Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 03, 2022 | |
Cover [Abstract] | ||
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 | 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Entity File Number | 1-13163 | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 281,687,866 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |||||
Revenues | ||||||||
Total Revenues | $ 1,640 | $ 1,606 | $ 4,823 | $ 4,694 | ||||
Costs and Expenses, Net | ||||||||
Company restaurant expenses | 402 | 421 | 1,219 | 1,230 | ||||
General and Administrative Expense | 261 | 253 | 768 | 689 | ||||
Franchise and property expenses | 28 | 31 | 89 | 81 | ||||
Franchise advertising and other services expense | 396 | 375 | 1,153 | 1,090 | ||||
Refranchising (gain) loss | (3) | 1 | (15) | (21) | ||||
Other (income) expense | 10 | (2) | 0 | (12) | ||||
Total costs and expenses, net | 1,094 | 1,079 | 3,214 | 3,057 | ||||
Operating Profit | 546 | 527 | 1,609 | 1,637 | ||||
Investment (income) expense, net | [1] | (27) | (51) | (19) | (52) | |||
Other pension (income) expense | 2 | 1 | 3 | 6 | ||||
Interest expense, net | 124 | [2] | 126 | [2] | 390 | 416 | [2] | |
Income Before Income Taxes | 447 | 451 | 1,235 | 1,267 | ||||
Income tax provision | 116 | (77) | 281 | 22 | ||||
Net Income | $ 331 | $ 528 | $ 954 | $ 1,245 | ||||
Basic Earnings Per Common Share | $ 1.16 | $ 1.78 | $ 3.33 | $ 4.17 | ||||
Diluted Earnings Per Common Share | 1.14 | 1.75 | 3.28 | 4.10 | ||||
Dividends Declared Per Common Share | $ 0.57 | $ 0.50 | $ 1.71 | $ 1.50 | ||||
Company Sales | ||||||||
Revenues | ||||||||
Revenues | $ 479 | $ 513 | $ 1,448 | $ 1,509 | ||||
Franchise and property revenues | ||||||||
Revenues | ||||||||
Revenues | 760 | 716 | 2,211 | 2,080 | ||||
Franchise contributions for advertising and other services | ||||||||
Revenues | ||||||||
Revenues | $ 401 | $ 377 | $ 1,164 | $ 1,105 | ||||
[1]Includes changes in the value of our investment in Devyani International Limited (see Note 12).[2]Includes a $23 million call premium and $5 million of unamortized debt issuance costs written off related to the redemption of the 2025 Notes (see Note 10) during the quarter ended June 30, 2022. Includes a $28 million call premium and $6 million of unamortized debt issuance costs written off related to the redemption of the $1,050 million aggregate principal amount of 5.25% Subsidiary Senior Unsecured Notes due in 2026 during the quarter ended June 30, 2021. Includes fees expensed and unamortized debt issuance costs written off totaling $12 million related to the refinancing of the Credit Agreement (as described within our 2021 Form 10-K) during the quarter ended March 31, 2021. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net Income | $ 331 | $ 528 | $ 954 | $ 1,245 |
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature | ||||
Adjustments and gains (losses) arising during the period | (55) | (19) | (99) | (2) |
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature, before tax | (55) | (19) | (99) | (2) |
Tax (expense) benefit | 0 | 0 | 0 | 0 |
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature, net of tax | (55) | (19) | (99) | (2) |
Changes in pension and post-retirement benefits | ||||
Unrealized gains (losses) arising during period, before Tax | 20 | 3 | 20 | 61 |
Reclassification of (gains) losses into Net Income | 5 | 5 | 14 | 16 |
Changes in pension and post-retirement benefits, before Tax | 25 | 8 | 34 | 77 |
Pension and post-retirement benefit plans, tax | (6) | (2) | (8) | (19) |
Pension and post-retirement benefit plans, net of tax | 19 | 6 | 26 | 58 |
Changes in derivative instruments | ||||
Unrealized gains (losses) arising during the period | 42 | 1 | 114 | 17 |
Reclassification of (gains) losses into Net Income | 1 | 7 | 19 | 15 |
Changes in derivative instruments | 43 | 8 | 133 | 32 |
Changes in derivatives, Tax | (11) | (2) | (33) | (8) |
Changes in derivatives, net of tax | 32 | 6 | 100 | 24 |
Other comprehensive income (loss), net of tax | (4) | (7) | 27 | 80 |
Comprehensive Income (Loss) | $ 327 | $ 521 | $ 981 | $ 1,325 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | ||
Cash Flows - Operating Activities | |||
Net Income | $ 954 | $ 1,245 | |
Depreciation and amortization | 104 | 117 | |
Refranchising (gain) loss | (15) | (21) | |
Investment (income) expense, net | [1] | (19) | (52) |
Deferred income taxes | 3 | (173) | |
Share-based compensation expense | 64 | 58 | |
Changes in accounts and notes receivable | (26) | 0 | |
Changes in prepaid expenses and other current assets | (3) | (5) | |
Changes in accounts payable and other current liabilities | (149) | 24 | |
Changes in income taxes payable | (3) | (45) | |
Other, net | 65 | 144 | |
Net Cash Provided by Operating Activities | 975 | 1,292 | |
Cash Flows - Investing Activities | |||
Capital spending | (158) | (138) | |
Proceeds from refranchising of restaurants | 51 | 48 | |
Other, net | (5) | (33) | |
Net Cash Used in Investing Activities | (112) | (123) | |
Cash Flows - Financing Activities | |||
Proceeds from long-term debt | 999 | 4,150 | |
Repayments of long-term debt | (678) | (3,647) | |
Repurchase shares of Common Stock | (714) | (857) | |
Dividends paid on Common Stock | (489) | (446) | |
Debt Issuance Costs | (11) | (37) | |
Other, net | (35) | (44) | |
Net Cash Provided by (Used in) Financing Activities | (928) | (881) | |
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (43) | (1) | |
Net Increase (Decrease) in Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (108) | 287 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents - Beginning of Period | 771 | 1,024 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents - End of Period | $ 663 | $ 1,311 | |
[1]Includes changes in the value of our investment in Devyani International Limited (see Note 12). |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) shares in Millions, $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 410 | $ 486 |
Accounts and notes receivable, net | 579 | 596 |
Prepaid expenses and other current assets | 606 | 450 |
Total Current Assets | 1,595 | 1,532 |
Property, plant and equipment, net | 1,114 | 1,207 |
Goodwill | 633 | 657 |
Intangible assets, net | 341 | 359 |
Other assets | 1,429 | 1,487 |
Deferred Income Taxes | 667 | 724 |
Total Assets | 5,779 | 5,966 |
Current Liabilities | ||
Accounts payable and other current liabilities | 1,156 | 1,334 |
Income taxes payable | 16 | 13 |
Short-term borrowings | 72 | 68 |
Total Current Liabilities | 1,244 | 1,415 |
Long-term debt | 11,517 | 11,178 |
Other liabilities and deferred credits | 1,560 | 1,746 |
Total Liabilities | 14,321 | 14,339 |
Shareholders' Equity | ||
Common Stock, no par value, 750 shares authorized; 285 shares issued in 2022 and 289 issued in 2021 | 0 | 0 |
Accumulated Deficit | (8,244) | (8,048) |
Accumulated other comprehensive loss | (298) | (325) |
Total Shareholders' Deficit | (8,542) | (8,373) |
Total Liabilities and Shareholders' Deficit | $ 5,779 | $ 5,966 |
Common Stock, No Par Value | $ 0 | $ 0 |
Common Stock, Shares Authorized | 750 | 750 |
Common Stock, Shares, Issued | 284 | 289 |
CONDENSED STATEMENT OF SHAREHOL
CONDENSED STATEMENT OF SHAREHOLDERS EQUITY STATEMENT - USD ($) $ in Millions | Total | Issued Common Stock | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Total Shareholders' Deficit | $ (7,891) | $ 0 | $ (7,480) | $ (411) |
Issued Common Stock, Shares | 300,000,000 | |||
Net Income | 1,245 | 1,245 | ||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature | (2) | (2) | ||
Pension and post-retirement benefit plans, net of tax | 58 | 58 | ||
Pension and post-retirement benefit plans, tax | 19 | |||
Changes in derivatives, net of tax | 24 | 24 | ||
Changes in derivatives, Tax | 8 | |||
Comprehensive Income (Loss) | 1,325 | |||
Dividends declared | (448) | (448) | ||
Shares Repurchased | (7,348,000) | |||
Repurchase of shares of Common Stock, value | (860) | $ (24) | (836) | |
Employee Stock Option and SARs Exercises, Shares | 1,000,000 | |||
Employee Stock Option and SARs Exercises, Value | (43) | $ (38) | (5) | |
Share-based compensation events | 62 | 62 | ||
Total Shareholders' Deficit | (7,893) | $ 0 | (7,569) | (324) |
Issued Common Stock, Shares | 296,000,000 | |||
Net Income | 528 | 528 | ||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature | (19) | (19) | ||
Pension and post-retirement benefit plans, net of tax | 6 | 6 | ||
Pension and post-retirement benefit plans, tax | 2 | |||
Changes in derivatives, net of tax | 6 | 6 | ||
Changes in derivatives, Tax | 2 | |||
Comprehensive Income (Loss) | 521 | |||
Dividends declared | (148) | (148) | ||
Shares Repurchased | (2,000,000) | |||
Repurchase of shares of Common Stock, value | (330) | $ 0 | (330) | |
Employee Stock Option and SARs Exercises, Shares | 0 | |||
Employee Stock Option and SARs Exercises, Value | (26) | $ (21) | (5) | |
Share-based compensation events | 21 | 21 | ||
Total Shareholders' Deficit | (7,855) | $ 0 | (7,524) | (331) |
Issued Common Stock, Shares | 294,000,000 | |||
Total Shareholders' Deficit | (8,373) | $ 0 | (8,048) | (325) |
Issued Common Stock, Shares | 289,000,000 | |||
Net Income | 954 | 954 | ||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature | (99) | (99) | ||
Pension and post-retirement benefit plans, net of tax | 26 | 26 | ||
Pension and post-retirement benefit plans, tax | 8 | |||
Changes in derivatives, net of tax | 100 | 100 | ||
Changes in derivatives, Tax | 33 | |||
Comprehensive Income (Loss) | 981 | |||
Dividends declared | (491) | (491) | ||
Shares Repurchased | (5,987,000) | |||
Repurchase of shares of Common Stock, value | (714) | $ (55) | (659) | |
Employee Stock Option and SARs Exercises, Shares | 1,000,000 | |||
Employee Stock Option and SARs Exercises, Value | (24) | $ (24) | ||
Share-based compensation events | 79 | 79 | ||
Total Shareholders' Deficit | (8,568) | $ 0 | (8,274) | (294) |
Issued Common Stock, Shares | 285,000,000 | |||
Net Income | 331 | 331 | ||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature | (55) | (55) | ||
Pension and post-retirement benefit plans, net of tax | 19 | 19 | ||
Pension and post-retirement benefit plans, tax | 6 | |||
Changes in derivatives, net of tax | 32 | 32 | ||
Changes in derivatives, Tax | 11 | |||
Comprehensive Income (Loss) | 327 | |||
Dividends declared | (162) | (162) | ||
Shares Repurchased | (1,000,000) | |||
Repurchase of shares of Common Stock, value | (157) | $ (18) | (139) | |
Employee Stock Option and SARs Exercises, Shares | 0 | |||
Employee Stock Option and SARs Exercises, Value | (3) | $ (3) | ||
Share-based compensation events | 21 | 21 | ||
Total Shareholders' Deficit | $ (8,542) | $ 0 | $ (8,244) | $ (298) |
Issued Common Stock, Shares | 284,000,000 |
Financial Statement Presentatio
Financial Statement Presentation | 9 Months Ended |
Sep. 30, 2022 | |
