Revenues

Company sales
% revenue
Franchise and license fees and income
% revenue
Total revenues
% growth
Company restaurants
Food and paper
% company sales
Payroll and employee benefits
% company sales
Occupancy and other operating expenses
% company sales
Company restaurant expenses
% revenue
General and administrative expenses
% revenue
Franchise and license expenses
% franchise and license income
Closures and impairment (income) expenses
% revenue
Refranchising (gain) loss
% revenue
Other (income) expense
% revenue
Total costs and expenses, net
% revenue
Operating Profit
% growth
Interest expense, net
% revenue
Income Before Income Taxes
% growth
Income tax provision
% revenue
Net Income including noncontrolling interest
% growth
Net Income noncontrolling interest
% growth
Net Income YUM! Brands, Inc.
% growth
Basic Earnings Per Common Share
% growth

Actual
2009A 2010A 2011A

9,413
9,783 10,893
86.9% 86.2% 86.3%
1,423
1,560
1,733
13.1% 13.8% 13.7%
###
###
###
4.7% 11.3%

3,003
3,091
3,633
31.9% 31.6% 33.4%
2,154
2,172
2,418
22.9% 22.2% 22.2%
2,777
2,857
3,089
29.5% 29.2%
8.1%
7,934 8,120 9,140
1,221
11.3%
118
8.3%
103
1.0%
(26)
-0.2%
(104)
-1.0%
9,246
85.3%
1,590
194

1,396

313
1,083
12
1,071

2.28

1,277
1,372
11.3% 10.9%
110
145
7.1%
8.4%
47
135
0.4%
1.1%
63
72
0.6%
0.6%
(43)
(53)
-0.4%
-0.4%
9,574 10,811
84.4% 85.6%
1,769 1,815
11.3%
2.6%
175
156
1.5%
1.2%
1,594 1,659
14.2%
4.1%
416
324
32.9% 22.1%
1,178
1,335
-8.8% -13.3%
20
16
66.7% -20.0%
1,158 1,319
2.44
7%

2.81
15%

Balance Sheet
ASSETS
Current Assets
Cash and cash equivalents
% of revenue
Accounts and notes receivable, net
% of revenue
Inventories
% of company restaurant expense
Prepaid expenses and other current assets
% of revenue
Deferred income taxes
% of revenue
Advertising cooperative assets, restricted
% of revenue
Total Current Assets
Property, plant and equipment, net
% of revenue
Goodwill
% of revenue
Intangible assets, net
% of revenue
Investments in unconsolidated affiliates
% of revenue
Restricted Cash
% of revenue
Other assets
% of revenue
Deferred income taxes
% of revenue
Total Assets
% growth
LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)
Current Liabilities
Accounts payable and other current liabilities
% of assets
Income taxes payable
% of assets
Short-term borrowings
% of assets
Advertising cooperative liabilities
% of assets
Total Current Liabilities
Long-term debt
% of assets
Other liabilities and deferred credits

353
3%
239
2%
122
2%
314
3%
81
1%
99
1%
1,208
3,899
36%
640
6%
462
4%
144
1%
0%
544
5%
251
2%
7,148

1,426
13%
256
2%
189
2%
269
2%
61
1%
112
1%
2,313
3,830
35%
659
6%
475
4%
154
1%
0%
519
5%
366
3%
8,316
16%

1,198
9%
286
3%
273
3%
338
3%
112
1%
114
1%
2,321
4,042
37%
681
6%
299
3%
167
2%
300
3%
475
4%
549
5%
8,834
6%

1,413
20%
82
1%
59
1%
99
1%
1,653
3,207
45%
1,174

1,602
22%
61
1%
673
9%
112
2%
2,448
2,915
41%
1,284

1,874
26%
142
2%
320
4%
114
2%
2,450
2,997
42%
1,471

% of assets
16%
Total Liabilities
6,034
% growth
Reedemable Noncontrolling Interest
% of assets
0%

Shareholders Equity (Deficit)

Common Stock, no par value, 750 shares authorized; 469 sha
253
% of assets
4%
Retained earnings
996
% of assets
14%
Accumulated other comprehensive loss
(224)
% of assets
-3%
Total Shareholders Equity (Deficit) YUM! Brands, Inc. 1,025
Noncontrolling interest
89
% of assets
1%
Total Shareholders Equity (Deficit)
1,114
Total Liabilities and Shareholders Equity (Deficit)
7,148
% growth
Check for balancing out

18%
6,647
10%
0%

21%
6,918
4%
0%

86
1%
1,717
24%
(227)
-3%
1,576
93
1%
1,669
8,316
16%

18
0%
2,052
29%
(247)
-3%
1,823
93
1%
1,916
8,834
6%

Actual
2012A

2013A

11,833 11,184
86.8% 85.5%
1,800
1,900
13.2% 14.5%
###
###
8.0%
-4.0%
3,874
32.7%
2,620
22.1%
3,358
8.7%
9,852

Forcasted
2014E
12,324
86.0%
2,006
14.0%
###
9.5%

3,669
32.8%
2,499
22.3%
3,333
-0.7%
9,501

4,042
32.8%
2,588
21.0%
3,673
10.2%
###

1,510
1,412
11.1% 10.8%
133
158
7.4%
8.3%
37
331
0.3%
2.5%
(78)
(100)
-0.6%
-0.8%
(115)
(16)
-0.8%
-0.1%
11,339 11,286
83.2% 86.3%
2,294 1,798
26.4% -21.6%
149
247
1.1%
1.9%
2,145 1,551
29.3% -27.7%
537
487
-65.7%
9.3%
1,608
1,064
-20.4% 33.8%
11
(27)
-31.3% -345.5%
1,597 1,091

1,576
11.0%
142
7.1%
143
1.0%
(57)
-0.4%
(14)
-0.1%
12,093
84.4%
2,237
24%
149
1.0%
2,087
34.6%
564
-15.7%
1,524
-43.2%
15
156.4%
1,509

3.46
23%

2.41
-30%

3.41
41%

776
6%
301
3%
313
3%
272
3%
111
1%
136
1%
1,909
4,250
39%
1,034
10%
690
6%
72
1%
0%
575
5%
467
4%
9,013
2%

573
4%
319
3%
294
3%
286
3%
123
1%
96
1%
1,691
4,459
41%
889
8%
638
6%
53
0%
0%
566
5%
399
4%
8,695
-4%

645
5%
373
3%
393
4%
287
3%
143
1%
100
1%
1,941
4,918
45%
917
8%
716
7%
57
1%
0%
631
6%
401
4%
9,581
10%

2,036
28%
97
1%
10
0%
136
2%
2,279
2,932
41%
1,490

1,929
27%
169
2%
71
1%
96
1%
2,265
2,918
41%
1,244

2,166
30%
143
2%
78
1%
100
1%
2,487
2,918
41%
1,109

21%
6,701
-3%
59
1%

17%
6,427
-4%
39
1%

16%
6,515
1%
39
1%

0%
2,286
32%
(132)
-2%
2,154
99
1%
2,253
9,013
2%

0%
2,102
29%
64
1%
2,166
63
1%
2,229
8,695
-4%

0%
2,900
41%
64
1%
2,964
63
1%
3,027
9,581
10%

Notes

Non operating

No this is not a typo. YUM! splits their current portion of deferred income taxes and its more long term

Non Operating
Actuarial Gains/Lossses in pension plans - assuming it is operating

Gains/losses on pension plans and on derivative instruments

d its more long term portion of deferred income taxes

numbers in millions, except store count

2010

2011

2012

Forcasting Revenues
Revenues By Segment
China
Company Operated
% Growth
Franshise
% Growth
Total China
India
Company Operated
% Growth
Franshise
% Growth
Total India
KFC
Company Operated
% Growth
Franshise
% Growth
Total KFC
Pizza Hut
Company Operated
% Growth
Franshise
% Growth
Total Pizza Hut
Taco Bell
Company Operated
% Growth
Franshise
% Growth
Total Taco Bell

