Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 12, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Title of 12(b) Security | Common Stock, no par value | ||
Trading Symbol | YUM | ||
Security Exchange Name | NYSE | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Type | 10-K | ||
Entity File Number | 1-13163 | ||
Entity Registrant Name | YUM! BRANDS, INC. | ||
Entity Incorporation, State or Country Code | NC | ||
Entity Tax Identification Number | 13-3951308 | ||
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 | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Entity Central Index Key | 0001041061 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 26,200,000,000 | ||
Entity Common Stock, Shares Outstanding | 300,055,312 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
ICFR Auditor Attestation Flag | true |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Revenues | ||||
Total revenues | $ 5,652 | $ 5,597 | $ 5,688 | |
Costs and Expenses, Net | ||||
Company restaurant expenses | 1,506 | 1,235 | 1,634 | |
General and administrative expenses | 1,064 | 917 | 895 | |
Franchise and property expenses | 145 | 180 | 188 | |
Franchise advertising and other services expense | 1,314 | 1,368 | 1,208 | |
Refranchising (gain) loss | (34) | (37) | (540) | |
Other (income) expense | 154 | 4 | 7 | |
Total costs and expenses, net | 4,149 | 3,667 | 3,392 | |
Operating Profit | 1,503 | 1,930 | 2,296 | |
Investment (income) expense, net | [1] | (74) | 67 | (9) |
Other Pension (income) expense | [1] | 14 | 4 | 14 |
Interest expense, net | [1] | (543) | (486) | (452) |
Income before income taxes | 1,020 | 1,373 | 1,839 | |
Income tax provision | 116 | 79 | 297 | |
Net Income | $ 904 | $ 1,294 | $ 1,542 | |
Basic Earnings Per Common Share (in dollars per share) | $ 2.99 | $ 4.23 | $ 4.80 | |
Diluted Earnings Per Common Share (in dollars per share) | 2.94 | 4.14 | 4.69 | |
Dividends Declared Per Common Share (in dollars per share) | $ 1.88 | $ 1.68 | $ 1.44 | |
Company Sales | ||||
Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 1,810 | $ 1,546 | $ 2,000 | |
Franchise and property revenue [Member] | ||||
Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | 2,510 | 2,660 | 2,482 | |
Franchise contributions for advertising and other services | ||||
Revenues | ||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 1,332 | $ 1,391 | $ 1,206 | |
[1] | Amounts have not been allocated to any segment for performance reporting purposes. |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Net Income | $ 904 | $ 1,294 | $ 1,542 |
Adjustments and gains (losses) arising during the year | 39 | 28 | (94) |
Reclassifications of adjustments and (gains) losses into Net Income | 0 | 0 | (4) |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax | 39 | 28 | (98) |
Tax (expense) benefit | 0 | (4) | 6 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | 39 | 24 | (92) |
Unrealized gains (losses) arising during the year | (8) | (39) | 32 |
Reclassification of (gains) losses into Net Income | 18 | 10 | 22 |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Unrealized Gains (Losses), before Tax | 10 | (29) | 54 |
Pension and post-retirement benefit plans (tax impact) | (2) | 7 | (13) |
Pension and post-retirement benefit plans (net of tax impact) | 8 | (22) | 41 |
Unrealized gains (losses) arising during the year | (99) | (51) | 19 |
Reclassification of (gains) losses into Net Income | 6 | (25) | (39) |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax | (93) | (76) | (20) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | (23) | (20) | (6) |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax | (70) | (56) | (14) |
Other Comprehensive Income (Loss), Net of Tax | (23) | (54) | (65) |
Comprehensive Income | $ 881 | $ 1,240 | $ 1,477 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Millions | 12 Months Ended | |||||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | ||||
Cash Flows - Operating Activities | ||||||
Net Income | $ 904 | $ 1,294 | $ 1,542 | |||
Depreciation and amortization | 146 | 112 | 137 | |||
Impairment and closure expense | 172 | [1] | 5 | [1] | 6 | [1] |
Refranchising (gain) loss | (34) | (37) | (540) | |||
Investment (income) expense, net | (74) | [2] | 67 | [2] | (9) | [2] |
Contributions to defined benefit pension plans | (6) | (15) | (16) | |||
Deferred income taxes | (65) | (232) | (11) | |||
Share-based compensation expense | 97 | 59 | 50 | |||
Changes in Accounts and Notes Receivable | 62 | (56) | (66) | |||
Changes in Prepaid Expense and Other Assets | 8 | (8) | 0 | |||
Changes in accounts payable and other current liabilities | 128 | (36) | (68) | |||
Changes in income taxes payable | (110) | 23 | 65 | |||
Other, net | 77 | 139 | 86 | |||
Net Cash Provided by Operating Activities | 1,305 | 1,315 | 1,176 | |||
Cash Flows - Investing Activities | ||||||
Capital spending | (160) | (196) | (234) | |||
Payments for (Proceeds from) Investments | 206 | 0 | (200) | |||
Proceeds from refranchising of restaurants | 19 | 110 | 825 | |||
Other, net | 8 | (2) | (12) | |||
Net Cash Provided by (Used in) Investing Activities | (335) | (88) | 313 | |||
Cash Flows - Financing Activities | ||||||
Proceeds from long-term debt | 1,650 | 800 | 1,556 | |||
Repayments of long-term debt | (1,517) | (331) | (1,264) | |||
Revolving credit facilities, three months or less, net | 0 | 0 | 0 | |||
Short-term borrowings by original maturity | ||||||
More than three months - proceeds | 95 | 130 | 59 | |||
More than three months - payments | (100) | (126) | (59) | |||
Three months or less, net | 0 | 0 | 0 | |||
Repurchase shares of Common Stock | (239) | (815) | (2,390) | |||
Dividends paid on Common Stock | (566) | (511) | (462) | |||
Debt issuance costs | (20) | (10) | (13) | |||
Other, net | (41) | (75) | (47) | |||
Net Cash Used in Financing Activities | (738) | (938) | (2,620) | |||
Effect of Exchange Rate on Cash and Cash Equivalents | 24 | 5 | (63) | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | 256 | 294 | (1,194) | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 1,024 | 768 | 474 | |||
QuikOrder Acquisition | ||||||
Cash Flows - Investing Activities | ||||||
Payments to Acquire Businesses, Net of Cash Acquired | 0 | 0 | (66) | |||
The Habit Burger Grill [Member] | ||||||
Cash Flows - Investing Activities | ||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ (408) | $ 0 | $ 0 | |||
[1] | The year ended December 31, 2020, includes a charge of $144 million related to the impairment of Habit Burger Grill goodwill. The year ended December 31, 2020, also includes charges of $12 million related to the impairment of restaurant-level assets and charges of $11 million related to the write-off of software no longer being used. | |||||
[2] | Amounts have not been allocated to any segment for performance reporting purposes. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) shares in Millions, $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 | |
Current Assets | |||
Cash and cash equivalents | $ 730 | $ 605 | |
Accounts and notes receivable, net | 534 | 584 | |
Prepaid Expense and Other Assets, Current | 425 | 338 | |
Total Current Assets | 1,689 | 1,527 | |
Property, Plant and equipment, net | 1,235 | 1,170 | |
Goodwill | [1] | 597 | 530 |
Intangible assets, net | 343 | 244 | |
Other assets | 1,435 | 1,313 | |
Deferred Income Taxes | 553 | 447 | |
Total Assets | [2] | 5,852 | 5,231 |
Current Liabilities | |||
Accounts payable and other current liabilities | 1,189 | 960 | |
Income taxes payable | 33 | 150 | |
Short-term borrowings | 453 | 431 | |
Total Current Liabilities | 1,675 | 1,541 | |
Long-term debt | 10,272 | 10,131 | |
Other liabilities and deferred credits | 1,796 | 1,575 | |
Total Liabilities | 13,743 | 13,247 | |
Shareholders' Equity | |||
Common stock, no par value, 750 shares authorized; 300 shares issued in 2020 and 2019 | 0 | 0 | |
Accumulated Deficit | (7,480) | (7,628) | |
Accumulated other comprehensive income (loss) | (411) | (388) | |
Total Shareholders' Equity | (7,891) | (8,016) | |
Total Liabilities, Redeemable Noncontrolling Interest and Shareholders' Equity | $ 5,852 | $ 5,231 | |
Common Stock, shares issued | 300 | 300 | |
[1] | Goodwill, net includes $144 million of accumulated impairment loss recorded in the year ended December 31, 2020, related to our Habit Burger Grill segment and $17 million of accumulated impairment losses for each year presented related to our Pizza Hut segment. | ||
[2] | U.S. identifiable assets included in the combined Corporate and KFC, Pizza Hut, Taco Bell and Habit Burger Grill Divisions totaled $3.0 billion and $2.7 billion in 2020 and 2019, respectively. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions, $ / shares in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Shareholders' Equity (Deficit) | ||
Common Stock, par value | $ 0 | $ 0 |
Common Stock, shares authorized | 750 | 750 |
Common Stock, shares issued | 300 | 300 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2016-02 [Member] | Accounting Standards Update 2016-13 [Member] | Shareholders' Equity [Member] (Deprecated 2019-01-31)Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Retained EarningsAccounting Standards Update 2016-02 [Member] | Retained EarningsAccounting Standards Update 2016-13 [Member] | |
Balance at Dec. 31, 2017 | $ (6,334) | $ 0 | $ (6,063) | $ (271) | |||||||
Balance (in shares) at Dec. 31, 2017 | 332,000 | ||||||||||
Net Income | 1,542 | 1,542 | |||||||||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature (net of tax impact) | (88) | ||||||||||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature - including noncontrolling interest (net of tax impact) | (88) | ||||||||||
Reclassifications of adjustments and (gains) losses into Net Income | (4) | (4) | |||||||||
Pension and post-retirement benefit plans (net of tax impact) | 41 | 41 | |||||||||
Net unrealized gain (loss) on derivative instruments (net of tax impact) | (14) | (14) | |||||||||
Comprehensive income - including noncontrolling interests | 1,477 | ||||||||||
Dividends declared | (464) | (464) | |||||||||
Repurchase of shares of Common Stock | $ (2,394) | $ (38) | (2,356) | ||||||||
Repurchase of shares of Common Stock (in shares) | (28,243) | (28,000) | |||||||||
Employee stock option and SARs exercises (includes tax impact) | $ 41 | $ 41 | |||||||||
Employee stock option and SARs exercises (in shares) | 2,000 | ||||||||||
Compensation-related events (includes tax impact) | 79 | $ 79 | |||||||||
Other Comprehensive Income (Loss), Net of Tax | (65) | $ 2 | |||||||||
Balance at Dec. 31, 2018 | (7,926) | $ 0 | (7,592) | (334) | |||||||
Balance (in shares) at Dec. 31, 2018 | 306,000 | ||||||||||
Accumulated Deficit | $ 251 | ||||||||||
Stockholders' Equity Attributable to Parent | $ (249) | ||||||||||
Net Income | 1,294 | 1,294 | |||||||||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature (net of tax impact) | 24 | ||||||||||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature - including noncontrolling interest (net of tax impact) | 24 | ||||||||||
Reclassifications of adjustments and (gains) losses into Net Income | 0 | ||||||||||
Pension and post-retirement benefit plans (net of tax impact) | (22) | (22) | |||||||||
Net unrealized gain (loss) on derivative instruments (net of tax impact) | (56) | (56) | |||||||||
Comprehensive income - including noncontrolling interests | 1,240 | ||||||||||
Dividends declared | (514) | (514) | |||||||||
Repurchase of shares of Common Stock | $ (810) | [1] | $ (14) | (796) | |||||||
Repurchase of shares of Common Stock (in shares) | (7,788) | [1] | (8,000) | ||||||||
Employee stock option and SARs exercises (includes tax impact) | $ 75 | $ 57 | 18 | ||||||||
Employee stock option and SARs exercises (in shares) | 2,000 | ||||||||||
Compensation-related events (includes tax impact) | 71 | $ 71 | |||||||||
Other Comprehensive Income (Loss), Net of Tax | (54) | ||||||||||
Balance at Dec. 31, 2019 | (8,016) | $ 0 | (7,628) | (388) | |||||||
Balance (in shares) at Dec. 31, 2019 | 300,000 | ||||||||||
Accumulated Deficit | 7,628 | $ 2 | |||||||||
Stockholders' Equity Attributable to Parent | $ (2) | ||||||||||
Net Income | 904 | 904 | |||||||||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature (net of tax impact) | 39 | ||||||||||
Translation adjustments and gains (losses) from intra-entity transactions of a long-term investment nature - including noncontrolling interest (net of tax impact) | 39 | ||||||||||
Reclassifications of adjustments and (gains) losses into Net Income | 0 | ||||||||||
Pension and post-retirement benefit plans (net of tax impact) | 8 | 8 | |||||||||
Net unrealized gain (loss) on derivative instruments (net of tax impact) | (70) | (70) | |||||||||
Comprehensive income - including noncontrolling interests | 881 | ||||||||||
Dividends declared | (569) | (569) | |||||||||
Repurchase of shares of Common Stock | $ (250) | [1] | $ (71) | (179) | |||||||
Repurchase of shares of Common Stock (in shares) | (2,419) | [1] | (2,000) | ||||||||
Employee stock option and SARs exercises (includes tax impact) | $ 41 | $ 41 | |||||||||
Employee stock option and SARs exercises (in shares) | 2,000 | ||||||||||
Compensation-related events (includes tax impact) | 112 | $ 112 | |||||||||
Other Comprehensive Income (Loss), Net of Tax | (23) | ||||||||||
Balance at Dec. 31, 2020 | (7,891) | $ 0 | $ (7,480) | $ (411) | |||||||
Balance (in shares) at Dec. 31, 2020 | 300,000 | ||||||||||
Accumulated Deficit | $ 7,480 | $ 8 | |||||||||
Stockholders' Equity Attributable to Parent | $ (8) | ||||||||||
[1] | 2019 amount excludes and 2018 amount includes the effect of $5 million in share repurchases (0.1 million shares) with trade dates on, or prior to, December 31, 2018, but settlement dates subsequent to December 31, 2018. |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Pension and post-retirement benefit plans (tax impact) | $ 7 | $ (13) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | 20 | 6 |
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax | $ (4) | $ 6 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Yum! Brands, Inc. and its Subsidiaries (collectively referred to herein as the “Company,” “YUM,” “we,” “us” or “our”) franchise or operate a system of over 50,000 restaurants in more than 150 countries and territories primarily under the concepts of KFC, Pizza Hut, Taco Bell and The Habit Burger Grill (collectively, the "Concepts"). The Company’s KFC, Pizza Hut and Taco Bell brands are global leaders of the chicken, pizza and Mexican-style food categories. The Habit Burger Grill, a concept we acquired on March 18, 2020, is a fast-casual restaurant concept specializing in made-to-order chargrilled burgers, sandwiches and more. At December 31, 2020, 98% of our restaurants were owned and operated by franchisees. Through our widely-recognized Concepts, we develop, operate or franchise a system of both traditional and non-traditional restaurants. The terms "franchise" or "franchisee" within these Consolidated Financial Statements are meant to describe third parties that operate units under either franchise or license agreements. Our traditional restaurants feature dine-in, carryout and, in some instances, drive-thru service. Non-traditional units include express units and kiosks which have a more limited menu and operate in non-traditional locations like malls, airports, gasoline service stations, train stations, subways, convenience stores, stadiums, amusement parks and colleges, where a full-scale traditional outlet would not be practical or efficient. As of December 31, 2020, over 35,000 of our restaurants are also currently offering delivery. We also operate or franchise multibrand units, where two or more of our Concepts are operated in a single unit. As of December 31, 2020, YUM consisted of four operating segments: • The KFC Division which includes our worldwide operations of the KFC concept • The Pizza Hut Division which includes our worldwide operations of the Pizza Hut concept • The Taco Bell Division which includes our worldwide operations of the Taco Bell concept |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Our preparation of the accompanying Consolidated Financial Statements in conformity with Generally Accepted Accounting Principles in the United States of America (“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 Consolidated Financial Statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Principles of Consolidation and Basis of Preparation. Intercompany accounts and transactions have been eliminated in consolidation. We consolidate entities in which we have a controlling financial interest, the usual condition of which is ownership of a majority voting interest. We also consider for consolidation an entity, in which we have certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. Our most significant variable interests are in certain entities that operate restaurants under our Concepts’ franchise arrangements. We do not typically provide significant financial support such as loans or guarantees to our franchisees. Thus, our most significant variable interests in franchisees result from real estate lease arrangements to which we are a party. At the end of 2020, YUM has future lease payments due from certain franchisees, on a nominal basis, of approximately $1 billion, and we are secondarily liable on certain other lease agreements that have been assigned to certain franchisees. See the Lease Guarantees section in Note 20. As our franchise arrangements provide our franchisee entities the power to direct the activities that most significantly impact their economic performance, we do not consider ourselves the primary beneficiary of any such entity that might otherwise be considered a VIE. We do not have an equity interest in any of our franchisee businesses except for a minority interest in an entity that owns our KFC Brazil and Pizza Hut Brazil master franchisee rights and a minority interest in an entity that operates KFC and Pizza Hut franchised units in India. These minority interests do not give us the ability to significantly influence these entities and we account for our investment in these entities as equity securities. When the fair value of these equity securities is readily determinable we record changes in fair value in Investment (income) expense, net. When the fair value of these equity securities is not readily determinable we apply the measurement alternative in accordance with ASC Topic 321 and, when applicable, record fair value changes from observable prices as well as impairment in Investment (income) expense, net. We participate in various advertising cooperatives with our franchisees, typically within a country where we have both Company-owned restaurants and franchise restaurants, established to collect and administer funds contributed for use in advertising and promotional programs designed to increase sales and enhance the reputation of the Company and our Concepts. Contributions to the advertising cooperatives are required for both Company-owned and franchise restaurants and are generally based on a percentage of restaurant sales. We maintain certain variable interests in these cooperatives. As the cooperatives are required to spend all funds collected on advertising and promotional programs, total equity at risk is not sufficient to permit the cooperatives to finance their activities without additional subordinated financial support. Therefore, these cooperatives are VIEs. As a result of our voting rights, we consolidate certain of these cooperatives for which we are the primary beneficiary. Fiscal Year. 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 and certain international subsidiaries operate on a weekly periodic calendar where the first three quarters of each fiscal year consists of 12 weeks and the fourth quarter consists of 16 weeks in fiscal years with 52 weeks and 17 weeks in fiscal years with 53 weeks. Our Habit Burger Grill subsidiaries, which we acquired on March 18, 2020, operate on a weekly periodic calendar where each quarter consists of 13 weeks, except in fiscal years with 53 weeks when the fourth quarter consists of 14 weeks. Our remaining international subsidiaries operate on a monthly calendar similar to that on which YUM operates. Fiscal year 2019 included 53 weeks for our U.S. businesses and for our international subsidiaries that reported on a period calendar. The 53rd week added $66 million to Total revenues, $24 million to Operating Profit and $17 million to Net Income in our 2019 Consolidated Statement of Income. Our next fiscal year scheduled to include a 53rd week is 2024. Foreign Currency. The functional currency of our foreign entities is the currency of the primary economic environment in which the entity operates. Functional currency determinations are made based upon a number of economic factors, including but not limited to cash flows and financing transactions. The operations, assets and liabilities of our entities outside the U.S. are initially measured using the functional currency of that entity. Income and expense accounts for our operations of these foreign entities are then translated into U.S. dollars at the average exchange rates prevailing during the period. Assets and liabilities of these foreign entities are then translated into U.S. dollars at exchange rates in effect at the balance sheet date. As of December 31, 2020, net cumulative translation adjustment losses of $182 million are recorded in Accumulated other comprehensive income ("AOCI") in the Consolidated Balance Sheet. The majority of our foreign currency net asset exposure is in countries where we have Company-owned restaurants. As we manage and share resources at the individual brand level within a country, cumulative translation adjustments are recorded and tracked at the foreign-entity level that represents the operations of our individual brands within that country. Translation adjustments recorded in AOCI are subsequently recognized as income or expense generally only upon sale of the related investment in a foreign entity, or upon a sale of assets and liabilities within a foreign entity that represents a complete or substantially complete liquidation of that foreign entity. For purposes of determining whether a sale or complete or substantially complete liquidation of an investment in a foreign entity has occurred, we consider those same foreign entities for which we record and track cumulative translation adjustments. Gains and losses arising from the impact of foreign currency exchange rate fluctuations on transactions in foreign currency are included in Other (income) expense in our Consolidated Statements of Income. Reclassifications. We have reclassified certain items in the Consolidated Financial Statements for prior periods to be comparable with the classification for the fiscal year ended December 31, 2020. These reclassifications had no effect on previously reported Net Income. Revenue Recognition. Below is a discussion of how our revenues are earned, our accounting policies pertaining to revenue recognition subsequent to the adoption of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“Topic 606”) and other required disclosures. We adopted Topic 606 at the beginning of the year ended December 31, 2018, using the modified retrospective method. Topic 606 was applied to all contracts with customers as of January 1, 2018, and the cumulative effect of this transition was recorded as an increase to Accumulated deficit of $240 million as of this date. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue transaction and collected from a customer are excluded from revenue. Company Sales Revenues from the sale of food items by Company-owned restaurants are recognized as Company sales when a customer purchases the food, which is when our obligation to perform is satisfied. Franchise and Property Revenues Franchise Revenues Our most significant source of revenues arises from the operation of our Concepts' stores by our franchisees. Franchise rights may be granted through a store-level franchise agreement or through a master franchise agreement that sets out the terms of our arrangement with the franchisee. Our franchise agreements require that the franchisee remit continuing fees to us as a percentage of the applicable restaurant’s sales in exchange for the license of the intellectual property associated with our Concepts' brands (the “franchise right”). Our franchise agreements also typically require certain, less significant, upfront franchise fees such as initial fees paid upon opening of a store, fees paid to renew the term of the franchise right and fees paid in the event the franchise agreement is transferred to another franchisee. Continuing fees represent the substantial majority of the consideration we receive under our franchise agreements. Continuing fees are typically billed and paid monthly and are usually 4% - 6% for store-level franchise agreements. Master franchise agreements allow master franchisees to operate restaurants as well as sub-franchise restaurants within certain geographic territories. The percentage of sales that we receive for restaurants owned or sub-franchised by our master franchisees as a continuing fee is typically less than the percentage we receive for restaurants operating under a store-level franchise agreement. Based on the application of the sales-based royalty exception within Topic 606 continuing fees are recognized as the related restaurant sales occur. Upfront franchise fees are typically billed and paid when a new franchise or sub-franchise agreement becomes effective or when an existing agreement is transferred to another franchisee or sub-franchisee. We have determined that the services we provide in exchange for upfront franchise fees, which primarily relate to pre-opening support, are highly interrelated with the franchise right and are not individually distinct from the ongoing services we provide to our franchisees. As a result, upfront franchise fees are recognized as revenue over the term of each respective franchise or sub-franchise agreement. Revenues for these upfront franchise fees are recognized on a straight-line basis, which is consistent with the franchisee’s or sub-franchisee's right to use and benefit from the intellectual property. Revenues from continuing fees and upfront franchise fees are presented within Franchise and property revenues in our Consolidated Statements of Income. Additionally, from time-to-time we provide non-refundable consideration to franchisees in the form of cash or other incentives (e.g. cash payments to incent new unit openings, free or subsidized equipment, etc.). The Company’s intent in providing such consideration is to drive new unit development or same-store sales growth that will result in higher future revenues for the Company. Such payments are capitalized and presented within Prepaid expense and other current assets or Other assets. These assets are being amortized as a reduction in Franchise and property revenues over the period of expected cash flows from the franchise agreements to which the payment relates. Property Revenues From time to time, we enter into rental agreements with franchisees for the lease or sublease of restaurant locations. These rental agreements typically originate from refranchising transactions and revenues related to the agreements are recognized as they are earned. Amounts owed under the rental agreements are typically billed and paid on a monthly basis. Revenues from rental agreements with franchisees are presented within Franchise and property revenues within our Consolidated Statements of Income. Related expenses are presented as Franchise and property expenses within our Consolidated Statements of Income and primarily include depreciation or, in the case of a sublease, rental expense. Franchise Contributions for Advertising and Other Services Advertising Cooperatives We have determined we act as a principal in the transactions entered into by the advertising cooperatives we are required to consolidate based on our responsibility to define the nature of the goods or services provided and/or our commitment to pay for advertising services in advance of the related franchisee contributions. Additionally, we have determined the advertising services provided to franchisees are highly interrelated with the franchise right and therefore not distinct. Franchisees remit to these consolidated advertising cooperatives a percentage of restaurant sales as consideration for providing the advertising services. As a result, revenues for advertising services are recognized when the related restaurant sales occur based on the application of the sales-based royalty exception within Topic 606. Revenues for these services are typically billed and received on a monthly basis. These revenues are presented as Franchise contributions for advertising and other services. Other Goods or Services On a much more limited basis, we provide goods or services to certain franchisees that are individually distinct from the franchise right because they do not require integration with other goods or services we provide. Such arrangements typically relate to supply chain, quality assurance and information technology services. In instances where we rely on third parties to provide goods or services to franchisees at our direction, we have determined we act as a principal in these transactions. The extent to which we provide such goods or services varies by brand, geographic region and, in some instances, franchisee. Similar to advertising services, receipts related to these other services are presented as Franchise contributions for advertising and other services within our Consolidated Statements of Income. These revenues are recognized as the goods or services are transferred to the franchisee. Franchise Support Costs. The internal costs we incur to provide support services to our franchisees for which we do not receive a reimbursement are charged to General and administrative expenses (“G&A”) as incurred. Certain direct costs of our franchise operations are charged to Franchise and property expenses. These costs include provisions for estimated uncollectible upfront and continuing fees, rent or depreciation expense associated with restaurants we lease or sublease to franchisees, marketing funding on behalf of franchisees, amortization expense for franchise-related intangible assets, value added taxes on royalties and certain other direct incremental franchise support costs. Expenses related to the provisioning of goods or services for which we receive reimbursement or other payment from a franchisee are recorded in Franchise advertising and other services expense (the associated revenue is recorded within Franchise contributions for advertising and other services as described above). The majority of these expenses relate to advertising and are incurred on behalf of franchisees by the advertising cooperatives we are required to consolidate. These expenses are accounted for as described in the Advertising Costs policy below. For such expenses that do not relate to advertising the expenses are recognized as incurred. Advertising Costs. To the extent we participate in advertising cooperatives, we, like our participating franchisees, are required to make contributions. Our contributions are based on a percentage of sales of our participating Company restaurants. These contributions as well as direct marketing costs we may incur outside of a cooperative related to Company restaurants are recorded within Company restaurant expenses. Advertising expense included in Company restaurant expenses totaled $68 million, $73 million and $96 million in 2020, 2019 and 2018, respectively. To the extent we consolidate advertising cooperatives, we incur advertising expense as a result of our obligation to spend franchisee contributions to those cooperatives (see above for our accounting for these contributions). Such advertising expense is recorded in Franchise advertising and other services expense and totaled $1,079 million, $1,133 million and $1,035 million in 2020, 2019 and 2018, respectively. At the end of each fiscal year additional advertising costs are accrued to the extent advertising revenues exceed the related advertising expense to date, as we are obligated to expend such amounts on advertising. From time to time, we may make the decision to incur discretionary advertising expenditures on behalf of franchised restaurants. Such amounts are recorded within Franchise and property expenses and totaled $10 million, $10 million and $35 million in 2020, 2019 and 2018, respectively. To the extent the advertising cooperatives we are required to consolidate are unable to collect amounts due from franchisees they incur bad debt expense. In 2020 and 2019 we recorded $7 million in net recoveries and $19 million in net provisions, respectively, within Franchise advertising and other services expense related to recoveries on and provisions for uncollectible franchisee receivables. To the extent our consolidated advertising cooperatives have a provision or recovery for bad debt expense, the cooperative’s advertising spend obligation is adjusted such that there is no net impact within our Financial Statements. Share-Based Employee Compensation. We recognize ongoing share-based payments to employees, including grants of employee stock options and stock appreciation rights (“SARs”), in the Consolidated Financial Statements as compensation cost over the service period based on their fair value on the date of grant. This compensation cost is recognized over the service period on a straight-line basis, net of an assumed forfeiture rate, for awards that actually vest. Forfeiture rates are estimated at grant date based on historical experience and compensation cost is adjusted in subsequent periods for differences in actual forfeitures from the previous estimates. We present this compensation cost consistent with the other compensation costs for the employee recipient in either Company restaurant expenses or G&A. See Note 16 for further discussion of our share-based compensation plans. Legal Costs. Settlement costs are accrued when they are deemed probable and reasonably estimable. Anticipated legal fees related to self-insured workers' compensation, employment practices liability, general liability, automobile liability, product liability and property losses (collectively, "property and casualty losses") are accrued when deemed probable and reasonably estimable. Legal fees not related to self-insured property and casualty losses are recognized as incurred. See Note 20 for further discussion of our legal proceedings. Impairment or Disposal of Long-Lived Assets. Long-lived assets, including Property, plant and equipment (“PP&E”) as well as right-of-use operating lease assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The assets are not recoverable if their carrying value is less than the undiscounted cash flows we expect to generate from such assets. If the assets are not deemed to be recoverable, impairment is measured based on the excess of their carrying value over their fair value. For purposes of impairment testing for our restaurants, we have concluded that an individual restaurant is the lowest level of independent cash flows unless it is more likely than not that we will refranchise restaurants as a group. We review our long-lived assets of such individual restaurants (primarily PP&E, right-of-use operating lease assets and allocated intangible assets subject to amortization) that we intend to continue operating as Company restaurants annually for impairment, or whenever events or changes in circumstances indicate that the carrying amount of a restaurant may not be recoverable. We use two consecutive years of operating losses as our primary indicator of potential impairment for our annual impairment testing of these restaurant assets. We evaluate the recoverability of these restaurant assets by comparing the estimated undiscounted future cash flows, which are based on our entity-specific assumptions, to the carrying value of such assets. For restaurant assets that are not deemed to be recoverable, we write-down an impaired restaurant to its estimated fair value, which becomes its new cost basis. Fair value is an estimate of the price a franchisee would pay for the restaurant and its related assets, including any right-of-use assets, and is determined by discounting the estimated future after-tax cash flows of the restaurant, which include a deduction for royalties we would receive under a franchise agreement with terms substantially at market. The after-tax cash flows incorporate reasonable assumptions we believe a franchisee would make such as sales growth and margin improvement. The discount rate used in the fair value calculation is our estimate of the required rate of return that a franchisee would expect to receive when purchasing a similar restaurant and the related long-lived assets. The discount rate incorporates rates of returns for historical refranchising market transactions and is commensurate with the risks and uncertainty inherent in the forecasted cash flows. Individual restaurant-level impairment is recorded within Other (income) expense. Any right-of-use asset may alternatively be valued at the amount we could receive for such right-of-use asset from a third-party that is not a franchisee through a sublease if doing so would result in less overall impairment of the restaurant assets in total. In executing our refranchising initiatives, we most often offer groups of restaurants for sale. When we believe it is more likely than not a restaurant or groups of restaurants