our cash flow hedges that will be reclassified into earnings in the next 12 months is $6 million , based on current LIBOR interest rates. See Note 14 for the fair value of our derivative assets and liabilities. |
Fair Value Disclosures
Fair Value Disclosures | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Disclosures As of June 30, 2019 , the carrying values of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, short-term borrowings, accounts payable and borrowings under our Revolving Facility approximated their fair values because of the short-term nature of these instruments. The fair value of notes receivable net of allowances and lease guarantees less subsequent amortization approximates their carrying value. The following table presents the carrying value and estimated fair value of the Company’s debt obligations: 6/30/2019 12/31/2018 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) Securitization Notes (a) $ 2,913 $ 3,048 $ 2,928 $ 2,967 Subsidiary Senior Unsecured Notes (b) 2,850 2,972 2,850 2,733 Term Loan A Facility (b) 475 474 488 479 Term Loan B Facility (b) 1,945 1,946 1,955 1,915 YUM Senior Unsecured Notes (b) 1,875 1,899 1,875 1,798 (a) We estimated the fair value of the Securitization Notes by obtaining broker quotes from two separate brokerage firms that are knowledgeable about the Company’s Securitization Notes and, at times, trade these notes. The markets in which the Securitization Notes trade are not considered active markets. (b) We estimated the fair value of the YUM and Subsidiary Senior Unsecured Notes, Term Loan A Facility, and Term Loan B Facility using market quotes and calculations based on market rates. Recurring Fair Value Measurements The Company has interest rate swaps, foreign currency contracts, an investment in Grubhub common stock and other investments, all of which are required to be measured at fair value on a recurring basis (See Note 13 for discussion regarding derivative instruments and Note 5 for discussion regarding our investment in Grubhub common stock). The following table presents fair values for those assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the measurements fall. Fair Value Condensed Consolidated Balance Sheet Level 6/30/2019 12/31/2018 Assets Interest Rate Swaps Prepaid expenses and other current assets 2 $ 10 $ 21 Foreign Currency Contracts Prepaid expenses and other current assets 2 — 5 Interest Rate Swaps Other assets 2 6 29 Investment in Grubhub Common Stock Other assets 1 218 214 Other Investments Other assets 1 32 27 Liabilities Foreign Currency Contracts Accounts payable and other current liabilities 2 9 — Interest Rate Swaps Other liabilities and deferred credits 2 69 23 Foreign Currency Contracts Other liabilities and deferred credits 2 — 24 The fair value of the Company’s foreign currency contracts and interest rate swaps were determined based on the present value of expected future cash flows considering the risks involved, including nonperformance risk, and using discount rates appropriate for the duration based on observable inputs. The fair value of the investment in Grubhub common stock was determined primarily based on closing market prices for the shares. The other investments include investments in mutual funds, which are used to offset fluctuations for a portion of our deferred compensation liabilities. The other investments' fair value is determined based on the closing market prices of the respective mutual funds as of June 30, 2019 and December 31, 2018. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantees, Commitments and Contingencies | Contingencies Lease Guarantees As a result of having assigned our interest in obligations under real estate leases as a condition to the refranchising of certain Company-owned restaurants, and guaranteeing certain other leases, we are frequently secondarily liable on lease agreements. These leases have varying terms, the latest of which expires in 2065. As of June 30, 2019 , 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 June 30, 2019 , was approximately $400 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 as of June 30, 2019 was not material. 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. We are currently engaged in various legal proceedings and have certain unresolved claims pending, the ultimate liability for which, if any, cannot be determined at this time. However, based upon consultation with legal counsel, we are of the opinion that such proceedings and claims are not expected to have a material adverse effect, individually or in the aggregate, on our Condensed Consolidated Financial Statements. |
Note 2. Lease Accounting Poli_2
Note 2. Lease Accounting Policy (Tables) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2018 | |
Schedule of lease expenses [Line Items] | ||
Schedule of lease expenses [Table Text Block] | The components of lease expense were as follows: Quarter Ended 6/30/2019 Year to date 6/30/2019 Operating lease cost $ 27 $ 56 Finance lease cost Amortization of right-of-use assets 1 2 Interest on lease liabilities — 1 Total finance lease cost 1 3 Sublease income (16 ) (34 ) | |
Schedule Of Future Minimum Commitments And Lease Receivables [Text Block] | Future minimum lease payments as of June 30, 2019, including rental payments for lease renewal options we are reasonably certain to exercise were as follows: Commitments Finance Operating Less than 1 year $ 10 $ 112 1-2 years 9 103 2-3 years 9 94 3-4 years 8 85 4-5 years 7 79 Thereafter 53 548 Total lease payments 96 1,021 Less imputed interest (27 ) (294 ) Total lease liabilities $ 69 $ 727 | Future minimum lease payments under the non-cancellable term of leases as of December 31, 2018 as required to be disclosed under Legacy GAAP were as follows: Commitments Capital Operating 2019 $ 10 $ 103 2020 10 89 2021 9 78 2022 8 71 2023 8 61 Thereafter 58 384 Total lease payments $ 103 $ 786 |
Note 2. Lease Accounting Poli_3
Note 2. Lease Accounting Policy Supplemental Balance Sheet Information Related to Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental Balance Sheet Information Related to Leases [Line Items] | |
Supplemental Balance Sheet Information Related to Leases [Table Text Block] | Supplemental balance sheet information related to leases was as follows: 6/30/2019 Condensed Consolidated Balance Sheet Assets Operating lease right-of-use assets $ 663 Other assets Finance lease right-of-use assets 34 Property, plant and equipment, net Total right-of-use assets (a) $ 697 Liabilities Current Operating $ 74 Accounts payable and other current liabilities Finance 6 Short-term borrowings Non-current Operating 653 Other liabilities and deferred credits Finance 63 Long-term debt Total lease liabilities (a) $ 796 Weighted-average Remaining Lease Term (in years) Operating leases 12.1 Finance leases 11.9 Weighted-average Discount Rate Operating leases 5.5 % Finance leases 5.7 % (a) U.S. operating lease right-of-use assets and liabilities totaled $282 million and $333 million , respectively, as of June 30, 2019 and primarily related to Taco Bell U.S. |
Note 2. Lease Accounting Poli_4
Note 2. Lease Accounting Policy Supplemental Cash Flow Information Related to Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental Cash Flow Related to Leases [Line Items] | |
Supplemental Cash Flow Related to Leases [Table Text Block] | Supplemental cash flow information related to leases was as follows: Year to date 6/30/2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 53 Operating cash flows from finance leases 1 Financing cash flows from finance leases 2 Right-of-use assets obtained in exchange for lease obligations Operating leases 29 Finance leases 3 |
Note 3. Earnings Per Common Sha
Note 3. Earnings Per Common Share ("EPS") Earnings Per Common Share ("EPS") (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Quarter ended Year to date 2019 2018 2019 2018 Net Income $ 289 $ 321 $ 551 $ 754 Weighted-average common shares outstanding (for basic calculation) 307 324 307 328 Effect of dilutive share-based employee compensation 7 7 7 8 Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) 314 331 314 336 Basic EPS $ 0.94 $ 0.99 $ 1.79 $ 2.30 Diluted EPS $ 0.92 $ 0.97 $ 1.75 $ 2.25 Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation (a) 2.3 2.3 1.8 1.8 (a) These unexercised employee stock options and stock appreciation rights were not included in the computation of diluted EPS because to do so would have been antidilutive for the periods presented. |
Shareholders' Deficit (Tables)
Shareholders' Deficit (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in Accumulated other comprehensive loss ("AOCI") 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 March 31, 2019, net of tax $ (215 ) $ (79 ) $ (30 ) $ (324 ) OCI, net of tax Gains (losses) arising during the period classified into AOCI, net of tax (25 ) — (33 ) (58 ) (Gains) losses reclassified from AOCI, net of tax — 1 1 2 (25 ) 1 (32 ) (56 ) Balance at June 30, 2019, net of tax $ (240 ) $ (78 ) $ (62 ) $ (380 ) Balance at December 31, 2018, net of tax $ (245 ) $ (82 ) $ (7 ) $ (334 ) OCI, net of tax Gains (losses) arising during the period classified into AOCI, net of tax 5 — (44 ) (39 ) (Gains) losses reclassified from AOCI, net of tax — 4 (11 ) (7 ) 5 4 (55 ) (46 ) Balance at June 30, 2019, net of tax $ (240 ) $ (78 ) $ (62 ) $ (380 ) |
