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YUM · Yum! Brands

50 filings

10-Q

YUM 10-Q Quarterly Reports

Yum! Brands - 50 quarterly reports

Filing record · 2016–202610-K1110-Q328-K146

YUM filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 146 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Material agreement8-K · Sep ’19Sep ’19
  3. Leadership change8-K · Sep ’21Sep ’21
  4. Material agreement8-K · Sep ’25Sep ’25
  1. 2026-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 30, 2026

    Yum! Brands, Inc. reported second-quarter 2026 GAAP net income of $853 million, or $3.08 per diluted share, versus $374 million, or $1.33 per diluted share, in the prior-year quarter. Total revenues rose to $2.169 billion from $1.933 billion, and Operating Profit increased to $655 million from $622 million. Results were significantly affected by a $359 million net deferred tax benefit tied to the planned Pizza Hut sale, which drove a negative quarterly effective tax rate of (60.1)%. Excluding Special Items, diluted EPS was $1.62 versus $1.44 a year earlier, and Core Operating Profit was $683 million versus $650 million. On June 16, 2026, the company entered into two definitive agreements to sell the Pizza Hut brand: Pizza Hut excluding Mainland China to LongRange Capital, and Pizza Hut in Mainland China to Yum China Holdings, Inc. The company expects approximately $2.3 billion of net proceeds across both transactions, with closings anticipated in August 2026, and an additional $75 million earn-out opportunity by 2030. Proceeds are expected to first pay down revolving borrowings, with the majority of the remainder set aside for share repurchases; the Board authorized up to $4 billion of incremental buybacks through June 30, 2028. Balance sheet items warrant attention. Short-term borrowings rose to $2.813 billion from $38 million, largely because the Term Loan A and Revolving Facility were reclassified to current liabilities given the timing of the $750 million Subsidiary Senior Unsecured Notes maturing June 1, 2027. Long-term debt declined to $9.462 billion from $11.872 billion, and total shareholders' deficit was $(7.107) billion. The filing also discloses an unreserved IRS proposed adjustment of approximately $2.1 billion in tax plus $418 million in penalties for fiscal 2014, with interest of approximately $2.3 billion accruing through June 30, 2026, and an India regulatory penalty order of approximately $120 million that the company contests. Taco Bell U.S. also reported a meaningful near-term sales impact from a July 2026 lettuce recall.

    Aug 5, 2026
  2. 2026-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 31, 2026

    Yum! Brands, Inc. reported first-quarter 2026 results (quarter ended March 31, 2026) with total revenues of $2.06 billion, up from $1.79 billion a year earlier, and operating profit of $644 million versus $548 million. Net income rose to $432 million, or $1.55 diluted EPS, compared with $253 million, or $0.90 diluted EPS, in the prior-year quarter. The filing notes that the current quarter's results include Special Items, including a credit card interchange fee litigation settlement that contributed about $44 million of income and $37 million of charges tied to the Pizza Hut strategic options review. Excluding Special Items, diluted EPS was $1.50 versus $1.30 a year earlier. The company reported worldwide system sales growth of 6% excluding FX, same-store sales growth of 3%, and 1,030 gross unit openings for a net increase of 400 units. Balance sheet and capital allocation remain central to the investment case. Total shareholders' deficit was $(7.28) billion at March 31, 2026. Long-term debt fell to $10.21 billion from $11.87 billion, while short-term borrowings rose to $1.74 billion, reflecting the reclassification of Term Loan A and Revolving Facility borrowings to current because of the June 1, 2027 maturity of $750 million in Subsidiary Senior Unsecured Notes. During the quarter the company repurchased shares for $185 million and paid $207 million in dividends, and it had about $0.9 billion of remaining repurchase capacity under its May 2024 authorization. The filing also discloses an ongoing IRS dispute over approximately $2.1 billion of asserted tax underpayments plus $418 million in penalties for fiscal 2014, with interest of approximately $2.2 billion accruing through March 31, 2026. The company has not recorded a reserve, believing its tax position is more likely than not to be sustained, but states an unfavorable resolution could be materially adverse. The company also continues a strategic options review for the Pizza Hut brand, which it intends to complete in 2026.

    May 6, 2026
  3. 2025-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 30, 2025

    Yum! Brands, Inc. reported third-quarter 2025 total revenues of $1.98 billion, up from $1.83 billion a year earlier, and GAAP net income of $397 million, or $1.41 diluted EPS, versus $382 million and $1.35 a year earlier. Year to date, total revenues were $5.70 billion and net income was $1.02 billion, or $3.64 diluted EPS, compared with $3.73 in the prior-year period. Results include Special Items; excluding them, the company reported third-quarter diluted EPS of $1.58 versus $1.37 and year-to-date diluted EPS of $4.32 versus $3.87. Quarterly system sales excluding FX rose 5%, same-store sales grew 3%, and Core Operating Profit increased 7%. The Taco Bell Division was the strongest performer, while the Pizza Hut Division's same-store sales declined 1% and the company has begun a strategic options review for that brand. The balance sheet remains heavily levered, with a shareholders' deficit of $7.51 billion and long-term debt of $11.51 billion at September 30, 2025. The company ended the quarter with a consolidated net leverage ratio of 3.7x EBITDA and credit ratings of BB+ (Standard & Poor's) and Ba2 (Moody's). In September 2025, the Taco Bell securitization issued $1.5 billion of 2025-1 Notes, used in part to repay $938 million of notes due May 2026. The company also signed agreements to acquire 128 Taco Bell restaurants in the Southeast U.S. for approximately $670 million, expected to close in the fourth quarter of 2025. The effective tax rate rose to 26.7% in the quarter and 30.3% year to date, driven by a $90 million charge related to the One Big Beautiful Bill Act, a $105 million foreign tax reserve, and a $63 million audit-related benefit. The company's IRS dispute, which involves a proposed underpayment of $2.1 billion plus $418 million in penalties, remains in litigation in U.S. Tax Court, and no reserve has been recorded because management believes the tax position is more likely than not to be sustained.

    Nov 7, 2025
  4. 2025-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 30, 2025

    Yum! Brands, Inc. reported second-quarter 2025 Total revenues of $1.93 billion, up from $1.76 billion a year earlier, and Net Income of $374 million versus $367 million. Diluted EPS was $1.33 versus $1.28, and EPS excluding Special Items was $1.44 versus $1.35. Year to date, Net Income fell to $628 million from $681 million, with diluted EPS of $2.23 versus $2.38, largely reflecting a $102 million reserve tied to a Mexican tax matter that raised the year-to-date effective tax rate to 32.4% from 21.8%. Excluding Special Items, year-to-date diluted EPS rose to $2.74 from $2.50. Consolidated system sales excluding FX rose 4% for both the quarter and year to date, with same-store sales growth of 2% in each period. The company's cash generation strengthened, with operating cash flow of $850 million year to date versus $705 million a year earlier. Management used this cash to fund $338 million of share repurchases and $395 million of dividends, and it reported $1.3 billion of remaining capacity under its May 2024 repurchase authorization. Total debt was $11.0 billion, with approximately 96% fixed and a consolidated net leverage ratio of 3.8x EBITDA. Management stated it expects to maintain leverage near 4.0x over the medium term and to deliver materially higher capital returns going forward. Key risks include a $938 million Securitization Notes tranche with an anticipated repayment date of May 2026, which the company expects to refinance, and an unresolved IRS proposed underpayment of $2.1 billion in tax plus $418 million in penalties, for which no reserve has been recorded. The filing also discloses an Indian regulatory penalty order of approximately $130 million that is stayed and that the company does not consider probable of significant loss. Unit count declined by 74 year to date, mainly due to the January 2025 closure of 283 KFC and 254 Pizza Hut restaurants in Turkey.

    Aug 7, 2025
  5. 2025-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 31, 2025

    Yum! Brands, Inc. reported first-quarter 2025 results (quarter ended March 31, 2025) with total revenues of $1,787 million, up from $1,598 million, and Net Income of $253 million, down from $314 million. Diluted EPS was $0.90 versus $1.10 a year earlier, but the company reported EPS excluding Special Items of $1.30 versus $1.15, up 13%. The decline in GAAP results was driven largely by a $92 million reserve related to a Mexican tax matter, which pushed the effective tax rate to 41.0% from 18.0%. Operating Profit rose to $548 million from $520 million, and Core Operating Profit increased 8% to $586 million. System sales excluding FX grew 5%, with same-store sales up 3% company-wide. The Taco Bell Division led with same-store sales growth of 9% and Core Operating Profit growth of 16%, while the Pizza Hut Division's same-store sales declined 2%. Net units declined by 460 for the quarter, primarily due to the termination of the Turkey franchise agreements and resulting closures of 283 KFC and 254 Pizza Hut restaurants. The company repurchased 1,556 thousand shares for $229 million and paid $198 million in dividends. Shareholders' deficit widened to $(7,804) million, and total debt outstanding was $11.4 billion principal, with a consolidated net leverage ratio of 3.9x EBITDA. The company also disclosed an IRS Notice of Deficiency received in March 2025 asserting an underpayment of $2.1 billion plus $418 million in penalties for fiscal 2014, with interest estimated at approximately $1.5 billion; the company disagrees and plans to file a petition in U.S. Tax Court in the second quarter of 2025. No reserve has been recorded for this matter, which management believes is more likely than not to be sustained, though an unfavorable resolution could have a material adverse impact.

    May 7, 2025
  6. 2024-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 30, 2024

    Yum! Brands, Inc. reported third-quarter 2024 total revenues of $1.83 billion, up from $1.71 billion in the prior-year quarter, and net income of $382 million, or $1.35 diluted EPS, versus $416 million and $1.46 a year earlier. Year to date, net income was $1.06 billion ($3.73 diluted EPS) versus $1.13 billion ($3.97) in 2023. Diluted EPS excluding Special Items was $1.37 for the quarter and $3.87 year to date. Same-store sales declined 2% for both the quarter and year to date, with the KFC Division down 4% for the quarter and the Pizza Hut Division down 4%, while the Taco Bell Division grew 4%. The filing cites Middle East conflict impacts as a low single-digit headwind to same-store sales growth, with approximately 275 restaurants temporarily closed in affected markets. The company's cash position and capital allocation changed during the period. Operating cash flow was $1.18 billion year to date, compared with $1.16 billion in 2023. Shareholders' deficit stood at $(7.67) billion at September 30, 2024, with total debt of about $11 billion. Yum acquired 216 KFC restaurants in the U.K. and Ireland for $174 million in cash, sold its Devyani investment for $104 million, and repurchased $327 million of stock year to date under a $2 billion May 2024 authorization, leaving $1.7 billion remaining. The company also refinanced its Term Loan A and Revolving Facility, and the net leverage ratio ended the quarter at 4.1x EBITDA. The filing also discloses an unresolved IRS proposed adjustment asserting an underpayment of $2.1 billion plus $418 million in penalties for fiscal 2014, with interest estimated at about $1.3 billion through the third quarter of 2024. The company disagrees, believes its position is more likely than not to be sustained, and has recorded no reserve. An Indian enforcement penalty of approximately $130 million remains under a Delhi High Court stay.

