What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-02-23 compared with 2021-02-22 · 3 added, 83 removed, 28 unchanged (75% of the section changed)

4 unchanged sentences

In 2021, the Company declared and paid four cash dividends of $0.50 per share.

In February 2022, the Board of Directors declared a dividend of $0.57 per share to be distributed March 11, 2022 to shareholders of record at the close of business on February 18, 2022.

Future decisions to pay cash dividends continue to be at the discretion of the Board of Directors and will be dependent on our operating performance, financial condition, capital expenditure requirements and other factors that the Board of Directors considers relevant.

13 unchanged sentences

Total 5,633 $ 127.74 5,633 $ 950

On November 21, 2019, our Board of Directors authorized share repurchases through June 2021 of up to $2 billion (excluding applicable transaction fees) of our outstanding Common Stock.

As of December 31, 2020, we have remaining capacity to repurchase up to $1.75 billion of Common Stock under this authorization.

In May 2021, our Board of Directors authorized share repurchases from July 1, 2021 through December 31, 2022 of up to $2 billion (excluding applicable transaction fees) of our outstanding Common Stock.

As of December 31, 2021, we have remaining capacity to repurchase up to $950 million of Common Stock under this authorization.

Stock Performance Graph

6 unchanged sentences

Source of total return data:

Selected Financial Data.

Selected Financial Data

and Subsidiaries

(in millions, except per share and unit amounts)

2020 2019 2018 2017 2016

Income Statement Data

Company sales $ 1,810 $ 1,546 $ 2,000 $ 3,572 $ 4,189

Franchise and property revenues 2,510 2,660 2,482 2,306 2,167

Franchise contributions for advertising and other services 1,332 1,391 1,206 — —

Total 5,652 5,597 5,688 5,878 6,356

Refranchising (gain) loss (34) (37) (540) (1,083) (163)

Operating Profit 1,503 1,930 2,296 2,761 1,682

Investment (income) expense, net (74) 67 (9) (5) (2)

Other pension (income) expense 14 4 14 47 32

Interest expense, net 543 486 452 445 307

Income from continuing operations before income taxes 1,020 1,373 1,839 2,274 1,345

Income from continuing operations 904 1,294 1,542 1,340 1,018

Income from discontinued operations, net of tax N/A N/A N/A N/A 625

Net Income 904 1,294 1,542 1,340 1,643

Basic earnings per share from continuing operations 2.99 4.23 4.80 3.86 2.58

Basic earnings per share from discontinued operations N/A N/A N/A N/A 1.59

Basic earnings per share 2.99 4.23 4.80 3.86 4.17

Diluted earnings per share from continuing operations 2.94 4.14 4.69 3.77 2.54

Diluted earnings per share from discontinued operations N/A N/A N/A N/A 1.56

Diluted earnings per share 2.94 4.14 4.69 3.77 4.10

Diluted earnings per share from continuing operations excluding Special Items 3.62 3.55 3.17 2.96 2.46

Cash Flow Data

Provided by operating activities $ 1,305 $ 1,315 $ 1,176 $ 1,030 $ 1,248

Capital spending 160 196 234 318 427

Proceeds from refranchising of restaurants 19 110 825 1,773 370

Repurchase shares of Common Stock 239 815 2,390 1,960 5,403

Dividends paid on Common Stock 566 511 462 416 744

Balance Sheet Data

Total assets $ 5,852 $ 5,231 $ 4,130 $ 5,311 $ 5,453

Long-term debt 10,272 10,131 9,751 9,429 9,059

Total debt 10,725 10,562 10,072 9,804 9,125

Number of units at year end

Franchise 49,255 49,257 47,268 43,603 40,834

Company 1,098 913 856 1,481 2,841

System 50,353 50,170 48,124 45,084 43,675

System net new unit growth — % 4 % 7 % 3 % 3 %

System and same-store sales

KFC Division System sales

$ 26,289 $ 27,900 $ 26,239 $ 24,515 $ 23,242

System sales growth (decline) (6) % 6 % 7 % 5 % 3 %

System sales growth, ex FX and 53rd week (5) % 9 % 6 % 6 % 6 %

Same-store sales growth (9) % 4 % 2 % 3 % 2 %

Pizza Hut Division System sales

$ 11,955 $ 12,900 $ 12,212 $ 12,034 $ 12,019

System sales growth (decline) (7) % 6 % 1 % — % — %

System sales growth, ex FX and 53rd week (6) % 7 % 1 % 2 % 1 %

Same-store sales growth (decline) (6) % — % — % — % (2 %)