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, 2021 (“2021 Form 10-K”). Yum! Brands, Inc. and its Subsidiaries (collectively referred to herein as the “Company,” “YUM,” “we,” “us” or “our”) franchise or operate a system of nearly 54,000 restaurants in more than 155 countries and territories. As of September 30, 2022, 98% of these restaurants were owned and operated by franchisees. The Company’s KFC, Taco Bell and Pizza Hut brands are global leaders of the chicken, Mexican-style and pizza food categories, respectively. The Habit Burger Grill is a fast-casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches and more. As of September 30, 2022, YUM consisted of four operating segments: • The KFC Division which includes our worldwide operations of the KFC concept • The Taco Bell Division which includes our worldwide operations of the Taco Bell concept • The Pizza Hut Division which includes our worldwide operations of the Pizza Hut concept • The Habit Burger Grill Division which includes our worldwide operations of the Habit Burger Grill concept YUM's fiscal year begins on January 1 and ends December 31 of each year, with each quarter comprised of three months. The majority of our U.S. subsidiaries, including, beginning in fiscal year 2022, our Habit Burger Grill Division, and certain international subsidiaries operate on a weekly periodic calendar where the first three quarters of each fiscal year consist of 12 weeks and the fourth quarter consists of 16 weeks in fiscal years with 52 weeks and 17 weeks in fiscal years with 53 weeks. Our remaining international subsidiaries operate on a monthly calendar similar to that on which YUM operates. For fiscal year 2021, our Habit Burger Grill Division operated on a weekly periodic calendar where each quarter consisted of 13 weeks. The impact of this change in reporting calendar was not significant and accordingly, prior year amounts presented in these Condensed Consolidated Financial Statements have not been restated. 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 2021 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 September 30, 2022. These reclassifications had no effect on previously reported Net Income. Russia Invasion of Ukraine In the first quarter of 2022, as a result of the Russian invasion of Ukraine, we suspended all investment and restaurant development in Russia. We also suspended all operations of our 70 company-owned KFC restaurants in Russia and began finalizing an agreement to suspend all Pizza Hut operations in Russia, in partnership with our master franchisee. Further, we pledged to redirect any future net profits attributable to Russia subsequent to the date of invasion to humanitarian efforts. During the second quarter, we completed the transfer of ownership of the Pizza Hut Russia business to a local operator who has initiated the process of re-branding locations to a non-YUM concept. During the third quarter, we initiated the bidding process for the KFC Russia business and, as a result, those operations qualified for held-for-sale accounting at September 30, 2022. Total KFC Russia assets held-for-sale of $224 million and total KFC Russia liabilities held-for-sale of $82 million are included in Prepaid expenses and other current assets and Accounts payable and other current liabilities, respectively, in our Condensed Consolidated Balance Sheet at September 30, 2022. At September 30, 2022, we determined the carrying value of the KFC Russia asset group was recoverable based on expected sale proceeds. In October 2022, we announced that we have entered into a sale and purchase agreement to transfer ownership of our KFC Russia restaurants, operating system and master franchise rights, including the network of KFC franchised restaurants, to Smart Service Ltd., a business operated by one of our existing KFC franchisees in Russia. Under the agreement, the buyer will be responsible for re-branding locations to a non-YUM concept and retaining the Company's employees in Russia. Completion of the transaction is subject to regulatory and governmental approvals, as well as other conditions. Following the completion of the transaction, we will have ceased our corporate presence in Russia. |
Earnings Per Common Share ("EPS
Earnings Per Common Share ("EPS") | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share (EPS) | Earnings Per Common Share (“EPS”) Quarter ended Year to date 2022 2021 2022 2021 Net Income $ 331 $ 528 $ 954 $ 1,245 Weighted-average common shares outstanding (for basic calculation) 285 296 287 298 Effect of dilutive share-based employee compensation 4 6 4 6 Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) 289 302 291 304 Basic EPS $ 1.16 $ 1.78 $ 3.33 $ 4.17 Diluted EPS $ 1.14 $ 1.75 $ 3.28 $ 4.10 Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation (a) 2.0 0.1 1.9 1.5 (a) These unexercised employee stock options and stock appreciation rights were not included in the computation of diluted EPS because to do so would have been antidilutive for the periods presented. |
Shareholders' Deficit
Shareholders' Deficit | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders' Deficit Under the authority of our Board of Directors, we repurchased shares of our Common Stock during the years to date ended September 30, 2022 and 2021 as indicated below. All amounts exclude applicable transaction fees. Shares Repurchased Dollar Value of Shares Remaining Dollar Value of Shares that may be Repurchased Authorization Date 2022 2021 2022 2021 2022 November 2019 — 4,746 $ — $ 530 $ — May 2021 5,987 2,602 714 330 236 September 2022 — — — — 2,000 Total 5,987 7,348 (a) $ 714 $ 860 (a) $ 2,236 (a) Includes the effect of $14 million in share repurchases (0.1 million shares) with trade dates on, or prior to, September 30, 2021, but cash settlement dates subsequent to September 30, 2021, and excludes the effect of $11 million in share repurchases (0.1 million shares) with trade dates on, or prior to, December 31, 2020, but cash settlement dates subsequent to December 31, 2020. In May 2021, our Board of Directors authorized share repurchases from July 1, 2021 through December 31, 2022, of up to $2 billion (excluding applicable transaction fees) of our outstanding Common Stock. As of September 30, 2022, $236 million remains available under this authorization. In September 2022, our Board of Directors authorized share repurchases of up to $2 billion (excluding applicable transaction fees) of our outstanding Common Stock through June 30, 2024. The new authorization will take effect upon the earlier of the exhaustion or expiration of the authorization approved in May 2021. 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 June 30, 2022, net of tax $ (250) $ (27) $ (17) $ (294) OCI, net of tax Gains (losses) arising during the period classified into AOCI, net of tax (55) 15 32 (8) (Gains) losses reclassified from AOCI, net of tax — 4 — 4 (55) 19 32 (4) Balance at September 30, 2022, net of tax $ (305) $ (8) $ 15 $ (298) Balance at December 31, 2021, net of tax $ (206) $ (34) $ (85) $ (325) OCI, net of tax Gains (losses) arising during the period classified into AOCI, net of tax (99) 15 86 2 (Gains) losses reclassified from AOCI, net of tax — 11 14 25 (99) 26 100 27 Balance at September 30, 2022, net of tax $ (305) $ (8) $ 15 $ (298) |
Other (Income) Expense
Other (Income) Expense | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Other (Income) Expense | Other (Income) Expense Quarter ended Year to date 9/30/2022 9/30/2021 9/30/2022 9/30/2021 Foreign exchange net (gain) loss $ 4 $ 2 $ (8) $ 5 Impairment and closure expense 1 1 — 2 Other 5 (5) 8 (19) Other (income) expense $ 10 $ (2) $ — $ (12) |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 9 Months Ended |
Sep. 30, 2022 | |
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 from 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. 9/30/2022 12/31/2021 Accounts and notes receivable, gross $ 613 $ 632 Allowance for doubtful accounts (34) (36) Accounts and notes receivable, net $ 579 $ 596 Property, Plant and Equipment, net 9/30/2022 12/31/2021 Property, plant and equipment, gross $ 2,376 $ 2,477 Accumulated depreciation and amortization (1,262) (1,270) Property, plant and equipment, net $ 1,114 $ 1,207 Assets held-for-sale totaled $228 million and $12 million as of September 30, 2022 and December 31, 2021, respectively, and are included in Prepaid expenses and other current assets in our Condensed Consolidated Balance Sheets. Liabilities held-for-sale totaled $82 million as of September 30, 2022, and are included in Accounts payable and other current liabilities in our Condensed Consolidated Balance Sheets as of September 30, 2022. KFC Russia assets held-for-sale accounted for $224 million including property, plant and equipment of $69 million, of the $228 million, while KFC Russia liabilities held-for-sale accounted for all of the $82 million as of September 30, 2022. Other Assets 9/30/2022 12/31/2021 Operating lease right-of-use assets (a) $ 734 $ 809 Franchise incentives 174 164 Investment in Devyani International Limited (See Note 12) 127 118 Other 394 396 Other assets $ 1,429 $ 1,487 (a) Non-current operating lease liabilities of $721 million and $793 million as of September 30, 2022 and December 31, 2021, respectively, are included in Other liabilities and deferred credits in our Condensed Consolidated Balance Sheets. Reconciliation of Cash and Cash Equivalents for Condensed Consolidated Statements of Cash Flows 9/30/2022 12/31/2021 Cash and cash equivalents as presented in Condensed Consolidated Balance Sheets $ 410 $ 486 Restricted cash included in Prepaid expenses and other current assets (a) 178 250 Restricted cash and restricted cash equivalents included in Other assets (b) 34 35 Cash and restricted cash related to KFC Russia included in assets held-for-sale 41 — Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents as presented in Condensed Consolidated Statements of Cash Flows $ 663 $ 771 (a) Restricted cash within Prepaid expenses and other current assets reflects the cash related to advertising cooperatives which we consolidate that can only be used to settle obligations of the respective cooperatives and cash held in reserve for Taco Bell Securitization interest payments. (b) Primarily trust accounts related to our self-insurance program. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Quarter ended Year to date 2022 2021 2022 2021 Income tax (benefit) provision $ 116 $ (77) $ 281 $ 22 Effective tax rate 25.8 % (17.0) % 22.7 % 1.8 % Our third quarter effective tax rate was higher than the prior year primarily due to the following: • Lapping a $152 million tax benefit recorded in the quarter ended September 30, 2021, resulting from a KFC Europe reorganization in which we concentrated management responsibility for European (excluding the United Kingdom ("UK")) KFC franchise development, support operation and management oversight in Switzerland. Concurrent with this change in management responsibility, we completed intra-entity transfers of certain KFC intellectual property rights from subsidiaries in the UK to subsidiaries in Switzerland. With the transfer of these rights, we received a step-up in amortizable tax basis to current fair value under applicable Swiss tax law which resulted in the recording of the one-time tax benefit to record the deferred tax asset. • Lower excess tax benefits on share-based compensation than those recognized in the quarter ended September 30, 2021. • Higher tax expense recognized in the quarter ended September 30, 2022, associated with adjustments related to prior year taxes. Our year-to-date effective tax rate was also higher than the prior year due to the items discussed above, as well as the following: • Our decision to exit the Russia market is anticipated to result in a reduction in the tax basis of intellectual property rights held in Switzerland due to the expected loss of the Russian royalty income associated with such rights going forward. As a result, we have remeasured and reassessed the need for a valuation allowance on those deferred tax assets. In addition, we have reassessed certain deferred tax liabilities associated with the Russia business given the expectation that the existing basis difference will now reverse by way of sale. Primarily as a result of these items, we recorded $69 million of net tax expense in the year to date ended September 30, 2022 associated with our decision to exit the Russia market. • Lapping a $64 million tax benefit that was recorded in the quarter ended June 30, 2021, to remeasure deferred taxes necessitated by the enactment of the UK Finance Act 2021. The UK Finance Act increased the UK corporate income tax rate from 19% to 25%, beginning April 1, 2023. • The items above were partially offset by $82 million of tax benefit discretely recorded in the quarter ended March 31, 2022, from the release of a valuation allowance on foreign tax credit carryforwards. In January 2022, the U.S. Treasury published new regulations impacting foreign tax credit utilization beginning in the Company’s 2022 tax year. These regulations make foreign taxes paid to certain countries no longer creditable in the U.S. Accordingly, we reversed a valuation allowance associated with existing foreign tax credit carryforwards that we now believe will be used to offset these now non-creditable taxes in 2022 and future years. |
