UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact Name of Registrant as Specified in its Charter)
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(State or other jurisdiction of incorporation or organization) |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
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(Address, including zip code, of principal executive offices) |
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(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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9987 |
The Stock Exchange of Hong Kong Limited |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. |
Results of Operations and Financial Condition. |
On February 7, 2023, Yum China Holdings, Inc. issued a press release announcing its unaudited results for the full year and fourth quarter ended December 31, 2022. A copy of the press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. |
Financial Statements and Exhibits. |
The following exhibits are furnished with this report:
Exhibit No. |
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Exhibit Description |
99.1 |
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Press Release of Yum China Holdings, Inc. issued February 7, 2023. |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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YUM CHINA HOLDINGS, INC. |
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By: |
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/s/ Joseph Chan |
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Name: |
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Joseph Chan |
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Title: |
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Chief Legal Officer |
Date: February 7, 2023 |
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Exhibit 99.1
Yum China Reports Fourth Quarter and Full Year 2022 Results
Reported Operating Profit of $41 million in the fourth quarter and
$629 million for the full year reflecting resilience and business agility
Opened 1,159 net new stores in the year, laying solid foundation for growth
Shanghai, China (February 7, 2023) – Yum China Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC and HKEX: 9987) today reported unaudited results for the fourth quarter and year ended December 31, 2022.
Impact of COVID Outbreak and Mitigation Efforts
In the fourth quarter, there were substantial changes in COVID conditions and policies in China. In October and November, sporadic occurrences of COVID infection quickly evolved into major regional outbreaks, leading to tightened COVID-related health measures and lockdowns. The number of our stores that were either temporarily closed or offered only takeaway and delivery services increased in October and November, peaking at over 4,300 in late November.
In December, the government issued a series of new COVID response guidelines that significantly changed its COVID policies, including removing mass testing and central quarantine requirements as well as lifting travel restrictions. A massive wave of infections quickly surged in the country, spreading from major cities such as Beijing, Guangzhou and Shanghai. The northern and western regions of China were impacted first, followed by the southern and eastern regions. Due to widespread infections, we experienced a shortage of restaurant staff which led to over 1,300 stores on average being either temporarily closed or offering limited services during December. As a significant portion of the population was either infected or chose to stay home to avoid infection, dine-in traffic declined substantially. We quickly responded to the new challenges by reallocating crew resources among stores to prioritize stores with stronger demand. Many of the stores that remained open operated with shortened operating hours and a simplified menu to streamline operations. We also addressed off-premise demand by leveraging our dedicated riders, encouraging pick-up and promoting packaged food products.
Sales in January improved sequentially, driven by the resumption of normal services at our restaurants and an earlier Chinese New Year (“CNY”) holiday season, which coincided with the pivot in COVID policies. Many people traveled during the holiday for the first time since COVID began. According to government statistics, the number of domestic travelers and related tourism spending during the 7-day CNY holiday increased approximately 20% and 30% year over year, respectively, but remained over 10% and 30% below the 2019 level, respectively. Performance at our transportation and tourist locations was better than the statistics indicated. Overall same-store sales for the comparable CNY holiday also increased mid-single digit year over year, but remained below the 2019 level.
As the country enters the new phase of COVID response, we are cautiously optimistic. The overall business environment and consumer sentiment have improved but near term uncertainties remain. Consumers tend to be more careful with spending after holidays. Experiences in other countries also suggest further outbreaks following relaxation of COVID restrictions and emergence of different COVID variants are real possibilities. A portion of the population may remain cautious about going out in public, while macroeconomic factors such as an inflationary environment and softening global economic conditions may weigh on consumer spending. As such, we are staying alert in this fluid situation and planning for multiple scenarios to capture growth opportunities and mitigate risks when needed.
Fourth Quarter Highlights
Yum China Holdings, Inc. • Shanghai, China • Website http://ir.yumchina.com
Full Year Highlights
Key Financial Results
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Fourth Quarter 2022 |
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Full Year 2022 |
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% Change |
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% Change |
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System Sales |
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Same-Store Sales |
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Net New Units |
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Operating Profit |
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System Sales |
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Same-Store Sales |
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Net New Units |
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Operating Profit |
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Yum China |
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(4 |
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(4 |
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+10 |
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(94 |
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(5 |
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(7 |
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+10 |
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(55 |
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KFC |
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(1 |
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(3 |
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+11 |
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+79 |
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(4 |
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(7 |
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+11 |
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(5 |
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Pizza Hut |
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(6 |
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(8 |
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+12 |
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(207 |
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(3 |
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(6 |
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+12 |
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(36 |
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2
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Fourth Quarter |
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Full Year |
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(in US$ million, except |
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% Change |
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% Change |
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per share data and percentages) |
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2022 |
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2021 |
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Reported |
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Ex F/X |
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2022 |
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2021 |
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Reported |
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Ex F/X |
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Operating Profit |
$ |
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41 |
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$ |
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633 |
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(94 |
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(93 |
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$ |
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629 |
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$ |
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1,386 |
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(55 |
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(53 |
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Adjusted Operating Profit(1) |
$ |
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40 |
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$ |
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16 |
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+152 |
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+189 |
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$ |
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633 |
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$ |
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766 |
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(17 |
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(14 |
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Net Income |
$ |
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53 |
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$ |
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475 |
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(89 |
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(88 |
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$ |
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442 |
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$ |
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990 |
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(55 |
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(54 |
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Adjusted Net Income(1) |
$ |
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52 |
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$ |
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11 |
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+376 |
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+406 |
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$ |
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446 |
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$ |
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525 |
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(15 |
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(12 |
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Basic Earnings Per Common Share |
$ |
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0.13 |
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$ |
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1.11 |
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(88 |
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(87 |
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$ |
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1.05 |
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$ |
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2.34 |
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(55 |
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(53 |
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Adjusted Basic Earnings |
$ |
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0.13 |
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$ |
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0.03 |
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+333 |
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+333 |
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$ |
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1.06 |
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$ |
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1.24 |
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(15 |
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(11 |
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Diluted Earnings Per Common Share |
$ |
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0.13 |
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$ |
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1.10 |
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(88 |
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(88 |
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$ |
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1.04 |
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$ |
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2.28 |
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(54 |
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(53 |
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Adjusted Diluted Earnings |
$ |
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0.13 |
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$ |
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0.03 |
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+333 |
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+333 |
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$ |
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1.05 |
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$ |
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1.21 |
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(13 |
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(10 |
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1 See “Reconciliation of Reported GAAP Results to Non-GAAP Adjusted Measures” included in the accompanying tables of this release for further details.
Note: All comparisons are versus the same period a year ago.
Percentages may not recompute due to rounding.
System sales and same-store sales percentages exclude the impact of F/X. Effective January 1, 2018, temporary store closures are normalized in the same-store sales calculation by excluding the period during which stores are temporarily closed.
CEO and CFO Comments
Joey Wat, CEO of Yum China, commented, “I am incredibly grateful to our employees for their agility, creativity and tenacity navigating the extraordinary challenges in the fourth quarter. Our team executed well in a volatile environment, serving our customers and communities even at times of labor shortages. Despite major disruptions, we protected margins and delivered meaningful operating profit for the quarter. Looking back at the past year, our delicious food such as beef burgers and durian pizza won the hearts of customers. Our value for money offerings such as Crazy Thursday and Sunday Buy More Save More drove traffic. Co-branded campaigns with Pokemon Psyduck and Genshin Impact generated huge social buzz. We also transformed our business fundamentals amidst hardship – innovating store formats, rebasing cost structures as well as investing in supply chain and digital capabilities which position us well for stronger, long-term growth.”
Wat added, “As we embark on 2023, we are excited to see positive momentum in the Chinese New Year holiday. Our signature golden bucket at KFC and holiday-themed pizza at Pizza Hut have become favorites among friends and families celebrating together. We carefully planned our restaurant staffing and rider resources to ensure operational excellence, ready to meet consumer demand. Our anti-fragile operations will help us shine, in good times and bad. We will continue to build Yum China into an even more resilient, profitable and growing company.”
Andy Yeung, CFO of Yum China, added, “Regional outbreaks in October and November resulted in strict COVID-related health measures. However, most of these measures were lifted in December. Our operations were significantly disrupted by widespread infections nationwide in the quarter. We took decisive actions to sustain operations, capture off-premise demand, manage costs and drive operational efficiencies. We improved profitability despite lower sales. We also opened a record 538 net new stores in the fourth quarter while maintaining healthy new store payback.”
Yeung continued, “Looking ahead, we are encouraged by the new COVID policy and Chinese New Year holiday trading. But the real test will be the sales trajectory after the holiday and how the economy will rebound, given the fluid COVID conditions and macroeconomic headwinds. As such, we must stay agile and plan for a range of scenarios. Our priority this year is to drive sales. We also plan to open between 1,100 to 1,300 net new stores in 2023 and continue to invest in technology and infrastructure.”