Repurchase Of Shares Of Common Stock | Under the authority of our Board of Directors, we repurchased shares of our Common Stock during the years to date ended June 30, 2019 and 2018 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 2019 2018 2019 2018 2019 November 2017 Authorization — 14,147 $ — $ 1,171 $ — August 2018 Authorization 3,018 — 302 — 804 Total 3,018 (a) 14,147 (b) $ 302 (a) $ 1,171 (b) $ 804 (a) Includes the effect of $2 million in share repurchases ( 0.02 million shares) with trade dates prior to June 30, 2019, but cash settlement dates subsequent to June 30, 2019 and excludes the effect of $5 million in share repurchases ( 0.05 million shares) with trade dates on, or prior to, December 31, 2018, but cash settlement dates subsequent to December 31, 2018. (b) Includes the effect of $3 million in share repurchases ( 0.03 million shares) with trade dates prior to June 30, 2018, but cash settlement dates subsequent to June 30, 2018. |
Note 5. Items Affecting Compara
Note 5. Items Affecting Comparability of Net Income, Financial Position and Cash Flows Refranchising (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Refranchising (gain) loss [Member] | |
Facility Actions [Line Items] | |
Facility Actions [Table Text Block] | A summary of Refranchising (gain) loss is as follows: Quarter ended Year to date 2019 2018 2019 2018 KFC Division $ (4 ) $ (42 ) $ (6 ) $ (99 ) Pizza Hut Division — 13 — 11 Taco Bell Division — — (4 ) (97 ) Worldwide $ (4 ) $ (29 ) $ (10 ) $ (185 ) |
Note 5. Items Affecting Compa_2
Note 5. Items Affecting Comparability of Net Income, Financial Position and Cash Flows Impact of Adopting New Accounting Standards (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Lease adjustments made to Condensed Consolidated Balance Sheet [Table Text Block] | As a result of adopting Topic 842, the following adjustments were made to the Condensed Consolidated Balance Sheet as of the beginning of the quarter ended March 31, 2019: CONDENSED CONSOLIDATED BALANCE SHEET As Reported 12/31/2018 Adjustments Balances with Adoption of Topic 842 1/1/2019 ASSETS Current Assets Cash and cash equivalents $ 292 $ — $ 292 Accounts and notes receivable, net 561 — 561 Prepaid expenses and other current assets 354 (10 ) 344 Total Current Assets 1,207 (10 ) 1,197 Property, plant and equipment, net 1,237 — 1,237 Goodwill 525 — 525 Intangible assets, net 242 — 242 Other assets 724 689 1,413 Deferred income taxes 195 — 195 Total Assets $ 4,130 $ 679 $ 4,809 LIABILITIES AND SHAREHOLDERS’ DEFICIT Current Liabilities Accounts payable and other current liabilities $ 911 $ 76 $ 987 Income taxes payable 69 — 69 Short-term borrowings 321 — 321 Total Current Liabilities 1,301 76 1,377 Long-term debt 9,751 — 9,751 Other liabilities and deferred credits 1,004 605 1,609 Total Liabilities 12,056 681 12,737 Shareholders’ Deficit Accumulated deficit (7,592 ) (2 ) (7,594 ) Accumulated other comprehensive loss (334 ) — (334 ) Total Shareholders’ Deficit (7,926 ) (2 ) (7,928 ) Total Liabilities and Shareholders’ Deficit $ 4,130 $ 679 $ 4,809 |
Refranchising (gain) loss [Member] | |
Facility Actions [Table Text Block] | A summary of Refranchising (gain) loss is as follows: Quarter ended Year to date 2019 2018 2019 2018 KFC Division $ (4 ) $ (42 ) $ (6 ) $ (99 ) Pizza Hut Division — 13 — 11 Taco Bell Division — — (4 ) (97 ) Worldwide $ (4 ) $ (29 ) $ (10 ) $ (185 ) |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental Balance Sheet Information Disclosure [Abstract] | |
Schedule of Cash and Cash Equivalents [Table Text Block] | 6/30/2019 12/31/2018 Cash and cash equivalents as presented in Condensed Consolidated Balance Sheets $ 252 $ 292 Restricted cash included in Prepaid expenses and other current assets (a) 112 151 Restricted cash and restricted cash equivalents included in Other assets (b) 25 31 Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents as presented in Condensed Consolidated Statements of Cash Flows $ 389 $ 474 (a) Restricted cash within Prepaid expenses and other current assets reflects Taco Bell Securitization interest reserves and the cash related to advertising cooperatives that we consolidate that can only be used to settle obligations of the respective cooperatives. (b) Primarily trust accounts related to our self-insurance program. |
Accounts and Notes Receivable | 6/30/2019 12/31/2018 Accounts and notes receivable, gross $ 580 $ 592 Allowance for doubtful accounts (45 ) (31 ) Accounts and notes receivable, net $ 535 $ 561 |
Property, Plant and Equipment | 6/30/2019 12/31/2018 Property, plant and equipment, gross $ 2,328 $ 2,353 Accumulated depreciation and amortization (1,135 ) (1,116 ) Property, plant and equipment, net $ 1,193 $ 1,237 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax And Effective Tax Rate | Quarter ended Year to date 2019 2018 2019 2018 Income tax provision $ 88 $ 36 $ 125 $ 112 Effective tax rate 23.3 % 9.9 % 18.5 % 12.9 % |
Revenue Recognition Accountin_2
Revenue Recognition Accounting Policy (Tables) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||||
Disaggregation of Revenue [Table Text Block] | The following tables disaggregate revenue by Concept, for our two most significant markets based on Operating Profit and for all other markets. We believe this disaggregation best reflects the extent to which the nature, amount, timing and uncertainty of our revenues and cash flows are impacted by economic factors. Quarter ended 6/30/2019 KFC Division Pizza Hut Division Taco Bell Division Total U.S. Company sales $ 18 $ 5 $ 212 $ 235 Franchise revenues 41 67 140 248 Property revenues 5 1 11 17 Franchise contributions for advertising and other services 3 78 109 190 China Franchise revenues 52 15 — 67 Other Company sales 117 6 1 124 Franchise revenues 218 60 7 285 Property revenues 16 — — 16 Franchise contributions for advertising and other services 114 14 — 128 $ 584 $ 246 $ 480 $ 1,310 | Quarter ended 6/30/2018 KFC Division Pizza Hut Division Taco Bell Division Total U.S. Company sales $ 16 $ 11 $ 252 $ 279 Franchise revenues 40 63 123 226 Property revenues 5 1 6 12 Franchise contributions for advertising and other services 2 60 97 159 China Franchise revenues 49 15 — 64 Other Company sales 225 7 1 233 Franchise revenues 198 61 5 264 Property revenues 18 — — 18 Franchise contributions for advertising and other services 98 15 — 113 $ 651 $ 233 $ 484 $ 1,368 | Year to date ended 6/30/2019 KFC Division Pizza Hut Division Taco Bell Division Total U.S. Company sales $ 34 $ 10 $ 408 $ 452 Franchise revenues 79 134 268 481 Property revenues 11 3 21 35 Franchise contributions for advertising and other services 5 152 213 370 China Franchise revenues 108 30 — 138 Other Company sales 226 12 2 240 Franchise revenues 423 120 13 556 Property revenues 34 1 — 35 Franchise contributions for advertising and other services 230 27 — 257 $ 1,150 $ 489 925 $ 2,564 | Year to date ended 6/30/2018 KFC Division Pizza Hut Division Taco Bell Division Total U.S. Company sales $ 33 $ 25 $ 494 552 Franchise revenues 78 132 240 450 Property revenues 11 2 11 24 Franchise contributions for advertising and other services 4 125 188 317 China Franchise revenues 103 31 — 134 Other Company sales 453 17 2 472 Franchise revenues 388 123 11 522 Property revenues 37 1 — 38 Franchise contributions for advertising and other services 202 28 — 230 $ 1,309 $ 484 $ 946 $ 2,739 |
Deferred Franchise Fees [Table Text Block] | A summary of significant changes to the contract liability balance during 2019 is presented below. Deferred Franchise Fees Balance at December 31, 2018 $ 414 Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period (33 ) Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period 38 Balance at June 30, 2019 $ 419 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block] | We expect to recognize contract liabilities as revenue over the remaining term of the associated franchise agreement as follows: Less than 1 year $ 61 1 - 2 years 57 2 - 3 years 52 3 - 4 years 48 4 - 5 years 43 Thereafter 158 Total $ 419 |
Reportable Operating Segments (
Reportable Operating Segments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables summarize Revenues and Operating Profit for each of our reportable operating segments: Quarter ended Year to date Revenues 2019 2018 2019 2018 KFC Division $ 584 $ 651 $ 1,150 $ 1,309 Pizza Hut Division 246 233 489 484 Taco Bell Division 480 484 925 946 $ 1,310 $ 1,368 $ 2,564 $ 2,739 Quarter ended Year to date Operating Profit 2019 2018 2019 2018 KFC Division $ 261 $ 235 $ 497 $ 456 Pizza Hut Division 96 81 193 169 Taco Bell Division 159 149 297 281 Corporate and unallocated G&A expenses (38 ) (40 ) (81 ) (84 ) Unallocated Company restaurant expenses — 1 — 1 Unallocated Franchise and property expenses (a) (2 ) (1 ) (3 ) (2 ) Unallocated Refranchising gain (loss) (See Note 5) 4 29 10 185 Unallocated Other income (expense) (b) (9 ) (5 ) (9 ) (4 ) Operating Profit $ 471 $ 449 $ 904 $ 1,002 Investment income (expense), net (See Note 5) 25 23 9 89 Other pension income (expense) (See Note 11) — (3 ) (3 ) (6 ) Interest expense, net (119 ) (112 ) (234 ) (219 ) Income before income taxes $ 377 $ 357 $ 676 $ 866 (a) Represents costs associated with the KFC U.S. Acceleration Agreement and Pizza Hut U.S. Transformation Agreement. See Note 5. (b) Includes settlement of contingent consideration associated with our 2013 acquisition of the KFC Turkey and Pizza Hut Turkey businesses. See Note 5. |