Revenue Recognition Accounting
Revenue Recognition Accounting Policy | 9 Months Ended |
Sep. 30, 2022 | |
Revenue Recognition and Deferred Revenue [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 9/30/2022 KFC Division Taco Bell Division Pizza Hut Division Habit Burger Grill Division Total U.S. Company sales $ 16 $ 234 $ 4 $ 129 $ 383 Franchise revenues 47 173 65 — 285 Property revenues 4 10 1 1 16 Franchise contributions for advertising and other services 7 136 72 1 216 China Franchise revenues 61 — 17 — 78 Other Company sales 96 — — — 96 Franchise revenues 291 13 62 — 366 Property revenues 15 — — — 15 Franchise contributions for advertising and other services 167 2 16 — 185 $ 704 $ 568 $ 237 $ 131 $ 1,640 Quarter ended 9/30/2021 KFC Division Taco Bell Division Pizza Hut Division Habit Burger Grill Division Total U.S. Company sales $ 15 $ 225 $ 5 $ 132 $ 377 Franchise revenues 46 156 63 1 266 Property revenues 3 11 2 — 16 Franchise contributions for advertising and other services 7 130 70 — 207 China Franchise revenues 61 — 16 — 77 Other Company sales 128 — 8 — 136 Franchise revenues 265 10 66 — 341 Property revenues 16 — — — 16 Franchise contributions for advertising and other services 151 2 17 — 170 $ 692 $ 534 $ 247 $ 133 $ 1,606 Year to date 9/30/2022 KFC Division Taco Bell Division Pizza Hut Division Habit Burger Grill Division Total U.S. Company sales $ 47 $ 691 $ 14 $ 390 $ 1,142 Franchise revenues 139 508 193 3 843 Property revenues 10 31 3 1 45 Franchise contributions for advertising and other services 20 401 216 1 638 China Franchise revenues 170 — 46 — 216 Other Company sales 306 — — — 306 Franchise revenues 834 35 195 — 1,064 Property revenues 42 — 1 — 43 Franchise contributions for advertising and other services 473 5 48 — 526 $ 2,041 $ 1,671 $ 716 $ 395 $ 4,823 Year to date 9/30/2021 KFC Division Taco Bell Division Pizza Hut Division Habit Burger Grill Division Total U.S. Company sales $ 45 $ 656 $ 15 $ 391 $ 1,107 Franchise revenues 138 460 197 3 798 Property revenues 10 31 4 — 45 Franchise contributions for advertising and other services 20 375 223 — 618 China Franchise revenues 181 — 48 — 229 Other Company sales 378 — 24 — 402 Franchise revenues 750 27 185 — 962 Property revenues 45 — 1 — 46 Franchise contributions for advertising and other services 432 5 50 — 487 $ 1,999 $ 1,554 $ 747 $ 394 $ 4,694 Contract Liabilities Our contract liabilities are comprised of unamortized upfront fees received from franchisees and are presented within Accounts payable and other current liabilities and Other liabilities and deferred credits in our Condensed Consolidated Balance Sheets. A summary of significant changes to the contract liability balance during 2022 is presented below. Deferred Franchise Fees Balance at December 31, 2021 $ 421 Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period (57) Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period 65 Deferred franchise fees related to KFC Russia reclassified to liabilities held-for-sale (20) Other (a) (5) Balance at September 30, 2022 $ 404 (a) Primarily includes impact of foreign currency translation. We expect to recognize contract liabilities as revenue over the remaining term of the associated franchise agreement as follows: Less than 1 year $ 63 1 - 2 years 60 2 - 3 years 54 3 - 4 years 49 4 - 5 years 43 Thereafter 135 Total $ 404 |
Reportable Operating Segments
Reportable Operating Segments | 9 Months Ended |
Sep. 30, 2022 | |
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 2022 2021 2022 2021 KFC Division $ 704 $ 692 $ 2,041 $ 1,999 Taco Bell Division 568 534 1,671 1,554 Pizza Hut Division 237 247 716 747 Habit Burger Grill Division 131 133 395 394 $ 1,640 $ 1,606 $ 4,823 $ 4,694 Quarter ended Year to date Operating Profit 2022 2021 2022 2021 KFC Division $ 304 $ 314 $ 888 $ 932 Taco Bell Division 204 184 604 560 Pizza Hut Division 92 101 287 306 Habit Burger Grill Division (4) 1 (14) 6 Corporate and unallocated G&A expenses (a) (67) (70) (203) (183) Unallocated Franchise and property expenses (a) — — (4) — Unallocated Refranchising gain (loss) 3 (1) 15 21 Unallocated Other income (expense) (a) 14 (2) 36 (5) Operating Profit $ 546 $ 527 $ 1,609 $ 1,637 Investment income (expense), net (b) 27 51 19 52 Other pension income (expense) (2) (1) (3) (6) Interest expense, net (c) (124) (126) (390) (416) Income before income taxes $ 447 $ 451 $ 1,235 $ 1,267 Our chief operating decision maker ( “ CODM ” ) does not consider the impact of Corporate and unallocated amounts when assessing Divisional segment performance. As such, we do not allocate such amounts to our Divisional segments for performance reporting purposes. (a) Our operating results for the year to date ended September 30, 2022, continue to reflect royalty revenues from and expenses to support the Russian operations for Pizza Hut prior to the date of transfer and for KFC for the entire quarter and year to date (see Note 1) within their historical financial statement line items and operating segments. However, given our decision to exit Russia and our pledge to direct any future net profits attributable to Russia subsequent to the date of invasion to humanitarian efforts, we have reclassed such net operating profits from the Division segment results in which they were earned to Corporate and unallocated Other income (expense). As a result, we reclassed net operating profits of $18 million and $44 million from KFC and Pizza Hut Other income (expense) to Unallocated Other (income) expense during the quarter and year to date ended September 30, 2022, respectively. Additionally, we have incurred certain expenses related to the transfer of the businesses and other one-time costs related to our exit from Russia which we have recorded within Corporate and unallocated. As a result of these other costs and expenses we have incurred, we recorded charges of $1 million to Corporate and unallocated G&A expenses and less than $1 million to Unallocated Franchise and property expenses during the quarter ended September 30, 2022. During the year to date ended September 30, 2022, we recorded charges of $3 million to Corporate and unallocated G&A expenses and $4 million to Unallocated Franchise and property expenses. (b) Includes changes in the value of our investment in Devyani International Limited (see Note 12). (c) Includes a $23 million call premium and $5 million of unamortized debt issuance costs written off related to the redemption of the 2025 Notes (see Note 10) during the quarter ended June 30, 2022. Includes a $28 million call premium and $6 million of unamortized debt issuance costs written off related to the redemption of the $1,050 million aggregate principal amount of 5.25% Subsidiary Senior Unsecured Notes due in 2026 during the quarter ended June 30, 2021. Includes fees expensed and unamortized debt issuance costs written off totaling $12 million related to the refinancing of the Credit Agreement (as described within our 2021 Form 10-K) during the quarter ended March 31, 2021. |
Pension Benefits
Pension Benefits | 9 Months Ended |
Sep. 30, 2022 | |
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 non-qualified plans in the U.S. are currently closed to new salaried and hourly participants. The components of net periodic benefit cost associated with our U.S. pension plans are as follows: Quarter ended Year to date 2022 2021 2022 2021 Service cost $ 2 $ 2 $ 5 $ 6 Interest cost 8 8 24 24 Expected return on plan assets (11) (11) (34) (32) Amortization of net loss 3 3 8 12 Amortization of prior service cost 1 1 4 4 Net periodic benefit cost $ 3 $ 3 $ 7 $ 14 Additional loss recognized due to settlements (a) $ 2 $ — $ 2 $ — (a) Loss is a result of settlement transactions which exceeded the sum of annual service and interest costs for the applicable plan. This loss was recorded in Other pension (income) expense. |
Short-term Borrowings and Long-
Short-term Borrowings and Long-term Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Short-term Borrowings and Long-term Debt | Short-term Borrowings and Long-term Debt Short-term Borrowings 9/30/2022 12/31/2021 Current maturities of long-term debt $ 79 $ 75 Less current portion of debt issuance costs and discounts (7) (7) Short-term borrowings $ 72 $ 68 Long-term Debt Securitization Notes $ 3,782 $ 3,811 Subsidiary Senior Unsecured Notes 750 750 Term Loan A Facility 741 750 Term Loan B Facility 1,478 1,489 YUM Senior Unsecured Notes 4,875 4,475 Finance lease obligations 54 64 $ 11,680 $ 11,339 Less long-term portion of debt issuance costs and discounts (84) (86) Less current maturities of long-term debt (79) (75) Long-term debt $ 11,517 $ 11,178 Details of our Short-term borrowings and Long-term debt as of December 31, 2021 can be found within our 2021 Form 10-K. On February 23, 2022, Yum! Brands, Inc. issued a notice of redemption for the $600 million aggregate principal amount of 7.75% YUM Senior Unsecured Notes due April 1, 2025 (the “2025 Notes”). The 2025 Notes were redeemed on April 1, 2022, at an amount equal to 103.875% of the aggregate principal amount of the 2025 Notes, reflecting a $23 million call premium, plus accrued and unpaid interest to the date of redemption. We recognized the call premium and the write-off of $5 million of unamortized debt issuance costs associated with the 2025 Notes within Interest expense, net in the quarter ended June 30, 2022. Also on April 1, 2022, Yum! Brands, Inc. issued $1 billion aggregate principal amount of 5.375% YUM Senior Unsecured Notes due April 1, 2032 (the “April 2032 Notes”). Interest on the April 2032 Notes is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2022. The indenture governing the April 2032 Notes contains covenants and events of default that are customary for debt securities of this type, including cross-default provisions whereby the acceleration of the maturity of any of our indebtedness in a principal amount of $100 million or more or the failure to pay the principal of such indebtedness at its stated maturity will constitute an event of default under the April 2032 Notes unless such indebtedness is discharged, or the acceleration of the maturity of that indebtedness is annulled, within 30 days after notice. The Company paid debt issuance costs of $12 million in connection with the April 2032 Notes. The debt issuance costs will be amortized to Interest expense, net over the life of the April 2032 Notes using the effective interest method. We used the net proceeds from the April 2032 Notes to fund the redemption of the 2025 Notes discussed above and for general corporate purposes. Excluding the amounts associated with the extinguishment of the 2025 Notes discussed above, cash paid for interest during the year to date ended September 30, 2022, was $341 million. Excluding $12 million associated with the Credit Agreement refinancing and $34 million associated with the extinguishment of the 2026 Notes (as discussed in our 2021 Form 10-K), cash paid for interest during the year to date ended September 30, 2021, was $328 million. |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2022 | |
