YUM! Brands Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 26, 2015	Dec 27, 2014	Dec 28, 2013	Dec 29, 2012	Dec 31, 2011
Net income, YUM! Brands, Inc.	1,293)	1,051)	1,091)	1,597)	1,319)
Net (income) loss, noncontrolling interests	5)	(30)	(27)	11)	16)
Net noncash charges	711)	1,164)	1,178)	574)	721)
Changes in operating capital	130)	(136)	(103)	112)	114)
Net cash provided by operating activities	2,139)	2,049)	2,139)	2,294)	2,170)
Cash paid for interest, net of tax¹	112)	107)	185)	125)	160)
Capital spending	(973)	(1,033)	(1,049)	(1,099)	(940)
Capital lease obligations incurred	(28)	(24)	(15)	(17)	(58)
Free cash flow to the firm (FCFF)	1,250)	1,099)	1,260)	1,303)	1,332)

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).

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the YUM! Brands Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	YUM! Brands Inc. FCFF decreased from 2013 to 2014 but then increased from 2014 to 2015 not reaching 2013 level.

YUM! Brands Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 26, 2015	Dec 27, 2014	Dec 28, 2013	Dec 29, 2012	Dec 31, 2011
Effective Income Tax Rate (EITR)
EITR¹	27.30%	28.50%	31.40%	25.00%	19.50%
Interest Paid, Net of Tax
Cash paid for interest, before tax	154)	149)	269)	166)	199)
Less: Cash paid for interest, tax²	42)	42)	84)	42)	39)
Cash paid for interest, net of tax	112)	107)	185)	125)	160)

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 See details »

² 2015 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 154 × 27.30% = 42

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YUM! Brands Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	35,686)
Free cash flow to the firm (FCFF)	1,250)
Valuation Ratio
EV/FCFF	28.55
Benchmarks
EV/FCFF, Competitors¹
Airbnb Inc.	19.84
Booking Holdings Inc.	22.02
Chipotle Mexican Grill Inc.	—
McDonald’s Corp.	29.64
Starbucks Corp.	29.81

Based on: 10-K (reporting date: 2015-12-26).

¹ Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

YUM! Brands Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 26, 2015	Dec 27, 2014	Dec 28, 2013	Dec 29, 2012	Dec 31, 2011
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	31,712)	35,761)	34,919)	31,364)	32,369)
Free cash flow to the firm (FCFF)²	1,250)	1,099)	1,260)	1,303)	1,332)
Valuation Ratio
EV/FCFF³	25.37	32.55	27.72	24.08	24.30
Benchmarks
EV/FCFF, Competitors⁴
Airbnb Inc.	—	—	—	—	—
Booking Holdings Inc.	—	—	—	—	—
Chipotle Mexican Grill Inc.	—	—	—	—	—
McDonald’s Corp.	—	—	—	—	—
Starbucks Corp.	—	—	—	—	—

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 See details »

² See details »

³ 2015 Calculation
EV/FCFF = EV ÷ FCFF
= 31,712 ÷ 1,250 = 25.37

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	YUM! Brands Inc. EV/FCFF ratio increased from 2013 to 2014 but then decreased significantly from 2014 to 2015.

YUM! Brands Inc. (NYSE:YUM)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical