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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Yum Brands Inc | NYSE:YUM | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.21 | 0.15% | 141.77 | 142.79 | 140.635 | 140.83 | 2,000,063 | 01:00:00 |
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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D. C. 20549
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[
]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934
for the quarterly period ended June 11, 2016
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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North Carolina
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13-3951308
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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1441 Gardiner Lane, Louisville, Kentucky
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40213
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code: (502) 874-8300
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Page
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No.
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Part I.
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Financial Information
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Item 1 - Financial Statements
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Condensed Consolidated Statements of Income - Quarters and Years to date ended
June 11, 2016 and June, 13, 2015
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Condensed Consolidated Statements of Comprehensive Income - Quarters and Years to date ended June 11, 2016 and June 13, 2015
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Condensed Consolidated Statements of Cash Flows – Years to date ended
June 11, 2016 and June 13, 2015
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Condensed Consolidated Balance Sheets – June 11, 2016 and December 26, 2015
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Notes to Condensed Consolidated Financial Statements
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Item 2 - Management’s Discussion and Analysis of Financial Condition
and Results of Operations
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Item 3 - Quantitative and Qualitative Disclosures about Market Risk
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Item 4 – Controls and Procedures
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Report of Independent Registered Public Accounting Firm
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Part II.
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Other Information and Signatures
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Item 1 – Legal Proceedings
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Item 1A – Risk Factors
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Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds
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Item 6 – Exhibits
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Signatures
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Item 1.
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Financial Statements
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•
|
YUM China (“China” or “China Division”) which includes all operations in mainland China
|
•
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The KFC Division which includes all operations of the KFC concept outside of China Division
|
•
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The Pizza Hut Division which includes all operations of the Pizza Hut concept outside of China Division
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•
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The Taco Bell Division which includes all operations of the Taco Bell concept
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Quarter ended
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Year to date
|
||||||||||||
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2016
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2015
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2016
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2015
|
||||||||
Net Income – YUM! Brands, Inc.
|
|
$
|
339
|
|
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$
|
235
|
|
|
$
|
730
|
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|
$
|
597
|
|
|
|
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|
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||||||||
Weighted-average common shares outstanding (for basic calculation)
|
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410
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437
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413
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437
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||||
Effect of dilutive share-based employee compensation
|
|
7
|
|
|
8
|
|
|
7
|
|
|
9
|
|
||||
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation)
|
|
417
|
|
|
445
|
|
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420
|
|
|
446
|
|
||||
Basic EPS
|
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$
|
0.82
|
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$
|
0.54
|
|
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$
|
1.77
|
|
|
$
|
1.36
|
|
Diluted EPS
|
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$
|
0.81
|
|
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$
|
0.53
|
|
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$
|
1.74
|
|
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$
|
1.34
|
|
Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation
(a)
|
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6.6
|
|
|
4.3
|
|
|
6.8
|
|
|
5.3
|
|
(a)
|
These unexercised employee stock options and stock appreciation rights were not included in the computation of diluted EPS because to do so would have been antidilutive for the periods presented.
|
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|
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Shares Repurchased (thousands)
|
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Dollar Value of Shares Repurchased
|
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Remaining Dollar Value of Shares that may be Repurchased
|
|
|||||||||||||||||
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Authorization Date
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
2016
|
|
|||||||||||||
|
November 2013
|
|
—
|
|
|
|
1,779
|
|
|
|
$
|
—
|
|
|
|
$
|
133
|
|
|
|
$
|
—
|
|
|
|
|
November 2014
|
|
—
|
|
|
|
1,901
|
|
|
|
—
|
|
|
|
162
|
|
|
|
—
|
|
|
|
|||
|
December 2015
|
|
13,369
|
|
|
|
—
|
|
|
|
933
|
|
|
|
—
|
|
|
|
—
|
|
|
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|||
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March 2016
|
|
2,823
|
|
|
|
—
|
|
|
|
228
|
|
|
|
—
|
|
|
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—
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|
|
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|||
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May 2016
|
|
6,102
|
|
|
|
—
|
|
|
|
503
|
|
|
|
—
|
|
|
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3,697
|
|
|
|
|||
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Total
|
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22,294
|
|
(a)
|
|
3,680
|
|
(b)
|
|
$
|
1,664
|
|
(a)
|
|
$
|
295
|
|
(b)
|
|
$
|
3,697
|
|
|
|
|
|
|
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(a)
|
Includes the effect of
$105 million
in share repurchases (
1.3 million
shares) with trade dates prior to June 11, 2016 but cash settlement dates subsequent to June 11, 2016.
|
(b)
|
Includes the effect of
$8 million
in share repurchases (
0.1 million
shares) with trade dates prior to June 13, 2015 but cash settlement dates subsequent to June 13, 2015.
|
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Translation Adjustments and Gains (Losses) From Intra-Entity Transactions of a Long-Term Nature
|
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Pension and Post-Retirement Benefits
|
|
Derivative Instruments
|
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Total
|
||||||||
Balance at December 26, 2015, net of tax
|
|
$
|
(109
|
)
|
|
$
|
(113
|
)
|
|
$
|
(17
|
)
|
|
$
|
(239
|
)
|
|
|
|
|
|
|
|
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||||||||
Gains (losses) arising during the year classified into accumulated OCI, net of tax
|
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(33
|
)
|
|
—
|
|
|
(31
|
)
|
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(64
|
)
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||||
|
|
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|
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||||||||
(Gains) losses reclassified from accumulated OCI, net of tax
|
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—
|
|
|
4
|
|
|
33
|
|
|
37
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
OCI, net of tax
|
|
(33
|
)
|
|
4
|
|
|
2
|
|
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(27
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance at June 11, 2016, net of tax
|
$
|
(142
|
)
|
|
$
|
(109
|
)
|
|
$
|
(15
|
)
|
|
$
|
(266
|
)
|
|
|
Quarter ended
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Year to date
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
China
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
$
|
(4
|
)
|
KFC Division
(a)
|
|
2
|
|
|
35
|
|
|
1
|
|
|
32
|
|
||||
Pizza Hut Division
(a)
|
|
(54
|
)
|
|
36
|
|
|
(56
|
)
|
|
37
|
|
||||
Taco Bell Division
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(7
|
)
|
||||
Worldwide
|
|
$
|
(53
|
)
|
|
$
|
68
|
|
|
$
|
(60
|
)
|
|
$
|
58
|
|
(a)
|
In 2010 we refranchised our then-remaining Company-operated restaurants in Mexico. To the extent we owned real estate related to these restaurants, we did not sell the real estate, but instead leased it to the franchisee. During the quarter ended June 13, 2015 we initiated plans to sell this real estate and determined it was held for sale in accordance with GAAP. The sales price we expected to receive for this real estate exceeded its book value. However, the sale of the real estate represented a substantial liquidation of our Mexican operations under GAAP. Accordingly, we were required to include accumulated translation losses associated with our Mexican business within our held for sale impairment evaluations. As such, we recorded a
$68 million
non-cash charge to Refranchising loss, consisting of losses of
$36 million
and
$32 million
related to KFC and Pizza Hut, respectively. The loss was not allocated to any segment for performance reporting. This loss represents the excess of the sum of the book value of the real estate and related assets, an insignificant amount of goodwill and our accumulated translation losses over the expected sales price. We subsequently sold this real estate in 2015.
