SHANGHAI, April 28, 2020 /PRNewswire/ -- Yum China
Holdings, Inc. (the "Company" or "Yum China") (NYSE: YUMC) today
reported unaudited results for the first quarter ended
March 31, 2020.
Impact of COVID-19 Outbreak and Mitigation
Efforts
As the COVID-19 outbreak progressed, Yum China further
heightened its focus on safeguarding the health and safety of its
employees and customers. The Company implemented stringent health
measures at its restaurants and workplaces, and provided extended
healthcare and other support to employees.
First quarter operations were significantly affected by the
outbreak. Working closely with local health authorities to
safeguard the public, the Company began temporary store closures in
late January where appropriate. Approximately 35% of stores were
closed by mid-February at the peak of the outbreak, with
significant regional differences. As of the date of this release,
approximately 99% of stores in China are either partially or fully open.
For restaurants that remained open, same-store sales
declined due to shortened operating hours and reduced traffic,
with a significant portion of stores providing only delivery and
takeaway services. Our results were strong for the first three
weeks of January, but then the outbreak led to subsequent
same-store sales declines of 40-50% compared to the comparable
Chinese New Year holiday period in 2019. As the first quarter
progressed, sales performance recovered gradually, with
same-store sales down approximately 20% in late March. The pace of
recovery is uneven with recent sales and traffic still below
pre-outbreak levels as people continue to avoid going out and
practice social distancing. Same-stores sales were still down by
more than 10% month-to-date.
Yum China pioneered contactless delivery and contactless
takeaway in late January to enhance preventative health measures.
Those services proved popular with customers and have supported the
businesses during this period of reduced dine-in traffic. Delivery
contributed to 35% of Company sales in the first quarter, an
increase of 16 percentage points year over year.
Sales deleveraging and additional costs incurred reduced
restaurant margin and Operating Profit for the quarter. Those
negative impacts were partially offset by effective cost
management, labor productivity improvement, and one-time relief
provided by our landlords and government agencies.
During the quarter, the Company opened 179 new stores, with the
majority opened in January before the Chinese New Year. After that,
openings were interrupted due to outbreak-related traffic
restrictions and unavailability of construction workers. The
Company subsequently resumed new store construction with four store
openings in late March.
First Quarter Highlights
- Total revenues declined 24% year over year to
$1.75 billion from $2.30 billion (a 21% decline excluding foreign
currency translation ("F/X")).
- Total system sales declined 20% year over year, with
declines of 15% at KFC and 38% at Pizza Hut, excluding F/X.
- Same-store sales declined 15% year over year, with an
11% decline at KFC and 31% decline at Pizza Hut, excluding
F/X.
- Restaurant margin was 10.7%, compared with 18.5% in the
prior year period.
- Operating Profit declined 68% year over year to
$97 million from $303 million (67% decline excluding F/X).
Adjusted Operating Profit
declined 67% year over year to $98
million from $303 million (66%
decline excluding F/X).
- Effective tax rate was 32.7%.
- Net Income declined 72% to $62 million from $222
million in the prior year period, primarily due to the
decline in Operating Profit and mark-to-market loss from our equity
investment in Meituan Dianping.
- Adjusted Net Income declined to $63 million from $230
million in the prior year period. (68% decline excluding the
mark-to-market loss of $8 million in
the first quarter of 2020 and mark-to-market gain of $10 million in the first quarter of 2019 from our
equity investment in Meituan Dianping, 67% decline excluding
F/X).
- Diluted EPS declined 72% to $0.16 from $0.57 in
the prior year period.
- Adjusted Diluted EPS declined to $0.16 from $0.59 in
the prior year period (68% decline excluding the mark-to-market
loss and gain from our equity investment in Meituan Dianping in
2020 and 2019, respectively, 67% decline excluding F/X).
- Opened 179 new stores during the quarter, bringing total store
count to 9,295 across more than 1,400 cities.
Key Financial Results
|
First Quarter
2020
|
|
|
|
%
Change
|
|
|
|
System
Sales
|
|
|
Same-Store
Sales
|
|
|
Net New
Units
|
|
|
Operating
Profit
|
|
|
Yum China
|
|
(20)
|
|
|
|
(15)
|
|
|
|
+7
|
|
|
|
(68)
|
|
|
KFC
|
|
(15)
|
|
|
|
(11)
|
|
|
|
+10
|
|
|
|
(47)
|
|
|
Pizza
Hut
|
|
(38)
|
|
|
|
(31)
|
|
|
|
+1
|
|
|
NM
|
|
|
|
|
First
Quarter
|
|
|
(in US$ million,
except
|
|
|
|
|
|
|
|
|
|
|
%
Change
|
|
|
per share data and
percentages)
|
|
2020
|
|
|
|
2019
|
|
|
Reported
|
|
|
Ex F/X
|
|
|
Operating
Profit
|
$
|
|
97
|
|
|
$
|
|
303
|
|
|
|
(68)
|
|
|
|
(67)
|
|
|
Adjusted Operating
Profit[1]
|
$
|
|
98
|
|
|
$
|
|
303
|
|
|
|
(67)
|
|
|
|
(66)
|
|
|
Net Income
|
$
|
|
62
|
|
|
$
|
|
222
|
|
|
|
(72)
|
|
|
|
(71)
|
|
|
Adjusted Net
Income[1]
|
$
|
|
63
|
|
|
$
|
|
230
|
|
|
|
(73)
|
|
|
|
(72)
|
|
|
Basic Earnings Per
Common Share
|
$
|
|
0.16
|
|
|
$
|
|
0.59
|
|
|
|
(73)
|
|
|
|
(71)
|
|
|
Adjusted Basic
Earnings Per Common Share[1]
|
$
|
|
0.17
|
|
|
$
|
|
0.61
|
|
|
|
(72)
|
|
|
|
(72)
|
|
|
Diluted Earnings Per
Common Share
|
$
|
|
0.16
|
|
|
$
|
|
0.57
|
|
|
|
(72)
|
|
|
|
(70)
|
|
|
Adjusted Diluted
Earnings Per Common Share[1]
|
$
|
|
0.16
|
|
|
$
|
|
0.59
|
|
|
|
(73)
|
|
|
|
(71)
|
|
|
[1] See
"Reconciliation of Reported GAAP Results to Adjusted Measures"
included in the accompanying tables of this release for further
details.