will be refranchised for a price less than their carrying value, but do not believe the restaurant(s) have met the criteria to be classified as held for sale, we review the restaurants for impairment. We evaluate the recoverability of these restaurant assets by comparing estimated sales proceeds plus holding period cash flows, if any, to the carrying value of the restaurant or group of restaurants. For restaurant assets that are not deemed to be recoverable, we recognize impairment for any excess of carrying value over the fair value of the restaurants, which is based on the expected net sales proceeds. To the extent ongoing agreements to be entered into with the franchisee simultaneous with the refranchising are expected to contain terms, such as royalty rates or rental payments, not at prevailing market rates, we consider the off-market terms in our impairment evaluation. We recognize any such impairment charges in Refranchising (gain) loss. We recognize gains on restaurant refranchisings when the sale transaction closes and control of the restaurant operations have transferred to the franchisee. When we decide to close a restaurant, it is reviewed for impairment, which includes an estimate of sublease income that could be reasonably obtained, if any, in relation to the right-of-use operating lease asset. Additionally, depreciable lives are adjusted based on the expected disposal date. Other costs incurred when closing a restaurant such as costs of disposing of the assets as well as other facility-related expenses from previously closed stores are generally expensed as incurred. Any costs recorded upon store closure as well as any subsequent adjustments to liabilities for remaining lease obligations as a result of lease termination or changes in estimates of sublease income are recorded in Other (income) expense. To the extent we sell assets, primarily land, associated with a closed store, any gain or loss upon that sale is also recorded in Other (income) expense. Management judgment is necessary to estimate future cash flows, including cash flows from continuing use, terminal value, sublease income and refranchising proceeds. Accordingly, actual results could vary significantly from our estimates. Guarantees. We recognize, at inception of a guarantee, a liability for the fair value of certain obligations undertaken. Additionally, effective January 1, 2020, we adopted ASU No. 2016-13 which required that we also recognize as a liability the expected credit losses over the life of such guarantees. As a result of the adoption of ASU No. 2016-13, we recorded a cumulative adjustment to Accumulated deficit of $8 million to establish such expected credit loss liability for our outstanding guarantees. The majority of our guarantees are issued as a result of assigning our interest in obligations under operating leases as a condition to the refranchising of certain Company restaurants. We recognize a liability for such lease guarantees upon refranchising and upon subsequent renewals of such leases when we remain secondarily liable. The related expense and any subsequent changes are included in Refranchising (gain) loss. Any expense and subsequent changes in the guarantees for other franchise support guarantees not associated with a refranchising transaction are included in Franchise and property expenses. Income Taxes. We record deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences or carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in our Income tax provision in the period that includes the enactment date. Additionally, in determining the need for recording a valuation allowance against the carrying amount of deferred tax assets, we consider the amount of taxable income and periods over which it must be earned, actual levels of past taxable income and known trends and events or transactions that are expected to affect future levels of taxable income. Where we determine that it is more likely than not that all or a portion of an asset will not be realized, we record a valuation allowance. We recognize the benefit of positions taken or expected to be taken in our tax returns in our Income tax provision when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon settlement with the taxing authorities. We evaluate these amounts on a quarterly basis to ensure that they have been appropriately adjusted for audit settlements and other events we believe may impact the outcome. Changes in judgment that result in subsequent recognition, derecognition or a change in measurement of a tax position taken in a prior annual period (including any related interest and penalties) are recognized as a discrete item in the interim period in which the change occurs. We recognize accrued interest and penalties related to unrecognized tax benefits as components of our Income tax provision. We do not record a deferred tax liability for unremitted earnings of our foreign subsidiaries to the extent that the earnings meet the indefinite reversal criteria. This criteria is met if the foreign subsidiary has invested, or will invest, the earnings indefinitely. The decision as to the amount of unremitted earnings that we intend to maintain in non-U.S. subsidiaries considers items including, but not limited to, forecasts and budgets of financial needs of cash for working capital, liquidity plans and expected cash requirements in the U.S. See Note 18 for a further discussion of our income taxes. Fair Value Measurements. Fair value is the price we would receive to sell an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants. For those assets and liabilities we record or disclose at fair value, we determine fair value based upon the quoted market price, if available. If a quoted market price is not available for identical assets, we determine fair value based upon the quoted market price of similar assets or the present value of expected future cash flows considering the risks involved, including counterparty performance risk if appropriate, and using discount rates appropriate for the duration. The fair values are assigned a level within the fair value hierarchy, depending on the source of the inputs into the calculation. Level 1 Inputs based upon quoted prices in active markets for identical assets. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. Level 3 Inputs that are unobservable for the asset. Cash and Cash Equivalents. Cash equivalents represent funds we have temporarily invested (with original maturities not exceeding three months), including short-term, highly liquid debt securities. Cash and overdraft balances that meet the criteria for right of setoff are presented net on our Consolidated Balance Sheet. Receivables. The Company’s receivables are primarily generated from ongoing business relationships with our franchisees as a result of franchise agreements, including contributions due to advertising cooperatives we consolidate. These receivables 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 on our Consolidated Balance Sheet. Effective with the adoption of ASU No. 2016-13 on January 1, 2020, our receivables are now stated net of expected credit losses. The impact to our net receivables as a result of adopting the standard was not significant. Expected credit losses for uncollectible franchisee receivable balances consider both current conditions and reasonable and supportable forecasts of future conditions. Current conditions we consider include pre-defined aging criteria as well as specified events that indicate we may not collect the balance due. Reasonable and supportable forecasts used in determining the probability of future collection consider publicly available data regarding default probability. While we use the best information available in making our determination, the ultimate recovery of recorded receivables is dependent upon future economic events and other conditions that may be beyond our control. Receivables that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. We recorded $12 million, $24 million and $11 million in net provisions within Franchise and property expenses in 2020, 2019 and 2018, respectively, related to uncollectible continuing fees, initial fees and rent receivables from our franchisees. Accounts and notes receivable as well as the Allowance for doubtful accounts, including balances attributable to our consolidated advertising cooperatives, as of December 31, 2020 and 2019, respectively, are as follows: 2020 2019 Accounts and notes receivable $ 579 $ 656 Allowance for doubtful accounts (45) (72) Accounts and notes receivable, net $ 534 $ 584 Our financing receivables primarily consist of notes receivables and direct financing leases with franchisees which we enter into from time-to-time. As these receivables primarily relate to our ongoing business agreements with franchisees, we consider such receivables to have similar risk characteristics and eva |
Habit Burger Acquisition
Habit Burger Acquisition | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Business Combination Disclosure | Habit Burger Grill Acquisition On March 18, 2020, we completed the acquisition of all of the issued and outstanding common shares of The Habit Restaurants, Inc. As of the date of acquisition, The Habit Restaurants, Inc. operated 245 company-owned and 31 franchised Habit Burger Grill restaurants across the U.S. and in China, offering a flavor-forward variety of made-to-order items chargrilled over an open flame. We expect Habit Burger Grill to benefit from the global scale and resources of YUM and that the acquisition will accelerate and diversify YUM's growth. Total cash consideration paid in connection with the acquisition was $408 million, net of acquired cash of $20 million. This included $9 million for the settlement of existing share-based awards previously issued to The Habit Restaurants, Inc. employees and $53 million associated with an obligation to former shareholders of The Habit Restaurants, Inc. related to a tax receivable agreement entered into in connection with its initial public offering in 2014. The acquisition was accounted for as a business combination using the acquisition method of accounting. During the quarter ended December 31, 2020, we adjusted our preliminary estimate of the fair value of net assets acquired. The components of the preliminary purchase price allocation upon the March 18, 2020, acquisition, subsequent to the adjustments to the allocation through the year ended December 31, 2020, were as follows: Total Current Assets $ 11 Property, plant and equipment, net 111 Habit Burger Grill brand (included in Intangible assets, net) 96 Operating lease right-of-use assets (included in Other assets) 196 Other assets 28 Total Assets 442 Total Current Liabilities (69) Operating lease liabilities (included in Other liabilities and deferred credits) (170) Other liabilities (1) Total Liabilities (240) Total identifiable net assets 202 Goodwill 206 Net consideration transferred $ 408 The adjustments to the preliminary estimate of identifiable net assets acquired resulted in a corresponding $13 million decrease in estimated goodwill due to the following changes to the preliminary purchase price allocation. Change in Increase (Decrease) in Goodwill Total Current Assets $ 1 Property, plant and equipment, net 18 Habit Burger Grill brand (included in Intangible assets, net) 2 Operating lease right-of-use assets (included in Other assets) (33) Other assets (6) Total Current Liabilities 1 Operating lease liabilities (included in Other liabilities and deferred credits) 5 Other liabilities (1) Total decrease in goodwill $ (13) The preliminary allocation of the purchase price was based on management's analysis as of March 18, 2020. We will continue to obtain information to assist in determining the fair value of net assets acquired during the remaining measurement period. The Habit Burger Grill brand, which includes the related trademarks, was valued by applying the income approach through a relief from royalty analysis and it has been assigned an indefinite life and, therefore, will not be amortized. The brand asset will be tested for impairment on an annual basis as of the beginning of our fourth quarter or more often if an event occurs or circumstances change that indicate impairment might exist. The excess of the purchase price over the preliminary estimated fair value of the net, identifiable assets acquired was recorded as goodwill. The factors contributing to the recognition of goodwill were several strategic and synergistic benefits that are expected to be realized by Habit Burger Grill from the acquisition. These benefits include leveraging YUM's scale and resources in unit development, primarily through franchising, supply chain and global brand-building. Goodwill determined through the purchase price allocation will be entirely allocated to the Habit Burger Grill Division and goodwill of approximately $200 million is expected to be deductible for tax purposes. The pro forma impact on our results of operations if the acquisition had been completed as of the beginning of 2019 would not have been significant. During the first quarter of 2020, the operations of substantially all Habit Burger Grill restaurants were impacted by COVID-19. As a result, we performed an interim impairment test of the Habit Burger Grill reporting unit goodwill as of March 31, 2020. This test of impairment included comparing the estimated fair value of the Habit Burger Grill reporting unit to its carrying value, including goodwill, as originally determined through our preliminary purchase price allocation. The fair value estimate of the Habit Burger Grill reporting unit was based on the estimated price a willing buyer would pay for the reporting unit and was determined using an income approach through a discounted cash flow analysis using unobservable inputs (Level 3). The most impactful of these inputs included future average unit volumes of Habit Burger Grill restaurants as well as restaurant unit counts. The fair value was determined based upon a probability-weighted average of three scenarios, which included assumed recovery of Habit Burger Grill average unit volumes to a pre—COVID-19 level over periods ranging from the beginning of 2021 to the end of 2022. Factors impacting restaurant unit counts were near-term unit closures as the result of COVID-19 as well as the pace of expected new unit development. Unit counts assumed were correlated with the expected recoveries in average unit volumes. Based upon this fair value estimate, we determined that the carrying value of our Habit Burger Grill reporting unit exceeded its fair value. As a result, during the first quarter of 2020 we recorded a goodwill impairment charge of $139 million to Other (income) expense and a corresponding income tax benefit of $32 million. As we continued to refine our preliminary purchase price allocation in the quarter ended September 30, 2020, the impairment charge was adjusted upward by $5 million, which resulted in a corresponding income tax benefit of $1 million. The amount of the goodwill impairment charge and related tax benefit could change again as we finalize the purchase price allocation associated with the acquisition. During the fourth quarter of 2020, in accordance with our policy on evaluating goodwill and indefinite-lived intangible assets annually for impairment, we performed an impairment test of the Habit Burger Grill reporting unit goodwill and Habit Burger Grill brand asset. The fair values of the reporting unit goodwill and brand asset were determined to be in excess of their respective carrying values and no further impairment charges were recorded. |
Earnings Per Common Share ("EPS
Earnings Per Common Share ("EPS") | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share (EPS) | Earnings Per Common Share (“EPS”) 2020 2019 2018 Net Income $ 904 $ 1,294 $ 1,542 Weighted-average common shares outstanding (for basic calculation) 302 306 322 Effect of dilutive share-based employee compensation 5 7 7 Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) 307 313 329 Basic EPS $ 2.99 $ 4.23 $ 4.80 Diluted EPS $ 2.94 $ 4.14 $ 4.69 Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation (a) 4.8 2.0 2.0 (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. |
Items Affecting Comparability o
Items Affecting Comparability of Net Income and Cash Flows | 12 Months Ended |
Dec. 31, 2020 | |
Items Affecting Comparability Of Net Income And Cash Flows Disclosure [Abstract] | |
Items Affecting Comparability of Net Income and Cash Flows | Items Affecting Comparability of Net Income and Cash Flows Refranchising (Gain) Loss The Refranchising (gain) loss by our Divisional reportable segments is presented below. Given the size and volatility of refranchising initiatives, our chief operating decision maker ("CODM") does not consider the impact of Refranchising (gain) loss when assessing Divisional segment performance. As such, we do not allocate such gains and losses to our Divisional segments for performance reporting purposes. During the years ended December 31, 2020, 2019 and 2018, we refranchised 97, 25 and 660 restaurants, respectively. Additionally, during the years ended December 31, 2020 and 2019, we sold certain restaurant assets associated with existing franchise restaurants to the franchisee. We received $19 million, $110 million and $825 million in pre-tax cash refranchising proceeds in 2020, 2019 and 2018, respectively. In 2020, we also received as refranchising proceeds minority interests in an entity that operates KFC and Pizza Hut franchised units in India. At the time of the refranchisings, these minority interests had fair values of $31 million. In 2019, we also received as refranchising proceeds a minority interest in an entity that owns our KFC Brazil and Pizza Hut Brazil master franchisee rights. At the time of refranchising, this minority interest had a fair value of $6 million. A summary of Refranchising (gain) loss is as follows: Refranchising (gain) loss 2020 2019 2018 KFC Division $ (33) $ (6) $ (240) Pizza Hut Division 1 — 13 Taco Bell Division (2) (31) (313) Worldwide $ (34) $ (37) $ (540) Unlocking Opportunity Initiative On June 24, 2020, the Yum! Brands, Inc. Board of Directors approved the establishment of the Company’s new global “Unlocking Opportunity Initiative” including a $100 million investment over the next five years to fight inequality by unlocking opportunities for employees, restaurant team members and communities. The Company contributed $50 million in the second quarter of 2020 to Yum! Brands Foundation, Inc. (a stand-alone, not-for-profit organization that is not consolidated in the Company's results) as part of these efforts and investment. As a result of the size and specific nature of this contribution it was not allocated to any of our segment operating results for performance reporting purposes. COVID-19 Relief During the year ended December 31, 2020, we recorded a charge of $25 million related to a contribution made to Yum! Brands Foundation, Inc. expected to fund past and anticipated payments for COVID-19 relief provided to restaurant-level employees within the YUM system diagnosed with COVID-19 or acting as the primary caregiver for someone diagnosed with COVID-19. As a result of the size and specific nature of this contribution it was not allocated to any of our segment operating results for performance reporting purposes. Resource Optimization During the year ended December 31, 2020, we recorded charges of $36 million and $2 million to G&A expenses and Other pension (income) expense, respectively, associated with a voluntary early retirement program offered to our U.S. based employees and a worldwide severance program. These programs were part of our efforts to optimize our resources, reallocating them toward critical areas of the business that will drive future growth. These critical areas include accelerating our digital, technology and innovation capabilities to deliver a modern, world-class team member and customer experience and improve unit economics. Due to their scope and size, these costs were not allocated to any of our segment operating results for performance reporting purposes. Redemption of Subsidiary Senior Unsecured Notes During the quarter ended September 30, 2020, certain subsidiaries of the Company issued a notice of redemption for $1,050 million aggregate principal amount of 5.00% Subsidiary Senior Unsecured Notes due in 2024. The redemption amount included a $26 million call premium plus accrued and unpaid interest to the date of redemption of October 9, 2020. We recorded the call premium, $6 million of unamortized debt issuance costs associated with the notes and $2 million of accrued and unpaid interest associated with the period of time from prepayment of the notes with the trustee on September 25, 2020, to their redemption date within Interest expense, net. See Note 11. Investment in Grubhub, Inc. ("Grubhub") In April of 2018 we purchased 2.8 million shares of Grubhub common stock for $200 million. In the quarter ended September 30, 2020, we sold our entire investment in Grubhub and received proceeds of $206 million. While we held our investment in Grubhub common stock we recognized changes in the fair value in our investment in our Consolidated Statements of Income. For the years ended December 31, 2020, 2019 and 2018, we recognized pre-tax investment income of $69 million, pre-tax investment expense of $77 million and pre-tax investment income of $14 million, respectively. Income Tax Matters In the fourth quarter of 2019, we completed intra-entity transfers of certain intellectual property rights. As a result of the transfer of certain of these rights, largely to subsidiaries in the United Kingdom (“UK”), we received a step-up in tax basis to current fair value under applicable tax law. To the extent this step-up in tax basis will be amortizable against future taxable income, we recognized one-time deferred tax benefits of $3 million and $226 million in the quarters ended December 31, 2020 and December 31, 2019, respectively. During the quarter ended September 30, 2020, the UK Finance Act 2020 was enacted resulting in an increase in the UK corporate tax rate from 17% to 19%. As a result, in the quarter ended September 30, 2020, we remeasured the related deferred tax asset originally recorded in the fourth quarter of 2019. This remeasurement resulted in the recognition of an additional $25 million deferred tax benefit in the quarter ended September 30, 2020. During the year ended December 31, 2018, we recorded a $35 million decrease related to our provisional tax expense recorded in the fourth quarter of 2017 associated with the Tax Cuts and Jobs Act of 2017 ("Tax Act"). |
Revenue Recognition (Notes)
Revenue Recognition (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue from Contract with Customer | 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. 2020 KFC Division Pizza Hut Division Taco Bell Division Habit Burger Grill Division Total U.S. Company sales $ 60 $ 21 $ 882 $ 346 $ 1,309 Franchise revenues 184 272 593 1 1,050 Property revenues 16 5 44 — 65 Franchise contributions for advertising and other services 18 317 483 — 818 China Franchise revenues 204 51 — — 255 Other Company sales 446 55 — — 501 Franchise revenues 833 222 25 — 1,080 Property revenues 58 2 — — 60 Franchise contributions for advertising and other services 453 57 4 — 514 $ 2,272 $ 1,002 $ 2,031 $ 347 $ 5,652 2019 KFC Division Pizza Hut Division Taco Bell Division Total U.S. Company sales $ 74 $ 21 $ 919 $ 1,014 Franchise revenues 175 282 602 1,059 Property revenues 20 6 44 70 Franchise contributions for advertising and other services 10 318 483 811 China Franchise revenues 214 60 — 274 Other Company sales 497 33 2 532 Franchise revenues 912 246 27 1,185 Property revenues 69 3 — 72 Franchise contributions for advertising and other services 520 58 2 580 $ 2,491 $ 1,027 $ 2,079 $ 5,597 Contract Liabilities Our contract liabilities are comprised of unamortized upfront fees received from franchisees. A summary of significant changes to the contract liability balance during 2020 and 2019 is presented below. Deferred Franchise Fees Balance at December 31, 2018 $ 414 Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period (70) Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period 93 Other (a) 4 Balance at December 31, 2019 $ 441 Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period (76) Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period 53 Other (a) (3) Balance at December 31, 2020 $ 415 (a) 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 $ 64 1 - 2 years 60 2 - 3 years 55 3 - 4 years 50 4 - 5 years 44 Thereafter 142 Total $ 415 |
Supplemental Cash Flow Data (No
Supplemental Cash Flow Data (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Data | Supplemental Cash Flow Data 2020 2019 2018 Cash Paid For: Interest $ 480 $ 497 $ 455 Income taxes 328 283 279 Significant Non-Cash Investing and Financing Activities: Finance lease obligations incurred $ 4 $ 14 $ 4 Finance lease and other debt obligations transferred through refranchising (1) (1) (24) Non-cash refranchising proceeds (c) 31 6 — Reconciliation of Cash and cash equivalents to Consolidated Statements of Cash Flows: Cash and cash equivalents as presented in Consolidated Balance Sheets $ 730 $ 605 $ 292 Restricted cash included in Prepaid expenses and other current assets (a) 258 138 151 Restricted cash and restricted cash equivalents included in Other assets (b) 36 25 31 Cash, Cash Equivalents and Restricted Cash as presented in Consolidated Statements of Cash Flows $ 1,024 $ 768 $ 474 (a) Restricted cash within Prepaid expenses and other current assets reflects cash related to advertising cooperatives that we consolidate that can only be used to settle obligations of the respective cooperatives and Taco Bell Securitization interest reserves (See Note 11). (b) Primarily trust accounts related to our self-insurance program. (c) In 2020 we received as refranchising consideration a minority interest in an entity that operates KFC and Pizza Hut franchised units in India and in 2019 we received as refranchising consideration a minority interest in an entity that owns our KFC Brazil and Pizza Hut Brazil master franchisee rights, respectively (See Note 5). |
Other (Income) Expense
Other (Income) Expense | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other (Income) Expense | Other (Income) Expense 2020 2019 2018 Foreign exchange net (gain) loss and other (a) $ (18) $ (1) $ 1 Impairment and closure expense (b) 172 5 6 Other (income) expense $ 154 $ 4 $ 7 (a) The year ended December 31, 2019, includes a charge of $8 million for the settlement of contingent consideration associated with our 2013 acquisition of the KFC Turkey and Pizza Hut Turkey businesses. (b) The year ended December 31, 2020, includes a charge of $144 million related to the impairment of Habit Burger Grill goodwill. The year ended December 31, 2020, also includes charges of $12 million related to the impairment of restaurant-level assets and charges of $11 million related to the write-off of software no longer being used. The years ended December 31, 2019 and 2018 primarily included impairment of restaurant-level assets and store closure expenses, respectively. |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Balance Sheet Information Disclosure [Abstract] | |
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Prepaid Expenses and Other Current Assets 2020 2019 Income tax receivable $ 35 $ 39 Restricted cash 258 138 Assets held for sale (a) 7 25 Other prepaid expenses and current assets 125 136 Prepaid expenses and other current assets $ 425 $ 338 Property, Plant and Equipment 2020 2019 Land $ 428 $ 408 Buildings and improvements 1,423 1,325 Finance leases, primarily buildings 71 68 Machinery, equipment and other 543 505 Property, plant and equipment, gross 2,465 2,306 Accumulated depreciation and amortization (1,230) (1,136) Property, plant and equipment, net $ 1,235 $ 1,170 Depreciation and amortization expense related to PP&E was $132 million, $114 million and $146 million in 2020, 2019 and 2018, respectively. Other Assets 2020 2019 Operating lease right-of-use assets $ 851 $ 642 Investment in Grubhub common stock (b) — 137 Franchise incentives 163 174 Other 421 360 Other assets $ 1,435 $ 1,313 Accounts Payable and Other Current Liabilities 2020 2019 Accounts payable $ 215 $ 173 Accrued compensation and benefits 225 223 Accrued advertising 196 96 Operating lease liabilities 97 67 Accrued taxes, other than income taxes 36 52 Other current liabilities 420 349 Accounts payable and other current liabilities $ 1,189 $ 960 (a) Reflects the carrying value of restaurants we have offered for sale to franchisees and excess properties that we do not intend to use for restaurant operations in the future. (b) In the third quarter of 2020 we sold our entire investment in Grubhub, Inc. common stock and received proceeds of $206 million. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the carrying amount of goodwill are as follows: KFC Pizza Hut Taco Bell Habit Burger Grill Worldwide Goodwill, net as of December 31, 2018 (a) $ 230 $ 196 $ 99 $ — $ 525 Disposal and other, net (b) 3 3 (1) — 5 Goodwill, net as of December 31, 2019 (a) $ 233 $ 199 $ 98 $ — $ 530 Disposal and other, net (b) 2 3 — — 5 Habit Burger Grill acquisition and impairment (See Note 3) — — — 62 62 Goodwill, net as of December 31, 2020 (a) $ 235 $ 202 $ 98 $ 62 $ 597 (a) Goodwill, net includes $144 million of accumulated impairment loss recorded in the year ended December 31, 2020, related to our Habit Burger Grill segment and $17 million of accumulated impairment losses for each year presented related to our Pizza Hut segment. (b) Disposals and other, net includes the impact of foreign currency translation on existing balances and goodwill write-offs associated with refranchising. Intangible assets, net for the years ended 2020 and 2019 are as follows: 2020 2019 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Definite-lived intangible assets Capitalized software costs $ 335 $ (160) $ 306 $ (130) Reacquired franchise rights 39 (33) 38 (32) Franchise contract rights 100 (85) 100 (83) Lease tenancy rights 5 (1) 5 (1) Other 48 (32) 38 (28) $ 527 $ (311) $ 487 $ (274) Indefinite-lived intangible assets KFC trademark $ 31 $ 31 Habit Burger Grill brand asset 96 — $ 127 $ 31 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Lease Accounting Components of Lease Expense 2020 2019 Operating lease cost $ 137 $ 115 Finance lease cost Amortization of right-of-use assets 5 3 Interest on lease liabilities 3 3 Total finance lease cost $ 8 $ 6 Sublease income $ (60) $ (69) Rental expense related to operating leases was $151 million for the year ended December 31, 2018. Supplemental Cash Flow Information 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 133 $ 104 Operating cash flows from finance leases 3 3 Financing cash flows from finance leases 5 4 Right-of-use assets obtained in exchange for lease obligations Operating leases (a) 296 79 Finance leases 4 14 (a) The year ended December 31, 2020, includes right-of-use assets acquired as part of the acquisition of Habit Burger Grill of $196 million (See Note 3). Supplemental Balance Sheet Information 2020 2019 Consolidated Balance Sheet Assets Operating lease right-of-use assets $ 851 $ 642 Other assets Finance lease right-of-use assets 40 42 Property, plant and equipment, net Total right-of-use assets (a) $ 891 $ 684 Liabilities Current Operating $ 97 $ 67 Accounts payable and other current liabilities Finance 7 7 Short-term borrowings Non-current Operating 823 640 Other liabilities and deferred credits Finance 65 70 Long-term debt Total lease liabilities (a) $ 992 $ 784 Weighted-average Remaining Lease Term (in years) Operating leases 11.1 12.3 Finance leases 12.2 12.7 Weighted-average Discount Rate Operating leases 5.1 % 5.6 % Finance leases 6.5 % 6.6 % (a) U.S. operating lease right-of-use assets and liabilities totaled $499 million and $556 million, respectively, as of December 31, 2020, and $283 million and $337 million, respectively, as of December 31, 2019. These amounts primarily related to Taco Bell U.S. and the Habit Burger Grill including leases related to Company-operated restaurants, leases related to franchise-operated restaurants we sublease and the Taco Bell restaurant support center. Maturity of Lease Payments and Receivables Future minimum lease payments, including rental payments for lease renewal options we are reasonably certain to exercise, and amounts to be received as lessor or sublessor as of December 31, 2020, were as follows: Commitments Lease Receivables Finance Operating Direct Financing Operating 2021 $ 9 $ 128 $ 3 $ 80 2022 10 133 4 82 2023 9 123 4 80 2024 8 115 4 76 2025 8 103 3 71 Thereafter 58 623 27 599 Total lease payments/receipts 102 1,225 45 $ 988 Less imputed interest/unearned income (30) (305) (18) Total lease liabilities/receivables $ 72 $ 920 $ 27 As of December 31, 2020, we have executed real estate leases that have not yet commenced with estimated future nominal lease payments of approximately $100 million, which are not included in the tables above. These leases are expected to commence in 2021 and 2022 with lease terms of up to 20 years. |
Derivative Instruments (Notes)
Derivative Instruments (Notes) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Derivative Instruments We use derivative instruments to manage certain of our market risks related to fluctuations in interest rates and foreign currency exchange rates. Interest Rate Swaps We have entered into interest rate swaps with the objective of reducing our exposure to interest rate risk for a portion of our variable-rate debt interest payments. On July 25, 2016, we agreed with multiple counterparties to swap the variable LIBOR-based component of the interest payments related to $1.55 billion of borrowings under our Term Loan B Facility. These interest rate swaps will expire in July 2021. Further, on May 14, 2018, we entered into forward-starting interest rate swaps to fix the interest rate on $1.5 billion of borrowings under our Term Loan B Facility from the date the July 2016 swaps expire through March 2025. The interest rate swaps executed in May 2018 will result in a fixed rate of 4.81% on the swapped portion of the Term Loan B Facility from July 2021 through March 2025. These interest rate swaps are designated cash flow hedges as the changes in the future cash flows of the swaps are expected to offset changes in expected future interest payments on the related variable-rate debt. There were no other interest rate swaps outstanding as of December 31, 2020. Gains or losses on the interest rate swaps are reported as a component of AOCI and reclassified into Interest expense, net in our Consolidated Statements of Income in the same period or periods during which the related hedged interest payments affect earnings. Through December 31, 2020, the swaps were highly effective cash flow hedges. Foreign Currency Contracts We have entered into foreign currency forward and swap contracts with the objective of reducing our exposure to earnings volatility arising from foreign currency fluctuations associated with certain foreign currency denominated intercompany receivables and payables. The notional amount, maturity date, and currency of these contracts match those of the underlying intercompany receivables or payables. Our foreign currency contracts are designated cash flow hedges as the future cash flows of the contracts are expected to offset changes in intercompany receivables and payables due to foreign currency exchange rate fluctuations. Gains or losses on the foreign currency contracts are reported as a component of AOCI. Amounts are reclassified from AOCI each quarter to offset foreign currency transaction gains or losses recorded within Other (income) expense when the related intercompany receivables and payables affect earnings due to their functional currency remeasurements. Through December 31, 2020, all foreign currency contracts related to intercompany receivables and payables were highly effective cash flow hedges. As of December 31, 2020 and 2019, foreign currency contracts outstanding related to intercompany receivables and payables had total notional amounts of $39 million and $20 million, respectively. Our foreign currency forward contracts all have durations that expire in 2021. As a result of the use of interest rate swaps and foreign currency contracts, the Company is exposed to risk that the counterparties will fail to meet their contractual obligations. To mitigate the counterparty credit risk, we only enter into contracts with major financial institutions carefully selected based upon their credit ratings and other factors, and continually assess the creditworthiness of counterparties. At December 31, 2020, all of the counterparties to our interest rate swaps and foreign currency contracts had investment grade ratings according to the three major ratings agencies. To date, all counterparties have performed in accordance with their contractual obligations. Gains and losses on derivative instruments designated as cash flow hedges recognized in OCI and reclassifications from AOCI into Net Income: Gains/(Losses) Recognized in OCI (Gains)/Losses Reclassified from AOCI into Net Income 2020 2019 2018 2020 2019 2018 Interest rate swaps $ (103) $ (71) $ (3) $ 10 $ (17) $ (19) Foreign currency contracts 4 20 22 (4) (8) (20) Income tax benefit/(expense) 24 16 1 (1) 4 5 As of December 31, 2020, the estimated net loss included in AOCI related to our cash flow hedges that will be reclassified into earnings in the next 12 months is $28 million, based on current LIBOR interest rates. See Note 14 for the fair value of our derivative assets and liabilities. |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair Value Disclosures As of December 31, 2020, 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 notes receivable net of allowances and lease guarantees less subsequent amortization approximates their carrying value. The following table presents the carrying value and estimated fair value of the Company’s debt obligations: 2020 2019 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) Securitization Notes (a) $ 2,869 $ 3,015 $ 2,898 $ 3,040 Subsidiary Senior Unsecured Notes (b) 1,800 1,890 2,850 3,004 Term Loan A Facility (b) 431 428 463 464 Term Loan B Facility (b) 1,916 1,907 1,935 1,949 YUM Senior Unsecured Notes (b) 3,725 4,094 2,425 2,572 (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, foreign currency contracts and other investments, all of which are required to be measured at fair value on a recurring basis (See Note 13 for discussion regarding derivative instruments). 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 Consolidated Balance Sheet Level 2020 2019 Assets Interest Rate Swaps Prepaid expenses and other current assets 2 $ — $ 6 Foreign Currency Contracts Prepaid expenses and other current assets 2 1 — Interest Rate Swaps Other assets 2 — 3 Investment in Grubhub, Inc. Common Stock Other assets 1 — 137 Other Investments Other assets 1 45 43 Liabilities Interest Rate Swaps Accounts Payable and other current liabilities 2 28 — Interest Rate Swaps Other liabilities and deferred credits 2 127 71 The fair value of the Company’s foreign currency contracts and interest rate swaps were determined based on the present value of expected future cash flows considering the risks involved, including nonperformance risk, and using discount rates appropriate for the duration based on observable inputs. The fair value of our investment in 2.8 million shares of Grubhub, Inc. common stock at December 31, 2019, was determined primarily based on closing market prices for the shares. In the third quarter of 2020 we sold our entire investment in Grubhub, Inc. common stock (See Note 5). The other investments primarily include investments in mutual funds, which are used to offset fluctuations for a portion of our deferred compensation liabilities and whose fair values were determined based on the closing market prices of the respective mutual funds as of December 31, 2020 and December 31, 2019. Non-Recurring Fair Value Measurements During the year ended December 31, 2019, we recognized non-recurring fair value measurements of $7 million related to refranchising related impairment. Refranchising related impairment results from writing down the assets of restaurants or restaurant groups offered for refranchising, including certain instances where a decision has been made to refranchise restaurants that are deemed to be impaired. The fair value measurements used in our impairment evaluation were based on actual bids received from potential buyers (Level 2). The remaining net book value of these restaurants at December 31, 2020, is insignificant. During the years ended December 31, 2020 and 2019, we recognized non-recurring fair value measurements of $12 million and $4 million, respectively, related to restaurant-level impairment. Restaurant-level impairment charges are recorded in Other (income) expense and resulted primarily from our impairment evaluation of long-lived assets of individual restaurants that were being operated at the time of impairment and had not been offered for refranchising. The fair value measurements used in these impairment evaluations were based on discounted cash flow estimates using unobservable inputs (Level 3). These amounts exclude fair value measurements made for assets that were subsequently disposed of prior to those respective year end dates. The remaining net book value of restaurant assets measured at fair value during the year ended December 31, 2020, is $11 million and is insignificant for assets measured at fair value during the year ended December 31, 2019. During the year ended December 31, 2020, we also recognized impairment charges related to our Habit Burger Grill reporting unit. See Note 3. |