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. Our use of foreign currency contracts to manage foreign currency exchange rates is currently not significant. 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 primarily under our Term Loan B Facility. At both September 30, 2022 and December 31, 2021, we had interest rate swaps expiring in March 2025 with notional amounts of $1.5 billion. These interest rate swaps have been designated cash flow hedges as the changes in the future cash flows of the swaps are expected to offset changes in expected future interest payments on the related variable-rate debt. There were no other interest rate swaps outstanding as of September 30, 2022 or December 31, 2021. 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 September 30, 2022, the swaps were highly effective cash flow hedges. As a result of the use of interest rate swaps, 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 September 30, 2022, all of the counterparties to our interest rate swaps 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 these interest rate swaps recognized in OCI and reclassifications from AOCI into Net Income were as follows: 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 2022 2021 2022 2021 2022 2021 2022 2021 Interest rate swaps $ 40 $ — $ 3 $ 9 $ 111 $ 17 $ 23 $ 17 Income tax benefit/(expense) (10) (1) (1) (1) (27) (5) (6) (3) As of September 30, 2022, 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 $19 million, based on current LIBOR interest rates. Total Return Swaps We have entered into total return swap derivative contracts, with the objective of reducing our exposure to market-driven changes in certain of the liabilities associated with compensation deferrals into our Executive Income Deferral (“EID”) plan. While these total return swaps represent economic hedges, we have not designated them as hedges for accounting purposes. As a result, the changes in the fair value of these derivatives are recognized immediately in earnings within General and administrative expenses in our Condensed Consolidated Statements of Income largely offsetting the changes in the associated EID liabilities. The fair value associated with the total return swaps as of both September 30, 2022 and December 31, 2021, was not significant. See Note 12 for the fair value of our derivative assets and liabilities. |
Fair Value Disclosures
Fair Value Disclosures | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value DisclosuresAs of September 30, 2022, the carrying values of cash and cash equivalents, restricted cash, short-term investments, accounts receivable, short-term borrowings and accounts payable approximated their fair values because of the short-term nature of these instruments. The fair value of our notes receivable, net of allowances, and lease guarantees, less reserves for expected losses, approximates their carrying value. The following table presents the carrying value and estimated fair value of the Company’s debt obligations: 9/30/2022 12/31/2021 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) Securitization Notes (a) $ 3,782 $ 3,429 $ 3,811 $ 3,872 Subsidiary Senior Unsecured Notes (b) 750 708 750 784 Term Loan A Facility (b) 741 728 750 748 Term Loan B Facility (b) 1,478 1,467 1,489 1,490 YUM Senior Unsecured Notes (b) 4,875 4,277 4,475 4,845 (a) We estimated the fair value of the Securitization Notes using market quotes and calculations. 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 and other investments, all of which are required to be measured at fair value on a recurring basis (see Note 11 for discussion regarding derivative instruments). The following table presents fair values for those assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the measurements fall. Fair Value Condensed Consolidated Balance Sheet Level 9/30/2022 12/31/2021 Assets Other Investments Other assets 1 $ 128 $ 119 Other Investments Other assets 3 5 5 Interest Rate Swaps Prepaid expenses and other current assets 2 19 — Interest Rate Swaps Other assets 2 23 — Liabilities Interest Rate Swaps Accounts payable and other current liabilities 2 — 38 Interest Rate Swaps Other liabilities and deferred credits 2 — 54 The fair value of the Company’s 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 other investments primarily include a minority interest in Devyani International Limited (“Devyani”), an entity that operates KFC and Pizza Hut franchised units in India, with a fair value of Indian Rupee 10.3 billion (or approximately $127 million) and Indian Rupee 8.8 billion (or approximately $118 million) at September 30, 2022 and December 31, 2021, respectively. For the quarter and year to date ended September 30, 2022, we recognized pre-tax investment gains of Indian Rupee 2.1 billion (or approximately $27 million) and Indian Rupee 1.6 billion (or approximately $20 million), respectively, related to changes in fair value of our investment in Devyani. |
Guarantees
Guarantees | 9 Months Ended |
Sep. 30, 2022 | |
Guarantees and Product Warranties [Abstract] | |
Guarantees, Commitments and Contingencies | Contingencies Internal Revenue Service Proposed Adjustment As a result of an audit by the Internal Revenue Service (“IRS”) for fiscal years 2013 through 2015, in August 2022, we received a Revenue Agent’s Report (“RAR”) from the IRS asserting an underpayment of tax of $2.1 billion plus $418 million in penalties for the 2014 fiscal year. Additionally, interest on the underpayment is estimated to be approximately $740 million through the third quarter of 2022. The proposed underpayment relates primarily to a series of reorganizations we undertook during that year in connection with the business realignment of our corporate and management reporting structure along brand lines. The IRS asserts that these transactions resulted in taxable distributions of approximately $6.0 billion. We disagree with the IRS’s position as asserted in the RAR and intend to contest that position vigorously. In September 2022, we filed a Protest with the IRS Examination Division disputing on multiple grounds the proposed underpayment of tax and penalties. We are awaiting the IRS Examination Division’s Rebuttal to our Protest. When that Rebuttal is filed we intend to pursue independent review by the IRS Office of Appeals. The Company does not expect resolution of this matter within twelve months and cannot predict with certainty the timing of such resolution. The Company believes that it is more likely than not the Company’s tax position will be sustained; therefore, no reserve is recorded with respect to this matter. An unfavorable resolution of this matter could have a material, adverse impact on our consolidated Financial Statements in future periods. 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 September 30, 2022, the potential amount of undiscounted payments we could be required to make in the event of non-payment by the primary lessee was approximately $375 million. The present value of these potential payments discounted at our pre-tax cost of debt at September 30, 2022, was approximately $300 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, although such risk may not be reduced in the context of a bankruptcy or other similar restructuring of a large franchisee or group of franchisees. The liability recorded for our expected losses under such leases as of September 30, 2022, 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. India Regulatory Matter Yum! Restaurants India Private Limited (“YRIPL”), a YUM subsidiary that operates KFC and Pizza Hut restaurants in India, is the subject of a regulatory enforcement action in India (the “Action”). The Action alleges, among other things, that KFC International Holdings, Inc. and Pizza Hut International failed to satisfy certain conditions imposed by the Secretariat for Industrial Approval in 1993 and 1994 when those companies were granted permission for foreign investment and operation in India. The conditions at issue include an alleged minimum investment commitment and store build requirements as well as limitations on the remittance of fees outside of India. The Action originated with a complaint and show cause notice filed in 2009 against YRIPL by the Deputy Director of the Directorate of Enforcement (“DOE”) of the Indian Ministry of Finance following an income tax audit for the years 2002 and 2003. The matter was argued at various hearings in 2015, but no order was issued. Following a change in the incumbent official holding the position of Special Director of DOE (the “Special Director”), the matter resumed in 2018 and several additional hearings were conducted. On January 29, 2020, the Special Director issued an order imposing a penalty on YRIPL and certain former directors of approximately Indian Rupee 11 billion, or approximately $135 million. Of this amount, $130 million relates to the alleged failure to invest a total of $80 million in India within an initial seven-year period. We have been advised by external counsel that the order is flawed and have filed a writ petition with the Delhi High Court, which granted an interim stay of the penalty order on March 5, 2020. The stay order remains in effect and the next hearing is now scheduled for January 31, 2023. We deny liability and intend to continue vigorously defending this matter. We do not consider the risk of any significant loss arising from this order to be probable. Yum China License Fee Dispute Yum China Holdings, Inc. (“Yum China”) is disputing license fees due on certain amounts of its gross revenue under the terms of the Master License Agreement (“MLA”) between the Company and Yum China. These license fees total approximately $7 million for the year to date ended September 30, 2022. License fees related to such revenue have historically been paid by Yum China and we believe they continue to be due under the terms of the MLA. Yum China has paid the $7 million, under protest and without any prejudice to Yum China’s position that they are not obligated to pay under the MLA. Other Matters We are currently engaged in various other legal proceedings and have certain unresolved claims pending, the ultimate liability for which, if any, cannot be determined at this time. However, based upon 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. |
Earnings Per Common Share ("E_2
Earnings Per Common Share ("EPS") Earnings Per Common Share ("EPS") (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Quarter ended Year to date 2022 2021 2022 2021 Net Income $ 331 $ 528 $ 954 $ 1,245 Weighted-average common shares outstanding (for basic calculation) 285 296 287 298 Effect of dilutive share-based employee compensation 4 6 4 6 Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) 289 302 291 304 Basic EPS $ 1.16 $ 1.78 $ 3.33 $ 4.17 Diluted EPS $ 1.14 $ 1.75 $ 3.28 $ 4.10 Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation (a) 2.0 0.1 1.9 1.5 (a) These unexercised employee stock options and stock appreciation rights were not included in the computation of diluted EPS because to do so would have been antidilutive for the periods presented. |
Shareholders' Deficit (Tables)