|
Note:
All comparisons are versus the same period a year ago.
|
NM refers to changes
over 100%, from negative to positive amounts or from zero to an
amount.
|
Percentages may not
recompute due to rounding.
|
System sales and
same-store sales percentages exclude the impact of F/X. Temporary
store closures are normalized in the same-store sales calculation
by excluding store weeks when stores are closed.
|
CEO and CFO Comments
"First and foremost, we wholeheartedly thank all the medical
staff and frontline workers who put public health and safety above
their own in fighting the COVID-19 outbreak," said Joey Wat, CEO of Yum China. "I am also
incredibly proud of how the Yum China team rose to meet the
challenges of this outbreak. Our top priority was—and still is—the
health and safety of our employees and customers. We did not
hesitate to close stores where appropriate, and put in place strict
sanitation procedures at all of our stores that remained open. We
also proactively expanded our Family Care Program to provide health
insurance coverage for all restaurant management team members. In
addition, our board members and senior executives have agreed to
voluntarily forgo 10% of their base compensation for the balance of
2020 as contributions to fund additional assistance for frontline
employees and their families impacted by COVID-19 as well as other
emergency relief."
Wat continued, "Furthermore, we leveraged our culture of
innovation to both protect our stakeholders and support our
business. Most importantly, we quickly implemented a safe way to
reach our customers through highly sanitary contactless delivery
and contactless takeaway. Our digital infrastructure enabled us to
stay nimble and communicate quickly with customers and employees
online and through mobile technology. We were able to inform our
members about compelling offers through our APPs, while
efficiently adjusting labor hours based on rapidly changing
traffic and sales patterns."
Wat concluded, "We were able to sustain operating profitability
while extending much needed support to our employees, business
partners and franchisees. This achievement under extraordinary
circumstances is a testament to our resilient and flexible business
model. Weathering this storm of all storms gives us great
confidence in our ability to thrive in the years ahead by serving
our employees, customers, and shareholders."
Andy Yeung, CFO of Yum China,
added, "After a strong start to the year, the outbreak
significantly impacted our business starting in late January.
System sales declined 20% due to the temporary store closures
combined with the 15% decline in same-store sales. Solid execution
and aggressive cost controls allowed us to partially mitigate sales
deleverage. Together with one-time relief from landlords and
government agencies, we were able to generate an operating profit
for the quarter."
Yeung continued, "The situation in China is gradually stabilizing, but we remain
cautious as our restaurant traffic is still below pre-outbreak
levels. We expect an extended recovery period, and that the pace
will be uneven across regions, dayparts and segments. We will
continue to implement aggressive measures to control our costs. On
the other hand, global infections continue to rise. It remains
difficult to predict the full impact of the pandemic on the broader
economy and how consumer behavior may change. So, despite having a
strong balance sheet, we will temporarily suspend our share
repurchases and, for the next two quarters, dividends. We have
taken these actions out of an abundance of caution as we navigate
through these challenging times. We believe the strength of our
balance sheet and capital structure will offer us flexibility to
respond to contingencies, if needed, and to continue investments in
long-term value-creating opportunities, where appropriate."
Dividends and Share Repurchases
- Due to the unprecedented effects of the COVID-19 pandemic and
associated economic uncertainty, the Company announced that it will
temporarily suspend its share repurchases and, for the next two
quarters, cash dividends on the Company's common stock. The Company
had $1.54 billion in cash and
short-term investments and no material debt at the end of the first
quarter.
- During the first quarter, the Company returned $52 million to shareholders through dividends and
share repurchases. The Company repurchased approximately 0.16
million shares of common stock for $7.1
million at an average price of $43.49 per share.
Digital and Delivery
- As of March 31, 2020, the KFC and
Pizza Hut loyalty programs had over 250 million members. KFC member
sales represented approximately 62% of KFC's system sales and Pizza
Hut member sales represented approximately 44% of Pizza Hut's
system sales in the first quarter of 2020.
- Delivery contributed to 32% of Company sales at KFC and 48% of
Company sales at Pizza Hut in the first quarter of 2020, an
increase of 14 and 24 percentage points, respectively, year over
year.
- Digital orders, including delivery, mobile orders and kiosk
orders, accounted for 84% of Company sales at KFC and 65% of
Company sales at Pizza Hut in the first quarter of 2020, an
increase of 29 and 36 percentage points, respectively, year over
year.
New-Unit Development and Asset Upgrade
- The Company opened 179 new stores in the first quarter 2020,
mainly driven by development of the KFC brand.
- The Company remodeled 31 stores in the first quarter 2020.
|
|
New
Units
|
|
|
Restaurant
Count
|
|
|
|
|
First
Quarter
|
|
|
|
As of March
31
|
|
|
|
|
2020
|
|
|
|
2020
|
|
|
2019
|
|
|
Yum China
|
|
179
|
|
|
|
|
9,295
|
|
|
|
8,653
|
|
|
KFC
|
|
165
|
|
|
|
|
6,661
|
|
|
|
6,078
|
|
|
Pizza
Hut
|
|
11
|
|
|
|
|
2,271
|
|
|
|
2,249
|
|
|
Others[2]
|
|
3
|
|
|
|
|
363
|
|
|
|
326
|
|
|
[2] Others
include Little Sheep, East Dawning, Taco Bell and COFFii &
JOY.
|
Restaurant Margin
Restaurant margin was 10.7% in the first quarter of 2020,
compared with 18.5% in the prior-year period, primarily
attributable to same-store sales decline and temporary store
closures impacted by COVID-19, wage and commodity inflation,
partially offset by the relief provided by our landlords and
government agencies.
|
First
Quarter
|
|
|
|
|
2020
|
|
|
2019
|
|
|
ppts
change
|
|
|
Yum China
|
|
|
10.7
|
%
|
|
|
18.5
|
%
|
|
|
(7.8)
|
|
|
KFC
|
|
|
13.6
|
%
|
|
|
20.0
|
%
|
|
|
(6.4)
|
|
|
Pizza
Hut
|
|
|
0.3
|
%
|
|
|
14.3
|
%
|
|
|
(14.0)
|
|
|
Recent Developments in April
The Company completed the acquisition of a controlling interest
in the Huang Ji Huang group, a leading Chinese-style casual dining
franchise business, for approximately $185
million. Upon completion of the acquisition, the Company
held a 93.3% interest in the Huang Ji Huang group. Founded in 2004
and headquartered in Beijing,
Huang Ji Huang has over 640 restaurants in China and internationally.