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Quarter ended
|
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Year to date
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Equity (income) loss from investments in unconsolidated affiliates
|
$
|
(10
|
)
|
|
$
|
(7
|
)
|
|
$
|
(26
|
)
|
|
$
|
(16
|
)
|
Foreign exchange net (gain) loss and other
|
(18
|
)
|
|
1
|
|
|
(9
|
)
|
|
7
|
|
||||
Other (income) expense
|
$
|
(28
|
)
|
|
$
|
(6
|
)
|
|
$
|
(35
|
)
|
|
$
|
(9
|
)
|
|
6/11/2016
|
|
12/26/2015
|
||||
Accounts and notes receivable, gross
|
$
|
413
|
|
|
$
|
393
|
|
Allowance for doubtful accounts
|
(18
|
)
|
|
(16
|
)
|
||
Accounts and notes receivable, net
|
$
|
395
|
|
|
$
|
377
|
|
|
6/11/2016
|
|
12/26/2015
|
||||
Property, plant and equipment, gross
|
$
|
7,795
|
|
|
$
|
7,832
|
|
Accumulated depreciation and amortization
|
(3,699
|
)
|
|
(3,643
|
)
|
||
Property, plant and equipment, net
|
$
|
4,096
|
|
|
$
|
4,189
|
|
|
Noncontrolling Interests
|
|
Redeemable Noncontrolling Interest
|
||||
Balance at December 26, 2015
|
$
|
58
|
|
|
$
|
6
|
|
Net Income (loss) – noncontrolling interests
|
7
|
|
|
1
|
|
||
Noncontrolling interest loss upon redemption
|
—
|
|
|
(8
|
)
|
||
Dividends declared
|
(7
|
)
|
|
—
|
|
||
Currency translation adjustments and other
|
—
|
|
|
1
|
|
||
Balance at June 11, 2016
|
$
|
58
|
|
|
$
|
—
|
|
|
Quarter ended
|
|
Year to date
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Income tax provision
|
$
|
116
|
|
|
$
|
102
|
|
|
$
|
248
|
|
|
$
|
213
|
|
Effective tax rate
|
25.8
|
%
|
|
30.4
|
%
|
|
25.4
|
%
|
|
26.3
|
%
|
|
Quarter ended
|
|
Year to date
|
||||||||||||
Revenues
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
China
|
$
|
1,588
|
|
|
$
|
1,636
|
|
|
$
|
2,891
|
|
|
$
|
2,892
|
|
KFC Division
|
712
|
|
|
726
|
|
|
1,337
|
|
|
1,388
|
|
||||
Pizza Hut Division
|
246
|
|
|
266
|
|
|
511
|
|
|
538
|
|
||||
Taco Bell Division
|
463
|
|
|
477
|
|
|
889
|
|
|
909
|
|
||||
Unallocated
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
|
$
|
3,008
|
|
|
$
|
3,105
|
|
|
$
|
5,627
|
|
|
$
|
5,727
|
|
|
Quarter ended
|
|
Year to date
|
||||||||||||
Operating Profit
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
China
(a)
|
$
|
147
|
|
|
$
|
144
|
|
|
$
|
403
|
|
|
$
|
334
|
|
KFC Division
|
149
|
|
|
149
|
|
|
309
|
|
|
315
|
|
||||
Pizza Hut Division
|
64
|
|
|
60
|
|
|
151
|
|
|
141
|
|
||||
Taco Bell Division
|
139
|
|
|
140
|
|
|
258
|
|
|
254
|
|
||||
Unallocated and Corporate General and administrative expenses
(b)
|
(76
|
)
|
|
(54
|
)
|
|
(133
|
)
|
|
(100
|
)
|
||||
Unallocated Other income (expense)
|
15
|
|
|
—
|
|
|
7
|
|
|
(9
|
)
|
||||
Unallocated Refranchising gain (loss)
(c)
|
53
|
|
|
(68
|
)
|
|
60
|
|
|
(58
|
)
|
||||
Operating Profit
|
$
|
491
|
|
|
$
|
371
|
|
|
$
|
1,055
|
|
|
$
|
877
|
|
Interest expense, net
|
(40
|
)
|
|
(33
|
)
|
|
(77
|
)
|
|
(67
|
)
|
||||
Income Before Income Taxes
|
$
|
451
|
|
|
$
|
338
|
|
|
$
|
978
|
|
|
$
|
810
|
|
(a)
|
Includes equity income from investments in unconsolidated affiliates of
$10 million
and
$7 million
for the quarters ended
June 11, 2016
and
June 13, 2015
, respectively. Includes equity income from investments in unconsolidated affiliates of
|
(b)
|
Primarily Corporate G&A expenses for the quarters ended June 11, 2016 and June 13, 2015. Amounts also include costs associated with the KFC U.S. Acceleration Agreement of
$8 million
for both the quarters ended June 11, 2016 and June 13, 2015, respectively, and
$17 million
and
$10 million
for the years to date ended June 11, 2016 and June 13, 2015, respectively. Also included are
$10 million
and
$19 million
for the quarter and year to date ended June 11, 2016, respectively, related to the planned spin-off of the China business and YUM recapitalization. See Note 4.
|
(c)
|
See the Refranchising (Gain) Loss section of Note 4.