Pension, Retiree Medical and Re
Pension, Retiree Medical and Retiree Savings Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Retiree Medical Benefits | Pension, Retiree Medical and Retiree Savings Plans U.S. Pension Plans We sponsor qualified and supplemental (non-qualified) noncontributory defined benefit plans covering certain full-time salaried and hourly U.S. employees. The qualified plan meets the requirements of certain sections of the Internal Revenue Code and provides benefits to a broad group of employees with restrictions on discriminating in favor of highly compensated employees with regard to coverage, benefits and contributions. The supplemental plans provides additional benefits to certain employees. We fund our supplemental plans as benefits are paid. The most significant of our U.S. plans is the YUM Retirement Plan (the “Plan”), which is a qualified plan. Our funding policy with respect to the Plan is to contribute amounts necessary to satisfy minimum pension funding requirements, including requirements of the Pension Protection Act of 2006, plus additional amounts from time-to-time as are determined to be necessary to improve the Plan’s funded status. We do not expect to make any significant contributions to the Plan in 2021. Our two significant U.S. plans, including the Plan and a supplemental plan, were previously amended such that any salaried employee hired or rehired by YUM after September 30, 2001, is not eligible to participate in those plans. We do not anticipate any plan assets being returned to the Company during 2021 for any U.S. plans. Obligation and Funded Status at Measurement Date: The following chart summarizes the balance sheet impact, as well as benefit obligations, assets, and funded status associated with our two significant U.S. pension plans. The actuarial valuations for all plans reflect measurement dates coinciding with our fiscal year end. 2020 2019 Change in benefit obligation: Benefit obligation at beginning of year $ 1,015 $ 873 Service cost 8 6 Interest cost 35 39 Plan amendments 1 2 Special termination benefits 2 — Benefits paid (46) (57) Settlement payments — (1) Actuarial (gain) loss 118 153 Benefit obligation at end of year $ 1,133 $ 1,015 A significant component of the overall increase in the Company's benefit obligation for the year ended December 31, 2020, was due to an actuarial loss, which was primarily due to a decrease in the discount rate used to measure our benefit obligation from 3.50% at December 31, 2019, to 2.80% at December 31, 2020. A significant component of the overall increase in the Company's benefit obligation for the year ended December 31, 2019, was due to an actuarial loss, which was primarily due to a decrease in the discount rate used to measure our benefit obligation from 4.60% at December 31, 2018, to 3.50% at December 31, 2019. Change in plan assets: Fair value of plan assets at beginning of year $ 886 $ 755 Actual return on plan assets 168 176 Employer contributions 6 12 Benefits paid (46) (57) Fair value of plan assets at end of year $ 1,014 $ 886 Funded status at end of year $ (119) $ (129) Amounts recognized in the Consolidated Balance Sheet: 2020 2019 Accrued benefit liability - current $ (9) $ (4) Accrued benefit liability - non-current (110) (125) $ (119) $ (129) The accumulated benefit obligation was $1,111 million and $984 million at December 31, 2020 and December 31, 2019, respectively. The table below provides information for pension plans with an accumulated benefit obligation in excess of plan assets. These pension plans also have a projected benefit obligation in excess of plan assets. 2020 2019 Projected benefit obligation $ 1,133 $ 1,015 Accumulated benefit obligation 1,111 984 Fair value of plan assets 1,014 886 Components of net periodic benefit cost: 2020 2019 2018 Service cost $ 8 $ 6 $ 8 Interest cost 35 39 38 Amortization of prior service cost (a) 5 6 5 Expected return on plan assets (43) (44) (44) Amortization of net loss 14 1 16 Net periodic benefit cost $ 19 $ 8 $ 23 Additional (gain) loss recognized due to: Settlement charges (b) $ — $ 3 $ — Special termination benefits $ 2 $ — $ 1 (a) Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits. (b) Settlement losses result when benefit payments exceed the sum of the service cost and interest cost within a plan during the year. These losses were recorded in Other pension (income) expense. Pension gains (losses) in AOCI: 2020 2019 Beginning of year $ (136) $ (123) Net actuarial gain (loss) 7 (22) Curtailments 1 — Amortization of net loss 14 1 Amortization of prior service cost 5 6 Prior service cost (2) (2) Settlement charges — 4 End of year $ (111) $ (136) Accumulated pre-tax losses recognized within AOCI: 2020 2019 Actuarial net loss $ (96) $ (118) Prior service cost (15) (18) $ (111) $ (136) Weighted-average assumptions used to determine benefit obligations at the measurement dates: 2020 2019 Discount rate 2.80 % 3.50 % Rate of compensation increase 3.00 % 3.00 % Weighted-average assumptions used to determine the net periodic benefit cost for fiscal years: 2020 2019 2018 Discount rate 3.50 % 4.60 % 3.90 % Long-term rate of return on plan assets 5.50 % 5.75 % 5.65 % Rate of compensation increase 3.00 % 3.00 % 3.75 % Our estimated long-term rate of return on plan assets represents the weighted-average of expected future returns on the asset categories included in our target investment allocation based primarily on the historical returns for each asset category and future growth expectations. Plan Assets The fair values of our pension plan assets at December 31, 2020 and December 31, 2019, by asset category and level within the fair value hierarchy are as follows: 2020 2019 Level 1: Cash $ 9 $ 5 Cash Equivalents (a) 10 13 Fixed Income Securities - U.S. Corporate (b) 164 161 Equity Securities – U.S. Large cap (b) 306 268 Equity Securities – U.S. Mid cap (b) 51 44 Equity Securities – U.S. Small cap (b) 52 43 Equity Securities – Non-U.S. (b) 102 88 Level 2: Fixed Income Securities – U.S. Corporate (c) 148 120 Fixed Income Securities – U.S. Government and Government Agencies (d) 354 274 Fixed Income Securities – Other (d) 30 39 Total fair value of plan assets (e) $ 1,226 $ 1,055 (a) Short-term investments in money market funds. (b) Securities held in common trusts. (c) Investments held directly by the Plan. (d) Includes securities held in common trusts and investments held directly by the Plan. (e) 2020 and 2019 exclude net unsettled trade payables of $212 million and $169 million, respectively. Our primary objectives regarding the investment strategy for the Plan’s assets are to reduce interest rate and market risk and to provide adequate liquidity to meet immediate and future payment requirements. To achieve these objectives, we are using a combination of active and passive investment strategies. The Plan's equity securities, currently targeted to be 50% of our investment mix, consist primarily of low-cost index funds focused on achieving long-term capital appreciation. The Plan diversifies its equity risk by investing in several different U.S. and foreign market index funds. Investing in these index funds provides the Plan with the adequate liquidity required to fund benefit payments and plan expenses. The fixed income asset allocation, currently targeted to be 50% of our mix, is actively managed and consists of long-duration fixed income securities that help to reduce exposure to interest rate variation and to better correlate asset maturities with obligations. The fair values of all pension plan assets are determined based on closing market prices or net asset values. A mutual fund held as an investment by the Plan includes shares of Common Stock valued at $0.3 million at both December 31, 2020 and 2019 (less than 1% of total plan assets in each instance). Benefit Payments The benefits expected to be paid in each of the next five years and in the aggregate for the five years thereafter are set forth below: Year ended: 2021 $ 54 2022 52 2023 53 2024 55 2025 58 2026 - 2030 299 Expected benefit payments are estimated based on the same assumptions used to measure our benefit obligation on the measurement date and include benefits attributable to estimated future employee service. International Pension Plans We also sponsor various defined benefit plans covering certain of our non-U.S. employees, the most significant of which are in the UK. Both of our UK plans have previously been frozen such that they are closed to new participants and existing participants can no longer earn future service credits. At the end of 2020 and 2019, the projected benefit obligations of these UK plans totaled $362 million and $290 million, respectively and plan assets totaled $440 million and $372 million, respectively. These plans were both in a net overfunded position at the end of 2020 and 2019. Total actuarial pre-tax losses related to the UK plans of $18 million and $25 million were recognized in AOCI at the end of 2020 and 2019, respectively. The total net periodic benefit income recorded was less than $1 million in 2020, $2 million in 2019 and $4 million in 2018. The funding rules for our pension plans outside of the U.S. vary from country to country and depend on many factors including discount rates, performance of plan assets, local laws and regulations. We do not plan to make significant contributions to either of our UK plans in 2021. Retiree Medical Benefits Our post-retirement plan provides health care benefits, principally to U.S. salaried retirees and their dependents, and includes retiree cost-sharing provisions and a cap on our liability. This plan was previously amended such that any salaried employee hired or rehired by YUM after September 30, 2001, is not eligible to participate in this plan. Employees hired prior to September 30, 2001, are eligible for benefits if they meet age and service requirements and qualify for retirement benefits. We fund our post-retirement plan as benefits are paid. At the end of 2020 and 2019, the accumulated post-retirement benefit obligation was $46 million and $44 million, respectively. Actuarial pre-tax gains of $4 million and $9 million were recognized in AOCI at the end of 2020 and 2019, respectively. The net periodic benefit cost recorded was $1 million in 2020, $1 million in 2019 and $2 million in 2018, the majority of which is interest cost on the accumulated post-retirement benefit obligation. The weighted-average assumptions used to determine benefit obligations and net periodic benefit cost for the post-retirement medical plan are identical to those as shown for the U.S. pension plans. The benefits expected to be paid in each of the next five years are approximately $4 million and in aggregate for the five years thereafter are $14 million. U.S. Retiree Savings Plan We sponsor a contributory plan to provide retirement benefits under the provisions of Section 401(k) of the Internal Revenue Code (the “401(k) Plan”) for eligible U.S. salaried and hourly employees. Participants are able to elect to contribute up to 75% of eligible compensation on a pre-tax basis. Participants may allocate their contributions to one or any combination of multiple investment options or a self-managed account within the 401(k) Plan. We match 100% of the participant’s contribution to the |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Deficit Under the authority of our Board of Directors, we repurchased shares of our Common Stock during 2020, 2019 and 2018. All amounts exclude applicable transaction fees. Shares Repurchased Dollar Value of Shares Authorization Date 2020 2019 2018 2020 2019 2018 November 2019 2,419 — — $ 250 $ — $ — August 2018 — 7,788 10,003 — 810 894 November 2017 — — 18,240 — — 1,500 Total 2,419 (a) 7,788 (b) 28,243 (b) $ 250 (a) $ 810 (b) $ 2,394 (b) (a) 2020 amount includes the effect of $11 million in share repurchases (0.1 million shares) with trade dates on, or prior to, December 31, 2020, but settlement dates subsequent to December 31, 2020. (b) 2019 amount excludes and 2018 amount includes the effect of $5 million in share repurchases (0.1 million shares) with trade dates on, or prior to, December 31, 2018, but settlement dates subsequent to December 31, 2018. On November 21, 2019, our Board of Directors authorized share repurchases through June 2021 of up to $2 billion (excluding applicable transaction fees) of our outstanding Common Stock. As of December 31, 2020, we have remaining capacity to repurchase up to $1.75 billion of Common Stock under this authorization. Changes in AOCI are presented below. Translation Adjustments and Gains (Losses) From Intra-Entity Transactions of a Long-Term Nature Pension and Post-Retirement Benefits (a) Derivative Instruments (b) Total Balance at December 31, 2018, net of tax $ (245) $ (82) $ (7) $ (334) OCI, net of tax Gains (losses) arising during the year classified into AOCI, net of tax 24 (30) (35) (41) (Gains) losses reclassified from AOCI, net of tax — 8 (21) (13) 24 (22) (56) (54) Balance at December 31, 2019, net of tax $ (221) $ (104) $ (63) $ (388) OCI, net of tax Gains (losses) arising during the year classified into AOCI, net of tax 39 (6) (75) (42) (Gains) losses reclassified from AOCI, net of tax — 14 5 19 39 8 (70) (23) Balance at December 31, 2020, net of tax $ (182) $ (96) $ (133) $ (411) (a) Amounts reclassified from AOCI for pension and post-retirement benefit plans losses during 2020 include amortization of net losses of $14 million, amortization of prior service cost of $4 million and related income tax benefit of $4 million. Amounts reclassified from AOCI for pension and post-retirement benefit plans losses during 2019 include amortization of net losses of $2 million, amortization of prior service cost of $5 million, settlement charges of $3 million and related income tax benefit of $2 million. See Note 15. (b) See Note 13 for details on amounts reclassified from AOCI. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes U.S. and foreign income before taxes are set forth below: 2020 2019 2018 U.S. $ 684 $ 466 $ 726 Foreign 336 907 1,113 $ 1,020 $ 1,373 $ 1,839 The details of our income tax provision (benefit) are set forth below: 2020 2019 2018 Current: Federal $ 37 $ 129 $ 102 Foreign 121 166 181 State 23 16 25 $ 181 $ 311 $ 308 Deferred: Federal $ (21) $ (16) $ (24) Foreign (29) (213) 5 State (15) (3) 8 $ (65) $ (232) $ (11) $ 116 $ 79 $ 297 The reconciliation of income taxes calculated at the U.S. federal statutory rate to our effective tax rate is set forth below: 2020 2019 2018 U.S. federal statutory rate 21.0 % 21.0 % 21.0 % State income tax, net of federal tax 1.0 0.9 0.8 Statutory rate differential attributable to foreign operations (0.9) 0.9 (4.6) Adjustments to reserves and prior years (1.7) 2.3 2.8 Excess tax benefits from stock-based awards (3.4) (3.6) (2.4) Change in valuation allowances (2.5) (0.6) 0.7 Intercompany restructuring (0.3) (16.6) — Impact of Tax Law Changes (2.5) — (1.9) Other, net 0.7 1.4 (0.2) Effective income tax rate 11.4 % 5.7 % 16.2 % Statutory rate differential attributable to foreign operations. This item includes local country taxes, withholding taxes, and shareholder-level taxes, net of foreign tax credits. In 2020, this item was favorably impacted by the ongoing effects of the fourth quarter 2019 intercompany restructuring that resulted in the transfer of certain intellectual property rights from wholly owned foreign subsidiaries to the United States (U.S.) and the United Kingdom (UK). In 2019, this item was unfavorably impacted by the full year impact of the global intangible low-taxed income (GILTI) and Foreign Derived Intangible Income (FDII) provisions of the Tax Cuts and Jobs Act of 2017. In 2018, this item was not significantly impacted by the GILTI or FDII provisions. Adjustments to reserves and prior years. This item includes: (1) changes in tax reserves, including interest thereon, established for potential exposure we may incur if a taxing authority takes a position on a matter contrary to our position; and (2) the effects of reconciling income tax amounts recorded in our Consolidated Statements of Income to amounts reflected on our tax returns, including any adjustments to the Consolidated Balance Sheets. In 2020, this item was favorably impacted by $11 million of adjustments made to current and deferred tax accounts in various jurisdictions to align with balances supported by 2019 and prior tax filings . Additionally, in 2020 this item was favorably impacted by a $6 million tax benefit associated with a state settlement. In 2019, this item was unfavorably impacted by $34 million in reserves related to taxes recorded associated with a prior year divestiture and $18 million of tax expense related to the establishment of reserves associated with the inclusion of stock based compensation in cost sharing arrangements as well as other matters. This unfavorable impact was partially offset by the reversal of a $20 million reserve established in 2018 due to the favorable resolution of an income tax rate dispute in a foreign jurisdiction. In 2018, this item was unfavorably impacted by the aforementioned $20 million reserve and a $19 million charge for the correction of an error associated with the tax recorded on a prior year divestiture. Excess tax benefits from stock-based awards. 2020, 2019 and 2018 includes $35 million, $49 million and $44 million, respectively, of excess federal tax benefit related to share-based compensation. Change in valuation allowances. This item relates to changes for deferred tax assets generated or utilized during the current year and changes in our judgment regarding the likelihood of using deferred tax assets that existed at the beginning of the year. In 2020, this item was favorably impacted by $22 million of tax benefit associated with a valuation allowance release in a foreign jurisdiction resulting from a change in management’s judgement as to realizability of indefinite lived tax loss carryforward in that jurisdiction . Intercompany Restructuring. In December 2019, the Company completed an intercompany restructuring that resulted in the transfer of certain intellectual property rights held by wholly owned foreign subsidiaries primarily to the U.S. and the UK. The intellectual property rights transferred to the UK resulted in a step up in the tax basis for UK tax purposes resulting in a deferred tax asset of $586 million. The deferred tax asset was analyzed for realizability and a valuation allowance of $366 million was established representing the portion of the deferred tax asset not likely to be realized. The recognized tax benefit of $220 million is amortizable for UK tax purposes over a twenty Impact of Significant Tax Law Changes. UK Tax Rate Change – On July 22, 2020, the UK Finance Act 2020 was enacted resulting in an increase in the UK corporate tax rate from 17% to 19%. As such, the Company recognized a $25 million tax benefit in 2020 associated with remeasuring its deferred tax assets in the UK from 17% to 19%. These deferred tax assets were primarily related to the step-up in tax basis associated with the Intercompany Restructuring . U.S. Tax Reform - On December 22, 2017, the U.S. government enacted comprehensive Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). The Tax Act significantly modified the U.S. corporate income tax system by, among other things, reducing the federal income tax rate from 35% to 21%, limiting certain deductions, including limiting the deductibility of interest expense to 30% of U.S. Earnings Before Interest, Taxes, Depreciation and Amortization, imposed a mandatory one-time deemed repatriation tax on accumulated foreign earnings and changed the manner in which foreign earnings are subject to U.S. tax. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin 118 which allowed us to record provisional amounts related to the impacts of the Tax Act during a measurement period not to extend beyond one year of the enactment date. As a result, we recorded a $434 million provisional estimate of the effect of the Tax Act in 2017. This expense was comprised of an estimate of our deemed repatriation tax, the remeasurement of net deferred tax assets resulting from the permanent reduction in the U.S. tax rate to 21%, and establishment of a valuation allowance on foreign tax credit carryforwards which were unlikely to be realized under revised U.S tax law. In 2018, we completed the accounting for the tax effects of the enactment of the Tax Act. As a result of the Tax Act, we recorded cumulative net tax expense of $399 million ($35 million benefit in 2018 and $434 million expense in 2017). This net expense was comprised of $241 million for our deemed repatriation tax liability, $47 million related to the remeasurement of our net deferred tax assets to the 21% U.S. tax rate and $111 million to establish a valuation allowance on foreign tax credits that are unlikely to be realized under revised U.S. tax law. Other. This item primarily includes the net impact of permanent differences related to current year earnings, U.S. tax credits, and other individually insignificant items impacting income tax expense. Companies subject to the Global Intangible Low-Taxed Income provision (GILTI) have the option to account for the GILTI tax as a period cost if and when incurred, or to recognize deferred taxes for outside basis temporary differences expected to reverse as GILTI. The Company has elected to account for GILTI as a period cost. The details of 2020 and 2019 deferred tax assets (liabilities) are set forth below: 2020 2019 Operating losses and interest deduction carryforwards $ 181 $ 176 Capital losses 3 3 Tax credit carryforwards 226 230 Employee benefits 82 85 Share-based compensation 58 55 Lease-related liabilities 199 199 Accrued liabilities and other 47 49 Derivative instruments 50 30 Intangible assets 678 602 Property, plant and equipment 31 21 Deferred income 81 55 Gross deferred tax assets 1,636 1,505 Deferred tax asset valuation allowances (789) (787) Net deferred tax assets $ 847 $ 718 Intangible assets, including goodwill $ (1) $ (40) Property, plant and equipment (75) (44) Operating lease right-of-use assets (161) (156) Other (57) (31) Gross deferred tax liabilities $ (294) $ (271) Net deferred tax assets (liabilities) $ 553 $ 447 The details of the 2020 valuation allowance activity are set forth below: 2020 2019 Beginning of Year $ (787) $ (454) Increases (64) (384) Decreases 45 57 Other Adjustments 17 (6) End of Year $ (789) $ (787) Net deferred tax assets (liabilities) for 2020 and 2019 are reported in our Consolidated Balance Sheets as Deferred income taxes. As of December 31, 2020, we had approximately $3.9 billion of unremitted foreign retained earnings. The Tax Act imposed U.S. federal tax on all post-1986 foreign Earnings and Profits accumulated through December 31, 2017. Repatriation of earnings generated after December 31, 2017, will generally be eligible for the 100% dividends received deduction or considered a distribution of previously taxed income and, therefore, exempt from U.S. tax. Undistributed foreign earnings may still be subject to certain foreign income and withholding taxes upon repatriation. Subject to limited exceptions, our intent is to indefinitely reinvest our unremitted earnings outside the U.S., and our current plans do not demonstrate a need to repatriate these amounts to fund our U.S. operations. Thus, we have not provided taxes, including U.S. federal and state income, foreign income, or foreign withholding taxes, for the unremitted earnings that we believe are permanently invested. However, if these funds were repatriated in taxable transactions, we would be required to accrue and pay applicable income taxes (if any) and foreign withholding taxes. A determination of the deferred tax liability on this amount is not practicable due to the complexities, variables and assumptions inherent in the hypothetical calculations. Details of tax loss, credit carryforwards, and expiration dates along with valuation allowances as of December 31, 2020, are as follows: Gross Amount Deferred Tax Asset Valuation Allowance Expiration Federal net operating losses $ 25 $ 5 $ — 2035-2036 Federal net operating losses - Indefinite 61 13 — None Foreign net operating losses 32 10 (10) 2021-2030 Foreign net operating losses - Indefinite 253 75 (51) None State net operating losses 1,268 63 (48) 2021-2039 Foreign capital loss carryforward - Indefinite 14 3 (3) None Foreign tax credits 220 220 (220) 2023-2030 State tax credits 8 6 (5) 2023 State interest deduction carryforward - Indefinite 361 15 (15) None $ 2,242 $ 410 $ (352) We recognize the benefit of positions taken or expected to be taken in tax returns in the Consolidated Financial Statements when it is more likely than not that the position would be sustained upon examination by tax authorities. A recognized tax position is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon settlement. At December 31, 2020, the Company had $175 million of gross unrecognized tax benefits, $132 million of which would impact the effective income tax rate if recognized. A reconciliation of the beginning and ending unrecognized tax benefits follows: 2020 2019 Beginning of Year $ 188 $ 113 Additions on tax positions - current year 5 84 Additions for tax positions - prior years 34 54 Reductions for tax positions - prior years (22) (30) Reductions for settlements (30) (31) Reductions due to statute expiration — (2) Foreign currency translation adjustment — — End of Year $ 175 $ 188 The Company believes it is reasonably possible that its unrecognized tax benefits as of December 31, 2020, may decrease by approximately $30 million in the next 12 months due to settlements or statute of limitations expirations. During 2020, 2019, and 2018 the Company recognized $2 million of net expense, $13 million of net expense, and $2 million of net benefit, respectively, for interest and penalties in our Consolidated Statements of Income as components of its Income tax provision. At December 31, 2020 and December 31, 2019, the Company has recorded $1 million of net tax receivables and $26 million of net tax payables, respectively, associated with interest and penalties. The Company’s income tax returns are subject to examination in the U.S. federal jurisdiction and numerous U.S. state and foreign jurisdictions. The Company has settled audits with the IRS through fiscal year 2012 and is currently under IRS examination for 2013-2015. Our operations in certain foreign jurisdictions remain subject to examination for tax years as far back as 2006, some of which years are currently under audit by local tax authorities. |
Reportable Operating Segments
Reportable Operating Segments | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Reportable Operating Segments | Reportable Operating Segments See Note 1 for a description of our operating segments. Revenues 2020 2019 2018 KFC Division (a) $ 2,272 $ 2,491 $ 2,644 Pizza Hut Division (a) 1,002 1,027 988 Taco Bell Division (a) 2,031 2,079 2,056 Habit Burger Grill Division (a) 347 — — $ 5,652 $ 5,597 $ 5,688 Operating Profit 2020 2019 2018 KFC Division $ 922 $ 1,052 $ 959 Pizza Hut Division 335 369 348 Taco Bell Division 696 683 633 Habit Burger Grill Division (22) — — Corporate and unallocated G&A expenses (b)(c) (312) (188) (171) Unallocated Company restaurant expenses (b)(d) — — 3 Unallocated Franchise and property expenses (b)(e) (4) (14) (8) Unallocated Refranchising gain (loss) (b) 34 37 540 Unallocated Other income (expense) (b)(f) (146) (9) (8) Operating Profit 1,503 1,930 2,296 Investment income (expense), net (b) 74 (67) 9 Other pension income (expense) (b) (14) (4) (14) Interest expense, net (b) (543) (486) (452) Income before income taxes $ 1,020 $ 1,373 $ 1,839 Depreciation and Amortization 2020 2019 2018 KFC Division $ 29 $ 30 $ 58 Pizza Hut Division 24 15 10 Taco Bell Division 56 59 61 Habit Burger Grill Division 25 — — Corporate 12 8 8 $ 146 $ 112 $ 137 Capital Spending 2020 2019 2018 KFC Division $ 59 $ 81 $ 105 Pizza Hut Division 28 33 38 Taco Bell Division 42 76 85 Habit Burger Grill Division 16 — — Corporate 15 6 6 $ 160 $ 196 $ 234 Identifiable Assets (h) 2020 2019 KFC Division $ 2,011 $ 2,042 Pizza Hut Division 804 801 Taco Bell Division 1,387 1,330 Habit Burger Grill Division 537 — Corporate (g) 1,113 1,058 $ 5,852 $ 5,231 Long-Lived Assets (i) 2020 2019 KFC Division $ 1,160 $ 1,179 Pizza Hut Division 415 427 Taco Bell Division 925 938 Habit Burger Grill Division 458 — Corporate 68 42 $ 3,026 $ 2,586 (a) U.S. revenues included in the combined KFC, Pizza Hut, Taco Bell and Habit Burger Grill Divisions totaled $3.2 billion in 2020, $3.0 billion in 2019 and $2.9 billion in 2018. (b) Amounts have not been allocated to any segment for performance reporting purposes. (c) Amounts in 2020 include charitable contributions to Yum! Brands Foundation, Inc. of $50 million and $25 million related to our Unlocking Opportunity Initiative and COVID-19 employee relief, respectively. Additionally, 2020 includes $36 million for charges associated with resource optimization (See Note 5) and $9 million in costs associated with our acquisition and integration of Habit Burger Grill (See Note 3). (d) Represents depreciation reductions arising primarily from KFC restaurants that were held for sale. (e) Represents costs related to an agreement executed in 2015 with our KFC U.S. franchisees that gave us control of brand marketing execution as well as an accelerated path to expanded menu offerings, improved assets and enhanced customer experience (the “KFC U.S. Acceleration Agreement”). Also represents costs related to an agreement executed in May 2017 with our Pizza Hut U.S. franchisees to improve brand marketing alignment, accelerate enhancements in operations and technology and that included a permanent commitment to incremental advertising as well as digital and technology contributions by franchisees (the “Pizza Hut U.S. Transformation Agreement”). (f) Unallocated Other income (expense) in 2020 includes a charge of $144 million related to the impairment of Habit Burger Grill goodwill. See Note 5. (g) Primarily includes cash, deferred tax assets and, in 2019, our Grubhub investment. (h) U.S. identifiable assets included in the combined Corporate and KFC, Pizza Hut, Taco Bell and Habit Burger Grill Divisions totaled $3.0 billion and $2.7 billion in 2020 and 2019, respectively. (i) Includes PP&E, goodwill, intangible assets, net and Operating lease right-of-use assets. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 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 $150 million. Of this amount, $145 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 scheduled for March 24, 2021. 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. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Selected Quarterly Financial Information [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited ) 2020 First Second Third Fourth Total Revenues: Company sales $ 355 $ 403 $ 486 $ 566 $ 1,810 Franchise and property revenues 596 525 639 750 2,510 Franchise contributions for advertising and other services 312 270 323 427 1,332 Total revenues 1,263 1,198 1,448 1,743 5,652 Restaurant profit 57 54 87 106 304 Operating Profit 250 300 471 482 1,503 Net Income 83 206 283 332 904 Basic earnings per common share 0.28 0.68 0.94 1.10 2.99 Diluted earnings per common share 0.27 0.67 0.92 1.08 2.94 Dividends declared per common share 0.47 0.47 0.47 0.47 1.88 2019 First Second Third Fourth Total Revenues: Company sales $ 333 $ 359 $ 364 $ 490 $ 1,546 Franchise and property revenues 612 633 645 770 2,660 Franchise contributions for advertising and other services 309 318 330 434 1,391 Total revenues 1,254 1,310 1,339 1,694 5,597 Restaurant profit 61 73 72 105 311 Operating Profit 433 471 480 546 1,930 Net Income 262 289 255 488 1,294 Basic earnings per common share 0.85 0.94 0.83 1.61 4.23 Diluted earnings per common share 0.83 0.92 0.81 1.58 4.14 Dividends declared per common share 0.42 0.42 0.42 0.42 1.68 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Principles of Consolidation and Basis of Preparation | Principles of Consolidation and Basis of Preparation. Intercompany accounts and transactions have been eliminated in consolidation. We consolidate entities in which we have a controlling financial interest, the usual condition of which is ownership of a majority voting interest. We also consider for consolidation an entity, in which we have certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. Our most significant variable interests are in certain entities that operate restaurants under our Concepts’ franchise arrangements. We do not typically provide significant financial support such as loans or guarantees to our franchisees. Thus, our most significant variable interests in franchisees result from real estate lease arrangements to which we are a party. At the end of 2020, YUM has future lease payments due from certain franchisees, on a nominal basis, of approximately $1 billion, and we are secondarily liable on certain other lease agreements that have been assigned to certain franchisees. See the Lease Guarantees section in Note 20. As our franchise arrangements provide our franchisee entities the power to direct the activities that most significantly impact their economic performance, we do not consider ourselves the primary beneficiary of any such entity that might otherwise be considered a VIE. We do not have an equity interest in any of our franchisee businesses except for a minority interest in an entity that owns our KFC Brazil and Pizza Hut Brazil master franchisee rights and a minority interest in an entity that operates KFC and Pizza Hut franchised units in India. These minority interests do not give us the ability to significantly influence these entities and we account for our investment in these entities as equity securities. When the fair value of these equity securities is readily determinable we record changes in fair value in Investment (income) expense, net. When the fair value of these equity securities | |
Fiscal Year | Fiscal Year. 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 and certain international subsidiaries operate on a weekly periodic calendar where the first three quarters of each fiscal year consists of 12 weeks and the fourth quarter consists of 16 weeks in fiscal years with 52 weeks and 17 weeks in fiscal years with 53 weeks. Our Habit Burger Grill subsidiaries, which we acquired on March 18, 2020, operate on a weekly periodic calendar where each quarter consists of 13 weeks, except in fiscal years with 53 weeks when the fourth quarter consists of 14 weeks. Our remaining international subsidiaries operate on a monthly calendar similar to that on which YUM operates. Fiscal year 2019 included 53 weeks for our U.S. businesses and for our international subsidiaries that reported on a period calendar. The 53rd week added $66 million to Total revenues, $24 million to Operating Profit and $17 million to Net Income in our 2019 Consolidated Statement of Income. Our next fiscal year scheduled to include a 53rd week is 2024. | |
Foreign Currency | Foreign Currency. The functional currency of our foreign entities is the currency of the primary economic environment in which the entity operates. Functional currency determinations are made based upon a number of economic factors, including but not limited to cash flows and financing transactions. The operations, assets and liabilities of our entities outside the U.S. are initially measured using the functional currency of that entity. Income and expense accounts for our operations of these foreign entities are then translated into U.S. dollars at the average exchange rates prevailing during the period. Assets and liabilities of these foreign entities are then translated into U.S. dollars at exchange rates in effect at the balance sheet date. As of December 31, 2020, net cumulative translation adjustment losses of $182 million are recorded in Accumulated other comprehensive income ("AOCI") in the Consolidated Balance Sheet. The majority of our foreign currency net asset exposure is in countries where we have Company-owned restaurants. As we manage and share resources at the individual brand level within a country, cumulative translation adjustments are recorded and tracked at the foreign-entity level that represents the operations of our individual brands within that country. Translation adjustments recorded in AOCI are subsequently recognized as income or expense generally only upon sale of the related investment in a foreign entity, or upon a sale of assets and liabilities within a foreign entity that represents a complete or substantially complete liquidation of that foreign entity. For purposes of determining whether a sale or complete or substantially complete liquidation of an investment in a foreign entity has occurred, we consider those same foreign entities for which we record and track cumulative translation adjustments. Gains and losses arising from the impact of foreign currency exchange rate fluctuations on transactions in foreign currency are included in Other (income) expense in our Consolidated Statements of Income. | |
Reclassifications | Reclassifications. We have reclassified certain items in the Consolidated Financial Statements for prior periods to be comparable with the classification for the fiscal year ended December 31, 2020. These reclassifications had no effect on previously reported Net Income. | |
Revenue Recognition | Advertising Costs. To the extent we participate in advertising cooperatives, we, like our participating franchisees, are required to make contributions. Our contributions are based on a percentage of sales of our participating Company restaurants. These contributions as well as direct marketing costs we may incur outside of a cooperative related to Company restaurants are recorded within Company restaurant expenses. Advertising expense included in Company restaurant expenses totaled $68 million, $73 million and $96 million in 2020, 2019 and 2018, respectively. To the extent we consolidate advertising cooperatives, we incur advertising expense as a result of our obligation to spend franchisee contributions to those cooperatives (see above for our accounting for these contributions). Such advertising expense is recorded in Franchise advertising and other services expense and totaled $1,079 million, $1,133 million and $1,035 million in 2020, 2019 and 2018, respectively. At the end of each fiscal year additional advertising costs are accrued to the extent advertising revenues exceed the related advertising expense to date, as we are obligated to expend such amounts on advertising. From time to time, we may make the decision to incur discretionary advertising expenditures on behalf of franchised restaurants. Such amounts are recorded within Franchise and property expenses and totaled $10 million, $10 million and $35 million in 2020, 2019 and 2018, respectively. | |
Direct Marketing Costs | Advertising Costs. To the extent we participate in advertising cooperatives, we, like our participating franchisees, are required to make contributions. Our contributions are based on a percentage of sales of our participating Company restaurants. These contributions as well as direct marketing costs we may incur outside of a cooperative related to Company restaurants are recorded within Company restaurant expenses. Advertising expense included in Company restaurant expenses totaled $68 million, $73 million and $96 million in 2020, 2019 and 2018, respectively. To the extent we consolidate advertising cooperatives, we incur advertising expense as a result of our obligation to spend franchisee contributions to those cooperatives (see above for our accounting for these contributions). Such advertising expense is recorded in Franchise advertising and other services expense and totaled $1,079 million, $1,133 million and $1,035 million in 2020, 2019 and 2018, respectively. At the end of each fiscal year additional advertising costs are accrued to the extent advertising revenues exceed the related advertising expense to date, as we are obligated to expend such amounts on advertising. From time to time, we may make the decision to incur discretionary advertising expenditures on behalf of franchised restaurants. Such amounts are recorded within Franchise and property expenses and totaled $10 million, $10 million and $35 million in 2020, 2019 and 2018, respectively. | |
Share-Based Employee Compensation | Share-Based Employee Compensation. We recognize ongoing share-based payments to employees, including grants of employee stock options and stock appreciation rights (“SARs”), in the Consolidated Financial Statements as compensation cost over the service period based on their fair value on the date of grant. This compensation cost is recognized over the service period on a straight-line basis, net of an assumed forfeiture rate, for awards that actually vest. Forfeiture rates are estimated at | |
Legal Costs | Legal Costs. Settlement costs are accrued when they are deemed probable and reasonably estimable. Anticipated legal fees related to self-insured workers' compensation, employment practices liability, general liability, automobile liability, product liability and property losses (collectively, "property and casualty losses") are accrued when deemed probable and reasonably estimable. Legal fees not related to self-insured property and casualty losses are recognized as incurred. See Note 20 for further discussion of our legal proceedings. | |
Impairment or Disposal of Property, Plant and Equipment | Impairment or Disposal of Long-Lived Assets. Long-lived assets, including Property, plant and equipment (“PP&E”) as well as right-of-use operating lease assets are tested for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The assets are not recoverable if their carrying value is less than the undiscounted cash flows we expect to generate from such assets. If the assets are not deemed to be recoverable, impairment is measured based on the excess of their carrying value over their fair value. For purposes of impairment testing for our restaurants, we have concluded that an individual restaurant is the lowest level of independent cash flows unless it is more likely than not that we will refranchise restaurants as a group. We review our long-lived assets of such individual restaurants (primarily PP&E, right-of-use operating lease assets and allocated intangible assets subject to amortization) that we intend to continue operating as Company restaurants annually for impairment, or whenever events or changes in circumstances indicate that the carrying amount of a restaurant may not be recoverable. We use two consecutive years of operating losses as our primary indicator of potential impairment for our annual impairment testing of these restaurant assets. We evaluate the recoverability of these restaurant assets by comparing the estimated undiscounted future cash flows, which are based on our entity-specific assumptions, to the carrying value of such assets. For restaurant assets that are not deemed to be recoverable, we write-down an impaired restaurant to its estimated fair value, which becomes its new cost basis. Fair value is an estimate of the price a franchisee would pay for the restaurant and its related assets, including any right-of-use assets, and is determined by discounting the estimated future after-tax cash flows of the restaurant, which include a deduction for royalties we would receive under a franchise agreement with terms substantially at market. The after-tax cash flows incorporate reasonable assumptions we believe a franchisee would make such as sales growth and margin improvement. The discount rate used in the fair value calculation is our estimate of the required rate of return that a franchisee would expect to receive when purchasing a similar restaurant and the related long-lived assets. The discount rate incorporates rates of returns for historical refranchising market transactions and is commensurate with the risks and uncertainty inherent in the forecasted cash flows. Individual restaurant-level impairment is recorded within Other (income) expense. Any right-of-use asset may alternatively be valued at the amount we could receive for such right-of-use asset from a third-party that is not a franchisee through a sublease if doing so would result in less overall impairment of the restaurant assets in total. In executing our refranchising initiatives, we most often offer groups of restaurants for sale. When we believe it is more likely than not a restaurant or groups of restaurants will be refranchised for a price less than their carrying value, but do not believe the restaurant(s) have met the criteria to be classified as held for sale, we review the restaurants for impairment. We evaluate the recoverability of these restaurant assets by comparing estimated sales proceeds plus holding period cash flows, if any, to the carrying value of the restaurant or group of restaurants. For restaurant assets that are not deemed to be recoverable, we recognize impairment for any excess of carrying value over the fair value of the restaurants, which is based on the expected net sales proceeds. To the extent ongoing agreements to be entered into with the franchisee simultaneous with the refranchising are expected to contain terms, such as royalty rates or rental payments, not at prevailing market rates, we consider the off-market terms in our impairment evaluation. We recognize any such impairment charges in Refranchising (gain) loss. We recognize gains on restaurant refranchisings when the sale transaction closes and control of the restaurant operations have transferred to the franchisee. When we decide to close a restaurant, it is reviewed for impairment, which includes an estimate of sublease income that could be reasonably obtained, if any, in relation to the right-of-use operating lease asset. Additionally, depreciable lives are adjusted based on the expected disposal date. Other costs incurred when closing a restaurant such as costs of disposing of the assets as well as other facility-related expenses from previously closed stores are generally expensed as incurred. Any costs recorded upon store closure as well as any subsequent adjustments to liabilities for remaining lease obligations as a result of lease termination or changes in estimates of sublease income are recorded in Other (income) expense. To the extent we sell assets, primarily land, associated with a closed store, any gain or loss upon that sale is also recorded in Other (income) expense. Management judgment is necessary to estimate future cash flows, including cash flows from continuing use, terminal value, sublease income and refranchising proceeds. Accordingly, actual results could vary significantly from our estimates. | |
Guarantees | Guarantees. We recognize, at inception of a guarantee, a liability for the fair value of certain obligations undertaken. Additionally, effective January 1, 2020, we adopted ASU No. 2016-13 which required that we also recognize as a liability the expected credit losses over the life of such guarantees. As a result of the adoption of ASU No. 2016-13, we recorded a cumulative adjustment to Accumulated deficit of $8 million to establish such expected credit loss liability for our outstanding guarantees. | |
Income Taxes | Income Taxes. We record deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences or carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in our Income tax provision in the period that includes the enactment date. Additionally, in determining the need for recording a valuation allowance against the carrying amount of deferred tax assets, we consider the amount of taxable income and periods over which it must be earned, actual levels of past taxable income and known trends and events or transactions that are expected to affect future levels of taxable income. Where we determine that it is more likely than not that all or a portion of an asset will not be realized, we record a valuation allowance. We recognize the benefit of positions taken or expected to be taken in our tax returns in our Income tax provision when it is more likely than not (i.e., a likelihood of more than fifty percent) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon settlement with the taxing authorities. We evaluate these amounts on a quarterly basis to ensure that they have been appropriately adjusted for audit settlements and other events we believe may impact the outcome. Changes in judgment that result in subsequent recognition, derecognition or a change in measurement of a tax position taken in a prior annual period (including any related interest and penalties) are recognized as a discrete item in the interim period in which the change occurs. We recognize accrued interest and penalties related to unrecognized tax benefits as components of our Income tax provision. We do not record a deferred tax liability for unremitted earnings of our foreign subsidiaries to the extent that the earnings meet the indefinite reversal criteria. This criteria is met if the foreign subsidiary has invested, or will invest, the earnings indefinitely. The decision as to the amount of unremitted earnings that we intend to maintain in non-U.S. subsidiaries considers items including, but not limited to, forecasts and budgets of financial needs of cash for working capital, liquidity plans and expected cash requirements in the U.S. See Note 18 for a further discussion of our income taxes. | |
Fair Value Measurements | Fair Value Measurements. Fair value is the price we would receive to sell an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants. For those assets and liabilities we record or disclose at fair value, we determine fair value based upon the quoted market price, if available. If a quoted market price is not available for identical assets, we determine fair value based upon the quoted market price of similar assets or the present value of expected future cash flows considering the risks involved, including counterparty performance risk if appropriate, and using discount rates appropriate for the duration. The fair values are assigned a level within the fair value hierarchy, depending on the source of the inputs into the calculation. Level 1 Inputs based upon quoted prices in active markets for identical assets. Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly. Level 3 Inputs that are unobservable for the asset. | |
Cash and Cash Equivalents | Cash and Cash Equivalents. Cash equivalents represent funds we have temporarily invested (with original maturities not exceeding three months), including short-term, highly liquid debt securities. | |
Receivables | Receivables. The Company’s receivables are primarily generated from ongoing business relationships with our franchisees as a result of franchise agreements, including contributions due to advertising cooperatives we consolidate. These receivables 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 on our Consolidated Balance Sheet. Effective with the adoption of ASU No. 2016-13 on January 1, 2020, our receivables are now stated net of expected credit losses. The impact to our net receivables as a result of adopting the standard was not significant. Expected credit losses for uncollectible franchisee receivable balances consider both current conditions and reasonable and supportable forecasts of future conditions. Current conditions we consider include pre-defined aging criteria as well as specified events that indicate we may not collect the balance due. Reasonable and supportable forecasts used in determining the probability of future collection consider publicly available data regarding default probability. While we use the best information available in making our determination, the ultimate recovery of recorded receivables is dependent upon future economic events and other conditions that may be beyond our control. Receivables that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. We recorded $12 million, $24 million and $11 million in net provisions within Franchise and property expenses in 2020, 2019 and 2018, respectively, related to uncollectible continuing fees, initial fees and rent receivables from our franchisees. Accounts and notes receivable as well as the Allowance for doubtful accounts, including balances attributable to our consolidated advertising cooperatives, as of December 31, 2020 and 2019, respectively, are as follows: 2020 2019 Accounts and notes receivable $ 579 $ 656 Allowance for doubtful accounts (45) (72) Accounts and notes receivable, net $ 534 $ 584 Our financing receivables primarily consist of notes receivables and direct financing leases with franchisees which we enter into from time-to-time. As these receivables primarily relate to our ongoing business agreements with franchisees, we consider such receivables to have similar risk characteristics and evaluate them as one collective portfolio segment and class for determining the allowance for doubtful accounts. Balances of notes receivable and direct financing leases due within one year are included in Accounts and notes receivable, net while amounts due beyond one year are included in Other assets. Amounts included in Other assets totaled $72 million (net of an allowance of $5 million) and $68 million (net of an allowance of less than $1 million) at December 31, 2020, and December 31, 2019, respectively. Financing receivables that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. Interest income recorded on financing receivables has historically been insignificant. | |
Property, Plant and Equipment | Property, Plant and Equipment. PP&E is carried net of accumulated depreciation and amortization. We calculate depreciation and amortization on a straight-line basis over the estimated useful lives of the assets as follows: 5 to 25 years for buildings and leasehold improvements and 3 to 20 years for machinery and equipment. We suspend depreciation and amortization on assets that are held for sale. | |
Leases and Leasehold Improvements | Leases and Leasehold Improvements. We adopted ASU No. 2016-02, Leases (“Topic 842”) as of the beginning of the year ended December 31 ,2019, using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of 2019. The cumulative effect of this transition was recorded as an increase to Accumulated deficit of $2 million as of this date. We lease land, buildings or both for certain of our Company-operated restaurants and restaurant support centers worldwide. Rental expense for leased Company-operated restaurants is presented in our Consolidated Statements of Income within Company restaurant expenses and rental expense for restaurant support centers is presented within G&A. The length of our lease terms, which vary by country and often include renewal options, are an important factor in determining the appropriate accounting for leases including the initial classification of the lease as finance or operating as well as the timing of recognition of rent expense over the duration of the lease. We include renewal option periods in determining the term of our leases when failure to renew the lease would impose a penalty on the Company in such an amount that a renewal appears to be reasonably certain at the commencement of the lease. The primary penalty to which we are subject is the economic detriment associated with the existence of leasehold improvements that might be impaired if we choose not to continue the use of the leased property. Leasehold improvements are amortized over the shorter of their estimated useful lives or the lease term. We generally do not receive leasehold improvement incentives upon opening a store that is subject to a lease. We expense rent associated with leased land or buildings while a restaurant is being constructed whether rent is paid or we are subject to a rent holiday. Our leasing activity for other assets, including equipment, is not significant. Right-of-use assets and liabilities are recognized upon lease commencement for operating and finance leases based on the present value of lease payments over the lease term. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Subsequent amortization of the right-of-use asset and accretion of the lease liability for an operating lease is recognized as a single lease cost, on a straight-line basis, over the lease term. For finance leases, the right-of-use asset is depreciated on a straight-line basis over the lesser of the useful life of the leased asset or lease term. Interest on each finance lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. As most of our leases do not provide an implicit discount rate, we use our incremental secured borrowing rate based on the information available at commencement date, including the lease term and currency, in determining the present value of lease payments for both operating and finance leases. Leases with an initial term of 12 months or less are not recorded in the Consolidated Balance Sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Right-of-use assets are assessed for impairment in accordance with our long-lived asset impairment policy, which is performed annually for restaurant-level assets or whenever events or changes in circumstances indicate that the carrying amount of a restaurant may not be recoverable. We reassess lease classification and remeasure right-of-use assets and lease liabilities when a lease is modified and that modification is not accounted for as a separate new lease or upon certain other events that require reassessment. The difference between operating lease rental expense recognized in our Consolidated Statements of Income and cash payments for operating leases is recognized within Other, net within Net Cash Provided by Operating Activities in our Consolidated Statements of Cash Flows. | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets. From time-to-time, the Company acquires restaurants from one of our Concept’s franchisees or acquires another business. Goodwill from these acquisitions represents the excess of the cost of a business acquired over the net of the amounts assigned to assets acquired, including identifiable intangible assets and liabilities assumed. Goodwill is not amortized and has been assigned to reporting units for purposes of impairment testing. Our reporting units are our business units (which are aligned based on geography) in our KFC, Pizza Hut, Taco Bell and Habit Burger Grill Divisions. We evaluate goodwill for impairment on an annual basis or more often if an event occurs or circumstances change that indicate impairment might exist. We have selected the beginning of our fourth quarter as the date on which to perform our ongoing annual impairment test for goodwill. We may elect to perform a qualitative assessment for our reporting units to determine whether it is more likely than not that the fair value of the reporting unit is greater than its carrying value. If a qualitative assessment is not performed, or if as a result of a qualitative assessment it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, then the reporting unit’s fair value is compared to its carrying value. Fair value is the price a willing buyer would pay for a reporting unit, and is generally estimated using discounted expected future after-tax cash flows from Company-owned restaurant operations, if any, and franchise royalties. The discount rate is our estimate of the required rate of return that a third-party buyer would expect to receive when purchasing a business from us that constitutes a reporting unit. We believe the discount rate is commensurate with the risks and uncertainty inherent in the forecasted cash flows. At the beginning of the quarter ended March 31, 2020, we adopted ASU No. 2017-04, which eliminated the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, an impairment charge is recognized based on the excess of a reporting unit’s carrying amount over its fair value. This standard required prospective application, beginning with the quarter ended March 31, 2020. As a result, the goodwill impairment charge related to our Habit Burger Grill reporting unit (see Note 3) was measured as the excess of the reporting unit’s carrying value over its fair value. If we record goodwill upon acquisition of a restaurant(s) from a franchisee and such restaurant(s) is then sold within two years of acquisition, the goodwill associated with the acquired restaurant(s) is written off in its entirety. If the restaurant is refranchised two years or more subsequent to its acquisition, we include goodwill in the carrying amount of the restaurants disposed of based on the relative fair values of the portion of the reporting unit disposed of in the refranchising and the portion of the reporting unit that will be retained. The fair value of the portion of the reporting unit disposed of in a refranchising is determined by reference to the discounted value of the future cash flows expected to be generated by the restaurant and retained by the franchisee, which includes a deduction for the anticipated, future royalties the franchisee will pay us associated with the franchise agreement entered into simultaneously with the refranchising transition. The fair value of the reporting unit retained is based on the price a willing buyer would pay for the reporting unit and includes the value of franchise agreements. Appropriate adjustments are made if a franchise agreement includes terms that are determined to not be at prevailing market rates. As such, the fair value of the reporting unit retained can include expected cash flows from future royalties from those restaurants currently being refranchised, future royalties from existing franchise businesses and company restaurant operations. As a result, the percentage of a reporting unit’s goodwill that will be written off in a refranchising transaction will be less than the percentage of the reporting unit’s Company-owned restaurants that are refranchised in that transaction and goodwill can be allocated to a reporting unit with only franchise restaurants. We evaluate the remaining useful life of an intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful life. If an intangible asset that is not being amortized is subsequently determined to have a finite useful life, we amortize the intangible asset prospectively over its estimated remaining useful life. Intangible assets that are deemed to have a definite life are amortized on a straight-line basis to their residual value. We evaluate our indefinite-lived intangible assets for impairment on an annual basis or more often if an event occurs or circumstances change that indicate impairments might exist. We perform our annual test for impairment of our indefinite-lived intangible assets at the beginning of our fourth quarter. We may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is greater than its carrying value. If a qualitative assessment is not performed, or if as a result of a qualitative assessment it is not more likely than not that the fair value of an indefinite-lived intangible asset exceeds its carrying value, then the asset's fair value is compared to its carrying value. Fair value is an estimate of the price a willing buyer would pay for the intangible asset and is estimated by discounting the expected future after-tax cash flows associated with the intangible asset. Our definite-lived intangible assets that are not allocated to an individual restaurant are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. An intangible asset that is deemed not recoverable on an undiscounted basis is written down to its estimated fair value, which is our estimate of the price a willing buyer would pay for the intangible asset based on discounted expected future after-tax cash flows. For purposes of our impairment analysis, we update the cash flows that were initially used to value the definite-lived intangible asset to reflect our current estimates and assumptions over the asset’s future remaining life. Capitalized Software. We state capitalized software at cost less accumulated amortization within Intangible assets, net on our Consolidated Balance Sheets. We calculate amortization on a straight line basis over the estimated useful life of the software which ranges from 3 to 7 years upon initial capitalization. | |
Derivative Financial Instruments | Derivative Financial Instruments. We use derivative instruments primarily to hedge interest rate and foreign currency risks. These derivative contracts are entered into with financial institutions. We do not use derivative instruments for trading purposes and we have procedures in place to monitor and control their use. We record all derivative instruments on our Consolidated Balance Sheet at fair value. For derivative instruments that are designated and qualify as a cash flow hedge, gain or loss on the derivative instrument is reported as a component of AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For derivative instruments not designated as hedging instruments, the gain or loss is recognized in the results of operations immediately. As a result of the use of derivative instruments, 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 carefully selected major financial institutions based upon their credit ratings and other factors, and continually assess the creditworthiness of counterparties. At December 31, 2020 and December 31, 2019, all of the counterparties to our interest rate swaps and foreign currency forwards had investment grade ratings according to the three major ratings agencies. To date, all counterparties have performed in accordance with their contractual obligations. | |
Common Stock Share Repurchases | Common Stock Share Repurchases. From time-to-time, we repurchase shares of our Common Stock under share repurchase programs authorized by our Board of Directors. Shares repurchased constitute authorized, but unissued shares under the North Carolina laws under which we are incorporated. Additionally, our Common Stock has no par or stated value. Accordingly, we record the full value of share repurchases, or other deductions to Common Stock such as shares cancelled upon employee share-based award exercises, upon the trade date, against Common Stock on our Consolidated Balance Sheet except when to do so would result in a negative balance in such Common Stock account. In such instances, on a period basis, we record the cost of any further share repurchases, or other deductions to Common Stock as an addition to Accumulated deficit. Due to the large | |
Accounts and notes receivable, net | Accounts and notes receivable as well as the Allowance for doubtful accounts, including balances attributable to our consolidated advertising cooperatives, as of December 31, 2020 and 2019, respectively, are as follows: 2020 2019 Accounts and notes receivable $ 579 $ 656 Allowance for doubtful accounts (45) (72) Accounts and notes receivable, net $ 534 $ 584 | |
Pension and Post-retirement Medical Benefits | Pension and Post-retirement Medical Benefits. We measure and recognize the overfunded or underfunded status of our pension and post-retirement plans as an asset or liability in our Consolidated Balance Sheet as of our fiscal year end. The funded status represents the difference between the projected benefit obligations and the fair value of plan assets, which is calculated on a plan-by-plan basis. The projected benefit obligation and related funded status are determined using assumptions as of the end of each year. The projected benefit obligation is the present value of benefits earned to date by plan participants, including the effect of future salary increases, as applicable. The difference between the projected benefit obligations and the fair value of plan assets that has not previously been recognized in our Consolidated Statement of Income is recorded as a component of AOCI. The net periodic benefit costs associated with the Company's defined benefit pension and post-retirement medical plans are determined using assumptions regarding the projected benefit obligation and, for funded plans, the market-related value of plan assets as of the beginning of each year, or remeasurement period, if applicable. We record the service cost component of net periodic benefit costs in G&A. Non-service cost components are recorded in Other pension (income) expense. We have elected to use a market-related value of plan assets to calculate the expected return on assets, net of administrative and investment fees paid from plan assets, in net periodic benefit costs. For each individual plan we amortize into pension expense the net amounts in AOCI, as adjusted for the difference between the fair value and market-related value of plan assets, to the extent that such amounts exceed 10% of the greater of a plan’s projected benefit obligation or market-related value of assets, over the remaining service period of active participants in the plan or, for plans with no active participants, over the expected average life expectancy of the inactive participants in the plan. The market-related value of plan assets is the fair value of plan assets as of the beginning of each year adjusted for variances between actual returns and expected returns. We attribute such variances to the market-related value of plan assets evenly over five years. We record a curtailment when an event occurs that significantly reduces the expected years of future service or eliminates the accrual of defined benefits for the future services of a significant number of employees. We record a curtailment gain when the employees who are entitled to the benefits terminate their employment; we record a curtailment loss when it becomes probable a loss will occur. We recognize settlement gains or losses only when we have determined that the cost of all settlements in a year will exceed the sum of the service and interest costs within an individual plan. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Accounts and notes receivable as well as the Allowance for doubtful accounts, including balances attributable to our consolidated advertising cooperatives, as of December 31, 2020 and 2019, respectively, are as follows: 2020 2019 Accounts and notes receivable $ 579 $ 656 Allowance for doubtful accounts (45) (72) Accounts and notes receivable, net $ 534 $ 584 |
Habit Burger Grill (Tables)
Habit Burger Grill (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The components of the preliminary purchase price allocation upon the March 18, 2020, acquisition, subsequent to the adjustments to the allocation through the year ended December 31, 2020, were as follows: Total Current Assets $ 11 Property, plant and equipment, net 111 Habit Burger Grill brand (included in Intangible assets, net) 96 Operating lease right-of-use assets (included in Other assets) 196 Other assets 28 Total Assets 442 Total Current Liabilities (69) Operating lease liabilities (included in Other liabilities and deferred credits) (170) Other liabilities (1) Total Liabilities (240) Total identifiable net assets 202 Goodwill 206 Net consideration transferred $ 408 The adjustments to the preliminary estimate of identifiable net assets acquired resulted in a corresponding $13 million decrease in estimated goodwill due to the following changes to the preliminary purchase price allocation. Change in Increase (Decrease) in Goodwill Total Current Assets $ 1 Property, plant and equipment, net 18 Habit Burger Grill brand (included in Intangible assets, net) 2 Operating lease right-of-use assets (included in Other assets) (33) Other assets (6) Total Current Liabilities 1 Operating lease liabilities (included in Other liabilities and deferred credits) 5 Other liabilities (1) Total decrease in goodwill $ (13) |
Earnings Per Common Share ("E_2
Earnings Per Common Share ("EPS") (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | 2020 2019 2018 Net Income $ 904 $ 1,294 $ 1,542 Weighted-average common shares outstanding (for basic calculation) 302 306 322 Effect of dilutive share-based employee compensation 5 7 7 Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) 307 313 329 Basic EPS $ 2.99 $ 4.23 $ 4.80 Diluted EPS $ 2.94 $ 4.14 $ 4.69 Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation (a) 4.8 2.0 2.0 (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. |
Items Affecting Comparability_2
Items Affecting Comparability of Net Income and Cash Flows (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Refranchising (gain) loss [Member] | |
Facility Actions [Line Items] | |
Facility Actions | A summary of Refranchising (gain) loss is as follows: Refranchising (gain) loss 2020 2019 2018 KFC Division $ (33) $ (6) $ (240) Pizza Hut Division 1 — 13 Taco Bell Division (2) (31) (313) Worldwide $ (34) $ (37) $ (540) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Disaggregation of Revenue [Table Text Block] | 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. 2020 KFC Division Pizza Hut Division Taco Bell Division Habit Burger Grill Division Total U.S. Company sales $ 60 $ 21 $ 882 $ 346 $ 1,309 Franchise revenues 184 272 593 1 1,050 Property revenues 16 5 44 — 65 Franchise contributions for advertising and other services 18 317 483 — 818 China Franchise revenues 204 51 — — 255 Other Company sales 446 55 — — 501 Franchise revenues 833 222 25 — 1,080 Property revenues 58 2 — — 60 Franchise contributions for advertising and other services 453 57 4 — 514 $ 2,272 $ 1,002 $ 2,031 $ 347 $ 5,652 2019 KFC Division Pizza Hut Division Taco Bell Division Total U.S. Company sales $ 74 $ 21 $ 919 $ 1,014 Franchise revenues 175 282 602 1,059 Property revenues 20 6 44 70 Franchise contributions for advertising and other services 10 318 483 811 China Franchise revenues 214 60 — 274 Other Company sales 497 33 2 532 Franchise revenues 912 246 27 1,185 Property revenues 69 3 — 72 Franchise contributions for advertising and other services 520 58 2 580 $ 2,491 $ 1,027 $ 2,079 $ 5,597 |
Deferred Revenue, by Arrangement, Disclosure [Table Text Block] | Contract Liabilities Our contract liabilities are comprised of unamortized upfront fees received from franchisees. A summary of significant changes to the contract liability balance during 2020 and 2019 is presented below. Deferred Franchise Fees Balance at December 31, 2018 $ 414 Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period (70) Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period 93 Other (a) 4 Balance at December 31, 2019 $ 441 Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period (76) Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period 53 Other (a) (3) Balance at December 31, 2020 $ 415 (a) 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 $ 64 1 - 2 years 60 2 - 3 years 55 3 - 4 years 50 4 - 5 years 44 Thereafter 142 Total $ 415 |
Supplemental Cash Flow Data (Ta
Supplemental Cash Flow Data (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash paid for interest and income taxes, and significant non-cash investing and financing activities | 2020 2019 2018 Cash Paid For: Interest $ 480 $ 497 $ 455 Income taxes 328 283 279 Significant Non-Cash Investing and Financing Activities: Finance lease obligations incurred $ 4 $ 14 $ 4 Finance lease and other debt obligations transferred through refranchising (1) (1) (24) Non-cash refranchising proceeds (c) 31 6 — Reconciliation of Cash and cash equivalents to Consolidated Statements of Cash Flows: Cash and cash equivalents as presented in Consolidated Balance Sheets $ 730 $ 605 $ 292 Restricted cash included in Prepaid expenses and other current assets (a) 258 138 151 Restricted cash and restricted cash equivalents included in Other assets (b) 36 25 31 Cash, Cash Equivalents and Restricted Cash as presented in Consolidated Statements of Cash Flows $ 1,024 $ 768 $ 474 (a) Restricted cash within Prepaid expenses and other current assets reflects cash related to advertising cooperatives that we consolidate that can only be used to settle obligations of the respective cooperatives and Taco Bell Securitization interest reserves (See Note 11). (b) Primarily trust accounts related to our self-insurance program. (c) In 2020 we received as refranchising consideration a minority interest in an entity that operates KFC and Pizza Hut franchised units in India and in 2019 we received as refranchising consideration a minority interest in an entity that owns our KFC Brazil and Pizza Hut Brazil master franchisee rights, respectively (See Note 5). |
Other (Income) Expense (Tables)
Other (Income) Expense (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other (Income) Expense Table | 2020 2019 2018 Foreign exchange net (gain) loss and other (a) $ (18) $ (1) $ 1 Impairment and closure expense (b) 172 5 6 Other (income) expense $ 154 $ 4 $ 7 (a) The year ended December 31, 2019, includes a charge of $8 million for the settlement of contingent consideration associated with our 2013 acquisition of the KFC Turkey and Pizza Hut Turkey businesses. (b) The year ended December 31, 2020, includes a charge of $144 million related to the impairment of Habit Burger Grill goodwill. The year ended December 31, 2020, also includes charges of $12 million related to the impairment of restaurant-level assets and charges of $11 million related to the write-off of software no longer being used. |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Balance Sheet Information Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets 2020 2019 Income tax receivable $ 35 $ 39 Restricted cash 258 138 Assets held for sale (a) 7 25 Other prepaid expenses and current assets 125 136 Prepaid expenses and other current assets $ 425 $ 338 |
Property, Plant and Equipment | Property, Plant and Equipment 2020 2019 Land $ 428 $ 408 Buildings and improvements 1,423 1,325 Finance leases, primarily buildings 71 68 Machinery, equipment and other 543 505 Property, plant and equipment, gross 2,465 2,306 Accumulated depreciation and amortization (1,230) (1,136) Property, plant and equipment, net $ 1,235 $ 1,170 |
Schedule of Other Assets | Other Assets 2020 2019 Operating lease right-of-use assets $ 851 $ 642 Investment in Grubhub common stock (b) — 137 Franchise incentives 163 174 Other 421 360 Other assets $ 1,435 $ 1,313 |
Accounts Payable and Other Current Liabilities | Accounts Payable and Other Current Liabilities 2020 2019 Accounts payable $ 215 $ 173 Accrued compensation and benefits 225 223 Accrued advertising 196 96 Operating lease liabilities 97 67 Accrued taxes, other than income taxes 36 52 Other current liabilities 420 349 Accounts payable and other current liabilities $ 1,189 $ 960 (a) Reflects the carrying value of restaurants we have offered for sale to franchisees and excess properties that we do not intend to use for restaurant operations in the future. (b) In the third quarter of 2020 we sold our entire investment in Grubhub, Inc. common stock and received proceeds of $206 million. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the carrying amount of goodwill | The changes in the carrying amount of goodwill are as follows: KFC Pizza Hut Taco Bell Habit Burger Grill Worldwide Goodwill, net as of December 31, 2018 (a) $ 230 $ 196 $ 99 $ — $ 525 Disposal and other, net (b) 3 3 (1) — 5 Goodwill, net as of December 31, 2019 (a) $ 233 $ 199 $ 98 $ — $ 530 Disposal and other, net (b) 2 3 — — 5 Habit Burger Grill acquisition and impairment (See Note 3) — — — 62 62 Goodwill, net as of December 31, 2020 (a) $ 235 $ 202 $ 98 $ 62 $ 597 (a) Goodwill, net includes $144 million of accumulated impairment loss recorded in the year ended December 31, 2020, related to our Habit Burger Grill segment and $17 million of accumulated impairment losses for each year presented related to our Pizza Hut segment. (b) Disposals and other, net includes the impact of foreign currency translation on existing balances and goodwill write-offs associated with refranchising. |
Schedule Of Finite And Indefinite Lived Intangible Assets By Major Class | Intangible assets, net for the years ended 2020 and 2019 are as follows: 2020 2019 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Definite-lived intangible assets Capitalized software costs $ 335 $ (160) $ 306 $ (130) Reacquired franchise rights 39 (33) 38 (32) Franchise contract rights 100 (85) 100 (83) Lease tenancy rights 5 (1) 5 (1) Other 48 (32) 38 (28) $ 527 $ (311) $ 487 $ (274) Indefinite-lived intangible assets KFC trademark $ 31 $ 31 Habit Burger Grill brand asset 96 — $ 127 $ 31 |
Short-term Borrowings and Long-
Short-term Borrowings and Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt [Table Text Block] | 2020 2019 Short-term Borrowings Current maturities of long-term debt $ 463 $ 437 Other — 4 463 441 Less current portion of debt issuance costs and discounts (10) (10) Short-term borrowings $ 453 $ 431 Long-term Debt Securitization Notes $ 2,869 $ 2,898 Subsidiary Senior Unsecured Notes 1,800 2,850 Term Loan A Facility 431 463 Term Loan B Facility 1,916 1,935 YUM Senior Unsecured Notes 3,725 2,425 Finance lease obligations (See Note 12) 72 77 $ 10,813 $ 10,648 Less debt issuance costs and discounts (78) (80) Less current maturities of long-term debt (463) (437) Long-term debt $ 10,272 $ 10,131 |
Securitization Notes issued that remain outstanding | The following table summarizes Securitization Notes outstanding at December 31, 2020: Interest Rate Issuance Date Anticipated Repayment Date (a) Outstanding Principal Stated Effective (b) May 2016 May 2023 $ 483 4.377 % 4.59 % May 2016 May 2026 $ 965 4.970 % 5.14 % November 2018 November 2023 $ 808 4.318 % 4.53 % November 2018 November 2028 $ 613 4.940 % 5.06 % (a) The legal final maturity dates of the Securitization Notes issued in 2016 and 2018 are May 2046 and November 2048, respectively. If the Issuer has not repaid or refinanced a series of Securitization Notes prior to its respective Anticipated Repayment Dates, rapid amortization of principal on all Securitization Notes will occur and additional interest will accrue on the Securitization Notes. (b) Includes the effects of the amortization of any discount and debt issuance costs. |
Credit Agreement and Subsidiary Senior Unsecured Notes issued that remain outstanding | The following table summarizes borrowings outstanding under the Credit Agreement as well as our Subsidiary Senior Unsecured Notes as of December 31, 2020. There are no outstanding borrowings under the Revolving Facility and $1.3 million of letters of credit outstanding as of December 31, 2020. Interest Rate Issuance Date Maturity Date Outstanding Principal Stated Effective (b) Term Loan A Facility June 2016 June 2022 $ 431 (a) 3.22 % Term Loan B Facility June 2016 April 2025 $ 1,916 (a) 3.53 % Senior Note Due 2026 June 2016 June 2026 $ 1,050 5.25 % 5.39 % Senior Note Due 2027 June 2017 June 2027 $ 750 4.75 % 4.90 % (a) The interest rates applicable to the Term Loan A Facility as well as the Revolving Facility range from 1.25% to 1.75% plus LIBOR or from 0.25% to 0.75% plus the Base Rate (as defined in the Credit Agreement), at the Borrowers’ election, based upon the total net leverage ratio of the Borrowers and the Specified Guarantors (as defined in the Credit Agreement). As of December 31, 2020, the interest rate spreads on the LIBOR and Base Rate applicable to our Term Loan A Facility were 1.25% and 0.25%, respectively. The interest rates applicable to the Term Loan B Facility are 1.75% plus LIBOR or 0.75% plus the Base Rate, at the Borrowers’ election. (b) Includes the effects of the amortization of any discount and debt issuance costs as well as the impact of the interest rate swaps on the Term Loan B Facility (See Note 13). The effective rates related to our Term Loan A and B Facilities are based on LIBOR-based interest rates through December 31, 2020. |
Senior Unsecured Notes issued that remain outstanding | The following table summarizes all YUM Senior Unsecured Notes issued that remain outstanding at December 31, 2020: Interest Rate Issuance Date Maturity Date Principal Amount (in millions) Stated Effective (a) October 2007 November 2037 $ 325 6.88 % 7.45 % August 2011 November 2021 $ 350 3.75 % 3.88 % October 2013 November 2023 $ 325 3.88 % 4.01 % October 2013 November 2043 $ 275 5.35 % 5.42 % September 2019 January 2030 $ 800 4.75 % 4.90 % April 2020 April 2025 $ 600 7.75 % 8.05 % September 2020 March 2031 $ 1,050 3.63 % 3.77 % (a) Includes the effects of the amortization of any (1) premium or discount; (2) debt issuance costs; and (3) gain or loss upon settlement of related treasury locks and forward starting interest rate swaps utilized to hedge the interest rate risk prior to debt issuance. |
Annual maturities of short-term borrowings and long-term debt excluding capital lease obligations and derivative instrument adjustments | The annual maturities of all Short-term borrowings and Long-term debt as of December 31, 2020, excluding finance lease obligations of $72 million and debt issuance costs and discounts of $88 million are as follows: Year ended: 2021 $ 455 2022 424 2023 1,626 2024 36 2025 2,452 Thereafter 5,748 Total $ 10,741 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost | 2020 2019 Operating lease cost $ 137 $ 115 Finance lease cost Amortization of right-of-use assets 5 3 Interest on lease liabilities 3 3 Total finance lease cost $ 8 $ 6 Sublease income $ (60) $ (69) |
Condensed Cash Flow Statement | 2020 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 133 $ 104 Operating cash flows from finance leases 3 3 Financing cash flows from finance leases 5 4 Right-of-use assets obtained in exchange for lease obligations Operating leases (a) 296 79 Finance leases 4 14 (a) The year ended December 31, 2020, includes right-of-use assets acquired as part of the acquisition of Habit Burger Grill of $196 million (See Note 3). |
Condensed Balance Sheet | 2020 2019 Consolidated Balance Sheet Assets Operating lease right-of-use assets $ 851 $ 642 Other assets Finance lease right-of-use assets 40 42 Property, plant and equipment, net Total right-of-use assets (a) $ 891 $ 684 Liabilities Current Operating $ 97 $ 67 Accounts payable and other current liabilities Finance 7 7 Short-term borrowings Non-current Operating 823 640 Other liabilities and deferred credits Finance 65 70 Long-term debt Total lease liabilities (a) $ 992 $ 784 Weighted-average Remaining Lease Term (in years) Operating leases 11.1 12.3 Finance leases 12.2 12.7 Weighted-average Discount Rate Operating leases 5.1 % 5.6 % Finance leases 6.5 % 6.6 % (a) U.S. operating lease right-of-use assets and liabilities totaled $499 million and $556 million, respectively, as of December 31, 2020, and $283 million and $337 million, respectively, as of December 31, 2019. These amounts primarily related to Taco Bell U.S. and the Habit Burger Grill including leases related to Company-operated restaurants, leases related to franchise-operated restaurants we sublease and the Taco Bell restaurant support center. |
Future minimum commitments and amounts to be received as lessor or sublessor under non-cancelable leases | Future minimum lease payments, including rental payments for lease renewal options we are reasonably certain to exercise, and amounts to be received as lessor or sublessor as of December 31, 2020, were as follows: Commitments Lease Receivables Finance Operating Direct Financing Operating 2021 $ 9 $ 128 $ 3 $ 80 2022 10 133 4 82 2023 9 123 4 80 2024 8 115 4 76 2025 8 103 3 71 Thereafter 58 623 27 599 Total lease payments/receipts 102 1,225 45 $ 988 Less imputed interest/unearned income (30) (305) (18) Total lease liabilities/receivables $ 72 $ 920 $ 27 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments, Gain (Loss) [Table Text Block] | Gains and losses on derivative instruments designated as cash flow hedges recognized in OCI and reclassifications from AOCI into Net Income: Gains/(Losses) Recognized in OCI (Gains)/Losses Reclassified from AOCI into Net Income 2020 2019 2018 2020 2019 2018 Interest rate swaps $ (103) $ (71) $ (3) $ 10 $ (17) $ (19) Foreign currency contracts 4 20 22 (4) (8) (20) Income tax benefit/(expense) 24 16 1 (1) 4 5 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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: 2020 2019 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) Securitization Notes (a) $ 2,869 $ 3,015 $ 2,898 $ 3,040 Subsidiary Senior Unsecured Notes (b) 1,800 1,890 2,850 3,004 Term Loan A Facility (b) 431 428 463 464 Term Loan B Facility (b) 1,916 1,907 1,935 1,949 YUM Senior Unsecured Notes (b) 3,725 4,094 2,425 2,572 (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. |
Fair Value Measurements, Recurring Basis | The following table presents fair values for those assets and liabilities measured at fair value on a recurring basis and the level within the fair value hierarchy in which the measurements fall. Fair Value Consolidated Balance Sheet Level 2020 2019 Assets Interest Rate Swaps Prepaid expenses and other current assets 2 $ — $ 6 Foreign Currency Contracts Prepaid expenses and other current assets 2 1 — Interest Rate Swaps Other assets 2 — 3 Investment in Grubhub, Inc. Common Stock Other assets 1 — 137 Other Investments Other assets 1 45 43 Liabilities Interest Rate Swaps Accounts Payable and other current liabilities 2 28 — Interest Rate Swaps Other liabilities and deferred credits 2 127 71 |
Pension, Retiree Medical and _2
Pension, Retiree Medical and Retiree Savings Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Funded status of pension plans | The following chart summarizes the balance sheet impact, as well as benefit obligations, assets, and funded status associated with our two significant U.S. pension plans. The actuarial valuations for all plans reflect measurement dates coinciding with our fiscal year end. 2020 2019 Change in benefit obligation: Benefit obligation at beginning of year $ 1,015 $ 873 Service cost 8 6 Interest cost 35 39 Plan amendments 1 2 Special termination benefits 2 — Benefits paid (46) (57) Settlement payments — (1) Actuarial (gain) loss 118 153 Benefit obligation at end of year $ 1,133 $ 1,015 A significant component of the overall increase in the Company's benefit obligation for the year ended December 31, 2020, was due to an actuarial loss, which was primarily due to a decrease in the discount rate used to measure our benefit obligation from 3.50% at December 31, 2019, to 2.80% at December 31, 2020. A significant component of the overall increase in the Company's benefit obligation for the year ended December 31, 2019, was due to an actuarial loss, which was primarily due to a decrease in the discount rate used to measure our benefit obligation from 4.60% at December 31, 2018, to 3.50% at December 31, 2019. Change in plan assets: Fair value of plan assets at beginning of year $ 886 $ 755 Actual return on plan assets 168 176 Employer contributions 6 12 Benefits paid (46) (57) Fair value of plan assets at end of year $ 1,014 $ 886 Funded status at end of year $ (119) $ (129) |
Amounts recognized in the Consolidated Balance Sheet | Amounts recognized in the Consolidated Balance Sheet: 2020 2019 Accrued benefit liability - current $ (9) $ (4) Accrued benefit liability - non-current (110) (125) $ (119) $ (129) |
Pension plans with an accumulated benefit obligation in excess of pan assets | The table below provides information for pension plans with an accumulated benefit obligation in excess of plan assets. These pension plans also have a projected benefit obligation in excess of plan assets. 2020 2019 Projected benefit obligation $ 1,133 $ 1,015 Accumulated benefit obligation 1,111 984 Fair value of plan assets 1,014 886 |
Components of net periodic benefit cost | Components of net periodic benefit cost: 2020 2019 2018 Service cost $ 8 $ 6 $ 8 Interest cost 35 39 38 Amortization of prior service cost (a) 5 6 5 Expected return on plan assets (43) (44) (44) Amortization of net loss 14 1 16 Net periodic benefit cost $ 19 $ 8 $ 23 Additional (gain) loss recognized due to: Settlement charges (b) $ — $ 3 $ — Special termination benefits $ 2 $ — $ 1 (a) Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits. (b) Settlement losses result when benefit payments exceed the sum of the service cost and interest cost within a plan during the year. These losses were recorded in Other pension (income) expense. |
Pension losses in accumulated other comprehensive income (loss) | Pension gains (losses) in AOCI: 2020 2019 Beginning of year $ (136) $ (123) Net actuarial gain (loss) 7 (22) Curtailments 1 — Amortization of net loss 14 1 Amortization of prior service cost 5 6 Prior service cost (2) (2) Settlement charges — 4 End of year $ (111) $ (136) |
Schedule of Accumulated pre-tax losses recognized in Accumulated Other Comprehensive Income | Accumulated pre-tax losses recognized within AOCI: 2020 2019 Actuarial net loss $ (96) $ (118) Prior service cost (15) (18) $ (111) $ (136) |
Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost | Weighted-average assumptions used to determine benefit obligations at the measurement dates: 2020 2019 Discount rate 2.80 % 3.50 % Rate of compensation increase 3.00 % 3.00 % Weighted-average assumptions used to determine the net periodic benefit cost for fiscal years: 2020 2019 2018 Discount rate 3.50 % 4.60 % 3.90 % Long-term rate of return on plan assets 5.50 % 5.75 % 5.65 % Rate of compensation increase 3.00 % 3.00 % 3.75 % |
Fair values of pension plan assets | The fair values of our pension plan assets at December 31, 2020 and December 31, 2019, by asset category and level within the fair value hierarchy are as follows: 2020 2019 Level 1: Cash $ 9 $ 5 Cash Equivalents (a) 10 13 Fixed Income Securities - U.S. Corporate (b) 164 161 Equity Securities – U.S. Large cap (b) 306 268 Equity Securities – U.S. Mid cap (b) 51 44 Equity Securities – U.S. Small cap (b) 52 43 Equity Securities – Non-U.S. (b) 102 88 Level 2: Fixed Income Securities – U.S. Corporate (c) 148 120 Fixed Income Securities – U.S. Government and Government Agencies (d) 354 274 Fixed Income Securities – Other (d) 30 39 Total fair value of plan assets (e) $ 1,226 $ 1,055 (a) Short-term investments in money market funds. (b) Securities held in common trusts. (c) Investments held directly by the Plan. (d) Includes securities held in common trusts and investments held directly by the Plan. (e) 2020 and 2019 exclude net unsettled trade payables of $212 million and $169 million, respectively. |
Expected benefit payments | The benefits expected to be paid in each of the next five years and in the aggregate for the five years thereafter are set forth below: Year ended: 2021 $ 54 2022 52 2023 53 2024 55 2025 58 2026 - 2030 299 |
Share-based and Deferred Compen
Share-based and Deferred Compensation Plans (Tables) | 12 Months Ended | |
Dec. 31, 2020 | ||
Compensation Related Costs [Abstract] | ||
Weighted-average assumptions used in the Black-Scholes option-pricing model | We estimated the fair value of each stock option and SAR award as of the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: 2020 2019 2018 Risk-free interest rate 1.0 % 2.5 % 2.5 % Expected term 5.8 years 6.5 years 6.5 years Expected volatility 24.0 % 22.0 % 22.0 % Expected dividend yield 1.9 % 1.8 % 1.8 % | |
Summary of award activity | Stock Options and SARs Shares Weighted-Average Exercise Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value (in millions) Outstanding at the beginning of the year 14,864 $ 60.76 Granted 4,358 101.42 Exercised (3,137) 44.41 Forfeited or expired (523) 88.29 Outstanding at the end of the year 15,562 (a) 74.52 6.39 $ 530 Exercisable at the end of the year 10,108 $ 65.64 5.43 $ 434 (a) Outstanding awards include 601 options and 14,960 SARs with weighted average exercise prices of $66.89 and $74.83, respectively. Outstanding awards represent YUM awards held by employees of both YUM and Yum China. | [1] |
Impact on net income | The components of share-based compensation expense and the related income tax benefits are shown in the following table: 2020 2019 2018 Options and SARs $ 75 $ 39 $ 37 Restricted Stock Units 20 12 6 Performance Share Units 2 8 7 Total Share-based Compensation Expense $ 97 $ 59 $ 50 Deferred Tax Benefit recognized $ 18 $ 9 $ 9 EID compensation expense not share-based $ 9 $ 17 $ (2) | |
[1] | Outstanding awards include 601 options and 14,960 SARs with weighted average exercise prices of $66.89 and $74.83, respectively. Outstanding awards represent YUM awards held by employees of both YUM and Yum China. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Stockholders' Equity Note [Abstract] | |
Repurchase Of Shares Of Common Stock | Shares Repurchased Dollar Value of Shares Authorization Date 2020 2019 2018 2020 2019 2018 November 2019 2,419 — — $ 250 $ — $ — August 2018 — 7,788 10,003 — 810 894 November 2017 — — 18,240 — — 1,500 Total 2,419 (a) 7,788 (b) 28,243 (b) $ 250 (a) $ 810 (b) $ 2,394 (b) (a) 2020 amount includes the effect of $11 million in share repurchases (0.1 million shares) with trade dates on, or prior to, December 31, 2020, but settlement dates subsequent to December 31, 2020. (b) 2019 amount excludes and 2018 amount includes the effect of $5 million in share repurchases (0.1 million shares) with trade dates on, or prior to, December 31, 2018, but settlement dates subsequent to December 31, 2018. |
Schedule of changes in accumulated other comprehensive income | Changes in AOCI are presented below. Translation Adjustments and Gains (Losses) From Intra-Entity Transactions of a Long-Term Nature Pension and Post-Retirement Benefits (a) Derivative Instruments (b) Total Balance at December 31, 2018, net of tax $ (245) $ (82) $ (7) $ (334) OCI, net of tax Gains (losses) arising during the year classified into AOCI, net of tax 24 (30) (35) (41) (Gains) losses reclassified from AOCI, net of tax — 8 (21) (13) 24 (22) (56) (54) Balance at December 31, 2019, net of tax $ (221) $ (104) $ (63) $ (388) OCI, net of tax Gains (losses) arising during the year classified into AOCI, net of tax 39 (6) (75) (42) (Gains) losses reclassified from AOCI, net of tax — 14 5 19 39 8 (70) (23) Balance at December 31, 2020, net of tax $ (182) $ (96) $ (133) $ (411) (a) Amounts reclassified from AOCI for pension and post-retirement benefit plans losses during 2020 include amortization of net losses of $14 million, amortization of prior service cost of $4 million and related income tax benefit of $4 million. Amounts reclassified from AOCI for pension and post-retirement benefit plans losses during 2019 include amortization of net losses of $2 million, amortization of prior service cost of $5 million, settlement charges of $3 million and related income tax benefit of $2 million. See Note 15. (b) See Note 13 for details on amounts reclassified from AOCI. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income before income taxes | U.S. and foreign income before taxes are set forth below: 2020 2019 2018 U.S. $ 684 $ 466 $ 726 Foreign 336 907 1,113 $ 1,020 $ 1,373 $ 1,839 |
Details of income tax provision (benefit) | The details of our income tax provision (benefit) are set forth below: 2020 2019 2018 Current: Federal $ 37 $ 129 $ 102 Foreign 121 166 181 State 23 16 25 $ 181 $ 311 $ 308 Deferred: Federal $ (21) $ (16) $ (24) Foreign (29) (213) 5 State (15) (3) 8 $ (65) $ (232) $ (11) $ 116 $ 79 $ 297 |
Effective income tax and tax rate reconciliation | The reconciliation of income taxes calculated at the U.S. federal statutory rate to our effective tax rate is set forth below: 2020 2019 2018 U.S. federal statutory rate 21.0 % 21.0 % 21.0 % State income tax, net of federal tax 1.0 0.9 0.8 Statutory rate differential attributable to foreign operations (0.9) 0.9 (4.6) Adjustments to reserves and prior years (1.7) 2.3 2.8 Excess tax benefits from stock-based awards (3.4) (3.6) (2.4) Change in valuation allowances (2.5) (0.6) 0.7 Intercompany restructuring (0.3) (16.6) — Impact of Tax Law Changes (2.5) — (1.9) Other, net 0.7 1.4 (0.2) Effective income tax rate 11.4 % 5.7 % 16.2 % |
Details of deferred tax assets (liabilities) | The details of 2020 and 2019 deferred tax assets (liabilities) are set forth below: 2020 2019 Operating losses and interest deduction carryforwards $ 181 $ 176 Capital losses 3 3 Tax credit carryforwards 226 230 Employee benefits 82 85 Share-based compensation 58 55 Lease-related liabilities 199 199 Accrued liabilities and other 47 49 Derivative instruments 50 30 Intangible assets 678 602 Property, plant and equipment 31 21 Deferred income 81 55 Gross deferred tax assets 1,636 1,505 Deferred tax asset valuation allowances (789) (787) Net deferred tax assets $ 847 $ 718 Intangible assets, including goodwill $ (1) $ (40) Property, plant and equipment (75) (44) Operating lease right-of-use assets (161) (156) Other (57) (31) Gross deferred tax liabilities $ (294) $ (271) Net deferred tax assets (liabilities) $ 553 $ 447 The details of the 2020 valuation allowance activity are set forth below: 2020 2019 Beginning of Year $ (787) $ (454) Increases (64) (384) Decreases 45 57 Other Adjustments 17 (6) End of Year $ (789) $ (787) Net deferred tax assets (liabilities) for 2020 and 2019 are reported in our Consolidated Balance Sheets as Deferred income taxes. |
Loss carryforwards, by year of expiration | Details of tax loss, credit carryforwards, and expiration dates along with valuation allowances as of December 31, 2020, are as follows: Gross Amount Deferred Tax Asset Valuation Allowance Expiration Federal net operating losses $ 25 $ 5 $ — 2035-2036 Federal net operating losses - Indefinite 61 13 — None Foreign net operating losses 32 10 (10) 2021-2030 Foreign net operating losses - Indefinite 253 75 (51) None State net operating losses 1,268 63 (48) 2021-2039 Foreign capital loss carryforward - Indefinite 14 3 (3) None Foreign tax credits 220 220 (220) 2023-2030 State tax credits 8 6 (5) 2023 State interest deduction carryforward - Indefinite 361 15 (15) None $ 2,242 $ 410 $ (352) |
Unrecognized tax benefits reconciliation | A reconciliation of the beginning and ending unrecognized tax benefits follows: 2020 2019 Beginning of Year $ 188 $ 113 Additions on tax positions - current year 5 84 Additions for tax positions - prior years 34 54 Reductions for tax positions - prior years (22) (30) Reductions for settlements (30) (31) Reductions due to statute expiration — (2) Foreign currency translation adjustment — — End of Year $ 175 $ 188 |
Reportable Operating Segments (
Reportable Operating Segments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | Revenues 2020 2019 2018 KFC Division (a) $ 2,272 $ 2,491 $ 2,644 Pizza Hut Division (a) 1,002 1,027 988 Taco Bell Division (a) 2,031 2,079 2,056 Habit Burger Grill Division (a) 347 — — $ 5,652 $ 5,597 $ 5,688 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Operating Profit 2020 2019 2018 KFC Division $ 922 $ 1,052 $ 959 Pizza Hut Division 335 369 348 Taco Bell Division 696 683 633 Habit Burger Grill Division (22) — — Corporate and unallocated G&A expenses (b)(c) (312) (188) (171) Unallocated Company restaurant expenses (b)(d) — — 3 Unallocated Franchise and property expenses (b)(e) (4) (14) (8) Unallocated Refranchising gain (loss) (b) 34 37 540 Unallocated Other income (expense) (b)(f) (146) (9) (8) Operating Profit 1,503 1,930 2,296 Investment income (expense), net (b) 74 (67) 9 Other pension income (expense) (b) (14) (4) (14) Interest expense, net (b) (543) (486) (452) Income before income taxes $ 1,020 $ 1,373 $ 1,839 |
Reconciliation of Other Significant Reconciling Items from Segments to Consolidated | Depreciation and Amortization 2020 2019 2018 KFC Division $ 29 $ 30 $ 58 Pizza Hut Division 24 15 10 Taco Bell Division 56 59 61 Habit Burger Grill Division 25 — — Corporate 12 8 8 $ 146 $ 112 $ 137 Capital Spending 2020 2019 2018 KFC Division $ 59 $ 81 $ 105 Pizza Hut Division 28 33 38 Taco Bell Division 42 76 85 Habit Burger Grill Division 16 — — Corporate 15 6 6 $ 160 $ 196 $ 234 Identifiable Assets (h) 2020 2019 KFC Division $ 2,011 $ 2,042 Pizza Hut Division 804 801 Taco Bell Division 1,387 1,330 Habit Burger Grill Division 537 — Corporate (g) 1,113 1,058 $ 5,852 $ 5,231 Long-Lived Assets (i) 2020 2019 KFC Division $ 1,160 $ 1,179 Pizza Hut Division 415 427 Taco Bell Division 925 938 Habit Burger Grill Division 458 — Corporate 68 42 $ 3,026 $ 2,586 (a) U.S. revenues included in the combined KFC, Pizza Hut, Taco Bell and Habit Burger Grill Divisions totaled $3.2 billion in 2020, $3.0 billion in 2019 and $2.9 billion in 2018. (b) Amounts have not been allocated to any segment for performance reporting purposes. (c) Amounts in 2020 include charitable contributions to Yum! Brands Foundation, Inc. of $50 million and $25 million related to our Unlocking Opportunity Initiative and COVID-19 employee relief, respectively. Additionally, 2020 includes $36 million for charges associated with resource optimization (See Note 5) and $9 million in costs associated with our acquisition and integration of Habit Burger Grill (See Note 3). (d) Represents depreciation reductions arising primarily from KFC restaurants that were held for sale. (e) Represents costs related to an agreement executed in 2015 with our KFC U.S. franchisees that gave us control of brand marketing execution as well as an accelerated path to expanded menu offerings, improved assets and enhanced customer experience (the “KFC U.S. Acceleration Agreement”). Also represents costs related to an agreement executed in May 2017 with our Pizza Hut U.S. franchisees to improve brand marketing alignment, accelerate enhancements in operations and technology and that included a permanent commitment to incremental advertising as well as digital and technology contributions by franchisees (the “Pizza Hut U.S. Transformation Agreement”). (f) Unallocated Other income (expense) in 2020 includes a charge of $144 million related to the impairment of Habit Burger Grill goodwill. See Note 5. (g) Primarily includes cash, deferred tax assets and, in 2019, our Grubhub investment. (h) U.S. identifiable assets included in the combined Corporate and KFC, Pizza Hut, Taco Bell and Habit Burger Grill Divisions totaled $3.0 billion and $2.7 billion in 2020 and 2019, respectively. (i) Includes PP&E, goodwill, intangible assets, net and Operating lease right-of-use assets. |
Contingencies (Tables)
Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Activity related to self-insured property and casualty reserves | The following table summarizes the 2020 and 2019 activity related to our net self-insured property and casualty reserves as of December 31, 2020. Beginning Balance Habit Acquisition (a) Expense Payments Ending Balance 2020 Activity $ 54 6 13 (23) $ 50 2019 Activity $ 66 — 9 (21) $ 54 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Selected Quarterly Financial Information [Abstract] | |
Schedule of Quarterly Financial Information | 2020 First Second Third Fourth Total Revenues: Company sales $ 355 $ 403 $ 486 $ 566 $ 1,810 Franchise and property revenues 596 525 639 750 2,510 Franchise contributions for advertising and other services 312 270 323 427 1,332 Total revenues 1,263 1,198 1,448 1,743 5,652 Restaurant profit 57 54 87 106 304 Operating Profit 250 300 471 482 1,503 Net Income 83 206 283 332 904 Basic earnings per common share 0.28 0.68 0.94 1.10 2.99 Diluted earnings per common share 0.27 0.67 0.92 1.08 2.94 Dividends declared per common share 0.47 0.47 0.47 0.47 1.88 2019 First Second Third Fourth Total Revenues: Company sales $ 333 $ 359 $ 364 $ 490 $ 1,546 Franchise and property revenues 612 633 645 770 2,660 Franchise contributions for advertising and other services 309 318 330 434 1,391 Total revenues 1,254 1,310 1,339 1,694 5,597 Restaurant profit 61 73 72 105 311 Operating Profit 433 471 480 546 1,930 Net Income 262 289 255 488 1,294 Basic earnings per common share 0.85 0.94 0.83 1.61 4.23 Diluted earnings per common share 0.83 0.92 0.81 1.58 4.14 Dividends declared per common share 0.42 0.42 0.42 0.42 1.68 |
Description of Business (Detail
Description of Business (Details) | 12 Months Ended |
Dec. 31, 2020restaurantsoperating_segmentscountries_and_territiories | |
Segment Reporting Information [Line Items] | |
Approximate Number Of System Units | 50,000 |
Franchise Restaurant Ownership | 98.00% |
Approximate Number Of Countries And Territories Where System Units Are Located | countries_and_territiories | 150 |
Number of Operating Segments | operating_segments | 4 |
Number of Stores Offering Delivery Services [Member] | |
Segment Reporting Information [Line Items] | |
Approximate Number Of System Units | 35,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2020USD ($)Years | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | ||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Net Income | $ 332 | $ 283 | $ 206 | $ 83 | $ 488 | $ 255 | $ 289 | $ 262 | $ 904 | $ 1,294 | $ 1,542 | |
Advertising Expense | 68 | 73 | 96 | |||||||||
