Stock Analysis on Net
Stock Analysis on Net

YUM! Brands Inc. (NYSE:YUM)

This company has been moved to the archive! The financial data has not been updated since October 11, 2016.

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

YUM! Brands Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
Federal 287 255 159 160 78
Foreign 263 321 330 314 374
State 28 2 22 35 9
Current 578 578 511 509 461
Federal (143) (67) 42 91 (83)
Foreign 54 (106) (53) (57) (40)
State — 1 (13) (6) (14)
Deferred (89) (172) (24) 28 (137)
Income tax provision 489 406 487 537 324

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).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. YUM! Brands Inc. deferred decreased from 2013 to 2014 but then increased from 2014 to 2015 not reaching 2013 level.
Income tax provision Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. YUM! Brands Inc. income tax provision decreased from 2013 to 2014 but then increased from 2014 to 2015 exceeding 2013 level.

Effective Income Tax Rate (EITR)

YUM! Brands Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
U.S. federal statutory tax rate 35.00% 35.00% 35.00% 35.00% 35.00%
State income tax, net of federal tax benefit 0.70% 0.60% 0.20% 0.20% 0.10%
Statutory rate differential attributable to foreign operations -11.80% -11.70% -11.40% -7.70% -13.10%
Adjustments to reserves and prior years 0.70% -0.30% 3.10% -2.20% 1.40%
Net benefit from LJS and A&W divestitures 0.00% 0.00% 0.00% 0.00% -4.30%
Change in valuation allowances 3.00% 2.40% 1.50% 0.60% 1.30%
Other, net -0.30% 2.50% 3.00% -0.90% -0.90%
Effective income tax rate 27.30% 28.50% 31.40% 25.00% 19.50%

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).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. YUM! Brands Inc. effective income tax rate decreased from 2013 to 2014 and from 2014 to 2015.

Components of Deferred Tax Assets and Liabilities

YUM! Brands Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
Operating losses 239 271 310 495 590
Tax credit carryforwards 282 162 — — —
Employee benefits 154 238 182 251 259
Share-based compensation 126 119 118 108 106
Self-insured casualty claims 36 42 48 50 47
Lease-related liabilities 112 119 120 115 137
Various liabilities 82 73 88 82 72
Property, plant and equipment 33 39 42 39 —
Deferred income and other 86 102 58 57 49
Gross deferred tax assets 1,150 1,165 966 1,197 1,260
Deferred tax asset valuation allowances (250) (228) (203) (358) (368)
Net deferred tax assets 900 937 763 839 892
Intangible assets, including goodwill (130) (148) (233) (256) (147)
Property, plant and equipment (56) (63) (93) (95) (92)
Other (70) (104) (55) (48) (53)
Gross deferred tax liabilities (256) (315) (381) (399) (292)
Net deferred tax assets (liabilities) 644 622 382 440 600

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).

Item Description The company
Gross deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. YUM! Brands Inc. gross deferred tax assets increased from 2013 to 2014 but then slightly decreased from 2014 to 2015.
Net deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. YUM! Brands Inc. net deferred tax assets increased from 2013 to 2014 but then slightly decreased from 2014 to 2015.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. YUM! Brands Inc. net deferred tax assets (liabilities) increased from 2013 to 2014 and from 2014 to 2015.

Deferred Tax Assets and Liabilities, Classification

YUM! Brands Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
Deferred income tax assets, current — 93 123 111 112
Deferred income tax assets, long-term 676 571 399 481 549
Deferred income tax liabilities, current (included in Accounts payable and other current liabilities) — 2 2 5 16
Deferred income tax liabilities, long-term (included in Other liabilities and deferred credits) 32 40 138 147 45

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).

Item Description The company
Deferred income tax assets, long-term Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. YUM! Brands Inc. deferred income tax assets, long-term increased from 2013 to 2014 and from 2014 to 2015.
Deferred income tax liabilities, long-term (included in Other liabilities and deferred credits) Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. YUM! Brands Inc. deferred income tax liabilities, long-term (included in Other liabilities and deferred credits) decreased from 2013 to 2014 and from 2014 to 2015.

