YUM BRANDS INCYUM

YUM BRANDS INC Fair Value Disclosure

10-KFiled Feb 20, 20262 min read
Fair Value Disclosures
As of December 31, 2025, the carrying values of cash and cash equivalents, restricted cash, accounts receivable, short-term borrowings, accounts payable and borrowings under our Revolving Facility approximated their fair values because of the short-term nature of these instruments. The fair value of notes receivable net of allowances and lease guarantees less subsequent amortization approximates their carrying value. The following table presents the carrying value and estimated fair value of the Company’s debt obligations:

 
2025
2024
 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2)
Securitization Notes(a)
$4,306 $4,160 $3,743 $3,561 
Subsidiary Senior Unsecured Notes(b)
750 753 750 739 
Term Loan A Facility(b)
494 492 500 496 
Term Loan B Facility(b)
1,429 1,440 1,444 1,451 
YUM Senior Unsecured Notes(b)
4,550 4,581 4,550 4,368 
(a)    We estimated the fair value of the Securitization Notes using market quotes and calculations. The markets in which the Securitization Notes trade are not considered active markets.

(b)    We estimated the fair value of the YUM and Subsidiary Senior Unsecured Notes, Term Loan A Facility, and Term Loan B Facility using market quotes and calculations based on market rates.

Recurring Fair Value Measurements

The fair values of the assets and liabilities of the Company that are required to be measured at fair value on a recurring basis (see Note 13 for discussion regarding derivative instruments) were not significant at December 31, 2025 or 2024.

Non-Recurring Fair Value Measurements
During the years ended December 31, 2025, 2024 and 2023, we recognized non-recurring fair value measurements of $14 million, $13 million and $11 million, respectively, related to restaurant-level impairment. Restaurant-level impairment charges are recorded in Other (income) expense and resulted primarily from our impairment evaluation of long-lived assets of individual restaurants that were being operated at the time of impairment and had not been offered for refranchising. The fair value measurements used in these impairment evaluations were based on discounted cash flow estimates using unobservable inputs (Level 3). These amounts exclude fair value measurements made for assets that were subsequently disposed of prior to those respective year end dates. The remaining net book value of restaurant assets measured at fair value during the years ended December 31, 2025 and 2024 was $19 million and $21 million, respectively.

Historical Timeline

Fiscal YearFiled
2025Feb 20, 2026Showing above
2024Feb 19, 2025
2023Feb 20, 2024
2020Feb 22, 2021
2019Feb 20, 2020
2018Feb 21, 2019
2017Feb 22, 2018
2016Feb 22, 2017
2015Feb 16, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

Income TaxesRevenueEarnings Per SharePP&EGoodwill & IntangiblesLeasesSegmentsDebtCommitmentsStock Compensation