Operating Profit | 482 | 471 | 300 | 250 | 546 | 480 | 471 | 433 | 1,503 | 1,930 | 2,296 | |
Franchise advertising and other services expense | 1,314 | 1,368 | 1,208 | |||||||||
Future lease payments due from franchisees on a nominal basis | 1,000 | 1,000 | ||||||||||
Reclassification of Retained Earnings to Common Stock for Share Repurchase | 179 | 796 | 2,356 | |||||||||
Employee stock option and SARs exercises (includes tax impact) | 41 | 75 | 41 | |||||||||
Revenues | 1,743 | 1,448 | 1,198 | 1,263 | 1,694 | 1,339 | 1,310 | 1,254 | 5,652 | 5,597 | 5,688 | |
Accumulated Deficit | (7,480) | (7,628) | $ (7,480) | (7,628) | ||||||||
Number of consecutive years of operating losses used as primary indicator of potential impairment for our semi-annual impairment testing of restaurant assets | Years | 2 | |||||||||||
Retained Earnings | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Net Income | $ 904 | 1,294 | 1,542 | |||||||||
Employee stock option and SARs exercises (includes tax impact) | 18 | |||||||||||
Accounting Standards Update 2016-02 [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Accumulated Deficit | (2) | (2) | ||||||||||
Advertising Cooperatives [Domain] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Advertising Expense | 10 | 10 | 35 | |||||||||
Franchise advertising and other services expense | 1,079 | 1,133 | 1,035 | |||||||||
Company Sales | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 566 | 486 | 403 | 355 | 490 | 364 | 359 | 333 | 1,810 | 1,546 | 2,000 | |
Franchise contributions for advertising and other services | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 427 | $ 323 | $ 270 | $ 312 | $ 434 | $ 330 | $ 318 | $ 309 | 1,332 | 1,391 | 1,206 | |
United States | Company Sales | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,309 | 1,014 | ||||||||||
United States | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,050 | 1,059 | ||||||||||
United States | Franchise contributions for advertising and other services | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 818 | 811 | ||||||||||
CHINA | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 255 | 274 | ||||||||||
Other, Outside the U.S. and China [Member] | Company Sales | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 501 | 532 | ||||||||||
Other, Outside the U.S. and China [Member] | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,080 | 1,185 | ||||||||||
Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 514 | 580 | ||||||||||
KFC Global Division [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Operating Profit | 922 | 1,052 | 959 | |||||||||
Revenues | [1] | 2,272 | 2,491 | 2,644 | ||||||||
KFC Global Division [Member] | United States | Company Sales | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 60 | 74 | ||||||||||
KFC Global Division [Member] | United States | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 184 | 175 | ||||||||||
KFC Global Division [Member] | United States | Franchise contributions for advertising and other services | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 18 | 10 | ||||||||||
KFC Global Division [Member] | CHINA | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 204 | 214 | ||||||||||
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Company Sales | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 446 | 497 | ||||||||||
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 833 | 912 | ||||||||||
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 453 | 520 | ||||||||||
Pizza Hut Global Division [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Operating Profit | 335 | 369 | 348 | |||||||||
Revenues | [1] | 1,002 | 1,027 | 988 | ||||||||
Pizza Hut Global Division [Member] | United States | Company Sales | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 21 | 21 | ||||||||||
Pizza Hut Global Division [Member] | United States | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 272 | 282 | ||||||||||
Pizza Hut Global Division [Member] | United States | Franchise contributions for advertising and other services | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 317 | 318 | ||||||||||
Pizza Hut Global Division [Member] | CHINA | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 51 | 60 | ||||||||||
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Company Sales | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 55 | 33 | ||||||||||
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 222 | 246 | ||||||||||
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 57 | 58 | ||||||||||
Taco Bell Global Division [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Operating Profit | 696 | 683 | 633 | |||||||||
Revenues | [1] | 2,031 | 2,079 | 2,056 | ||||||||
Taco Bell Global Division [Member] | United States | Company Sales | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 882 | 919 | ||||||||||
Taco Bell Global Division [Member] | United States | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 593 | 602 | ||||||||||
Taco Bell Global Division [Member] | United States | Franchise contributions for advertising and other services | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 483 | 483 | ||||||||||
Taco Bell Global Division [Member] | CHINA | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | ||||||||||
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Company Sales | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 2 | ||||||||||
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 25 | 27 | ||||||||||
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 4 | 2 | ||||||||||
Franchise and property expenses [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Sales Allowances, Services | $ 12 | 24 | $ 11 | |||||||||
53rd Week Impact [Member] | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Net Income | 17 | |||||||||||
Operating Profit | 24 | |||||||||||
Revenues | $ 66 | |||||||||||
[1] | U.S. revenues included in the combined KFC, Pizza Hut, Taco Bell and Habit Burger Grill Divisions totaled $3.2 billion in 2020, $3.0 billion in 2019 and $2.9 billion in 2018. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 2) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020USD ($)Years | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jan. 01, 2018USD ($) | |
Fiscal Period Adjustment [Line Items] | ||||
Goodwill Written Off Related To Sale Of Business Unit Years From Acquisition | 2 | |||
Fair Value Goodwill Written Off Related To Sale Of Business Unit Minimum Years Refranchised | 2 | |||
Number of years notes receivable and direct financing leases are beyond and would be included in other assets | 1 | |||
Number of years notes receivable and direct financing leases are due within and would be included in accounts and notes receivable | 1 | |||
Number of consecutive years of operating losses used as primary indicator of potential impairment for our semi-annual impairment testing of restaurant assets | 2 | |||
Accumulated Deficit | $ | $ 7,480 | $ 7,628 | ||
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | ||||
Fiscal Period Adjustment [Line Items] | ||||
Accumulated Deficit | $ | $ 251 | $ (240) | ||
Accounting Standards Update 2016-13 [Member] | ||||
Fiscal Period Adjustment [Line Items] | ||||
Accumulated Deficit | $ | $ 8 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details 3) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($)Years | |
Foreign Currency [Abstract] | |
Foreign currency translation adjustment | $ | $ 182 |
Impairment or Disposal of Property, Plant and Equipment [Abstract] | |
Number of consecutive years of operating losses used as primary indicator of potential impairment for our semi-annual impairment testing of restaurant assets | Years | 2 |
Minimum [Member] | Buildings and improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years) | 5 years |
Minimum [Member] | Machinery, Equipment and Other | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years) | 3 years |
Maximum [Member] | Buildings and improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years) | 25 years |
Maximum [Member] | Machinery, Equipment and Other | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years) | 20 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details 4) - USD ($) $ / shares in Millions, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||
Period Within Date Of Corresponding Sales In Which Trade Receivables Are Classified As Accounts And Notes Receivable | 30 days | ||||
Other Assets | $ 453 | $ 431 | |||
Accounts and notes receivable | 579 | 656 | |||
Allowance for doubtful accounts | (45) | (72) | |||
Accounts and notes receivable, net | 534 | 584 | |||
Net amounts included in Other Assets | 72 | 68 | |||
Allowance for doubtful accounts related to notes and direct financing lease receivables | 5 | 1 | |||
Stock Repurchased During Period, Value | $ (250) | [1] | $ (810) | [1] | $ (2,394) |
Common Stock, No Par Value | $ 0 | $ 0 | |||
Prior Period Reclassification Adjustment | $ 0 | ||||
Reduction to Retained earnings | |||||
Stock Repurchased During Period, Value | (179) | $ (796) | (2,356) | ||
Franchise and property expenses [Member] | |||||
Sales Allowances, Services | 12 | 24 | $ 11 | ||
Franchise advertising and other services expenses [Member] [Member] | |||||
Sales Allowances, Services | $ (7) | $ 19 | |||
Minimum [Member] | |||||
Continuing Fees Rate | 4.00% | ||||
Maximum [Member] | |||||
Continuing Fees Rate | 6.00% | ||||
Capitalized software costs | Minimum [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 3 years | ||||
Capitalized software costs | Maximum [Member] | |||||
Finite-Lived Intangible Asset, Useful Life | 7 years | ||||
[1] | 2019 amount excludes and 2018 amount includes the effect of $5 million in share repurchases (0.1 million shares) with trade dates on, or prior to, December 31, 2018, but settlement dates subsequent to December 31, 2018. |
Habit Burger Acquisition (Detai
Habit Burger Acquisition (Details) $ in Millions | Mar. 18, 2020USD ($)restaurants | Dec. 31, 2020USD ($)restaurants | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($)restaurants | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Business Acquisition [Line Items] | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets | $ 11 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 111 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | 96 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets | 28 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | 442 | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities | (69) | |||||||
Business Combination, Recognized Identifiable Asset Acquired and Liability Assumed, Lease Obligation | (170) | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other | (1) | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | (240) | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | 202 | |||||||
Goodwill | [1] | $ 597 | $ 597 | $ 530 | $ 525 | |||
Payments to Acquire Businesses, Net of Cash Acquired | 408 | |||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Property, Plant, and Equipment | 18 | |||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles | $ 2 | |||||||
Approximate Number Of System Units | restaurants | 50,000 | 50,000 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | 20 | |||||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 200 | $ 200 | ||||||
Impairment and closure expense | [2] | 172 | 5 | 6 | ||||
Income tax provision | 116 | 79 | 297 | |||||
Goodwill impairment tax benefit [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Income tax provision | 1 | $ 32 | ||||||
Other Current Assets | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Assets | 1 | |||||||
Other Noncurrent Assets | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Assets | (33) | |||||||
Other Assets [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Assets | (6) | |||||||
Other Current Liabilities [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Liabilities | 1 | |||||||
Other Noncurrent Liabilities [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Liabilities | (1) | |||||||
Lease Agreements [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Financial Liabilities | 5 | |||||||
The Habit Burger Grill [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Goodwill | 206 | (13) | (13) | |||||
Payments to Acquire Businesses, Net of Cash Acquired | 408 | $ 0 | $ 0 | |||||
Share-based Payment Arrangement, Cash Used to Settle Award | 9 | |||||||
Amounts Payable Under Tax Receivable Agreement | $ 53 | |||||||
The Habit Burger Grill [Member] | Franchisee Owned Stores [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Approximate Number Of System Units | restaurants | 31 | |||||||
The Habit Burger Grill [Member] | Company Owned Stores [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Approximate Number Of System Units | restaurants | 245 | |||||||
Lease Agreements [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets | $ 196 | |||||||
Goodwill [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Impairment and closure expense | $ 0 | $ 5 | $ 139 | $ 144 | ||||
[1] | Goodwill, net includes $144 million of accumulated impairment loss recorded in the year ended December 31, 2020, related to our Habit Burger Grill segment and $17 million of accumulated impairment losses for each year presented related to our Pizza Hut segment. | |||||||
[2] | The year ended December 31, 2020, includes a charge of $144 million related to the impairment of Habit Burger Grill goodwill. The year ended December 31, 2020, also includes charges of $12 million related to the impairment of restaurant-level assets and charges of $11 million related to the write-off of software no longer being used. |
Earnings Per Common Share ("E_3
Earnings Per Common Share ("EPS") (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Earnings Per Share [Abstract] | ||||||||||||
Net Income | $ 332 | $ 283 | $ 206 | $ 83 | $ 488 | $ 255 | $ 289 | $ 262 | $ 904 | $ 1,294 | $ 1,542 | |
Weighted-average common shares outstanding (for basic calculation) (in shares) | 302 | 306 | 322 | |||||||||
Effect of dilutive share-based employee compensation (in shares) | 5 | 7 | 7 | |||||||||
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation) (in shares) | 307 | 313 | 329 | |||||||||
Basic EPS (in dollars per share) | $ 1.10 | $ 0.94 | $ 0.68 | $ 0.28 | $ 1.61 | $ 0.83 | $ 0.94 | $ 0.85 | $ 2.99 | $ 4.23 | $ 4.80 | |
Diluted EPS (in dollars per share) | $ 1.08 | $ 0.92 | $ 0.67 | $ 0.27 | $ 1.58 | $ 0.81 | $ 0.92 | $ 0.83 | $ 2.94 | $ 4.14 | $ 4.69 | |
Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation (in shares) | [1] | 4.8 | 2 | 2 | ||||||||
[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. |
Items Affecting Comparability_3
Items Affecting Comparability of Net Income and Cash Flows (Details) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2020USD ($) | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2018USD ($)shares | Dec. 31, 2020USD ($)restaurants | Dec. 31, 2019USD ($)restaurants | Dec. 31, 2018USD ($)restaurants | Dec. 31, 2017USD ($) | Jun. 24, 2020USD ($) | ||
Facility Actions [Line Items] | ||||||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ (35) | $ (434) | ||||||||
General and administrative expenses | $ 1,064 | $ 917 | 895 | |||||||
Investment (income) expense, net | [1] | 74 | (67) | 9 | ||||||
Deferred income taxes | 65 | 232 | 11 | |||||||
Refranchising (gain) loss | 34 | 37 | 540 | |||||||
Proceeds from Sale, Maturity and Collection of Investments | 206 | |||||||||
Noncash or Part Noncash Divestiture, Amount of Consideration Received | [2] | 31 | 6 | 0 | ||||||
Charitable Contribution, Authorized Spend | $ 100 | |||||||||
Proceeds from Divestiture of Businesses, Including Noncash Consideration | $ 19 | $ 110 | $ 825 | |||||||
Statutory rate differential attributable to foreign operations (in hundredths) | (0.90%) | 0.90% | (4.60%) | |||||||
Payments for (Proceeds from) Investments | $ 206 | $ 0 | $ (200) | |||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | (2.50%) | 0.00% | (1.90%) | |||||||
Subsidiary Senior Unsecured Notes [Member] | Unsecured Debt [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Repayments of Debt, Maturing in More than Three Months | $ 1,050 | |||||||||
Interest rate, stated (in hundredths) | 5.00% | |||||||||
Gain (Loss) on Extinguishment of Debt | $ 26 | |||||||||
Write off of Deferred Debt Issuance Cost | $ 6 | |||||||||
Foreign [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 19.00% | 17.00% | 17.00% | 19.00% | ||||||
Gain (loss) on disposition of assets [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Number of Restaurants Refranchised | restaurants | 97 | 25 | 660 | |||||||
General and Administrative Expense [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Costs Associated with Resource Optimization Initiative | $ 36 | |||||||||
Other pension (income) expense [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Costs Associated with Resource Optimization Initiative | 2 | |||||||||
Corporate and Other [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
General and administrative expenses | [1],[3] | (312) | $ (188) | $ (171) | ||||||
KFC Global Division [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Refranchising (gain) loss | 33 | 6 | 240 | |||||||
Pizza Hut Global Division [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Refranchising (gain) loss | (1) | 0 | (13) | |||||||
Taco Bell Global Division [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Refranchising (gain) loss | 2 | 31 | 313 | |||||||
Interest Expense [Member] | Subsidiary Senior Unsecured Notes [Member] | Unsecured Debt [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Gain (Loss) on Extinguishment of Debt | 2 | |||||||||
GrubHub Inc. [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Investment (income) expense, net | 69 | (77) | $ 14 | |||||||
Investment Owned, Balance, Shares | shares | 2.8 | |||||||||
Payments for (Proceeds from) Investments | $ 200 | |||||||||
Intra-Entity IP Transfers [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Deferred income taxes | $ 25 | 3 | $ 226 | |||||||
2018 [Member] | ||||||||||
Facility Actions [Line Items] | ||||||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 35 | |||||||||
[1] | Amounts have not been allocated to any segment for performance reporting purposes. | |||||||||
[2] | In 2020 we received as refranchising consideration a minority interest in an entity that operates KFC and Pizza Hut franchised units in India and in 2019 we received as refranchising consideration a minority interest in an entity that owns our KFC Brazil and Pizza Hut Brazil master franchisee rights, respectively (See Note 5). | |||||||||
[3] | Amounts in 2020 include charitable contributions to Yum! Brands Foundation, Inc. of $50 million and $25 million related to our Unlocking Opportunity Initiative and COVID-19 employee relief, respectively. Additionally, 2020 includes $36 million for charges associated with resource optimization (See Note 5) and $9 million in costs associated with our acquisition and integration of Habit Burger Grill (See Note 3). |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 | ||
Deferred Revenue, Revenue Recognized | $ (76) | $ (70) | |||||||||||
Revenues | $ 1,743 | $ 1,448 | $ 1,198 | $ 1,263 | $ 1,694 | $ 1,339 | $ 1,310 | $ 1,254 | 5,652 | 5,597 | $ 5,688 | ||
Deferred Revenue, Additions | 53 | 93 | |||||||||||
Deferred Revenue | 415 | 441 | 415 | 441 | $ 414 | ||||||||
1 year [Member] | |||||||||||||
Deferred Revenue, Revenue Expected to be Recognized | 64 | 64 | |||||||||||
2 years [Member] | |||||||||||||
Deferred Revenue, Revenue Expected to be Recognized | 60 | 60 | |||||||||||
3 years [Member] | |||||||||||||
Deferred Revenue, Revenue Expected to be Recognized | 55 | 55 | |||||||||||
4 years [Member] | |||||||||||||
Deferred Revenue, Revenue Expected to be Recognized | 50 | 50 | |||||||||||
5 years [Member] | |||||||||||||
Deferred Revenue, Revenue Expected to be Recognized | 44 | 44 | |||||||||||
Thereafter 5 years [Member] | |||||||||||||
Deferred Revenue, Revenue Expected to be Recognized | 142 | 142 | |||||||||||
Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 566 | 486 | 403 | 355 | 490 | 364 | 359 | 333 | 1,810 | 1,546 | 2,000 | ||
Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 427 | $ 323 | $ 270 | $ 312 | $ 434 | $ 330 | $ 318 | $ 309 | 1,332 | 1,391 | 1,206 | ||
United States | |||||||||||||
Rental income | 65 | 70 | |||||||||||
United States | Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,309 | 1,014 | |||||||||||
United States | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,050 | 1,059 | |||||||||||
United States | Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 818 | 811 | |||||||||||
CHINA | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 255 | 274 | |||||||||||
Other, Outside the U.S. and China [Member] | |||||||||||||
Rental income | 60 | 72 | |||||||||||
Other, Outside the U.S. and China [Member] | Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 501 | 532 | |||||||||||
Other, Outside the U.S. and China [Member] | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1,080 | 1,185 | |||||||||||
Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 514 | 580 | |||||||||||
KFC Global Division [Member] | |||||||||||||
Revenues | [1] | 2,272 | 2,491 | 2,644 | |||||||||
KFC Global Division [Member] | United States | |||||||||||||
Rental income | 16 | 20 | |||||||||||
KFC Global Division [Member] | United States | Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 60 | 74 | |||||||||||
KFC Global Division [Member] | United States | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 184 | 175 | |||||||||||
KFC Global Division [Member] | United States | Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 18 | 10 | |||||||||||
KFC Global Division [Member] | CHINA | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 204 | 214 | |||||||||||
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | |||||||||||||
Rental income | 58 | 69 | |||||||||||
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 446 | 497 | |||||||||||
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 833 | 912 | |||||||||||
KFC Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 453 | 520 | |||||||||||
Pizza Hut Global Division [Member] | |||||||||||||
Revenues | [1] | 1,002 | 1,027 | 988 | |||||||||
Pizza Hut Global Division [Member] | United States | |||||||||||||
Rental income | 5 | 6 | |||||||||||
Pizza Hut Global Division [Member] | United States | Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 21 | 21 | |||||||||||
Pizza Hut Global Division [Member] | United States | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 272 | 282 | |||||||||||
Pizza Hut Global Division [Member] | United States | Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 317 | 318 | |||||||||||
Pizza Hut Global Division [Member] | CHINA | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 51 | 60 | |||||||||||
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | |||||||||||||
Rental income | 2 | 3 | |||||||||||
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 55 | 33 | |||||||||||
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 222 | 246 | |||||||||||
Pizza Hut Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 57 | 58 | |||||||||||
Taco Bell Global Division [Member] | |||||||||||||
Revenues | [1] | 2,031 | 2,079 | 2,056 | |||||||||
Taco Bell Global Division [Member] | United States | |||||||||||||
Rental income | 44 | 44 | |||||||||||
Taco Bell Global Division [Member] | United States | Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 882 | 919 | |||||||||||
Taco Bell Global Division [Member] | United States | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 593 | 602 | |||||||||||
Taco Bell Global Division [Member] | United States | Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 483 | 483 | |||||||||||
Taco Bell Global Division [Member] | CHINA | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 0 | |||||||||||
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | |||||||||||||
Rental income | 0 | 0 | |||||||||||
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | 2 | |||||||||||
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 25 | 27 | |||||||||||
Taco Bell Global Division [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 4 | 2 | |||||||||||
The Habit Burger Grill Global Division | |||||||||||||
Revenues | 347 | 0 | $ 0 | ||||||||||
The Habit Burger Grill Global Division | United States | |||||||||||||
Rental income | 0 | ||||||||||||
The Habit Burger Grill Global Division | United States | Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 346 | ||||||||||||
The Habit Burger Grill Global Division | United States | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 1 | ||||||||||||
The Habit Burger Grill Global Division | United States | Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | ||||||||||||
The Habit Burger Grill Global Division | CHINA | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | ||||||||||||
The Habit Burger Grill Global Division | Other, Outside the U.S. and China [Member] | |||||||||||||
Rental income | 0 | ||||||||||||
The Habit Burger Grill Global Division | Other, Outside the U.S. and China [Member] | Company Sales | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | ||||||||||||
The Habit Burger Grill Global Division | Other, Outside the U.S. and China [Member] | Franchise [Member] | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | ||||||||||||
Other, Outside the U.S. and China [Member] | Other, Outside the U.S. and China [Member] | Franchise contributions for advertising and other services | |||||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 0 | ||||||||||||
Foreign Currency Gain (Loss) and Refranchising Gain (Loss) [Member] | |||||||||||||
Deferred Revenue, Period Increase (Decrease) | [2] | $ (3) | $ 4 | ||||||||||
[1] | U.S. revenues included in the combined KFC, Pizza Hut, Taco Bell and Habit Burger Grill Divisions totaled $3.2 billion in 2020, $3.0 billion in 2019 and $2.9 billion in 2018. | ||||||||||||
[2] | (a) Includes impact of foreign currency translation. |
Supplemental Cash Flow Data (De
Supplemental Cash Flow Data (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Cash Paid For: | ||||
Interest Paid, Excluding Capitalized Interest, Operating Activities | $ 480 | $ 497 | $ 455 | |
Income taxes | 328 | 283 | 279 | |
Significant Non-Cash Investing and Financing Activities: | ||||
Capital lease obligations incurred | 4 | 14 | 4 | |
Capital lease and other debt obligations transferred through refranchising | (1) | (1) | (24) | |
Noncash or Part Noncash Divestiture, Amount of Consideration Received | [1] | 31 | 6 | 0 |
Cash and Cash Equivalents, at Carrying Value | 730 | 605 | 292 | |
Restricted Cash and Cash Equivalents, Current | 258 | 138 | ||
Cash, Cash Equivalents and Restricted Cash as presented in the Consolidated Statement of Cash Flows | 1,024 | 768 | 474 | |
Prepaid Expenses and Other Current Assets [Member] | ||||
Significant Non-Cash Investing and Financing Activities: | ||||
Restricted Cash and Cash Equivalents, Current | [2] | 258 | 138 | 151 |
Other Assets [Member] | ||||
Significant Non-Cash Investing and Financing Activities: | ||||
Restricted Cash and Cash Equivalents, Noncurrent | [3] | $ 36 | $ 25 | $ 31 |
[1] | In 2020 we received as refranchising consideration a minority interest in an entity that operates KFC and Pizza Hut franchised units in India and in 2019 we received as refranchising consideration a minority interest in an entity that owns our KFC Brazil and Pizza Hut Brazil master franchisee rights, respectively (See Note 5). | |||
[2] | Restricted cash within Prepaid expenses and other current assets reflects cash related to advertising cooperatives that we consolidate that can only be used to settle obligations of the respective cooperatives and Taco Bell Securitization interest reserves (See Note 11). | |||
[3] | Primarily trust accounts related to our self-insurance program. |
Other (Income) Expense (Details
Other (Income) Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Other Income and Expenses [Line Items] | |||||||
Foreign currency transaction (gain) loss and other (income) expense, before tax | [1] | $ (18) | $ (1) | $ 1 | |||
Impairment and closure expense | [2] | 172 | 5 | 6 | |||
Other (income) expense | 154 | 4 | $ 7 | ||||
Other Income and Expenses [Domain] | |||||||
Other Income and Expenses [Line Items] | |||||||
Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability | $ 8 | ||||||
Finite-Lived Intangible Assets [Member] | |||||||
Other Income and Expenses [Line Items] | |||||||
Impairment and closure expense | 11 | ||||||
Property, Plant and Equipment [Member] | |||||||
Other Income and Expenses [Line Items] | |||||||
Impairment and closure expense | 12 | ||||||
Goodwill [Member] | |||||||
Other Income and Expenses [Line Items] | |||||||
Impairment and closure expense | $ 0 | $ 5 | $ 139 | $ 144 | |||
[1] | The year ended December 31, 2019, includes a charge of $8 million for the settlement of contingent consideration associated with our 2013 acquisition of the KFC Turkey and Pizza Hut Turkey businesses. | ||||||
[2] | The year ended December 31, 2020, includes a charge of $144 million related to the impairment of Habit Burger Grill goodwill. The year ended December 31, 2020, also includes charges of $12 million related to the impairment of restaurant-level assets and charges of $11 million related to the write-off of software no longer being used. |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Prepaid Expenses and Other Current Assets [Line Items] | ||||
Income tax receivable | $ 35 | $ 39 | ||
Restricted Cash and Cash Equivalents, Current | 258 | 138 | ||
Assets held for sale | [1] | 7 | 25 | |
Prepaid expenses and other current assets | 125 | 136 | ||
Prepaid Expense and Other Assets, Current | 425 | 338 | ||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and equipment, gross | 2,465 | 2,306 | ||
Accumulated depreciation and amortization | (1,230) | (1,136) | ||
Property, Plant and equipment, net | 1,235 | 1,170 | ||
Depreciation and amortization | 132 | 114 | $ 146 | |
Other Assets, Noncurrent [Line Items] | ||||
Operating Lease, Right-of-Use Asset | 851 | 642 | ||
Other assets | 1,435 | 1,313 | ||
Other Assets, Miscellaneous, Noncurrent | 421 | 360 | ||
Proceeds from Sale, Maturity and Collection of Investments | 206 | |||
Accounts Payable and Other Current Liabilities [Line Items] | ||||
Accounts payable and other current liabilities | 1,189 | 960 | ||
Franchise Incentive [Member] | ||||
Other Assets, Noncurrent [Line Items] | ||||
Other assets | 163 | 174 | ||
Land | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and equipment, gross | 428 | 408 | ||
Buildings and improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and equipment, gross | 1,423 | 1,325 | ||
Finance leases, primarily buildings | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and equipment, gross | 71 | 68 | ||
Machinery, Equipment and Other | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and equipment, gross | 543 | 505 | ||
GrubHub Inc. [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||||
Other Assets, Noncurrent [Line Items] | ||||
Equity Securities, FV-NI | [2] | 0 | 137 | |
Accounts Payable and Accrued Liabilities [Member] | ||||
Accounts Payable and Other Current Liabilities [Line Items] | ||||
Accounts payable | 215 | 173 | ||
Accrued compensation and benefits | 225 | 223 | ||
Accrued Advertising, Current | 196 | 96 | ||
Operating Lease, Liability, Current | 97 | 67 | ||
Accrued taxes, other than income taxes | 36 | 52 | ||
Other current liabilities | $ 420 | $ 349 | ||
[1] | (a) Reflects the carrying value of restaurants we have offered for sale to franchisees and excess properties that we do not intend to use for restaurant operations in the future. | |||
[2] | (b) In the third quarter of 2020 we sold our entire investment in Grubhub, Inc. common stock and received proceeds of $206 million. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Changes in the carrying amount of goodwill [Roll Forward] | |||||||
Goodwill | [1] | $ 597 | $ 597 | $ 530 | $ 525 | ||
Disposals and other, net | [2] | 5 | 5 | ||||
Goodwill Acquired and Impaired During Period | 62 | ||||||
Impairment and closure expense | [3] | 172 | 5 | 6 | |||
Goodwill [Member] | |||||||
Changes in the carrying amount of goodwill [Roll Forward] | |||||||
Impairment and closure expense | 0 | $ 5 | $ 139 | 144 | |||
KFC Global Division [Member] | |||||||
Changes in the carrying amount of goodwill [Roll Forward] | |||||||
Goodwill | [1] | 235 | 235 | 233 | 230 | ||
Disposals and other, net | [2] | 2 | 3 | ||||
Goodwill Acquired and Impaired During Period | 0 | ||||||
Pizza Hut Global Division [Member] | |||||||
Changes in the carrying amount of goodwill [Roll Forward] | |||||||
Goodwill | [1] | 202 | 202 | 199 | 196 | ||
Disposals and other, net | [2] | 3 | 3 | ||||
Goodwill Acquired and Impaired During Period | 0 | ||||||
Goodwill, Impaired, Accumulated Impairment Loss | 17 | 17 | |||||
Taco Bell Global Division [Member] | |||||||
Changes in the carrying amount of goodwill [Roll Forward] | |||||||
Goodwill | [1] | 98 | 98 | 98 | 99 | ||
Disposals and other, net | [2] | 0 | (1) | ||||
Goodwill Acquired and Impaired During Period | 0 | ||||||
The Habit Burger Grill Global Division | |||||||
Changes in the carrying amount of goodwill [Roll Forward] | |||||||
Goodwill | [1] | 62 | 62 | 0 | $ 0 | ||
Disposals and other, net | [2] | 0 | $ 0 | ||||
Goodwill Acquired and Impaired During Period | 62 | ||||||
Goodwill, Impaired, Accumulated Impairment Loss | $ 144 | $ 144 | |||||
[1] | Goodwill, net includes $144 million of accumulated impairment loss recorded in the year ended December 31, 2020, related to our Habit Burger Grill segment and $17 million of accumulated impairment losses for each year presented related to our Pizza Hut segment. | ||||||
[2] | Disposals and other, net includes the impact of foreign currency translation on existing balances and goodwill write-offs associated with refranchising. | ||||||
[3] | The year ended December 31, 2020, includes a charge of $144 million related to the impairment of Habit Burger Grill goodwill. The year ended December 31, 2020, also includes charges of $12 million related to the impairment of restaurant-level assets and charges of $11 million related to the write-off of software no longer being used. |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Definite-lived intangible assets | |||
Gross Carrying Amount | $ 527 | $ 487 | |
Accumulated Amortization | (311) | (274) | |
Definite-lived intangible assets, amortization expense | 63 | 52 | $ 37 |
Approximate amortization expense for definite-lived intangible assets - 2021 | 70 | ||
Approximate amortization expense for definite-lived intangible assets - 2022 | 52 | ||
Approximate amortization expense for definite-lived intangible assets - 2023 | 41 | ||
Approximate amortization expense for definite-lived intangible assets - 2024 | 24 | ||
Approximate amortization expense for definite-lived intangible assets - 2025 | 15 | ||
Trademarks/brands [Member] | |||
Indefinite-lived intangible assets | |||
Gross Carrying Amount | 127 | 31 | |
Capitalized software costs | |||
Definite-lived intangible assets | |||
Gross Carrying Amount | 335 | 306 | |
Accumulated Amortization | (160) | (130) | |
Reacquired franchise rights [Member] | |||
Definite-lived intangible assets | |||
Gross Carrying Amount | 39 | 38 | |
Accumulated Amortization | (33) | (32) | |
Franchise contract rights [Member] | |||
Definite-lived intangible assets | |||
Gross Carrying Amount | 100 | 100 | |
Accumulated Amortization | (85) | (83) | |
Lease tenancy rights [Member] | |||
Definite-lived intangible assets | |||
Gross Carrying Amount | 5 | 5 | |
Accumulated Amortization | (1) | (1) | |
Other [Member] | |||
Definite-lived intangible assets | |||
Gross Carrying Amount | 48 | 38 | |
Accumulated Amortization | (32) | (28) | |
KFC Global Division [Member] | Trademarks/brands [Member] | |||
Indefinite-lived intangible assets | |||
Gross Carrying Amount | 31 | 31 | |
The Habit Burger Grill Global Division | Trademarks/brands [Member] | |||
Indefinite-lived intangible assets | |||
Gross Carrying Amount | $ 96 | $ 0 |
Short-term Borrowings and Lon_2
Short-term Borrowings and Long-term Debt (Details) - USD ($) $ in Millions | Apr. 01, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 25, 2020 | |
Debt Instrument [Line Items] | ||||||
Long-term Debt and Lease Obligation, Current | $ (463) | $ (437) | ||||
Debt Issuance Costs, Current, Net | (10) | (10) | ||||
Short-term Borrowings | ||||||
Total Short-term Borrowings | 453 | 431 | ||||
Long-term Debt | ||||||
Long-term debt including hedge accounting adjustment | 10,272 | 10,131 | ||||
Capital Lease Obligations Excluded from Annual Maturities | 72 | |||||
Line of Credit Facility [Abstract] | ||||||
Capital Lease Obligations, Noncurrent | 72 | 77 | ||||
Long-term debt and capital less obligations, excluding current maturities and debt issuance costs | 10,813 | 10,648 | ||||
Debt Issuance Costs, Noncurrent, Net | (78) | (80) | ||||
Senior Unsecured Notes [Abstract] | ||||||
Long-term Debt, Current Maturities | 463 | 441 | ||||
Other Short-term Borrowings | 0 | 4 | ||||
Restricted Cash and Cash Equivalents, Current | 258 | 138 | ||||
Payments of Debt Issuance Costs | 20 | 10 | $ 13 | |||
Interest expense, net | [1] | $ (543) | (486) | (452) | ||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 102.50% | |||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | $ 88 | |||||