5487
79
5566
76
17
93
2434
763
3198
1192
621
1813
1704
253
1957

Total Company Operated

% Growth
Total Franchised
% Growth

10893

Total Revenues

12626

1733

6797
23.9%
101
27.8%
6898
84
10.5%
18
5.9%
102
2277
-6.5%
768
0.6%
3045
1247
4.6%
655
5.5%
1902
1428
-16.2%
258
2.1%
1686
11833
8.6%
1800
3.9%
13633
8.0%

Stores by Segment
China
Company Operated
% Growth
Common Size (% China)
Franshise
% Growth
Common Size (% China)
India
Company Operated
% Growth
Common Size (% India)
Franshise
% Growth
Common Size (% India)
KFC
Company Operated
% Growth
Common Size (% KFC)
Franshise
% Growth
Common Size (% KFC)
Pizza Hut
Company Operated
% Growth
Common Size (% Pizza Hut)
Franshise
% Growth
Common Size (% Pizza Hut)
Taco Bell
Company Operated
% Growth
Common Size (%Taco Bell)
Franshise
% Growth
Common Size (%Taco Bell)
Total Stores
Company Operated
% Growth
Franshise
% Growth
Revenues per Store by Segment
China
Company Operated
% Growth
Franshise

3228
95.5%
153
4.5%
54
15.2%
301
84.8%
1659
12.3%
11846
87.7%
1137
10.2%
10050
89.8%
1247
22.9%
4200
77.1%

3705
14.8%
94.9%
201
31.4%
5.1%

4547
22.7%
89.8%
519
158.2%
10.2%

82
51.9%
17.6%
384
27.6%
82.4%

120
46.3%
20.2%
473
23.2%
79.8%

1457
-12.2%
10.7%
12170
2.7%
89.3%

1200
-17.6%
8.9%
12358
1.5%
91.1%

1089
-4.2%
9.5%
10318
2.7%
90.5%

667
-38.8%
5.8%
10793
4.6%
94.2%

1204
-3.4%
22.0%
4266
1.6%
78.0%

1044
-13.3%
19.8%
4218
-1.1%
80.2%

34876
7537

35939
7578
0.5%
28361
3.7%

27339

1.48
0.39

1.49
0.9%
0.19

% Growth

-50.5%

India
Company Operated
% Growth
Franshise
% Growth
KFC
Company Operated
% Growth
Franshise
% Growth
Pizza Hut
Company Operated
% Growth
Franshise
% Growth
Taco Bell
Company Operated
% Growth
Franshise
% Growth

0.93
0.04

1.67
0.06

1.09
0.06

1.42
0.06

0.70
-24.5%
0.04
-14.0%
1.90
13.6%
0.06
-0.9%
1.87
70.8%
0.06
0.8%
1.37
-3.3%
0.06
3.3%

Operating Expenses
Company Restaurant Expenses (% of Company Sales)
Food and paper
Payroll and employee benefits
Occupancy and other operating expenses

32%
22%
29%

33%
22%
28%

33%
22%
28%

General and Administrative Expenses (% of Total Revenue)

Franchise and License Expenses (% of Franchise and Licen
Closures and Impairment (Income) Expenses (% Total Reve
Refranchising (Gain) Loss (% Total Revenue)
Other (Income) Expense (% Total Revenue)

11%
8%
1%
1%
0%

11%
7%
0%
1%
0%

11%
8%
1%
-1%
-1%

Accounts and notes receivable, net (% of Franchise Income)

Franchise Income
1,560
Accounts Recievable
256
Accounts Recievable Turnover
6.3
Accounts Recievale Days
57.9

1,733
286
6.4
57.1

1,800
301
6.1
59.5

189
8120
52

273
9140
40

313
9852
34

2%

3%

2%

Operating Assets and Liabilities

Inventory
Company Restaurant Expense
Inventory Turnover Ratio
Prepaid Expenses (% of total revenue)

Deferred Income Taxes ( % of total revenue)