    Nov 7, 2024
  7. 2024-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 30, 2024

    Yum! Brands, Inc. reported second-quarter 2024 total revenues of $1.76 billion, up from $1.69 billion a year earlier, and operating profit of $607 million versus $573 million. Net income fell to $367 million from $418 million, and diluted EPS was $1.28 compared with $1.46. The filing attributes the decline partly to a higher effective tax rate of 24.7% versus 12.6%, and the company's non-GAAP diluted EPS excluding Special Items was $1.35 versus $1.41. Core Operating Profit rose 10% to $645 million, and system sales excluding FX were up 3% for the quarter. Same-store sales declined 1% for the quarter and 2% year to date, with the KFC Division down 3% and Pizza Hut down 3%, while Taco Bell grew 5%. The quarter included the April 2024 acquisition of 216 KFC restaurants in the U.K. and Ireland for a purchase price of $171 million, and the sale of its approximate 5% stake in Devyani International for $104 million in pre-tax proceeds. The company is also disclosing an ongoing Middle East conflict that management describes as a low single-digit headwind to same-store sales growth. Total debt was about $11 billion, with approximately 96% fixed-rate at an effective interest rate of roughly 4.5%, and the company ended the quarter with a net leverage ratio of 4.1x EBITDA. Shareholders' deficit remained at $(7.63) billion. The filing also details an unreserved IRS proposed adjustment of $2.1 billion in tax plus $418 million in penalties for fiscal 2014, with interest estimated at about $1.2 billion through the second quarter of 2024. The company disagrees with the IRS position and believes it is more likely than not to be sustained, so no reserve is recorded. Management says an unfavorable outcome could have a material adverse impact on future financial statements. In May 2024, the board authorized a new $2 billion share repurchase program running through December 31, 2026.

    Aug 8, 2024
  8. 2024-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 31, 2024

    Yum! Brands, Inc. reported first-quarter 2024 total revenues of $1.598 billion, down from $1.645 billion a year earlier, while net income rose to $314 million from $300 million and diluted EPS increased to $1.10 from $1.05. Operating profit was $520 million versus $523 million. Excluding Special Items, diluted EPS was $1.15 versus $1.06. Worldwide same-store sales declined 3%, with KFC down 2%, Taco Bell up 1%, and Pizza Hut down 7%. System sales excluding FX grew 2%, and the company opened 808 gross units for 421 net new units. Core Operating Profit rose 6% to $555 million from $526 million, and Special Items included $21 million of resource optimization charges. Cash from operating activities was $363 million, and the company sold its approximate 5% stake in Devyani International for $104 million in pre-tax proceeds, recognizing a $20 million pre-tax investment loss before the sale. Total debt was about $11.2 billion, with approximately 94% fixed-rate at an effective rate of about 4.6%, and the net leverage ratio ended at 4.1x EBITDA. Shareholders' deficit was $7.756 billion. After the quarter, the company refinanced its Term Loan A and Revolving Facility, and on April 29, 2024 it acquired 216 KFC restaurants in the U.K. and Ireland for about $180 million in cash. The filing also discloses an unreserved IRS proposed underpayment of $2.1 billion plus $418 million in penalties for fiscal 2014, with interest estimated at about $1.2 billion, which the company is contesting. It also discloses an Indian regulatory penalty of about $135 million that the company is contesting and that is stayed by the Delhi High Court.

    May 7, 2024
  9. 2023-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 30, 2023

    Yum! Brands, Inc. reported third-quarter 2023 total revenues of $1.71 billion, up from $1.64 billion in the prior-year quarter, and operating profit of $613 million versus $546 million. Net income rose to $416 million from $331 million, with diluted EPS of $1.46 compared with $1.14. Year to date, total revenues were $5.04 billion and net income was $1.13 billion. Same-store sales grew 6% in the quarter and 7% year to date, and the company operated 57,274 units as of September 30, 2023, 98% of them franchised. The company exited Russia in April 2023 by selling the KFC business there to Smart Service Ltd., receiving cash proceeds of $121 million and recording a $3 million charge. Cash from operations was $1.155 billion year to date, and the company repurchased only $50 million of stock in the period, leaving $1.7 billion of authorization remaining. Total debt was $11.6 billion, about 94% fixed-rate with an effective interest rate of approximately 4.6%, and the consolidated net leverage ratio was 4.4x EBITDA. The principal open item for investors is an IRS proposed adjustment asserting a $2.1 billion underpayment of tax plus $418 million in penalties for fiscal 2014, with estimated interest of approximately $940 million through the third quarter of 2023. The company believes its position is more likely than not to be sustained and has recorded no reserve, but states that an unfavorable resolution could have a material adverse impact on future financial statements. Shareholders' deficit was $8.19 billion.

    Nov 7, 2023
  10. 2023-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 30, 2023

    Yum! Brands, Inc. reported second-quarter 2023 total revenues of $1.687 billion, up from $1.636 billion a year earlier, and GAAP operating profit of $573 million versus $554 million. Net income rose to $418 million from $224 million, and diluted EPS was $1.46 versus $0.77. The filing notes the quarter's income tax provision was lower than the prior year, with a $71 million net tax expense recorded in Q2 2022 tied to the exit from Russia and an $18 million tax benefit in Q2 2023 from a favorable tax audit resolution. Excluding Special Items, diluted EPS was $1.41 versus $1.06. Systemwide, the company reported same-store sales growth of 9% for the quarter and 8% year to date, and system sales excluding FX grew 13% in the quarter. The company completed its exit from Russia in April 2023 by selling the KFC Russia business to Smart Service Ltd., generating cash proceeds of $121 million and a $4 million loss in Other (income) expense. Cash provided by operating activities was $678 million year to date, versus $522 million a year earlier. The company repurchased no shares in the quarter, with $1.7 billion of remaining capacity under its September 2022 authorization. Total debt was $11.6 billion, with shareholders' deficit of $8.436 billion at June 30, 2023. The filing also highlights contingent risks: the IRS has asserted a proposed underpayment of $2.1 billion plus $418 million in penalties for fiscal 2014, with interest estimated at approximately $880 million through Q2 2023. The company disagrees, has filed a protest, and recorded no reserve, though it states an unfavorable resolution could have a material adverse impact. An Indian regulatory penalty order of approximately $135 million remains stayed, and the company deems significant loss not probable. The filing also discloses a January 2023 ransomware attack affecting certain IT systems and employee personal information.

    Aug 7, 2023
  11. 2023-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 31, 2023

    Yum! Brands, Inc. reported first-quarter 2023 total revenues of $1.645 billion, up from $1.547 billion in the prior-year quarter, and operating profit of $523 million versus $509 million. Net income fell to $300 million from $399 million, and diluted EPS was $1.05 compared with $1.36. The filing attributes the EPS decline largely to prior-year Special Items, which included a $82 million one-time tax benefit in Q1 2022. Excluding Special Items, diluted EPS was $1.06 versus $1.05. Core Operating Profit rose to $553 million from $500 million, and system sales excluding foreign currency grew 11%, with same-store sales up 8% system-wide. The balance sheet remains highly leveraged, with a shareholders' deficit of $8.774 billion and total debt of $11.6 billion, of which about 94% is fixed at an effective rate of approximately 4.5%. Management cites a consolidated net leverage ratio of 4.9x EBITDA and credit ratings of BB+ (S&P) and Ba2 (Moody's). Cash from operations was $349 million, and the company repurchased $50 million of stock in the quarter, leaving $1.7 billion of capacity under the September 2022 authorization. The company also agreed in April 2023 to sell its KFC Russia business to Smart Service Ltd., completing its exit from Russia. The filing also discloses an unreserved IRS proposed underpayment of $2.1 billion plus $418 million in penalties for fiscal 2014, with interest estimated at about $830 million through Q1 2023. Management believes the tax position is more likely than not to be sustained and has recorded no reserve, while noting that an unfavorable outcome could have a material adverse impact. A ransomware attack in January 2023 led to elevated corporate G&A costs and class actions filed in April 2023 by employees.

    May 9, 2023
  12. 2022-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 30, 2022

    Yum! Brands, Inc. reported third-quarter 2022 total revenues of $1.64 billion, up from $1.61 billion a year earlier, and net income of $331 million, down from $528 million. Diluted EPS was $1.14 versus $1.75, and diluted EPS excluding Special Items was $1.09 versus $1.22. Operating profit rose to $546 million from $527 million, while year-to-date operating profit declined to $1.61 billion from $1.64 billion. Results were shaped by the company's decision to exit Russia, a higher effective tax rate of 25.8% in the quarter (versus (17.0)% a year earlier, which reflected a prior-year $152 million tax benefit), and foreign currency translation, which reduced Divisional Operating Profit by $39 million in the quarter and $76 million year to date. System sales excluding FX grew 7% in the quarter and same-store sales grew 5%, while reported system sales growth was 1%. Russia units were removed from the unit count and same-store sales base, and the company agreed in October 2022 to sell its KFC Russia business to Smart Service Ltd. Cash from operations fell to $975 million from $1,292 million year to date, and the company repurchased $714 million of shares. Long-term debt rose to $11.52 billion, and shareholders' deficit was $8.54 billion. The filing also discloses a potential IRS adjustment asserting $2.1 billion of tax plus $418 million of penalties for fiscal 2014, with interest estimated at approximately $740 million through the third quarter of 2022. The company disputes the assertion, has filed a protest, and recorded no reserve, stating it believes the tax position is more likely than not to be sustained, while noting an unfavorable outcome could have a material adverse impact.