Annual maturities of short-term borrowings and long-term debt excluding capital lease obligations and derivative instrument adjustments [Abstract] | ||||||
2016 | 455 | |||||
2017 | 424 | |||||
2018 | 1,626 | |||||
2019 | 36 | |||||
2020 | 2,452 | |||||
Thereafter | 5,748 | |||||
Total | 10,741 | |||||
Interest expense on short-term borrowings and long-term debt | 558 | 519 | 496 | |||
Revolving credit facilities, three months or less, net | $ 0 | 0 | 0 | |||
Senior Unsecured Notes Due November 2037 [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Nov. 15, 2037 | |||||
Interest rate, stated (in hundredths) | 6.88% | |||||
Interest rate, effective (in hundredths) | 7.45% | |||||
Debt Instrument, Face Amount | $ 325 | |||||
Issuance date | Oct. 19, 2007 | |||||
Senior Unsecured Notes Due November 2021 [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Nov. 1, 2021 | |||||
Interest rate, stated (in hundredths) | 3.75% | |||||
Interest rate, effective (in hundredths) | 3.88% | |||||
Debt Instrument, Face Amount | $ 350 | |||||
Issuance date | Aug. 29, 2011 | |||||
Senior Unsecured Notes Due November 2023 [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Nov. 1, 2023 | |||||
Interest rate, stated (in hundredths) | 3.88% | |||||
Interest rate, effective (in hundredths) | 4.01% | |||||
Debt Instrument, Face Amount | $ 325 | |||||
Issuance date | Oct. 31, 2013 | |||||
Senior Unsecured Notes Due November 2043 [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Nov. 1, 2043 | |||||
Interest rate, stated (in hundredths) | 5.35% | |||||
Interest rate, effective (in hundredths) | 5.42% | |||||
Debt Instrument, Face Amount | $ 275 | |||||
Issuance date | Oct. 31, 2013 | |||||
Senior Unsecured Notes Due January 2030 [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Jan. 15, 2030 | |||||
Interest rate, stated (in hundredths) | 4.75% | |||||
Interest rate, effective (in hundredths) | 4.90% | |||||
Debt Instrument, Face Amount | $ 800 | |||||
Issuance date | Sep. 11, 2019 | |||||
Term Loan A Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 431 | |||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Jun. 7, 2022 | |||||
Issuance date | Jun. 16, 2016 | |||||
Term Loan B Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 1,916 | |||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Apr. 3, 2025 | |||||
Issuance date | Jun. 16, 2016 | |||||
Subsidiary Senior Unsecured Notes due 2026 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 1,050 | |||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | May 31, 2026 | |||||
Interest rate, stated (in hundredths) | 5.25% | |||||
Issuance date | Jun. 15, 2016 | |||||
Subsidiary Senior Unsecured Notes due 2027 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 750 | |||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | May 31, 2027 | |||||
Interest rate, stated (in hundredths) | 4.75% | |||||
Issuance date | Jun. 15, 2017 | |||||
Senior Unsecured Notes Due April 2025 | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Apr. 1, 2025 | |||||
Interest rate, stated (in hundredths) | 7.75% | |||||
Interest rate, effective (in hundredths) | 8.05% | |||||
Debt Instrument, Face Amount | $ 600 | |||||
Payments of Debt Issuance Costs | $ 7 | |||||
Issuance date | Apr. 1, 2020 | |||||
Senior Unsecured Notes Due March 2031 | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Mar. 15, 2031 | |||||
Interest rate, stated (in hundredths) | 3.63% | |||||
Interest rate, effective (in hundredths) | 3.77% | |||||
Debt Instrument, Face Amount | $ 1,050 | |||||
Payments of Debt Issuance Costs | $ 13 | |||||
Issuance date | Sep. 25, 2020 | |||||
Secured Debt [Member] | Class A-2-II Notes [Member] | 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 483 | |||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | May 25, 2023 | |||||
Interest rate, stated (in hundredths) | 4.377% | |||||
Interest rate, effective (in hundredths) | 4.59% | |||||
Issuance date | May 11, 2016 | |||||
Secured Debt [Member] | Class A-2-II Notes [Member] | 2018 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 613 | |||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Nov. 25, 2028 | |||||
Interest rate, stated (in hundredths) | 4.94% | |||||
Interest rate, effective (in hundredths) | 5.06% | |||||
Issuance date | Nov. 28, 2018 | |||||
Secured Debt [Member] | Term Loan A Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | [2] | $ 431 | 463 | |||
Senior Unsecured Notes [Abstract] | ||||||
Interest rate, effective (in hundredths) | [3] | 3.22% | ||||
Frequency of interest payments | quarterly | |||||
Term Loan A Facility, Repayments of Principal in Year Four | 1.875% | |||||
Annual maturities of short-term borrowings and long-term debt excluding capital lease obligations and derivative instrument adjustments [Abstract] | ||||||
Term Loan A, Repayments of Principal in Year Five | 3.75% | |||||
Secured Debt [Member] | Term Loan B Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | [2] | $ 1,916 | 1,935 | |||
Senior Unsecured Notes [Abstract] | ||||||
Interest rate, effective (in hundredths) | [3] | 3.53% | ||||
Frequency of interest payments | quarterly | |||||
Term Loan B, Repayment of Principal | 0.25% | |||||
Secured Debt [Member] | Revolving Facility [Member] | ||||||
Line of Credit Facility [Abstract] | ||||||
Line of credit facility, maximum borrowing capacity | $ 1,000 | |||||
Secured Debt [Member] | the Credit Agreement [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Payment Terms | The Credit Agreement is subject to certain mandatory prepayments, including an amount equal to 50% of excess cash flow (as defined in the Credit Agreement) on an annual basis and the proceeds of certain asset sales, casualty events and issuances of indebtedness, subject to customary exceptions and reinvestment rights | |||||
Debt Instrument, Covenant Compliance | We were in compliance with all debt covenants as of December 31, 2020 | |||||
Secured Debt [Member] | Class A-2-I Notes [Member] | 2018 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 808 | |||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Nov. 25, 2023 | |||||
Interest rate, stated (in hundredths) | 4.318% | |||||
Interest rate, effective (in hundredths) | 4.53% | |||||
Issuance date | Nov. 28, 2018 | |||||
Secured Debt [Member] | Class A-2-III Notes [Member] | 2016 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Long-term Debt | $ 965 | |||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | May 25, 2026 | |||||
Interest rate, stated (in hundredths) | 4.97% | |||||
Interest rate, effective (in hundredths) | 5.14% | |||||
Issuance date | May 11, 2016 | |||||
Secured Debt [Member] | Securitization Notes [Member] | ||||||
Short-term Borrowings | ||||||
Senior Notes, Noncurrent | [4] | $ 2,869 | 2,898 | |||
Senior Unsecured Notes [Abstract] | ||||||
Frequency of interest payments | quarterly | |||||
Debt Instrument, Payment Terms | no amortization of principal of the Securitization Notes is required prior to their anticipated repayment dates | |||||
Debt Instrument, Debt Default, Description of Violation or Event of Default | The Securitization Notes are also subject to certain customary events of default, including events relating to non-payment of required interest or principal due on the Securitization Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, certain judgments and failure of the Securitization Entities to maintain a stated debt service coverage ratio | |||||
Debt Instrument, Covenant Compliance | As of December 31, 2020, we were in compliance with all of our debt covenant requirements and were not subject to any rapid amortization events | |||||
Long-term Debt, Contingent Payment of Principal or Interest | as of any quarterly measurement date the consolidated leverage ratio (the ratio of total debt to Net Cash Flow (as defined in the related indenture)) for the preceding four fiscal quarters of either the Company and its subsidiaries or the Issuer and its subsidiaries exceeds 5.0:1, in which case amortization payments of 1% per year of the outstanding principal as of the closing of the Securitization Notes are required. As of the most recent quarterly measurement date the consolidated leverage ratio for both the Company and its subsidiaries as well as the Issuer and its subsidiaries exceeded 5.0:1 and, as a result, amortization payments are required. | |||||
Secured Debt [Member] | Class A-2 Notes [Member] | 2016 [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | May 1, 2046 | |||||
Secured Debt [Member] | Class A-2 Notes [Member] | 2018 [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Maturity date | Nov. 1, 2048 | |||||
Senior Unsecured Notes [Member] | Subsidiary Senior Unsecured Notes [Member] | ||||||
Short-term Borrowings | ||||||
Senior Notes, Noncurrent | [2] | $ 1,800 | 2,850 | |||
Senior Unsecured Notes [Abstract] | ||||||
Interest rate, stated (in hundredths) | 5.00% | |||||
Debt Instrument, Covenant Compliance | We were in compliance with all debt covenants as of December 31, 2020 | |||||
Repayments of Debt, Maturing in More than Three Months | $ 1,050 | |||||
Gain (Loss) on Extinguishment of Debt | 26 | |||||
Write off of Deferred Debt Issuance Cost | 6 | |||||
Senior Unsecured Notes [Member] | Subsidiary Senior Unsecured Notes [Member] | Interest Expense [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Gain (Loss) on Extinguishment of Debt | $ 2 | |||||
Senior Unsecured Notes [Member] | Subsidiary Senior Unsecured Notes due 2026 [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Interest rate, effective (in hundredths) | [3] | 5.39% | ||||
Senior Unsecured Notes [Member] | Subsidiary Senior Unsecured Notes due 2027 [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Interest rate, effective (in hundredths) | [3] | 4.90% | ||||
Senior Unsecured Notes [Member] | YUM Senior Unsecured Notes [Member] | ||||||
Short-term Borrowings | ||||||
Senior Notes, Noncurrent | [2] | $ 3,725 | 2,425 | |||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Debt Default, Description of Violation or Event of Default | Our YUM Senior Unsecured Notes contain cross-default provisions whereby the acceleration of the maturity of any of our indebtedness in a principal amount in excess of $50 million ($100 million or more in the case of the 2025 Notes, the 2030 Notes and the 2031 Notes) will constitute a default under the YUM Senior Unsecured Notes unless such indebtedness is discharged, or the acceleration of the maturity of that indebtedness is annulled, within 30 days after notice | |||||
Senior Unsecured Notes [Member] | Unsecured Notes Due April 2025 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from Issuance of Debt | $ 600 | |||||
Senior Unsecured Notes [Abstract] | ||||||
Interest rate, stated (in hundredths) | 7.75% | |||||
Senior Unsecured Notes [Member] | Unsecured Notes Due March 2031 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from Issuance of Debt | $ 1,050 | |||||
Senior Unsecured Notes [Abstract] | ||||||
Interest rate, stated (in hundredths) | 3.625% | |||||
London Interbank Offered Rate (LIBOR) [Member] | Secured Debt [Member] | Term Loan A and B Facilities and Revolving Facility [Domain] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |||||
London Interbank Offered Rate (LIBOR) [Member] | Secured Debt [Member] | Term Loan B Facility [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||||
Base Rate [Member] | Secured Debt [Member] | Term Loan A and B Facilities and Revolving Facility [Domain] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | |||||
Base Rate [Member] | Secured Debt [Member] | Term Loan B Facility [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | |||||
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Secured Debt [Member] | Term Loan A Facility and Revolving Facility [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |||||
Minimum [Member] | Base Rate [Member] | Secured Debt [Member] | Term Loan A Facility and Revolving Facility [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | |||||
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | Secured Debt [Member] | Term Loan A Facility and Revolving Facility [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||||
Maximum [Member] | Base Rate [Member] | Secured Debt [Member] | Term Loan A Facility and Revolving Facility [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | |||||
Total Leverage Ratio [Member] | Secured Debt [Member] | the Credit Agreement [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Covenant Description | require the Borrowers to maintain a total leverage ratio (defined as the ratio of Consolidated Total Debt to Consolidated EBITDA (as these terms are defined in the Credit Agreement)) of 5.0:1 or less | |||||
Fixed Charge Coverage Ratio [Member] | Secured Debt [Member] | the Credit Agreement [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Covenant Description | fixed charge coverage ratio (defined as the ratio of EBITDA minus capital expenditures to fixed charges (inclusive of rental expense and scheduled amortization)) of at least 1.5:1 | |||||
Debt Service Coverage Ratio - Rapid Amortization Events [Member] | Secured Debt [Member] | Securitization Notes [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Covenant Description | debt service coverage ratio (as defined in the related indenture) of at least 1.1:1 | |||||
Debt Service Coverage Ratio - Cash Trap Reserve Account [Member] | Secured Debt [Member] | Securitization Notes [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Debt Instrument, Covenant Description | debt service coverage ratio (or the ratio of Net Cash Flow to all debt service payments for the preceding four fiscal quarters) of at least 1.75:1 | |||||
Debt Instrument, Covenant Compliance | During the most recent quarter ended December 31, 2020, the Securitization Entities maintained a debt service coverage ratio significantly in excess of the 1.75:1 requirement | |||||
Prepaid Expenses and Other Current Assets [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Restricted Cash and Cash Equivalents, Current | [5] | $ 258 | $ 138 | $ 151 | ||
Prepaid Expenses and Other Current Assets [Member] | Securitization Notes [Member] | ||||||
Senior Unsecured Notes [Abstract] | ||||||
Restricted Cash and Cash Equivalents, Current | 85 | |||||
Letter of Credit [Member] | Revolving Credit Facility [Member] | ||||||
Line of Credit Facility [Abstract] | ||||||
Outstanding letters of credit | $ 1.3 | |||||
[1] | Amounts have not been allocated to any segment for performance reporting purposes. | |||||
[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. | |||||
[3] | Includes the effects of the amortization of any discount and debt issuance costs as well as the impact of the interest rate swaps on the Term Loan B Facility (See Note 13). The effective rates related to our Term Loan A and B Facilities are based on LIBOR-based interest rates through December 31, 2020. | |||||
[4] | 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. | |||||
[5] | Restricted cash within Prepaid expenses and other current assets reflects cash related to advertising cooperatives that we consolidate that can only be used to settle obligations of the respective cooperatives and Taco Bell Securitization interest reserves (See Note 11). |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 18, 2020 | ||
Operating Lease, Cost | $ 137 | $ 115 | |||
Finance Lease, Right-of-Use Asset, Amortization | 5 | 3 | |||
Finance Lease, Interest Expense | 3 | 3 | |||
Finance Lease Cost | 8 | 6 | |||
Sublease Income | (60) | (69) | |||
Operating Leases, Rent Expense | $ 151 | ||||
Operating Lease, Payments | 133 | 104 | |||
Finance Lease, Interest Payment on Liability | 3 | 3 | |||
Finance Lease, Principal Payments | 5 | 4 | |||
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 296 | 79 | |||
Right-of-Use Asset Obtained in Exchange for Finance Lease Liability | 4 | 14 | |||
Operating Lease, Right-of-Use Asset | 851 | 642 | |||
Finance Lease, Right-of-Use Asset | 40 | 42 | |||
Lease Right of Use Asset | 891 | [1] | 684 | ||
Total Lease Liability | $ 992 | [1] | $ 784 | ||
Operating Lease, Weighted Average Remaining Lease Term | 11 years 1 month 6 days | 12 years 3 months 18 days | |||
Finance Lease, Weighted Average Remaining Lease Term | 12 years 2 months 12 days | 12 years 8 months 12 days | |||
Operating Lease, Weighted Average Discount Rate, Percent | 5.10% | 5.60% | |||
Finance Lease, Weighted Average Discount Rate, Percent | 6.50% | 6.60% | |||
Finance Lease, Liability, Undiscounted Excess Amount | $ (30) | ||||
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (305) | ||||
Sales-type and Direct Financing Leases, Lease Receivable, Undiscounted Excess Amount | (18) | ||||
Finance Lease, Liability | 72 | ||||
Sales-type and Direct Financing Leases, Lease Receivable | 45 | ||||
Operating Leases, Future Minimum Payments Receivable | 988 | ||||
Capital Leases, Net Investment in Direct Financing Leases, Minimum Payments to be Received | 27 | ||||
YUM_LesseeOperatingLeaseLeaseNotYetCommencedAssumptionAndJudgmentValueOfUnderlyingLiabilityAmount | $ 100 | ||||
Lessee, Operating Lease, Term of Contract | 20 years | ||||
Capital leases, future minimum commitments [Abstract] | |||||
2016 | $ 9 | ||||
2017 | 10 | ||||
2018 | 9 | ||||
2019 | 8 | ||||
2020 | 8 | ||||
Thereafter | 58 | ||||
Capital leases, total future minimum commitments | 102 | ||||
Operating leases, future minimum commitments [Abstract] | |||||
2016 | 128 | ||||
2017 | 133 | ||||
2018 | 123 | ||||
2019 | 115 | ||||
2020 | 103 | ||||
Thereafter | 623 | ||||
Operating leases, total future minimum commitments | 1,225 | ||||
Sales-type and Direct Financing Leases, Lease Receivable, Lease Payments to be Received, after Rolling Year Five | 27 | ||||
Lessor, Operating Lease, Payments to be Received, Thereafter | 599 | ||||
Sales-type and Direct Financing Leases, Lease Receivable, Payments to be Received, Five Years | 3 | ||||
Lessor, Operating Lease, Payments to be Received, Five Years | 71 | ||||
Sales-type and Direct Financing Leases, Lease Receivable, Payments to be Received, Four Years | 4 | ||||
Lessor, Operating Lease, Payments to be Received, Four Years | 76 | ||||
Sales-type and Direct Financing Leases, Lease Receivable, Lease Payments to be Received, Rolling Year Three | 4 | ||||
Lessor, Operating Lease, Payments to be Received, Three Years | 80 | ||||
Sales-type and Direct Financing Leases, Lease Receivable, Lease Payments to be Received, Rolling Year Two | 4 | ||||
Direct Financing Lease, Lease Receivable | 3 | ||||
Lessor, Operating Lease, Payments to be Received, Next Twelve Months | 80 | ||||
Operating Leases, Future Minimum Payments Receivable, in Two Years | 82 | ||||
Lease Agreements [Member] | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Assets | $ 196 | ||||
Other Current Liabilities [Member] | |||||
Operating Lease, Liability, Current | 97 | $ 67 | |||
Finance Lease, Liability, Current | 7 | 7 | |||
Other Noncurrent Liabilities [Member] | |||||
Operating Lease, Liability, Noncurrent | 823 | 640 | |||
Finance Lease, Liability, Noncurrent | 65 | 70 | |||
Other Liabilities [Member] | |||||
Operating Lease, Liability | 920 | ||||
United States | |||||
Operating Lease, Right-of-Use Asset | 499 | 283 | |||
Operating Lease, Liability | $ 556 | $ 337 | |||
[1] | (a) U.S. operating lease right-of-use assets and liabilities totaled $499 million and $556 million, respectively, as of December 31, 2020, and $283 million and $337 million, respectively, as of December 31, 2019. These amounts primarily related to Taco Bell U.S. and the Habit Burger Grill including leases related to Company-operated restaurants, leases related to franchise-operated restaurants we sublease and the Taco Bell restaurant support center. |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flow Hedging [Member] | |||
Derivative, Notional Amount | $ 0 | ||
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | (28) | ||
Cash Flow Hedging [Member] | Foreign Exchange Contract [Member] | |||
Derivative, Notional Amount | 39 | $ 20 | |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | (4) | (8) | $ (20) |
Cash Flow Hedging [Member] | Interest Rate Swap [Member] | |||
Derivative, Notional Amount | 1,550 | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ 10 | $ (17) | $ (19) |
Derivative, Maturity Date | Jul. 27, 2021 | ||
Cash Flow Hedging [Member] | Forward-starting interest rate swap [Member] | |||
Derivative, Notional Amount | $ 1,500 | ||
Derivative, Maturity Date | Mar. 1, 2025 | ||
July 2021 through March 2025 [Member] | Fixed Income Interest Rate [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | |||
Derivative, Forward Interest Rate | 4.81% |
Derivative Instruments (Detai_2
Derivative Instruments (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | $ (99) | $ (51) | $ 19 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | (23) | (20) | (6) |
Cash Flow Hedging [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | 24 | 16 | 1 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax | 1 | (4) | (5) |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | (28) | ||
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | (103) | (71) | (3) |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | 10 | (17) | (19) |
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax | 4 | 20 | 22 |
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (4) | $ (8) | $ (20) |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2018 | ||
Non-recurring basis | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Refranchise Impairment | $ 7 | |||
Remaining Net Book Value of Assets Measured at Fair Value | $ 11 | |||
Non-recurring basis | Fair Value, Inputs, Level 3 [Member] | Closures and impairment (income) expenses | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Total losses related to long-lived assets held for use and measured at fair value on a non-recurring basis | 12 | 4 | ||
Other Assets [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Asset | 0 | 3 | ||
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 | 45 | 43 | ||
Other Noncurrent Liabilities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Liability | 28 | 0 | ||
Other Noncurrent Liabilities [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Forward-starting interest rate swap [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Liability | 127 | 71 | ||
Prepaid Expenses and Other Current Assets [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Foreign Exchange Forward [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Asset | 1 | 0 | ||
Prepaid Expenses and Other Current Assets [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Interest Rate Swap [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative Liability, Fair Value, Gross Asset | 0 | 6 | ||
Term Loan A Facility [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt | 431 | |||
Term Loan B Facility [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt | 1,916 | |||
Unsecured Debt [Member] | Subsidiary Senior Unsecured Notes [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior Notes, Noncurrent | [1] | 1,800 | 2,850 | |
Unsecured Debt [Member] | Subsidiary Senior Unsecured Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | [1] | 1,890 | 3,004 | |
Unsecured Debt [Member] | YUM Senior Unsecured Notes [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior Notes, Noncurrent | [1] | 3,725 | 2,425 | |
Unsecured Debt [Member] | YUM Senior Unsecured Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | [1] | 4,094 | 2,572 | |
Secured Debt [Member] | Securitization Notes [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Senior Notes, Noncurrent | [2] | 2,869 | 2,898 | |
Secured Debt [Member] | Securitization Notes [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | [2] | 3,015 | 3,040 | |
Secured Debt [Member] | Term Loan A Facility [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt | [1] | 431 | 463 | |
Secured Debt [Member] | Term Loan A Facility [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | [1] | 428 | 464 | |
Secured Debt [Member] | Term Loan B Facility [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt | [1] | 1,916 | 1,935 | |
Secured Debt [Member] | Term Loan B Facility [Member] | Fair Value, Inputs, Level 2 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term Debt, Fair Value | [1] | 1,907 | 1,949 | |
GrubHub Inc. [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investment Owned, Balance, Shares | 2.8 | |||
GrubHub Inc. [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | [3] | 0 | 137 | |
GrubHub Inc. [Member] | Other Assets [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Equity Securities, FV-NI | $ 0 | $ 137 | ||
[1] | We estimated the fair value of the YUM and Subsidiary Senior Unsecured Notes, Term Loan A Facility, and Term Loan B Facility using market quotes and calculations based on market rates. | |||
[2] | We estimated the fair value of the Securitization Notes using market quotes and calculations. The markets in which the Securitization Notes trade are not considered active markets. | |||
[3] | (b) In the third quarter of 2020 we sold our entire investment in Grubhub, Inc. common stock and received proceeds of $206 million. |
Pension, Retiree Medical and _3
Pension, Retiree Medical and Retiree Savings Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Contributions to defined benefit pension plans | $ (6) | $ (15) | $ (16) | ||||
Components of net periodic benefit cost: | |||||||
Amortization of prior service cost | 4 | 5 | |||||
Amortization of net loss | (14) | (2) | |||||
Pension losses in accumulated other comprehensive income (loss): | |||||||
Unrealized gains (losses) arising during the year | $ (8) | (39) | 32 | ||||
Effect of one-percentage point change in assumed health care cost trend rates [Abstract] | |||||||
Maximum 401(k) participant contribution of eligible compensation | 75.00% | ||||||
Company match of participant contribution up to 6% of eligible compensation | 100.00% | ||||||
Maximum company match of participant contribution of eligible compensation | 6.00% | ||||||
Defined Contribution Plan, Cost | $ 10 | 11 | 12 | ||||
Pension settlement charges | (4) | (3) | |||||
Foreign Pension Plan [Member] | |||||||
Change in benefit obligation | |||||||
Benefit obligation at beginning of year | 290 | ||||||
Benefit obligation at end of year | 362 | 290 | |||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | 372 | ||||||
Fair value of plan assets at end of year | 440 | 372 | |||||
Amounts recognized as a loss in Accumulated Other Comprehensive Income: | |||||||
Actuarial net gain | $ (18) | $ (25) | |||||
Components of net periodic benefit cost: | |||||||
Net periodic benefit cost | 1 | 2 | 4 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | 372 | 372 | 440 | 372 | |||
Foreign Pension Plan [Member] | Fair Value, Inputs, Level 1 [Member] | Equity Securities - Non US [Member] | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | [1] | 88 | |||||
Fair value of plan assets at end of year | [1] | 102 | 88 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | [1] | 88 | 88 | 102 | 88 | ||
United States | |||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||
Net Payable For Unsettled Transactions | 212 | 169 | |||||
Defined Benefit Plan, Benefit Obligation, Benefits Paid | (46) | (57) | |||||
Change in benefit obligation | |||||||
Benefit obligation at beginning of year | 1,015 | 873 | |||||
Service cost | 8 | 6 | 8 | ||||
Interest cost | 35 | 39 | 38 | ||||
Plan amendments | 1 | 2 | |||||
Special termination benefits | 2 | 0 | 1 | ||||
Settlement payments | 0 | 1 | |||||
Actuarial (gain) loss | 118 | 153 | |||||
Benefit obligation at end of year | 1,133 | 1,015 | 873 | ||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | 886 | 755 | |||||
Actual return on plan assets | 168 | 176 | |||||
Employer contributions | 6 | 12 | |||||
Fair value of plan assets at end of year | 1,014 | 886 | 755 | ||||
Defined Benefit Plan, Plan Assets, Benefits Paid | (46) | (57) | |||||
Funded status at end of year | (119) | (129) | |||||
Benefit Payments [Abstract] | |||||||
2016 | 54 | ||||||
2017 | 52 | ||||||
2018 | 53 | ||||||
2019 | 55 | ||||||
2020 | 58 | ||||||
2021 - 2025 | 299 | ||||||
Amounts recognized in the Consolidated Balance Sheet: | |||||||
Accrued benefit liability - current | (9) | (4) | |||||
Accrued benefit liability - non-current | (110) | (125) | |||||
Accrued benefit amounts recognized | (119) | (129) | |||||
Amounts recognized as a loss in Accumulated Other Comprehensive Income: | |||||||
Actuarial net gain | 96 | 118 | |||||
Prior service cost | (15) | (18) | |||||
Amounts recognized as a loss in Accumulated Other Comprehensive Income | (111) | (136) | (123) | (111) | (136) | $ (123) | |
Accumulated benefit obligation | $ 1,111 | $ 984 | |||||
Components of net periodic benefit cost: | |||||||
Service cost | 8 | 6 | 8 | ||||
Interest cost | 35 | 39 | 38 | ||||
Amortization of prior service cost | [2] | 5 | 6 | 5 | |||
Expected return on plan assets | (43) | (44) | (44) | ||||
Amortization of net loss | (14) | (1) | (16) | ||||
Net periodic benefit cost | 19 | 8 | 23 | ||||
Additional loss recognized due to: | |||||||
Special termination benefits | 2 | 0 | 1 | ||||
Pension losses in accumulated other comprehensive income (loss): | |||||||
Beginning of year | (136) | (123) | |||||
Unrealized gains (losses) arising during the year | 7 | (22) | |||||
Other Comprehensive Income (Loss),Defined Benefit Plans, Curtailment Gain (Loss), before Tax | 1 | 0 | |||||
Curtailment gain | 0 | 4 | |||||
Amortization of net loss | 14 | 1 | |||||
Amortization of prior service cost | 5 | 6 | |||||
Prior service cost | (2) | (2) | |||||
End of year | $ (111) | $ (136) | $ (123) | ||||
Weighted-average assumptions used to determine benefit obligations at the measurement dates: | |||||||
Discount rate (in hundredths) | 2.80% | 3.50% | 4.60% | ||||
Rate of compensation increase (in hundredths) | 3.00% | 3.00% | |||||
Weighted-average assumptions used to determine the net periodic benefit cost for fiscal years: | |||||||
Discount rate (in hundredths) | 3.50% | 4.60% | 3.90% | ||||
Long-term rate return on plan assets (in hundredths) | 5.50% | 5.75% | 5.65% | ||||
Rate of compensation increase (in hundredths) | 3.00% | 3.00% | 3.75% | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | $ 1,014 | $ 755 | $ 755 | $ 1,014 | $ 886 | $ 755 | |
Equity securities, target allocation (in hundredths) | 50.00% | ||||||
Approximate percentage of total plan assets in investment that includes YUM stock (in hundredths) | 1.00% | ||||||
Effect of one-percentage point change in assumed health care cost trend rates [Abstract] | |||||||
Pension settlement charges | [3] | $ 0 | (3) | 0 | |||
Projected benefit obligation | $ 1,133 | 1,015 | |||||
Accumulated benefit obligation | 1,111 | 984 | |||||
Accumulated benefit obligation | 1,111 | 984 | |||||
Defined Benefit Plan, Pension Plan with Projected Benefit Obligation in Excess of Plan Assets, Plan Assets | 1,014 | 886 | |||||
Fair value of plan assets | 1,014 | 886 | |||||
Defined Benefit Plan, Pension Plan with Projected Benefit Obligation in Excess of Plan Assets, Projected Benefit Obligation | 1,133 | 1,015 | |||||
United States | Defined Benefit Plan, Equity Securities, Common Stock [Member] | |||||||
Plan Assets [Abstract] | |||||||
Value of mutual fund held as an investment that includes YUM stock | 0.3 | ||||||
United States | Fair Value, Inputs, Level 1 [Member] | Cash [Member] | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | 5 | ||||||
Fair value of plan assets at end of year | 9 | 5 | |||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | 5 | 5 | 9 | 5 | |||
United States | Fair Value, Inputs, Level 1 [Member] | Cash Equivalents [Member] | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | [4] | 13 | |||||
Fair value of plan assets at end of year | [4] | 10 | 13 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | [4] | 13 | 13 | 10 | 13 | ||
United States | Fair Value, Inputs, Level 1 [Member] | Equity Securities - US Large cap [Member] | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | [1] | 268 | |||||
Fair value of plan assets at end of year | [1] | 306 | 268 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | [1] | 268 | 268 | 306 | 268 | ||
United States | Fair Value, Inputs, Level 1 [Member] | Debt Security, Corporate, US [Member] | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | [1] | 161 | |||||
Fair value of plan assets at end of year | [1] | 164 | 161 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | [1] | 161 | 161 | 164 | 161 | ||
United States | Fair Value, Inputs, Level 1 [Member] | Equity Securities - US Mid cap [Member] | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | [1] | 44 | |||||
Fair value of plan assets at end of year | [1] | 51 | 44 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | [1] | 44 | 44 | 51 | 44 | ||
United States | Fair Value, Inputs, Level 1 [Member] | Equity Securities - US Small cap [Member] | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | [1] | 43 | |||||
Fair value of plan assets at end of year | [1] | 52 | 43 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | [1] | 43 | 43 | 52 | 43 | ||
United States | Fair Value, Inputs, Level 2 [Member] | Debt Security, Corporate, US [Member] | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | [5] | 120 | |||||
Fair value of plan assets at end of year | [5] | 148 | 120 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | [5] | 120 | 120 | 148 | 120 | ||
United States | Fair Value, Inputs, Level 2 [Member] | US Treasury and Government [Member] | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | [6] | 274 | |||||
Fair value of plan assets at end of year | [6] | 354 | 274 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | [6] | 274 | 274 | 354 | 274 | ||
United States | Fair Value, Inputs, Level 2 [Member] | Fixed Income Securities [Member] | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | [6] | 39 | |||||
Fair value of plan assets at end of year | [6] | 30 | 39 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | [6] | 39 | 39 | 30 | 39 | ||
United States | Fair Value, Inputs, Level 1, 2 and 3 | |||||||
Change in plan assets | |||||||
Fair value of plan assets at beginning of year | [7] | 1,055 | |||||
Fair value of plan assets at end of year | [7] | 1,226 | 1,055 | ||||
Plan Assets [Abstract] | |||||||
Fair value of plan assets by asset category | [7] | 1,055 | 1,055 | 1,226 | 1,055 | ||
Other Postretirement Benefits Plan [Member] | |||||||
Benefit Payments [Abstract] | |||||||
2016 | 4 | ||||||
2021 - 2025 | 14 | ||||||
Amounts recognized as a loss in Accumulated Other Comprehensive Income: | |||||||
Actuarial net gain | (4) | (9) | |||||
Accumulated benefit obligation | $ 46 | $ 44 | |||||
Components of net periodic benefit cost: | |||||||
Net periodic benefit cost | $ 1 | $ 1 | $ 2 | ||||
[1] | Securities held in common trusts. | ||||||
[2] | Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits. | ||||||
[3] | Settlement losses result when benefit payments exceed the sum of the service cost and interest cost within a plan during the year. These losses were recorded in Other pension (income) expense. | ||||||
[4] | Short-term investments in money market funds. | ||||||
[5] | Investments held directly by the Plan. | ||||||
[6] | Includes securities held in common trusts and investments held directly by the Plan. | ||||||
[7] | 2020 and 2019 exclude net unsettled trade payables of $212 million and $169 million, respectively. |
Share-based and Deferred Comp_2
Share-based and Deferred Compensation Plans (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |||
Dec. 31, 2020USD ($)groups$ / sharesRateshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Expense | $ 97 | $ 59 | $ 50 | |
Award Valuation | ||||
Risk-free interest rate (in hundredths) | 1.00% | 2.50% | 2.50% | |
Expected term (years) | 5 years 9 months 18 days | 6 years 6 months | 6 years 6 months | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 24.00% | 22.00% | 22.00% | |
Expected dividend yield (in hundredths) | 1.90% | 1.80% | 1.80% | |
Number of homogeneous groups appropriate to group awards into when estimating expected term | groups | 2 | |||
Summary of award activity - Stock options and SARs, additional disclosures [Abstract] | ||||
Options outstanding at the end of the year (in shares) | shares | 601 | |||
SARs outstanding at the end of the year (in shares) | shares | 14,960 | |||
Options outstanding at the end of the year, Weighted-average exercise price (in dollars per share) | $ / shares | $ 66.89 | |||
SARs outstanding at the end of the year, Weighted-average exercise price (in dollars per share) | $ / shares | $ 74.83 | |||
Impact on net income [Abstract] | ||||
Share-based Payment Arrangement, Expense, Tax Benefit | $ 18 | $ 9 | $ 9 | |
EID compensation expense not share-based | 9 | 17 | (2) | |
Cash received from stock options exercises | 10 | 1 | 6 | |
Share-based Payment Arrangement, Exercise of Option, Tax Benefit | 58 | 66 | 60 | |
General and administrative expenses | 1,064 | 917 | 895 | |
Stock Options and Stock Appreciation Rights [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Expense | $ 75 | 39 | 37 | |
Minimum vesting period of outstanding awards (in years) | 1.7 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 70 | $ 31 | $ 28 | |
Summary of award activity - Stock options and SARs [Roll Forward] | ||||
Granted (in shares) | shares | 4,358 | |||
Exercised (in shares) | shares | (3,137) | |||
Forfeited or expired (in shares) | shares | (523) | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ / shares | $ 88.29 | |||
Summary of award activity - Stock options and SARs, additional disclosures [Abstract] | ||||