Shareholders' Deficit (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Accelerated Share Repurchases | Shares Repurchased Dollar Value of Shares Remaining Dollar Value of Shares that may be Repurchased Authorization Date 2022 2021 2022 2021 2022 November 2019 — 4,746 $ — $ 530 $ — May 2021 5,987 2,602 714 330 236 September 2022 — — — — 2,000 Total 5,987 7,348 (a) $ 714 $ 860 (a) $ 2,236 (a) Includes the effect of $14 million in share repurchases (0.1 million shares) with trade dates on, or prior to, September 30, 2021, but cash settlement dates subsequent to September 30, 2021, and excludes the effect of $11 million in share repurchases (0.1 million shares) with trade dates on, or prior to, December 31, 2020, but cash settlement dates subsequent to December 31, 2020. |
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 June 30, 2022, net of tax $ (250) $ (27) $ (17) $ (294) OCI, net of tax Gains (losses) arising during the period classified into AOCI, net of tax (55) 15 32 (8) (Gains) losses reclassified from AOCI, net of tax — 4 — 4 (55) 19 32 (4) Balance at September 30, 2022, net of tax $ (305) $ (8) $ 15 $ (298) Balance at December 31, 2021, net of tax $ (206) $ (34) $ (85) $ (325) OCI, net of tax Gains (losses) arising during the period classified into AOCI, net of tax (99) 15 86 2 (Gains) losses reclassified from AOCI, net of tax — 11 14 25 (99) 26 100 27 Balance at September 30, 2022, net of tax $ (305) $ (8) $ 15 $ (298) |
Other Income and Expenses (Tabl
Other Income and Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Operating Cost and Expense, by Component | Quarter ended Year to date 9/30/2022 9/30/2021 9/30/2022 9/30/2021 Foreign exchange net (gain) loss $ 4 $ 2 $ (8) $ 5 Impairment and closure expense 1 1 — 2 Other 5 (5) 8 (19) Other (income) expense $ 10 $ (2) $ — $ (12) |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Supplemental Balance Sheet Information Disclosure [Abstract] | |
Accounts and Notes Receivable | 9/30/2022 12/31/2021 Accounts and notes receivable, gross $ 613 $ 632 Allowance for doubtful accounts (34) (36) Accounts and notes receivable, net $ 579 $ 596 |
Property, Plant and Equipment | 9/30/2022 12/31/2021 Property, plant and equipment, gross $ 2,376 $ 2,477 Accumulated depreciation and amortization (1,262) (1,270) Property, plant and equipment, net $ 1,114 $ 1,207 |
Schedule of Other Assets | Other Assets 9/30/2022 12/31/2021 Operating lease right-of-use assets (a) $ 734 $ 809 Franchise incentives 174 164 Investment in Devyani International Limited (See Note 12) 127 118 Other 394 396 Other assets $ 1,429 $ 1,487 (a) Non-current operating lease liabilities of $721 million and $793 million as of September 30, 2022 and December 31, 2021, respectively, are included in Other liabilities and deferred credits in our Condensed Consolidated Balance Sheets. |
Schedule of Cash and Cash Equivalents [Table Text Block] | 9/30/2022 12/31/2021 Cash and cash equivalents as presented in Condensed Consolidated Balance Sheets $ 410 $ 486 Restricted cash included in Prepaid expenses and other current assets (a) 178 250 Restricted cash and restricted cash equivalents included in Other assets (b) 34 35 Cash and restricted cash related to KFC Russia included in assets held-for-sale 41 — Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents as presented in Condensed Consolidated Statements of Cash Flows $ 663 $ 771 (a) Restricted cash within Prepaid expenses and other current assets reflects the cash related to advertising cooperatives which we consolidate that can only be used to settle obligations of the respective cooperatives and cash held in reserve for Taco Bell Securitization interest payments. (b) Primarily trust accounts related to our self-insurance program. |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax And Effective Tax Rate | Quarter ended Year to date 2022 2021 2022 2021 Income tax (benefit) provision $ 116 $ (77) $ 281 $ 22 Effective tax rate 25.8 % (17.0) % 22.7 % 1.8 % |
Revenue Recognition Accountin_2
Revenue Recognition Accounting Policy (Tables) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue Recognition and Deferred Revenue [Abstract] | ||||
Disaggregation of Revenue [Table Text Block] | Quarter ended 9/30/2022 KFC Division Taco Bell Division Pizza Hut Division Habit Burger Grill Division Total U.S. Company sales $ 16 $ 234 $ 4 $ 129 $ 383 Franchise revenues 47 173 65 — 285 Property revenues 4 10 1 1 16 Franchise contributions for advertising and other services 7 136 72 1 216 China Franchise revenues 61 — 17 — 78 Other Company sales 96 — — — 96 Franchise revenues 291 13 62 — 366 Property revenues 15 — — — 15 Franchise contributions for advertising and other services 167 2 16 — 185 $ 704 $ 568 $ 237 $ 131 $ 1,640 | Quarter ended 9/30/2021 KFC Division Taco Bell Division Pizza Hut Division Habit Burger Grill Division Total U.S. Company sales $ 15 $ 225 $ 5 $ 132 $ 377 Franchise revenues 46 156 63 1 266 Property revenues 3 11 2 — 16 Franchise contributions for advertising and other services 7 130 70 — 207 China Franchise revenues 61 — 16 — 77 Other Company sales 128 — 8 — 136 Franchise revenues 265 10 66 — 341 Property revenues 16 — — — 16 Franchise contributions for advertising and other services 151 2 17 — 170 $ 692 $ 534 $ 247 $ 133 $ 1,606 | Year to date 9/30/2022 KFC Division Taco Bell Division Pizza Hut Division Habit Burger Grill Division Total U.S. Company sales $ 47 $ 691 $ 14 $ 390 $ 1,142 Franchise revenues 139 508 193 3 843 Property revenues 10 31 3 1 45 Franchise contributions for advertising and other services 20 401 216 1 638 China Franchise revenues 170 — 46 — 216 Other Company sales 306 — — — 306 Franchise revenues 834 35 195 — 1,064 Property revenues 42 — 1 — 43 Franchise contributions for advertising and other services 473 5 48 — 526 $ 2,041 $ 1,671 $ 716 $ 395 $ 4,823 | Year to date 9/30/2021 KFC Division Taco Bell Division Pizza Hut Division Habit Burger Grill Division Total U.S. Company sales $ 45 $ 656 $ 15 $ 391 $ 1,107 Franchise revenues 138 460 197 3 798 Property revenues 10 31 4 — 45 Franchise contributions for advertising and other services 20 375 223 — 618 China Franchise revenues 181 — 48 — 229 Other Company sales 378 — 24 — 402 Franchise revenues 750 27 185 — 962 Property revenues 45 — 1 — 46 Franchise contributions for advertising and other services 432 5 50 — 487 $ 1,999 $ 1,554 $ 747 $ 394 $ 4,694 |
Deferred Franchise Fees [Table Text Block] | Deferred Franchise Fees Balance at December 31, 2021 $ 421 Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period (57) Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period 65 Deferred franchise fees related to KFC Russia reclassified to liabilities held-for-sale (20) Other (a) (5) Balance at September 30, 2022 $ 404 (a) Primarily includes impact of foreign currency translation. | |||
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 $ 63 1 - 2 years 60 2 - 3 years 54 3 - 4 years 49 4 - 5 years 43 Thereafter 135 Total $ 404 |
Reportable Operating Segments (
Reportable Operating Segments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 2022 2021 2022 2021 KFC Division $ 704 $ 692 $ 2,041 $ 1,999 Taco Bell Division 568 534 1,671 1,554 Pizza Hut Division 237 247 716 747 Habit Burger Grill Division 131 133 395 394 $ 1,640 $ 1,606 $ 4,823 $ 4,694 Quarter ended Year to date Operating Profit 2022 2021 2022 2021 KFC Division $ 304 $ 314 $ 888 $ 932 Taco Bell Division 204 184 604 560 Pizza Hut Division 92 101 287 306 Habit Burger Grill Division (4) 1 (14) 6 Corporate and unallocated G&A expenses (a) (67) (70) (203) (183) Unallocated Franchise and property expenses (a) — — (4) — Unallocated Refranchising gain (loss) 3 (1) 15 21 Unallocated Other income (expense) (a) 14 (2) 36 (5) Operating Profit $ 546 $ 527 $ 1,609 $ 1,637 Investment income (expense), net (b) 27 51 19 52 Other pension income (expense) (2) (1) (3) (6) Interest expense, net (c) (124) (126) (390) (416) Income before income taxes $ 447 $ 451 $ 1,235 $ 1,267 Our chief operating decision maker ( “ CODM ” ) does not consider the impact of Corporate and unallocated amounts when assessing Divisional segment performance. As such, we do not allocate such amounts to our Divisional segments for performance reporting purposes. (a) Our operating results for the year to date ended September 30, 2022, continue to reflect royalty revenues from and expenses to support the Russian operations for Pizza Hut prior to the date of transfer and for KFC for the entire quarter and year to date (see Note 1) within their historical financial statement line items and operating segments. However, given our decision to exit Russia and our pledge to direct any future net profits attributable to Russia subsequent to the date of invasion to humanitarian efforts, we have reclassed such net operating profits from the Division segment results in which they were earned to Corporate and unallocated Other income (expense). As a result, we reclassed net operating profits of $18 million and $44 million from KFC and Pizza Hut Other income (expense) to Unallocated Other (income) expense during the quarter and year to date ended September 30, 2022, respectively. Additionally, we have incurred certain expenses related to the transfer of the businesses and other one-time costs related to our exit from Russia which we have recorded within Corporate and unallocated. As a result of these other costs and expenses we have incurred, we recorded charges of $1 million to Corporate and unallocated G&A expenses and less than $1 million to Unallocated Franchise and property expenses during the quarter ended September 30, 2022. During the year to date ended September 30, 2022, we recorded charges of $3 million to Corporate and unallocated G&A expenses and $4 million to Unallocated Franchise and property expenses. (b) Includes changes in the value of our investment in Devyani International Limited (see Note 12). (c) Includes a $23 million call premium and $5 million of unamortized debt issuance costs written off related to the redemption of the 2025 Notes (see Note 10) during the quarter ended June 30, 2022. Includes a $28 million call premium and $6 million of unamortized debt issuance costs written off related to the redemption of the $1,050 million aggregate principal amount of 5.25% Subsidiary Senior Unsecured Notes due in 2026 during the quarter ended June 30, 2021. Includes fees expensed and unamortized debt issuance costs written off totaling $12 million related to the refinancing of the Credit Agreement (as described within our 2021 Form 10-K) during the quarter ended March 31, 2021. |
Pension Benefits (Tables)
Pension Benefits (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost associated with our U.S. pension plans are as follows: Quarter ended Year to date 2022 2021 2022 2021 Service cost $ 2 $ 2 $ 5 $ 6 Interest cost 8 8 24 24 Expected return on plan assets (11) (11) (34) (32) Amortization of net loss 3 3 8 12 Amortization of prior service cost 1 1 4 4 Net periodic benefit cost $ 3 $ 3 $ 7 $ 14 Additional loss recognized due to settlements (a) $ 2 $ — $ 2 $ — (a) Loss is a result of settlement transactions which exceeded the sum of annual service and interest costs for the applicable plan. This loss was recorded in Other pension (income) expense. |
Short-term Borrowings and Lon_2