    Nov 8, 2022
  13. 2022-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 30, 2022

    Yum! Brands, Inc. reported second-quarter 2022 total revenues of $1.64 billion, up from $1.60 billion a year earlier, while GAAP operating profit fell to $554 million from $567 million and GAAP net income dropped to $224 million from $391 million. Diluted EPS was $0.77 versus $1.29, and diluted EPS excluding Special Items was $1.05 versus $1.16. The decline was driven largely by a $71 million net tax expense tied to the decision to exit KFC Russia, and by higher G&A expenses, which rose to $254 million from $230 million. Worldwide same-store sales grew 1% in the quarter and 2% year to date, and Taco Bell was the standout division with same-store sales growth of 8% for the quarter. The company is exiting Russia. It has transferred Pizza Hut Russia ownership to a local operator, is transferring KFC Russia, and expects that sale to be completed by the end of 2022. Operating cash flow was $522 million year to date versus $773 million a year earlier, and total debt was $11.6 billion, with about 94% fixed-rate at an effective rate of approximately 4.3%. The company issued $1 billion of 5.375% notes due 2032 and redeemed $600 million of 7.75% notes due 2025. The most significant risk flagged is an IRS Revenue Agent's Report received in August 2022 asserting a $2.1 billion underpayment of tax plus $418 million in penalties for fiscal 2014, with interest estimated at roughly $700 million through the second quarter of 2022. Yum! disagrees, plans to contest it, and has recorded no reserve because it believes the tax position is more likely than not to be sustained. The filing states that an unfavorable resolution could have a material adverse impact on future financial statements.

    Aug 8, 2022
  14. 2022-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 31, 2022

    Yum! Brands, Inc. reported first-quarter 2022 GAAP net income of $399 million, or $1.36 diluted EPS, versus $326 million, or $1.07 diluted EPS, a year earlier. Excluding Special Items, diluted EPS was $1.05, compared with $1.07 in the prior-year quarter. Special Items were driven mainly by an $82 million one-time tax benefit from the release of a valuation allowance on foreign tax credit carryforwards. Total revenues rose to $1.55 billion from $1.49 billion, and Operating Profit declined to $509 million from $543 million. Worldwide system sales excluding FX grew 8%, same-store sales grew 3%, and the company opened 997 gross units, contributing 628 net new units. The company is suspending its operations in Russia, including 70 company-owned KFC restaurants and a Pizza Hut master franchise arrangement, and is working to transfer ownership to local operators. Management said Russia has historically represented approximately 3% of total operating profit, and that Russia reduced consolidated Core Operating Profit growth by one percentage point in the quarter. Cash from operations was $253 million, versus $324 million a year earlier. The company repurchased $407 million of stock during the quarter and had $543 million remaining under its authorization. Total debt outstanding was $11.4 billion, and the company drew $174 million on its $1.25 billion revolving facility. The filing also discloses an IRS Notice of Proposed Adjustment relating to a 2014 reorganization involving asserted taxable distributions of approximately $6.0 billion. The company expects the IRS Revenue Agent's Report in the second quarter of 2022, has recorded no reserve, and says an unfavorable outcome could have a material adverse impact. Subsequent to the quarter, the company redeemed $600 million of 7.75% notes due 2025 and issued $1.0 billion of 5.375% notes due 2032.

    May 10, 2022
  15. 2021-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 30, 2021

    Yum! Brands, Inc. reported third-quarter 2021 total revenues of $1.61 billion, up from $1.45 billion a year earlier, and GAAP operating profit of $527 million versus $471 million. GAAP diluted EPS was $1.75 versus $0.92, and diluted EPS excluding Special Items was $1.22 versus $1.01. The quarter's net income of $528 million includes a one-time tax benefit of $152 million tied to a KFC intellectual property transfer to Switzerland. Worldwide same-store sales rose 5% in the quarter and 12% year to date, and 760 net new units were added in the quarter and 1,798 year to date. Approximately 500 restaurants remained temporarily closed due to COVID-19 at quarter end. Cash flow and capital structure were active during the period. Net cash from operating activities was $1.29 billion year to date, versus $853 million a year earlier. The company repurchased $860 million of shares year to date and paid $446 million in dividends. Long-term debt totaled $11.19 billion at September 30, 2021, against a shareholders' deficit of $7.86 billion. Refinancing activity included a $1.1 billion 4.625% senior notes issuance due 2032 and $2.04 billion of Taco Bell securitization notes issued in August 2021. The filing highlights two contingent matters. The IRS issued a Notice of Proposed Adjustment on October 13, 2021, asserting taxable distributions of approximately $6.0 billion related to 2014 reorganizations, and the company expects the amount of additional tax to be material. In India, a $150 million penalty order is stayed by the Delhi High Court, and the company denies liability. The company recorded no reserve for the IRS matter because it believes its tax position is more likely than not to be sustained.

    Nov 3, 2021
  16. 2021-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 30, 2021

    Yum! Brands, Inc. reported a strong second quarter of 2021, with total revenues of $1,602 million, up from $1,198 million in the prior-year quarter, and net income of $391 million versus $206 million. GAAP diluted EPS was $1.29 compared with $0.67 a year earlier, and diluted EPS excluding Special Items was $1.16 versus $0.82. For the year to date, total revenues were $3,088 million and net income was $717 million, with diluted EPS of $2.35. Worldwide same-store sales increased 23% in the quarter and 16% year to date, and system sales excluding FX grew 26% and 18%, respectively. Operating profit rose to $567 million for the quarter from $300 million, though the prior-year period included a $50 million charity contribution and other special items. The company's balance sheet remains heavily leveraged, with a shareholders' deficit of $7,893 million and long-term debt of $10,258 million at June 30, 2021. Management stated total debt outstanding was $10.7 billion, approximately 93% fixed, with an effective interest rate of approximately 4.6%. During the period, Yum refinanced its credit agreement, issued $1.1 billion of 4.625% senior notes due 2032, and redeemed $1,050 million of 5.25% subsidiary notes at a $28 million call premium. Shareholders received $299 million in dividends, and the company repurchased $530 million of stock year to date, with a new authorization of up to $2 billion through December 31, 2022. Key risks include a pending IRS proposed adjustment tied to a 2014 reorganization, which the filing says could be material if resolved unfavorably, and an Indian regulatory penalty order of approximately $150 million that is stayed. The company also noted that COVID-19 temporarily closed about 700 restaurants as of June 30, 2021, and that it expects a one-time deferred tax benefit exceeding $100 million in the third quarter from a Swiss intellectual property step-up.

    Aug 5, 2021
  17. 2021-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 31, 2021

    Yum! Brands, Inc. reported first-quarter 2021 GAAP net income of $326 million, or $1.07 diluted EPS, versus $83 million, or $0.27 diluted EPS, in the quarter ended March 31, 2020. Total revenues rose to $1,486 million from $1,263 million. The prior-year quarter included a $139 million Habit Burger Grill goodwill impairment, which was recorded in Other (income) expense. Operating profit was $543 million versus $250 million. Worldwide same-store sales grew 9%, and system sales excluding FX rose 11%. Core Operating Profit was $525 million versus $395 million, a 33% increase. Cash flow and capital allocation were active in the quarter. Net cash provided by operating activities was $324 million, versus $238 million a year earlier. The company repurchased 2.6 million shares for $275 million at an average price of $106, and paid $150 million in dividends. Total debt was refinanced during the quarter: the Credit Agreement was amended into a $1.5 billion Term Loan B, a $750 million Term Loan A and a $1.25 billion revolving facility, which was undrawn at March 31, 2021. The balance sheet still shows a shareholders' deficit of $7.9 billion, with total liabilities of $13.5 billion against total assets of $5.6 billion. Subsequent to quarter-end, the company issued $1.1 billion of 4.625% senior unsecured notes due 2032 and called $1,050 million of 5.25% Subsidiary Senior Unsecured Notes due 2026 for redemption on June 1, 2021 at 102.625% of principal. Management said COVID-19 continues to create uncertainty, with nearly 900 restaurants still temporarily closed at quarter-end. A pending Indian regulatory penalty of approximately $150 million remains stayed by the Delhi High Court, and the company says it does not consider a significant loss probable.

    May 5, 2021
  18. 2020-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 30, 2020

    Yum! Brands, Inc. reported third-quarter 2020 results with total revenues of $1.448 billion, up from $1.339 billion a year earlier, and GAAP net income of $283 million versus $255 million. GAAP diluted EPS was $0.92, compared with $0.81. Year-to-date, total revenues were flat at $3.909 billion versus $3.903 billion, while net income fell to $572 million from $806 million and diluted EPS to $1.86 from $2.57. The filing attributes the year-to-date decline to COVID-19, which drove a worldwide same-store sales decline of 8% year to date and a 2% decline in the quarter. Management states that temporary closures peaked at about 11,000 restaurants in early April and that about 98% of the system was open in some capacity as of October 29, 2020. Excluding Special Items, quarterly diluted EPS rose 27% to $1.01, while year-to-date diluted EPS excluding Special Items fell 3% to $2.47. Special Items included a $144 million year-to-date Habit Burger Grill goodwill impairment, a $50 million Unlocking Opportunity Initiative contribution, and $32 million of resource optimization charges. The balance sheet and liquidity picture changed materially during the period. Yum acquired The Habit Restaurants, Inc. for $408 million net of cash acquired, issued $600 million of 7.75% notes due 2025 and $1.05 billion of 3.625% notes due 2031, and redeemed $1.05 billion of 5.00% Subsidiary Senior Unsecured Notes due 2024 at a 102.50% redemption price. The $1.0 billion revolving facility, which had $950 million drawn at March 31, 2020, was fully repaid and undrawn at September 30, 2020. Total debt was $11.1 billion, about 93% fixed, with an effective interest rate of approximately 4.7%. The company also sold its entire Grubhub investment for $206 million, and shareholders' deficit remained at $(7.919) billion. Share repurchases were suspended in the first quarter of 2020, and the company stated it resumed them in the fourth quarter of 2020. The filing also flags a franchisee-related issue. Net bad debt recoveries of $21 million were recorded in the quarter, mainly from KFC international franchisees, while NPC International, the largest Pizza Hut U.S. franchisee, filed for Chapter 11 on July 1, 2020. Pizza Hut's net unit count fell by 860 year to date, and management expects a headwind to that division's growth. Separately, an Indian regulatory penalty of about $150 million was stayed by the Delhi High Court, and the company says it does not consider a significant loss probable.

