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, Feb. 7, 2023
/PRNewswire/ -- 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
- Total revenues decreased 9% year over year to
$2.09 billion from $2.29 billion (a 2% increase excluding foreign
currency translation ("F/X")).
- Total system sales decreased 4% year over year, with
decreases of 1% at KFC and 6% at Pizza Hut, excluding F/X.
- Same-store sales decreased 4% year over year, with
decreases of 3% at KFC and 8% at Pizza Hut, excluding F/X.
- Opened 538 net new stores during the quarter.
- Restaurant margin was 10.4%, compared with 7.5% in the
prior year period.
- Operating Profit decreased 94% year over year to
$41 million from $633 million (a 93% decrease excluding F/X),
primarily due to the non-cash re-measurement gain of $618 million from the consolidation of
Hangzhou in the fourth quarter of
2021.
- Adjusted Operating Profit increased 152% year over year
to $40 million from $16 million (a 189% increase excluding F/X).
- Effective tax rate was 29.9%.
- Net Income decreased 89% to $53
million from $475 million in
the prior year period, primarily due to the decrease in Operating
Profit.
- Adjusted Net Income increased to $52 million from $11
million in the prior year period (a 137% increase excluding
the net gain of $4 million in the
fourth quarter of 2022 and net loss of $9
million in the fourth quarter of 2021, respectively, from
our mark-to-market equity investments; a 154% increase if further
excluding F/X).
- Diluted EPS decreased 88% to $0.13 from $1.10 in
the prior year period.
- Adjusted Diluted EPS increased to $0.13 from $0.03 in
the prior year period (a 120% increase excluding the net gain from
our mark-to-market equity investments in the fourth quarter of 2022
and net loss in the fourth quarter of 2021, respectively; a 140%
increase if further excluding F/X).
Full Year Highlights
- Total revenues decreased 3% year over year to
$9.57 billion from $9.85 billion (a 1% increase excluding F/X).
- Total system sales decreased 5% year over year, with
decreases of 4% at KFC and 3% at Pizza Hut, excluding F/X.
- Same-store sales decreased 7% year over year, with
decreases of 7% at KFC and 6% at Pizza Hut, excluding F/X.
- Total store count reached 12,947 as of December 31, 2022, with 1,159 net new store
openings during the year.
- Restaurant margin was 14.1%, compared with 13.7% in the
prior year.
- Operating Profit decreased 55% year over year to
$629 million from $1.39 billion (a 53% decrease excluding F/X),
primarily due to the non-cash gain from the re-measurement of our
previously held equity interest in Hangzhou KFC in the fourth
quarter of 2021.
- Adjusted Operating Profit decreased 17% year over year
to $633 million from $766 million (a 14% decrease excluding F/X).
- Effective tax rate was 30.1%.
- Net Income decreased 55% to $442
million from $990 million in
the prior year, primarily due to the decrease in Operating Profit,
partially offset by loss from mark-to-market investments.
- Adjusted Net Income decreased 15% to $446 million from $525
million in the prior year (a 19% decrease excluding the net
losses of $22 million and
$52 million in 2022 and 2021,
respectively, from mark-to-market equity investments; a 16%
decrease if further excluding F/X).
- Diluted EPS decreased 54% to $1.04 from $2.28 in
the prior year.
- Adjusted Diluted EPS decreased 13% to $1.05 from $1.21 in
the prior year (a 17% decrease excluding the net losses in 2022 and
2021, respectively, from mark-to-market equity investments; a 14%
decrease if further excluding F/X).