|
|
Quarter ended
|
|
Year to date
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Service cost
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
8
|
|
Interest cost
|
12
|
|
|
12
|
|
|
25
|
|
|
25
|
|
||||
Expected return on plan assets
|
(15
|
)
|
|
(14
|
)
|
|
(30
|
)
|
|
(28
|
)
|
||||
Amortization of net loss
|
2
|
|
|
11
|
|
|
3
|
|
|
21
|
|
||||
Amortization of prior service cost
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
Net periodic benefit cost
|
$
|
4
|
|
|
$
|
13
|
|
|
$
|
8
|
|
|
$
|
26
|
|
|
|
|
|
|
|
|
|
Short-term Borrowings
|
|
6/11/2016
|
|
12/26/2015
|
|
|||
Current maturities of long-term debt
|
|
$
|
30
|
|
|
$
|
313
|
|
Unsecured Short-term Loan Credit Facility (the "Bridge Facility")
|
|
—
|
|
|
600
|
|
||
Other
|
|
9
|
|
|
9
|
|
||
|
|
$
|
39
|
|
|
$
|
922
|
|
|
|
|
|
|
||||
Long-term Debt
|
|
|
|
|
||||
Existing Senior Unsecured Notes
|
|
$
|
2,200
|
|
|
$
|
2,500
|
|
Existing Unsecured Revolving Credit Facility
|
|
738
|
|
|
701
|
|
||
Securitization Notes
|
|
2,300
|
|
|
—
|
|
||
Capital lease obligations
|
|
162
|
|
|
169
|
|
||
|
|
5,400
|
|
|
3,370
|
|
||
Less debt issuance costs and discounts
|
|
(46
|
)
|
|
(16
|
)
|
||
Less current maturities of long-term debt
|
|
(30
|
)
|
|
(313
|
)
|
||
Long-term debt
|
|
$
|
5,324
|
|
|
$
|
3,041
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
YUM China (“China” or “China Division”) which includes all operations in mainland China
|
•
|
The KFC Division which includes all operations of the KFC concept outside of China Division
|
•
|
The Pizza Hut Division which includes all operations of the Pizza Hut concept outside of China Division
|
•
|
The Taco Bell Division which includes all operations of the Taco Bell concept
|
•
|
The Company provides certain percentage changes excluding the impact of foreign currency translation (“FX” or “Forex”). These amounts are derived by translating current year results at prior year average exchange rates. We believe the elimination of the foreign currency translation impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.
|
•
|
System sales growth includes the results of all restaurants regardless of ownership, including company-owned, franchise, unconsolidated affiliate and license restaurants that operate our Concepts, except for non-company-owned restaurants for which we do not receive a sales-based royalty. Sales of franchise, unconsolidated affiliate and license restaurants typically generate ongoing franchise and license fees for the Company (typically at a rate of 4% to 6% of sales). Franchise, unconsolidated affiliate and license restaurant sales are not included in Company sales on the Condensed Consolidated
|
•
|
Same-store sales growth is the estimated percentage change in sales of all restaurants that have been open and in the YUM system one year or more.
|
•
|
Company Restaurant profit ("Restaurant profit") is defined as Company sales less expenses incurred directly by our Company-owned restaurants in generating Company sales. Company restaurant margin as a percentage of sales is defined as Restaurant profit divided by Company sales. Within the Company Sales and Restaurant Profit analyses, Store Portfolio Actions represent the net impact of new unit openings, acquisitions, refranchising and store closures, and Other primarily represents the impact of same-store sales as well as the impact of changes in costs such as inflation/deflation.
|
•
|
Operating Margin is Operating Profit divided by Total revenues.
|
•
|
In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") , the Company has provided non-GAAP measurements which present Diluted Earnings Per Share before Special Items and Core Operating Profit. Core Operating Profit excludes Special Items and foreign currency translation and we use Core Operating Profit for the purposes of evaluating performance internally. Special Items are not included in any of our externally reported segment results, and we believe the elimination of the foreign currency translation impact provides better year-to-year comparability without the distortion of foreign currency fluctuations. These non-GAAP measurements are not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of Diluted Earnings Per Share before Special Items and Core Operating Profit provide additional information to investors to facilitate the comparison of past and present operations, excluding items that the Company does not believe are indicative of our ongoing operations due to their size and/or nature.
|
|
% Change
|
||||
|
System Sales
(a)
|
Same-Store Sales
|
Units
|
GAAP Operating Profit
|
Core Operating Profit
|
China Division
|
+3
|
Even
|
+6
|
+1
|
+6
|
KFC Division
|
+6
|
+2
|
+3
|
Even
|
+6
|
Pizza Hut Division
|
+1
|
Even
|
+1
|
+6
|
+7
|
Taco Bell Division
|
+2
|
(1)
|
+3
|
(1)
|
(1)
|
Worldwide
|
+3
|
Even
|
+3
|
+32
|
+7
|
|
% Change
|
||||
|
System Sales
(a)
|
Same-Store Sales
|
Units
|
GAAP Operating Profit
|
Core Operating Profit
|
China Division
|
+7
|
+2
|
+6
|
+20
|
+26
|
KFC Division
|
+5
|
+1
|
+3
|
(2)
|
+5
|
Pizza Hut Division
|
+3
|
+1
|
+1
|
+7
|
+8
|
Taco Bell Division
|
+3
|
Even
|
+3
|
+1
|
+1
|
Worldwide
|
+4
|
+1
|
+3
|
+20
|
+14
|
(a)
|
System Sales percentages as shown in tables exclude the impact of foreign currency translation.
|
•
|
Foreign currency translation negatively impacted our reported quarterly and year to date Operating Profit by $16 million and $44 million, respectively, which included $7 million and $20 million, respectively, from our China Division.
|
•
|
Our effective tax rate for the quarter, excluding Special Items, decreased to 24.6% from 25.6%. Our year to date effective tax rate, excluding Special Items, increased to 24.8% from 24.4%.
|
|
Quarter ended
|
|
Year to date
|
||||||||||||||||||||
|
2016
|
|
2015
|
|
% B/(W)
|
|
2016
|
|
2015
|
|
% B/(W)
|
||||||||||||
Company sales
|
$
|
2,554
|
|
|
$
|
2,659
|
|
|
(4
|
)
|
|
|
$
|
4,719
|
|
|
$
|
4,838
|
|
|
(2
|
)
|
|
Franchise and license fees and income
|
454
|
|
|
446
|
|
|
2
|
|
|
|
908
|
|
|
889
|
|
|
2
|
|
|
||||
Total revenues
|
$
|
3,008
|
|
|
$
|
3,105
|
|
|
(3
|
)
|
|
|
$
|
5,627
|
|
|
$
|
5,727
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restaurant profit
|
$
|
408
|
|
|
$
|
411
|
|
|
(1
|
)
|
|
|
$
|
841
|
|
|
$
|
793
|
|
|
6
|
|
|
Restaurant margin %
|
16.0
|
%
|
|
15.5
|
%
|
|
0.5
|
|
ppts.
|
|
17.8
|
%
|
|
16.4
|
%
|
|
1.4
|
|
ppts.