Pension Benefits (Tables)
Pension Benefits (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost associated with our significant U.S. pension plans are as follows: Quarter ended Year to date 2019 2018 2019 2018 Service cost $ 1 $ 2 $ 3 $ 4 Interest cost 10 9 20 18 Expected return on plan assets (11 ) (11 ) (22 ) (21 ) Amortization of net loss 1 3 1 7 Amortization of prior service cost 1 2 2 3 Net periodic benefit cost $ 2 $ 5 $ 4 $ 11 Additional loss recognized due to settlements (a) $ — $ — $ 2 $ — (a) Loss is a result of settlement transactions which exceeded the sum of annual service and interest costs for the applicable plan. These losses were recorded in Other pension (income) expense. |
Short-term Borrowings and Lon_2
Short-term Borrowings and Long-term Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Borrowings and Long-term Debt | Short-term Borrowings 6/30/2019 12/31/2018 Current maturities of long-term debt $ 331 $ 331 Other 4 — 335 331 Less current portion of debt issuance costs and discounts (10 ) (10 ) Short-term borrowings $ 325 $ 321 Long-term Debt Securitization Notes $ 2,913 $ 2,928 Subsidiary Senior Unsecured Notes 2,850 2,850 Revolving Facility 157 — Term Loan A Facility 475 488 Term Loan B Facility 1,945 1,955 YUM Senior Unsecured Notes 1,875 1,875 Finance lease obligations 69 71 $ 10,284 $ 10,167 Less debt issuance costs and discounts (84 ) (85 ) Less current maturities of long-term debt (331 ) (331 ) Long-term debt $ 9,869 $ 9,751 6/30/2019 12/31/2018 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) Securitization Notes (a) $ 2,913 $ 3,048 $ 2,928 $ 2,967 Subsidiary Senior Unsecured Notes (b) 2,850 2,972 2,850 2,733 Term Loan A Facility (b) 475 474 488 479 Term Loan B Facility (b) 1,945 1,946 1,955 1,915 YUM Senior Unsecured Notes (b) 1,875 1,899 1,875 1,798 (a) We estimated the fair value of the Securitization Notes by obtaining broker quotes from two separate brokerage firms that are knowledgeable about the Company’s Securitization Notes and, at times, trade these notes. The markets in which the Securitization Notes trade are not considered active markets. (b) We estimated the fair value of the YUM and Subsidiary Senior Unsecured Notes, Term Loan A Facility, and Term Loan B Facility using market quotes and calculations based on market rates. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Gains and losses on derivative instruments designated as cash flow hedges recognized in other comprehensive income and reclassifications from AOCI to earnings | Gains and losses on derivative instruments designated as cash flow hedges recognized in OCI and reclassifications from AOCI into Net Income: Quarter ended Year to date Gains/(Losses) Recognized in OCI (Gains)/Losses Reclassified from AOCI into Net Income Gains/(Losses) Recognized in OCI (Gains)/Losses Reclassified from AOCI into Net Income 2019 2018 2019 2018 2019 2018 2019 2018 Interest rate swaps $ (43 ) $ (2 ) $ (5 ) $ (2 ) $ (70 ) $ 16 $ (10 ) $ (3 ) Foreign currency contracts (1 ) 27 6 (24 ) 10 11 (4 ) (12 ) Income tax benefit/(expense) 11 (1 ) — 2 16 (5 ) 3 2 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Short-term Borrowings and Long-term Debt | Short-term Borrowings 6/30/2019 12/31/2018 Current maturities of long-term debt $ 331 $ 331 Other 4 — 335 331 Less current portion of debt issuance costs and discounts (10 ) (10 ) Short-term borrowings $ 325 $ 321 Long-term Debt Securitization Notes $ 2,913 $ 2,928 Subsidiary Senior Unsecured Notes 2,850 2,850 Revolving Facility 157 — Term Loan A Facility 475 488 Term Loan B Facility 1,945 1,955 YUM Senior Unsecured Notes 1,875 1,875 Finance lease obligations 69 71 $ 10,284 $ 10,167 Less debt issuance costs and discounts (84 ) (85 ) Less current maturities of long-term debt (331 ) (331 ) Long-term debt $ 9,869 $ 9,751 6/30/2019 12/31/2018 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) Securitization Notes (a) $ 2,913 $ 3,048 $ 2,928 $ 2,967 Subsidiary Senior Unsecured Notes (b) 2,850 2,972 2,850 2,733 Term Loan A Facility (b) 475 474 488 479 Term Loan B Facility (b) 1,945 1,946 1,955 1,915 YUM Senior Unsecured Notes (b) 1,875 1,899 1,875 1,798 (a) We estimated the fair value of the Securitization Notes by obtaining broker quotes from two separate brokerage firms that are knowledgeable about the Company’s Securitization Notes and, at times, trade these notes. The markets in which the Securitization Notes trade are not considered active markets. (b) We estimated the fair value of the YUM and Subsidiary Senior Unsecured Notes, Term Loan A Facility, and Term Loan B Facility using market quotes and calculations based on market rates. |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents fair values for those assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the measurements fall. Fair Value Condensed Consolidated Balance Sheet Level 6/30/2019 12/31/2018 Assets Interest Rate Swaps Prepaid expenses and other current assets 2 $ 10 $ 21 Foreign Currency Contracts Prepaid expenses and other current assets 2 — 5 Interest Rate Swaps Other assets 2 6 29 Investment in Grubhub Common Stock Other assets 1 218 214 Other Investments Other assets 1 32 27 Liabilities Foreign Currency Contracts Accounts payable and other current liabilities 2 9 — Interest Rate Swaps Other liabilities and deferred credits 2 69 23 Foreign Currency Contracts Other liabilities and deferred credits 2 — 24 |
Financial Statement Presentat_2
Financial Statement Presentation (Details) | 6 Months Ended |
Jun. 30, 2019weeksMonthsoperating_segmentsrestaurantscountries_and_territioriesRate | |
Number of Reportable Segments | operating_segments | 3 |
Number of Countries in which Entity Operates | countries_and_territiories | 145 |
Number of Stores | restaurants | 48,000 |
Percent Of System Units Located Outside United States | Rate | 98.00% |
Fiscal Period Weeks Standard for U.S. subsidiaries and certain international subsidiaries | 12 |
Fiscal Period Weeks Standard Fourth Quarter | 16 |
Number of weeks in a standard year | 52 |
Fiscal Period Weeks Standard Fourth Quarter of a 53rd Week Year for U.S. subsidiaries and certain international subsidiaries | 17 |
Number of weeks in a 53rd week year | 53 |
Fiscal period months standard for each quarter | Months | 3 |
Note 2. Lease Accounting Poli_5
Note 2. Lease Accounting Policy (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | ||
Operating Leased Assets [Line Items] | ||||
Operating Lease, Cost | $ 27 | $ 56 | ||
Operating Lease, Payments | 53 | |||
Operating Lease, Right-of-Use Asset | 663 | 663 | ||
Capital Leases, Future Minimum Payments Due | $ 103 | |||
Capital Leases, Future Minimum Payments Due Thereafter | 58 | |||
Operating Leases, Future Minimum Payments, Due Thereafter | 384 | |||
Capital Leases, Future Minimum Payments Due in Five Years | 8 | |||
Operating Leases, Future Minimum Payments, Due in Five Years | 61 | |||
Capital Leases, Future Minimum Payments Due in Four Years | 8 | |||
Operating Leases, Future Minimum Payments, Due in Four Years | 71 | |||
Capital Leases, Future Minimum Payments Due in Three Years | 9 | |||
Operating Leases, Future Minimum Payments, Due in Three Years | 78 | |||
Capital Leases, Future Minimum Payments Due, Next Twelve Months | 10 | |||
Finance Lease, Liability, Payments, Due Next Twelve Months | 10 | 10 | ||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 112 | 112 | 103 | |
Finance Lease, Liability, Payments, Due Year Two | 9 | 9 | ||
Operating Leases, Future Minimum Payments, Due in Rolling Year Two | 103 | 103 | ||
Finance Lease, Liability, Payments, Due Year Three | 9 | 9 | ||
Operating Leases, Future Minimum Payments, Due in Rolling Year Three | 94 | 94 | ||
Capital Leases, Future Minimum Payments Due in Two Years | 10 | |||
Operating Leases, Future Minimum Payments, Due in Two Years | 89 | |||
Operating Leases, Future Minimum Payments Due | 1,021 | 1,021 | $ 786 | |
Finance Lease, Liability, Payments, Due in Rolling Year Four | 8 | 8 | ||
Operating Leases, Future Minimum Payments, Due in Rolling Year Four | 85 | 85 | ||
Finance Lease, Liability, Payments, Due in Rolling Year Five | 7 | 7 | ||
Operating Leases, Future Minimum Payments, Due in Rolling Year Five | 79 | 79 | ||
Finance Lease, Liability, Payments, Due in Rolling after Year Five | 53 | 53 | ||
Operating Leases, Future Minimum Payments, Due in Rolling after Year Five | 548 | 548 | ||
Finance Lease, Liability, Payment, Due | 96 | 96 | ||
Finance Lease, Interest Expense | (27) | (27) | ||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (294) | (294) | ||
Finance Lease, Liability | 69 | 69 | ||
Operating Lease, Liability | 727 | 727 | ||
Finance Lease, Right-of-Use Asset | 34 | 34 | ||
Lease Right of Use Asset | 697 | 697 | ||
Operating Lease, Liability, Current | 74 | 74 | ||
Finance Lease, Liability, Current | 6 | 6 | ||
Operating Lease, Liability, Noncurrent | 653 | 653 | ||
Finance Lease, Liability, Noncurrent | 63 | 63 | ||
Total Lease Liability | [1] | $ 796 | $ 796 | |
Operating Lease, Weighted Average Remaining Lease Term | 12 years 1 month 4 days | 12 years 1 month 4 days | ||