Key Financial Results
|
Fourth Quarter
2022
|
|
|
Full Year
2022
|
|
|
%
Change
|
|
|
%
Change
|
|
|
System
Sales
|
|
Same-Store
Sales
|
|
Net New
Units
|
|
Operating
Profit
|
|
|
System
Sales
|
|
Same-Store
Sales
|
|
Net New
Units
|
|
Operating
Profit
|
|
Yum China
|
(4)
|
|
(4)
|
|
+10
|
|
(94)
|
|
|
(5)
|
|
(7)
|
|
+10
|
|
(55)
|
|
KFC
|
(1)
|
|
(3)
|
|
+11
|
|
+79
|
|
|
(4)
|
|
(7)
|
|
+11
|
|
(5)
|
|
Pizza
Hut
|
(6)
|
|
(8)
|
|
+12
|
|
(207)
|
|
|
(3)
|
|
(6)
|
|
+12
|
|
(36)
|
|
|
|
Fourth
Quarter
|
|
|
|
Full
Year
|
(in US$ million, except
per share data and percentages)
|
|
|
|
|
|
%
Change
|
|
|
|
|
|
|
|
%
Change
|
|
|
2022
|
|
|
2021
|
Reported
|
|
Ex F/X
|
|
|
|
2022
|
|
|
2021
|
Reported
|
|
Ex F/X
|
Operating
Profit
|
$
|
41
|
|
$
|
633
|
(94)
|
|
(93)
|
|
|
$
|
629
|
|
$
|
1,386
|
(55)
|
|
(53)
|
Adjusted Operating
Profit(1)
|
$
|
40
|
|
$
|
16
|
+152
|
|
+189
|
|
|
$
|
633
|
|
$
|
766
|
(17)
|
|
(14)
|
Net Income
|
$
|
53
|
|
$
|
475
|
(89)
|
|
(88)
|
|
|
$
|
442
|
|
$
|
990
|
(55)
|
|
(54)
|
Adjusted Net
Income(1)
|
$
|
52
|
|
$
|
11
|
+376
|
|
+406
|
|
|
$
|
446
|
|
$
|
525
|
(15)
|
|
(12)
|
Basic Earnings Per
Common Share
|
$
|
0.13
|
|
$
|
1.11
|
(88)
|
|
(87)
|
|
|
$
|
1.05
|
|
$
|
2.34
|
(55)
|
|
(53)
|
Adjusted Basic
Earnings
Per Common Share(1)
|
$
|
0.13
|
|
$
|
0.03
|
+333
|
|
+333
|
|
|
$
|
1.06
|
|
$
|
1.24
|
(15)
|
|
(11)
|
Diluted Earnings Per
Common Share
|
$
|
0.13
|
|
$
|
1.10
|
(88)
|
|
(88)
|
|
|
$
|
1.04
|
|
$
|
2.28
|
(54)
|
|
(53)
|
Adjusted Diluted
Earnings
Per Common Share(1)
|
$
|
0.13
|
|
$
|
0.03
|
+333
|
|
+333
|
|
|
$
|
1.05
|
|
$
|
1.21
|
(13)
|
|
(10)
|
(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
- During the fourth quarter, we repurchased approximately 1.2
million shares of Yum China common
stock for $52 million at an average
price of $44.13 per share. As of
December 31, 2022, approximately
$1.2 billion remained available for
future share repurchases under the current authorization.
- The Board of Directors declared an increase in our cash
dividend to $0.13 per share on
Yum China's common stock, payable on
March 28, 2023 to shareholders of
record as of the close of business on March
7, 2023.
- For the full year 2022, the Company returned approximately
$668 million to shareholders in the
form of share repurchases and cash dividends.
Digital and Delivery
- The KFC and Pizza Hut loyalty programs exceeded 410 million
members combined, as of quarter-end. Member sales accounted for
approximately 60% of system sales in the fourth quarter of
2022.
- Delivery contributed approximately 45% of KFC and Pizza Hut's
Company sales in the fourth quarter of 2022, an increase of
approximately 10 percentage points from the prior year period.
Worsened COVID conditions in the quarter significantly impacted
dine-in traffic and drove strong demand for delivery.
- Digital orders, including delivery, mobile orders and kiosk
orders, accounted for approximately 90% of KFC and Pizza Hut's
Company sales in the fourth quarter of 2022.
KFC and Pizza Hut
Total
|
|
Fourth
Quarter
|
|
|
Full
Year
|
|
|
|
2022
|
|
2021
|
|
|
2022
|
|
2021
|
|
Member count (as of
period-end)
|
|
410 million+
|
|
360 million+
|
|
|
410 million+
|
|
360 million+
|
|
Member sales as % of
system sales
|
|
~60%
|
|
~62%
|
|
|
~62%
|
|
~63%
|
|
Delivery as % of
Company sales
|
|
~45%
|
|
~35%
|
|
|
~39%
|
|
~32%
|
|
Digital orders as % of
Company sales
|
|
~90%
|
|
~88%
|
|
|
~89%
|
|
~86%
|
|
New-Unit Development and Asset Upgrade
- The Company opened 538 net new stores in the fourth quarter of
2022, and 1,824 gross new stores, or 1,159 net new stores, in the
full year 2022, mainly driven by development of the KFC and Pizza
Hut brands.