The Company entered into a definitive agreement to acquire an
additional 25% equity interest in an unconsolidated affiliate that
operates KFC stores in and around Suzhou, China ("Suzhou KFC"), for cash consideration
of approximately $149 million. Upon
closing of the acquisition in the second half of the year, subject
to the satisfaction of closing conditions, the Company is expected
to increase its equity interest to 72%, allowing the Company to
consolidate Suzhou KFC.
2020 Outlook
The Company provides the following fiscal year 2020 targets,
subject to revision based on future impacts of COVID-19 that cannot
be predicted at this time:
- To open between 800 and 850 new stores (gross), excluding Huang
Ji Huang.
- To make capital expenditures between $500 million and $550
million
The Company believes that the COVID-19 outbreak is likely to
have a material and extended adverse impact on its operational and
financial results for full year 2020. Future operations, as well as
the Company's cash flows and financial position, may be materially
and adversely influenced by further developments related to this
global outbreak, including potential additional announcements and
actions from governments and local authorities, disruption in our
supply chain, our inability to provide safety measures to protect
our employees, or other reasons.
Note on Adjusted Measures
Reported GAAP results include Special Items, which are
excluded from 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 Adjusted Measures" within this release.
Conference Call
Yum China's management will hold an earnings conference call at
8:00 p.m. U.S. Eastern Time on Tuesday,
April 28, 2020 (8:00 a.m.
Beijing/Hong Kong Time
on Wednesday, April 29, 2020). A copy of the
presentation will be available on the Yum China Holdings, Inc.
website, http://ir.yumchina.com.
U.S.:
|
|
+1 845 675
0437
|
Mainland
China:
|
|
400 620 8038 or 800
819 0121
|
Hong Kong:
|
|
+852 3018
6771
|
U.K.:
|
|
+44 20
36214779
|
International:
|
|
+65 6713
5090
|
Password:
|
|
Yum China
|
A replay of the conference call will be available two hours
after the call ends until 10:00 a.m.
U.S. Eastern Time on Tuesday, May 5, 2020 (10:00 p.m. Beijing/Hong Kong Time on Tuesday, May 5,
2020) and may be accessed by phone at the following
numbers:
U.S.:
Mainland
China:
Hong Kong
U.K.:
|
|
+1 855 452
5696
400 632 2162 or 800
870 0205
+852 3051
2780
+44 20
37014269
|
International:
|
|
+61 2 9003
4211
|
Passcode:
|
|
7469858
|
Additionally, a live webcast and an archived webcast of this
conference call will be available at
http://ir.yumchina.com.
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
"2020 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" 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, business plans, investment, dividend and share
repurchase plans, earnings, performance and returns of Yum China,
anticipated effects of population and macroeconomic trends, and the
expected impact of the COVID-19 outbreak, the anticipated effects
of our digital and delivery capabilities on growth and beliefs
regarding the long-term drivers of Yum China's business.
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 outbreak, 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) for
additional detail about factors that could affect our financial and
other results.
About Yum China Holdings, Inc.
Yum China Holdings, Inc. is a licensee of Yum! Brands in
mainland China. It has exclusive
rights in mainland China to KFC,
China's leading quick-service
restaurant brand, Pizza Hut, the leading casual dining restaurant
brand in China, and Taco Bell, a
California-based restaurant chain
serving innovative Mexican-inspired food. Yum China also owns the
Little Sheep, Huang Ji Huang, East Dawning and COFFii & JOY
concepts outright. The Company had 9,295 restaurants in over 1,400
cities at the end of March 2020. Yum
China ranked # 362 on the Fortune 500 list for 2019. In 2020, Yum
China was named to the Bloomberg Gender-Equality Index and was
certified as a Top Employer 2020 in China by the Top Employers Institute,
both for the second consecutive year. For more information,
please visit http://ir.yumchina.com.
Investor Relations
Contact:
|
|
|
Tel: +86 21 2407
7556
IR@YumChina.com
|
|
|
|
Media
Contact:
|
|
|
Tel: +86 21 2407
7510
Media@YumChina.com
|
Yum China
Holdings, Inc.
|
Condensed
Consolidated Statements of Income
|
(in US$ million,
except per share data)
|
(unaudited)
|
|
|
|
Quarter
Ended
|
|
|
% Change
|
|
|
3/31/2020
|
|
|
3/31/2019
|
|
|
B/(W)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
sales
|
|
$
|
1,548
|
|
|
$
|
2,089
|
|
|
|
(26)
|
|
|
Franchise fees and
income
|
|
|
35
|
|
|
|
39
|
|
|
|
(10)
|
|
|
Revenues from
transactions with
franchisees and unconsolidated affiliates
|
|
|
161
|
|
|
|
170
|
|
|
|
(5)
|
|
|
Other
revenues
|
|
|
10
|
|
|
|
6
|
|
|
|
70
|
|
|
Total
revenues
|
|
|
1,754
|
|
|
|
2,304
|
|
|
|
(24)
|
|
|
Costs and
Expenses, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
restaurants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and
paper
|
|
|
495
|
|
|
|
638
|
|
|
|
22
|
|
|
Payroll and employee
benefits
|
|
|
394
|
|
|
|
466
|
|
|
|
15
|
|
|
Occupancy and other
operating expenses
|
|
|
494
|
|
|
|
599
|
|
|
|
18
|
|
|
Company restaurant
expenses
|
|
|
1,383
|
|
|
|
1,703
|
|
|
|
19
|
|
|
General and
administrative expenses
|
|
|
99
|
|
|
|
114
|
|
|
|
14
|
|
|
Franchise
expenses
|
|
|
17
|
|
|
|
20
|
|
|
|
12
|
|
|
Expenses for
transactions with
franchisees and unconsolidated affiliates
|
|
|
156
|
|
|
|
167
|
|
|
|
7
|
|
|
Other operating costs
and expenses
|
|
|
10
|
|
|
|
5
|
|
|
NM
|
|
|
Closures and
impairment expenses, net
|
|
|
8
|
|
|
|
11
|
|
|
|
31
|
|
|
Other income,
net
|
|
|
(16)
|
|
|
|
(19)
|
|
|
|
(13)
|
|
|
Total costs and
expenses, net
|
|
|
1,657
|
|
|
|
2,001
|
|
|
|
17
|
|
|
Operating
Profit
|
|
|
97
|
|
|
|
303
|
|
|
|
(68)
|
|
|
Interest income,
net
|
|
|
9
|
|
|
|
9
|
|
|
|
(7)
|
|
|
Investment (loss)
gain
|
|
|
(8)
|
|
|
|
10
|
|
|
NM
|
|
|
Income Before
Income Taxes
|
|
|
98
|
|
|
|
322
|
|
|
|
(69)
|
|
|
Income tax
provision
|
|
|
(32)
|
|
|
|
(93)
|
|
|
|
65
|
|
|
Net income –
including noncontrolling interests
|
|
|
66
|
|
|
|
229
|
|
|
|
(71)
|
|
|
Net income –
noncontrolling interests
|
|
|
4
|
|
|
|
7
|
|
|
|
36
|
|
|
Net Income – Yum
China Holdings, Inc.