Finance Lease, Weighted Average Remaining Lease Term | 11 years 11 months 2 days | 11 years 11 months 2 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 5.50% | 5.50% | ||
Finance Lease, Weighted Average Discount Rate, Percent | 5.70% | 5.70% | ||
Finance Lease, Interest Payment on Liability | $ 1 | |||
Finance Lease, Principal Payments | 2 | |||
Finance Lease, Right-of-Use Asset, Amortization | $ 1 | 2 | ||
Finance Lease, Interest Expense | 0 | 1 | ||
Lease, Cost | 1 | 3 | ||
Sublease Income | (16) | (34) | ||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 29 | |||
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 3 | |||
UNITED STATES | ||||
Operating Leased Assets [Line Items] | ||||
Operating Lease, Right-of-Use Asset | 282 | 282 | ||
Operating Lease, Liability | $ 333 | $ 333 | ||
[1] | (a) U.S. operating lease right-of-use assets and liabilities totaled $282 million and $333 million , respectively, as of June 30, 2019 and primarily related to Taco Bell U.S. |
Note 2. Lease Accounting Poli_6
Note 2. Lease Accounting Policy Supplemental Balance Sheet Information Related to Leases (Details) $ in Millions | Jun. 30, 2019USD ($) |
Supplemental Balance Sheet Information Related to Leases [Line Items] | |
Operating Lease, Right-of-Use Asset | $ 663 |
Operating Lease, Weighted Average Remaining Lease Term | 12 years 1 month 4 days |
Finance Lease, Weighted Average Remaining Lease Term | 11 years 11 months 2 days |
Operating Lease, Liability | $ 727 |
UNITED STATES | |
Supplemental Balance Sheet Information Related to Leases [Line Items] | |
Operating Lease, Right-of-Use Asset | 282 |
Operating Lease, Liability | $ 333 |
Earnings Per Common Share ("E_2
Earnings Per Common Share ("EPS") (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Net Income - YUM! Brands, Inc. | $ 289 | $ 321 | $ 551 | $ 754 | |
Weighted-average common shares outstanding (for basic calculation) | 307 | 324 | 307 | 328 | |
Effect of dilutive share-based employee compensation | 7 | 7 | 7 | 8 | |
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) | 314 | 331 | 314 | 336 | |
Basic EPS | $ 0.94 | $ 0.99 | $ 1.79 | $ 2.30 | |
Diluted EPS | $ 0.92 | $ 0.97 | $ 1.75 | $ 2.25 | |
Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation | [1] | 2.3 | 2.3 | 1.8 | 1.8 |
[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' Deficit (Details)
Shareholders' Deficit (Details) - USD ($) shares in Thousands, $ in Millions | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | |||
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Shares Repurchased | 3,018 | [1] | 14,147 | [2] |
Dollar Value of Shares Repurchased | $ 302 | [1] | $ 1,171 | [2] |
Remaining Dollar Value of Shares that may be Repurchased | 804 | |||
Value of share repurchases with trade dates prior to current reporting date but with settlement dates subsequent to the current reporting date. | $ 2 | $ 3 | ||
Number of shares repurchased with trade dates prior to current reporting date but with settlement dates subsequent to the current reporting date. | 20 | 30 | ||
Value of shares repurchased with trade dates prior to the current reporting quarter, but settlement dates in the current quarter | $ 5 | |||
Number of shares repurchased with trade dates prior to the current reporting quarter, but settlement dates in the current quarter | 50 | |||
November 2017 [Member] | ||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Shares Repurchased | 0 | 14,147 | ||
Dollar Value of Shares Repurchased | $ 0 | $ 1,171 | ||
Remaining Dollar Value of Shares that may be Repurchased | $ 0 | |||
August 2018 [Member] | ||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Shares Repurchased | 3,018 | 0 | ||
Dollar Value of Shares Repurchased | $ 302 | $ 0 | ||
Remaining Dollar Value of Shares that may be Repurchased | $ 804 | |||
[1] | Includes the effect of $2 million in share repurchases ( 0.02 million shares) with trade dates prior to June 30, 2019, but cash settlement dates subsequent to June 30, 2019 and excludes the effect of $5 million in share repurchases ( 0.05 million shares) with trade dates on, or prior to, December 31, 2018, but cash settlement dates subsequent to December 31, 2018. | |||
[2] | Includes the effect of $3 million in share repurchases ( 0.03 million shares) with trade dates prior to June 30, 2018, but cash settlement dates subsequent to June 30, 2018. |
Shareholders' Deficit (Details
Shareholders' Deficit (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 2 | |||
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (324) | (334) | ||
Gains (losses) arising during the year classified into accumulated OCI, net of tax | (58) | (39) | ||
(Gains) losses reclassified from accumulated OCI, net of tax | 2 | (7) | ||
Other comprehensive income (loss), net of tax | (56) | $ (67) | (46) | $ (13) |
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | (380) | (380) | ||
Translation Adjustments and Gains (Losses) From Intra-Entity Transactions of a Long-Term Nature | ||||
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | (215) | (245) | ||
Gains (losses) arising during the year classified into accumulated OCI, net of tax | (25) | 5 | ||
(Gains) losses reclassified from accumulated OCI, net of tax | 0 | 0 | ||
Other comprehensive income (loss), net of tax | (25) | 5 | ||
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | (240) | (240) | ||
Pension and Post-Retirement Benefits | ||||
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | (79) | (82) | ||
Gains (losses) arising during the year classified into accumulated OCI, net of tax | 0 | 0 | ||
(Gains) losses reclassified from accumulated OCI, net of tax | 1 | 4 | ||
Other comprehensive income (loss), net of tax | 1 | 4 | ||
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | (78) | (78) | ||
Derivative Instruments | ||||
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Beginning Accumulated Other Comprehensive Income (Loss), Net of Tax | (30) | (7) | ||
Gains (losses) arising during the year classified into accumulated OCI, net of tax | (33) | (44) | ||
(Gains) losses reclassified from accumulated OCI, net of tax | 1 | (11) | ||
Other comprehensive income (loss), net of tax | (32) | (55) | ||
Ending Accumulated Other Comprehensive Income (Loss), Net of Tax | $ (62) | $ (62) |
Items Affecting Comparability_2
Items Affecting Comparability of Net Income, Financial Position and Cash Flows (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | 26 Months Ended | 48 Months Ended | 54 Months Ended | |||||
Jun. 30, 2019USD ($)daysYears$ / sharesshares | Mar. 31, 2019USD ($)restaurants | Jun. 30, 2018USD ($)restaurants$ / shares | Jun. 30, 2019USD ($)daysYears$ / sharesshares | Jun. 30, 2018USD ($)restaurants$ / shares | Dec. 31, 2018USD ($) | Jun. 30, 2019USD ($)daysYearsshares | Dec. 31, 2018USD ($) | Jun. 30, 2019USD ($)daysYearsshares | Jan. 01, 2019USD ($) | ||
Net Cash Provided by (Used in) Investing Activities | $ (52) | $ (42) | |||||||||
Net Cash Provided by (Used in) Financing Activities | $ (492) | (1,579) | |||||||||
Investment Owned, Balance, Shares | shares | 2.8 | 2.8 | 2.8 | 2.8 | |||||||
Net Cash Provided by (Used in) Operating Activities | $ 461 | 381 | |||||||||
Costs associated with PH U.S. Acceleration Agreement | $ 5 | $ 4 | 13 | 11 | |||||||
Revenues | 1,310 | 1,368 | 2,564 | 2,739 | |||||||
Total Liabilities and Shareholders’ Deficit | 4,674 | 4,674 | $ 4,130 | $ 4,674 | $ 4,130 | $ 4,674 | |||||
Cash and cash equivalents | 252 | 252 | 292 | 252 | 292 | 252 | |||||
Proceeds from refranchising of restaurants | 11 | 47 | 25 | 252 | |||||||
Refranchising (gain) loss | (4) | (29) | (10) | (185) | |||||||
General and Administrative Expense | 198 | 208 | 409 | 427 | |||||||
Interest Income (Expense), Net | 119 | 112 | 234 | 219 | |||||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 377 | 357 | 676 | 866 | |||||||
Income tax provision | 88 | 36 | 125 | 112 | |||||||
Cost of Goods and Services Sold | 286 | 421 | 558 | 859 | |||||||
Accounts and notes receivable, net | 535 | 535 | 561 | 535 | 561 | 535 | |||||
Prepaid expenses and other current assets | (335) | (335) | (354) | (335) | (354) | (335) | |||||
Assets, Current | 1,122 | 1,122 | 1,207 | 1,122 | 1,207 | 1,122 | |||||
Property, plant and equipment, net | 1,193 | 1,193 | 1,237 | 1,193 | 1,237 | 1,193 | |||||
Goodwill | 526 | 526 | 525 | 526 | 525 | 526 | |||||
Intangible assets, net | 243 | 243 | 242 | 243 | 242 | 243 | |||||
Other assets | 1,378 | 1,378 | 724 | 1,378 | 724 | 1,378 | |||||
Deferred income taxes | 212 | 212 | 195 | 212 | 195 | 212 | |||||
Assets | 4,674 | 4,674 | 4,130 | 4,674 | 4,130 | 4,674 | |||||
Accounts payable and other current liabilities | 798 | 798 | 911 | 798 | 911 | 798 | |||||
Income taxes payable | 63 | 63 | 69 | 63 | 69 | 63 | |||||
Short-term borrowings | 325 | 325 | 321 | 325 | 321 | 325 | |||||
Liabilities, Current | 1,186 | 1,186 | 1,301 | 1,186 | 1,301 | 1,186 | |||||
Long-term debt | 9,869 | 9,869 | 9,751 | 9,869 | 9,751 | 9,869 | |||||
Other liabilities and deferred credits | 1,613 | 1,613 | 1,004 | 1,613 | 1,004 | 1,613 | |||||
Liabilities | 12,668 | 12,668 | 12,056 | 12,668 | 12,056 | 12,668 | |||||
Accumulated deficit | 7,614 | 7,614 | 7,592 | 7,614 | 7,592 | 7,614 | |||||
Accumulated other comprehensive income (loss) | (380) | $ (324) | (380) | (334) | (380) | (334) | (380) | ||||
Stockholders' Equity Attributable to Parent | (7,994) | (7,994) | (7,926) | (7,994) | (7,926) | (7,994) | |||||
Franchisor Costs | 38 | 40 | 81 | 87 | |||||||
Cooperative Advertising Expense | 315 | 274 | 616 | 546 | |||||||
Other (income) expense | 6 | 5 | 6 | 3 | |||||||
Total costs and expenses, net | 839 | 919 | 1,660 | 1,737 | |||||||
Operating Income (Loss) | 471 | 449 | 904 | 1,002 | |||||||
Other investment (income) expense, net | (25) | (23) | (9) | (89) | |||||||
Other pension (income) expense | 0 | 3 | 3 | 6 | |||||||
Net Income (Loss) Attributable to Parent | $ 289 | $ 321 | $ 551 | $ 754 | |||||||
Earnings Per Share, Basic | $ / shares | $ 0.94 | $ 0.99 | $ 1.79 | $ 2.30 | |||||||
Diluted Earnings Per Common Share | $ / shares | $ 0.92 | $ 0.97 | $ 1.75 | $ 2.25 | |||||||
Equity Securities, FV-NI, Cost | $ 200 | $ 200 | 200 | $ 200 | |||||||
Equity Securities, FV-NI, Unrealized Gain (Loss) | 24 | $ 25 | 4 | $ 91 | |||||||
KFC Global Division [Member] | |||||||||||
Revenues | 584 | 651 | 1,150 | 1,309 | |||||||
Refranchising (gain) loss | (4) | (42) | (6) | (99) | |||||||
Operating Income (Loss) | 261 | 235 | 497 | 456 | |||||||
Unallocated [Member] | |||||||||||
Refranchising (gain) loss | (4) | (29) | (10) | (185) | |||||||
General and Administrative Expense | 38 | 40 | 81 | 84 | |||||||
Cost of Goods and Services Sold | 0 | 1 | 0 | 1 | |||||||
Franchisor Costs | [1] | 2 | 1 | 3 | 2 | ||||||
Other (income) expense | [2] | 9 | 5 | 9 | 4 | ||||||
Pizza Hut Global Division [Member] | |||||||||||
Revenues | 246 | 233 | 489 | 484 | |||||||
Refranchising (gain) loss | 0 | 13 | 0 | 11 | |||||||
Operating Income (Loss) | 96 | 81 | 193 | 169 | |||||||
Taco Bell Global Division [Member] | |||||||||||
Revenues | 480 | 484 | 925 | 946 | |||||||
Refranchising (gain) loss | 0 | 0 | (4) | (97) | |||||||
Operating Income (Loss) | 159 | 149 | 297 | $ 281 | |||||||
General and Administrative Expense [Member] | Unallocated [Member] | |||||||||||
Restructuring and Related Cost, Incurred Cost | $ 1 | ||||||||||
Refranchising (gain) loss | |||||||||||
Number of Restaurants Refranchised | restaurants | 6 | 51 | 195 | ||||||||
Franchise and property expenses [Member] | |||||||||||
Costs associated with PH U.S. Acceleration Agreement | $ 2 | $ 5 | |||||||||
Franchise and property expenses [Member] | Unallocated and General and administrative expenses [Domain] | |||||||||||
Costs associated with PH U.S. Acceleration Agreement | 1 | 1 | 2 | 37.5 | $ 82 | ||||||
Other Income and Expenses [Domain] | |||||||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | 8 | ||||||||||
Interest Expense [Member] | |||||||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | 2 | ||||||||||
Balances with Adoption of Topic 842 [Member] | |||||||||||
Total Liabilities and Shareholders’ Deficit | $ 4,809 | ||||||||||
Cash and cash equivalents | 292 | ||||||||||
Accounts and notes receivable, net | 561 | ||||||||||
Prepaid expenses and other current assets | (344) | ||||||||||
Assets, Current | 1,197 | ||||||||||
Property, plant and equipment, net | 1,237 | ||||||||||
Goodwill | 525 | ||||||||||
Intangible assets, net | 242 | ||||||||||
Other assets | 1,413 | ||||||||||
Deferred income taxes | 195 | ||||||||||
Assets | 4,809 | ||||||||||
Accounts payable and other current liabilities | 987 | ||||||||||
Income taxes payable | 69 | ||||||||||
Short-term borrowings | 321 | ||||||||||
Liabilities, Current | 1,377 | ||||||||||
Long-term debt | 9,751 | ||||||||||
Other liabilities and deferred credits | 1,609 | ||||||||||
Liabilities | 12,737 | ||||||||||
Accumulated deficit | 7,594 | ||||||||||
Accumulated other comprehensive income (loss) | (334) | ||||||||||
Stockholders' Equity Attributable to Parent | (7,928) | ||||||||||
Product [Member] | |||||||||||
Revenues | 359 | 512 | 692 | 1,024 | |||||||
Franchise [Member] | |||||||||||
Revenues | 633 | 584 | 1,245 | 1,168 | |||||||
Advertising [Member] | |||||||||||
Revenues | $ 318 | 272 | $ 627 | 547 | |||||||
Investment closing date [Member] | |||||||||||
Time period shares are restricted from being transferred | Years | 2 | 2 | 2 | 2 | |||||||
Termination of Master Services Agreement [Member] | |||||||||||
Time period shares are restricted from being transferred | days | 30 | 30 | 30 | 30 | |||||||
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | Maximum [Member] | |||||||||||
Derivative, Maturity Date | Jun. 12, 2020 | ||||||||||
Equipment [Member] | Franchise and property expenses [Member] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | $ 1 | 2 | $ 2 | 3 | $ 125 | ||||||
Incremental Advertising [Member] | KFC Global Division [Member] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | $ 3 | $ 5 | |||||||||
2017 to 2018 [Domain] | Franchise and property expenses [Member] | Unallocated and General and administrative expenses [Domain] | |||||||||||
Costs associated with PH U.S. Acceleration Agreement | 90 | ||||||||||
2015 to 2019 [Member] | Equipment [Member] | Franchise and property expenses [Member] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | 130 | ||||||||||
2015 to 2018 [Domain] | Incremental Advertising [Member] | KFC Global Division [Member] | |||||||||||
Costs associated with KFC U.S. Acceleration Agreement | 60 | ||||||||||
Previously Reported [Member] | |||||||||||
Total Liabilities and Shareholders’ Deficit | 4,130 | 4,130 | |||||||||
Cash and cash equivalents | 292 | 292 | |||||||||
Accounts and notes receivable, net | 561 | 561 | |||||||||
Prepaid expenses and other current assets | (354) | (354) | |||||||||
Assets, Current | 1,207 | 1,207 | |||||||||
Property, plant and equipment, net | 1,237 | 1,237 | |||||||||
Goodwill | 525 | 525 | |||||||||
Intangible assets, net | 242 | 242 | |||||||||
Other assets | 724 | 724 | |||||||||
Deferred income taxes | 195 | 195 | |||||||||
Assets | 4,130 | 4,130 | |||||||||
Accounts payable and other current liabilities | 911 | 911 | |||||||||
Income taxes payable | 69 | 69 | |||||||||
Short-term borrowings | 321 | 321 | |||||||||
Liabilities, Current | 1,301 | 1,301 | |||||||||
Long-term debt | 9,751 | 9,751 | |||||||||
Other liabilities and deferred credits | 1,004 | 1,004 | |||||||||
Liabilities | 12,056 | 12,056 | |||||||||
Accumulated deficit | 7,592 | 7,592 | |||||||||
Accumulated other comprehensive income (loss) | (334) | (334) | |||||||||
Stockholders' Equity Attributable to Parent | (7,926) | (7,926) | |||||||||
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | Other Assets [Member] | |||||||||||
Equity Securities, FV-NI | $ 218 | $ 218 | $ 214 | $ 218 | $ 214 | $ 218 | |||||
Accounting Standards Update 2016-02 [Member] | |||||||||||
Total Liabilities and Shareholders’ Deficit | 679 | ||||||||||
Cash and cash equivalents | 0 | ||||||||||
Accounts and notes receivable, net | 0 | ||||||||||
Prepaid expenses and other current assets | 10 | ||||||||||
Assets, Current | (10) | ||||||||||
Property, plant and equipment, net | 0 | ||||||||||
Goodwill | 0 | ||||||||||
Intangible assets, net | 0 | ||||||||||
Other assets | 689 | ||||||||||
Deferred income taxes | 0 | ||||||||||
Assets | 679 | ||||||||||
Accounts payable and other current liabilities | 76 | ||||||||||
Income taxes payable | 0 | ||||||||||
Short-term borrowings | 0 | ||||||||||
Liabilities, Current | 76 | ||||||||||
Long-term debt | 0 | ||||||||||
Other liabilities and deferred credits | 605 | ||||||||||
Liabilities | 681 | ||||||||||
Accumulated deficit | 2 | ||||||||||
Accumulated other comprehensive income (loss) | 0 | ||||||||||
Stockholders' Equity Attributable to Parent | (2) | ||||||||||
Accounting Standards Update 2016-02 [Member] | Lease Right of Use Asset [Member] | |||||||||||
Other assets | 690 | ||||||||||
Present Value of Operating Lease Payments [Member] | Accounting Standards Update 2016-02 [Member] | |||||||||||
Accounts payable and other current liabilities | 83 | ||||||||||
Other liabilities and deferred credits | 661 | ||||||||||
Write off impact of recognizing rent expense on straight line basis [Member] | Accounting Standards Update 2016-02 [Member] | |||||||||||
Accounts payable and other current liabilities | 7 | ||||||||||
Other liabilities and deferred credits | 56 | ||||||||||
Write off of prepaid rent recorded under Legacy GAAP [Member] | Accounting Standards Update 2016-02 [Member] | |||||||||||
Prepaid expenses and other current assets | (11) | ||||||||||
Other assets | $ 1 | ||||||||||
[1] | Represents costs associated with the KFC U.S. Acceleration Agreement and Pizza Hut U.S. Transformation Agreement. See Note 5. | ||||||||||
[2] | Includes settlement of contingent consideration associated with our 2013 acquisition of the KFC Turkey and Pizza Hut Turkey businesses. See Note 5. |
Other (Income) Expense (Details
Other (Income) Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Other Income and Expenses [Line Items] | ||||
Other (income) expense | $ 6 | $ 5 | $ 6 | $ 3 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) $ in Millions | Jun. 30, 2019USD ($)days | Dec. 31, 2018USD ($) |
Accounts and Notes Receivable [Abstract] | ||
Number of days from the period in which the corresponding sales occur that trade receivables are generally due | days | 30 | |
Accounts and notes receivable, gross | $ 580 | $ 592 |