Short-term Borrowings and Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Borrowings and Long-term Debt | Short-term Borrowings 9/30/2022 12/31/2021 Current maturities of long-term debt $ 79 $ 75 Less current portion of debt issuance costs and discounts (7) (7) Short-term borrowings $ 72 $ 68 Long-term Debt Securitization Notes $ 3,782 $ 3,811 Subsidiary Senior Unsecured Notes 750 750 Term Loan A Facility 741 750 Term Loan B Facility 1,478 1,489 YUM Senior Unsecured Notes 4,875 4,475 Finance lease obligations 54 64 $ 11,680 $ 11,339 Less long-term portion of debt issuance costs and discounts (84) (86) Less current maturities of long-term debt (79) (75) Long-term debt $ 11,517 $ 11,178 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 these interest rate swaps recognized in OCI and reclassifications from AOCI into Net Income were as follows: 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 2022 2021 2022 2021 2022 2021 2022 2021 Interest rate swaps $ 40 $ — $ 3 $ 9 $ 111 $ 17 $ 23 $ 17 Income tax benefit/(expense) (10) (1) (1) (1) (27) (5) (6) (3) |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis | The following table presents the carrying value and estimated fair value of the Company’s debt obligations: 9/30/2022 12/31/2021 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) Securitization Notes (a) $ 3,782 $ 3,429 $ 3,811 $ 3,872 Subsidiary Senior Unsecured Notes (b) 750 708 750 784 Term Loan A Facility (b) 741 728 750 748 Term Loan B Facility (b) 1,478 1,467 1,489 1,490 YUM Senior Unsecured Notes (b) 4,875 4,277 4,475 4,845 (a) We estimated the fair value of the Securitization Notes using market quotes and calculations. 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 | Fair Value Condensed Consolidated Balance Sheet Level 9/30/2022 12/31/2021 Assets Other Investments Other assets 1 $ 128 $ 119 Other Investments Other assets 3 5 5 Interest Rate Swaps Prepaid expenses and other current assets 2 19 — Interest Rate Swaps Other assets 2 23 — Liabilities Interest Rate Swaps Accounts payable and other current liabilities 2 — 38 Interest Rate Swaps Other liabilities and deferred credits 2 — 54 |
Financial Statement Presentat_2
Financial Statement Presentation (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 USD ($) Months restaurants operating_segments countries_and_territiories Rate | Dec. 31, 2021 USD ($) | |
Number of Stores | restaurants | 54,000 | |
Number of Countries in which Entity Operates | countries_and_territiories | 155 | |
Percent Of System Units Located Outside United States | Rate | 98% | |
Number of Reportable Segments | operating_segments | 4 | |
Fiscal period months standard for each quarter | Months | 3 | |
Prior Period Reclassification Adjustment | $ 0 | |
Goodwill | 633 | $ 657 |
Cash and cash equivalents | 410 | $ 486 |
KFC Russia | ||
Assets held-for-sale | 224 | |
Disposal Group, Including Discontinued Operation, Liabilities | $ 82 | |
RUSSIAN FEDERATION | ||
Number of Stores with Suspended Operations | restaurants | 70 |
Earnings Per Common Share ("E_3
Earnings Per Common Share ("EPS") (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Net Income | $ 331 | $ 528 | $ 954 | $ 1,245 | |
Weighted-average common shares outstanding (for basic calculation) | 285 | 296 | 287 | 298 | |
Effect of dilutive share-based employee compensation | 4 | 6 | 4 | 6 | |
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) | 289 | 302 | 291 | 304 | |
Basic EPS | $ 1.16 | $ 1.78 | $ 3.33 | $ 4.17 | |
Diluted EPS | $ 1.14 | $ 1.75 | $ 3.28 | $ 4.10 | |
Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation | [1] | 2 | 0.1 | 1.9 | 1.5 |
[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 ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Repurchase of shares of Common Stock, value | $ 157 | $ 330 | $ 714 | $ 860 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 2,236 | 2,236 | ||
Number of shares repurchased with trade dates during the current reporting date but with settlement dates subsequent to the current reporting date | 100,000 | |||
Value of share repurchases with trade dates during the current reporting date but with settlement dates subsequent to the current reporting date | $ 14 | |||
Value of shares repurchased with trade dates prior to the current reporting quarter, but settlement dates in the current quarter | $ 11 | |||
Number of shares repurchased with trade dates prior to the current reporting quarter, but settlement dates in the current quarter | 100,000 | |||
May 2021 | ||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Repurchase of shares of Common Stock, value | 714 | $ 330 | ||
Stock Repurchase Program, Authorized Amount | 2,000 | 2,000 | ||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 236 | 236 | ||
November 2019 | ||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Repurchase of shares of Common Stock, value | 530 | |||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | 0 | 0 | ||
September 2022 | ||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Repurchase of shares of Common Stock, value | $ 0 | |||
Stock Repurchase Program, Authorized Amount | 2,000 | 2,000 | ||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 2,000 | $ 2,000 | ||
Issued Common Stock | ||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Shares Repurchased | 1,000,000 | 2,000,000 | 5,987,000 | 7,348,000 |
Repurchase of shares of Common Stock, value | $ 18 | $ 0 | $ 55 | $ 24 |
Issued Common Stock | May 2021 | ||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Shares Repurchased | 5,987,000 | 2,602,000 | ||
Issued Common Stock | November 2019 | ||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Shares Repurchased | 0 | 4,746,000 | ||
Issued Common Stock | September 2022 | ||||
Repurchase Of Shares Of Common Stock [Line Items] | ||||
Shares Repurchased | 0 | 0 |
Shareholders' Deficit (Details
Shareholders' Deficit (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Accumulated other comprehensive loss | $ (294) | $ (325) | ||
Gains (losses) arising during the year classified into AOCI, net of tax | (8) | 2 | ||
(Gains) losses reclassified from AOCI, net of tax | 4 | 25 | ||
Other comprehensive income (loss), net of tax | (4) | $ (7) | 27 | $ 80 |
Accumulated other comprehensive loss | (298) | (298) | ||
May 2021 | ||||
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Stock Repurchase Program, Authorized Amount | 2,000 | 2,000 | ||
Translation Adjustments and Gains (Losses) From Intra-Entity Transactions of a Long-Term Nature | ||||
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Accumulated other comprehensive loss | (250) | (206) | ||
Gains (losses) arising during the year classified into AOCI, net of tax | (55) | (99) | ||
(Gains) losses reclassified from AOCI, net of tax | 0 | 0 | ||
Other comprehensive income (loss), net of tax | (55) | (99) | ||
Accumulated other comprehensive loss | (305) | (305) | ||
Pension and Post-Retirement Benefits | ||||
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Accumulated other comprehensive loss | (27) | (34) | ||
Gains (losses) arising during the year classified into AOCI, net of tax | 15 | 15 | ||
(Gains) losses reclassified from AOCI, net of tax | 4 | 11 | ||
Other comprehensive income (loss), net of tax | 19 | 26 | ||
Accumulated other comprehensive loss | (8) | (8) | ||
Derivative Instruments | ||||
Schedule of changes in accumulated comprehensive income [Line Items] | ||||
Accumulated other comprehensive loss | (17) | (85) | ||
Gains (losses) arising during the year classified into AOCI, net of tax | 32 | 86 | ||
(Gains) losses reclassified from AOCI, net of tax | 0 | 14 | ||
Other comprehensive income (loss), net of tax | 32 | 100 | ||
Accumulated other comprehensive loss | $ 15 | $ 15 |
Other (Income) Expense (Details
Other (Income) Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Other Income and Expenses [Line Items] | ||||
Foreign Currency Transaction Gain (Loss), before Tax | $ 4 | $ 2 | ||
Impairment and closure expense | 1 | 1 | $ 0 | $ 2 |
Other income (expense) excluding foreign exchange gain (loss) | 5 | (5) | 8 | (19) |
Other (income) expense | 10 | (2) | 0 | (12) |
Foreign exchange net (gain) loss and other | (8) | 5 | ||
Gain (Loss) on Disposition of Assets | (3) | 1 | (15) | (21) |
Income tax provision | $ 116 | $ (77) | 281 | $ 22 |
RUSSIAN FEDERATION | ||||
Other Income and Expenses [Line Items] | ||||
Income tax provision | $ 69 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) $ in Millions | Sep. 30, 2022 USD ($) days | Dec. 31, 2021 USD ($) |
Accounts and Notes Receivable [Abstract] | ||
Number of days from the period in which the corresponding sales occur that trade receivables are generally due | days | 30 | |
Accounts and notes receivable, gross | $ 613 | $ 632 |
Allowance for doubtful accounts | (34) | (36) |
Accounts and notes receivable, net | 579 | 596 |
Prepaid Expenses and Other Current Assets [Member] | ||
Assets held-for-sale | 228 | $ 12 |
Accounts Payable and Accrued Liabilities | ||
Disposal Group, Including Discontinued Operation, Liabilities | 82 | |
KFC Russia | ||
Assets held-for-sale | 224 | |
Disposal Group, Including Discontinued Operation, Liabilities | 82 | |
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment, Current | $ 69 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information (Details 2) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Property, plant and equipment, gross | $ 2,376 | $ 2,477 | |||
Accumulated depreciation and amortization | (1,262) | (1,270) | |||
Property, plant and equipment, net | 1,114 | 1,207 | |||
Operating lease, right-of-use assets | [1] | 734 | 809 | ||
Other assets | 1,429 | 1,487 | |||
Other Assets, Miscellaneous, Noncurrent | 394 | 396 | |||
Operating Lease, Liability, Noncurrent | 721 | 793 | |||
Cash and cash equivalents as presented in Condensed Consolidated Balance Sheets | 410 | 486 | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 663 | 771 | $ 1,311 | $ 1,024 | |
KFC Russia | |||||
Assets held-for-sale | 224 | ||||
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations | 41 | 0 | |||
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | Devyani | |||||
Equity Securities, FV-NI | 127 | 118 | |||
Prepaid Expenses and Other Current Assets [Member] | |||||
Assets held-for-sale | 228 | 12 | |||
Restricted Cash and Cash Equivalents | [2] | 178 | 250 | ||
Other Current Assets [Member] | |||||
Restricted Cash and Cash Equivalents | [3] | 34 | 35 | ||
Franchise Incentive [Member] | |||||
Other assets | $ 174 | $ 164 | |||
[1]Non-current operating lease liabilities of $721 million and $793 million as of September 30, 2022 and December 31, 2021, respectively, are included in Other liabilities and deferred credits in our Condensed Consolidated Balance Sheets.[2]Restricted cash within Prepaid expenses and other current assets reflects the cash related to advertising cooperatives which we consolidate that can only be used to settle obligations of the respective cooperatives and cash held in reserve for Taco Bell Securitization interest payments.[3]Primarily trust accounts related to our self-insurance program. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Apr. 01, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income tax provision | $ (116) | $ 77 | $ (281) | $ (22) | |
Effective tax rate | 25.80% | (17.00%) | 22.70% | 1.80% | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 82 | ||||
Intra-Entity IP Transfers | |||||
Income Tax Expense (Benefit), Continuing Operations, Adjustment of Deferred Tax (Asset) Liability | $ 152 | ||||
RUSSIAN FEDERATION | |||||
Income tax provision | $ (69) | ||||
UNITED KINGDOM | |||||
Income tax provision | $ 64 | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 19% | ||||
UNITED KINGDOM | Forecast | |||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25% |
Revenue Recognition Accountin_3
Revenue Recognition Accounting Policy (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues | $ 1,640 | $ 1,606 | $ 4,823 | $ 4,694 |
Company Sales | ||||
Revenues | 479 | 513 | 1,448 | 1,509 |
Franchise and property revenues | ||||
Revenues | 760 | 716 | 2,211 | 2,080 |