Advertising cooperative assets, restricted

1%
1%

1%
1%

1%
1%

7,103
-3,273
3,830
796

7,267
-3,225
4,042
940

7,389
-3,139
4,250
1,099

560
29
531
12.7

599
31
568
12.1

629
28
601
11.7

Good Will (% of Total Revenue)

6%

5%

8%

Intangible Assets (% of revenue)

Investments in unconsolidated affiliates (% total revenue)
Other assets (% total revenue)
Deferred income taxes (% total revenue)

4%
1%
5%
3%

2%
1%
4%
4%

5%
1%
4%
3%

PP&E Gross
Accumulated Depreciation
PP&E net
CAPEX
Depreciation & Ammortization expense
Amortization Expense
Depreciation Expense
Estimated Useful Life
Depreciation Expense on existing PP&E
Depreciation Expense on new PP&E
Total Depreciation Expense
Forcasted PP&E Gross
Accumulated Depreciation
Forcasted PP&E net

Accounts Payable
Beginning Inventory
Purchases
Company Restaurant Expenses
Ending Inventory

122
8,187
8,120
189

189
9,224
9,140
273

273
9,892
9,852
313

Accounts Payable
Accounts Payable Turnover Ratio

1,602
5.43

1,874
5.31

2,036
5.06

1%
6%
1%
13%

1%
3%
1%
14%

1%
0%
1%
13%

0%
13%
2915
-

2%
9%
2997
-

0%
6%
2932
59

Income taxes payable (% total revenue)

Short-term borrowings (% total revenue)
Advertising cooperative liabilities (% total revenue)
Other liabilities and deferred credits (% company sales)

Non Operating Assets and Liabilities

Restricted Cash (% total revenue)
Cash and cash equivalents (% total revenue)
Long Term Debt

Reedemable Non Controlling Interest

Common Stock
Accumulated Comprehensive Income( Loss)
Shares Outstanding
Non Controlling Interest

86
(227)
469
93

18
(247)
460
93

(132)
451
99

Interest Income
Asset Base
Implied Interest Rate

20
1426
1%

28
1198
2%

20
776
3%

Interest Expense
Long Term Debt
Implied Interest Rate

195
2915
7%

184
2997
6%

169
2932
6%

175

156

149

Effective Tax Rate

Earnings attributable to non controlling interest

26%
2%

20%
1%

25%
1%

Retained Earnings
Dividend Payouts
Dividend Payout Ratio

412
36%

481
36%

544
34%

996
-412
1158
1717

1717
-481
1319
2052

2052
-544
1597
2286

Non Operating Income and Expenses

Interest Expense Net

Tax and Dividends

Beginning Retained Earnings

Dividends
Net Income Attributable to Yum!
Ending Retained Earnings

2013

6800
0.0%
105
4.0%
6905
109
29.8%
18
0.0%
127
2045
-10.2%
815
6.1%
2861
1045
-16.2%
692
5.7%
1737
1185
-17.0%
270
4.5%
1455
11184
-5.5%
1900
5.6%
13084
-4.0%

Averag
2014
e
Additions

Partial Year
New Store
Adjustment

0.5
12.0%
0.5
15.9%

0.5
20.1%
0.5
2.9%

0.5
-8.3%
0.5
3.4%

0.5
-5.8%
0.5
5.6%

0.5
-16.6%
0.5
3.3%

1.6%
4.7%

2014
Growth
Rate

2014
Common
Size %

2014
Forcasted
Value

7771
14.3%
113
7.6%
7884
120
10.0%
21
17.0%
141
2109
3.1%
847
3.9%
2956
1114
6.6%
737
6.6%
1851
1209
2.1%
287
6.5%
1497
12324
10.2%
2006
5.6%
14330
9.5%

5026
10.5%
90.9%
501
-3.5%
9.1%
191
59.2%
26.1%
542
14.6%
73.9%
1291
7.6%
9.3%
12572
1.7%
90.7%
732
9.7%
6.2%
11033
2.2%
93.8%
891
-14.7%
15.9%
4701
11.5%
84.1%