|
|
$
|
62
|
|
|
$
|
222
|
|
|
|
(72)
|
|
|
Effective tax
rate
|
|
|
32.7
|
%
|
|
|
28.9
|
%
|
|
|
(3.8)
|
|
ppts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Common Share
|
|
$
|
0.16
|
|
|
$
|
0.59
|
|
|
|
|
|
|
Weighted average
shares outstanding
(in millions)
|
|
|
376
|
|
|
|
379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Common Share
|
|
$
|
0.16
|
|
|
$
|
0.57
|
|
|
|
|
|
|
Weighted average
shares outstanding
(in millions)
|
|
|
386
|
|
|
|
388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Dividends
Declared Per Common Share
|
|
$
|
0.12
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
Food and
paper
|
|
|
32.0
|
|
|
|
30.5
|
|
|
|
(1.5)
|
|
ppts.
|
Payroll and employee
benefits
|
|
|
25.5
|
|
|
|
22.3
|
|
|
|
(3.2)
|
|
ppts.
|
Occupancy and other
operating expenses
|
|
|
31.8
|
|
|
|
28.7
|
|
|
|
(3.1)
|
|
ppts.
|
Restaurant
margin
|
|
|
10.7
|
%
|
|
|
18.5
|
%
|
|
|
(7.8)
|
|
ppts.
|
Operating
margin
|
|
|
6.3
|
%
|
|
|
14.5
|
%
|
|
|
(8.2)
|
|
ppts.
|
Percentages may not recompute due to rounding.
Yum China
Holdings, Inc.
|
KFC Operating
Results
|
(in US$
million)
|
(unaudited)
|
|
|
|
Quarter
Ended
|
|
|
% Change
|
|
|
3/31/2020
|
|
|
3/31/2019
|
|
|
B/(W)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
sales
|
|
$
|
1,220
|
|
|
$
|
1,539
|
|
|
|
(21)
|
|
|
Franchise fees and
income
|
|
|
33
|
|
|
|
36
|
|
|
|
(8)
|
|
|
Revenues from
transactions with
franchisees and unconsolidated affiliates
|
|
|
16
|
|
|
|
17
|
|
|
|
(3)
|
|
|
Other
revenues
|
|
|
—
|
|
|
|
—
|
|
|
|
(5)
|
|
|
Total
revenues
|
|
|
1,269
|
|
|
|
1,592
|
|
|
|
(20)
|
|
|
Costs and
Expenses, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
restaurants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and
paper
|
|
|
392
|
|
|
|
476
|
|
|
|
18
|
|
|
Payroll and employee
benefits
|
|
|
287
|
|
|
|
320
|
|
|
|
10
|
|
|
Occupancy and other
operating expenses
|
|
|
375
|
|
|
|
434
|
|
|
|
14
|
|
|
Company restaurant
expenses
|
|
|
1,054
|
|
|
|
1,230
|
|
|
|
14
|
|
|
General and
administrative expenses
|
|
|
46
|
|
|
|
49
|
|
|
|
5
|
|
|
Franchise
expenses
|
|
|
16
|
|
|
|
19
|
|
|
|
12
|
|
|
Expenses for
transactions with
franchisees and unconsolidated affiliates
|
|
|
16
|
|
|
|
17
|
|
|
|
2
|
|
|
Closures and
impairment expenses, net
|
|
|
1
|
|
|
|
7
|
|
|
|
86
|
|
|
Other income,
net
|
|
|
(17)
|
|
|
|
(18)
|
|
|
|
(6)
|
|
|
Total costs and
expenses, net
|
|
|
1,116
|
|
|
|
1,304
|
|
|
|
14
|
|
|
Operating
Profit
|
|
$
|
153
|
|
|
$
|
288
|
|
|
|
(47)
|
|
|
Company
sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
Food and
paper
|
|
|
32.1
|
|
|
|
30.9
|
|
|
|
(1.2)
|
|
ppts.
|
Payroll and employee
benefits
|
|
|
23.5
|
|
|
|
20.8
|
|
|
|
(2.7)
|
|
ppts.
|
Occupancy and other
operating expenses
|
|
|
30.8
|
|
|
|
28.3
|
|
|
|
(2.5)
|
|
ppts.
|
Restaurant
margin
|
|
|
13.6
|
%
|
|
|
20.0
|
%
|
|
|
(6.4)
|
|
ppts.
|
Operating
margin
|
|
|
12.6
|
%
|
|
|
18.7
|
%
|
|
|
(6.1)
|
|
ppts.
|
Percentages may not recompute due to rounding.