    Nov 5, 2020
  19. 2020-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 30, 2020

    Yum! Brands, Inc. reported a sharply lower second quarter 2020, with total revenues of $1,198 million versus $1,310 million a year earlier and operating profit of $300 million versus $471 million. GAAP diluted EPS was $0.67 versus $0.92, and year-to-date diluted EPS was $0.94 versus $1.75. The results reflect COVID-19 store closures and reduced operations, with worldwide same-store sales declining 15% in the quarter and 11% year to date. Net income for the quarter was $206 million, and the company reported a $139 million pre-tax goodwill impairment on Habit Burger Grill in the first quarter, which was recorded as a Special Item. The company completed the acquisition of The Habit Restaurants, Inc. on March 18, 2020 for $408 million net of cash acquired, and it issued $600 million of 7.75% senior unsecured notes due 2025. Total debt rose to $11,780 million gross from $10,648 million at year-end 2019, and the company drew heavily on its revolving facility, which had a $575 million balance at June 30, 2020. Cash and cash equivalents were $1,243 million, and total shareholders' deficit was $(8,108) million. Operating cash flow was $362 million year to date versus $461 million a year earlier. Management stated that about 2,500 restaurants remained fully closed as of the filing date, and that it expects continuing adverse impacts from COVID-19. The company also disclosed that its largest Pizza Hut U.S. franchisee, NPC International, Inc., which operates about 1,200 units, filed for Chapter 11 bankruptcy on July 1, 2020. It suspended its $2 billion share repurchase program in the first quarter and ended that suspension in July 2020, and it made a $50 million contribution to the Yum! Brands Foundation.

    Aug 5, 2020
  20. 2020-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 31, 2020

    Yum! Brands, Inc. reported first-quarter 2020 results heavily affected by COVID-19. Total revenues were $1.263 billion versus $1.254 billion a year earlier, while GAAP operating profit fell to $250 million from $433 million, largely due to a $139 million goodwill impairment for Habit Burger Grill and a $152 million total in Other (income) expense. GAAP diluted EPS was $0.27 versus $0.83, and diluted EPS excluding Special Items was $0.64 per share. Worldwide same-store sales declined 7%, and management expects the quarter ending June 30, 2020 to be significantly impacted, with same-store declines in excess of the 7% reported for the first quarter. Approximately 9,500 restaurants remained closed as a result of COVID-19 as of the filing date. The company completed the acquisition of The Habit Restaurants, Inc. on March 18, 2020 for $408 million net of cash acquired. To bolster liquidity, Yum suspended its $2 billion share repurchase program, drew a total of $950 million on its Revolving Facility, and, after quarter-end, issued $600 million of 7.75% Senior Unsecured Notes due 2025. Cash and cash equivalents rose to $1.154 billion from $605 million at year-end, while long-term debt increased to $11.059 billion from $10.131 billion and total shareholders' deficit widened to $(8.229) billion. Franchise credit quality is a key watch item. Franchise bad debt expense was $29 million versus $7 million a year earlier, driven by KFC franchisees in Europe and Latin America and Pizza Hut U.S. franchisees, and the company noted that the outcome for these receivables is uncertain. Separately, an Indian regulatory order imposed a penalty of about $150 million on a subsidiary and former directors, which the company has stayed through the Delhi High Court and is contesting, considering a significant loss not probable.

    May 6, 2020
  21. 2019-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 30, 2019

    Yum! Brands, Inc. reported a weaker third quarter ended September 30, 2019. Total revenues were $1,339 million versus $1,391 million a year earlier, and net income fell to $255 million from $454 million. GAAP diluted EPS was $0.81 compared with $1.40. The filing attributes part of the EPS decline to changes in the fair value of its Grubhub investment, which unfavorably impacted quarterly EPS growth by $0.37 per share. Excluding Special Items, diluted EPS was $0.80. Year to date, net income was $806 million versus $1,208 million, and GAAP diluted EPS was $2.57 versus $3.64. Operationally, the company reported worldwide system sales growth ex-FX of 8% for the quarter and same-store sales growth of 3%. It opened 389 net new units in the quarter, and the system grew to 49,158 units, with 98% of restaurants owned and operated by franchisees. Core Operating Profit rose 6% for the quarter and 12% year to date. Total shareholders' deficit was $(8,097) million at September 30, 2019, and long-term debt rose to $10,491 million, reflecting an $800 million issuance of 4.75% senior unsecured notes due 2030 in September. The company repurchased $476 million of shares year to date and had $630 million remaining under its August 2018 authorization. Cash and cash equivalents increased to $691 million. The filing states that the company intends to return $6.5 to $7.0 billion to shareholders from 2017 through 2019, and that it had returned a cumulative $6.1 billion through the third quarter of 2019. The company also disclosed that its $1 billion revolving facility was undrawn at quarter end, and that it adopted the new lease standard (Topic 842) in 2019, recording a right-of-use asset of $690 million. KPMG LLP reviewed the interim financial information and identified no material modifications needed.

    Nov 5, 2019
  22. 2019-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 30, 2019

    Yum! Brands, Inc. reported second-quarter 2019 total revenues of $1.31 billion, down from $1.37 billion in the prior-year quarter, while GAAP operating profit rose to $471 million from $449 million. GAAP diluted EPS was $0.92 versus $0.97 a year earlier, and the filing states that diluted EPS excluding Special Items was $0.93, up from $0.82. Year-to-date net income was $551 million versus $754 million, with the prior-year period boosted by $185 million of refranchising gains and $91 million of Grubhub mark-to-market income. Worldwide system sales excluding foreign currency rose 10% in the quarter, with same-store sales growth of 5% and 7% net new unit growth. Management attributes the company-sales decline largely to refranchising, with Company-operated units falling to 859 from 1,302. The balance sheet remained in a shareholders' deficit of $7.99 billion at June 30, 2019, with long-term debt of $9.87 billion and total liabilities of $12.67 billion. Adoption of the new lease standard (Topic 842) added right-of-use assets of $690 million and lease liabilities to the balance sheet. The company repurchased 1.9 million shares for $196 million in the quarter and 3.0 million shares for $302 million year to date, leaving $804 million remaining under its authorization. Management reiterated its 2017–2019 shareholder return target of $6.5 to $7.0 billion, with $5.7 billion returned through the second quarter of 2019. The filing notes a $157 million revolving facility balance outstanding against a $1 billion facility, and a contingent guarantee exposure on leases of approximately $500 million undiscounted. Management reported that disclosure controls were effective and that there were no material changes to risk factors from the 2018 Form 10-K.

    Aug 9, 2019
  23. 2019-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 31, 2019

    Yum! Brands, Inc. reported first-quarter 2019 GAAP net income of $262 million, or $0.83 per diluted share, versus $433 million, or $1.27 per diluted share, in the first quarter of 2018. Total revenues were $1,254 million compared with $1,371 million a year earlier, with Company sales falling to $333 million from $512 million, reflecting refranchising. Operating Profit declined to $433 million from $553 million, which the filing attributes in part to the prior-year refranchising gain of $156 million versus $6 million in the current quarter. Diluted EPS excluding Special Items decreased 8% to $0.82 per share, and the filing states that Grubhub investment fair value changes reduced EPS by $0.21 year over year. Operating results showed growth on a system-wide basis. System sales excluding foreign currency rose 8% worldwide, with Worldwide same-store sales up 4% and net new units up 7%. The filing reports that 98% of the more than 48,000 restaurants are owned and operated by franchisees, and that the company operated 857 Company-owned units at March 31, 2019. Core Operating Profit grew 12%, and the filing notes that foreign currency translation reduced Divisional Operating Profit by $19 million. The balance sheet reflects a shareholders' deficit of $7,904 million at March 31, 2019, with long-term debt of $9,736 million. Total assets rose to $4,744 million from $4,130 million, largely due to the adoption of Topic 842 (lease accounting), which added operating lease right-of-use assets. Cash used for share repurchases was $109 million on the cash flow statement, and dividends paid were $129 million. The company also states it has $1,000 million remaining under its August 2018 repurchase authorization.

    May 8, 2019
  24. 2018-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 30, 2018

    Yum! Brands, Inc. reported third-quarter 2018 results with total revenues of $1.39 billion, down from $1.44 billion a year earlier, as refranchising reduced Company sales to $499 million from $871 million. GAAP operating profit fell to $553 million from $643 million, but net income rose to $454 million from $418 million, helped by $94 million of investment income tied to its Grubhub Inc. stake. GAAP diluted EPS was $1.40 versus $1.18, and the company stated diluted EPS excluding Special Items was $1.04 versus $0.68. Franchise contributions for advertising and other services of $287 million reflect the adoption of Topic 606, which the company said lowered GAAP operating profit by $2 million in the quarter. Year to date, net income was $1.21 billion versus $904 million, and diluted EPS was $3.64 versus $2.52. The company repurchased 20.5 million shares for $1.70 billion and paid $349 million in dividends year to date. Cash and cash equivalents fell to $198 million from $1.52 billion at December 31, 2017, and total shareholders' deficit widened to $7.46 billion. Management said it refranchised 134 restaurants in the quarter for $193 million in pre-tax proceeds and expects Core Operating Profit growth for 2018 to be affected by the adoption of Topic 606 by 2 to 3 percentage points. The filing also notes a board authorization on August 10, 2018 for up to $2 billion in share repurchases through December 2019, and a planned refinancing of $788 million in Securitization Notes due in 2020 through $1.2 billion of new notes. Total long-term debt was $9.4 billion at September 30, 2018.

    Nov 7, 2018
  25. 2018-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 30, 2018

    Yum! Brands, Inc. reported second-quarter 2018 GAAP net income of $321 million, or $0.97 per diluted share, compared with $206 million, or $0.58, in the year-ago quarter. Total revenues fell to $1.368 billion from $1.448 billion, but this comparison is affected by the adoption of Topic 606, which the company applied beginning with the quarter ended March 31, 2018, using the modified retrospective method. Under Topic 606, franchise contributions for advertising and other services are now presented gross, adding $272 million to quarterly revenues, while prior-year periods were not restated. Company sales declined sharply to $512 million from $909 million, reflecting refranchising, with 195 restaurants refranchised year to date for $252 million in pre-tax proceeds. Diluted EPS excluding Special Items rose 20% to $0.82 for the quarter and 29% to $1.71 year to date, and the company reported worldwide system sales growth of 4% excluding FX for the quarter. The company repurchased $1.171 billion of common stock year to date and paid $236 million in dividends, while cash and cash equivalents declined to $313 million from $1.522 billion at December 31, 2017. Long-term debt stood at $9.612 billion, and total shareholders' deficit widened to $7.247 billion. Management stated it expects Core Operating Profit growth for 2018 to be negatively affected by 6 to 7 percentage points from refranchising, net of G&A reductions, and by 2 to 3 percentage points from the adoption of Topic 606. The company also disclosed a $200 million investment in Grubhub common stock, which produced $91 million of year-to-date investment income, and a KFC U.K. supply disruption that reduced worldwide Core Operating Profit growth by 1 percentage point in the quarter. The filing notes a $19 million charge in the quarter for correcting a prior-year divestiture tax error, and a $32 million benefit from the Tax Act provisional adjustment. A jury trial in the Ameranth patent suit against Pizza Hut, LLC is scheduled for September 4, 2018, and the company states it cannot reasonably estimate a possible loss.