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
General and administrative ("G&A") expenses
|
$
|
365
|
|
|
$
|
353
|
|
|
(3
|
)
|
|
|
$
|
651
|
|
|
$
|
648
|
|
|
(1
|
)
|
|
Franchise and license expenses
|
50
|
|
|
47
|
|
|
(8
|
)
|
|
|
98
|
|
|
81
|
|
|
(20
|
)
|
|
||||
Closures and impairment (income) expenses
|
37
|
|
|
24
|
|
|
(60
|
)
|
|
|
40
|
|
|
27
|
|
|
(52
|
)
|
|
||||
Refranchising (gain) loss
|
(53
|
)
|
|
68
|
|
|
NM
|
|
|
|
(60
|
)
|
|
58
|
|
|
NM
|
|
|
||||
Other (income) expense
|
(28
|
)
|
|
(6
|
)
|
|
NM
|
|
|
|
(35
|
)
|
|
(9
|
)
|
|
NM
|
|
|
||||
Operating Profit
|
$
|
491
|
|
|
$
|
371
|
|
|
32
|
|
|
|
$
|
1,055
|
|
|
$
|
877
|
|
|
20
|
|
|
Operating margin %
|
16.3
|
%
|
|
12.0
|
%
|
|
4.3
|
|
ppts.
|
|
18.8
|
%
|
|
15.3
|
%
|
|
3.5
|
|
ppts.
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
$
|
40
|
|
|
$
|
33
|
|
|
(22
|
)
|
|
|
77
|
|
|
67
|
|
|
(15
|
)
|
|
||
Income tax provision
|
116
|
|
|
102
|
|
|
(13
|
)
|
|
|
248
|
|
|
213
|
|
|
(16
|
)
|
|
||||
Effective Tax Rate
|
25.8
|
%
|
|
30.4
|
%
|
|
4.6
|
|
ppts.
|
|
25.4
|
%
|
|
26.3
|
%
|
|
0.9
|
ppts.
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income – including noncontrolling interests
|
$
|
335
|
|
|
$
|
236
|
|
|
42
|
|
|
|
$
|
730
|
|
|
$
|
597
|
|
|
22
|
|
|
Net Income (loss) – noncontrolling interests
|
(4
|
)
|
|
1
|
|
|
NM
|
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
||||
Net Income – YUM! Brands, Inc.
|
$
|
339
|
|
|
$
|
235
|
|
|
44
|
|
|
|
$
|
730
|
|
|
$
|
597
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share
(a)
|
$
|
0.81
|
|
|
$
|
0.53
|
|
|
54
|
|
|
|
$
|
1.74
|
|
|
$
|
1.34
|
|
|
30
|
|
|
Diluted earnings per share before Special Items
(a)
|
$
|
0.75
|
|
|
$
|
0.69
|
|
|
9
|
|
|
|
$
|
1.71
|
|
|
$
|
1.50
|
|
|
14
|
|
|
(a)
|
See Note 2 for the number of shares used in this calculation.
|
|
Quarter ended
|
|
|
|
|
Year to date
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|||||||
System Sales Growth, reported
|
—
|
%
|
|
(2
|
)%
|
|
|
|
1
|
%
|
|
(1
|
)%
|
|
|
|
||
System Sales Growth, excluding FX
|
3
|
%
|
|
3
|
%
|
|
|
|
4
|
%
|
|
4
|
%
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unit Count
|
6/11/2016
|
|
|
6/13/2015
|
|
|
% Increase (Decrease)
|
|
|
|
|
|
||||||
Franchise & License
|
33,186
|
|
|
32,190
|
|
|
3
|
|
|
|
|
|
|
|||||
Company-owned
|
8,896
|
|
|
8,785
|
|
|
1
|
|
|
|
|
|
|
|||||
Unconsolidated Affiliates
|
811
|
|
|
773
|
|
|
5
|
|
|
|
|
|
|
|||||
|
42,893
|
|
|
41,748
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
Quarter ended
|
|
Year to date
|
||||||||||||
Detail of Special Items
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Costs associated with the planned spin-off of the China business and YUM recapitalization (See Note 4)
|
|
$
|
(10
|
)
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
Costs associated with KFC U.S. Acceleration Agreement (See Note 4)
|
|
(8
|
)
|
|
(8
|
)
|
|
(17
|
)
|
|
(10
|
)
|
||||
Refranchising initiatives
(a)
|
|
53
|
|
|
(72
|
)
|
|
56
|
|
|
(65
|
)
|
||||
Other Special Items Income (Expense)
|
|
(6
|
)
|
|
2
|
|
|
(6
|
)
|
|
2
|
|
||||
Total Special Items Income (Expense)
|
|
29
|
|
|
(78
|
)
|
|
14
|
|
|
(73
|
)
|
||||
Tax Benefit (Expense) on Special Items
(b)
|
|
$
|
(13
|
)
|
|
$
|
3
|
|
|
$
|
(9
|
)
|
|
$
|
1
|
|
Special Items Income (Expense), net of tax - including noncontrolling interests
|
|
$
|
16
|
|
|
$
|
(75
|
)
|
|
5
|
|
|
(72
|
)
|
||
Special Items Income (Expense), net of tax - noncontrolling interests
(See Note 6)
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
||||
Special Items Income (Expense), net of tax - YUM! Brands, Inc.
|
|
$
|
24
|
|
|
$
|
(75
|
)
|
|
$
|
13
|
|
|
$
|
(72
|
)
|
Average diluted shares outstanding
|
|
417
|
|
|
445
|
|
|
420
|
|
|
446
|
|
||||
Special Items diluted EPS
|
|
$
|
0.06
|
|
|
$
|
(0.16
|
)
|
|
$
|
0.03
|
|
|
$
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Core Operating Profit to GAAP Operating Profit
|
|
|
|
|
|
|
|
|
||||||||
Core Operating Profit
|
|
$
|
478
|
|
|
$
|
449
|
|
|
$
|
1,085
|
|
|
$
|
950
|
|
Special Items Income (Expense)
|
|
29
|
|
|
(78
|
)
|
|
14
|
|
|
(73
|
)
|
||||
Foreign Currency Impact on Operating Profit
|
|
(16
|
)
|
|
N/A
|
|
|
(44
|
)
|
|
N/A
|
|
||||
GAAP Operating Profit
|
|
$
|
491
|
|
|
$
|
371
|
|
|
$
|
1,055
|
|
|
$
|
877
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of EPS Before Special Items to GAAP EPS
|
|
|
|
|
|
|
|
|
||||||||
Diluted EPS before Special Items
|
|
$
|
0.75
|
|
|
$
|
0.69
|
|
|
$
|
1.71
|
|
|
$
|
1.50
|
|
Special Items EPS
|
|
0.06
|
|
|
(0.16
|
)
|
|
0.03
|
|
|
(0.16
|
)
|
||||
GAAP EPS
|
|
$
|
0.81
|
|
|
$
|
0.53
|
|
|
$
|
1.74
|
|
|
$
|
1.34
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation of Effective Tax Rate Before Special Items to GAAP Effective Tax Rate
|
|
|
|
|
|
|
|
|
||||||||
Effective Tax Rate before Special Items
|
|
24.6
|
%
|
|
25.6
|
%
|
|
24.8
|
%
|
|
24.4
|
%
|
||||
Impact on Tax Rate as a result of Special Items
(b)
|
|
1.2
|
%
|
|
4.8
|
%
|
|
0.6
|
%
|
|
1.9
|
%
|
||||
GAAP Effective Tax Rate
|
|
25.8
|
%
|
|
30.4
|
%
|
|
25.4
|
%
|
|
26.3
|
%
|
(a)
|
We have historically recorded refranchising gains and losses in the U.S. as Special Items due to the scope of our refranchising program and the volatility in associated gains and losses. Beginning in 2016, we are also including all international refranchising gains and losses, excluding China, in Special Items. The inclusion in Special Items of these additional international refranchising gains and losses is the result of the anticipated size and volatility of refranchising initiatives outside the U.S. that will take place in connection with our previously announced plans to increase franchise ownership of our global restaurants to at least 96% by the end of 2017. International refranchising gains and losses in the quarter and year to date ended June 13, 2015 previously not included in Special Items were not significant and have not been reclassified into Special Items. (See Note 4)
|
(b)
|
The tax benefit (expense) was determined based upon the impact of the nature, as well as the jurisdiction of the respective individual components within Special Items.
|
|
|
Quarter ended
|
|
Year to date
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
% B/(W)
|
|
|
|
|
|
% B/(W)
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
Reported
|
|
Ex FX
|
|
2016
|
|
2015
|
|
Reported
|
|
Ex FX
|
||||||||||||||||
Company sales
|
|
$
|
1,558
|
|
|
$
|
1,608
|
|
|
(3
|
)
|
|
|
1
|
|
|
|
$
|
2,836
|
|
|
$
|
2,843
|
|
|
—
|
|
|
|
5
|
|
|
Franchise and license fees and income
|
|
30
|
|
|
28
|
|
|
7
|
|
|
|
12
|
|
|
|
55
|
|
|
49
|
|
|
12
|
|
|
|
18
|
|
|
||||
Total revenues
|
|
$
|
1,588
|
|
|
$
|
1,636
|
|
|
(3
|
)
|
|
|
2
|
|
|
|
$
|
2,891
|
|
|
$
|
2,892
|
|
|
—
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restaurant profit
|
|
$
|
243
|
|
|
$
|
234
|
|
|
4
|
|
|
|
9
|
|
|
|
$
|
529
|
|
|
$
|
467
|
|
|
13
|
|
|
|
19
|
|
|
Restaurant margin %
|
|
15.7
|
%
|
|
14.6
|
%
|
|
1.1
|
|
ppts.
|
|
1.1
|
|
ppts.
|
|
18.7
|
%
|
|
16.4
|
%
|
|
2.3
|
|
ppts.
|
|
2.3
|
|
ppts.
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
G&A expenses
|
|
$
|
102
|
|
|
$
|
100
|
|
|
(2
|
)
|
|
|
(6
|
)
|
|
|
$
|
168
|
|
|
$
|
168
|
|
|
—
|
|
|
|
(4
|
)
|
|
Operating Profit
|
|
$
|
147
|
|
|
$
|
144
|
|
|
1
|
|
|
|
6
|
|
|
|
$
|
403
|
|
|
$
|
334
|
|
|
20
|
|
|
|
26
|
|
|
Operating margin %
|
|
9.2
|
%
|
|
8.8
|
%
|
|
0.4
|
|
ppts.
|
|
0.4
|
|
ppts.
|
|
13.9
|
%
|
|
11.6
|
%
|
|
2.3
|
|
ppts.
|
|
2.3
|
|
ppts.
|
|
|
Quarter ended
|
|
Year to date
|
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
System Sales Growth, reported
|
|
(1
|
)%
|
|
(4
|
)%
|
|
2
|
%
|
|
(6
|
)%
|
System Sales Growth, excluding FX
|
|
3
|
%
|
|
(4
|
)%
|
|
7
|
%
|
|
(5
|
)%
|
Same-Store Sales Growth %
|
|
—
|
%
|
|
(10
|
)%
|
|
2
|
%
|
|
(11
|
)%
|
|
|
|
|
|
|
% Increase (Decrease)
|
|
|||||
Unit Count
|
|
6/11/2016
|
|
6/13/2015
|
|
|
||||||
Company-owned
|
|
5,800
|
|
|
5,520
|
|
|
5
|
|
|
||
Unconsolidated Affiliates
|
|
811
|
|
|
773
|
|
|
5
|
|
|
||
Franchise & License
|
|
635
|
|
|
560
|
|
|
13
|
|
|
||
|
|
7,246
|
|
|
6,853
|
|
|
6
|
|
|
|
Quarter ended
|
||||||||||||||||||
Income / (Expense)
|
2015
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2016
|
||||||||||
Company sales
|
$
|
1,608
|
|
|
$
|
45
|
|
|
$
|
(22
|
)
|
|
$
|
(73
|
)
|
|
$
|
1,558
|
|
Cost of sales
|
(515
|
)
|
|
(10
|
)
|
|
42
|
|
|
21
|
|
|
(462
|
)
|
|||||
Cost of labor
|
(333
|
)
|
|
(12
|
)
|
|
(13
|
)
|
|
16
|
|
|
(342
|
)
|
|||||
Occupancy and other
|
(526
|
)
|
|
(14
|
)
|
|
5
|
|
|
24
|
|
|
(511
|
)
|
|||||
Company restaurant expenses
|
$
|
(1,374
|
)
|
|
$
|
(36
|
)
|
|
$
|
34
|
|
|
$
|
61
|
|
|
$
|
(1,315
|
)
|
Restaurant profit
|
$
|
234
|
|
|
$
|
9
|
|
|
$
|
12
|
|
|
$
|
(12
|
)
|
|
$
|
243
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year to date
|
||||||||||||||||||
Income / (Expense)
|
2015
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2016
|
||||||||||
Company sales
|
$
|
2,843
|
|
|
$
|
93
|
|
|
$
|
38
|
|
|
$
|
(138
|
)
|
|
$
|
2,836
|
|
Cost of sales
|
(907
|
)
|
|
(22
|
)
|
|
41
|
|
|
41
|
|
|
(847
|
)
|
|||||
Cost of labor
|
(577
|
)
|
|
(22
|
)
|
|
(17
|
)
|
|
29
|
|
|
(587
|
)
|
|||||
Occupancy and other
|
(892
|
)
|
|
(27
|
)
|
|
3
|
|
|
43
|
|
|
(873
|
)
|
|||||
Company restaurant expenses
|
$
|
(2,376
|
)
|
|
$
|
(71
|
)
|
|
$
|
27
|
|
|
$
|
113
|
|
|
$
|
(2,307
|
)
|
Restaurant profit
|
$
|
467
|
|
|
$
|
22
|
|
|
$
|
65
|
|
|
$
|
(25
|
)
|
|
$
|
529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended
|
|
Year to date
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
% B/(W)
|
|
|
|
|
|
% B/(W)
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
Reported
|
|
Ex FX
|
|
2016
|
|
2015
|
|
Reported
|
|
Ex FX
|
||||||||||||||||
Company sales
|
|
$
|
518
|
|
|
$
|
535
|
|
|
(3
|
)
|
|
|
3
|
|
|
|
$
|
948
|
|
|
$
|
999
|
|
|
(5
|
)
|
|
|
3
|
|
|
Franchise and license fees and income
|
|
194
|
|
|
191
|
|
|
1
|
|
|
|
5
|
|
|
|
389
|
|
|
389
|
|
|
—
|
|
|
|
6
|
|
|
||||
Total revenues
|
|
$
|
712
|
|
|
$
|
726
|
|
|
(2
|
)
|
|
|
4
|
|
|
|
$
|
1,337
|
|
|
$
|
1,388
|
|
|
(4
|
)
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restaurant profit
|
|
$
|
75
|
|
|
$
|
78
|
|
|
(3
|
)
|
|
|
3
|
|
|
|
$
|
139
|
|
|
$
|
145
|
|
|
(4
|
)
|
|
|
4
|
|
|
Restaurant margin %
|
|
14.5
|
%
|
|
14.5
|
%
|
|
—
|
|
ppts.