Granted, Weighted-average exercise price (in dollars per share) | $ / shares | 101.42 | |||
Exercised, Weighted-average exercise price (in dollars per share) | $ / shares | $ 44.41 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 530 | |||
Exercisable at the end of the year (in shares) | shares | 10,108 | |||
Exercisable at the end of the year, Weighted-average exercise price (in dollars per share) | $ / shares | $ 65.64 | |||
Share Based Compensation Arrangement By Share Based Payment Award, Options, Exercisable Weighted Average Remaining Contractual Term | 5 years 5 months 4 days | |||
Exercisable at the end of the year, Aggregate intrinsic value (in dollars) | $ 434 | |||
Options outstanding at the end of the year (in shares) | shares | 15,562 | [1] | 14,864 | |
Options outstanding at the end of the year, Weighted-average exercise price (in dollars per share) | $ / shares | $ 74.52 | $ 60.76 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 6 years 4 months 20 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares | $ 18.83 | $ 19.82 | $ 16.45 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 170 | $ 204 | $ 195 | |
Unrecognized compensation cost | 50 | |||
Performance Share Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Expense | 2 | 8 | 7 | |
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Expense | 20 | 12 | 6 | |
Restricted Stock Units And Performance Share Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | 15 | $ 14 | $ 16 | |
Summary of award activity - Stock options and SARs, additional disclosures [Abstract] | ||||
Unrecognized compensation cost | $ 28 | |||
Unvested RSUs and PSUs | shares | 1,000 | |||
Long Term Incentive Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Minimum vesting period of outstanding awards (in years) | immediate | |||
Maximum vesting period of outstanding awards (in years) | five | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Average Exercise Period | 5 years | |||
Approximate number of shares available for grant (in shares) | shares | 24,000 | |||
Executive Income Deferral Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of Company match on amount deferred (in hundredths) | Rate | 33.00% | |||
Executive Income Deferral Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 2 years | |||
Restaurant-level Employees [Domain] | Long Term Incentive Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||
Vesting period (in years) | 4 years | |||
Executives [Domain] | Long Term Incentive Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||
Share-based Compensation Arrangement by Share-based Payment Award, Average Exercise Period | 6 years 6 months | |||
Vesting period (in years) | 4 years | |||
Award Valuation | ||||
Graded vesting schedule of grants made to executives under other stock award plans | 25% | |||
Certain Executives [Domain] | Long Term Incentive Plans [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||
[1] | Outstanding awards include 601 options and 14,960 SARs with weighted average exercise prices of $66.89 and $74.83, respectively. Outstanding awards represent YUM awards held by employees of both YUM and Yum China. |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||
Repurchase Of Shares Of Common Stock [Line Items] | |||||
Value of share repurchases with trade dates during the current reporting date but with settlement dates subsequent to the current reporting date. | $ 11 | $ 5 | |||
Number of shares repurchased with trade dates during the current reporting date but with settlement dates subsequent to the current reporting date. | 100 | 100 | |||
Stock Repurchased During Period, Shares | 2,419 | [1] | 7,788 | [1] | 28,243 |
Stock Repurchased During Period, Value | $ 250 | [1] | $ 810 | [1] | $ 2,394 |
Defined Benefit Plan, Amortization of Gain (Loss) | 14 | 2 | |||
Amortization of prior service cost | 4 | 5 | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | $ 4 | $ 3 | |||
November 2019 [Member] | |||||
Repurchase Of Shares Of Common Stock [Line Items] | |||||
Stock Repurchased During Period, Shares | 2,419 | 0 | 0 | ||
Stock Repurchased During Period, Value | $ 250 | $ 0 | $ 0 | ||
November 2017 [Member] | |||||
Repurchase Of Shares Of Common Stock [Line Items] | |||||
Stock Repurchased During Period, Shares | 0 | 0 | 18,240 | ||
Stock Repurchased During Period, Value | $ 0 | $ 0 | $ 1,500 | ||
August 2018 [Member] | |||||
Repurchase Of Shares Of Common Stock [Line Items] | |||||
Stock Repurchased During Period, Shares | 0 | 7,788 | 10,003 | ||
Stock Repurchased During Period, Value | $ 0 | $ 810 | $ 894 | ||
November 2019 [Member] | |||||
Repurchase Of Shares Of Common Stock [Line Items] | |||||
Stock Repurchase Program, Authorized Amount | 2,000 | ||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 1,750 | ||||
[1] | 2019 amount excludes and 2018 amount includes the effect of $5 million in share repurchases (0.1 million shares) with trade dates on, or prior to, December 31, 2018, but settlement dates subsequent to December 31, 2018. |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | $ (388) | |||||
Other Comprehensive Income (Loss), Net of Tax | (23) | $ (54) | $ (65) | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | (411) | (388) | ||||
Defined Benefit Plan, Amortization of Gain (Loss) | (14) | (2) | ||||
Pension settlement charges | (4) | (3) | ||||
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) | 4 | 5 | ||||
Tax (expense) benefit on reclassification of pension and post-retirement losses to net income | 2 | |||||
Translation Adjustment and Gains (Losses) From Intra-Entity Transactions of a Long-Term Nature | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | (221) | (245) | ||||
Amounts classified into OCI, net of tax | 39 | 24 | ||||
Amounts reclassified from accumulated OCI, net of tax | 0 | 0 | ||||
Other Comprehensive Income (Loss), Net of Tax | 39 | 24 | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | (182) | (221) | (245) | |||
Pension and Post-Retirement Benefit Plan Losses | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | [1] | (104) | (82) | |||
Amounts classified into OCI, net of tax | (6) | (30) | [1] | |||
Amounts reclassified from accumulated OCI, net of tax | 14 | 8 | [1] | |||
Other Comprehensive Income (Loss), Net of Tax | 8 | (22) | [1] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | (96) | (104) | [1] | (82) | [1] | |
Net Unrealized Loss on Derivative Instruments | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | [2] | (63) | (7) | |||
Amounts classified into OCI, net of tax | (75) | (35) | [2] | |||
Amounts reclassified from accumulated OCI, net of tax | 5 | (21) | [2] | |||
Other Comprehensive Income (Loss), Net of Tax | (70) | (56) | [2] | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | (133) | (63) | [2] | (7) | [2] | |
Total | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Beginning Balance | (388) | (334) | ||||
Amounts classified into OCI, net of tax | (42) | (41) | ||||
Amounts reclassified from accumulated OCI, net of tax | 19 | (13) | ||||
Other Comprehensive Income (Loss), Net of Tax | (23) | (54) | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Ending Balance | $ (411) | $ (388) | $ (334) | |||
[1] | Amounts reclassified from AOCI for pension and post-retirement benefit plans losses during 2020 include amortization of net losses of $14 million, amortization of prior service cost of $4 million and related income tax benefit of $4 million. Amounts reclassified from AOCI for pension and post-retirement benefit plans losses during 2019 include amortization of net losses of $2 million, amortization of prior service cost of $5 million, settlement charges of $3 million and related income tax benefit of $2 million. See Note 15. | |||||
[2] | See Note 13 for details on amounts reclassified from AOCI. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation Allowance [Line Items] | |||||||
Tax Credit Carryforward, Valuation Allowance | $ 111 | ||||||
Effective income tax rate reconciliation [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 21.00% | 21.00% | |||
State income tax, net of federal tax benefit (in hundredths) | 1.00% | 0.90% | 0.80% | ||||
Statutory rate differential attributable to foreign operations (in hundredths) | (0.90%) | 0.90% | (4.60%) | ||||
Effective Income Tax Rate Reconciliation Adjustments To Reserves And Prior Years | (1.70%) | 2.30% | 2.80% | ||||
Change in valuation allowance (in hundredths) | (2.50%) | (0.60%) | 0.70% | ||||
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Restructuring Charges, Percent | (0.30%) | (16.60%) | 0.00% | ||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | (2.50%) | 0.00% | (1.90%) | ||||
Other, net (in hundredths) | 0.70% | 1.40% | (0.20%) | ||||
Effective income tax rate (in hundredths) | 11.40% | 5.70% | 16.20% | ||||
Share-based Payment Arrangement, Expense, Tax Benefit | $ (18) | $ (9) | $ (9) | ||||
Effective Income Tax Rate Reconciliation Share Based Compensation | (3.40%) | (3.60%) | (2.40%) | ||||
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | |||||||
Effective income tax rate | $ 116 | $ 79 | $ 297 | ||||
Details of income tax provision (benefit) [Abstract] | |||||||
Current: Federal | 37 | 129 | 102 | ||||
Current: Foreign | 121 | 166 | 181 | ||||
Current: State | 23 | 16 | 25 | ||||
Total current income tax provision (benefit) | 181 | 311 | 308 | ||||
Deferred: Federal | (21) | (16) | (24) | ||||
Deferred: Foreign | (29) | (213) | 5 | ||||
Deferred: State | (15) | (3) | 8 | ||||
Deferred income taxes | 65 | 232 | 11 | ||||
Effective income tax rate | 116 | 79 | 297 | ||||
U.S. and foreign income before income taxes [Abstract] | |||||||
U.S. | 684 | 466 | 726 | ||||
Foreign | 336 | 907 | 1,113 | ||||
Income from Continuing Operations Before Income Taxes | 1,020 | 1,373 | 1,839 | ||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | 35 | $ 434 | |||||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 11 | 34 | |||||
Employee Service Share-based Compensation, Deferred Tax Benefit from Compensation Expense | 35 | 49 | 44 | ||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 22 | ||||||
Limit on deductibility of interest expense | 30.00% | ||||||
Unrecognized Tax Benefits | 175 | 188 | 113 | ||||
Additions on tax positions related to the current year | 5 | 84 | |||||
Additions for tax positions of prior years | 34 | 54 | |||||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 132 | ||||||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount | 20 | ||||||
Deferred Tax Assets, Gross | 1,636 | 1,505 | |||||
Deferred Tax Assets, Net | 553 | 447 | |||||
Income Tax Examination, Penalties and Interest Expense | 2 | 13 | 2 | ||||
Income Tax Examination, Penalties and Interest Accrued | 1 | 26 | |||||
Reductions for tax positions of prior years | (22) | (30) | |||||
Reductions for settlements | (30) | (31) | |||||
Reductions due to statute expiration | 0 | (2) | |||||
Foreign currency translation adjustment | 0 | 0 | |||||
Deferred Tax Assets, Valuation Allowance | (789) | (787) | (454) | ||||
Deferred Tax Assets, Increases [Member] | |||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | (64) | (384) | |||||
Deferred Tax Assets, Decreases | |||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 45 | 57 | |||||
Deferred Tax Assets, Other Adjustments | |||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 17 | (6) | |||||
UNITED KINGDOM | |||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 366 | ||||||
Deferred Tax Assets, Gross | 586 | ||||||
Non-UK [Member] | |||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 7 | ||||||
Deferred Tax Assets, Gross | 13 | ||||||
Deferred Tax Assets, Net | 6 | ||||||
Tax Year 2018 [Member] | |||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | 399 | ||||||
Tax Year 2017 [Member] | |||||||
Effective income tax rate reconciliation [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | ||||||
Tax Year 2020 [Member] | |||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 6 | ||||||
State and Local Jurisdiction [Member] | Indefinite | |||||||
Valuation Allowance [Line Items] | |||||||
Tax Credit Carryforward, Valuation Allowance | 15 | ||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Tax Credit Carryforward, Amount | 361 | ||||||
State and Local Jurisdiction [Member] | 2023 | |||||||
Valuation Allowance [Line Items] | |||||||
Tax Credit Carryforward, Valuation Allowance | 5 | ||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Tax Credit Carryforward, Amount | $ 8 | ||||||
Foreign [Member] | |||||||
Effective income tax rate reconciliation [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 19.00% | 17.00% | 17.00% | 19.00% | |||
Foreign [Member] | Indefinite | |||||||
Valuation Allowance [Line Items] | |||||||
Tax Credit Carryforward, Valuation Allowance | $ 3 | ||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Tax Credit Carryforward, Amount | 14 | ||||||
Foreign [Member] | 2023 - 2030 | |||||||
Valuation Allowance [Line Items] | |||||||
Tax Credit Carryforward, Valuation Allowance | 220 | ||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Tax Credit Carryforward, Amount | $ 220 | ||||||
Prior Year Divestiture [Member] | |||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount | $ 19 | ||||||
Deferred Compensation, Share-based Payments [Member] | |||||||
U.S. and foreign income before income taxes [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | $ 18 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | $ 181 | $ 176 | |
Deferred Tax Assets, Capital Loss Carryforwards | 3 | 3 | |
Net deferred tax assets (liabilities) [Abstract] | |||
Deferred Tax Assets, Tax Credit Carryforwards, Foreign | 226 | 230 | |
Employee benefits | 82 | 85 | |
Share-based compensation | 58 | 55 | |
Lease related liabilities | 199 | 199 | |
Various liabilities | 47 | 49 | |
Deferred Tax Assets, Goodwill and Intangible Assets | 678 | 602 | |
Deferred Tax Assets, Property, Plant and Equipment | 31 | 21 | |
Deferred income and other | 81 | 55 | |
Gross deferred tax assets | 1,636 | 1,505 | |
Deferred tax asset valuation allowances | (789) | (787) | $ (454) |
Net deferred tax assets | 847 | 718 | |
Intangible assets, including goodwill | (1) | (40) | |
Property, plant and equipment | (75) | (44) | |
Deferred Tax Liabilities Deemed Repatriation | (161) | (156) | |
Other | (57) | (31) | |
Gross deferred tax liabilities | (294) | (271) | |
Deferred Tax Assets, Net | 553 | 447 | |
Reported in Consolidated Balance Sheets as: | |||
Deferred Tax Assets, Net | 553 | 447 | |
Income (Loss) from Continuing Operations before Income Taxes, Domestic | 684 | 466 | 726 |
Income (Loss) from Continuing Operations before Income Taxes, Foreign | 336 | 907 | 1,113 |
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 1,020 | 1,373 | $ 1,839 |
Deferred Tax Assets, Derivative Instruments | $ 50 | $ 30 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2018 | Dec. 31, 2019 | |
Operating and capital loss carryforwards [Line Items] | |||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount | $ 20 | ||
Foreign Earnings Repatriated | $ 3,900 | ||
Deferred Tax Assets, Tax Deferred Expense | 410 | ||
Tax Credit Carryforward, Valuation Allowance | $ (111) | ||
Operating Loss and Tax Credit Carryforward, Amount | 2,242 | ||
Operating Loss Carryforwards | 181 | $ 176 | |
Operating Loss and Tax Credit Carryforward, Valuation Allowance | (352) | ||
Foreign [Member] | Indefinite | |||
Operating and capital loss carryforwards [Line Items] | |||
Tax Credit Carryforward, Amount | 14 | ||
Tax Credit Carryforward, Valuation Allowance | (3) | ||
Operating Loss Carryforwards | 253 | ||
Deferred Tax Assets, Operating Loss Carryforwards | 75 | ||
Operating Loss Carryforwards, Valuation Allowance | (51) | ||
Deferred Tax Assets, Tax Credit Carryforwards | 3 | ||
Foreign [Member] | 2021 - 2030 | |||
Operating and capital loss carryforwards [Line Items] | |||
Operating Loss Carryforwards | 32 | ||
Deferred Tax Assets, Operating Loss Carryforwards | 10 | ||
Operating Loss Carryforwards, Valuation Allowance | (10) | ||
Foreign [Member] | 2023 - 2030 | |||
Operating and capital loss carryforwards [Line Items] | |||
Tax Credit Carryforward, Amount | 220 | ||
Tax Credit Carryforward, Valuation Allowance | (220) | ||
Deferred Tax Assets, Tax Credit Carryforwards | 220 | ||
State and Local Jurisdiction [Member] | Indefinite | |||
Operating and capital loss carryforwards [Line Items] | |||
Tax Credit Carryforward, Amount | 361 | ||
Tax Credit Carryforward, Valuation Allowance | (15) | ||
Deferred Tax Assets, Tax Credit Carryforwards | 15 | ||
State and Local Jurisdiction [Member] | 2021 - 2039 | |||
Operating and capital loss carryforwards [Line Items] | |||
Operating Loss Carryforwards | 1,268 | ||
Deferred Tax Assets, Operating Loss Carryforwards | 63 | ||
Operating Loss Carryforwards, Valuation Allowance | (48) | ||
State and Local Jurisdiction [Member] | 2023 | |||
Operating and capital loss carryforwards [Line Items] | |||
Tax Credit Carryforward, Amount | 8 | ||
Tax Credit Carryforward, Valuation Allowance | (5) | ||
Deferred Tax Assets, Tax Credit Carryforwards | 6 | ||
Domestic Tax Authority | 2035 - 2036 | |||
Operating and capital loss carryforwards [Line Items] | |||
Operating Loss Carryforwards | 25 | ||
Deferred Tax Assets, Operating Loss Carryforwards | 5 | ||
Operating Loss Carryforwards, Valuation Allowance | 0 | ||
Domestic Tax Authority | Indefinite | |||
Operating and capital loss carryforwards [Line Items] | |||
Operating Loss Carryforwards | 61 | ||
Deferred Tax Assets, Operating Loss Carryforwards | 13 | ||
Operating Loss Carryforwards, Valuation Allowance | $ 0 |
Income Taxes (Details 4)
Income Taxes (Details 4) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2021 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Unrecognized Tax Benefits | $ 175 | $ 188 | $ 113 | |
Income Tax Examination, Penalties and Interest Accrued | 1 | 26 | ||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount | 20 | |||
Income Tax Examination, Penalties and Interest Expense | 2 | 13 | $ 2 | |
Deferred Tax Assets, Tax Deferred Expense | $ 847 | 718 | ||
UNITED KINGDOM | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Deferred Tax Assets, Tax Deferred Expense | $ 220 | |||
Tax Benefit Amortization Period | 20 years | |||
Forecast [Member] | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Unrecognized Tax Benefits | $ 30 |
Income Taxes (Details 5)
Income Taxes (Details 5) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Examination [Line Items] | ||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | (2.50%) | 0.00% | (1.90%) | |||
Foreign [Member] | ||||||
Income Tax Examination [Line Items] | ||||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 19.00% | 17.00% | 17.00% | 19.00% |
Income Taxes (Details 6)
Income Taxes (Details 6) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Tax Act Enactment [Line Items] | ||||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | $ 30 | $ 31 | ||
Foreign Earnings Repatriated | $ 3,900 | |||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount | $ 20 | |||
Effective Income Tax Rate Reconciliation Adjustments To Reserves And Prior Years | (1.70%) | 2.30% | 2.80% | |
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | $ 11 | $ 34 | ||
Employee Service Share-based Compensation, Deferred Tax Benefit from Compensation Expense | 35 | 49 | $ 44 | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 22 | |||
Tax Credit Carryforward, Valuation Allowance | 111 | |||
Deferred Tax Assets, Gross | 1,636 | 1,505 | ||
Deferred Tax Assets, Net | 553 | 447 | ||
Deferred Tax Assets, Tax Deferred Expense | $ 847 | $ 718 | ||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 35 | $ 434 | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 21.00% | 21.00% |
Limit on deductibility of interest expense | 30.00% | |||
Income tax provision | $ 116 | $ 79 | $ 297 | |
Unrecognized Tax Benefits | $ 175 | 188 | 113 | |
Effective Income Tax Rate Reconciliation, Tax Cuts and Jobs Act, Transition Tax on Accumulated Foreign Earnings, Amount | 241 | |||
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount | 47 | |||
Deferred Compensation, Share-based Payments [Member] | ||||
Tax Act Enactment [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount | 18 | |||
Prior Year Divestiture [Member] | ||||
Tax Act Enactment [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Amount | 19 | |||
Tax Year 2018 [Member] | ||||
Tax Act Enactment [Line Items] | ||||
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount | $ 399 | |||
Tax Year 2017 [Member] | ||||
Tax Act Enactment [Line Items] | ||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | |||
Non-UK [Member] | ||||
Tax Act Enactment [Line Items] | ||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 7 | |||
Deferred Tax Assets, Gross | 13 | |||
Deferred Tax Assets, Net | 6 | |||
UNITED KINGDOM | ||||
Tax Act Enactment [Line Items] | ||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 366 | |||
Deferred Tax Assets, Gross | 586 | |||
Deferred Tax Assets, Tax Deferred Expense | $ 220 |
Reportable Operating Segments_2
Reportable Operating Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | $ 1,743 | $ 1,448 | $ 1,198 | $ 1,263 | $ 1,694 | $ 1,339 | $ 1,310 | $ 1,254 | $ 5,652 | $ 5,597 | $ 5,688 | ||
Operating Profit | 482 | 471 | 300 | $ 250 | 546 | $ 480 | $ 471 | $ 433 | 1,503 | 1,930 | 2,296 | ||
Investment (income) expense, net | [1] | 74 | (67) | 9 | |||||||||
Other Pension (income) expense | [1] | (14) | (4) | (14) | |||||||||
Company restaurant expenses | 1,506 | 1,235 | 1,634 | ||||||||||
Interest expense, net | [1] | (543) | (486) | (452) | |||||||||
Depreciation and amortization | 146 | 112 | 137 | ||||||||||
Capital Spending | 160 | 196 | 234 | ||||||||||
Total Assets | [2] | 5,852 | 5,231 | 5,852 | 5,231 | ||||||||
Long-Lived Assets | [3] | 3,026 | 2,586 | 3,026 | 2,586 | ||||||||
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest | 1,020 | 1,373 | 1,839 | ||||||||||
General and administrative expenses | 1,064 | 917 | 895 | ||||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | (4) | (3) | |||||||||||
Impairment and closure expense | [4] | 172 | 5 | 6 | |||||||||
Business Combination, Acquisition Related Costs | 9 | ||||||||||||
Unlocking Opportunity Initiative [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
General and administrative expenses | $ 50 | ||||||||||||
COVID-19 Relief [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
General and administrative expenses | 25 | ||||||||||||
Goodwill [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Impairment and closure expense | 0 | $ 5 | $ 139 | 144 | |||||||||
Self Insured Property And Casualty Reserves [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Liability for Claims and Claims Adjustment Expense, Property Casualty Liability | 50 | 54 | 50 | 54 | 66 | ||||||||
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | 13 | 9 | |||||||||||
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid | (23) | (21) | |||||||||||
Liability for Unpaid Claims and Claims Adjustment Expense, Business Acquisitions | 6 | 0 | |||||||||||
KFC Global Division [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | [5] | 2,272 | 2,491 | 2,644 | |||||||||
Operating Profit | 922 | 1,052 | 959 | ||||||||||
Depreciation and amortization | 29 | 30 | 58 | ||||||||||
Capital Spending | 59 | 81 | 105 | ||||||||||
Total Assets | [2] | 2,011 | 2,042 | 2,011 | 2,042 | ||||||||
Long-Lived Assets | [3] | 1,160 | 1,179 | 1,160 | 1,179 | ||||||||
Pizza Hut Global Division [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | [5] | 1,002 | 1,027 | 988 | |||||||||
Operating Profit | 335 | 369 | 348 | ||||||||||
Depreciation and amortization | 24 | 15 | 10 | ||||||||||
Capital Spending | 28 | 33 | 38 | ||||||||||
Total Assets | [2] | 804 | 801 | 804 | 801 | ||||||||
Long-Lived Assets | [3] | 415 | 427 | 415 | 427 | ||||||||
Taco Bell Global Division [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | [5] | 2,031 | 2,079 | 2,056 | |||||||||
Operating Profit | 696 | 683 | 633 | ||||||||||
Depreciation and amortization | 56 | 59 | 61 | ||||||||||
Capital Spending | 42 | 76 | 85 | ||||||||||
Total Assets | [2] | 1,387 | 1,330 | 1,387 | 1,330 | ||||||||
Long-Lived Assets | [3] | 925 | 938 | 925 | 938 | ||||||||
Corporate and Other [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Franchise and property expenses | [1],[6] | (4) | (14) | (8) | |||||||||
Company restaurant expenses | [1],[7] | 0 | 0 | 3 | |||||||||
Refranchising gain (loss) | [1] | 34 | 37 | 540 | |||||||||
Other (income) expense | [1],[8] | (146) | (9) | (8) | |||||||||
Depreciation and amortization | 12 | 8 | 8 | ||||||||||
Capital Spending | 15 | 6 | 6 | ||||||||||
Total Assets | [2],[9] | 1,113 | 1,058 | 1,113 | 1,058 | ||||||||
Long-Lived Assets | [3] | 68 | 42 | 68 | 42 | ||||||||
General and administrative expenses | [1],[10] | (312) | (188) | (171) | |||||||||
U.S. | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | 3,200 | 3,000 | 2,900 | ||||||||||
Total Assets | 3,000 | 2,700 | 3,000 | 2,700 | |||||||||
The Habit Burger Grill Global Division | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Total revenues | 347 | 0 | 0 | ||||||||||
Operating Profit | (22) | 0 | 0 | ||||||||||
Depreciation and amortization | 25 | 0 | 0 | ||||||||||
Capital Spending | 16 | 0 | $ 0 | ||||||||||
Total Assets | [2] | 537 | 0 | 537 | 0 | ||||||||
Long-Lived Assets | $ 458 | $ 0 | 458 | $ 0 | |||||||||
General and Administrative Expense [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Costs Associated with Resource Optimization Initiative | 36 | ||||||||||||
Other pension (income) expense [Member] | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Costs Associated with Resource Optimization Initiative | $ 2 | ||||||||||||
[1] | Amounts have not been allocated to any segment for performance reporting purposes. | ||||||||||||
[2] | U.S. identifiable assets included in the combined Corporate and KFC, Pizza Hut, Taco Bell and Habit Burger Grill Divisions totaled $3.0 billion and $2.7 billion in 2020 and 2019, respectively. | ||||||||||||
[3] | Includes PP&E, goodwill, intangible assets, net and Operating lease right-of-use assets. | ||||||||||||
[4] | The year ended December 31, 2020, includes a charge of $144 million related to the impairment of Habit Burger Grill goodwill. The year ended December 31, 2020, also includes charges of $12 million related to the impairment of restaurant-level assets and charges of $11 million related to the write-off of software no longer being used. | ||||||||||||
[5] | U.S. revenues included in the combined KFC, Pizza Hut, Taco Bell and Habit Burger Grill Divisions totaled $3.2 billion in 2020, $3.0 billion in 2019 and $2.9 billion in 2018. | ||||||||||||
[6] | Represents costs related to an agreement executed in 2015 with our KFC U.S. franchisees that gave us control of brand marketing execution as well as an accelerated path to expanded menu offerings, improved assets and enhanced customer experience (the “KFC U.S. Acceleration Agreement”). Also represents costs related to an agreement executed in May 2017 with our Pizza Hut U.S. franchisees to improve brand marketing alignment, accelerate enhancements in operations and technology and that included a permanent commitment to incremental advertising as well as digital and technology contributions by franchisees (the “Pizza Hut U.S. Transformation Agreement”). | ||||||||||||
[7] | Represents depreciation reductions arising primarily from KFC restaurants that were held for sale. | ||||||||||||
[8] | Unallocated Other income (expense) in 2020 includes a charge of $144 million related to the impairment of Habit Burger Grill goodwill. See Note 5. | ||||||||||||
[9] | Primarily includes cash, deferred tax assets and, in 2019, our Grubhub investment. | ||||||||||||
[10] | Amounts in 2020 include charitable contributions to Yum! Brands Foundation, Inc. of $50 million and $25 million related to our Unlocking Opportunity Initiative and COVID-19 employee relief, respectively. Additionally, 2020 includes $36 million for charges associated with resource optimization (See Note 5) and $9 million in costs associated with our acquisition and integration of Habit Burger Grill (See Note 3). |
Contingencies (Details)
Contingencies (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Guarantor Obligations [Line Items] | |
Unusual or Infrequent Item, or Both, Nature of Event or Transaction | ContingenciesLease GuaranteesAs 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 December 31, 2020, the potential amount of undiscounted payments we could be required to make in the event of non-payment by the primary lessee was approximately $425 million. The present value of these potential payments discounted at our pre-tax cost of debt at December 31, 2020, was approximately $375 million. Our franchisees are the primary lessees under the vast majority of these leases. We generally have cross-default provisions with these franchisees that would put them in default of their franchise agreement in the event of non-payment under the lease. We believe these cross-default provisions significantly reduce the risk that we will be required to make payments under these leases. Accordingly, the liability recorded for our expected exposure under such leases at December 31, 2020, and December 31, 2019, was not material.Insurance ProgramsWe are self-insured for a substantial portion of our current and prior years’ coverage including property and casualty losses. To mitigate the cost of our exposures for certain property and casualty losses, we self-insure the risks of loss up to defined maximum per occurrence retentions on a line-by-line basis. The Company then purchases insurance coverage, up to a certain limit, for losses that exceed the self-insurance per occurrence retention. The insurers’ maximum aggregate loss limits are significantly above our actuarially determined probable losses; therefore, we believe the likelihood of losses exceeding the insurers’ maximum aggregate loss limits is remote.The following table summarizes the 2020 and 2019 activity related to our net self-insured property and casualty reserves as of December 31, 2020. Beginning BalanceHabit Acquisition(a)ExpensePaymentsEnding Balance2020 Activity$54 6 13 (23)$50 2019 Activity$66 — 9 (21)$54 (a) Represents self-insurance liabilities assumed as part of our acquisition of Habit Burger Grill. See Note 3.Due to the inherent volatility of actuarially determined property and casualty loss estimates, it is reasonably possible that we could experience changes in estimated losses which could be material to our growth in quarterly and annual Net Income. We believe that we have recorded reserves for property and casualty losses at a level which has substantially mitigated the potential negative impact of adverse developments and/or volatility.In the U.S. and in certain other countries, we are also self-insured for healthcare claims and long-term disability for eligible participating employees subject to certain deductibles and limitations. We have accounted for our retained liabilities for property and casualty losses, healthcare and long-term disability claims, including reported and incurred but not reported claims, based on information provided by independent actuaries.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.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 $150 million. Of this amount, $145 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 scheduled for March 24, 2021. 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.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 Consolidated Financial Statements. |
Property Lease Guarantee [Member] | |
Guarantor Obligations [Line Items] | |
Year longest lease expires | 2065 |
Potential amount of undiscounted payments we could be required to make in the event of non-payment | $ 425 |
Present value of potential payments we could be required to make in the event of non-payment | $ 375 |
Contingencies (Details 3)
Contingencies (Details 3) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Unusual or Infrequent Item, or Both, Nature of Event or Transaction | ContingenciesLease GuaranteesAs 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 December 31, 2020, the potential amount of undiscounted payments we could be required to make in the event of non-payment by the primary lessee was approximately $425 million. The present value of these potential payments discounted at our pre-tax cost of debt at December 31, 2020, was approximately $375 million. Our franchisees are the primary lessees under the vast majority of these leases. We generally have cross-default provisions with these franchisees that would put them in default of their franchise agreement in the event of non-payment under the lease. We believe these cross-default provisions significantly reduce the risk that we will be required to make payments under these leases. Accordingly, the liability recorded for our expected exposure under such leases at December 31, 2020, and December 31, 2019, was not material.Insurance ProgramsWe are self-insured for a substantial portion of our current and prior years’ coverage including property and casualty losses. To mitigate the cost of our exposures for certain property and casualty losses, we self-insure the risks of loss up to defined maximum per occurrence retentions on a line-by-line basis. The Company then purchases insurance coverage, up to a certain limit, for losses that exceed the self-insurance per occurrence retention. The insurers’ maximum aggregate loss limits are significantly above our actuarially determined probable losses; therefore, we believe the likelihood of losses exceeding the insurers’ maximum aggregate loss limits is remote.The following table summarizes the 2020 and 2019 activity related to our net self-insured property and casualty reserves as of December 31, 2020. Beginning BalanceHabit Acquisition(a)ExpensePaymentsEnding Balance2020 Activity$54 6 13 (23)$50 2019 Activity$66 — 9 (21)$54 (a) Represents self-insurance liabilities assumed as part of our acquisition of Habit Burger Grill. See Note 3.Due to the inherent volatility of actuarially determined property and casualty loss estimates, it is reasonably possible that we could experience changes in estimated losses which could be material to our growth in quarterly and annual Net Income. We believe that we have recorded reserves for property and casualty losses at a level which has substantially mitigated the potential negative impact of adverse developments and/or volatility.In the U.S. and in certain other countries, we are also self-insured for healthcare claims and long-term disability for eligible participating employees subject to certain deductibles and limitations. We have accounted for our retained liabilities for property and casualty losses, healthcare and long-term disability claims, including reported and incurred but not reported claims, based on information provided by independent actuaries.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.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 $150 million. Of this amount, $145 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 scheduled for March 24, 2021. 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.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 Consolidated Financial Statements. | |
Self Insured Property And Casualty Reserves [Member] | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Beginning balance | $ 54 | $ 66 |
Liability for Unpaid Claims and Claims Adjustment Expense, Period Increase (Decrease) | 13 | 9 |
Payments | (23) | (21) |
Ending balance | $ 50 | $ 54 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fiscal Period Adjustment [Line Items] | |||||||||||
Refranchising (gain) loss | $ 34 | $ 37 | $ 540 | ||||||||
Share-based Compensation Expense | 97 | 59 | 50 | ||||||||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | (4) | (3) | |||||||||
Revenues | |||||||||||
Total revenues | $ 1,743 | $ 1,448 | $ 1,198 | $ 1,263 | $ 1,694 | $ 1,339 | $ 1,310 | $ 1,254 | 5,652 | 5,597 | 5,688 |
Restaurant Profit | 106 | 87 | 54 | 57 | 105 | 72 | 73 | 61 | 304 | 311 | |
Operating Profit | 482 | 471 | 300 | 250 | 546 | 480 | 471 | 433 | 1,503 | 1,930 | 2,296 |
Net Income | $ 332 | $ 283 | $ 206 | $ 83 | $ 488 | $ 255 | $ 289 | $ 262 | $ 904 | $ 1,294 | $ 1,542 |
Basic Earnings Per Common Share (in dollars per share) | $ 1.10 | $ 0.94 | $ 0.68 | $ 0.28 | $ 1.61 | $ 0.83 | $ 0.94 | $ 0.85 | $ 2.99 | $ 4.23 | $ 4.80 |
Diluted Earnings Per Common Share (in dollars per share) | 1.08 | 0.92 | 0.67 | 0.27 | 1.58 | 0.81 | 0.92 | 0.83 | 2.94 | 4.14 | 4.69 |
Dividends Declared Per Common Share (in dollars per share) | $ 0.47 | $ 0.47 | $ 0.47 | $ 0.47 | $ 0.42 | $ 0.42 | $ 0.42 | $ 0.42 | $ 1.88 | $ 1.68 | $ 1.44 |
Company Sales | |||||||||||
Revenues | |||||||||||
Company sales | $ 566 | $ 486 | $ 403 | $ 355 | $ 490 | $ 364 | $ 359 | $ 333 | $ 1,810 | $ 1,546 | $ 2,000 |
Company Sales | United States | |||||||||||
Revenues | |||||||||||
Company sales | 1,309 | 1,014 | |||||||||
Franchise and property revenue [Member] | |||||||||||
Revenues | |||||||||||
Company sales | 750 | 639 | 525 | 596 | 770 | 645 | 633 | 612 | 2,510 | 2,660 | 2,482 |
Franchise contributions for advertising and other services | |||||||||||
Revenues | |||||||||||
Company sales | $ 427 | $ 323 | $ 270 | $ 312 | $ 434 | $ 330 | $ 318 | $ 309 | 1,332 | 1,391 | $ 1,206 |
Franchise contributions for advertising and other services | United States | |||||||||||
Revenues | |||||||||||
Company sales | $ 818 | $ 811 |
Uncategorized Items - yum-20201
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents | $ 1,668,000,000 |