    Aug 7, 2018
  26. 2018-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 31, 2018

    Yum! Brands, Inc. reported a first quarter 2018 net income of $433 million, or $1.27 diluted earnings per share, compared with $280 million, or $0.77 per share, in the prior-year quarter. Total revenues were $1.37 billion versus $1.42 billion, with Company sales falling to $512 million from $902 million as the company refranchised 144 restaurants for pre-tax proceeds of $205 million. Operating profit rose to $553 million from $484 million, helped by a $156 million refranchising gain and a $66 million mark-to-market investment gain on the Grubhub investment. Diluted EPS excluding Special Items was $0.90 versus $0.65, and Core Operating Profit was flat at $384 million versus $385 million. The quarter was the first under Topic 606 (revenue recognition), which changed how upfront franchise fees and advertising contributions are presented, and the company cut its ending cash to $982 million from $1.52 billion. Cash used in financing activities was $976 million, driven by $498 million of share repurchases and $120 million of dividends, and $332 million of debt repayments. The company's shareholders' deficit widened to $6.75 billion. Management said the KFC U.K. supply disruption reduced Core Operating Profit growth by 3 percentage points for YUM and that Topic 606 is expected to reduce 2018 Core Operating Profit growth by 2 to 3 percentage points. Management also reaffirmed its plan to return $6.5 to $7.0 billion to shareholders from 2017 through 2019.

    May 9, 2018
  27. 2017-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 30, 2017

    Yum! Brands, Inc. filed this Form 10-Q for the quarter ended September 30, 2017. Total revenues for the quarter were $1,436 million, down from $1,518 million (as restated) a year earlier, while Company sales fell to $871 million from $992 million. Operating profit rose to $643 million from $398 million, driven largely by $201 million of refranchising gains. GAAP diluted EPS from continuing operations increased to $1.18 from $0.55, and diluted EPS excluding Special Items rose 22% to $0.68. Net income was $418 million, compared with $640 million a year earlier, which included discontinued operations from the China business separated on October 31, 2016. For the year to date, net income was $904 million versus $1,340 million, and GAAP diluted EPS from continuing operations increased 46% to $2.52. The company repurchased 19.1 million shares for $1.3 billion year to date and paid $315 million in dividends. Cash provided by operating activities from continuing operations was $718 million, versus $936 million a year earlier, and shareholders' deficit stood at $(6,121) million at quarter end. Long-term debt was $9,479 million, and the company issued $750 million of 4.75% senior notes due 2027. Management continues its Strategic Transformation Initiatives, targeting ownership of fewer than 1,000 stores by the end of 2018, at least 98% franchised by 2019, and $6.5 to $7.0 billion in shareholder returns from 2017 through 2019. The company expects Core Operating Profit growth for the quarter ending December 31, 2017 to be reduced by 10 to 12 percentage points from refranchising, net of G&A reductions, and the lapping of a 53rd week in the prior year.

    Nov 8, 2017
  28. 2017-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 30, 2017

    Yum! Brands, Inc. reported second-quarter 2017 results in this Form 10-Q, with GAAP diluted EPS from continuing operations of $0.58 for the quarter (down from $0.64 a year earlier, as restated) and $1.34 year to date. Total revenues were $1,448 million for the quarter and $2,865 million year to date, versus $1,509 million and $2,952 million in the prior-year periods. Operating profit rose to $419 million for the quarter from $415 million, driven by $130 million of year-to-date refranchising gains and lower G&A expenses. Interest expense, net increased to $104 million in the quarter from $51 million, reflecting increased outstanding borrowings. Net income from continuing operations was $206 million for the quarter, versus $266 million a year earlier. The company continued its Strategic Transformation Initiatives, including refranchising 244 restaurants in the quarter for $136 million in proceeds and 365 year to date for $321 million. The filing states that YUM intends to increase franchise ownership to at least 98% by the end of 2018 and to return $6.5 to $7.0 billion to shareholders from 2017 through 2019. During the year to date, the company repurchased shares for $856 million and paid dividends of $211 million. Cash and cash equivalents were $970 million at June 30, 2017, and long-term debt was $9,474 million, with total shareholders' deficit of $6,102 million. The filing notes a change in fiscal year to a calendar year ending December 31, starting in 2017, along with the removal of reporting lags for international subsidiaries, which was applied retrospectively to prior periods. The 2016 and December 31, 2016 comparatives are labeled as restated. The company also disclosed that the Separation of its China business into Yum China Holdings, Inc. on October 31, 2016 is reflected as discontinued operations for prior periods. KPMG LLP issued a review report with no material modifications identified.

    Aug 8, 2017
  29. 2017-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 31, 2017

    Yum! Brands, Inc. reported first-quarter 2017 GAAP diluted EPS from continuing operations of $0.77, compared with $0.54 in the prior-year quarter, while diluted EPS from continuing operations excluding Special Items rose to $0.65 from $0.55. Total revenues were $1,417 million versus $1,443 million, and operating profit rose to $484 million from $349 million, helped by a $111 million net pre-tax refranchising gain. Net income was $280 million, down from $364 million in the prior-year quarter, which included $138 million of income from discontinued operations tied to the China business spun off as Yum China Holdings, Inc. on October 31, 2016. The company's results reflect its ongoing strategic transformation: it refranchised 121 restaurants for $185 million in proceeds during the quarter and repurchased 6.8 million shares for $461 million in cash. System sales excluding FX grew 5%, with same-store sales up 2%. Taco Bell led with same-store sales growth of 8% and Operating Profit up 19%, while Pizza Hut's Operating Profit fell 9% amid same-store sales declines of 3%. Interest expense, net rose to $109 million from $42 million as long-term debt increased to $8,715 million. The balance sheet shows total liabilities of $10,963 million against total assets of $5,151 million, resulting in a shareholders' deficit of $5,812 million. The company also repriced its $1,990 million Term Loan B Facility, cutting its interest rate by 75 basis points to adjusted LIBOR plus 2.00%. Management intends to return $6.5 to $7.0 billion to shareholders from 2017 through 2019, funded by refranchising proceeds, free cash flow, and maintaining about five times EBITDA leverage.

    May 10, 2017
  30. 2016-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 3, 2016

    Yum! Brands, Inc. reported third-quarter 2016 Total revenues of $3.32 billion, down from $3.43 billion a year earlier, while Operating Profit rose to $654 million from $603 million. GAAP diluted EPS was $1.56 versus $0.95, and diluted EPS excluding Special Items was $1.09 versus $1.00. Year to date, Total revenues were $8.94 billion and Operating Profit was $1.71 billion, with GAAP diluted EPS of $3.28 and diluted EPS before Special Items of $2.79. Net income attributable to YUM! Brands was lifted by a $233 million tax benefit tied to previously recorded Little Sheep losses, which the company recognized as a Special Item in part. The quarter reflects a major capital structure change. During the year to date, the company issued $6.9 billion in new debt, including $2.3 billion of Taco Bell Securitization Notes, a $2.5 billion term loan package, and $2.1 billion of Subsidiary Senior Unsecured Notes, and it repurchased $3.8 billion of shares. Long-term debt rose to $9.12 billion from $3.04 billion at December 26, 2015, and shareholders' equity moved to a deficit of $1.83 billion. The filing states the company has transitioned to a non-investment grade credit rating and expects total leverage of approximately five times EBITDA after the planned spin-off of the China business, which is scheduled for completion after the close of business on October 31, 2016. Management also announced YUM's Strategic Transformation Initiatives, under which the company targets at least 98% refranchising by the end of 2018, reduced capital expenditures to approximately $100 million in 2019, and lower G&A expenses. The company raised its 2016 Core Operating Profit growth forecast to at least 15% from an original 10% target, citing China performance and the Chinese retail tax reform, and the filing notes the China Division's same-store sales were hurt by regional boycotts estimated at 400 to 500 basis points in the quarter.

    Oct 11, 2016
  31. 2016-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 11, 2016

    Yum! Brands, Inc. reported second-quarter 2016 results (quarter ended June 11, 2016) with total revenues of $3.008 billion, down from $3.105 billion a year earlier, and operating profit of $491 million versus $371 million. GAAP diluted EPS was $0.81 versus $0.53, and diluted EPS before Special Items was $0.75 versus $0.69. Year to date, total revenues were $5.627 billion versus $5.727 billion, operating profit was $1.055 billion versus $877 million, and diluted EPS was $1.74 versus $1.34. Management raised its 2016 Core Operating Profit growth forecast to at least 14%, up from an original target of 10%, citing strength in China and a change in China's retail tax structure effective May 1, 2016. The quarter was dominated by the recapitalization tied to the planned spin-off of the China business, targeted around October 31, 2016. The company issued $2.3 billion of Securitization Notes in May 2016, repaid its $2.0 billion Bridge Facility, and repurchased 22.3 million shares for $1.66 billion year to date. After quarter end, on June 16, 2016, it issued $2.1 billion of Subsidiary Senior Unsecured Notes and entered a credit agreement with a $2.0 billion Term Loan B, a $500 million Term Loan A and a $1.0 billion revolver. The filing states that total indebtedness is approximately $9.2 billion as of the filing date, and management says the company has moved to a non-investment grade credit rating. The filing also discloses risk from higher leverage, with stockholders' equity at a deficit of $(331) million at June 11, 2016, versus $969 million at December 26, 2015. Company restaurant margin improved to 16.0% in the quarter, and the company refranchised 93 restaurants, primarily Pizza Hut units in the U.S., for $89 million in proceeds and $53 million of net gains.

