Analyzing, Interpreting and Capitalizing Operating Leases Assume YUM! Brands, Inc., reports the following footnote relating to its capital and operating leases in its 2010 10-K report ($ millions). Future minimum commitments under non-cancelable leases

Analyzing, Interpreting and Capitalizing Operating Leases Assume YUM! Brands, Inc., reports the following footnote relating to its capital and operating leases in its 2010 10-K report ($ millions).

Future minimum commitments under non-cancelable leases are set forth below. At December 25, 2010, and December 26, 2009, the present value of minimum payments under capital leases was $245 million and $228 million, respectively.

Commitments ($ millions)     Capital     Operating

2011    $ 27           $ 422

2012                                        27               367

2013                                        65    339

2014                                        23    378

2015                                        23    280

Thereafter                               276             1,964

                                             $ 441          $ 3,750

(a) Confirm that the implicit rate on YUM!'s capital leases is 8.36%.

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Using a 8.36% discount rate and rounding the remaining lease life to three decimal places, compute the present value of YUM!'s operating leases. (Use a financial calculator or Excel to compute. Do not round until your final answers. Round each answer to the nearest whole number.)

($ millions) Present Value

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* (Use subsequent rounded answers for calculation.)