- The Company remodeled 153 stores in the fourth quarter of 2022
and 469 stores in the full year 2022.
|
|
Net New
Units
|
|
|
Restaurant
Count
|
|
|
|
Fourth
Quarter
|
|
Full
Year
|
|
|
As of
Year-End
|
|
|
|
2022
|
|
2022
|
|
|
2022
|
|
2021
|
|
Yum China
|
|
538
|
|
1,159
|
|
|
12,947
|
|
11,788
|
|
KFC
|
|
419
|
|
926
|
|
|
9,094
|
|
8,168
|
|
Pizza
Hut
|
|
97
|
|
313
|
|
|
2,903
|
|
2,590
|
|
Others(2)
|
|
22
|
|
(80)
|
|
|
950
|
|
1,030
|
|
(2) Others include Taco
Bell, Little Sheep, Huang Ji Huang, East Dawning, COFFii & JOY
and Lavazza.
|
Restaurant Margin
- Restaurant margin was 10.4% in the fourth quarter of 2022,
compared with 7.5% in the prior year period, primarily attributable
to higher labor productivity, operational efficiency and temporary
relief, partially offset by sales deleveraging including temporary
store closures, increased rider cost associated with rising
delivery volumes as well as commodity and wage inflation.
- Restaurant margin was 14.1% in the full year 2022, compared
with 13.7% in the prior year, primarily attributable to higher
labor productivity, operational efficiency and temporary relief,
partially offset by sales deleveraging, commodity and wage
inflation, and increased rider cost associated with rising delivery
volumes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth
Quarter
|
|
|
Full
Year
|
|
|
|
2022
|
|
2021
|
|
ppts
change
|
|
|
2022
|
|
2021
|
|
ppts
change
|
|
Yum China
|
|
10.4 %
|
|
7.5 %
|
|
+2.9
|
|
|
14.1 %
|
|
13.7 %
|
|
+0.4
|
|
KFC
|
|
12.7 %
|
|
8.6 %
|
|
+4.1
|
|
|
15.7 %
|
|
14.9 %
|
|
+0.8
|
|
Pizza
Hut
|
|
1.9 %
|
|
5.9 %
|
|
(4.0)
|
|
|
9.2 %
|
|
10.7 %
|
|
(1.5)
|
|
2023 Outlook
The Company currently expects:
- To open approximately 1,100 to 1,300 net new stores.
- To make capital expenditures in the range of approximately
$700 million to $900 million.
Other Updates
- In November 2022, the Company
received approval from Science Based Targets initiative (SBTi) on
its near-term greenhouse gas ("GHG") emissions reduction targets.
The Company has committed to reducing its absolute Scope 1 and 2
GHG emissions by 63% by 2035 from a 2020 base year, and to reducing
its Scope 3 GHG emissions from purchased goods by 66.3% per ton of
goods purchased by 2035 from a 2020 base year. The Company has
pledged to align its business with the most ambitious aim of the
Paris Agreement, to limit global temperature rise to 1.5
oC above pre-industrial levels and reach net-zero by
2050.
- In December 2022, the Company
acquired an additional 20% equity interest in the Suzhou KFC joint
venture ("Suzhou KFC") for approximately $115 million, bringing total ownership from 72%
to 92%. As Suzhou KFC has been consolidated by the Company since
2020, this transaction does not have a material impact on the
consolidated statement of income in the fourth quarter.
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.