Allowance for doubtful accounts | (45) | (31) |
Accounts and notes receivable, net | $ 535 | $ 561 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information (Details 2) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Cash and cash equivalents as presented in Condensed Consolidated Balance Sheets | $ 252 | $ 292 | |||
Property, plant and equipment, gross | 2,328 | 2,353 | |||
Accumulated depreciation and amortization | (1,135) | (1,116) | |||
Property, plant and equipment, net | 1,193 | 1,237 | |||
Cash, Cash Equivalents and Restricted Cash as presented in the Consolidated Statement of Cash Flows | 389 | 474 | $ 409 | $ 1,668 | |
Prepaid expenses and other current assets [Member] | |||||
Restricted Cash and Cash Equivalents | [1] | 112 | 151 | ||
Assets held for sale | 24 | 0 | |||
Other Current Assets [Member] | |||||
Restricted Cash and Cash Equivalents | [2] | $ 25 | $ 31 | ||
[1] | Restricted cash within Prepaid expenses and other current assets reflects Taco Bell Securitization interest reserves and the cash related to advertising cooperatives that we consolidate that can only be used to settle obligations of the respective cooperatives. | ||||
[2] | Primarily trust accounts related to our self-insurance program. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 54 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | |
Tax Adjustments, Settlements, and Unusual Provisions | $ 19 | ||||
Income Tax And Effective Tax Rate [Abstract] | |||||
Effective tax rate | 23.30% | 9.90% | 18.50% | 12.90% | |
Equipment [Member] | Franchise and property expenses [Member] | |||||
Costs associated with KFC U.S. Acceleration Agreement | $ 1 | $ 2 | $ 2 | $ 3 | $ 125 |
Revenue Recognition Accountin_3
Revenue Recognition Accounting Policy (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | $ 1,310 | $ 1,368 | $ 2,564 | $ 2,739 |
Product [Member] | ||||
Revenues | 359 | 512 | 692 | 1,024 |
Franchise [Member] | ||||
Revenues | 633 | 584 | 1,245 | 1,168 |
Advertising [Member] | ||||
Revenues | 318 | 272 | 627 | 547 |
CHINA | Franchise [Member] | ||||
Revenues | 67 | 64 | 138 | 134 |
Other, Outside the U.S. and China [Member] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 16 | 18 | 35 | 38 |
Other, Outside the U.S. and China [Member] | Product [Member] | ||||
Revenues | 124 | 233 | 240 | 472 |
Other, Outside the U.S. and China [Member] | Franchise [Member] | ||||
Revenues | 285 | 264 | 556 | 522 |
Other, Outside the U.S. and China [Member] | Advertising [Member] | ||||
Revenues | 128 | 113 | 257 | 230 |
UNITED STATES | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 17 | 12 | 35 | 24 |
UNITED STATES | Product [Member] | ||||
Revenues | 235 | 279 | 452 | 552 |
UNITED STATES | Franchise [Member] | ||||
Revenues | 248 | 226 | 481 | 450 |
UNITED STATES | Advertising [Member] | ||||
Revenues | 190 | 159 | 370 | 317 |
KFC Global Division [Member] | ||||
Revenues | 584 | 651 | 1,150 | 1,309 |
KFC Global Division [Member] | CHINA | Franchise [Member] | ||||
Revenues | 52 | 49 | 108 | 103 |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 16 | 18 | 34 | 37 |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Product [Member] | ||||
Revenues | 117 | 225 | 226 | 453 |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | ||||
Revenues | 218 | 198 | 423 | 388 |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Advertising [Member] | ||||
Revenues | 114 | 98 | 230 | 202 |
KFC Global Division [Member] | UNITED STATES | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 5 | 5 | 11 | 11 |
KFC Global Division [Member] | UNITED STATES | Product [Member] | ||||
Revenues | 18 | 16 | 34 | 33 |
KFC Global Division [Member] | UNITED STATES | Franchise [Member] | ||||
Revenues | 41 | 40 | 79 | 78 |
KFC Global Division [Member] | UNITED STATES | Advertising [Member] | ||||
Revenues | 3 | 2 | 5 | 4 |
Pizza Hut Global Division [Member] | ||||
Revenues | 246 | 233 | 489 | 484 |
Pizza Hut Global Division [Member] | CHINA | Franchise [Member] | ||||
Revenues | 15 | 15 | 30 | 31 |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 0 | 0 | 1 | 1 |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Product [Member] | ||||
Revenues | 6 | 7 | 12 | 17 |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | ||||
Revenues | 60 | 61 | 120 | 123 |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Advertising [Member] | ||||
Revenues | 14 | 15 | 27 | 28 |
Pizza Hut Global Division [Member] | UNITED STATES | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 1 | 1 | 3 | 2 |
Pizza Hut Global Division [Member] | UNITED STATES | Product [Member] | ||||
Revenues | 5 | 11 | 10 | 25 |
Pizza Hut Global Division [Member] | UNITED STATES | Franchise [Member] | ||||
Revenues | 67 | 63 | 134 | 132 |
Pizza Hut Global Division [Member] | UNITED STATES | Advertising [Member] | ||||
Revenues | 78 | 60 | 152 | 125 |
Taco Bell Global Division [Member] | ||||
Revenues | 480 | 484 | 925 | 946 |
Taco Bell Global Division [Member] | CHINA | Franchise [Member] | ||||
Revenues | 0 | 0 | 0 | 0 |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 0 | 0 | 0 | 0 |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Product [Member] | ||||
Revenues | 1 | 1 | 2 | 2 |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | ||||
Revenues | 7 | 5 | 13 | 11 |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Advertising [Member] | ||||
Revenues | 0 | 0 | 0 | 0 |
Taco Bell Global Division [Member] | UNITED STATES | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 11 | 6 | 21 | 11 |
Taco Bell Global Division [Member] | UNITED STATES | Product [Member] | ||||
Revenues | 212 | 252 | 408 | 494 |
Taco Bell Global Division [Member] | UNITED STATES | Franchise [Member] | ||||
Revenues | 140 | 123 | 268 | 240 |
Taco Bell Global Division [Member] | UNITED STATES | Advertising [Member] | ||||
Revenues | $ 109 | $ 97 | $ 213 | $ 188 |
Revenue Recognition Accountin_4
Revenue Recognition Accounting Policy (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | $ 1,310 | $ 1,368 | $ 2,564 | $ 2,739 |
KFC Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 584 | 651 | 1,150 | 1,309 |
Pizza Hut Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 246 | 233 | 489 | 484 |
Taco Bell Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenues | 480 | 484 | 925 | 946 |
UNITED STATES | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 17 | 12 | 35 | 24 |
UNITED STATES | KFC Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 5 | 5 | 11 | 11 |
UNITED STATES | Pizza Hut Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 1 | 1 | 3 | 2 |
UNITED STATES | Taco Bell Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 11 | 6 | 21 | 11 |
Other, Outside the U.S. and China [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 16 | 18 | 35 | 38 |
Other, Outside the U.S. and China [Member] | KFC Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 16 | 18 | 34 | 37 |
Other, Outside the U.S. and China [Member] | Pizza Hut Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 0 | 0 | 1 | 1 |
Other, Outside the U.S. and China [Member] | Taco Bell Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Operating Leases, Income Statement, Minimum Lease Revenue | 0 | 0 | 0 | 0 |
Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 359 | 512 | 692 | 1,024 |
Product [Member] | UNITED STATES | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 235 | 279 | 452 | 552 |
Product [Member] | UNITED STATES | KFC Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 18 | 16 | 34 | 33 |
Product [Member] | UNITED STATES | Pizza Hut Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 5 | 11 | 10 | 25 |
Product [Member] | UNITED STATES | Taco Bell Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 212 | 252 | 408 | 494 |
Product [Member] | Other, Outside the U.S. and China [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 124 | 233 | 240 | 472 |
Product [Member] | Other, Outside the U.S. and China [Member] | KFC Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 117 | 225 | 226 | 453 |
Product [Member] | Other, Outside the U.S. and China [Member] | Pizza Hut Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 6 | 7 | 12 | 17 |
Product [Member] | Other, Outside the U.S. and China [Member] | Taco Bell Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1 | 1 | 2 | 2 |
Franchise [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 633 | 584 | 1,245 | 1,168 |
Franchise [Member] | UNITED STATES | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 248 | 226 | 481 | 450 |
Franchise [Member] | UNITED STATES | KFC Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 41 | 40 | 79 | 78 |
Franchise [Member] | UNITED STATES | Pizza Hut Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 67 | 63 | 134 | 132 |
Franchise [Member] | UNITED STATES | Taco Bell Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 140 | 123 | 268 | 240 |
Franchise [Member] | CHINA | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 67 | 64 | 138 | 134 |
Franchise [Member] | CHINA | KFC Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 52 | 49 | 108 | 103 |
Franchise [Member] | CHINA | Pizza Hut Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 15 | 15 | 30 | 31 |
