Analysis of Debt
Total Debt (Carrying Amount)
YUM! Brands Inc., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2015-12-26), 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29), 10-K (reporting date: 2011-12-31).
Total debt obligations exhibited a fluctuating trend between 2011 and 2013, followed by a period of significant growth through 2015. Total liabilities increased from 3,317 million US$ in 2011 to a peak of 3,977 million US$ by the end of 2015, representing an overall increase of approximately 19.9% over the five-year period.
- Long-Term Debt Stability
- Long-term debt remained relatively stable throughout the analyzed period, fluctuating within a narrow range between 2,918 million US$ and 3,077 million US$. The minimal variance in this category suggests a consistent long-term financing strategy with limited reliance on new long-term issuance or aggressive early repayment.
- Short-Term Borrowing Volatility
- Short-term borrowings demonstrated significant volatility. After a sharp decline from 320 million US$ in 2011 to 10 million US$ in 2012, a sustained upward trend emerged. Borrowings rose incrementally in 2013 and 2014 before experiencing a substantial surge to 923 million US$ in 2015. This increase indicates a strategic shift toward short-term financing or a temporary increase in working capital requirements toward the end of the period.
- Debt Composition Shift
- The composition of total debt shifted notably by 2015. While long-term debt was the primary driver of total obligations in 2012 and 2013, the sharp rise in short-term borrowings in 2015 contributed significantly to the overall debt increase. By December 26, 2015, short-term borrowings accounted for approximately 23.2% of total debt obligations, compared to only 0.3% in 2012.
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Total Debt (Fair Value)
| Dec 26, 2015 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Debt obligations, excluding capital leases | 3,700) |
| Capital lease obligations | 169) |
| Total debt obligations, including capital leases (fair value) | 3,869) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.97 |
Based on: 10-K (reporting date: 2015-12-26).
Weighted-average Interest Rate on Debt
Weighted-average effective interest rate on debt: 5.45%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 6.03% | 300) | 18) | |
| 6.36% | 325) | 21) | |
| 7.45% | 325) | 24) | |
| 5.59% | 250) | 14) | |
| 4.01% | 350) | 14) | |
| 3.88% | 350) | 14) | |
| 4.01% | 325) | 13) | |
| 5.42% | 275) | 15) | |
| 7.63% | 169) | 13) | |
| Total | 2,669) | 145) | |
| 5.45% | |||
Based on: 10-K (reporting date: 2015-12-26).
1 US$ in millions
2 Weighted-average interest rate = 100 × 145 ÷ 2,669 = 5.45%