Share Repurchases and Dividends
3
Digital and Delivery
KFC and Pizza Hut Total |
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Fourth Quarter |
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Full Year |
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2022 |
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2021 |
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2022 |
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2021 |
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Member count (as of period-end) |
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410 million+ |
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360 million+ |
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410 million+ |
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360 million+ |
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Member sales as % of system sales |
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~60% |
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~62% |
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~62% |
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~63% |
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Delivery as % of Company sales |
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~45% |
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~35% |
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~39% |
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~32% |
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Digital orders as % of Company sales |
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~90% |
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~88% |
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~89% |
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~86% |
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New-Unit Development and Asset Upgrade
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Net New Units |
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Restaurant Count |
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Fourth Quarter |
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Full Year |
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As of Year-End |
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2022 |
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2022 |
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2022 |
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2021 |
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Yum China |
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538 |
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1,159 |
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12,947 |
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11,788 |
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KFC |
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419 |
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926 |
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9,094 |
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8,168 |
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Pizza Hut |
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97 |
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313 |
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2,903 |
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2,590 |
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Others(2) |
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22 |
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(80 |
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950 |
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1,030 |
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2 Others include Taco Bell, Little Sheep, Huang Ji Huang, East Dawning, COFFii & JOY and Lavazza.
Restaurant Margin
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Fourth Quarter |
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Full Year |
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2022 |
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2021 |
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ppts change |
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2022 |
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2021 |
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ppts change |
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Yum China |
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10.4 |
% |
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7.5 |
% |
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+2.9 |
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14.1 |
% |
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13.7 |
% |
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+0.4 |
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KFC |
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12.7 |
% |
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8.6 |
% |
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+4.1 |
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15.7 |
% |
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14.9 |
% |
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+0.8 |
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Pizza Hut |
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1.9 |
% |
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5.9 |
% |
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(4.0 |
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9.2 |
% |
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10.7 |
% |
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(1.5 |
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2023 Outlook
The Company currently expects:
4
Other Updates
Note on Non-GAAP Measures
Reported GAAP results include Special Items, which are excluded from non-GAAP adjusted measures. Special Items are not allocated to any segment and therefore only impact reported GAAP results of Yum China. See “Reconciliation of Reported GAAP Results to Non-GAAP Adjusted Measures” within this release. In addition, for the non-GAAP measures of Restaurant profit and Restaurant margin, see “Reconciliation of GAAP Operating Profit to Restaurant Profit” under “Segment Results” within this release.
Conference Call
Yum China’s management will hold an earnings conference call at 7:00 p.m. U.S. Eastern Time on Tuesday, February 7, 2023 (8:00 a.m. Beijing/Hong Kong Time on Wednesday, February 8, 2023).
A live webcast of the call may be accessed at https://edge.media-server.com/mmc/p/opfvhik8.
To join by phone, please register in advance of the conference through the link provided below. Upon registering, you will be provided with participant dial-in numbers, a passcode and a unique access PIN.
Pre-registration Link: https://s1.c-conf.com/diamondpass/10027402-9jv3to.html
A replay of the conference call will be available one hour after the call ends until Wednesday, February 15, 2023 and may be accessed by phone at the following numbers:
U.S.: 1 855 883 1031
Mainland China: 400 1209 216
Hong Kong: 800 930 639
U.K.: 0800 031 4295
Replay PIN: 10027402
Additionally, this earnings release, the accompanying slides, a live webcast and an archived webcast of this conference call will be available at Yum China’s Investor Relations website at http://ir.yumchina.com.
For important news and information regarding Yum China, including our filings with the U.S. Securities and Exchange Commission and the Hong Kong Stock Exchange, visit Yum China's Investor Relations website at http://ir.yumchina.com. Yum China uses this website as a primary channel for disclosing key information to its investors, some of which may contain material and previously non-public information.
5
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including under “2023 Outlook.” We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as “expect,” “expectation,” “believe,” “anticipate,” “may,” “could,” “intend,” “belief,” “plan,” “estimate,” “target,” “predict,” “project,” “likely,” “will,” “continue,” “should,” “forecast,” “outlook”, “commit” or similar terminology. These statements are based on current estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Forward-looking statements include, without limitation, statements regarding the future strategies, growth, business plans, investment, dividend and share repurchase plans, liquidity, earnings, performance and returns of Yum China, anticipated effects of population and macroeconomic trends, the expected impact of the COVID-19 pandemic, the anticipated effects of our innovation, digital and delivery capabilities and investments on growth, beliefs regarding the long-term drivers of Yum China’s business and GHG emissions reduction targets. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks and uncertainties that are difficult to predict and could cause our actual results or events to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or assumptions will be achieved. The forward-looking statements included in this press release are only made as of the date of this press release, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. Numerous factors could cause our actual results or events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: whether we are able to achieve development goals at the times and in the amounts currently anticipated, if at all, the success of our marketing campaigns and product innovation, our ability to maintain food safety and quality control systems, changes in public health conditions, including the COVID-19 pandemic and regional outbreaks caused by existing or new COVID-19 variants, our ability to control costs and expenses, including tax costs, as well as changes in political, economic and regulatory conditions in China. In addition, other risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. You should consult our filings with the Securities and Exchange Commission (including the information set forth under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q) for additional detail about factors that could affect our financial and other results.
About Yum China Holdings, Inc.
Yum China is the largest restaurant company in China with a mission to make every life taste beautiful. The Company has over 400,000 employees and operates nearly 13,000 restaurants under six brands across 1,800 cities in China. KFC and Pizza Hut are the leading brands in the quick-service and casual dining restaurant spaces in China, respectively. Taco Bell offers innovative Mexican-inspired food. Yum China has also partnered with Lavazza to develop the Lavazza coffee shop concept in China. Little Sheep and Huang Ji Huang specialize in Chinese cuisine. Yum China has a world-class, digitalized supply chain which includes an extensive network of logistics centers nationwide and an in-house supply chain management system. Its strong digital capabilities and loyalty program enable the Company to reach customers faster and serve them better. Yum China is a Fortune 500 company with the vision to be the world’s most innovative pioneer in the restaurant industry. For more information, please visit http://ir.yumchina.com.
Investor Relations Contact: |
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Tel: +86 21 2407 7556 / +852 2267 5801 IR@YumChina.com
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Media Contact: |
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Tel: +86 21 2407 7510 Media@YumChina.com |
6
Yum China Holdings, Inc.
Condensed Consolidated Statements of Income
(in US$ million, except per share data)
(unaudited)
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Quarter Ended |
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% Change |
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Year Ended |
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% Change |
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12/31/2022 |
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12/31/2021 |
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B/(W) |
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12/31/2022 |
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12/31/2021 |
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B/(W) |
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Revenues |
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Company sales |
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$ |
1,975 |
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$ |
2,087 |
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(5 |
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$ |
9,110 |
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$ |
8,961 |
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2 |
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Franchise fees and income |
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16 |
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33 |
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(49 |
) |
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81 |
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153 |
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(47 |
) |
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Revenues from transactions with |
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68 |
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144 |
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(53 |
) |
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287 |
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663 |
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(57 |
) |
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Other revenues |
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29 |
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|
27 |
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|
7 |
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91 |
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|
76 |
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20 |
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Total revenues |
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2,088 |
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2,291 |
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(9 |
) |
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9,569 |
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9,853 |
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(3 |
) |
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Costs and Expenses, Net |
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||||||
Company restaurants |
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||||||
Food and paper |
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630 |
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|
|
679 |
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|
7 |
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2,836 |
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|
|
2,812 |
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(1 |
) |
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Payroll and employee benefits |
|
|
570 |
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|
|
583 |
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|
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2 |
|
|
|
|
2,389 |
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|
|
2,258 |
|
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(6 |
) |
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Occupancy and other operating expenses |
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|
570 |
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|
|
669 |
|
|
|
15 |
|
|
|
|
2,604 |
|
|
|
2,664 |
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|
|
2 |
|
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Company restaurant expenses |
|
|
1,770 |
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|
|
1,931 |
|
|
|
8 |
|
|
|
|
7,829 |
|
|
|
7,734 |
|
|
|
(1 |
) |
|
General and administrative expenses |
|
|
145 |
|
|
|
156 |
|
|
|
7 |
|
|
|
|
594 |
|
|
|
564 |
|
|
|
(5 |
) |
|
Franchise expenses |
|
|
7 |
|
|
|
14 |
|
|
|
48 |
|
|
|
|
34 |
|
|
|
64 |
|
|
|
46 |
|
|
Expenses for transactions with |
|
|
67 |
|
|
|
140 |
|
|
|
52 |
|
|
|
|
279 |
|
|
|
649 |
|
|
|
57 |
|
|
Other operating costs and expenses |
|
|
25 |
|
|
|
24 |
|
|
|
(6 |
) |
|
|
|
78 |
|
|
|
65 |
|
|
|
(20 |
) |
|
Closures and impairment expenses, net |
|
|
12 |
|
|
|
21 |
|
|
|
43 |
|
|
|
|
32 |
|
|
|
34 |
|
|
|
6 |
|
|
Other expenses (income), net |
|
|
21 |
|
|
|
(628 |
) |
|
NM |
|
|
|
|
94 |
|
|
|
(643 |
) |
|
NM |
|
|
||
Total costs and expenses, net |
|
|
2,047 |
|
|
|
1,658 |
|
|
|
(23 |
) |
|
|
|
8,940 |
|
|
|
8,467 |
|
|
|
(6 |
) |
|
Operating Profit |
|
|
41 |
|
|
|
633 |
|
|
|
(94 |
) |
|
|
|
629 |
|
|
|
1,386 |
|
|
|
(55 |
) |
|
Interest income, net |
|
|
33 |
|
|
|
13 |
|
|
|
151 |
|
|
|
|
84 |
|
|
|
60 |
|
|
|
40 |
|
|
Investment gain (loss) |
|
|
6 |
|
|
|
(11 |
) |
|
NM |
|
|
|
|
(26 |
) |
|
|
(54 |
) |
|
|
51 |
|
|
|
Income Before Income Taxes and |
|
|
80 |
|
|
|
635 |
|
|
|
(87 |
) |
|
|
|
687 |
|
|
|
1,392 |
|
|
|
(51 |
) |
|
Income tax provision |
|
|
(24 |
) |
|
|
(159 |
) |
|
|
85 |
|
|
|
|
(207 |
) |
|
|
(369 |
) |
|
|
44 |
|
|
Equity in net earnings (losses) from |
|
|
2 |
|
|
|
— |
|
|
NM |
|
|
|
|
(2 |
) |
|
|
— |
|
|
NM |
|
|
||
Net income – including noncontrolling interests |
|
|
58 |
|
|
|
476 |
|
|
|
(88 |
) |
|
|
|
478 |
|
|
|
1,023 |
|
|
|
(53 |
) |
|
Net income – noncontrolling interests |
|
|
5 |
|
|
|
1 |
|
|
|
(551 |
) |
|
|
|
36 |
|
|
|
33 |
|
|
|
(9 |
) |
|
Net Income – Yum China Holdings, Inc. |
|
$ |
53 |
|
|
$ |
475 |
|
|
|
(89 |
) |
|
|
$ |
442 |
|
|
$ |
990 |
|
|
|
(55 |
) |
|
Effective tax rate |
|
|
29.9 |
% |
|
|
25.1 |
% |
|
|
(4.8 |
) |
ppts. |
|
|
30.1 |
% |
|
|
26.5 |
% |
|
|
(3.6 |
) |
ppts. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic Earnings Per Common Share |
|
$ |
0.13 |
|
|
$ |
1.11 |
|
|
|
|
|
|
$ |
1.05 |
|
|
$ |
2.34 |
|
|
|
|
|
||
Weighted-average shares outstanding |
|
|
419 |
|
|
|
427 |
|
|
|
|
|
|
|
421 |
|
|
|
422 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted Earnings Per Common Share |
|
$ |
0.13 |
|
|
$ |
1.10 |
|
|
|
|
|
|
$ |
1.04 |
|
|
$ |
2.28 |
|
|
|
|
|
||
Weighted-average shares outstanding |
|
|
423 |
|
|
|
433 |
|
|
|
|
|
|
|
425 |
|
|
|
434 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash Dividends Declared Per Common Share |
|
$ |
0.12 |
|
|
$ |
0.12 |
|
|
|
|
|
|
$ |
0.48 |
|
|
$ |
0.48 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company sales |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
||
Food and paper |
|
|
31.9 |
|
|
|
32.5 |
|
|
|
0.6 |
|
ppts. |
|
|
31.1 |
|
|
|
31.4 |
|
|
|
0.3 |
|
ppts. |
Payroll and employee benefits |
|
|
28.8 |
|
|
|
27.9 |
|
|
|
(0.9 |
) |
ppts. |
|
|
26.2 |
|
|
|
25.2 |
|
|
|
(1.0 |
) |
ppts. |
Occupancy and other operating expenses |
|
|
28.9 |
|
|
|
32.1 |
|
|
|
3.2 |
|
ppts. |
|
|
28.6 |
|
|
|
29.7 |
|
|
|
1.1 |
|
ppts. |
Restaurant margin |
|
|
10.4 |
% |
|
|
7.5 |
% |
|
|
2.9 |
|
ppts. |
|
|
14.1 |
% |
|
|
13.7 |
% |
|
|
0.4 |
|
ppts. |
Operating margin |
|
|
2.1 |
% |
|
|
30.3 |
% |
|
|
(28.2 |
) |
ppts. |
|
|
6.9 |
% |
|
|
15.5 |
% |
|
|
(8.6 |
) |
ppts. |
Percentages may not recompute due to rounding. NM refers to not meaningful.
7
8
Yum China Holdings, Inc.
KFC Operating Results
(in US$ million)
(unaudited)
|
|
Quarter Ended |
|
|
% Change |
|
Year Ended |
|
|
% Change |
||||||||||||||||
|
|
12/31/2022 |
|
|
12/31/2021 |
|
|
B/(W) |
|
12/31/2022 |
|
|
12/31/2021 |
|
|
B/(W) |
||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company sales |
|
$ |
1,566 |
|
|
$ |
1,596 |
|
|
|
(2 |
) |
|
|
$ |
7,120 |
|
|
$ |
6,816 |
|
|
|
4 |
|
|
Franchise fees and income |
|
|
12 |
|
|
|
25 |
|
|
|
(50 |
) |
|
|
|
56 |
|
|
|
120 |
|
|
|
(53 |
) |
|
Revenues from transactions with |
|
|
9 |
|
|
|
13 |
|
|
|
(36 |
) |
|
|
|
33 |
|
|
|
59 |
|
|
|
(45 |
) |
|
Other revenues |
|
|
4 |
|
|
|
2 |
|
|
|
107 |
|
|
|
|
10 |
|
|
|
8 |
|
|
|
26 |
|
|
Total revenues |
|
|
1,591 |
|
|
|
1,636 |
|
|
|
(3 |
) |
|
|
|
7,219 |
|
|
|
7,003 |
|
|
|
3 |
|
|
Costs and Expenses, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company restaurants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Food and paper |
|
|
496 |
|
|
|
529 |
|
|
|
6 |
|
|
|
|
2,208 |
|
|
|
2,158 |
|
|
|
(2 |
) |
|
Payroll and employee benefits |
|
|
434 |
|
|
|
428 |
|
|
|
(2 |
) |
|
|
|
1,797 |
|
|
|
1,642 |
|
|
|
(9 |
) |
|
Occupancy and other operating expenses |
|
|
437 |
|
|
|
503 |
|
|
|
13 |
|
|
|
|
1,994 |
|
|
|
2,003 |
|
|
|
— |
|
|
Company restaurant expenses |
|
|
1,367 |
|
|
|
1,460 |
|
|
|
6 |
|
|
|
|
5,999 |
|
|
|
5,803 |
|
|
|
(3 |
) |
|
General and administrative expenses |
|
|
63 |
|
|
|
65 |
|
|
|
2 |
|
|
|
|
254 |
|
|
|
240 |
|
|
|
(6 |
) |
|
Franchise expenses |
|
|
6 |
|
|
|
12 |
|
|
|
49 |
|
|
|
|
29 |
|
|
|
59 |
|
|
|
50 |
|
|
Expenses for transactions with |
|
|
8 |
|
|
|
13 |
|
|
|
40 |
|
|
|
|
30 |
|
|
|
58 |
|
|
|
49 |
|
|
Other operating costs and expenses |
|
|
3 |
|
|
|
1 |
|
|
|
(167 |
) |
|
|
|
7 |
|
|
|
4 |
|
|
|
(60 |
) |
|
Closures and impairment expenses, net |
|
|
5 |
|
|
|
13 |
|
|
|
56 |
|
|
|
|
16 |
|
|
|
20 |
|
|
|
19 |
|
|
Other expenses (income), net |
|
|
22 |
|
|
|
8 |
|
|
|
(175 |
) |
|
|
|
97 |
|
|
|
(8 |
) |
|
NM |
|
|
|
Total costs and expenses, net |
|
|
1,474 |
|
|
|
1,572 |
|
|
|
6 |
|
|
|
|
6,432 |
|
|
|
6,176 |
|
|
|
(4 |
) |
|
Operating Profit |
|
$ |
117 |
|
|
$ |
64 |
|
|
|
79 |
|
|
|
$ |
787 |
|
|
$ |
827 |
|
|
|
(5 |
) |
|
Company sales |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
||
Food and paper |
|
|
31.7 |
|
|
|
33.2 |
|
|
|
1.5 |
|
ppts. |
|
|
31.0 |
|
|
|
31.7 |
|
|
|
0.7 |
|
ppts. |
Payroll and employee benefits |
|
|
27.7 |
|
|
|
26.8 |
|
|
|
(0.9 |
) |
ppts. |
|
|
25.2 |
|
|
|
24.1 |
|
|
|
(1.1 |
) |
ppts. |
Occupancy and other operating expenses |
|
|
27.9 |
|
|
|
31.4 |
|
|
|
3.5 |
|
ppts. |
|
|
28.1 |
|
|
|
29.3 |
|
|
|
1.2 |
|
ppts. |
Restaurant margin |
|
|
12.7 |
% |
|
|
8.6 |
% |
|
|
4.1 |
|
ppts. |
|
|
15.7 |
% |
|
|
14.9 |
% |
|
|
0.8 |
|
ppts. |
Operating margin |
|
|
7.4 |
% |
|
|
4.1 |
% |
|
|
3.3 |
|
ppts. |
|
|
11.0 |
% |
|
|
12.1 |
% |
|
|
(1.1 |
) |
ppts. |
Percentages may not recompute due to rounding. NM refers to not meaningful.