Franchise contributions for advertising and other services | ||||
Revenues | 401 | 377 | 1,164 | 1,105 |
UNITED STATES | Company Sales | ||||
Revenues | 383 | 377 | 1,142 | 1,107 |
UNITED STATES | Franchise and property revenues | ||||
Revenues | 285 | 266 | 843 | 798 |
UNITED STATES | Property Revenues | ||||
Revenues | 16 | 16 | 45 | 45 |
UNITED STATES | Franchise contributions for advertising and other services | ||||
Revenues | 216 | 207 | 638 | 618 |
CHINA | Franchise and property revenues | ||||
Revenues | 78 | 77 | 216 | 229 |
Other, Outside the U.S. and China [Member] | Company Sales | ||||
Revenues | 96 | 136 | 306 | 402 |
Other, Outside the U.S. and China [Member] | Franchise and property revenues | ||||
Revenues | 366 | 341 | 1,064 | 962 |
Other, Outside the U.S. and China [Member] | Property Revenues | ||||
Revenues | 15 | 16 | 43 | 46 |
Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | ||||
Revenues | 185 | 170 | 526 | 487 |
KFC Global Division [Member] | ||||
Revenues | 704 | 692 | 2,041 | 1,999 |
KFC Global Division [Member] | UNITED STATES | Company Sales | ||||
Revenues | 16 | 15 | 47 | 45 |
KFC Global Division [Member] | UNITED STATES | Franchise and property revenues | ||||
Revenues | 47 | 46 | 139 | 138 |
KFC Global Division [Member] | UNITED STATES | Property Revenues | ||||
Revenues | 4 | 3 | 10 | 10 |
KFC Global Division [Member] | UNITED STATES | Franchise contributions for advertising and other services | ||||
Revenues | 7 | 7 | 20 | 20 |
KFC Global Division [Member] | CHINA | Franchise and property revenues | ||||
Revenues | 61 | 61 | 170 | 181 |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Company Sales | ||||
Revenues | 96 | 128 | 306 | 378 |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise and property revenues | ||||
Revenues | 291 | 265 | 834 | 750 |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Property Revenues | ||||
Revenues | 15 | 16 | 42 | 45 |
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | ||||
Revenues | 167 | 151 | 473 | 432 |
Pizza Hut Global Division [Member] | ||||
Revenues | 237 | 247 | 716 | 747 |
Pizza Hut Global Division [Member] | UNITED STATES | Company Sales | ||||
Revenues | 4 | 5 | 14 | 15 |
Pizza Hut Global Division [Member] | UNITED STATES | Franchise and property revenues | ||||
Revenues | 65 | 63 | 193 | 197 |
Pizza Hut Global Division [Member] | UNITED STATES | Property Revenues | ||||
Revenues | 1 | 2 | 3 | 4 |
Pizza Hut Global Division [Member] | UNITED STATES | Franchise contributions for advertising and other services | ||||
Revenues | 72 | 70 | 216 | 223 |
Pizza Hut Global Division [Member] | CHINA | Franchise and property revenues | ||||
Revenues | 17 | 16 | 46 | 48 |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Company Sales | ||||
Revenues | 0 | 8 | 0 | 24 |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise and property revenues | ||||
Revenues | 62 | 66 | 195 | 185 |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Property Revenues | ||||
Revenues | 0 | 0 | 1 | 1 |
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | ||||
Revenues | 16 | 17 | 48 | 50 |
Taco Bell Global Division [Member] | ||||
Revenues | 568 | 534 | 1,671 | 1,554 |
Taco Bell Global Division [Member] | UNITED STATES | Company Sales | ||||
Revenues | 234 | 225 | 691 | 656 |
Taco Bell Global Division [Member] | UNITED STATES | Franchise and property revenues | ||||
Revenues | 173 | 156 | 508 | 460 |
Taco Bell Global Division [Member] | UNITED STATES | Property Revenues | ||||
Revenues | 10 | 11 | 31 | 31 |
Taco Bell Global Division [Member] | UNITED STATES | Franchise contributions for advertising and other services | ||||
Revenues | 136 | 130 | 401 | 375 |
Taco Bell Global Division [Member] | CHINA | Franchise and property revenues | ||||
Revenues | 0 | 0 | 0 | 0 |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Company Sales | ||||
Revenues | 0 | 0 | 0 | 0 |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise and property revenues | ||||
Revenues | 13 | 10 | 35 | 27 |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Property Revenues | ||||
Revenues | 0 | 0 | 0 | 0 |
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | ||||
Revenues | 2 | 2 | 5 | 5 |
Habit Division [Member] | ||||
Revenues | 131 | 133 | 395 | 394 |
Habit Division [Member] | UNITED STATES | Company Sales | ||||
Revenues | 129 | 132 | 390 | 391 |
Habit Division [Member] | UNITED STATES | Franchise and property revenues | ||||
Revenues | 0 | 1 | 3 | 3 |
Habit Division [Member] | UNITED STATES | Property Revenues | ||||
Revenues | 1 | 0 | 1 | 0 |
Habit Division [Member] | UNITED STATES | Franchise contributions for advertising and other services | ||||
Revenues | 1 | 0 | 1 | 0 |
Habit Division [Member] | CHINA | Franchise and property revenues | ||||
Revenues | 0 | 0 | 0 | 0 |
Habit Division [Member] | Other, Outside the U.S. and China [Member] | Company Sales | ||||
Revenues | 0 | 0 | 0 | 0 |
Habit Division [Member] | Other, Outside the U.S. and China [Member] | Franchise and property revenues | ||||
Revenues | 0 | 0 | 0 | 0 |
Habit Division [Member] | Other, Outside the U.S. and China [Member] | Property Revenues | ||||
Revenues | 0 | 0 | 0 | 0 |
Habit Division [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Revenue Recognition Accountin_4
Revenue Recognition Accounting Policy (Details 2) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Deferred Revenue | $ 404 | $ 421 | |
Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period | (57) | ||
Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period | 65 | ||
Contract with Customer, Liability, Amount Classified as Held-For-Sale | (20) | ||
Foreign Currency Gain (Loss) and Refranchising Gain (Loss) [Member] | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Other | [1] | $ (5) | |
[1]Primarily includes impact of foreign currency translation. |
Revenue Recognition Accountin_5
Revenue Recognition Accounting Policy (Details 3) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred Revenue | $ 404 | $ 421 |
Less than 1 year | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred Revenue, Revenue Expected to be Recognized | 63 | |
1 - 2 years | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred Revenue, Revenue Expected to be Recognized | 60 | |
2 - 3 years | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred Revenue, Revenue Expected to be Recognized | 54 | |
3 - 4 years | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred Revenue, Revenue Expected to be Recognized | 49 | |
4 - 5 years | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred Revenue, Revenue Expected to be Recognized | 43 | |
Thereafter | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred Revenue, Revenue Expected to be Recognized | $ 135 |
Reportable Operating Segments_2
Reportable Operating Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||
Apr. 01, 2022 | Jun. 01, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |||||
Segment Reporting Information [Line Items] | ||||||||||
Revenues | $ 1,640 | $ 1,606 | $ 4,823 | $ 4,694 | ||||||
Operating Profit | 546 | 527 | 1,609 | 1,637 | ||||||
General and Administrative Expense | 261 | 253 | 768 | 689 | ||||||
Company restaurant expenses | 402 | 421 | 1,219 | 1,230 | ||||||
Franchise and property expenses | 28 | 31 | 89 | 81 | ||||||
Refranchising (gain) loss | (3) | 1 | (15) | (21) | ||||||
Other (income) expense | (10) | 2 | 0 | 12 | ||||||
Investment (income) expense, net | [1] | (27) | (51) | (19) | (52) | |||||
Other pension income (expense) | (2) | (1) | (3) | (6) | ||||||
Interest Income (Expense), Net | (124) | [2] | (126) | [2] | (390) | (416) | [2] | |||
Income Before Income Taxes | 447 | 451 | 1,235 | 1,267 | ||||||
Interest Expense, Debt | 12 | |||||||||
Subsidiary Senior Unsecured Notes [Member] | Unsecured Debt [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Payment for Debt Extinguishment or Debt Prepayment Cost | 28 | 34 | ||||||||
Write off of Deferred Debt Issuance Cost | 6 | |||||||||
Repayments of Debt, Maturing in More than Three Months | $ 1,050 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | |||||||||
Senior Unsecured Notes Due April 2025 | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Payment for Debt Extinguishment or Debt Prepayment Cost | $ 23 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.75% | |||||||||
Gain (Loss) on Extinguishment of Debt, before Write off of Debt Issuance Cost | $ 23 | |||||||||
Senior Unsecured Notes Due April 2025 | Secured Debt [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Write off of Deferred Debt Issuance Cost | 5 | |||||||||
KFC Global Division [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenues | 704 | 692 | 2,041 | 1,999 | ||||||
Operating Profit | 304 | 314 | 888 | 932 | ||||||
Pizza Hut Global Division [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenues | 237 | 247 | 716 | 747 | ||||||
Operating Profit | 92 | 101 | 287 | 306 | ||||||
Taco Bell Global Division [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenues | 568 | 534 | 1,671 | 1,554 | ||||||
Operating Profit | 204 | 184 | 604 | 560 | ||||||
Habit Division [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
Revenues | 131 | 133 | 395 | 394 | ||||||
Operating Profit | (4) | 1 | (14) | 6 | ||||||
Unallocated [Member] | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
General and Administrative Expense | [3] | 67 | 70 | 203 | 183 | |||||
Franchise and property expenses | [3] | 0 | 0 | 4 | 0 | |||||
Refranchising (gain) loss | (3) | 1 | (15) | (21) | ||||||
Other (income) expense | [3] | 14 | $ (2) | 36 | $ (5) | |||||
Unallocated [Member] | RUSSIAN FEDERATION | ||||||||||
Segment Reporting Information [Line Items] | ||||||||||
General and Administrative Expense | 1 | 3 | ||||||||
Franchise and property expenses | 1 | 4 | ||||||||
Other (income) expense | $ 18 | $ 44 | ||||||||
[1]Includes changes in the value of our investment in Devyani International Limited (see Note 12).[2]Includes a $23 million call premium and $5 million of unamortized debt issuance costs written off related to the redemption of the 2025 Notes (see Note 10) during the quarter ended June 30, 2022. Includes a $28 million call premium and $6 million of unamortized debt issuance costs written off related to the redemption of the $1,050 million aggregate principal amount of 5.25% Subsidiary Senior Unsecured Notes due in 2026 during the quarter ended June 30, 2021. Includes fees expensed and unamortized debt issuance costs written off totaling $12 million related to the refinancing of the Credit Agreement (as described within our 2021 Form 10-K) during the quarter ended March 31, 2021.[3]Our operating results for the year to date ended September 30, 2022, continue to reflect royalty revenues from and expenses to support the Russian operations for Pizza Hut prior to the date of transfer and for KFC for the entire quarter and year to date (see Note 1) within their historical financial statement line items and operating segments. However, given our decision to exit Russia and our pledge to direct any future net profits attributable to Russia subsequent to the date of invasion to humanitarian efforts, we have reclassed such net operating profits from the Division segment results in which they were earned to Corporate and unallocated Other income (expense). As a result, we reclassed net operating profits of $18 million and $44 million from KFC and Pizza Hut Other income (expense) to Unallocated Other (income) expense during the quarter and year to date ended September 30, 2022, respectively.Additionally, we have incurred certain expenses related to the transfer of the businesses and other one-time costs related to our exit from Russia which we have recorded within Corporate and unallocated. As a result of these other costs and expenses we have incurred, we recorded charges of $1 million to Corporate and unallocated G&A expenses and less than $1 million to Unallocated Franchise and property expenses during the quarter ended September 30, 2022. During the year to date ended September 30, 2022, we recorded charges of $3 million to Corporate and unallocated G&A expenses and $4 million to Unallocated Franchise and property expenses. |