Franchise [Member] | CHINA | Taco Bell Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Franchise [Member] | Other, Outside the U.S. and China [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 285 | 264 | 556 | 522 |
Franchise [Member] | Other, Outside the U.S. and China [Member] | KFC Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 218 | 198 | 423 | 388 |
Franchise [Member] | Other, Outside the U.S. and China [Member] | Pizza Hut Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 60 | 61 | 120 | 123 |
Franchise [Member] | Other, Outside the U.S. and China [Member] | Taco Bell Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 7 | 5 | 13 | 11 |
Advertising [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 318 | 272 | 627 | 547 |
Advertising [Member] | UNITED STATES | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 190 | 159 | 370 | 317 |
Advertising [Member] | UNITED STATES | KFC Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3 | 2 | 5 | 4 |
Advertising [Member] | UNITED STATES | Pizza Hut Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 78 | 60 | 152 | 125 |
Advertising [Member] | UNITED STATES | Taco Bell Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 109 | 97 | 213 | 188 |
Advertising [Member] | Other, Outside the U.S. and China [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 128 | 113 | 257 | 230 |
Advertising [Member] | Other, Outside the U.S. and China [Member] | KFC Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 114 | 98 | 230 | 202 |
Advertising [Member] | Other, Outside the U.S. and China [Member] | Pizza Hut Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 14 | 15 | 27 | 28 |
Advertising [Member] | Other, Outside the U.S. and China [Member] | Taco Bell Global Division [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue Recognition Accountin_5
Revenue Recognition Accounting Policy (Details 3) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Total Revenues | $ 1,310 | $ 1,368 | $ 2,564 | $ 2,739 | |
Deferred Revenue | $ 419 | 419 | $ 414 | ||
Deferred Revenue, Revenue Recognized | (33) | ||||
Deferred Revenue, Additions | $ 38 |
Revenue Recognition Accountin_6
Revenue Recognition Accounting Policy (Details 4) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Deferred Revenue | $ 419 | $ 419 | $ 414 | ||
Revenues | 1,310 | $ 1,368 | 2,564 | $ 2,739 | |
1 year [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Deferred Revenue, Revenue Recognized | 61 | 61 | |||
2 years [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Deferred Revenue, Revenue Recognized | 57 | 57 | |||
3 years [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Deferred Revenue, Revenue Recognized | 52 | 52 | |||
4 years [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Deferred Revenue, Revenue Recognized | 48 | 48 | |||
5 years [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Deferred Revenue, Revenue Recognized | 43 | 43 | |||
Thereafter 5 years [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Deferred Revenue, Revenue Recognized | 158 | 158 | |||
Product [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 359 | 512 | 692 | 1,024 | |
Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 633 | 584 | 1,245 | 1,168 | |
Advertising [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 318 | 272 | 627 | 547 | |
UNITED STATES | Product [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 235 | 279 | 452 | 552 | |
UNITED STATES | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 248 | 226 | 481 | 450 | |
UNITED STATES | Advertising [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 190 | 159 | 370 | 317 | |
China Division [Member] | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 67 | 64 | 138 | 134 | |
Other, Outside the U.S. and China [Member] | Product [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 124 | 233 | 240 | 472 | |
Other, Outside the U.S. and China [Member] | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 285 | 264 | 556 | 522 | |
Other, Outside the U.S. and China [Member] | Advertising [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 128 | 113 | 257 | 230 | |
Pizza Hut Global Division [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 246 | 233 | 489 | 484 | |
Pizza Hut Global Division [Member] | UNITED STATES | Product [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 5 | 11 | 10 | 25 | |
Pizza Hut Global Division [Member] | UNITED STATES | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 67 | 63 | 134 | 132 | |
Pizza Hut Global Division [Member] | UNITED STATES | Advertising [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 78 | 60 | 152 | 125 | |
Pizza Hut Global Division [Member] | China Division [Member] | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 15 | 15 | 30 | 31 | |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Product [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 6 | 7 | 12 | 17 | |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 60 | 61 | 120 | 123 | |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Advertising [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 14 | 15 | 27 | 28 | |
Taco Bell Global Division [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 480 | 484 | 925 | 946 | |
Taco Bell Global Division [Member] | UNITED STATES | Product [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 212 | 252 | 408 | 494 | |
Taco Bell Global Division [Member] | UNITED STATES | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 140 | 123 | 268 | 240 | |
Taco Bell Global Division [Member] | UNITED STATES | Advertising [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 109 | 97 | 213 | 188 | |
Taco Bell Global Division [Member] | China Division [Member] | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Product [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 1 | 1 | 2 | 2 | |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 7 | 5 | 13 | 11 | |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Advertising [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 0 | 0 | 0 | 0 | |
KFC Global Division [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 584 | 651 | 1,150 | 1,309 | |
KFC Global Division [Member] | UNITED STATES | Product [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 18 | 16 | 34 | 33 | |
KFC Global Division [Member] | UNITED STATES | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 41 | 40 | 79 | 78 | |
KFC Global Division [Member] | UNITED STATES | Advertising [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 3 | 2 | 5 | 4 | |
KFC Global Division [Member] | China Division [Member] | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 52 | 49 | 108 | 103 | |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Product [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 117 | 225 | 226 | 453 | |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | 218 | 198 | 423 | 388 | |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Advertising [Member] | |||||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||||
Revenues | $ 114 | $ 98 | $ 230 | $ 202 |
Reportable Operating Segments_2
Reportable Operating Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Segment Reporting Information [Line Items] | |||||
Franchisor Costs | $ 38 | $ 40 | $ 81 | $ 87 | |
Operating Profit | 471 | 449 | 904 | 1,002 | |
Other investment (income) expense, net | (25) | (23) | (9) | (89) | |
Refranchising (gain) loss | (4) | (29) | (10) | (185) | |
Other (income) expense | (6) | (5) | (6) | (3) | |
Cooperative Advertising Expense | 315 | 274 | 616 | 546 | |
General and Administrative Expense | 198 | 208 | 409 | 427 | |
Cost of Goods and Services Sold | 286 | 421 | 558 | 859 | |
Other pension income (expense) | 0 | (3) | (3) | (6) | |
Interest Income (Expense), Net | (119) | (112) | (234) | (219) | |
Income Before Income Taxes | 377 | 357 | 676 | 866 | |
KFC Global Division [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Profit | 261 | 235 | 497 | 456 | |
Refranchising (gain) loss | (4) | (42) | (6) | (99) | |
Pizza Hut Global Division [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Profit | 96 | 81 | 193 | 169 | |
Refranchising (gain) loss | 0 | 13 | 0 | 11 | |
Taco Bell Global Division [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating Profit | 159 | 149 | 297 | 281 | |
Refranchising (gain) loss | 0 | 0 | (4) | (97) | |
Unallocated [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Franchisor Costs | [1] | 2 | 1 | 3 | 2 |
Refranchising (gain) loss | (4) | (29) | (10) | (185) | |
Other (income) expense | [2] | (9) | (5) | (9) | (4) |
General and Administrative Expense | 38 | 40 | 81 | 84 | |
Cost of Goods and Services Sold | $ 0 | $ 1 | $ 0 | $ 1 | |
[1] | Represents costs associated with the KFC U.S. Acceleration Agreement and Pizza Hut U.S. Transformation Agreement. See Note 5. | ||||
[2] | Includes settlement of contingent consideration associated with our 2013 acquisition of the KFC Turkey and Pizza Hut Turkey businesses. See Note 5. |
Pension Benefits (Details)
Pension Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Defined Benefit Plan Disclosure [Line Items] | |||||
Payment for Pension Benefits | $ 11 | $ 5 | |||
UNITED STATES | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Net periodic benefit cost | $ 2 | $ 5 | 4 | 11 | |
UNITED STATES | General and Administrative Expense [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | 1 | 2 | 3 | 4 | |