    Jul 19, 2016
  32. 2016-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 19, 2016

    Yum! Brands, Inc. reported first-quarter 2016 (quarter ended March 19, 2016) total revenues of $2.62 billion, flat versus $2.62 billion a year earlier, while Company sales were $2.17 billion versus $2.18 billion. Operating Profit rose to $564 million from $506 million, and Net Income attributable to YUM! Brands was $391 million, or $0.93 diluted EPS, versus $362 million and $0.81 a year earlier. Diluted EPS before Special Items was $0.95, up 19%. Worldwide Core Operating Profit growth was 21%, led by the China Division, where Operating Profit rose 35% reported (42% excluding FX) on same-store sales growth of 6%. Management raised its full-year 2016 Core Operating Profit growth expectation from 10% to 12%. The filing centers on a planned tax-free spin-off of the China business by the end of 2016 and a large capital return program. Share repurchases in the quarter totaled $925 million, and the company had $2.0 billion drawn on a Bridge Facility at March 19, 2016, with short-term borrowings rising to $2.32 billion from $922 million. Management said it expects to refinance the Bridge Facility with a securitized financing of at least $2.0 billion backed by Taco Bell royalties, and to move toward a non-investment grade credit rating with higher leverage, targeting approximately 5.0X EBITDA. Total shareholders' equity fell to $210 million from $969 million, reflecting the buybacks. Cash from operating activities was $659 million versus $516 million a year earlier. Cash and cash equivalents ended at $934 million. The filing also notes a $0.46 per share dividend declared for payment on May 6, 2016, and a planned Chinese retail tax reform (6% VAT replacing a 5% business tax) effective May 1, 2016, which management expects to be a positive financial benefit.

    Apr 26, 2016
  33. 2015-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 5, 2015

    Yum! Brands, Inc. reported its third-quarter 2015 10-Q for the quarter and year to date ended September 5, 2015. Total revenues were $3.43 billion for the quarter, up from $3.35 billion, and $9.15 billion year to date, down from $9.28 billion. Operating profit rose to $603 million for the quarter from $550 million, while year-to-date operating profit fell to $1.48 billion from $1.60 billion. Diluted EPS was $0.95 for the quarter versus $0.89, and $2.29 year to date versus $2.50. Excluding Special Items, diluted EPS was $1.00 for the quarter, up from $0.87, and $2.50 year to date, up from $2.48. Special Items included $80 million of year-to-date refranchising losses tied to the sale of remaining Mexico real estate and charges related to the KFC U.S. Acceleration Agreement. China Division results drove the quarter's improvement, with operating profit of $327 million versus $202 million and same-store sales growth of 2%. Management noted that China sales trailed expectations, particularly at Pizza Hut, and it now expects the full-year EPS growth rate before Special Items to range from about flat to low-single-digit positive, compared with at least 10% in its ongoing earnings growth model. Fourth-quarter China same-store sales are expected to range from 0% to 4%. Cash flow from operations was $1.82 billion year to date, up from $1.61 billion. The company repurchased $370 million of stock year to date and paid $532 million in dividends, and it had $763 million remaining under its November 2014 repurchase authorization. Total debt carried a fair value of $3.2 billion against a carrying value of $3.1 billion. The company also declared a $0.46 quarterly dividend on October 2, 2015.

    Oct 15, 2015
  34. 2015-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 13, 2015

    Yum! Brands, Inc. reported a weaker second quarter and year to date ended June 13, 2015. Total revenues for the quarter were $3.105 billion versus $3.204 billion a year earlier, and Operating Profit fell to $371 million from $479 million. Net Income attributable to YUM! Brands, Inc. was $235 million, or $0.53 diluted EPS, compared with $334 million, or $0.73, in the prior-year quarter. Excluding Special Items, diluted EPS was $0.69 for the quarter (down 5%) and $1.50 year to date (down 7%). Management attributes the decline mainly to China, where same-store sales fell 10% in the quarter and Operating Profit declined 25%, reflecting residual effects of the July 2014 supplier food-handling incident. Results were also hit by a $68 million non-cash refranchising loss tied to the planned sale of Mexico real estate and $8 million of charges under the KFC U.S. Acceleration Agreement. Outside China, the KFC, Taco Bell and Pizza Hut divisions showed mixed results: KFC Division system sales rose 6% and Operating Profit rose 10% in the quarter, and Taco Bell Division Operating Profit rose 29%. Pizza Hut Division Operating Profit declined 1%. Management states it continues to expect at least 10% EPS growth for full-year 2015 before Special Items, based on expected strong second-half China recovery. Cash flow from operations was $947 million year to date versus $1.084 billion, and the company repurchased $295 million of shares and paid $355 million in dividends year to date. The company had $838 million remaining under its November 2014 repurchase authorization and declared a quarterly dividend of $0.41 per share payable August 7, 2015. The balance sheet shows total assets of $8.294 billion and long-term debt of $2.831 billion at June 13, 2015. Cash and cash equivalents rose to $636 million, and short-term borrowings increased to $568 million from $267 million at year-end 2014. The company also disclosed pending litigation, including a securities class action on appeal and derivative suits, along with a California labor class action against Taco Bell, but stated no reasonable estimate of possible loss can be made for most of these matters.

    Jul 21, 2015
  35. 2015-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 21, 2015

    Yum! Brands, Inc. reported its first-quarter 2015 results (quarter ended March 21, 2015) in this Form 10-Q. Total revenues were $2.62 billion versus $2.72 billion a year earlier, with Company sales of $2.18 billion and franchise and license fees and income of $443 million. Operating Profit fell to $506 million from $571 million, and net income attributable to YUM! Brands was $362 million, or $0.81 per diluted share, compared with $399 million, or $0.87, in the prior-year quarter. Management attributes the decline mainly to the adverse publicity in July 2014 about improper food handling by a former supplier, which hit China Division same-store sales (down 12%) and Operating Profit (down 31% excluding FX). Management states that diluted EPS before Special Items is expected to grow at least 10% for full-year 2015, with the second quarter expected to be the low point. Outside China, the filing shows mixed results. KFC Division system sales rose 8% excluding FX and Taco Bell Division Operating Profit rose 37% on same-store sales growth of 6%, while Pizza Hut Division Operating Profit declined 2% excluding FX. The company opened 171 new units in China and grew its total system to 41,691 restaurants. Cash flow from operations was $516 million versus $570 million, with capital spending of $227 million and share repurchases of $150 million; the Board approved a $0.41 per share dividend payable May 1, 2015. The filing also discloses a KFC U.S. franchisee agreement under which the company expects to invest about $125 million over three years, with a charge of approximately $90 million in 2015, presented as a Special Item. Legal matters include a securities class action that was dismissed and is on appeal, derivative suits stayed pending that appeal, and a Taco Bell California wage-and-hour case with a provision for reasonable estimated loss. The Pizza Hut delivery driver FLSA case was settled and approved by the court on March 26, 2015.

    Apr 27, 2015
  36. 2014-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 6, 2014

    Yum! Brands, Inc. reported its third-quarter 2014 results for the quarter ended September 6, 2014, with total revenues of $3,354 million, down from $3,466 million a year earlier, and operating profit of $550 million versus $350 million. The prior-year quarter included a $295 million Little Sheep impairment, and diluted EPS was $0.89 versus $0.33. Excluding Special Items, diluted EPS before Special Items was $0.87 versus $0.85. For the year to date, total revenues were $9,282 million, operating profit was $1,600 million, and diluted EPS was $2.50, compared with $1.66 a year earlier. The quarter was dominated by China, where a July 2014 food-safety report involving supplier OSI sharply reduced sales and profits at KFC and Pizza Hut. China Division system sales declined 9% in the quarter, with same-store sales down 14%, and China operating profit fell 38% excluding FX. Management now expects 2014 EPS excluding Special Items to grow between 6% and 10%, and it expects China same-store sales to remain negative in the fourth quarter. The KFC, Pizza Hut and Taco Bell divisions grew operating profit in the quarter, except for Pizza Hut, which declined 2%. The filing also notes that Little Sheep sales and profits have run below the assumptions used in the 2013 impairment test, so further impairment in the fourth quarter of 2014 is possible. Cash flow and capital returns remained strong. Net cash provided by operating activities was $1,612 million year to date, and the company repurchased $510 million of stock and paid $490 million in dividends. An IRS valuation dispute was settled in the quarter with a $120 million cash payment, which was already fully reserved. The Board approved an 11% increase in the quarterly dividend to $0.41 per share.

    Oct 14, 2014
  37. 2014-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 14, 2014

    Yum! Brands, Inc. (YUM) reported second-quarter 2014 results (quarter ended June 14, 2014) with total revenues of $3,204 million, up from $2,904 million a year earlier, and operating profit of $479 million versus $390 million. Net income attributable to YUM! Brands, Inc. was $334 million, or $0.73 diluted EPS, compared with $281 million and $0.61 a year earlier. Year to date, total revenues were $5,928 million and net income attributable to YUM! Brands, Inc. was $733 million, or $1.61 diluted EPS. Growth was led by China, where restaurant profit rose to $283 million for the quarter from $152 million, and where system sales grew 21%. Worldwide system sales grew 6% excluding foreign exchange, and worldwide restaurant margin improved 3.0 percentage points to 15.5%. The Pizza Hut Division was the weak spot, with operating profit down 22% for the quarter on same-store sales declines of 3%. The Taco Bell Division's restaurant margin fell 2.7 percentage points to 17.7%. Management flagged possible further impairment of the Little Sheep trademark and goodwill in the second half of 2014 if negative trends continue. The Company also said it now believes it is likely to settle a long-running IRS dispute over intangible-asset transfers during 2014, and it expects a full-year effective tax rate within the previously communicated range of 26% to 28%, inclusive of any additional reserves. Cash generation was solid, with operating cash flow of $1,084 million year to date versus $729 million a year earlier. The Company repurchased $300 million of stock and paid $327 million in dividends year to date, and $653 million remained under the November 2013 authorization. Cash and cash equivalents were $597 million at June 14, 2014, and long-term debt was $3,095 million.

    Jul 22, 2014
  38. 2014-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 22, 2014

    Yum! Brands, Inc. reported first-quarter 2014 results for the quarter ended March 22, 2014, with total revenues of $2,724 million, up from $2,535 million in the prior-year quarter, and operating profit of $571 million versus $487 million. Net income attributable to YUM! Brands was $399 million, or $0.87 diluted EPS, compared with $337 million and $0.72 a year earlier. Company restaurant profit rose to $441 million from $333 million, with restaurant margin of 19.2% versus 15.9%, driven largely by the China Division, where operating profit reached $285 million versus $154 million. Net cash provided by operating activities was $570 million, compared with $401 million in the prior-year quarter. By division, China system sales grew 17% excluding FX on 7% unit growth and 9% same-store sales growth, while the KFC Division's operating profit rose 4% excluding FX. Pizza Hut and Taco Bell operating profit declined 14% and 16% respectively excluding FX, reflecting same-store sales declines, commodity inflation and higher G&A at Pizza Hut. The company repurchased $124 million of common stock and paid $164 million in dividends, with $829 million remaining under its repurchase authorizations and a quarterly dividend of $0.37 per share declared for May 2014 payment. The filing highlights an unresolved IRS dispute over intangibles transferred to foreign subsidiaries, where the IRS has proposed roughly $700 million of additional taxes plus about $265 million of net interest for fiscal 2004-2006, and similar claims for 2007-2008. The company now believes a settlement in 2014 is reasonably possible and may record additional reserves, while it continues to expect its full-year effective tax rate to fall within 26%-28%. Several legal matters remain pending, including securities and shareholder derivative suits and wage-and-hour and disability-access litigation at Taco Bell, with the Taco Bell ADA matter settled in principle in April 2014.

    Apr 28, 2014
  39. 2013-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 7, 2013

    Yum! Brands, Inc. reported third-quarter 2013 results (quarter ended September 7, 2013) with total revenues of $3,466 million, down from $3,569 million a year earlier, and Net Income attributable to YUM! Brands of $152 million versus $471 million. Diluted EPS was $0.33 versus $1.00. The decline was driven largely by a $295 million non-cash Little Sheep impairment recorded in Closures and impairment expenses, which the filing says reduced diluted EPS by 55 percentage points. Excluding Special Items, the filing states diluted EPS was $0.85 versus $0.99 in the prior-year quarter, and the worldwide effective tax rate before Special Items rose to 33.1% from 25.1% due to a tax reserve adjustment related to the IRS dispute. China was the main operating weak spot. The filing reports KFC China same-store sales declined 11% for the quarter and 16% year to date, with China Division Operating Profit down 11% in the quarter and 31% year to date, prior to foreign currency translation. The company now says China same-store sales are unlikely to be positive in the fourth quarter, and it estimates a high-single to low-double-digit full-year decline in EPS before Special Items, versus its earlier expectation of at least 10% growth. Worldwide, same-store sales declined 2% in the quarter, while YRI same-store sales grew 1% and U.S. same-store sales were flat. Cash generation remained substantial, with year-to-date operating cash flow of $1,553 million versus $1,818 million, and $490 million of share repurchases and $451 million of dividends paid. The filing also discloses an unresolved IRS dispute with a proposed adjustment that would add approximately $700 million of taxes plus net interest of about $240 million for fiscal 2004-2006, along with additional proposed amounts for 2007-2008 and later years, and states that the company has filed a protest and intends to defend its position vigorously.

    Oct 15, 2013
  40. 2013-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 15, 2013

    Yum! Brands, Inc. reported second-quarter 2013 results (quarter ended June 15, 2013) with total revenues of $2.90 billion, down from $3.17 billion a year earlier, and operating profit of $390 million versus $473 million. Diluted EPS was $0.61 compared with $0.69 in the prior-year quarter. The filing attributes much of the decline to China, where Operating Profit fell 63% excluding foreign currency, driven by the December poultry supply incident and Avian flu media coverage. KFC China same-store sales declined 26% in the quarter, and the company says EPS before Special Items declined 16% in the quarter. Management states that a mid-single digit percentage decline in full-year EPS before Special Items remains its best estimate for 2013. Outside China, the filing shows more favorable trends: YRI Operating Profit rose 8% in the quarter and the U.S. rose 4%, with same-store sales growth of 1% in each segment. Year-to-date net cash from operating activities was $729 million versus $924 million, and the company repurchased $329 million of shares and paid $301 million in dividends during the period. Cash and equivalents were $500 million at quarter end, and the company had approximately $1.2 billion of unused capacity under its revolving credit facility. The filing also discloses ongoing risks. The IRS has proposed adjustments that could result in approximately $700 million of additional taxes plus net interest of about $235 million for fiscal 2004-2006, along with further proposed adjustments for 2007-2008, which the company is contesting. The company also faces a securities class action and derivative suits tied to its China growth disclosures, and it flagged a possible non-cash impairment of its Little Sheep business.

    Jul 16, 2013
  41. 2013-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 23, 2013

    Yum! Brands, Inc. reported first-quarter 2013 results (quarter ended March 23, 2013) with total revenues of $2,535 million, down from $2,743 million a year earlier, and Operating Profit of $487 million versus $645 million. Net Income – YUM! Brands, Inc. was $337 million compared with $458 million, and diluted EPS was $0.72 versus $0.96. The prior-year quarter included a $74 million non-cash gain from consolidating Little Sheep and a $45 million U.S. refranchising gain, which the company treats as Special Items. Excluding Special Items, the company's Operating Profit was $470 million versus $544 million, and diluted EPS before Special Items was $0.70 versus $0.76. The filing attributes the decline primarily to China, where same-store sales fell 20% following adverse publicity about the poultry supply situation in late December 2012. China Division Operating Profit decreased 40%, and China Division restaurant margin declined 7.0 percentage points. Management said that since the beginning of April, China sales have been further hurt by Avian Flu publicity, and it expects China same-store sales to decline about 30% for April. The company expects a significant double-digit percentage decline in EPS before Special Items for the quarter ending June 15, 2013, and now expects a mid-single digit percentage decline in full-year 2013 EPS before Special Items. YRI and U.S. results were more stable, with YRI Operating Profit up 19% and U.S. Operating Profit up 5%. Cash flow and balance sheet items are steady. Net cash provided by operating activities was $401 million versus $473 million, and the company repurchased $98 million of shares and paid $151 million in dividends during the quarter. Cash and cash equivalents were $762 million at quarter end, and about $1.2 billion was available under the revolving Credit Facility. The filing also discloses an IRS proposed adjustment that could result in approximately $700 million of additional taxes for fiscal years 2004 through 2006, plus net interest of about $230 million, and similar proposed adjustments for 2007 and 2008 of about $270 million in taxes plus about $35 million in interest. Several class actions and shareholder letters related to China poultry purchasing and securities disclosures were pending, and the company said it cannot reasonably estimate possible losses in those matters.

    Apr 29, 2013
  42. 2012-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 8, 2012

    Yum! Brands, Inc. reported a strong third quarter ended September 8, 2012, with total revenues of $3.57 billion, up from $3.27 billion a year earlier, and operating profit of $671 million versus $488 million. Net income attributable to YUM! Brands, Inc. was $471 million, or $1.00 per diluted share, compared with $383 million, or $0.80, in the prior-year quarter. Year to date, net income attributable to YUM! Brands was $1.26 billion, or $2.65 per diluted share, against $963 million and $1.99 a year earlier. The filing attributes much of the operating profit growth to same-store sales growth and new unit development, especially in China, and it notes that the Little Sheep acquisition and a $74 million non-cash gain on remeasurement of the prior 27% stake affected year-to-date results. Cash generation remained substantial, with net cash provided by operating activities of $1.82 billion year to date, versus $1.70 billion in 2011. The company repurchased $688 million of common stock and paid $393 million in dividends during the year to date period, and it repaid $263 million of senior unsecured notes at maturity in July 2012. Cash and equivalents fell to $942 million from $1.20 billion at year-end 2011, while goodwill and intangible assets rose sharply following the Little Sheep acquisition. Management reported worldwide system sales growth of 6% before foreign currency translation for the quarter, and noted an IRS proposed adjustment that could add approximately $700 million in taxes plus about $210 million in net interest, which the company is contesting. The filing also flags several items for investors to monitor: a planned refranchising of the remaining Pizza Hut UK dine-in restaurants expected in the fourth quarter of 2012 with a possible additional non-cash charge, a pre-tax non-cash pension settlement charge of $25 million to $75 million expected in the fourth quarter tied to early payouts, ongoing wage and disability-access litigation at Taco Bell, and a new China value added tax regulation whose impact the company cannot yet quantify.

    Oct 16, 2012
  43. 2012-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 16, 2012

    Yum! Brands, Inc. reported its 10-Q for the quarter ended June 16, 2012. Total revenues for the quarter were $3.17 billion, up from $2.82 billion, and Operating Profit rose to $473 million from $419 million. Net Income – YUM! Brands, Inc. was $331 million, versus $316 million a year earlier, and diluted EPS was $0.69 compared with $0.65. Year to date, total revenues were $5.91 billion, Operating Profit was $1.12 billion, and diluted EPS was $1.65 versus $1.20. Results were helped by a $74 million non-cash gain from the acquisition of an additional 66% interest in Little Sheep, which brought ownership to 93%, and by $54 million of year-to-date U.S. refranchising gains. The company reported Special Items income, net of tax, of $12 million for the quarter and $106 million year to date, and EPS before Special Items of $0.67 for the quarter. Cash generation remained steady, with net cash provided by operating activities of $924 million year to date versus $923 million a year earlier. Capital spending was $406 million, share repurchases totaled $289 million, and dividends paid were $262 million. Cash and cash equivalents fell to $984 million from $1.198 billion at year-end 2011, largely reflecting the Little Sheep acquisition, which cost $540 million net of cash acquired. Long-term debt was $2.995 billion, and the company had an unused $1.2 billion credit facility at quarter end. The filing also highlights ongoing risks. The IRS has proposed an adjustment that would result in approximately $700 million of additional taxes plus about $200 million of net interest for fiscal years 2004 through 2006, and the company has filed a protest and intends to defend its position. Several wage-and-hour and disability-access class actions against Taco Bell, KFC and Pizza Hut remain pending, and a $17 million Taco Bell California employment settlement was recorded in the U.S. division this quarter.

    Jul 24, 2012
  44. 2012-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 24, 2012

    Yum! Brands, Inc. reported first-quarter 2012 results for the quarter ended March 24, 2012, with total revenues of $2,743 million, up from $2,425 million, and Operating Profit of $645 million, up from $401 million. Net Income attributable to YUM! Brands, Inc. was $458 million, or $0.96 per diluted share, compared with $264 million, or $0.54 per diluted share, in the prior-year quarter. The results include a $74 million non-cash pre-tax gain from the acquisition of an additional 66% interest in Little Sheep Group Limited, which raised ownership to 93%, and net pre-tax Special Items income of $101 million, including $45 million of U.S. refranchising gains. Excluding Special Items, diluted EPS was $0.76 versus $0.63 a year earlier. Operating results were driven by China, where Operating Profit rose 19% (14% excluding foreign currency translation) and Company same-store sales grew 14%. Worldwide system sales grew 7% before foreign currency translation, and Worldwide Operating Profit grew 15% before foreign currency translation. Cash flow from operations was $484 million versus $508 million, and the company paid $131 million in dividends and repurchased $78 million of shares. At quarter end, cash totaled $1,099 million and debt obligations carried a value of $3.0 billion. The filing also flags an unresolved IRS proposed adjustment that could add approximately $700 million in taxes plus net interest of approximately $175 million for fiscal years 2004 through 2006, with potential additional taxes of approximately $350 million plus net interest of approximately $25 million for later years through 2011. The company says it has filed a protest and intends to defend its position vigorously. Several employment and accessibility class actions against Taco Bell, KFC and Pizza Hut remain pending, with the company stating that potential losses cannot be reasonably estimated in most of them.