Pension Benefits (Details)
Pension Benefits (Details) - UNITED STATES - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Defined Benefit Plan Disclosure [Line Items] | |||||
Net periodic benefit cost | $ 3 | $ 3 | $ 7 | $ 14 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | [1] | 2 | 0 | 2 | 0 |
General and Administrative Expense [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Service cost | 2 | 2 | 5 | 6 | |
Other pension (income) expense [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Interest cost | 8 | 8 | 24 | 24 | |
Expected return on plan assets | (11) | (11) | (34) | (32) | |
Amortization of net loss | 3 | 3 | 8 | 12 | |
Amortization of prior service cost | $ 1 | $ 1 | $ 4 | $ 4 | |
[1]Loss is a result of settlement transactions which exceeded the sum of annual service and interest costs for the applicable plan. This loss was 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 | 9 Months Ended | |||||
Apr. 01, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jun. 01, 2021 | |
Debt Instrument [Line Items] | |||||||
Finance Lease, Liability, Noncurrent | $ 54 | $ 54 | $ 64 | ||||
Long-term debt and capital less obligations, including current maturities and debt issuance costs | 11,680 | 11,680 | 11,339 | ||||
Less Debt Issuance Costs, Noncurrent, Net | (84) | (84) | (86) | ||||
Long-term debt | 11,517 | 11,517 | 11,178 | ||||
Interest Paid, Including Capitalized Interest, Operating and Investing Activities | 341 | $ 328 | |||||
Interest Expense, Debt | 12 | ||||||
Long-term Debt, Current Maturities | 79 | 79 | 75 | ||||
Less current portion of debt issuance costs and discounts | (7) | (7) | (7) | ||||
Debt Issuance Costs | 11 | 37 | |||||
Short-term borrowings | 72 | 72 | 68 | ||||
Subsidiary Senior Unsecured Notes [Member] | Unsecured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Senior Notes | 750 | 750 | 750 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | ||||||
Payment for Debt Extinguishment or Debt Prepayment Cost | $ 28 | $ 34 | |||||
Write off of Deferred Debt Issuance Cost | $ 6 | ||||||
Term Loan A Facility [Member] | Secured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | 741 | 741 | 750 | ||||
Term Loan B Facility [Member] | Secured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Long-term Debt | 1,478 | 1,478 | 1,489 | ||||
Senior Unsecured Notes Due April 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Face Amount | 600 | 600 | |||||
Debt Instrument, Interest Rate, Stated Percentage | 7.75% | ||||||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 103.875% | ||||||
Payment for Debt Extinguishment or Debt Prepayment Cost | $ 23 | ||||||
Debt Instrument, Maturity Date | Apr. 01, 2025 | ||||||
Senior Unsecured Notes Due April 2025 | Secured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Write off of Deferred Debt Issuance Cost | 5 | ||||||
Unsecured Notes Due April 2032 | Unsecured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from Issuance of Debt | $ 1,000 | ||||||
Senior Unsecured Notes Due April 2032 | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Maturity Date | Apr. 01, 2032 | ||||||
Debt Issuance Costs | 12 | ||||||
Senior Unsecured Notes Due April 2032 | Unsecured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.375% | ||||||
YUM Senior Unsecured Notes [Member] [Domain] | Unsecured Debt [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Senior Notes | $ 4,875 | $ 4,875 | $ 4,475 | ||||
Debt Instrument, Debt Default, Description of Notice of Default | The indenture governing the April 2032 Notes contains covenants and events of default that are customary for debt securities of this type, including cross-default provisions whereby the acceleration of the maturity of any of our indebtedness in a principal amount of $100 million or more or the failure to pay the principal of such indebtedness at its stated maturity will constitute an event of default under the April 2032 Notes unless such indebtedness is discharged, or the acceleration of the maturity of that indebtedness is annulled, within 30 days after notice. |
Derivative Instruments (Details
Derivative Instruments (Details) - Cash Flow Hedging [Member] - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ (19) | |
Forward-starting interest rate swap [Member] | ||
Derivative, Maturity Date | Mar. 01, 2025 | |
Derivative, Notional Amount | $ 1,500 | $ 1,500 |
Derivative Instruments (Detai_2
Derivative Instruments (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized gains (losses) arising during the period | $ 42 | $ 1 | $ 114 | $ 17 |
Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax | (10) | (1) | (27) | (5) |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax | (1) | (1) | (6) | (3) |
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized gains (losses) arising during the period | 40 | 0 | 111 | 17 |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ 3 | $ 9 | $ 23 | $ 17 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) ₨ in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 USD ($) | Sep. 30, 2022 INR (₨) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 INR (₨) | Sep. 30, 2022 INR (₨) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 INR (₨) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Investment Owned, at Fair Value | $ 127 | $ 127 | ₨ 10,300 | $ 118 | ₨ 8,800 | |||
Unrealized Gain (Loss) on Investments | 27 | ₨ 2,100 | 20 | ₨ 1,600 | ||||
Secured Debt [Member] | Securitization Notes [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Senior Notes, Noncurrent | 3,782 | 3,782 | 3,811 | |||||
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 | [1] | 3,429 | 3,429 | 3,872 | ||||
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 | 741 | 741 | 750 | |||||
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 | [2] | 728 | 728 | 748 | ||||
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 | 1,478 | 1,478 | 1,489 | |||||
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 | [2] | 1,467 | 1,467 | 1,490 | ||||
Unsecured Debt [Member] | Subsidiary Senior Unsecured Notes [Member] | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Senior Notes, Noncurrent | 750 | 750 | 750 | |||||
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 | [2] | 708 | 708 | 784 | ||||
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 | 4,875 | 4,875 | 4,475 | |||||
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 | [2] | 4,277 | 4,277 | 4,845 | ||||
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] | ||||||||
Investments, Fair Value Disclosure | 128 | 128 | 119 | |||||
Other Assets [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 | ||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||||
Investments, Fair Value Disclosure | 5 | 5 | 5 | |||||
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 Asset, Subject to Master Netting Arrangement, before Offset | 23 | 23 | 0 | |||||
Other Current 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 | 0 | 0 | 38 | |||||
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 | 0 | 0 | 54 | |||||
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 Asset, Subject to Master Netting Arrangement, before Offset | $ 19 | $ 19 | $ 0 | |||||
[1]We estimated the fair value of the Securitization Notes using market quotes and calculations. The markets in which the Securitization Notes trade are not considered active markets.[2]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. |
Contingencies (Details)
Contingencies (Details) - Property Lease Guarantee [Member] $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Guarantor Obligations [Line Items] | |
Year longest lease expires | 2065 |
Guarantor Obligations, Maximum Exposure | $ 375 |
Guarantee Obligations Maximum Exposure At Present Value | $ 300 |
Contingencies (Details 2)
Contingencies (Details 2) | 9 Months Ended |
Sep. 30, 2022 | |
Loss Contingencies [Line Items] | |
Deferred Tax Liability Not Recognized, Events that Would Cause Temporary Difference to be Taxable, Undistributed Earnings of Foreign Subsidiaries | As a result of an audit by the Internal Revenue Service (“IRS”) for fiscal years 2013 through 2015, in August 2022, we received a Revenue Agent’s Report (“RAR”) from the IRS asserting an underpayment of tax of $2.1 billion plus $418 million in penalties for the 2014 fiscal year. Additionally, interest on the underpayment is estimated to be approximately $740 million through the third quarter of 2022. The proposed underpayment relates primarily to a series of reorganizations we undertook during that year in connection with the business realignment of our corporate and management reporting structure along brand lines. The IRS asserts that these transactions resulted in taxable distributions of approximately $6.0 billion.We disagree with the IRS’s position as asserted in the RAR and intend to contest that position vigorously. In September 2022, we filed a Protest with the IRS Examination Division disputing on multiple grounds the proposed underpayment of tax and penalties. We are awaiting the IRS Examination Division’s Rebuttal to our Protest. When that Rebuttal is filed we intend to pursue independent review by the IRS Office of Appeals.The Company does not expect resolution of this matter within twelve months and cannot predict with certainty the timing of such resolution. The Company believes that it is more likely than not the Company’s tax position will be sustained; therefore, no reserve is recorded with respect to this matter.An unfavorable resolution of this matter could have a material, adverse impact on our consolidated Financial Statements in future periods. |
INDIA | |
Loss Contingencies [Line Items] | |
Litigation, Nature | On January 29, 2020, the Special Director issued an order imposing a penalty on YRIPL and certain former directors of approximately Indian Rupee 11 billion, or approximately $135 million. Of this amount, $130 million relates to the alleged failure to invest a total of $80 million in India within an initial seven-year period. We have been advised by external counsel that the order is flawed and have filed a writ petition with the Delhi High Court, which granted an interim stay of the penalty order on March 5, 2020. The stay order remains in effect and the next hearing is now scheduled for January 31, 2023. We deny liability and intend to continue vigorously defending this matter. We do not consider the risk of any significant loss arising from this order to be probable. |
CHINA | |
Loss Contingencies [Line Items] | |
Litigation, Nature | Yum China Holdings, Inc. (“Yum China”) is disputing license fees due on certain amounts of its gross revenue under the terms of the Master License Agreement (“MLA”) between the Company and Yum China. These license fees total approximately $7 million for the year to date ended September 30, 2022. License fees related to such revenue have historically been paid by Yum China and we believe they continue to be due under the terms of the MLA. Yum China has paid the $7 million, under protest and without any prejudice to Yum China’s position that they are not obligated to pay under the MLA. |