Adjustments to Financial Statements: Removal of Deferred Taxes

YUM! Brands Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
Adjustment to Current Assets
Current assets (as reported) 1,688 1,646 1,691 1,909 2,321
Less: Current deferred tax assets, net — 93 123 111 112
Current assets (adjusted) 1,688 1,553 1,568 1,798 2,209
Adjustment to Total Assets
Total assets (as reported) 8,075 8,345 8,695 9,011 8,834
Less: Current deferred tax assets, net — 93 123 111 112
Less: Noncurrent deferred tax assets, net 676 571 399 481 549
Total assets (adjusted) 7,399 7,681 8,173 8,419 8,173
Adjustment to Current Liabilities
Current liabilities (as reported) 3,088 2,411 2,265 2,188 2,450
Less: Current deferred tax liabilities, net — 2 2 5 16
Current liabilities (adjusted) 3,088 2,409 2,263 2,183 2,434
Adjustment to Total Liabilities
Total liabilities (as reported) 7,100 6,732 6,427 6,699 6,918
Less: Current deferred tax liabilities, net — 2 2 5 16
Less: Noncurrent deferred tax liabilities, net 32 40 138 147 45
Total liabilities (adjusted) 7,068 6,690 6,287 6,547 6,857
Adjustment to Shareholders’ Equity, YUM! Brands, Inc.
Shareholders’ equity, YUM! Brands, Inc. (as reported) 911 1,547 2,166 2,154 1,823
Less: Net deferred tax assets (liabilities) 644 622 382 440 600
Shareholders’ equity, YUM! Brands, Inc. (adjusted) 267 925 1,784 1,714 1,223
Adjustment to Net Income, YUM! Brands, Inc.
Net income, YUM! Brands, Inc. (as reported) 1,293 1,051 1,091 1,597 1,319
Add: Deferred income tax expense (benefit) (89) (172) (24) 28 (137)
Net income, YUM! Brands, Inc. (adjusted) 1,204 879 1,067 1,625 1,182

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).

YUM! Brands Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

YUM! Brands Inc., adjusted financial ratios

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
Current Ratio
Reported current ratio 0.55 0.68 0.75 0.87 0.95
Adjusted current ratio 0.55 0.64 0.69 0.82 0.91
Net Profit Margin
Reported net profit margin 9.87% 7.91% 8.34% 11.71% 10.45%
Adjusted net profit margin 9.19% 6.62% 8.15% 11.92% 9.36%
Total Asset Turnover
Reported total asset turnover 1.62 1.59 1.50 1.51 1.43
Adjusted total asset turnover 1.77 1.73 1.60 1.62 1.54
Financial Leverage
Reported financial leverage 8.86 5.39 4.01 4.18 4.85
Adjusted financial leverage 27.71 8.30 4.58 4.91 6.68
Return on Equity (ROE)
Reported ROE 141.93% 67.94% 50.37% 74.14% 72.35%
Adjusted ROE 450.94% 95.03% 59.81% 94.81% 96.65%
Return on Assets (ROA)
Reported ROA 16.01% 12.59% 12.55% 17.72% 14.93%
Adjusted ROA 16.27% 11.44% 13.06% 19.30% 14.46%

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).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. YUM! Brands Inc. adjusted current ratio deteriorated from 2013 to 2014 and from 2014 to 2015.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. YUM! Brands Inc. adjusted net profit margin ratio deteriorated from 2013 to 2014 but then improved from 2014 to 2015 exceeding 2013 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. YUM! Brands Inc. adjusted total asset turnover ratio improved from 2013 to 2014 and from 2014 to 2015.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 YUM! Brands Inc. adjusted financial leverage ratio increased from 2013 to 2014 and from 2014 to 2015.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. YUM! Brands Inc. adjusted ROE improved from 2013 to 2014 and from 2014 to 2015.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. YUM! Brands Inc. adjusted ROA deteriorated from 2013 to 2014 but then improved from 2014 to 2015 exceeding 2013 level.

YUM! Brands Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Current assets 1,688 1,646 1,691 1,909 2,321
Current liabilities 3,088 2,411 2,265 2,188 2,450
Liquidity Ratio
Current ratio1 0.55 0.68 0.75 0.87 0.95
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets 1,688 1,553 1,568 1,798 2,209
Adjusted current liabilities 3,088 2,409 2,263 2,183 2,434
Liquidity Ratio
Adjusted current ratio2 0.55 0.64 0.69 0.82 0.91

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).

2015 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 1,688 ÷ 3,088 = 0.55

2 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 1,688 ÷ 3,088 = 0.55

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. YUM! Brands Inc. adjusted current ratio deteriorated from 2013 to 2014 and from 2014 to 2015.

Adjusted Net Profit Margin

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income, YUM! Brands, Inc. 1,293 1,051 1,091 1,597 1,319
Revenues 13,105 13,279 13,084 13,633 12,626
Profitability Ratio
Net profit margin1 9.87% 7.91% 8.34% 11.71% 10.45%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income, YUM! Brands, Inc. 1,204 879 1,067 1,625 1,182
Revenues 13,105 13,279 13,084 13,633 12,626
Profitability Ratio
Adjusted net profit margin2 9.19% 6.62% 8.15% 11.92% 9.36%

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).