9
Yum China Holdings, Inc.
Pizza Hut Operating Results
(in US$ million)
(unaudited)
|
|
Quarter Ended |
|
|
% Change |
|
Year Ended |
|
|
% Change |
|
||||||||||||||||
|
|
12/31/2022 |
|
|
12/31/2021 |
|
|
B/(W) |
|
12/31/2022 |
|
|
12/31/2021 |
|
|
B/(W) |
|
||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company sales |
|
$ |
398 |
|
|
$ |
475 |
|
|
|
(16 |
) |
|
|
$ |
1,939 |
|
|
$ |
2,092 |
|
|
|
(7 |
) |
|
|
Franchise fees and income |
|
|
1 |
|
|
|
2 |
|
|
|
(22 |
) |
|
|
|
7 |
|
|
|
8 |
|
|
|
(6 |
) |
|
|
Revenues from transactions with |
|
|
1 |
|
|
|
1 |
|
|
|
0 |
|
|
|
|
4 |
|
|
|
6 |
|
|
|
(30 |
) |
|
|
Other revenues |
|
|
4 |
|
|
|
1 |
|
|
|
170 |
|
|
|
|
10 |
|
|
|
3 |
|
|
|
256 |
|
|
|
Total revenues |
|
|
404 |
|
|
|
479 |
|
|
|
(16 |
) |
|
|
|
1,960 |
|
|
|
2,109 |
|
|
|
(7 |
) |
|
|
Costs and Expenses, Net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Company restaurants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Food and paper |
|
|
131 |
|
|
|
144 |
|
|
|
9 |
|
|
|
|
612 |
|
|
|
637 |
|
|
|
4 |
|
|
|
Payroll and employee benefits |
|
|
135 |
|
|
|
148 |
|
|
|
9 |
|
|
|
|
572 |
|
|
|
598 |
|
|
|
4 |
|
|
|
Occupancy and other operating expenses |
|
|
125 |
|
|
|
155 |
|
|
|
20 |
|
|
|
|
577 |
|
|
|
633 |
|
|
|
9 |
|
|
|
Company restaurant expenses |
|
|
391 |
|
|
|
447 |
|
|
|
13 |
|
|
|
|
1,761 |
|
|
|
1,868 |
|
|
|
6 |
|
|
|
General and administrative expenses |
|
|
26 |
|
|
|
31 |
|
|
|
15 |
|
|
|
|
110 |
|
|
|
111 |
|
|
|
0 |
|
|
|
Franchise expenses |
|
|
1 |
|
|
|
1 |
|
|
|
17 |
|
|
|
|
4 |
|
|
|
4 |
|
|
|
9 |
|
|
|
Expenses for transactions with |
|
|
— |
|
|
|
1 |
|
|
|
(3 |
) |
|
|
|
3 |
|
|
|
6 |
|
|
|
28 |
|
|
|
Other operating costs and expenses |
|
|
3 |
|
|
|
1 |
|
|
|
(129 |
) |
|
|
|
8 |
|
|
|
2 |
|
|
|
(301 |
) |
|
|
Closures and impairment expenses, net |
|
|
3 |
|
|
|
4 |
|
|
|
41 |
|
|
|
|
4 |
|
|
|
7 |
|
|
|
58 |
|
|
|
Total costs and expenses, net |
|
|
424 |
|
|
|
485 |
|
|
|
13 |
|
|
|
|
1,890 |
|
|
|
1,998 |
|
|
|
5 |
|
|
|
Operating Profit |
|
$ |
(20 |
) |
|
$ |
(6 |
) |
|
|
(207 |
) |
|
|
$ |
70 |
|
|
$ |
111 |
|
|
|
(36 |
) |
|
|
Company sales |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
||
Food and paper |
|
|
32.9 |
|
|
|
30.3 |
|
|
|
(2.6 |
) |
ppts. |
|
|
31.5 |
|
|
|
30.4 |
|
|
|
(1.1 |
) |
ppts. |
|
Payroll and employee benefits |
|
|
33.9 |
|
|
|
31.3 |
|
|
|
(2.6 |
) |
ppts. |
|
|
29.5 |
|
|
|
28.6 |
|
|
|
(0.9 |
) |
ppts. |
|
Occupancy and other operating expenses |
|
|
31.3 |
|
|
|
32.5 |
|
|
|
1.2 |
|
ppts. |
|
|
29.8 |
|
|
|
30.3 |
|
|
|
0.5 |
|
ppts. |
|
Restaurant margin |
|
|
1.9 |
% |
|
|
5.9 |
% |
|
|
(4.0 |
) |
ppts. |
|
|
9.2 |
% |
|
|
10.7 |
% |
|
|
(1.5 |
) |
ppts. |
|
Operating margin |
|
|
(5.0 |
)% |
|
|
(1.4 |
)% |
|
|
(3.6 |
) |
ppts. |
|
|
3.6 |
% |
|
|
5.3 |
% |
|
|
(1.7 |
) |
ppts. |
|
Percentages may not recompute due to rounding. NM refers to not meaningful.
10
Yum China Holdings, Inc.