    Apr 25, 2012
  45. 2011-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 3, 2011

    Yum! Brands, Inc. reported its third quarter 2011 results for the twelve weeks ended September 3, 2011. Total revenues rose to $3,274 million from $2,862 million in the prior-year quarter, and Net Income attributable to YUM! Brands, Inc. was $383 million, or $0.80 diluted EPS, compared with $357 million and $0.74 a year earlier. Reported operating profit fell to $488 million from $544 million, driven largely by $76 million of refranchising losses tied to the decision to refranchise or close the remaining company-operated Pizza Hut dine-in restaurants in the UK, $16 million of impairment on the planned sale of Long John Silver's and A&W, and a $53 million one-time tax benefit that lowered the effective tax rate to 14.6%. Management stated that before Special Items, diluted EPS was $0.83 versus $0.73 a year earlier. Segment results were mixed. China operating profit rose 13% to $301 million, with same store sales growth of 19% in the quarter, while U.S. operating profit declined 16% to $143 million, reflecting negative same store sales of 3% and commodity inflation of $15 million. YRI operating profit increased 15% to $163 million, including favorable foreign currency translation. Year-to-date operating cash flow was $1,703 million, and the company repurchased $562 million of shares and paid $350 million in dividends. The company also issued $350 million of 3.75% Senior Unsecured Notes due 2021, placed $300 million in escrow for the proposed acquisition of additional Little Sheep shares, and disclosed an IRS proposed adjustment of approximately $700 million in additional taxes plus net interest of approximately $165 million, which the company is contesting.

    Oct 11, 2011
  46. 2011-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 11, 2011

    Yum! Brands, Inc. reported second-quarter 2011 (quarter ended June 11, 2011) total revenues of $2.82 billion, up from $2.57 billion, and net income attributable to YUM! Brands of $316 million, or $0.65 diluted EPS, versus $286 million and $0.59 a year earlier. Year to date, total revenues were $5.24 billion and net income was $580 million, or $1.20 diluted EPS. Reported operating profit was flat for the quarter at $419 million, while the filing states that worldwide operating profit declined 2% before foreign currency translation and rose 3% after it. Results were driven by strong growth in China (operating profit up 31% in the quarter) and YRI (up 19%), offset by a 28% decline in U.S. operating profit tied to sales declines and commodity inflation. The Taco Bell U.S. business was particularly affected by negative publicity from a lawsuit over beef, which was withdrawn in April 2011. The balance sheet and cash flow show operating cash flow of $923 million year to date, with cash falling to $955 million after $579 million of investing outflows, including $300 million placed in escrow for the potential acquisition of additional Little Sheep shares, and $840 million of financing outflows that included repayment of $650 million of Senior Unsecured Notes at maturity. The company also repurchased 3.2 million shares for $166 million in the quarter and paid $234 million in dividends year to date. The filing highlights several open legal and tax matters. The IRS has proposed an adjustment that would result in approximately $700 million of additional taxes plus about $160 million of net interest for fiscal 2004 through 2006, and the company has filed a protest and intends to defend its position. Several wage-and-hour and disability-access lawsuits against Taco Bell, KFC, Pizza Hut and LJS remain pending, and the company has provided for reasonable estimates of certain costs.

    Jul 19, 2011
  47. 2011-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 19, 2011

    Yum! Brands, Inc. reported first-quarter 2011 results (quarter ended March 19, 2011) with total revenues of $2.425 billion, up from $2.345 billion, and Net Income attributable to YUM! Brands, Inc. of $264 million, or $0.54 diluted EPS, versus $241 million, or $0.50, a year earlier. Results were burdened by a $66 million non-cash impairment charge tied to the company's decision to sell its Long John Silver's and A&W brands. Excluding Special Items, operating profit before Special Items was $466 million versus $430 million, and diluted EPS before Special Items was $0.63 versus $0.59. China Division operating profit rose 22% (18% excluding foreign currency translation), and YRI operating profit rose 12% (8% excluding forex), while U.S. operating profit fell 13%, which the filing attributes largely to a same store sales decline of 1% and higher restaurant operating costs. The filing also notes that Taco Bell sales trends reversed after a lawsuit filed in late January 2011 regarding its beef advertising, which the company says was false and was voluntarily withdrawn on April 18, 2011, and that it expects a significant negative impact on U.S. operating profit in the second quarter. Cash flow and balance sheet items were steady. Net cash provided by operating activities was $508 million versus $392 million, and the company repurchased 2.9 million shares for $142 million. Cash and cash equivalents were $1.529 billion at quarter end. Subsequent events include the April 15, 2011 repayment of $650 million of Senior Unsecured Notes and a preliminary proposal to acquire a majority interest in Little Sheep Group Limited, in which YUM currently owns 27%; no formal offer has been made. The filing also discloses an IRS proposed adjustment that could result in approximately $700 million of additional taxes plus net interest of approximately $155 million, which the company says it is contesting.

    Apr 26, 2011
  48. 2010-Q3

    Yum! Brands Quarterly Report for Q3 Ended Sep 4, 2010

    Yum! Brands, Inc. reported third-quarter 2010 results for the 12 weeks ended September 4, 2010, with total revenues of $2.86 billion (up from $2.78 billion), operating profit of $544 million (up from $470 million), and net income attributable to YUM! Brands of $357 million, or $0.74 diluted EPS, versus $334 million and $0.69 a year earlier. Year to date, net income attributable to YUM! was $884 million, or $1.82 diluted EPS, against $855 million and $1.77 in 2009. Results were affected by Special Items, including a $51 million U.S. refranchising loss and a $73 million non-cash impairment on KFC U.S. restaurants offered for refranchising, and the year-earlier $68 million gain on consolidating the Shanghai KFC operator. Excluding Special Items, year-to-date diluted EPS was $1.90 versus $1.67. The effective tax rate rose to 27.5% in the quarter from 20.6%. Operating cash flow for the year to date was $1,497 million, up from $1,135 million. Cash and cash equivalents rose to $1,274 million at September 4, 2010, largely reflecting the August 2010 issuance of $350 million of 3.875% Senior Unsecured Notes due 2020. The company noted that $650 million of Senior Unsecured Notes come due in April 2011 and will be classified as short-term borrowings. The Company also repurchased $283 million of shares year to date and declared a quarterly dividend increase from $0.21 to $0.25 per share. The filing also discloses a material contingent tax exposure: the IRS proposed an adjustment for fiscal 2004 through 2006 that would add approximately $700 million of taxes plus about $145 million of net interest, with a further potential $280 million plus about $15 million of interest for later years through 2009. The company disputes the adjustment and has filed a protest. Management also disclosed a planned refranchising of all Mexico company restaurants, expected to produce a pre-tax loss of approximately $50 million in the fourth quarter.

    Oct 12, 2010
  49. 2010-Q2

    Yum! Brands Quarterly Report for Q2 Ended Jun 12, 2010

    Yum! Brands, Inc. reported its 10-Q for the quarter and year to date ended June 12, 2010. Second-quarter total revenues were $2.574 billion versus $2.476 billion a year earlier, and net income attributable to YUM! Brands, Inc. was $286 million ($0.59 diluted EPS) versus $303 million ($0.63) in the prior-year quarter. Operating profit rose to $421 million from $394 million, helped by higher operating profit in the China Division ($139 million vs. $105 million), YRI ($122 million vs. $100 million) and the U.S. ($184 million vs. $169 million). Year-to-date net income attributable to YUM! Brands was $527 million ($1.09 diluted EPS) versus $521 million ($1.08), with year-to-date operating profit of $785 million versus $745 million. Year-to-date results were affected by a $51 million pre-tax U.S. refranchising loss, which includes a $73 million non-cash impairment on restaurants offered for refranchising. Cash generation strengthened, with year-to-date net cash provided by operating activities of $833 million versus $495 million in 2009. The company repurchased $247 million of shares year to date and paid $197 million in dividends. Total debt-related items shifted, with $650 million of Senior Unsecured Notes reclassified to short-term borrowings because of an April 2011 maturity, and short-term borrowings rising to $717 million from $59 million at year-end 2009. The filing also discloses a material tax contingency: on June 23, 2010 the company received an IRS Revenue Agent Report proposing about $700 million of additional taxes plus net interest of about $140 million for fiscal years 2004 through 2006, with potential additional taxes of about $280 million plus about $15 million of interest for later years through 2009. The company has filed a protest and intends to defend its position vigorously. Management states that payments could exceed the recorded reserve and could have a material adverse effect on its financial position.

    Jul 20, 2010
  50. 2010-Q1

    Yum! Brands Quarterly Report for Q1 Ended Mar 20, 2010

    Yum! Brands, Inc. reported first-quarter 2010 results for the quarter ended March 20, 2010, with total revenues of $2,345 million (versus $2,217 million a year earlier), operating profit of $364 million (versus $351 million), and net income attributable to YUM! Brands, Inc. of $241 million, or $0.50 diluted EPS (versus $218 million and $0.46). Results were burdened by $66 million of Special Items, including a $56 million U.S. refranchising loss driven by a $73 million non-cash impairment on the company's offer to refranchise a substantial portion of its Company-operated KFC restaurants in the U.S. Excluding Special Items, diluted EPS was $0.59, and operating profit before Special Items was $430 million. Worldwide system sales growth was 5% (1% excluding forex), with China Division Operating Profit up 37%, International Division up 13% (2% excluding forex), and U.S. Operating Profit down 9%. Cash flow from operations rose to $392 million from $297 million. The company repurchased $132 million of stock during the quarter, and in March 2010 the Board authorized an additional $300 million of repurchases through March 2011. Cash and cash equivalents were $444 million at quarter end, and the company paid $99 million in dividends. The filing also discloses that the company is in discussions with the SEC Office of Chief Accountant regarding an alternative goodwill write-off interpretation that could add roughly $30 million of goodwill write-offs related to Taiwan and about $40 million related to historical refranchising transactions, principally in the U.S. Litigation remains significant, including the Cole Arbitration involving Long John Silver's, several California wage-and-hour class actions against Taco Bell and KFC, and an ADA accessibility class action against Taco Bell. Management states that losses in excess of amounts provided are possible in the Cole matter, and that amounts for the other cases cannot be reasonably estimated.

    Apr 21, 2010