585

5611

16%
92%

90%
65

566

62%
8%

10%
48

239

52%
21%

30%
112

654

22%
79%

70%
36

1327

-7%
10%

10%
324

12896

2%
90%

90%
23

755

-11%
7%

7%
327

11360

3%
93%

93%
-50

841

-10%
19%

12%
130

4831

4%
81%

37480
8131
7.3%
29349
3.5%

4%

1.35
-9.5%
0.21

-4.3%

88%
39080
8773
7.9%
30307
3.3%

4%

1.46
8%
0.21

7.7%
0.57
-18.5%
0.03
-12.7%
1.58
-16.5%
0.06
4.3%
1.43
-23.7%
0.06
3.4%
1.33
-2.8%
0.06
-6.2%

-21.4%

1%
0.63

-21.5%

10%
0.04

-13.4%

6%

-1.5%

2%

1.7%

3%

1.61
0.07

1.50
23.6%

5%
0.07

2.1%

5%

-3.1%

5%

-1.5%

5%

1.40
0.06

33%
22%
30%

33%
22%
29%

33%
21%
30%

11%
7%
0%
-1%
0%

11%
8%
1%
0%
0%

11%
7%
1%
0%
0%

1,900
319
6.1
59.6
294
9501
31
2%

373
5.8

6
59

393
39
2%

30
2%

1%
1%

1%
1%

1%
1%

7,850
-3,391
4,459
1,049

9,050

1,200

686
28
658
11.4

11.4
689
53
741

0.5

9,050
-4,132
4,918
7%
5%
0%
4%
3%

6%
4%
1%
4%
4%

5%
0%
4%
3%

313
9,482
9,501
294

294
10,402
10,303
393

1,929
4.78

2,166
5.08

5.15

1%
1%
1%
11%

1%
2%
1%
13%

1%
1%
1%
9%

0%
4%
2918
39

1%
8%
2941
25

0%
5%
2,918
39

64
443
63

26
(136)
456
87

64
443
63

23
573
4%

25.79
644.84
4%

270
2918
9%

175.08
2,918
6%

7%

247

31%
-3%

615
56%
2286
-615
1091
2102

149.29

26%
0%

27%
1%

47%
2102
(710)
1,509
2900

Notes

Source of Data for China and India: Yum! 2013 10-K

China Company operated revenue did not change much because the decrease in same store sales was balanced

Revenues for KFC, Pizza Hut, and Taco Bell are estimated based in information from the 10K

Expenses just for company restaurants. Should be linked to company sales.

Company has implemented employee cost reducing measures

Using total revenue instead of just company sales as YUM! has recievables from its franchisees as well

YUM's recievables are primarily generated by ongoing relations with franchises and licensees. Will use franchise

Since YUM! does not record COGS, we are using company restaurant expenses for the numerator of the invento
YUM! seems to be holding less inventory, thus it is selling it off faster

some advertising expenses are a large portion of this , predict an increase due to increased ads needed for brea

Percentage of funds from both company owned restaurants and franchises to go towards advertising cooperativ

2014 10 K page 43

Decreasing trend has been due to impairments from little sheep closures

Assume accounts payable are primarily used to pay off inventories

There has been a steady downward trend of the turnover ratio evenwhile inventory purchases have been varied

Since this is mainly acturial gains on pension plans for YUM! employees we are making this a percentage of co

The restricted cash was due to the acquisition of little sheep. No indication that this will reoccur
Being in the QSR industry, YUM! has generated a substantial amount of cash flow from operations and uses this
Management provides no guidance about whether the ccompany will take on more long term debt
Management provides no guidance about this

Very difficult to predict gains in investment and pension plans

No guidance on changing non-controlling interest

10K indicates that long term interest rates range from 2.38% to 6.88%. This is the wighted average of the inter

re sales was balanced out by store portfolio acquisitions

sees as well

es. Will use franchise income for turnover ratio.

merator of the inventory turnover ratio

d ads needed for breakfast menu

dvertising cooperatives. There is no indication that this percentage will change

ses have been varied for the past few years. Must be paying off accounts payable faster.

his a percentage of company sales

erations and uses this cash mainly to run its restaurants and purchase land/franchised restaurants. Thus we are using cash

average of the interest on long term debt

hus we are using cash as a percentage of revenue. Assume a slight increase in cash because of expectations of increased o

ctations of increased operating cash flow from increased sales in China.