Yum China
Holdings, Inc.
|
Pizza Hut
Operating Results
|
(in US$
million)
|
(unaudited)
|
|
|
|
Quarter
Ended
|
|
|
% Change
|
|
|
3/31/2020
|
|
|
3/31/2019
|
|
|
B/(W)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
sales
|
|
$
|
322
|
|
|
$
|
541
|
|
|
|
(41)
|
|
|
Franchise fees and
income
|
|
|
1
|
|
|
|
1
|
|
|
|
(1)
|
|
|
Revenues from
transactions with
franchisees and unconsolidated affiliates
|
|
|
1
|
|
|
|
1
|
|
|
|
2
|
|
|
Other
revenues
|
|
|
—
|
|
|
|
—
|
|
|
|
(19)
|
|
|
Total
revenues
|
|
|
324
|
|
|
|
543
|
|
|
|
(40)
|
|
|
Costs and
Expenses, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
restaurants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and
paper
|
|
|
102
|
|
|
|
159
|
|
|
|
36
|
|
|
Payroll and employee
benefits
|
|
|
104
|
|
|
|
143
|
|
|
|
27
|
|
|
Occupancy and other
operating expenses
|
|
|
115
|
|
|
|
162
|
|
|
|
29
|
|
|
Company restaurant
expenses
|
|
|
321
|
|
|
|
464
|
|
|
|
31
|
|
|
General and
administrative expenses
|
|
|
24
|
|
|
|
24
|
|
|
|
3
|
|
|
Franchise
expenses
|
|
|
1
|
|
|
|
1
|
|
|
|
2
|
|
|
Expenses for
transactions with
franchisees and unconsolidated affiliates
|
|
|
1
|
|
|
|
1
|
|
|
|
(23)
|
|
|
Closures and
impairment expenses, net
|
|
|
5
|
|
|
|
3
|
|
|
|
(48)
|
|
|
Total costs and
expenses, net
|
|
|
352
|
|
|
|
493
|
|
|
|
29
|
|
|
Operating (Loss)
Profit
|
|
$
|
(28)
|
|
|
$
|
50
|
|
|
NM
|
|
|
Company
sales
|
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
|
|
|
|
Food and
paper
|
|
|
31.6
|
|
|
|
29.4
|
|
|
|
(2.2)
|
|
ppts.
|
Payroll and employee
benefits
|
|
|
32.4
|
|
|
|
26.4
|
|
|
|
(6.0)
|
|
ppts.
|
Occupancy and other
operating expenses
|
|
|
35.7
|
|
|
|
29.9
|
|
|
|
(5.8)
|
|
ppts.
|
Restaurant
margin
|
|
|
0.3
|
%
|
|
|
14.3
|
%
|
|
|
(14.0)
|
|
ppts.
|
Operating
margin
|
|
|
(8.7)
|
%
|
|
|
9.2
|
%
|
|
|
(17.9)
|
|
ppts.
|
Percentages may not recompute due to rounding.
Yum China
Holdings, Inc.
|
Condensed
Consolidated Balance Sheets
|
(in US$
million)
|
|
|
|
3/31/2020
|
|
|
12/31/2019
|
|
|
|
(Unaudited)
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,048
|
|
|
$
|
1,046
|
|
Short-term
investments
|
|
|
490
|
|
|
|
611
|
|
Accounts receivable,
net
|
|
|
78
|
|
|
|
88
|
|
Inventories,
net
|
|
|
317
|
|
|
|
380
|
|
Prepaid expenses and
other current assets
|
|
|
112
|
|
|
|
134
|
|
Total Current
Assets
|
|
|
2,045
|
|
|
|
2,259
|
|
Property, plant and
equipment, net
|
|
|
1,500
|
|
|
|
1,594
|
|
Operating lease
right-of-use assets
|
|
|
1,899
|
|
|
|
1,985
|
|
Goodwill
|
|
|
250
|
|
|
|
254
|
|
Intangible assets,
net
|
|
|
89
|
|
|
|
94
|
|
Deferred income
taxes
|
|
|
92
|
|
|
|
95
|
|
Investments in
unconsolidated affiliates
|
|
|
107
|
|
|
|
89
|
|
Other
assets
|
|
|
595
|
|
|
|
580
|
|
Total
Assets
|
|
|
6,577
|
|
|
|
6,950
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTEREST
AND EQUITY
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and
other current liabilities
|
|
|
1,434
|
|
|
|
1,691
|
|
Income taxes
payable
|
|
|
49
|
|
|
|
45
|
|
Total Current
Liabilities
|
|
|
1,483
|
|
|
|
1,736
|
|
Non-current operating
lease liabilities
|
|
|
1,704
|
|
|
|
1,803
|
|
Non-current finance
lease obligations
|
|
|
25
|
|
|
|
26
|
|
Other
liabilities
|
|
|
211
|
|
|
|
210
|
|
Total
Liabilities
|
|
|
3,423
|
|
|
|
3,775
|
|
|
|
|
|
|
|
|
|
|
Redeemable
Noncontrolling Interest
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock,
$0.01 par value; 1,000 million shares authorized; 396 million
shares and 395 million shares issued at March 31, 2020
and December 31,
2019, respectively; 376 million shares and 376 million
shares outstanding at
March 31, 2020 and December 31, 2019,
respectively
|
|
|
4
|
|
|
|
4
|
|
Treasury
stock
|
|
|
(728)
|
|
|
|
(721)
|
|
Additional paid-in
capital
|
|
|
2,434
|
|
|
|
2,427
|
|
Retained
earnings
|
|
|
1,433
|
|
|
|
1,416
|
|
Accumulated other
comprehensive loss
|
|
|
(89)
|
|
|
|
(49)
|
|
Total Equity – Yum
China Holdings, Inc.
|
|
|
3,054
|
|
|
|
3,077
|
|
Noncontrolling
interests
|
|
|
100
|
|
|
|
98
|
|
Total
Equity
|
|
|
3,154
|
|
|
|
3,175
|
|
Total Liabilities,
Redeemable Noncontrolling Interest and Equity
|
|
$
|
6,577
|
|
|
$
|
6,950
|
|
|
|
|
|
|
|
|
|
|
Yum China
Holdings, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(in US$
million)
|
(unaudited)
|
|
|
|
Quarter
Ended
|
|
|
3/31/2020
|
|
3/31/2019
|
Cash Flows –
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
Net income –
including noncontrolling interests
|
|
$
|
66
|
|
|
|
$
|
229
|
|
|
Depreciation and
amortization
|
|
|
109
|
|
|
|
|
111
|
|
|
Non-cash operating
lease cost
|
|
|
88
|
|
|
|
|
83
|
|
|
Closures and
impairment expenses
|
|
|
8
|
|
|
|
|
11
|
|
|
Investment loss
(gain)
|
|
|
8
|
|
|
|
|
(10)
|
|
|
Equity income from
investments in unconsolidated affiliates
|
|
|
(20)
|
|
|
|
|
(23)
|
|
|
Distributions of
income received from unconsolidated affiliates
|
|
|
8
|
|
|
|
|
28
|
|
|
Deferred income
taxes
|
|
|
2
|
|
|
|
|
6
|
|
|
Share-based
compensation expense
|
|
|
7
|
|
|
|
|
6
|
|
|
Changes in accounts
receivable
|
|
|
9
|
|
|
|
|
5
|
|
|
Changes in
inventories
|
|
|
57
|
|
|
|
|
34
|
|
|
Changes in prepaid
expenses and other current assets
|
|
|
10
|
|
|
|
|
(3)
|
|
|
Changes in accounts
payable and other current liabilities
|
|
|
(192)
|
|
|
|
|
(39)
|
|
|
Changes in income
taxes payable
|
|
|
5
|
|
|
|
|
24
|
|
|
Changes in
non-current operating lease liabilities
|
|
|
(102)
|
|
|
|
|
(103)
|
|
|
Other, net
|
|
|
(3)
|
|
|
|
|
(15)
|
|
|
Net Cash Provided
by Operating Activities
|
|
|
60
|
|
|
|
|
344
|
|
|
Cash Flows –
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
Capital
spending
|
|
|
(87)
|
|
|
|
|
(110)
|
|
|
Purchases of
short-term investments
|
|
|
(275)
|
|
|
|
|
(235)
|
|
|
Maturities of
short-term investments
|
|
|
390
|
|
|
|
|
76
|
|
|
Prepayment for
investment
|
|
|
(27)
|
|
|
|
|
—
|
|
|
Other, net
|
|
|
1
|
|
|
|
|
2
|
|
|
Net Cash Provided
by (Used in) Investing Activities
|
|
|
2
|
|
|
|
|
(267)
|
|
|
Cash Flows –
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
Repurchase of shares
of common stock
|
|
|
(8)
|
|
|
|
|
(68)
|
|
|
Cash dividends paid
on common stock
|
|
|
(45)
|
|
|
|
|
(46)
|
|
|
Other, net
|
|
|
1
|
|
|
|
|
1
|
|
|
Net Cash Used in
Financing Activities
|
|
|
(52)
|
|
|
|
|
(113)
|
|
|
Effect of Exchange
Rates on Cash, Cash Equivalents and Restricted Cash
|
|
|
(8)
|
|
|
|
|
17
|
|
|
Net Increase
(Decrease) in Cash, Cash Equivalents and Restricted
Cash
|
|
|
2
|
|
|
|
|
(19)
|
|
|
Cash, Cash
Equivalents and Restricted Cash - Beginning of
Period
|
|
|
1,055
|
|
|
|
|
1,266
|
|
|
Cash, Cash
Equivalents and Restricted Cash - End of Period
|
|
|
1,057
|
|
|
|
|
1,247
|
|
|
In this press release:
- The Company provides certain percentage changes excluding the
impact of foreign currency translation ("F/X"). These amounts are
derived by translating current year results at prior year average
exchange rates. We believe the elimination of the F/X impact
provides better year-to-year comparability without the distortion
of foreign currency fluctuations.
- System sales growth reflects the results of all restaurants
regardless of ownership, including Company-owned, franchise and
unconsolidated affiliate restaurants that operate our restaurant
concepts, except for non-Company-owned restaurants for which we do
not receive a sales-based royalty. Sales of franchise and
unconsolidated affiliate restaurants typically generate ongoing
franchise fees for the Company at a rate of approximately 6% of
system sales. Franchise and unconsolidated affiliate restaurant
sales are not included in Company sales in the Condensed
Consolidated Statements of Income; however, the franchise fees are
included in the Company's revenues. We believe system sales growth
is useful to investors as a significant indicator of the overall
strength of our business as it incorporates all of our revenue
drivers, Company and franchise same-store sales as well as net unit
growth.
- Same-store sales growth represents the estimated percentage
change in sales of food of all restaurants in the Company system
that have been open prior to the first day of our prior fiscal
year. We refer to these as our "base" stores.
- Company Restaurant profit ("Restaurant profit") is defined as
Company sales less expenses incurred directly by our Company-owned
restaurants in generating Company sales. Company restaurant margin
percentage is defined as Restaurant profit divided by Company
sales.
Reconciliation of Reported GAAP Results to
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 measures adjusted for Special Items,
which include Adjusted Operating Profit, Adjusted Net Income,
Adjusted EPS, Adjusted Effective Tax Rate and Adjusted EBITDA,
which we define as net income including noncontrolling interests
adjusted for income tax, interest income, net, investment gain or
loss, depreciation, amortization and other items, including store
impairment charges and Special Items. The Special Item for the
quarter ended March 31, 2020
represents share-based compensation cost recognized for a special
award of performance stock units ("Partner PSU Awards") granted to
select employees. The Special Item for the quarter ended
March 31, 2019 represents impact from
the U.S. Tax Cuts and Jobs Act (the "Tax Act"), as described in the
accompanying notes. 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 income tax, interest income, net,
investment gain or loss, depreciation, amortization and other
items, including store impairment charges and Special Items. 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. These adjusted measures
should not be considered in isolation or as a substitute for GAAP
financial results, but should be read in conjunction with the
unaudited Condensed Consolidated Statements of Income and other
information presented herein. A reconciliation of the most directly
comparable GAAP measures to adjusted measures is presented
below.
|
|
Quarter
Ended
|
|
|
|
3/31/2020
|
|
|
3/31/2019
|
|
Detail of Special
Items
|
|
|
|
|
|
|
|
|
Share-based
compensation expense for Partner PSU
awards(b)
|
|
|
(1)
|
|
|
|
—
|
|
Special Items,
Operating Profit
|
|
|
(1)
|
|
|
|
—
|
|
Tax effect on Special
Items(c)
|
|
|
—
|
|
|
|
—
|
|
Impact from the Tax
Act(d)
|
|
|
—
|
|
|
|
(8)
|
|
Special Items, net
income – including noncontrolling interests
|
|
|
(1)
|
|
|
|
(8)
|
|
Special Items, net
income – noncontrolling interests
|
|
|
—
|
|
|
|
—
|
|
Special Items, Net
Income –Yum China Holdings, Inc.