Condensed Consolidated Balance Sheets
(in US$ million)
|
|
12/31/2022 |
|
|
12/31/2021 |
|
||
|
|
(Unaudited) |
|
|
|
|
||
ASSETS |
|
|
|
|
|
|
||
Current Assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
1,130 |
|
|
$ |
1,136 |
|
Short-term investments |
|
|
2,022 |
|
|
|
2,860 |
|
Accounts receivable, net |
|
|
64 |
|
|
|
67 |
|
Inventories, net |
|
|
417 |
|
|
|
432 |
|
Prepaid expenses and other current assets |
|
|
307 |
|
|
|
221 |
|
Total Current Assets |
|
|
3,940 |
|
|
|
4,716 |
|
Property, plant and equipment, net |
|
|
2,118 |
|
|
|
2,251 |
|
Operating lease right-of-use assets |
|
|
2,219 |
|
|
|
2,612 |
|
Goodwill |
|
|
1,988 |
|
|
|
2,142 |
|
Intangible assets, net |
|
|
159 |
|
|
|
272 |
|
Long-term time deposits |
|
|
680 |
|
|
|
90 |
|
Investments in unconsolidated affiliates |
|
|
266 |
|
|
|
292 |
|
Deferred income tax assets |
|
|
113 |
|
|
|
106 |
|
Other assets |
|
|
343 |
|
|
|
742 |
|
Total Assets |
|
|
11,826 |
|
|
|
13,223 |
|
|
|
|
|
|
|
|
||
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY |
|
|
|
|
|
|
||
Current Liabilities |
|
|
|
|
|
|
||
Accounts payable and other current liabilities |
|
|
2,098 |
|
|
|
2,332 |
|
Income taxes payable |
|
|
68 |
|
|
|
51 |
|
Total Current Liabilities |
|
|
2,166 |
|
|
|
2,383 |
|
Non-current operating lease liabilities |
|
|
1,906 |
|
|
|
2,286 |
|
Non-current finance lease liabilities |
|
|
42 |
|
|
|
40 |
|
Deferred income tax liabilities |
|
|
390 |
|
|
|
425 |
|
Other liabilities |
|
|
162 |
|
|
|
167 |
|
Total Liabilities |
|
|
4,666 |
|
|
|
5,301 |
|
|
|
|
|
|
|
|
||
Redeemable Noncontrolling Interest |
|
|
12 |
|
|
|
14 |
|
|
|
|
|
|
|
|
||
Equity |
|
|
|
|
|
|
||
Common stock, $0.01 par value; 1,000 million shares authorized; 419 million shares and |
|
|
4 |
|
|
|
4 |
|
Treasury stock |
|
|
— |
|
|
|
(803 |
) |
Additional paid-in capital |
|
|
4,390 |
|
|
|
4,695 |
|
Retained earnings |
|
|
2,191 |
|
|
|
2,892 |
|
Accumulated other comprehensive (loss) income |
|
|
(103 |
) |
|
|
268 |
|
Total Yum China Holdings, Inc. Stockholders' Equity |
|
|
6,482 |
|
|
|
7,056 |
|
Noncontrolling interests |
|
|
666 |
|
|
|
852 |
|
Total Equity |
|
|
7,148 |
|
|
|
7,908 |
|
Total Liabilities, Redeemable Noncontrolling Interest and Equity |
|
$ |
11,826 |
|
|
$ |
13,223 |
|
|
|
|
|
|
|
|
||
11
Yum China Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(in US$ million)
(unaudited)
|
|
Year Ended |
||||||||
|
|
12/31/2022 |
|
12/31/2021 |
||||||
Cash Flows – Operating Activities |
|
|
|
|
|
|
|
|
||
Net income – including noncontrolling interests |
|
$ |
478 |
|
|
|
$ |
1,023 |
|
|
Depreciation and amortization |
|
|
602 |
|
|
|
|
516 |
|
|
Non-cash operating lease cost |
|
|
435 |
|
|
|
|
424 |
|
|
Closures and impairment expenses |
|
|
32 |
|
|
|
|
34 |
|
|
Gain from re-measurement of equity interest upon acquisition |
|
|
— |
|
|
|
|
(628 |
) |
|
Investment loss |
|
|
26 |
|
|
|
|
53 |
|
|
Equity income from investments in unconsolidated affiliates |
|
|
— |
|
|
|
|
(44 |
) |
|
Distributions of income received from unconsolidated affiliates |
|
|
7 |
|
|
|
|
32 |
|
|
Deferred income taxes |
|
|
(20 |
) |
|
|
|
160 |
|
|
Share-based compensation expense |
|
|
42 |
|
|
|
|
41 |
|
|
Changes in accounts receivable |
|
|
(1 |
) |
|
|
|
(5 |
) |
|
Changes in inventories |
|
|
(19 |
) |
|
|
|
(16 |
) |
|
Changes in prepaid expenses, other current assets and VAT assets |
|
|
207 |
|
|
|
|
(72 |
) |
|
Changes in accounts payable and other current liabilities |
|
|
16 |
|
|
|
|
118 |
|
|
Changes in income taxes payable |
|
|
25 |
|
|
|
|
(26 |
) |
|
Changes in non-current operating lease liabilities |
|
|
(396 |
) |
|
|
|
(461 |
) |
|
Other, net |
|
|
(21 |
) |
|
|
|
(18 |
) |
|
Net Cash Provided by Operating Activities |
|
|
1,413 |
|
|
|
|
1,131 |
|
|
Cash Flows – Investing Activities |
|
|
|
|
|
|
|
|
||
Capital spending |
|
|
(679 |
) |
|
|
|
(689 |
) |
|
Purchases of short-term investments and long-term time deposits |
|
|
(5,189 |
) |
|
|
|
(6,139 |
) |
|
Maturities of short-term investments and long-term time deposits |
|
|
5,365 |
|
|
|
|
6,383 |
|
|
Acquisition of business, net of cash acquired |
|
|
(23 |
) |
|
|
|
(115 |
) |
|
Acquisition of equity investment |
|
|
— |
|
|
|
|
(300 |
) |
|
Other, net |
|
|
4 |
|
|
|
|
5 |
|
|
Net Cash Used in Investing Activities |
|
|
(522 |
) |
|
|
|
(855 |
) |
|
Cash Flows – Financing Activities |
|
|
|
|
|
|
|
|
||
Repurchase of shares of common stock |
|
|
(466 |
) |
|
|
|
(75 |
) |
|
Cash dividends paid on common stock |
|
|
(202 |
) |
|
|
|
(203 |
) |
|
Dividends paid to noncontrolling interests |
|
|
(72 |
) |
|
|
|
(57 |
) |
|
Acquisitions of noncontrolling interests |
|
|
(113 |
) |
|
|
|
— |
|
|
Contribution from noncontrolling interests |
|
|
18 |
|
|
|
|
37 |
|
|
Payment of acquisition related holdback |
|
|
(7 |
) |
|
|
|
(8 |
) |
|
Other, net |
|
|
(2 |
) |
|
|
|
(7 |
) |
|
Net Cash Used in Financing Activities |
|
|
(844 |
) |
|
|
|
(313 |
) |
|
Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash |
|
|
(53 |
) |
|
|
|
15 |
|
|
Net Decrease in Cash, Cash Equivalents and Restricted Cash |
|
|
(6 |
) |
|
|
|
(22 |
) |
|
Cash, Cash Equivalents, and Restricted Cash - Beginning of Year |
|
|
1,136 |
|
|
|
|
1,158 |
|
|
Cash, Cash Equivalents, and Restricted Cash - End of Year |
|
$ |
1,130 |
|
|
|
$ |
1,136 |
|
|
12
In this press release:
13
Reconciliation of Reported GAAP Results to Non-GAAP Adjusted Measures
(in millions, except per share data)
(unaudited)
In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) in this press release, the Company provides non-GAAP measures adjusted for Special Items, which include Adjusted Operating Profit, Adjusted Net Income, Adjusted Earnings Per Common Share ("EPS"), Adjusted Effective Tax Rate and Adjusted EBITDA, which we define as net income including noncontrolling interests adjusted for equity in net earnings (losses) from equity method investments, income tax, interest income, net, investment gain or loss, certain non-cash expenses, consisting of depreciation and amortization as well as store impairment charges, and Special Items. We also use Restaurant profit and Restaurant margin (as defined above) for the purposes of internally evaluating the performance of our Company-owned restaurants and we believe Company restaurant profit and restaurant margin provide useful information to investors as to the profitability of our Company-owned restaurants.
The following table set forth the reconciliation of the most directly comparable GAAP financial measures to the non-GAAP adjusted financial measures. The reconciliation of GAAP Operating Profit to Restaurant Profit is presented in Segment Results within this release.
|
|
Quarter Ended |
|
|
Year Ended |
|
|
||||||||||
|
|
12/31/2022 |
|
|
12/31/2021 |
|
|
12/31/2022 |
|
|
12/31/2021 |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP Reconciliations |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of Operating Profit to Adjusted Operating Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating Profit |
|
$ |
41 |
|
|
$ |
633 |
|
|
$ |
629 |
|
|
$ |
1,386 |
|
|
Special Items, Operating Profit |
|
|
1 |
|
|
|
617 |
|
|
|
(4 |
) |
|
|
620 |
|
|
Adjusted Operating Profit |
|
$ |
40 |
|
|
$ |
16 |
|
|
$ |
633 |
|
|
$ |
766 |
|
|
Reconciliation of Net Income to Adjusted Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Income – Yum China Holdings, Inc. |
|
$ |
53 |
|
|
$ |
475 |
|
|
$ |
442 |
|
|
$ |
990 |
|
|
Special Items, Net Income –Yum China Holdings, Inc. |
|
|
1 |
|
|
|
464 |
|
|
|
(4 |
) |
|
|
465 |
|
|
Adjusted Net Income – Yum China Holdings, Inc. |
|
$ |
52 |
|
|
$ |
11 |
|
|
$ |
446 |
|
|
$ |
525 |
|
|
Reconciliation of EPS to Adjusted EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic Earnings Per Common Share |
|
$ |
0.13 |
|
|
$ |
1.11 |
|
|
$ |
1.05 |
|
|
$ |
2.34 |
|
|
Special Items, Basic Earnings Per Common Share |
|
|
— |
|
|
|
1.08 |
|
|
|
(0.01 |
) |
|
|
1.10 |
|
|
Adjusted Basic Earnings Per Common Share |
|
$ |
0.13 |
|
|
$ |
0.03 |
|
|
$ |
1.06 |
|
|
$ |
1.24 |
|
|
Diluted Earnings Per Common Share |
|
$ |
0.13 |
|
|
$ |
1.10 |
|
|
$ |
1.04 |
|
|
$ |
2.28 |
|
|
Special Items, Diluted Earnings Per Common Share |
|
|
— |
|
|
|
1.07 |
|
|
|
(0.01 |
) |
|
|
1.07 |
|
|
Adjusted Diluted Earnings Per Common Share |
|
$ |
0.13 |
|
|
$ |
0.03 |
|
|
$ |
1.05 |
|
|
$ |
1.21 |
|
|
Reconciliation of Effective Tax Rate to Adjusted Effective Tax Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effective tax rate |
|
|
29.9 |
% |
|
|
25.1 |
% |
|
|
30.1 |
% |
|
|
26.5 |
% |
|
Impact on effective tax rate as a result of Special Items |
|
|
(0.4 |
)% |
|
|
(13.0 |
)% |
|
|
0.2 |
% |
|
|
(1.3 |
)% |
|
Adjusted effective tax rate |
|
|
30.3 |
% |
|
|
38.1 |
% |
|
|
29.9 |
% |
|
|
27.8 |
% |
|
Net income, along with the reconciliation to Adjusted EBITDA, is presented below:
14
|
|
Quarter Ended |
|
|
Year Ended |
|
|
||||||||||
|
|
12/31/2022 |
|
|
12/31/2021 |
|
|
12/31/2022 |
|
|
12/31/2021 |
|
|
||||
Reconciliation of Net Income to Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net Income – Yum China Holdings, Inc. |
|
$ |
53 |
|
|
$ |
475 |
|
|
$ |
442 |
|
|
$ |
990 |
|
|
Net income – noncontrolling interests |
|
|
5 |
|
|
|
1 |
|
|
|
36 |
|
|
|
33 |
|
|
Equity in net (earnings) losses from equity method investments |
|
|
(2 |
) |
|
|
— |
|
|
|
2 |
|
|
|
— |
|
|
Income tax provision |
|
|
24 |
|
|
|
159 |
|
|
|
207 |
|
|
|
369 |
|
|
Interest income, net |
|
|
(33 |
) |
|
|
(13 |
) |
|
|
(84 |
) |
|
|
(60 |
) |
|
Investment (gain) loss |
|
|
(6 |
) |
|
|
11 |
|
|
|
26 |
|
|
|
54 |
|
|
Operating Profit |
|
|
41 |
|
|
|
633 |
|
|
|
629 |
|
|
|
1,386 |
|
|
Special Items, Operating Profit |
|
|
(1 |
) |
|
|
(617 |
) |
|
|
4 |
|
|
|
(620 |
) |
|
Adjusted Operating Profit |
|
|
40 |
|
|
|
16 |
|
|
|
633 |
|
|
|
766 |
|
|
Depreciation and amortization |
|
|
135 |
|
|
|
136 |
|
|
|
602 |
|
|
|
516 |
|
|
Store impairment charges |
|
|
14 |
|
|
|
25 |
|
|
|
51 |
|
|
|
48 |
|
|
Adjusted EBITDA |
|
$ |
189 |
|
|
$ |
177 |
|
|
$ |
1,286 |
|
|
$ |
1,330 |
|
|
Details of Special Items are presented below:
|
|
Quarter Ended |
|
|
Year Ended |
|
||||||||||
|
|
12/31/2022 |
|
|
12/31/2021 |
|
|
12/31/2022 |
|
|
12/31/2021 |
|
||||
Gain from re-measurement of equity interest upon acquisition(1) |
|
$ |
— |
|
|
$ |
618 |
|
|
$ |
— |
|
|
$ |
628 |
|
Share-based compensation expense for Partner PSU awards(2) |
|
|
1 |
|
|
|
(1 |
) |
|
|
(4 |
) |
|
|
(8 |
) |
Special Items, Operating Profit |
|
|
1 |
|
|
|
617 |
|
|
|
(4 |
) |
|
|
620 |
|
Tax effect on Special Items(3) |
|
|
— |
|
|
|
(153 |
) |
|
|
— |
|
|
|
(155 |
) |
Special Items, net income – including noncontrolling interests |
|
|
1 |
|
|
|
464 |
|
|
|
(4 |
) |
|
|
465 |
|
Special Items, net income – noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Special Items, Net Income –Yum China Holdings, Inc. |
|
$ |
1 |
|
|
$ |
464 |
|
|
$ |
(4 |
) |
|
$ |
465 |
|
Weighted-average Diluted Shares Outstanding (in millions) |
|
|
423 |
|
|
|
433 |
|
|
|
425 |
|
|
|
434 |
|
Special Items, Diluted Earnings Per Common Share |
|
$ |
— |
|
|
$ |
1.07 |
|
|
$ |
(0.01 |
) |
|
$ |
1.07 |
|
15
The Company excludes impact from Special Items for the purpose of evaluating performance internally. Special Items are not included in any of our segment results. In addition, the Company provides Adjusted EBITDA because we believe that investors and analysts may find it useful in measuring operating performance without regard to items such as equity in net earnings (losses) from equity method investments, income tax, interest income, net, investment gain or loss, depreciation and amortization, store impairment charges, and Special Items. Store impairment charges included as an adjustment item in Adjusted EBITDA primarily resulted from our semi-annual impairment evaluation of long-lived assets of individual restaurants, and additional impairment evaluation whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If these restaurant-level assets were not impaired, depreciation of the assets would have been recorded and included in EBITDA. Therefore, store impairment charges were a non-cash item similar to depreciation and amortization of our long-lived assets of restaurants. The Company believes that investors and analyst may find it useful in measuring operating performance without regard to such non-cash item.
These adjusted measures are not intended to replace the presentation of our financial results in accordance with GAAP. Rather, the Company believes that the presentation of these adjusted measures provides additional information to investors to facilitate the comparison of past and present results, excluding those items that the Company does not believe are indicative of our ongoing operations due to their nature.
16
Unit Count by Brand
KFC
|
|
12/31/2021 |
|
|
New Builds |
|
|
Closures |
|
|
Acquired |
|
|
Refranchised |
|
|
12/31/2022 |
|
||||||
Company-owned |
|
|
7,437 |
|
|
|
1,060 |
|
|
|
(283 |
) |
|
|
5 |
|
|
|
(5 |
) |
|
|
8,214 |
|
Franchisees |
|
|
731 |
|
|
|
169 |
|
|
|
(20 |
) |
|
|
(5 |
) |
|
|
5 |
|
|
|
880 |
|
Total |
|
|
8,168 |
|
|
|
1,229 |
|
|
|
(303 |
) |
|
|
— |
|
|
|
— |
|
|
|
9,094 |
|
Pizza Hut
|
|
12/31/2021 |
|
|
New Builds |
|
|
Closures |
|
|
Acquired |
|
|
12/31/2022 |
|
|||||
Company-owned |
|
|
2,452 |
|
|
|
401 |
|
|
|
(98 |
) |
|
|
5 |
|
|
|
2,760 |
|
Franchisees |
|
|
138 |
|
|
|
16 |
|
|
|
(6 |
) |
|
|
(5 |
) |
|
|
143 |
|
Total |
|
|
2,590 |
|
|
|
417 |
|
|
|
(104 |
) |
|
|
— |
|
|
|
2,903 |
|
Others
|
|
12/31/2021 |
|
|
New Builds |
|
|
Closures |
|
|
Acquired |
|
|
12/31/2022 |
|
|||||
Company-owned |
|
|
162 |
|
|
|
100 |
|
|
|
(76 |
) |
|
|
1 |
|
|
|
187 |
|
Franchisees |
|
|
868 |
|
|
|
78 |
|
|
|
(182 |
) |
|
|
(1 |
) |
|
|
763 |
|
Total |
|
|
1,030 |
|
|
|
178 |
|
|
|
(258 |
) |
|
|
— |
|
|
|
950 |
|
17
Yum China Holdings, Inc.
Segment Results
(in US$ million)
(unaudited)
|
|
Quarter Ended 12/31/2022 |
|
|||||||||||||||||||||
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other Segments |
|
|
Corporate |
|
|
Elimination |
|
|
Total |
|
||||||
Company sales |
|
$ |
1,566 |
|
|
$ |
398 |
|
|
$ |
11 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,975 |
|
Franchise fees and income |
|
|
12 |
|
|
|
1 |
|
|
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
16 |
|
Revenues from transactions with |
|
|
9 |
|
|
|
1 |
|
|
|
10 |
|
|
|
48 |
|
|
|
— |
|
|
|
68 |
|
Other revenues |
|
|
4 |
|
|
|
4 |
|
|
|
156 |
|
|
|
11 |
|
|
|
(146 |
) |
|
|
29 |
|
Total revenues |
|
$ |
1,591 |
|
|
$ |
404 |
|
|
$ |
180 |
|
|
$ |
59 |
|
|
$ |
(146 |
) |
|
$ |
2,088 |
|
Company restaurant expenses |
|
|
1,367 |
|
|
|
391 |
|
|
|
15 |
|
|
|
— |
|
|
|
(3 |
) |
|
|
1,770 |
|
General and administrative expenses |
|
|
63 |
|
|
|
26 |
|
|
|
10 |
|
|
|
46 |
|
|
|
— |
|
|
|
145 |
|
Franchise expenses |
|
|
6 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7 |
|
Expenses for transactions with |
|
|
8 |
|
|
|
— |
|
|
|
11 |
|
|
|
48 |
|
|
|
— |
|
|
|
67 |
|
Other operating costs and expenses |
|
|
3 |
|
|
|
3 |
|
|
|
151 |
|
|
|
11 |
|
|
|
(143 |
) |
|
|
25 |
|
Closures and impairment expenses, net |
|
|
5 |
|
|
|
3 |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
12 |
|
Other expenses (income), net |
|
|
22 |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
21 |
|
Total costs and expenses, net |
|
|
1,474 |
|
|
|
424 |
|
|
|
191 |
|
|
|
104 |
|
|
|
(146 |
) |
|
|
2,047 |
|
Operating Profit (Loss) |
|
$ |
117 |
|
|
$ |
(20 |
) |
|
$ |
(11 |
) |
|
$ |
(45 |
) |
|
$ |
— |
|
|
$ |
41 |
|
Reconciliation of GAAP Operating Profit to Restaurant Profit
|
|
Quarter Ended 12/31/2022 |
|
|||||||||||||||||||||
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other Segments |
|
|
Corporate |
|
|
Elimination |
|
|
Total |
|
||||||
GAAP Operating Profit (Loss) |
|
$ |
117 |
|
|
$ |
(20 |
) |
|
$ |
(11 |
) |
|
$ |
(45 |
) |
|
$ |
— |
|
|
$ |
41 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Franchise fees and income |
|
|
12 |
|
|
|
1 |
|
|
|
3 |
|
|
|
— |
|
|
|
— |
|
|
|
16 |
|
Revenues from transactions with |
|
|
9 |
|
|
|
1 |
|
|
|
10 |
|
|
|
48 |
|
|
|
— |
|
|
|
68 |
|
Other revenues |
|
|
4 |
|
|
|
4 |
|
|
|
156 |
|
|
|
11 |
|
|
|
(146 |
) |
|
|
29 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
General and administrative expenses |
|
|
63 |
|
|
|
26 |
|
|
|
10 |
|
|
|
46 |
|
|
|
— |
|
|
|
145 |
|
Franchise expenses |
|
|
6 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
7 |
|
Expenses for transactions with |
|
|
8 |
|
|
|
— |
|
|
|
11 |
|
|
|
48 |
|
|
|
— |
|
|
|
67 |
|
Other operating costs and expenses |
|
|
3 |
|
|
|
3 |
|
|
|
151 |
|
|
|
11 |
|
|
|
(143 |
) |
|
|
25 |
|
Closures and impairment expenses, net |
|
|
5 |
|
|
|
3 |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
12 |
|
Other expenses (income), net |
|
|
22 |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
— |
|
|
|
21 |
|
Restaurant profit (loss) |
|
$ |
199 |
|
|
$ |
7 |
|
|
$ |
(4 |
) |
|
$ |
— |
|
|
$ |
3 |
|
|
$ |
205 |
|
Company sales |
|
|
1,566 |
|
|
|
398 |
|
|
|
11 |
|
|
|
— |
|
|
|
— |
|
|
|
1,975 |
|
Restaurant margin % |
|
|
12.7 |
% |
|
|
1.9 |
% |
|
|
(42.6 |
)% |
|
N/A |
|
|
N/A |
|
|
|
10.4 |
% |
||
18
|
|
Quarter Ended 12/31/2021 |
|
|||||||||||||||||||||
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other Segments |
|
|
Corporate |
|
|
Elimination |
|
|
Total |
|
||||||
Company sales |
|
$ |
1,596 |
|
|
$ |
475 |
|
|
$ |
16 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,087 |
|
Franchise fees and income |
|
|
25 |
|
|
|
2 |
|
|
|
6 |
|
|
|
— |
|
|
|
— |
|
|
|
33 |
|
Revenues from transactions with |
|
|
13 |
|
|
|
1 |
|
|
|
23 |
|
|
|
107 |
|
|
|
— |
|
|
|
144 |
|
Other revenues |
|
|
2 |
|
|
|
1 |
|
|
|
110 |
|
|
|
9 |
|
|
|
(95 |
) |
|
|
27 |
|
Total revenues |
|
$ |
1,636 |
|
|
$ |
479 |
|
|
$ |
155 |
|
|
$ |
116 |
|
|
$ |
(95 |
) |
|
$ |
2,291 |
|
Company restaurant expenses |
|
|
1,460 |
|
|
|
447 |
|
|
|
23 |
|
|
|
— |
|
|
|
1 |
|
|
|
1,931 |
|
General and administrative expenses |
|
|
65 |
|
|
|
31 |
|
|
|
12 |
|
|
|
48 |
|
|
|
— |
|
|
|
156 |
|
Franchise expenses |
|
|
12 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
14 |
|
Expenses for transactions with |
|
|
13 |
|
|
|
1 |
|
|
|
19 |
|
|
|
107 |
|
|
|
— |
|
|
|
140 |
|
Other operating costs and expenses |
|
|
1 |
|
|
|
1 |
|
|
|
111 |
|
|
|
7 |
|
|
|
(96 |
) |
|
|
24 |
|
Closures and impairment expenses, net |
|
|
13 |
|
|
|
4 |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
21 |
|
Other expenses (income), net |
|
|
8 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(635 |
) |
|
|
— |
|
|
|
(628 |
) |
Total costs and expenses, net |
|
|
1,572 |
|
|
|
485 |
|
|
|
169 |
|
|
|
(473 |
) |
|
|
(95 |
) |
|
|
1,658 |
|
Operating Profit (Loss) |
|
$ |
64 |
|
|
$ |
(6 |
) |
|
$ |
(14 |
) |
|
$ |
589 |
|
|
$ |
— |
|
|
$ |
633 |
|
Reconciliation of GAAP Operating Profit to Restaurant Profit
|
|
Quarter Ended 12/31/2021 |
|
|||||||||||||||||||||
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other Segments |
|
|
Corporate |
|
|
Elimination |
|
|
Total |
|
||||||
GAAP Operating Profit (Loss) |
|
$ |
64 |
|
|
$ |
(6 |
) |
|
$ |
(14 |
) |
|
$ |
589 |
|
|
$ |
— |
|
|
$ |
633 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Franchise fees and income |
|
|
25 |
|
|
|
2 |
|
|
|
6 |
|
|
|
— |
|
|
|
— |
|
|
|
33 |
|
Revenues from transactions with |
|
|
13 |
|
|
|
1 |
|
|
|
23 |
|
|
|
107 |
|
|
|
— |
|
|
|
144 |
|
Other revenues |
|
|
2 |
|
|
|
1 |
|
|
|
110 |
|
|
|
9 |
|
|
|
(95 |
) |
|
|
27 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
General and administrative expenses |
|
|
65 |
|
|
|
31 |
|
|
|
12 |
|
|
|
48 |
|
|
|
— |
|
|
|
156 |
|
Franchise expenses |
|
|
12 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
14 |
|
Expenses for transactions with |
|
|
13 |
|
|
|
1 |
|
|
|
19 |
|
|
|
107 |
|
|
|
— |
|
|
|
140 |
|
Other operating costs and expenses |
|
|
1 |
|
|
|
1 |
|
|
|
111 |
|
|
|
7 |
|
|
|
(96 |
) |
|
|
24 |
|
Closures and impairment expenses, net |
|
|
13 |
|
|
|
4 |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
21 |
|
Other expenses (income), net |
|
|
8 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(635 |
) |
|
|
— |
|
|
|
(628 |
) |
Restaurant profit (loss) |
|
$ |
136 |
|
|
$ |
28 |
|
|
$ |
(7 |
) |
|
$ |
— |
|
|
$ |
(1 |
) |
|
$ |
156 |
|
Company sales |
|
|
1,596 |
|
|
|
475 |
|
|
|
16 |
|
|
|
— |
|
|
|
— |
|
|
|
2,087 |
|
Restaurant margin % |
|
|
8.6 |
% |
|
|
5.9 |
% |
|
|
(45.1 |
)% |
|
N/A |
|
|
N/A |
|
|
|
7.5 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
19
|
|
Year Ended 12/31/2022 |
|
|||||||||||||||||||||
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other Segments |
|
|
Corporate |
|
|
Elimination |
|
|
Total |
|
||||||
Company sales |
|
$ |
7,120 |
|
|
$ |
1,939 |
|
|
$ |
51 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
9,110 |
|
Franchise fees and income |
|
|
56 |
|
|
|
7 |
|
|
|
18 |
|
|
|
— |
|
|
|
— |
|
|
|
81 |
|
Revenues from transactions with |
|
|
33 |
|
|
|
4 |
|
|
|
39 |
|
|
|
211 |
|
|
|
— |
|
|
|
287 |
|
Other revenues |
|
|
10 |
|
|
|
10 |
|
|
|
563 |
|
|
|
42 |
|
|
|
(534 |
) |
|
|
91 |
|
Total revenues |
|
$ |
7,219 |
|
|
$ |
1,960 |
|
|
$ |
671 |
|
|
$ |
253 |
|
|
$ |
(534 |
) |
|
$ |
9,569 |
|
Company restaurant expenses |
|
|
5,999 |
|
|
|
1,761 |
|
|
|
70 |
|
|
|
— |
|
|
|
(1 |
) |
|
|
7,829 |
|
General and administrative expenses |
|
|
254 |
|
|
|
110 |
|
|
|
46 |
|
|
|
184 |
|
|
|
— |
|
|
|
594 |
|
Franchise expenses |
|
|
29 |
|
|
|
4 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
Expenses for transactions with |
|
|
30 |
|
|
|
3 |
|
|
|
35 |
|
|
|
211 |
|
|
|
— |
|
|
|
279 |
|
Other operating costs and expenses |
|
|
7 |
|
|
|
8 |
|
|
|
557 |
|
|
|
39 |
|
|
|
(533 |
) |
|
|
78 |
|
Closures and impairment expenses, net |
|
|
16 |
|
|
|
4 |
|
|
|
12 |
|
|
|
— |
|
|
|
— |
|
|
|
32 |
|
Other expenses (income), net |
|
|
97 |
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
94 |
|
Total costs and expenses, net |
|
|
6,432 |
|
|
|
1,890 |
|
|
|
721 |
|
|
|
431 |
|
|
|
(534 |
) |
|
|
8,940 |
|
Operating Profit (Loss) |
|
$ |
787 |
|
|
$ |
70 |
|
|
$ |
(50 |
) |
|
$ |
(178 |
) |
|
$ |
— |
|
|
$ |
629 |
|
Reconciliation of GAAP Operating Profit to Restaurant Profit
|
|
Year Ended 12/31/2022 |
|
|||||||||||||||||||||
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other Segments |
|
|
Corporate |
|
|
Elimination |
|
|
Total |
|
||||||
GAAP Operating Profit (Loss) |
|
$ |
787 |
|
|
$ |
70 |
|
|
$ |
(50 |
) |
|
$ |
(178 |
) |
|
$ |
— |
|
|
$ |
629 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Franchise fees and income |
|
|
56 |
|
|
|
7 |
|
|
|
18 |
|
|
|
— |
|
|
|
— |
|
|
|
81 |
|
Revenues from transactions with |
|
|
33 |
|
|
|
4 |
|
|
|
39 |
|
|
|
211 |
|
|
|
— |
|
|
|
287 |
|
Other revenues |
|
|
10 |
|
|
|
10 |
|
|
|
563 |
|
|
|
42 |
|
|
|
(534 |
) |
|
|
91 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
General and administrative expenses |
|
|
254 |
|
|
|
110 |
|
|
|
46 |
|
|
|
184 |
|
|
|
— |
|
|
|
594 |
|
Franchise expenses |
|
|
29 |
|
|
|
4 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
Expenses for transactions with |
|
|
30 |
|
|
|
3 |
|
|
|
35 |
|
|
|
211 |
|
|
|
— |
|
|
|
279 |
|
Other operating costs and expenses |
|
|
7 |
|
|
|
8 |
|
|
|
557 |
|
|
|
39 |
|
|
|
(533 |
) |
|
|
78 |
|
Closures and impairment expenses, net |
|
|
16 |
|
|
|
4 |
|
|
|
12 |
|
|
|
— |
|
|
|
— |
|
|
|
32 |
|
Other expenses (income), net |
|
|
97 |
|
|
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
— |
|
|
|
94 |
|
Restaurant profit (loss) |
|
$ |
1,121 |
|
|
$ |
178 |
|
|
$ |
(19 |
) |
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
1,281 |
|
Company sales |
|
|
7,120 |
|
|
|
1,939 |
|
|
|
51 |
|
|
|
— |
|
|
|
— |
|
|
|
9,110 |
|
Restaurant margin % |
|
|
15.7 |
% |
|
|
9.2 |
% |
|
|
(37.6 |
)% |
|
N/A |
|
|
N/A |
|
|
|
14.1 |
% |
||
20
|
|
Year Ended 12/31/2021 |
|
|||||||||||||||||||||
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other Segments |
|
|
Corporate |
|
|
Elimination |
|
|
Total |
|
||||||
Company sales |
|
$ |
6,816 |
|
|
$ |
2,092 |
|
|
$ |
53 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
8,961 |
|
Franchise fees and income |
|
|
120 |
|
|
|
8 |
|
|
|
25 |
|
|
|
— |
|
|
|
— |
|
|
|
153 |
|
Revenues from transactions with |
|
|
59 |
|
|
|
6 |
|
|
|
98 |
|
|
|
500 |
|
|
|
— |
|
|
|
663 |
|
Other revenues |
|
|
8 |
|
|
|
3 |
|
|
|
297 |
|
|
|
20 |
|
|
|
(252 |
) |
|
|
76 |
|
Total revenues |
|
$ |
7,003 |
|
|
$ |
2,109 |
|
|
$ |
473 |
|
|
$ |
520 |
|
|
$ |
(252 |
) |
|
$ |
9,853 |
|
Company restaurant expenses |
|
|
5,803 |
|
|
|
1,868 |
|
|
|
63 |
|
|
|
— |
|
|
|
— |
|
|
|
7,734 |
|
General and administrative expenses |
|
|
240 |
|
|
|
111 |
|
|
|
42 |
|
|
|
171 |
|
|
|
— |
|
|
|
564 |
|
Franchise expenses |
|
|
59 |
|
|
|
4 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
64 |
|
Expenses for transactions with |
|
|
58 |
|
|
|
6 |
|
|
|
88 |
|
|
|
497 |
|
|
|
— |
|
|
|
649 |
|
Other operating costs and expenses |
|
|
4 |
|
|
|
2 |
|
|
|
294 |
|
|
|
17 |
|
|
|
(252 |
) |
|
|
65 |
|
Closures and impairment expenses, net |
|
|
20 |
|
|
|
7 |
|
|
|
7 |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
Other (income) expenses, net |
|
|
(8 |
) |
|
|
— |
|
|
|
7 |
|
|
|
(642 |
) |
|
|
— |
|
|
|
(643 |
) |
Total costs and expenses, net |
|
|
6,176 |
|
|
|
1,998 |
|
|
|
502 |
|
|
|
43 |
|
|
|
(252 |
) |
|
|
8,467 |
|
Operating Profit (Loss) |
|
$ |
827 |
|
|
$ |
111 |
|
|
$ |
(29 |
) |
|
$ |
477 |
|
|
$ |
— |
|
|
$ |
1,386 |
|
Reconciliation of GAAP Operating Profit to Restaurant Profit
|
|
Year Ended 12/31/2021 |
|
|||||||||||||||||||||
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other Segments |
|
|
Corporate |
|
|
Elimination |
|
|
Total |
|
||||||
GAAP Operating Profit (Loss) |
|
$ |
827 |
|
|
$ |
111 |
|
|
$ |
(29 |
) |
|
$ |
477 |
|
|
$ |
— |
|
|
$ |
1,386 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Franchise fees and income |
|
|
120 |
|
|
|
8 |
|
|
|
25 |
|
|
|
— |
|
|
|
— |
|
|
|
153 |
|
Revenues from transactions with |
|
|
59 |
|
|
|
6 |
|
|
|
98 |
|
|
|
500 |
|
|
|
— |
|
|
|
663 |
|
Other revenues |
|
|
8 |
|
|
|
3 |
|
|
|
297 |
|
|
|
20 |
|
|
|
(252 |
) |
|
|
76 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
General and administrative expenses |
|
|
240 |
|
|
|
111 |
|
|
|
42 |
|
|
|
171 |
|
|
|
— |
|
|
|
564 |
|
Franchise expenses |
|
|
59 |
|
|
|
4 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
64 |
|
Expenses for transactions with |
|
|
58 |
|
|
|
6 |
|
|
|
88 |
|
|
|
497 |
|
|
|
— |
|
|
|
649 |
|
Other operating costs and expenses |
|
|
4 |
|
|
|
2 |
|
|
|
294 |
|
|
|
17 |
|
|
|
(252 |
) |
|
|
65 |
|
Closures and impairment expenses, net |
|
|
20 |
|
|
|
7 |
|
|
|
7 |
|
|
|
— |
|
|
|
— |
|
|
|
34 |
|
Other (income) expenses, net |
|
|
(8 |
) |
|
|
— |
|
|
|
7 |
|
|
|
(642 |
) |
|
|
— |
|
|
|
(643 |
) |
Restaurant profit (loss) |
|
$ |
1,013 |
|
|
$ |
224 |
|
|
$ |
(10 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,227 |
|
Company sales |
|
|
6,816 |
|
|
|
2,092 |
|
|
|
53 |
|
|
|
— |
|
|
|
— |
|
|
|
8,961 |
|
Restaurant margin % |
|
|
14.9 |
% |
|
|
10.7 |
% |
|
|
(20.8 |
)% |
|
N/A |
|
|
N/A |
|
|
|
13.7 |
% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
The above tables reconcile segment information, which is based on management responsibility, with our Condensed Consolidated Statements of Income.
21
22