Analysis of Operating Leases
An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.
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YUM! Brands Inc. pages available for free this week:
- Statement of Comprehensive Income
- Common-Size Income Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Present Value of Future Operating Lease Payments (before Adoption of FASB Topic 842)
YUM! Brands Inc., future operating lease payments (before adoption of FASB Topic 842)
US$ in millions
| Dec 26, 2015 | Dec 27, 2014 | Dec 28, 2013 | Dec 29, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Total undiscounted future operating lease payments | ||||||
| Discount rate1 | ||||||
| Total present value of future operating lease payments | ||||||
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).
1 Internal rate of return on capital leases
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2016 | 2016 | |||
| 2017 | 2017 | |||
| 2018 | 2018 | |||
| 2019 | 2019 | |||
| 2020 | 2020 | |||
| 2021 and thereafter | 2021 | |||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| Total: |
Based on: 10-K (reporting date: 2015-12-26).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2015 | 2015 | |||
| 2016 | 2016 | |||
| 2017 | 2017 | |||
| 2018 | 2018 | |||
| 2019 | 2019 | |||
| 2020 and thereafter | 2020 | |||
| 2021 | ||||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| Total: |
Based on: 10-K (reporting date: 2014-12-27).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2014 | 2014 | |||
| 2015 | 2015 | |||
| 2016 | 2016 | |||
| 2017 | 2017 | |||
| 2018 | 2018 | |||
| 2019 and thereafter | 2019 | |||
| 2020 | ||||
| 2021 | ||||
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| Total: |
Based on: 10-K (reporting date: 2013-12-28).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2013 | 2013 | |||
| 2014 | 2014 | |||
| 2015 | 2015 | |||
| 2016 | 2016 | |||
| 2017 | 2017 | |||
| 2018 and thereafter | 2018 | |||
| 2019 | ||||
| 2020 | ||||
| 2021 | ||||
| 2022 | ||||
| 2023 | ||||
| Total: |
Based on: 10-K (reporting date: 2012-12-29).
| Year | Future operating lease payments (as reported) | Year | Future operating lease payments (estimated) | Present value at |
|---|---|---|---|---|
| 2012 | 2012 | |||
| 2013 | 2013 | |||
| 2014 | 2014 | |||
| 2015 | 2015 | |||
| 2016 | 2016 | |||
| 2017 and thereafter | 2017 | |||
| 2018 | ||||
| 2019 | ||||
| 2020 | ||||
| 2021 | ||||
| 2022 | ||||
| Total: |
Based on: 10-K (reporting date: 2011-12-31).
Adjustments to Financial Statements for Operating Leases
YUM! Brands Inc., adjustments to financial statements
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).
1, 2 Equal to total present value of future operating lease payments.
YUM! Brands Inc., Financial Data: Reported vs. Adjusted
Adjusted Financial Ratios for Operating Leases (Summary)
YUM! Brands Inc., adjusted financial ratios
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 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 debt to equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | YUM! Brands Inc. adjusted debt to equity ratio deteriorated from 2013 to 2014 and from 2014 to 2015. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | YUM! Brands Inc. adjusted ROA improved from 2013 to 2014 and from 2014 to 2015. |
YUM! Brands Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
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
= ÷ =
2 Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= ÷ =
| 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 Debt to Equity
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 Debt to equity = Total debt ÷ Shareholders’ equity, YUM! Brands, Inc.
= ÷ =
2 Adjusted debt to equity = Adjusted total debt ÷ Shareholders’ equity, YUM! Brands, Inc.
= ÷ =
| Solvency ratio | Description | The company |
|---|---|---|
| Adjusted debt-to-equity | A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. | YUM! Brands Inc. adjusted debt-to-equity ratio deteriorated from 2013 to 2014 and from 2014 to 2015. |
Adjusted Return on Assets (ROA)
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 × ÷ =
2 Adjusted ROA = 100 × Net income, YUM! Brands, Inc. ÷ Adjusted total assets
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | YUM! Brands Inc. adjusted ROA improved from 2013 to 2014 and from 2014 to 2015. |