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YUM! BRANDS, INC.-2012 Form10-K 54
Form 10-K
PART II
ITEM 8Financial Statements andSupplementaryData
The following table summarizes all Senior Unsecured Notes issued that remain outstanding at December29, 2012:
Issuance Date(a) Maturity Date
Principal Amount
(in millions)
Interest Rate
Stated Effective(b)
April2006 April2016 $ 300 6.25% 6.03%
October2007 March2018 $ 600 6.25% 6.38%
October2007 November2037 $ 600 6.88% 7.29%
August2009 September2015 $ 250 4.25% 4.44%
August2009 September2019 $ 250 5.30% 5.59%
August2010 November2020 $ 350 3.88% 4.01%
August2011 November2021 $ 350 3.75% 3.88%
September2011 September2014 $ 56 2.38% 2.89%
(a) Interest payments commenced approximately six months after issuance date and are payable semi-annually thereafter.
(b) Includes the effects of the amortization of any (1) premium or discount; (2) debt issuance costs; and (3) gain or loss upon settlement of related treasury locks and forward-starting interest
rate swaps utilized to hedge the interest rate risk prior to the debt issuance.Excludes the effect of any swaps that remain outstanding as described in Note12.
The annual maturities of short-term borrowings and long-term debt as of December29, 2012, excluding capital lease obligations of $170million and fair value
hedge accounting adjustments of $22million, are as follows:
Year ended:
2013 $—
2014 56
2015 250
2016 300
2017 —
Thereafter 2,150
TOTAL $ 2,756
Interest expense on short-term borrowings and long-term debt was $169million, $184million and $195million in 2012, 2011 and 2010, respectively.
NOTE11 Leases
At December29, 2012 we operated nearly 7,600 restaurants, leasing the
underlying land and/or building in nearly 6,700 of those restaurants with
the vast majority of our commitments expiring within 20 years from the
inception of the lease.Our longest lease expires in 2151.We also lease
offi ce space for headquarters and support functions, as well as certain
offi ce and restaurant equipment.We do not consider any of these individual
leases material to our operations.Most leases require us to pay related
executory costs, which include property taxes, maintenance and insurance.
Future minimum commitments and amounts to be received as lessor or sublessor under non-cancelable leases are set forth below:
Commitments Lease Receivables
Capital Operating Direct Financing Operating
2013 $ 18 $ 678 $ 2 $ 57
2014 18 634 2 52
2015 19 592 2 49
2016 19 556 2 45
2017 17 500 2 41
Thereafter 189 2,714 12 185
$ 280 $ 5,674 $ 22 $ 429
At December29, 2012 and December31, 2011, the present value of minimum payments under capital leases was $170million and $279million,
respectively.At December29, 2012, unearned income associated with direct fi nancing lease receivables was $12million.
The details of rental expense and income are set forth below:
2012 2011 2010
RENTAL EXPENSE
Minimum $ 721 $ 625 $ 565
Contingent 290 233 158
$ 1,011 $ 858 $ 723
RENTAL INCOME $ 77 $ 66 $ 44