Year
YRI Revenue
Company
Franchise
US Revenue
Company
Franchise

2011

2012

2013

2341
851

2402
879

2159
940

2989

2550

2116

786

802

837

Stores as % of total YRI Stores

YRI Company
KFC
Pizza Hut
Taco Bell

0.81
0.19
0

0.81
0.19
0

0.82
0.18
0

YRI Franchise
KFC
Pizza Hut
Taco Bell

0.62
0.36
0.02

0.6
0.38
0.02

0.6
0.38
0.02

Stores as % of total US Stores

US Company
KFC
Pizza Hut
Taco Bell
US Franchise
KFC
Pizza Hut
Taco Bell

0.18
0.25
0.57

0.13
0.31
0.56

0.13
0.31
0.56

0.3
0.4
0.3

0.3
0.4
0.3

0.3
0.4
0.3

2434
1192
1704

2277
1247
1428

2045
1045
1185

763
621
253

768
655
258

815
692
270

Revenue for each segment

Company
KFC
Pizza Hut
Taco Bell
Franchise
KFC
Pizza Hut
Taco Bell

Sources:
2013 10 K pg 36 and 37
2013 Restaurant Unit Activity Summary
2012 Restaurant Unit Activity Summary
Explination

Since forward guidance was given in terms of

the new segment reporting which transformed
YRI (Yum! Restaurants International) and the
US segments into the KFC, Taco Bell, and Pizza
Hut Segments we estimated what revenue for
the newly defined KFC, Pizza Hut, and Taco
Bell Segments would have been in 2013,
2012, and 2011.

in terms of
transformed
al) and the
ell, and Pizza
revenue for
and Taco
2013,

Numbers in Millions
Revenues
Company sales
% growth
Franchise and license fees and income
% growth
Total revenues
% growth
Company restaurant expenses
General and administrative expenses
Franchise and license expenses
Closures and impairment (income) expenses
Refranchising (gain) loss
Other (income) expense
Total costs and expenses, net
Operating Income Before Tax
Income Taxes
tax benefit for interest
tax on operating income
Net Operating Profit After Tax (NOPAT)
Net Operating Profit Margin
Interest Expense
Statutory Tax Rate
Tax on Interest
Net Non Operating Expense
Inventories
Prepaid Expenses
Deferred Income Tax
Advertising cooperative assets
PP&E net
Goodwill
Intangible Assets
Investments in unconsolidated affiliates
Other assets
Deferred Income Tax
Accounts Payable
Income Tax Payable
Advertising Cooperative Liabilities
Net Operating Assets (NOA)
NOAT
Cash and equivalents

Actual
2009A

9,413
1,423
10,836

7,934
1,221
118
103
(26)
(104)
9,246
1,590
313
68
381
1,209
11.2%
194
35%
67.9
126
122
314
81
99
3,899
640
462
144
544
251
1,413
82
99
4,962
2.18
353

Accounts and notes recievable

Restricted Cash
Short Term Borrowing
Long Term Debt
Other Liabilities and Deferred Credits
Net Nonoperating Obligations (NNO)
Common Stock
Retained Earnings
Accumulated Comprehensive Loss
Non Controlling Interest
Equity

239
59
3,207
1,174
(3,848)
253
996
(224)
89
1,114

2010A

Actual
2011A

2012A

2013A

2014E

2015E

Forcasted
2016E
2017E

2018E

9,783
10,893
11,833
11,184
12,324 13,310 14,108 14,814 15,406
8.0%
6.0%
5.0%
4.0%
3.9%
11.3%
8.6%
-5.5%
10.2%
1,560
1,733
1,800
1,900
2,006
2,046
2,107
2,192
2,279
2.0%
3.0%
4.0%
4.0%
9.6%
11.1%
3.9%
5.6%
5.6%
11,343 12,626 13,633 13,084 14,330 15,356 16,216 17,005 17,686
7.2%
5.6%
4.9%
4.0%
4.7%
11.3%
8.0%
-4.0%
9.5%
8,120
1,277
110
47
63
(43)
9,574
1,769
416
61
477
1,292
11.4%

