Name: YUM! Brands Inc. (NYSE:YUM) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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YUM! Brands Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 26, 2015	Dec 27, 2014	Dec 28, 2013	Dec 29, 2012	Dec 31, 2011
Company sales	11,145)	11,324)	11,184)	11,833)	10,893)
Franchise and license fees and income	1,960)	1,955)	1,900)	1,800)	1,733)
Revenues	13,105)	13,279)	13,084)	13,633)	12,626)
Food and paper	(3,507)	(3,678)	(3,669)	(3,874)	(3,633)
Payroll and employee benefits	(2,517)	(2,579)	(2,499)	(2,620)	(2,418)
Occupancy and other operating expenses	(3,335)	(3,425)	(3,333)	(3,358)	(3,089)
Company restaurant expenses	(9,359)	(9,682)	(9,501)	(9,852)	(9,140)
General and administrative expenses	(1,504)	(1,419)	(1,412)	(1,510)	(1,372)
Franchise and license expenses	(242)	(160)	(158)	(133)	(145)
Closures and impairment expenses	(79)	(535)	(331)	(37)	(135)
Refranchising gain (loss)	(10)	33)	100)	78)	(72)
Equity income from investments in unconsolidated affiliates	41)	30)	26)	47)	47)
Gain upon acquisition of Little Sheep	—)	—)	—)	74)	—)
China poultry supply insurance recovery	5)	25)	—)	—)	—)
Loss associated with planned sale of aircraft	(15)	—)	—)	—)	—)
Foreign exchange net gain (loss) and other	(21)	(14)	(10)	(6)	6)
Other income (expense)	10)	41)	16)	115)	53)
Costs and expenses, net	(11,184)	(11,722)	(11,286)	(11,339)	(10,811)
Operating profit	1,921)	1,557)	1,798)	2,294)	1,815)
Interest expense	(155)	(152)	(270)	(169)	(184)
Interest income	21)	22)	23)	20)	28)
Interest expense, net	(134)	(130)	(247)	(149)	(156)
Income before income taxes	1,787)	1,427)	1,551)	2,145)	1,659)
Income tax provision	(489)	(406)	(487)	(537)	(324)
Net income, including noncontrolling interests	1,298)	1,021)	1,064)	1,608)	1,335)
Net (income) loss, noncontrolling interests	(5)	30)	27)	(11)	(16)
Net income, YUM! Brands, Inc.	1,293)	1,051)	1,091)	1,597)	1,319)

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 performance between 2011 and 2015 is characterized by initial growth followed by a period of volatility in operating margins and a shift in revenue composition. Total revenues peaked in 2012 at 13,633 million US$ before stabilizing near 13,105 million US$ by the end of 2015.

Revenue Composition and Mix: A divergence is observed between company-owned sales and franchise income. While company sales peaked in 2012 at 11,833 million US$ and subsequently declined to 11,145 million US$ by 2015, franchise and license fees demonstrated a consistent upward trajectory, increasing from 1,733 million US$ in 2011 to 1,960 million US$ in 2015. This indicates a strategic migration toward a more franchise-heavy, asset-light revenue model.
Operating Expense Analysis: Company restaurant expenses followed a similar pattern to company sales, peaking in 2012 at 9,852 million US$ before decreasing to 9,359 million US$ in 2015. General and administrative expenses remained relatively stable, fluctuating between 1,372 million US$ and 1,510 million US$. A significant source of volatility was found in closures and impairment expenses, which surged from 135 million US$ in 2011 to a peak of 535 million US$ in 2014, before dropping sharply to 79 million US$ in 2015.
Profitability and Operating Results: Operating profit experienced a cyclical trend, reaching a high of 2,294 million US$ in 2012 and a low of 1,557 million US$ in 2014. The decline during the 2013-2014 period correlates with the increase in impairment expenses. However, a recovery is evident in 2015, with operating profit rising to 1,921 million US$.
Net Income and Financial Obligations: Net income for the parent company mirrored the operating profit trends, peaking at 1,597 million US$ in 2012 and bottoming at 1,051 million US$ in 2014, before recovering to 1,293 million US$ in 2015. Net interest expense remained generally stable, though a notable spike to 247 million US$ occurred in 2013. The overall net income trend suggests that while the company faced significant impairment headwinds mid-period, it maintained a resilient ability to generate profit.

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