|
|
$
|
(1)
|
|
|
$
|
(8)
|
|
Weighted Average
Diluted Shares Outstanding (in millions)
|
|
|
386
|
|
|
|
388
|
|
Special Items,
Diluted Earnings Per Common Share
|
|
$
|
—
|
|
|
$
|
(0.02)
|
|
Reconciliation of
Operating Profit to Adjusted Operating Profit
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
$
|
97
|
|
|
$
|
303
|
|
Special Items,
Operating Profit
|
|
|
(1)
|
|
|
|
—
|
|
Adjusted Operating
Profit
|
|
$
|
98
|
|
|
$
|
303
|
|
Reconciliation of
Net Income to Adjusted Net Income
|
|
|
|
|
|
|
|
|
Net Income – Yum
China Holdings, Inc.
|
|
$
|
62
|
|
|
$
|
222
|
|
Special Items, Net
Income –Yum China Holdings, Inc.
|
|
|
(1)
|
|
|
|
(8)
|
|
Adjusted Net Income –
Yum China Holdings, Inc.
|
|
$
|
63
|
|
|
$
|
230
|
|
Reconciliation of
EPS to Adjusted EPS
|
|
|
|
|
|
|
|
|
Basic Earnings Per
Common Share
|
|
$
|
0.16
|
|
|
$
|
0.59
|
|
Special Items, Basic
Earnings Per Common Share
|
|
|
(0.01)
|
|
|
|
(0.02)
|
|
Adjusted Basic
Earnings Per Common Share
|
|
$
|
0.17
|
|
|
$
|
0.61
|
|
Diluted Earnings Per
Common Share
|
|
$
|
0.16
|
|
|
$
|
0.57
|
|
Special Items,
Diluted Earnings Per Common Share
|
|
|
—
|
|
|
|
(0.02)
|
|
Adjusted Diluted
Earnings Per Common Share
|
|
$
|
0.16
|
|
|
$
|
0.59
|
|
Reconciliation of
Effective Tax Rate to Adjusted Effective Tax Rate
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
32.7
|
%
|
|
|
28.9
|
%
|
Impact on effective
tax rate as a result of Special Items
|
|
|
0.3
|
%
|
|
|
2.4
|
%
|
Adjusted effective
tax rate
|
|
|
32.4
|
%
|
|
|
26.5
|
%
|
Notes to the Condensed Consolidated Statements of Income,
Condensed Consolidated Balance Sheets,
Condensed
Consolidated Statements of Cash Flows and Reconciliation of
Reported GAAP Results to Adjusted Measures
(in US$
million)
(unaudited)
(a) Amounts presented as of and
for the quarter ended March 31, 2020
and 2019 are unaudited.
(b) In February 2020, the Company granted Partner PSU
Awards to select employees who were deemed critical to the
Company's execution of its strategic operating plan. These PSU
awards will only vest if threshold performance goals are achieved
over a four-year performance period, with the payout ranging from
0% to 200% of the target number of shares subject to the PSU
awards. Partner PSU Awards were granted to address increased
competition for executive talent, motivate transformational
performance and encourage management retention. Given the unique
nature of these grants, the Compensation Committee does not intend
to grant similar, special grants during the performance period. The
impact from these special awards is excluded from metrics that
management uses to assess the Company's performance. The Company
recognized share-based compensation cost associated with the
Partner PSU Awards of $1 million in
the first quarter of 2020.
(c) The tax expense was determined
based upon the nature, as well as the jurisdiction, of each Special
Item at the applicable tax rate.
(d) We completed the evaluation of
the impact on our transition tax computation based on the final
regulations released by the U.S. Treasury Department and the U.S.
Internal Revenue Service became effective in the first quarter of
2019, and recorded an additional tax expense of $8 million for the transition tax
accordingly.
Reconciliation
of Net Income to Adjusted EBITDA
|
(in US$
million)
|
(unaudited)
|
|
Net income, along
with the reconciliation to Adjusted EBITDA, is presented
below.
|
|
|
|
Quarter
Ended
|
|
|
|
3/31/2020
|
|
|
3/31/2019
|
|
Reconciliation of
Net Income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
Net Income – Yum
China Holdings, Inc.
|
|
$
|
62
|
|
|
$
|
222
|
|
Net income –
noncontrolling interests
|
|
|
4
|
|
|
|
7
|
|
Income tax
provision
|
|
|
32
|
|
|
|
93
|
|
Interest income,
net
|
|
|
(9)
|
|
|
|
(9)
|
|
Investment loss
(gain)
|
|
|
8
|
|
|
|
(10)
|
|
Operating
Profit
|
|
|
97
|
|
|
|
303
|
|
Special Items,
Operating Profit
|
|
|
1
|
|
|
|
—
|
|
Adjusted Operating
Profit
|
|
|
98
|
|
|
|
303
|
|
Depreciation and
amortization
|
|
|
109
|
|
|
|
111
|
|
Store impairment
charges
|
|
|
12
|
|
|
|
14
|
|
Adjusted
EBITDA
|
|
$
|
219
|
|
|
$
|
428
|
|
Unit Count by
Brand
|
|
KFC
|
|
|
12/31/2019
|
|
|
New Builds
|
|
|
Closures
|
|
|
Refranchised
|
|
|
3/31/2020
|
|
Company-owned
|
|
|
5,083
|
|
|
|
122
|
|
|
|
(31)
|
|
|
|
—
|
|
|
|
5,174
|
|
Unconsolidated
affiliates
|
|
|
896
|
|
|
|
35
|
|
|
|
(7)
|
|
|
|
—
|
|
|
|
924
|
|
Franchisees
|
|
|
555
|
|
|
|
8
|
|
|
|
—
|
|
|
|
—
|
|
|
|
563
|
|
Total
|
|
|
6,534
|
|
|
|
165
|
|
|
|
(38)
|
|
|
|
—
|
|
|
|
6,661
|
|
Pizza
Hut
|
|
|
12/31/2019
|
|
|
New Builds
|
|
|
Closures
|
|
|
Refranchised
|
|
|
3/31/2020
|
|
Company-owned
|
|
|
2,178
|
|
|
|
10
|
|
|
|
(21)
|
|
|
|
(1)
|
|
|
|
2,166
|
|
Franchisees
|
|
|
103
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
|
105
|
|
Total
|
|
|
2,281
|
|
|
|
11
|
|
|
|
(21)
|
|
|
|
—
|
|
|
|
2,271
|
|
Others
|
|
|
12/31/2019
|
|
|
New Builds
|
|
|
Closures
|
|
|
Refranchised
|
|
|
3/31/2020
|
|
Company-owned
|
|
|
94
|
|
|
|
1
|
|
|
|
(3)
|
|
|
|
—
|
|
|
|
92
|
|
Franchisees
|
|
|
291
|
|
|
|
2
|
|
|
|
(22)
|
|
|
|
—
|
|
|
|
271
|
|
Total
|
|
|
385
|
|
|
|
3
|
|
|
|
(25)
|
|
|
|
—
|
|
|
|
363
|
|
Yum China
Holdings, Inc.