|
|
—
|
|
ppts.
|
|
14.7
|
%
|
|
14.5
|
%
|
|
0.2
|
|
ppts.
|
|
0.1
|
|
ppts.
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
G&A expenses
|
|
$
|
94
|
|
|
$
|
97
|
|
|
4
|
|
|
|
—
|
|
|
|
$
|
170
|
|
|
$
|
179
|
|
|
5
|
|
|
|
—
|
|
|
Operating Profit
|
|
$
|
149
|
|
|
$
|
149
|
|
|
—
|
|
|
|
6
|
|
|
|
$
|
309
|
|
|
$
|
315
|
|
|
(2
|
)
|
|
|
5
|
|
|
Operating margin %
|
|
21.0
|
%
|
|
20.5
|
%
|
|
0.5
|
|
ppts.
|
|
0.5
|
|
ppts.
|
|
23.1
|
%
|
|
22.7
|
%
|
|
0.4
|
|
ppts.
|
|
0.3
|
|
ppts.
|
|
|
Quarter ended
|
|
Year to date
|
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
System Sales Growth, reported
|
|
1
|
%
|
|
(4
|
)%
|
|
(1
|
)%
|
|
(2
|
)%
|
System Sales Growth, excluding FX
|
|
6
|
%
|
|
6
|
%
|
|
5
|
%
|
|
7
|
%
|
Same-Store Sales Growth %
|
|
2
|
%
|
|
2
|
%
|
|
1
|
%
|
|
3
|
%
|
|
|
|
|
|
|
% Increase (Decrease)
|
|
|||||
Unit Count
|
|
6/11/2016
|
|
|
6/13/2015
|
|
|
|
||||
Franchise & License
|
|
13,502
|
|
|
13,088
|
|
|
3
|
|
|
||
Company-owned
|
|
1,501
|
|
|
1,531
|
|
|
(2
|
)
|
|
||
|
|
15,003
|
|
|
14,619
|
|
|
3
|
|
|
|
Quarter ended
|
||||||||||||||||||
Income / (Expense)
|
2015
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2016
|
||||||||||
Company sales
|
$
|
535
|
|
|
$
|
7
|
|
|
$
|
9
|
|
|
$
|
(33
|
)
|
|
$
|
518
|
|
Cost of sales
|
(183
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
13
|
|
|
(176
|
)
|
|||||
Cost of labor
|
(123
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
6
|
|
|
(122
|
)
|
|||||
Occupancy and other
|
(151
|
)
|
|
—
|
|
|
(3
|
)
|
|
9
|
|
|
(145
|
)
|
|||||
Company restaurant expenses
|
$
|
(457
|
)
|
|
$
|
(4
|
)
|
|
$
|
(10
|
)
|
|
$
|
28
|
|
|
$
|
(443
|
)
|
Restaurant profit
|
$
|
78
|
|
|
$
|
3
|
|
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
$
|
75
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year to date
|
||||||||||||||||||
Income / (Expense)
|
2015
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2016
|
||||||||||
Company sales
|
$
|
999
|
|
|
$
|
15
|
|
|
$
|
12
|
|
|
$
|
(78
|
)
|
|
$
|
948
|
|
Cost of sales
|
(344
|
)
|
|
(6
|
)
|
|
—
|
|
|
29
|
|
|
(321
|
)
|
|||||
Cost of labor
|
(230
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
16
|
|
|
(225
|
)
|
|||||
Occupancy and other
|
(280
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
22
|
|
|
(263
|
)
|
|||||
Company restaurant expenses
|
$
|
(854
|
)
|
|
$
|
(11
|
)
|
|
$
|
(11
|
)
|
|
$
|
67
|
|
|
$
|
(809
|
)
|
Restaurant profit
|
$
|
145
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
(11
|
)
|
|
$
|
139
|
|
|
|
Quarter ended
|
|
Year to date
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
% B/(W)
|
|
|
|
|
|
% B/(W)
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
Reported
|
|
Ex FX
|
|
2016
|
|
2015
|
|
Reported
|
|
Ex FX
|
||||||||||||||||
Company sales
|
|
$
|
125
|
|
|
$
|
145
|
|
|
(14
|
)
|
|
|
(12
|
)
|
|
|
$
|
257
|
|
|
$
|
289
|
|
|
(11
|
)
|
|
|
(9
|
)
|
|
Franchise and license fees and income
|
|
121
|
|
|
121
|
|
|
1
|
|
|
|
3
|
|
|
|
254
|
|
|
249
|
|
|
2
|
|
|
|
4
|
|
|
||||
Total revenues
|
|
$
|
246
|
|
|
$
|
266
|
|
|
(7
|
)
|
|
|
(5
|
)
|
|
|
$
|
511
|
|
|
$
|
538
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restaurant profit
|
|
$
|
11
|
|
|
$
|
14
|
|
|
(19
|
)
|
|
|
(20
|
)
|
|
|
$
|
26
|
|
|
$
|
31
|
|
|
(15
|
)
|
|
|
(16
|
)
|
|
Restaurant margin %
|
|
9.4
|
%
|
|
9.9
|
%
|
|
(0.5
|
)
|
ppts.
|
|
(0.9
|
)
|
ppts.
|
|
10.3
|
%
|
|
10.8
|
%
|
|
(0.5
|
)
|
ppts.
|
|
(0.9
|
)
|
ppts.
