YUM! Brands Inc. (NYSE:YUM)

Between 2011 and 2015, a gradual transition in the revenue composition is observed. Company sales decreased from 86.27% to 85.04% of total revenues, while franchise and license fees and income increased from 13.73% to 14.96%. This pattern indicates a strategic shift toward a more franchise-heavy revenue model.

Operating Expense Trends

Food and paper costs demonstrated a consistent downward trend, improving from 28.77% of revenues in 2011 to 26.76% in 2015. Payroll and employee benefits remained relatively stable, fluctuating between 19.10% and 19.42%. Occupancy and other operating expenses showed slight volatility, remaining within a range of 24.47% to 25.79%.

Administrative and Non-Recurring Costs

General and administrative expenses were largely consistent, hovering around 11% of revenues. Closures and impairment expenses were highly volatile, peaking significantly at 4.03% in 2014 before declining to 0.60% in 2015. Refranchising gains provided a positive offset in 2012, 2013, and 2014, though this effect was negligible by 2015.

Profitability Analysis

Operating profit experienced a period of volatility, peaking at 16.83% in 2012 and reaching a low of 11.73% in 2014, before recovering to 14.66% in 2015. This fluctuation correlates closely with the peaks and troughs seen in closure and impairment expenses.

Net Income Performance

Net income attributable to YUM! Brands followed a similar trajectory to operating profit, with a high of 11.71% in 2012 and a low of 7.91% in 2014, eventually recovering to 9.87% by the end of 2015.

Financial and Tax Obligations

Net interest expense varied between 0.98% and 1.89% of revenues, showing no linear trend. The income tax provision fluctuated between 2.57% and 3.94%, with the 2015 provision standing at 3.73% of revenues.