Taco Bell Division System sales

$ 11,745 $ 11,784 $ 10,786 $ 10,145 $ 9,660

System sales growth — % 9 % 6 % 5 % 6 %

System sales growth, ex FX and 53rd week 1 % 8 % 6 % 7 % 5 %

Same-store sales growth (1) % 5 % 4 % 4 % 2 %

Shares outstanding at year end 300 300 306 332 355

Cash dividends declared per common share $ 1.88 $ 1.68 $ 1.44 $ 0.90 $ 1.73

Market price per share at year end $ 108.56 $ 100.73 $ 91.92 $ 81.61 $ 63.33

The table above reflects the impact of the adoption of new lease accounting standards in fiscal year 2019 and the impact of the adoption of new revenue recognition accounting standards in fiscal year 2018.

System sales growth and unit growth measures in 2020 reflect the addition of 276 units through our acquisition of The Habit Restaurants, Inc.

in March 2020.

System sales growth measures in 2019 and System unit growth in 2018 reflect the addition of approximately 1,300 Telepizza units in December 2018.

See additional discussion of the acquisition of The Habit Restaurants, Inc.

and the Telepizza strategic alliance within our MD&A.

Fiscal years for our U.S.

and certain international subsidiaries that operate on a weekly periodic calendar include 52 weeks in 2020, 2018 and 2017 and 53 weeks in 2019 and 2016.

Refer to Note 2 in our Consolidated Financial Statements for additional details related to our fiscal calendar, including the impact of the 53rd week on our results in 2019.

In 2019, the 53rd week added $24 million to Operating Profit.

In 2016, the 53rd week added $28 million to Operating Profit.

Discontinued operations in 2016 reflects the spin-off of our China business into an independent, publicly-traded company (the "Separation").

The non-GAAP measure of Diluted earnings per share from continuing operations excluding Special Items is discussed in further detail in our MD&A within Part II, Item 7.

System sales growth, System sales growth excluding the impacts of foreign currency translation ("FX") and 53rd week, Same-store sales growth and System net new unit growth are performance metrics and discussed in further detail in our MD&A within Part II, Item 7.

See discussion of our 2020, 2019 and 2018 Special Items in our MD&A.

Special Items in 2017 positively impacted Operating Profit by $1,001 million and positively impacted Net Income by $288 million, primarily due to $1,083 million in Refranchising gains, partially offset by $31 million in costs associated with the Pizza Hut U.S.

Transformation Agreement, $23 million in costs associated with YUM's Strategic Transformation Initiatives, $18 million in share-based compensation charges related to the Separation, $17 million in costs associated with the KFC U.S.

Acceleration Agreement, $434 million recognized in our Income tax provision as a result of the Tax Cuts and Jobs Act of 2017 and a $23 million charge within Other Pension (income) expense primarily due to an adjustment of certain historical deferred vested pension liability balances as a result of the completion of a pension data review and reconciliation.

Special Items in 2016 positively impacted Operating Profit by $35 million and positively impacted Net Income by $33 million, primarily due to $163 million in Refranchising gains, partially offset by $67 million in costs associated with YUM's Strategic Transformation Initiatives, $30 million in share-based compensation charges related to the Separation, $26 million in costs associated with the KFC Acceleration Agreement and $26 million incurred within Other Pension (income) expense primarily due to a settlement charge associated with an option for certain employees to voluntarily elect an early payout of their pension benefits.

Selected financial data for year 2016 have been recast from that originally presented to present a change in our reporting calendar and the retroactive adoption of an accounting standard related to the presentation of net periodic pension cost and net periodic postretirement benefit cost.

The selected financial data should be read in conjunction with the Consolidated Financial Statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity