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

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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YUM! Brands Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 26, 2015	Dec 27, 2014	Dec 28, 2013	Dec 29, 2012	Dec 31, 2011
Net income, including noncontrolling interests	1,298)	1,021)	1,064)	1,608)	1,335)
Depreciation and amortization	747)	739)	721)	645)	628)
Closures and impairment (income) expenses	79)	535)	331)	37)	135)
Refranchising (gain) loss	10)	(33)	(100)	(78)	72)
Contributions to defined benefit pension plans	(98)	(18)	(23)	—)	—)
Losses and other costs related to the extinguishment of debt	—)	—)	120)	—)	—)
Gain upon acquisition of Little Sheep	—)	—)	—)	(74)	—)
Deferred income taxes	(89)	(172)	(24)	28)	(137)
Equity income from investments in unconsolidated affiliates	(41)	(30)	(26)	(47)	(47)
Distributions of income received from unconsolidated affiliates	21)	28)	43)	41)	39)
Excess tax benefit from share-based compensation	(50)	(42)	(44)	(98)	(66)
Share-based compensation expense	57)	55)	49)	50)	59)
Changes in accounts and notes receivable	(54)	(21)	(12)	(18)	(39)
Changes in inventories	58)	(22)	18)	9)	(75)
Changes in prepaid expenses and other current assets	(22)	(10)	(21)	(14)	(25)
Changes in accounts payable and other current liabilities	128)	60)	(102)	9)	144)
Changes in income taxes payable	20)	(143)	14)	126)	109)
Changes in operating capital	130)	(136)	(103)	112)	114)
Other, net	75)	102)	131)	70)	38)
Net cash provided by operating activities	2,139)	2,049)	2,139)	2,294)	2,170)
Capital spending	(973)	(1,033)	(1,049)	(1,099)	(940)
Proceeds from refranchising of restaurants	246)	114)	260)	364)	246)
Acquisitions	(9)	(28)	(99)	(543)	(81)
Changes in restricted cash	—)	—)	—)	300)	(300)
Other, net	54)	11)	2)	(27)	69)
Net cash used in investing activities	(682)	(936)	(886)	(1,005)	(1,006)
Proceeds from long-term debt	—)	—)	599)	—)	404)
Repayments of long-term debt	(263)	(66)	(666)	(282)	(666)
Revolving credit facilities, three months or less, net	285)	416)	—)	—)	—)
Short-term borrowings, original maturity more than three months, proceeds	609)	2)	56)	—)	—)
Short-term borrowings, original maturity more than three months, payments	—)	(2)	(56)	—)	—)
Short-term borrowings, original maturity three months or less, net	—)	—)	—)	—)	—)
Repurchase shares of Common Stock	(1,200)	(820)	(770)	(965)	(752)
Excess tax benefit from share-based compensation	50)	42)	44)	98)	66)
Employee stock option proceeds	12)	29)	37)	62)	59)
Dividends paid on Common Stock	(730)	(669)	(615)	(544)	(481)
Other, net	(55)	(46)	(80)	(85)	(43)
Net cash used in financing activities	(1,292)	(1,114)	(1,451)	(1,716)	(1,413)
Effect of exchange rates on cash and cash equivalents	(6)	6)	(5)	5)	21)
Net increase (decrease) in cash and cash equivalents	159)	5)	(203)	(422)	(228)
Cash and cash equivalents, beginning of year	578)	573)	776)	1,198)	1,426)
Cash and cash equivalents, end of year	737)	578)	573)	776)	1,198)

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).

Net cash provided by operating activities remained remarkably stable between 2011 and 2015, fluctuating within a narrow range from a low of 2,049 million US$ in 2014 to a high of 2,294 million US$ in 2012. This stability is observed despite significant volatility in net income, which peaked at 1,608 million US$ in 2012 and declined to 1,021 million US$ by 2014.

Operating Cash Flow Drivers: Depreciation and amortization provided a consistent positive adjustment to net income, growing steadily from 628 million US$ in 2011 to 747 million US$ in 2015. Closures and impairment expenses showed significant volatility, peaking in 2014 at 535 million US$.
Working Capital Trends: Changes in operating capital exhibited inconsistent patterns, with a positive contribution of 114 million US$ in 2011 and 130 million US$ in 2015, contrasted by outflows of 103 million US$ in 2013 and 136 million US$ in 2014.

Investing activities were characterized by consistent capital expenditures and a strategic focus on refranchising. Net cash used in investing activities trended downward from approximately 1,006 million US$ in 2011 to 682 million US$ in 2015.

Capital Expenditure and Acquisitions: Capital spending remained heavy and relatively flat, averaging approximately 1 billion US$ annually. Acquisition activity was sporadic, with a notable peak of 543 million US$ in 2012, followed by a sharp decline to only 9 million US$ by 2015.
Refranchising Inflows: Proceeds from the refranchising of restaurants served as a consistent source of cash, although these inflows fluctuated, reaching a high of 364 million US$ in 2012 and a low of 114 million US$ in 2014.

Financing activities were dominated by an aggressive capital return strategy to shareholders, resulting in consistent net cash outflows throughout the period.

Shareholder Distributions: Repurchases of common stock increased significantly over the five-year period, rising from 752 million US$ in 2011 to 1,200 million US$ in 2015. Similarly, dividends paid on common stock grew steadily from 481 million US$ in 2011 to 730 million US$ in 2015.
Debt Management: Debt activity was inconsistent; long-term debt repayments were high in 2011 and 2013 (both 666 million US$), while 2014 and 2015 saw increased reliance on revolving credit facilities and short-term borrowings to manage liquidity.

The overall cash position experienced a downward trend for the majority of the period. Cash and cash equivalents decreased from 1,426 million US$ at the start of 2011 to a low of 573 million US$ by the end of 2013. However, a recovery began in 2014, ending 2015 with 737 million US$ in cash and cash equivalents.

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