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
G&A expenses
|
|
$
|
56
|
|
|
$
|
63
|
|
|
9
|
|
|
|
7
|
|
|
|
$
|
106
|
|
|
$
|
120
|
|
|
11
|
|
|
|
8
|
|
|
Operating Profit
|
|
$
|
64
|
|
|
$
|
60
|
|
|
6
|
|
|
|
7
|
|
|
|
$
|
151
|
|
|
$
|
141
|
|
|
7
|
|
|
|
8
|
|
|
Operating margin %
|
|
25.8
|
%
|
|
22.5
|
%
|
|
3.3
|
|
ppts.
|
|
3.0
|
|
ppts.
|
|
29.5
|
%
|
|
26.2
|
%
|
|
3.3
|
|
ppts.
|
|
2.9
|
|
ppts.
|
|
|
Quarter ended
|
|
Year to date
|
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
System Sales Growth, reported
|
|
—
|
%
|
|
(3
|
)%
|
|
—
|
%
|
|
(2
|
)%
|
System Sales Growth, excluding FX
|
|
1
|
%
|
|
2
|
%
|
|
3
|
%
|
|
2
|
%
|
Same-Store Sales Growth %
|
|
—
|
%
|
|
—
|
%
|
|
1
|
%
|
|
—
|
%
|
|
|
|
|
|
|
% Increase (Decrease)
|
|
|||||
Unit Count
|
|
6/11/2016
|
|
|
6/13/2015
|
|
|
|
||||
Franchise & License
|
|
13,490
|
|
|
13,212
|
|
|
2
|
|
|
||
Company-owned
|
|
686
|
|
|
801
|
|
|
(14
|
)
|
|
||
|
|
14,176
|
|
|
14,013
|
|
|
1
|
|
|
|
Quarter ended
|
||||||||||||||||||
Income / (Expense)
|
2015
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2016
|
||||||||||
Company sales
|
$
|
145
|
|
|
$
|
(22
|
)
|
|
$
|
5
|
|
|
$
|
(3
|
)
|
|
$
|
125
|
|
Cost of sales
|
(40
|
)
|
|
6
|
|
|
(2
|
)
|
|
1
|
|
|
(35
|
)
|
|||||
Cost of labor
|
(45
|
)
|
|
7
|
|
|
(2
|
)
|
|
1
|
|
|
(39
|
)
|
|||||
Occupancy and other
|
(46
|
)
|
|
6
|
|
|
(1
|
)
|
|
1
|
|
|
(40
|
)
|
|||||
Company restaurant expenses
|
$
|
(131
|
)
|
|
$
|
19
|
|
|
$
|
(5
|
)
|
|
$
|
3
|
|
|
$
|
(114
|
)
|
Restaurant profit
|
$
|
14
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Year to date
|
||||||||||||||||||
Income / (Expense)
|
2015
|
|
Store Portfolio Actions
|
|
Other
|
|
FX
|
|
2016
|
||||||||||
Company sales
|
$
|
289
|
|
|
$
|
(35
|
)
|
|
$
|
9
|
|
|
$
|
(6
|
)
|
|
$
|
257
|
|
Cost of sales
|
(80
|
)
|
|
10
|
|
|
(3
|
)
|
|
2
|
|
|
(71
|
)
|
|||||
Cost of labor
|
(89
|
)
|
|
11
|
|
|
(4
|
)
|
|
2
|
|
|
(80
|
)
|
|||||
Occupancy and other
|
(89
|
)
|
|
10
|
|
|
(3
|
)
|
|
2
|
|
|
(80
|
)
|
|||||
Company restaurant expenses
|
$
|
(258
|
)
|
|
$
|
31
|
|
|
$
|
(10
|
)
|
|
$
|
6
|
|
|
$
|
(231
|
)
|
Restaurant profit
|
$
|
31
|
|
|
$
|
(4
|
)
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
26
|
|
|
|
Quarter ended
|
|
Year to date
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
% B/(W)
|
|
|
|
|
|
% B/(W)
|
||||||||||||||||||||
|
|
2016
|
|
2015
|
|
Reported
|
|
Ex FX
|
|
2016
|
|
2015
|
|
Reported
|
|
Ex FX
|
||||||||||||||||
Company sales
|
|
$
|
353
|
|
|
$
|
371
|
|
|
(5
|
)
|
|
|
(5
|
)
|
|
|
$
|
678
|
|
|
$
|
707
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
Franchise and license fees and income
|
|
110
|
|
|
106
|
|
|
4
|
|
|
|
4
|
|
|
|
211
|
|
|
202
|
|
|
5
|
|
|
|
5
|
|
|
||||
Total revenues
|
|
$
|
463
|
|
|
$
|
477
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
|
$
|
889
|
|
|
$
|
909
|
|
|
(2
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restaurant profit
|
|
$
|
79
|
|
|
$
|
85
|
|
|
(7
|
)
|
|
|
(7
|
)
|
|
|
$
|
147
|
|
|
$
|
150
|
|
|
(3
|
)
|
|
|
(3
|
)
|
|
Restaurant margin %
|
|
22.3
|
%
|
|
22.9
|
%
|
|
(0.6
|
)
|
ppts.
|
|
(0.7
|
)
|
ppts.
|
|
21.6
|
%
|
|
21.3
|
%
|
|
0.3
|
|
ppts.
|
|
0.3
|
|
ppts.
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
G&A expenses
|
|
$
|
45
|
|
|
$
|
47
|
|
|
5
|
|
|
|
5
|
|
|
|
$
|
91
|
|
|
$
|
91
|
|
|
—
|
|
|
|
(1
|
)
|
|
Operating Profit
|
|
$
|
139
|
|
|
$
|
140
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
$
|
258
|
|
|
$
|
254
|
|
|
1
|
|
|
|
1
|
|
|
Operating margin %
|
|
29.9
|
%
|
|
29.3
|
%
|
|
0.6
|
|
ppts.
|
|
0.6
|
|
ppts.
|
|
29.0
|
%
|
|
28.0
|
%
|
|
1.0
|
|
ppts.
|
|
1.0
|
|
ppts.
|
|
|
Quarter ended
|
|
Year to date
|
||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
System Sales Growth, reported
|
|
2
|
%
|
|
9
|
%
|
|
3
|
%
|
|
9
|
%
|
System Sales Growth, excluding FX
|
|
2
|
%
|
|
9
|
%
|
|
3
|
%
|
|
9
|
%
|
Same-Store Sales Growth %
|
|
(1
|
)%
|
|
6
|
%
|
|
—
|
%
|
|
6
|
%
|
|
|
|
|
|
|
% Increase (Decrease)
|
|
|||||
Unit Count
|
|
6/11/2016
|
|
|
6/13/2015
|
|
|
|
||||
Franchise & License
|
|
5,559
|
|
|
5,330
|
|
|
4
|
|
|
||
Company-owned
|
|
909
|
|
|
933
|
|
|
(3
|
)
|
|
||
|
|
6,468
|
|
|
6,263
|
|
|
3
|
|
|
|
Quarter ended
|
||||||||||||||
Income / (Expense)
|
2015
|
|
Store Portfolio Actions
|
|
Other
|
|
2016
|
||||||||
Company sales
|
$
|
371
|
|
|
$
|
(10
|
)
|
|
$
|
(8
|
)
|
|
$
|
353
|
|
Cost of sales
|
(103
|
)
|
|
3
|
|
|
9
|
|
|
(91
|
)
|
||||
Cost of labor
|
(101
|
)
|
|
3
|
|
|
(2
|
)
|
|
(100
|
)
|
||||
Occupancy and other
|
(82
|
)
|
|
2
|
|
|
(3
|
)
|
|
(83
|
)
|
||||
Company restaurant expense
|
$
|
(286
|
)
|
|
$
|
8
|
|
|
$
|
4
|
|
|
$
|
(274
|
)
|
Restaurant profit
|
$
|
85
|
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
$
|
79
|
|
|
|
|
|
|
|
|
|
||||||||
|
Year to date
|
||||||||||||||
Income / (Expense)
|
2015
|
|
Store Portfolio Actions
|
|
Other
|
|
2016
|
||||||||
Company sales
|
$
|
707
|
|
|
$
|
(20
|
)
|
|
$
|
(9
|
)
|
|
$
|
678
|
|
Cost of sales
|
(198
|
)
|
|
6
|
|
|
18
|
|
|
(174
|
)
|
||||
Cost of labor
|
(199
|
)
|
|
6
|
|
|
(4
|
)
|
|
(197
|
)
|
||||
Occupancy and other
|
(160
|
)
|
|
5
|
|
|
(5
|
)
|
|
(160
|
)
|
||||
Company restaurant expense
|
$
|
(557
|
)
|
|
$
|
17
|
|
|
$
|
9
|
|
|
$
|
(531
|
)
|
Restaurant profit
|
$
|
150
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
$
|
147
|
|
|
|
Quarter ended
|
|
Year to date
|
||||||||||||||||||||
(Expense) / Income
|
|
2016
|
|
2015
|
|
% B/(W)
|
|
2016
|
|
2015
|
|
% B/(W)
|
||||||||||||
Corporate G&A expenses
|
|
$
|
(68
|
)
|
|
$
|
(46
|
)
|
|
(46
|
)
|
|
|
$
|
(116
|
)
|
|
$
|
(90
|
)
|
|
(28
|
)
|
|
Unallocated franchise and license fees and income
|
|
(1
|
)
|
|
—
|
|
|
NM
|
|
|
|
(1
|
)
|
|
—
|
|
|
NM
|
|
|
||||
Unallocated franchise and license expenses
|
|
(7
|
)
|
|
(8
|
)
|
|
17
|
|
|
|
(16
|
)
|
|
(10
|
)
|
|
(55
|
)
|
|
||||
Unallocated refranchising gain (loss) (See Note 4)
|
|
53
|
|
|
(68
|
)
|
|
NM
|
|
|
|
60
|
|
|
(58
|
)
|
|
NM
|
|
|
||||
Other unallocated
|
|
15
|
|
|
—
|
|
|
NM
|
|
|
|
7
|
|
|
(9
|
)
|
|
NM
|
|
|
||||
Interest expense, net
|
|
(40
|
)
|
|
(33
|
)
|
|
(22
|
)
|
|
|
(77
|
)
|
|
(67
|
)
|
|
(15
|
)
|
|
||||
Income tax provision (See Note 7)
|
|
(116
|
)
|
|
(102
|
)
|
|
(13
|
)
|
|
|
(248
|
)
|
|
(213
|
)
|
|
(16
|
)
|
|
||||
Effective tax rate (See Note 7)
|
|
25.8
|
%
|
|
30.4
|
%
|
|
4.6
|
|
ppts.
|
|
25.4
|
%
|
|
26.3
|
%
|
|
0.9
|
|
ppts.
|
/s/ KPMG LLP
|
Louisville, Kentucky
|
July 18, 2016
|
•
|
increasing our vulnerability to, and reducing our flexibility to plan for and respond to, general adverse economic and industry conditions and changes in our business and the competitive environment;
|
•
|
requiring the dedication of a substantial portion of our cash flow from operations to the payment of principal of, and interest on, indebtedness, thereby reducing the availability of such cash flow to fund working capital, capital expenditures, acquisitions, dividends, share repurchases or other corporate purposes;
|
•
|
increasing our vulnerability to a downgrade of our credit rating, which could adversely affect our cost of funds, liquidity and access to capital markets;
|
•
|
restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;
|
•
|
increasing our exposure to the risk of increased interest rates insofar as current and future borrowings are subject to variable rates of interest;
|
•
|
making it more difficult for us to repay, refinance or satisfy our obligations with respect to our debt;
|
•
|
limiting our ability to borrow additional funds in the future and increasing the cost of any such borrowing;
|
•
|
imposing restrictive covenants on our operations, which, if not complied with, could result in an event of default, which in turn, if not cured or waived, could result in the acceleration of the applicable debt, and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies; and
|
•
|
increasing our exposure to risks related to fluctuations in foreign currency as we earn profits in a variety of currencies around the world while our debt is denominated in U.S. dollars.
|
Fiscal Periods
|
|
Total number of shares purchased
(thousands)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
(thousands)
|
|
Approximate dollar value of shares that may yet be purchased under the plans or programs
(millions)
|
3/20/16-4/16/16
|
|
—
|
|
N/A
|
|
—
|
|
$508
|
|
|
|
|
|
|
|
|
|
4/17/16-5/14/16
|
|
1,531
|
|
$81.63
|
|
1,531
|
|
$383
|
|
|
|
|
|
|
|
|
|
5/15/16-6/11/16
|
|
7,488
|
|
$82.05
|
|
7,488
|
|
$3,697
|
Total
|
|
9,019
|
|
$81.98
|
|
9,019
|
|
$3,697
|
|
|
Exhibit 101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
Exhibit 101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
Exhibit 101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
Exhibit 101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
||
|
†
|
Indicates a management contract or compensatory plan.
|
|
YUM! BRANDS, INC.
|
|
(Registrant)
|
Date:
|
July 18, 2016
|
/s/ David E. Russell
|
|
|
Vice President, Finance and Corporate Controller
|
|
|
(Principal Accounting Officer)
|
1 Year Yum Brands Chart |
1 Month Yum Brands Chart |
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