9,140
1,372
145
135
72
(53)
10,811
1,815
324
55
379
1,436
11.4%

9,852
1,510
133
37
(78)
(115)
11,339
2,294
537
52
589
1,705
12.5%

175
35%
61.25
114

156
35%
54.6
101

149
35%
52.15
97

9,501 10,303
1,412
1,576
158
142
331
143
(100)
(57)
(16)
(14)
11,286
12,093
1,798
2,237
487
564
86
52
573
616
1,225
1,433
9.4%
10.0%
247
35%
86.45
161

###
10.5%

1,703
10.5%

1,786
10.5%

1,857
10.5%

6,590
2.33

6,989
2.32

7,330
2.32

7,656
2.31

149
35%
52.25
97

189
269
61
112
3,830
659
475
154
519
366

273
338
112
114
4,042
681
299
167
475
549

313
272
111
136
4,250
1,034
690
72
575
467

294
286
123
96
4,459
889
638
53
566
399

393
287
143
100
4,918
917
716
57
631
401

1,602
61
112
4,859
2.33
1,426

1,874
142
114
4,920
2.57
1,198

2,036
97
136
5,651
2.41
776

1,929
169
96
5,609
2.33
573

2,166
143
100
6,154
2.33
645

256
-

286
300

301
-

319
-

373
-

673
2,915
1,284
(3,190)

320
2,997
1,471
(3,004)

10
2,932
1,490
(3,355)

71
2,918
1,244
(3,341)

78
2,918
1,109
(3,087)

86
1,717
(227)
93
1,669

18
2,052
(247)
93
1,916

2,286
(132)
158
2,312

2,102
64
102
2,268

2,900
64
102
3,066

Notes

numbers in millions
2009A

2010A

10,836

11,343
5%

12,626
11%

NOPAT
Growth

1,209

1,292
7%

1,436
11%

NOA
Growth

4,962

4,859
-2%

4,920
1%

Total Revenues
Growth

Cost of Equity
Rf
Beta
Return on Equity
MV of Equity
Balance Sheet Stock Price
Shares Outstanding (Millions)
Total Equity
Cost of Debt
Average Borrowing Rate
1-Statutory Tax Rate
Return on Debt

Actual
2011A

Notes
2.7%
0.7
6.2%

$73.2
442.9
$32,438.0

6%
0.65
3.9%

MV of Debt

$2,808.0

MV of Firm

$35,246.0

2014 10K MD&A- no fair value given

WACC
Equity/FirmValue
Return on Equity
Debt/Firm Value
Return on Debt
WACC
Terminal Growth Rate

92.0%
6.2%
8.0%
3.9%
6.02%
3%

Estimate of US GDP growth rate

DCF Valuation

Increase in NOA
NOPAT-Increase in NOA

Period

1
545
888

2
437
1,176

3
399
1,304

Discount Factor

0.94

0.89

0.84

PV of FCF
Sum of PV FCF
Less NNO
Firm Equity Value
Shares Outstanding
Stock Value
Analyst Estimates
Current Stock Price
Percent Undervalued

837.82
42,009.66
(3,087.44)
38,922.23
442.9
87.88
85.00
76.30
15%

1,046.03

1,093.97

Actual

Forcasted
2015E 2016E 2017E

2012A

2013A

2014E

2018E

13,633
8%

13,084
-4%

14,330 15,356 16,216 17,005

10%
7%
6%
5%

1,705
19%

1,225
-28%

1,433
17%

1,612
13%

1,703
6%

1,786
5%

1,857
4%

5,651
15%

5,609
-1%

6,154
10%

6,590
7%

6,989
6%

7,330
5%

7,656
4%

17,686
4%

A- no fair value given so I added up the principle amount due on each bond still outstanding

GDP growth rate

4
340
1,445

5
326
1,531

0.79

0.75

1,143.98

37,887.86