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:
|
|
|
Tel: +86 21 2407 7556 /
+852 2267 5801
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
|
|
Year
Ended
|
|
%
Change
|
|
|
12/31/2022
|
|
12/31/2021
|
|
B/(W)
|
|
12/31/2022
|
|
12/31/2021
|
|
B/(W)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
sales
|
|
$ 1,975
|
|
$ 2,087
|
|
(5)
|
|
|
$ 9,110
|
|
$ 8,961
|
|
2
|
|
Franchise fees and
income
|
|
16
|
|
33
|
|
(49)
|
|
|
81
|
|
153
|
|
(47)
|
|
Revenues from
transactions with
franchisees and unconsolidated affiliates
|
|
68
|
|
144
|
|
(53)
|
|
|
287
|
|
663
|
|
(57)
|
|
Other
revenues
|
|
29
|
|
27
|
|
7
|
|
|
91
|
|
76
|
|
20
|
|
Total
revenues
|
|
2,088
|
|
2,291
|
|
(9)
|
|
|
9,569
|
|
9,853
|
|
(3)
|
|
Costs and Expenses,
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
restaurants
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and
paper
|
|
630
|
|
679
|
|
7
|
|
|
2,836
|
|
2,812
|
|
(1)
|
|
Payroll and employee
benefits
|
|
570
|
|
583
|
|
2
|
|
|
2,389
|
|
2,258
|
|
(6)
|
|
Occupancy and other
operating expenses
|
|
570
|
|
669
|
|
15
|
|
|
2,604
|
|
2,664
|
|
2
|
|
Company restaurant
expenses
|
|
1,770
|
|
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
franchisees and unconsolidated affiliates
|
|
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
Equity in Net Earnings (Losses) from
Equity Method Investments
|
|
80
|
|
635
|
|
(87)
|
|
|
687
|
|
1,392
|
|
(51)
|
|
Income tax
provision
|
|
(24)
|
|
(159)
|
|
85
|
|
|
(207)
|
|
(369)
|
|
44
|
|
Equity in net earnings
(losses) from
equity method investments
|
|
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
(in millions)
|
|
419
|
|
427
|
|
|
|
|
421
|
|
422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Common Share
|
|
$
0.13
|
|
$
1.10
|
|
|
|
|
$
1.04
|
|
$
2.28
|
|
|
|
Weighted-average shares
outstanding
(in millions)
|
|
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.
|
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
franchisees and unconsolidated affiliates
|
|
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
franchisees and unconsolidated affiliates
|
|
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.
|
|
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
franchisees and unconsolidated affiliates
|
|
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
franchisees and unconsolidated affiliates
|
|
—
|
|
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.
|
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
449 million shares issued at December 31, 2022
and 2021, respectively; 419
million shares and 428 million shares
outstanding at December 31, 2022 and 2021, respectively
|
|
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
|
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
|
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 an average 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.
- Effective January 1, 2018, the
Company revised its definition of same-store sales growth to
represent 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, excluding the period during
which stores are temporarily closed. We refer to these as our
"base" stores. Previously, same-store sales growth represented the
estimated percentage change in sales of all restaurants in the
Company system that have been open for one year or more, including
stores temporarily closed, and the base stores changed on a rolling
basis from month to month. This revision was made to align with how
management measures performance internally and focuses on trends of
a more stable base of stores.
- Company sales represent revenues from Company-owned
restaurants. Company Restaurant profit ("Restaurant profit") is
defined as Company sales less expenses incurred directly by our
Company-owned restaurants in generating Company sales, including
cost of food and paper, restaurant-level payroll and employee
benefits, rent, depreciation and amortization of restaurant-level
assets, advertising expenses, and other operating expenses. Company
restaurant margin percentage is defined as Restaurant profit
divided by Company sales.
- Certain comparative items in the Condensed Consolidated
Financial Statements have been reclassified to conform to the
current period's presentation to facilitate comparison.
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:
|
|
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
|
(1) In the quarters ended December 31 and September
30, 2021, as a result of the consolidation of Hangzhou KFC
and the Lavazza joint venture, the Company recognized a gain of
$618 million and $10 million, respectively, from the
re-measurement of our previously held equity interest at fair
value.
(2) 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 to the same employees during the performance period. The
impact from these special awards is excluded from metrics that
management uses to assess the Company's performance.
(3) The tax expense was determined based upon
the nature, as well as the jurisdiction, of each Special Item at
the applicable tax rate.
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.
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
|
|
|
|
|
Yum China Holdings,
Inc.
|
Segment
Results
|
(in US$
million)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
12/31/2022
|
|
|
KFC
|
|
Pizza Hut
|
|
All Other
Segments
|
|
Corporate
and
Unallocated(1)
|
|
Elimination
|
|
Total
|
Company
sales
|
|
$ 1,566
|
|
$
398
|
|
$
11
|
|
$
—
|
|
$
—
|
|
$ 1,975
|
Franchise fees and
income
|
|
12
|
|
1
|
|
3
|
|
—
|
|
—
|
|
16
|
Revenues from
transactions with
franchisees and unconsolidated
affiliates(2)
|
|
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
franchisees and unconsolidated
affiliates(2)
|
|
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
and
Unallocated
|
|
Elimination
|
|
Total
|
GAAP Operating Profit
(Loss)
|
|
$
117
|
|
$
(20)
|
|
$
(11)
|
|
$
(45)
|
|
$
—
|
|
$
41
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise fees and
income
|
|
12
|
|
1
|
|
3
|
|
—
|
|
—
|
|
16
|
Revenues from
transactions with
franchisees and unconsolidated affiliates
|
|
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
franchisees and unconsolidated affiliates
|
|
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 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
12/31/2021
|
|
|
KFC
|
|
Pizza Hut
|
|
All Other
Segments
|
|
Corporate
and
Unallocated(1)
|
|
Elimination
|
|
Total
|
Company
sales
|
|
$ 1,596
|
|
$
475
|
|
$
16
|
|
$
—
|
|
$
—
|
|
$ 2,087
|
Franchise fees and
income
|
|
25
|
|
2
|
|
6
|
|
—
|
|
—
|
|
33
|
Revenues from
transactions with
franchisees and unconsolidated
affiliates(2)
|
|
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
franchisees and unconsolidated
affiliates(2)
|
|
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
and
Unallocated
|
|
Elimination
|
|
Total
|
GAAP Operating Profit
(Loss)
|
|
$
64
|
|
$
(6)
|
|
$
(14)
|
|
$
589
|
|
$
—
|
|
$
633
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise fees and
income
|
|
25
|
|
2
|
|
6
|
|
—
|
|
—
|
|
33
|
Revenues from
transactions with
franchisees and unconsolidated affiliates
|
|
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
franchisees and unconsolidated affiliates
|
|
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 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
12/31/2022
|
|
|
KFC
|
|
Pizza Hut
|
|
All Other
Segments
|
|
Corporate
and
Unallocated(1)
|
|
Elimination
|
|
Total
|
Company
sales
|
|
$ 7,120
|
|
$ 1,939
|
|
$
51
|
|
$
—
|
|
$
—
|
|
$ 9,110
|
Franchise fees and
income
|
|
56
|
|
7
|
|
18
|
|
—
|
|
—
|
|
81
|
Revenues from
transactions with
franchisees and unconsolidated
affiliates(2)
|
|
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
franchisees and unconsolidated
affiliates(2)
|
|
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
and
Unallocated
|
|
Elimination
|
|
Total
|
GAAP Operating Profit
(Loss)
|
|
$
787
|
|
$
70
|
|
$
(50)
|
|
$
(178)
|
|
$
—
|
|
$
629
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise fees and
income
|
|
56
|
|
7
|
|
18
|
|
—
|
|
—
|
|
81
|
Revenues from
transactions with
franchisees and unconsolidated affiliates
|
|
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
franchisees and unconsolidated affiliates
|
|
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 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
12/31/2021
|
|
|
KFC
|
|
Pizza Hut
|
|
All Other
Segments
|
|
Corporate
and
Unallocated(1)
|
|
Elimination
|
|
Total
|
Company
sales
|
|
$ 6,816
|
|
$ 2,092
|
|
$
53
|
|
$
—
|
|
$
—
|
|
$ 8,961
|
Franchise fees and
income
|
|
120
|
|
8
|
|
25
|
|
—
|
|
—
|
|
153
|
Revenues from
transactions with
franchisees and unconsolidated
affiliates(2)
|
|
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
franchisees and unconsolidated
affiliates(2)
|
|
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
and
Unallocated
|
|
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
franchisees and unconsolidated affiliates
|
|
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
franchisees and unconsolidated affiliates
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts have not
been allocated to any segment for purpose of making operating
decision or assessing financial performance as the transactions
are deemed corporate revenues and expenses in nature.
|
(2) Primarily included
revenues and associated expenses of transactions with franchisees
and unconsolidated affiliates derived from the Company's
central procurement model whereby the Company centrally purchases
substantially all food and paper products from suppliers and then
sells and
delivers to KFC and Pizza Hut restaurants, including franchisees
and unconsolidated affiliates that operate our concepts.
|
View original
content:https://www.prnewswire.com/news-releases/yum-china-reports-fourth-quarter-and-full-year-2022-results-301740597.html
SOURCE Yum China Holdings, Inc.