UNITED STATES | Other pension (income) expense [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Interest cost | 10 | 9 | 20 | 18 | |
Expected return on plan assets | (11) | (11) | (22) | (21) | |
Amortization of net loss | 1 | 3 | 1 | 7 | |
Amortization of prior service cost | 1 | 2 | 2 | 3 | |
Additional loss (gain) recognized due to settlements | [1] | $ 0 | $ 0 | $ 2 | $ 0 |
[1] | Loss is a result of settlement transactions which exceeded the sum of annual service and interest costs for the applicable plan. These losses were recorded in Other pension (income) expense. |
Short-term Borrowings and Lon_3
Short-term Borrowings and Long-term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |||
Short-term Borrowings and Long-term Debt [Line Items] | |||||||
Capital lease obligations | $ 69 | $ 69 | $ 71 | ||||
Long-term debt and capital less obligations, including current maturities and debt issuance costs | 10,284 | 10,284 | 10,167 | ||||
Less Debt Issuance Costs, Noncurrent, Net | (84) | (84) | (85) | ||||
Less current maturities of long-term debt | (331) | (331) | (331) | ||||
Other Short-term Borrowings | 4 | 4 | 0 | ||||
Short-term Debt, excluding debt issuance costs | 335 | 335 | 331 | ||||
Long-term debt | 9,869 | 9,869 | 9,751 | ||||
Short-term borrowings | 325 | 325 | 321 | ||||
Less current portion of debt issuance costs and discounts | (10) | (10) | (10) | ||||
Interest Income (Expense), Net | (119) | $ (112) | (234) | $ (219) | |||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 253 | $ 236 | |||||
Unsecured Debt [Member] | Existing [Member] | |||||||
Short-term Borrowings and Long-term Debt [Line Items] | |||||||
Senior Notes | 1,875 | 1,875 | 1,875 | ||||
Unsecured Debt [Member] | Subsidiary Senior Unsecured Notes [Member] | |||||||
Short-term Borrowings and Long-term Debt [Line Items] | |||||||
Senior Notes | [1] | 2,850 | 2,850 | 2,850 | |||
Secured Debt [Member] | |||||||
Short-term Borrowings and Long-term Debt [Line Items] | |||||||
Senior Notes | 2,913 | 2,913 | 2,928 | ||||
Secured Debt [Member] | Securitization Notes [Member] | |||||||
Short-term Borrowings and Long-term Debt [Line Items] | |||||||
Senior Notes | [2] | 2,913 | 2,913 | 2,928 | |||
Secured Debt [Member] | Term Loan A Facility [Member] | |||||||
Short-term Borrowings and Long-term Debt [Line Items] | |||||||
Long-term Debt | [1] | 475 | 475 | 488 | |||
Secured Debt [Member] | Revolving Credit Facility [Member] | |||||||
Short-term Borrowings and Long-term Debt [Line Items] | |||||||
Long-term Line of Credit | 157 | 157 | 0 | ||||
Secured Debt [Member] | Term Loan B Facility [Member] | |||||||
Short-term Borrowings and Long-term Debt [Line Items] | |||||||
Long-term Debt | $ 1,945 | $ 1,945 | $ 1,955 | [1] | |||
[1] | We estimated the fair value of the YUM and Subsidiary Senior Unsecured Notes, Term Loan A Facility, and Term Loan B Facility using market quotes and calculations based on market rates. | ||||||
[2] | We estimated the fair value of the Securitization Notes by obtaining broker quotes from two separate brokerage firms that are knowledgeable about the Company’s Securitization Notes and, at times, trade these notes. The markets in which the Securitization Notes trade are not considered active markets. |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | ||
Other investment (income) expense, net | $ (25) | $ (23) | $ (9) | $ (89) | ||
Secured Debt [Member] | Term Loan B Facility [Member] | ||||||
Long-term Debt | 1,945 | 1,945 | $ 1,955 | [1] | ||
Cash Flow Hedging [Member] | ||||||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ 6 | |||||
Cash Flow Hedging [Member] | Forward-starting interest rate swap [Member] | ||||||
Derivative, Maturity Date | Mar. 29, 2025 | |||||
Derivative, Notional Amount | $ 1,500 | 1,500 | 0 | |||
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | ||||||
Derivative, Maturity Date | Jul. 27, 2021 | |||||
Derivative, Notional Amount | $ 1,550 | 1,550 | 0 | |||
Gain (Loss) on Cash Flow Hedge Ineffectiveness, Net | 0 | |||||
Intercompany receivables and payables [Domain] | Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | ||||||
Derivative, Notional Amount | $ 456 | $ 456 | $ 456 | |||
Minimum [Member] | Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | ||||||
Derivative, Maturity Date | Nov. 25, 2019 | |||||
Maximum [Member] | Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | ||||||
Derivative, Maturity Date | Jun. 12, 2020 | |||||
[1] | We estimated the fair value of the YUM and Subsidiary Senior Unsecured Notes, Term Loan A Facility, and Term Loan B Facility using market quotes and calculations based on market rates. |
Derivative Instruments (Detai_2
Derivative Instruments (Details 2) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ (44) | $ 25 | $ (60) | $ 27 |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 1 | (26) | (14) | (15) |
Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | 0 | 2 | 3 | 2 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | 11 | (1) | 16 | (5) |
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | (43) | (2) | (70) | 16 |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (5) | (2) | (10) | (3) |
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | (1) | 27 | 10 | 11 |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ 6 | $ (24) | $ (4) | $ (12) |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $ 0 | |||
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | |||
Unsecured Debt [Member] | Subsidiary Senior Unsecured Notes [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior Notes, Noncurrent | [1] | 2,850 | $ 2,850 | |
Unsecured Debt [Member] | Subsidiary Senior Unsecured Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | [1] | 2,972 | 2,733 | |
Unsecured Debt [Member] | YUM Senior Unsecured Notes [Member] [Domain] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior Notes, Noncurrent | [1] | 1,875 | 1,875 | |
Unsecured Debt [Member] | YUM Senior Unsecured Notes [Member] [Domain] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | [1] | 1,899 | 1,798 | |
Secured Debt [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior Notes, Noncurrent | 2,913 | 2,928 | ||
Secured Debt [Member] | Securitization Notes [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior Notes, Noncurrent | [2] | 2,913 | 2,928 | |
Secured Debt [Member] | Securitization Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | [2] | 3,048 | 2,967 | |
Secured Debt [Member] | Term Loan A Facility [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt obligations, excluding capital leases, carrying amount | [1] | 475 | 488 | |
Secured Debt [Member] | Term Loan A Facility [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | [1] | 474 | 479 | |
Secured Debt [Member] | Term Loan B Facility [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Debt obligations, excluding capital leases, carrying amount | 1,945 | 1,955 | [1] | |
Secured Debt [Member] | Term Loan B Facility [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | [1] | 1,946 | 1,915 | |
Other Assets [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | 218 | 214 | ||
Investments, Fair Value Disclosure | 32 | 27 | ||
Other Assets [Member] | Interest Rate Swap [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Asset | 6 | 29 | ||
Prepaid Expenses and Other Current Assets [Member] | Interest Rate Swap [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Asset | 10 | 21 | ||
Prepaid Expenses and Other Current Assets [Member] | Foreign Exchange Forward [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Asset | 0 | 5 | ||
Accounts Payable and Accrued Liabilities [Member] | Foreign Exchange Forward [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Liability | 9 | 0 | ||
Other Noncurrent Liabilities [Member] | Interest Rate Swap [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Liability | 69 | 23 | ||
Other Noncurrent Liabilities [Member] | Foreign Exchange Forward [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Liability | $ 0 | $ 24 | ||
[1] | We estimated the fair value of the YUM and Subsidiary Senior Unsecured Notes, Term Loan A Facility, and Term Loan B Facility using market quotes and calculations based on market rates. | |||
[2] | We estimated the fair value of the Securitization Notes by obtaining broker quotes from two separate brokerage firms that are knowledgeable about the Company’s Securitization Notes and, at times, trade these notes. The markets in which the Securitization Notes trade are not considered active markets. |
Contingencies (Details)
Contingencies (Details) - Property Lease Guarantee [Member] $ in Millions | 3 Months Ended |
Jun. 30, 2019USD ($) | |
Guarantor Obligations [Line Items] | |
Year longest lease expires | 2065 |
Guarantor Obligations, Maximum Exposure | $ 500 |
Guarantee Obligations Maximum Exposure At Present Value | $ 400 |
Uncategorized Items - yum-63020
Label | Element | Value |
Balances with Adoption of Topic 842 [Member] | ||
Retained Earnings (Accumulated Deficit) | us-gaap_RetainedEarningsAccumulatedDeficit | $ 2,000,000 |
Retained Earnings [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | (249,000,000) |
Stockholders' Equity Attributable to Parent | us-gaap_StockholdersEquity | $ (2,000,000) |