2015 Calculations

1 Net profit margin = 100 × Net income, YUM! Brands, Inc. ÷ Revenues
= 100 × 1,293 ÷ 13,105 = 9.87%

2 Adjusted net profit margin = 100 × Adjusted net income, YUM! Brands, Inc. ÷ Revenues
= 100 × 1,204 ÷ 13,105 = 9.19%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. YUM! Brands Inc. adjusted net profit margin ratio deteriorated from 2013 to 2014 but then improved from 2014 to 2015 exceeding 2013 level.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Revenues 13,105 13,279 13,084 13,633 12,626
Total assets 8,075 8,345 8,695 9,011 8,834
Activity Ratio
Total asset turnover1 1.62 1.59 1.50 1.51 1.43
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues 13,105 13,279 13,084 13,633 12,626
Adjusted total assets 7,399 7,681 8,173 8,419 8,173
Activity Ratio
Adjusted total asset turnover2 1.77 1.73 1.60 1.62 1.54

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).

2015 Calculations

1 Total asset turnover = Revenues ÷ Total assets
= 13,105 ÷ 8,075 = 1.62

2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 13,105 ÷ 7,399 = 1.77

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. YUM! Brands Inc. adjusted total asset turnover ratio improved from 2013 to 2014 and from 2014 to 2015.

Adjusted Financial Leverage

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Total assets 8,075 8,345 8,695 9,011 8,834
Shareholders’ equity, YUM! Brands, Inc. 911 1,547 2,166 2,154 1,823
Solvency Ratio
Financial leverage1 8.86 5.39 4.01 4.18 4.85
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 7,399 7,681 8,173 8,419 8,173
Adjusted shareholders’ equity, YUM! Brands, Inc. 267 925 1,784 1,714 1,223
Solvency Ratio
Adjusted financial leverage2 27.71 8.30 4.58 4.91 6.68

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).

2015 Calculations

1 Financial leverage = Total assets ÷ Shareholders’ equity, YUM! Brands, Inc.
= 8,075 ÷ 911 = 8.86

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity, YUM! Brands, Inc.
= 7,399 ÷ 267 = 27.71

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 YUM! Brands Inc. adjusted financial leverage ratio increased from 2013 to 2014 and from 2014 to 2015.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income, YUM! Brands, Inc. 1,293 1,051 1,091 1,597 1,319
Shareholders’ equity, YUM! Brands, Inc. 911 1,547 2,166 2,154 1,823
Profitability Ratio
ROE1 141.93% 67.94% 50.37% 74.14% 72.35%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income, YUM! Brands, Inc. 1,204 879 1,067 1,625 1,182
Adjusted shareholders’ equity, YUM! Brands, Inc. 267 925 1,784 1,714 1,223
Profitability Ratio
Adjusted ROE2 450.94% 95.03% 59.81% 94.81% 96.65%

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).

2015 Calculations

1 ROE = 100 × Net income, YUM! Brands, Inc. ÷ Shareholders’ equity, YUM! Brands, Inc.
= 100 × 1,293 ÷ 911 = 141.93%

2 Adjusted ROE = 100 × Adjusted net income, YUM! Brands, Inc. ÷ Adjusted shareholders’ equity, YUM! Brands, Inc.
= 100 × 1,204 ÷ 267 = 450.94%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. YUM! Brands Inc. adjusted ROE improved from 2013 to 2014 and from 2014 to 2015.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 26, 2015 Dec 27, 2014 Dec 28, 2013 Dec 29, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income, YUM! Brands, Inc. 1,293 1,051 1,091 1,597 1,319
Total assets 8,075 8,345 8,695 9,011 8,834
Profitability Ratio
ROA1 16.01% 12.59% 12.55% 17.72% 14.93%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income, YUM! Brands, Inc. 1,204 879 1,067 1,625 1,182
Adjusted total assets 7,399 7,681 8,173 8,419 8,173
Profitability Ratio
Adjusted ROA2 16.27% 11.44% 13.06% 19.30% 14.46%

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).

2015 Calculations

1 ROA = 100 × Net income, YUM! Brands, Inc. ÷ Total assets
= 100 × 1,293 ÷ 8,075 = 16.01%

2 Adjusted ROA = 100 × Adjusted net income, YUM! Brands, Inc. ÷ Adjusted total assets
= 100 × 1,204 ÷ 7,399 = 16.27%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. YUM! Brands Inc. adjusted ROA deteriorated from 2013 to 2014 but then improved from 2014 to 2015 exceeding 2013 level.