|
Segment
Results
|
(in US$
million)
|
(unaudited)
|
|
Quarter Ended
3/31/2020
|
|
KFC
|
|
|
Pizza Hut
|
|
|
All Other
Segments
|
|
|
Corporate
and
Unallocated(1)
|
|
|
Elimination
|
|
|
Total
|
|
Company
sales
|
|
$
|
1,220
|
|
|
$
|
322
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,548
|
|
Franchise fees and
income
|
|
|
33
|
|
|
|
1
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
35
|
|
Revenues from
transactions with
franchisees and unconsolidated affiliates
|
|
|
16
|
|
|
|
1
|
|
|
|
5
|
|
|
|
139
|
|
|
|
—
|
|
|
|
161
|
|
Other
revenues
|
|
|
—
|
|
|
|
—
|
|
|
|
16
|
|
|
|
1
|
|
|
|
(7)
|
|
|
|
10
|
|
Total
revenues
|
|
$
|
1,269
|
|
|
$
|
324
|
|
|
$
|
28
|
|
|
$
|
140
|
|
|
$
|
(7)
|
|
|
$
|
1,754
|
|
Company restaurant
expenses
|
|
|
1,054
|
|
|
|
321
|
|
|
|
9
|
|
|
|
—
|
|
|
|
(1)
|
|
|
|
1,383
|
|
General and
administrative expenses
|
|
|
46
|
|
|
|
24
|
|
|
|
8
|
|
|
|
21
|
|
|
|
—
|
|
|
|
99
|
|
Franchise
expenses
|
|
|
16
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
17
|
|
Expenses for
transactions with
franchisees
and unconsolidated affiliates
|
|
|
16
|
|
|
|
1
|
|
|
|
4
|
|
|
|
135
|
|
|
|
—
|
|
|
|
156
|
|
Other operating costs
and expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
15
|
|
|
|
1
|
|
|
|
(6)
|
|
|
|
10
|
|
Closures and
impairment income, net
|
|
|
1
|
|
|
|
5
|
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
8
|
|
Other (income)
expenses, net
|
|
|
(17)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
(16)
|
|
Total costs and
expenses, net
|
|
|
1,116
|
|
|
|
352
|
|
|
|
38
|
|
|
|
158
|
|
|
|
(7)
|
|
|
|
1,657
|
|
Operating Profit
(Loss)
|
|
$
|
153
|
|
|
$
|
(28)
|
|
|
$
|
(10)
|
|
|
$
|
(18)
|
|
|
$
|
—
|
|
|
$
|
97
|
|
Quarter Ended
3/31/2019
|
|
KFC
|
|
|
Pizza Hut
|
|
|
All Other
Segments
|
|
|
Corporate
and
Unallocated(1)
|
|
|
Elimination
|
|
|
Total
|
|
Company
sales
|
|
$
|
1,539
|
|
|
$
|
541
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,089
|
|
Franchise fees and
income
|
|
|
36
|
|
|
|
1
|
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
39
|
|
Revenues from
transactions with
franchisees and unconsolidated affiliates
|
|
|
17
|
|
|
|
1
|
|
|
|
7
|
|
|
|
145
|
|
|
|
—
|
|
|
|
170
|
|
Other
revenues
|
|
|
—
|
|
|
|
—
|
|
|
|
14
|
|
|
|
1
|
|
|
|
(9)
|
|
|
|
6
|
|
Total
revenues
|
|
$
|
1,592
|
|
|
$
|
543
|
|
|
$
|
32
|
|
|
$
|
146
|
|
|
$
|
(9)
|
|
|
$
|
2,304
|
|
Company restaurant
expenses
|
|
|
1,230
|
|
|
|
464
|
|
|
|
10
|
|
|
|
—
|
|
|
|
(1)
|
|
|
|
1,703
|
|
General and
administrative expenses
|
|
|
49
|
|
|
|
24
|
|
|
|
8
|
|
|
|
33
|
|
|
|
—
|
|
|
|
114
|
|
Franchise
expenses
|
|
|
19
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20
|
|
Expenses for
transactions with
franchisees
and unconsolidated affiliates
|
|
|
17
|
|
|
|
1
|
|
|
|
6
|
|
|
|
143
|
|
|
|
—
|
|
|
|
167
|
|
Other operating costs
and expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
12
|
|
|
|
1
|
|
|
|
(8)
|
|
|
|
5
|
|
Closures and
impairment income, net
|
|
|
7
|
|
|
|
3
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
11
|
|
Other income,
net
|
|
|
(18)
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1)
|
|
|
|
—
|
|
|
|
(19)
|
|
Total costs and
expenses, net
|
|
|
1,304
|
|
|
|
493
|
|
|
|
37
|
|
|
|
176
|
|
|
|
(9)
|
|
|
|
2,001
|
|
Operating Profit
(Loss)
|
|
$
|
288
|
|
|
$
|
50
|
|
|
$
|
(5)
|
|
|
$
|
(30)
|
|
|
$
|
—
|
|
|
$
|
303
|
|
The above tables reconcile segment information, which is based
on management responsibility, with our Condensed Consolidated
Statements of Income.
(1)
Corporate and unallocated expenses comprise items that are not
allocated to segments for performance reporting purposes. Amount
includes revenues and expenses associated with transactions with
franchisees and unconsolidated affiliates such as inventory
procurement and other services provided to franchisees and
unconsolidated affiliates. The Corporate and Unallocated column in
the above tables includes, among other amounts, all amounts that we
have deemed Special Items. See "Reconciliation of Reported GAAP
Results to Adjusted Measures".
View original
content:http://www.prnewswire.com/news-releases/yum-china-reports-first-quarter-2020-results-301048326.html
SOURCE Yum China Holdings, Inc.