Yum China Holdings, Inc. - FORM 8-K - EX-99.1

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8-K - 8-K - Yum China Holdings, Inc.	yumc-8k_20170606.htm

Exhibit 99.1

Yum China Holdings, Inc.

Recast Quarterly Segment Operating Results

(in US$ millions)

(unaudited)

2017

	Quarter Ended 2/28/2017
	KFC			Pizza Hut			All Other Segments			Corporate & Unallocated			Total
Total revenues		896			379			9			—			1,284
Company restaurant expenses		665			296			7			—			968
General and administrative expenses		25			17			2			23			67
Franchise expenses		13			—			—			—			13
Closures and impairment expenses (income), net		1			(1	)		—			—			—
Refranchising gain, net		—			—			—			(1	)		(1	)
Other income, net		(15	)		—			(2	)		—			(17	)
Total costs and expenses, net		689			312			7			22			1,030
Operating Profit (Loss)		207			67			2			(22	)		254

2016

	Quarter Ended 2/29/2016
	KFC			Pizza Hut			All Other Segments			Corporate & Unallocated			Total
Total revenues		921			367			15			—			1,303
Company restaurant expenses		706			313			13			—			1,032
General and administrative expenses		24			17			1			24			66
Franchise expenses		14			—			—			—			14
Closures and impairment (income) expenses, net		—			(1	)		1			—			—
Refranchising gain, net		—			—			—			(3	)		(3	)
Other income, net		(14	)		—			(1	)		—			(15	)
Total costs and expenses, net		730			329			14			21			1,094
Operating Profit (Loss)		191			38			1			(21	)		209

	Quarter Ended 5/31/2016
	KFC			Pizza Hut		All Other Segments			Corporate & Unallocated			Total
Total revenues		1,107			466		15			—			1,588
Company restaurant expenses		930			417		15			—			1,362
General and administrative expenses		38			26		3			37			104
Franchise expenses		17			—		—			—			17
Closures and impairment expenses (income), net		21			11		(1	)		—			31
Refranchising gain, net		—			—		—			(1	)		(1	)
Other income, net		(8	)		—		—			(4	)		(12	)
Total costs and expenses, net		998			454		17			32			1,501
Operating Profit (Loss)		109			12		(2	)		(32	)		87

Yum China Holdings, Inc.

Recast Quarterly Segment Operating Results

(in US$ millions)

(unaudited)

	Quarter Ended 8/31/2016
	KFC			Pizza Hut		All Other Segments			Corporate & Unallocated			Total
Total revenues		1,297			574		12			—			1,883
Company restaurant expenses (income)		1,013			465		15			(1	)		1,492
General and administrative expenses		39			25		2			35			101
Franchise expenses		19			1		—			—			20
Closures and impairment expenses, net		4			1		—			—			5
Refranchising gain, net		—			—		—			(4	)		(4	)
Other income, net		(16	)		—		—			(1	)		(17	)
Total costs and expenses, net		1,059			492		17			29			1,597
Operating Profit (Loss)		238			82		(5	)		(29	)		286

	Quarter Ended 12/31/2016
	KFC			Pizza Hut		All Other Segments			Corporate & Unallocated			Total
Total revenues		1,371			588		19			—			1,978
Company restaurant expenses		1,178			531		15			—			1,724
General and administrative expenses		60			32		4			57			153
Franchise expenses		18			2		—			—			20
Closures and impairment expenses, net		16			6		3			17			42
Refranchising gain, net		—			—		—			(7	)		(7	)
Other income, net		(7	)		—		(5	)		—			(12	)
Total costs and expenses, net		1,265			571		17			67			1,920
Operating Profit (Loss)		106			17		2			(67	)		58

Yum China Holdings, Inc.

Recast Annual Segment Operating Results

(in US$ millions)

(unaudited)

2016

	Year Ended 12/31/2016
	KFC			Pizza Hut		All Other Segments			Corporate & Unallocated			Total
Total revenues		4,696			1,995		61			—			6,752
Company restaurant expenses (income)		3,827			1,726		58			(1	)		5,610
General and administrative expenses		161			100		10			153			424
Franchise expenses		68			3		—			—			71
Closures and impairment expenses, net		41			17		3			17			78
Refranchising gain, net		—			—		—			(15	)		(15	)
Other income, net		(45	)		—		(6	)		(5	)		(56	)
Total costs and expenses, net		4,052			1,846		65			149			6,112
Operating Profit (Loss)		644			149		(4	)		(149	)		640

2015

	Year Ended 12/31/2015
	KFC			Pizza Hut		All Other Segments			Corporate & Unallocated			Total
Total revenues		4,768			2,041		100			—			6,909
Company restaurant expenses		4,032			1,803		96			—			5,931
General and administrative expenses		150			91		10			144			395
Franchise expenses		70			—		—			—			70
Closures and impairment expenses, net		50			8		6			—			64
Refranchising gain, net		—			—		—			(13	)		(13	)
Other (income) expenses, net		(33	)		—		(4	)		11			(26	)
Total costs and expenses, net		4,269			1,902		108			142			6,421
Operating Profit (Loss)		499			139		(8	)		(142	)		488

Yum China Holdings, Inc.

KFC Operating Results

(in US$ millions)

(unaudited)

	Quarter Ended			Quarter Ended												Year Ended			Year Ended
	2/28/2017			2/29/2016			5/31/2016			8/31/2016			12/31/2016			12/31/2016			12/31/2015
Revenues
Company sales		870			897			1,078			1,263			1,334			4,572			4,652
Franchise fees and income		26			24			29			34			37			124			116
Total revenues		896			921			1,107			1,297			1,371			4,696			4,768
Costs and Expenses, Net
Company restaurants
Food and paper		251			275			330			365			402			1,372			1,513
Payroll and employee benefits		167			159			223			243			308			933			903
Occupancy and other operating expenses		247			272			377			405			468			1,522			1,616
Company restaurant expenses		665			706			930			1,013			1,178			3,827			4,032
General and administrative expenses		25			24			38			39			60			161			150
Franchise expenses		13			14			17			19			18			68			70
Closures and impairment expenses, net		1			—			21			4			16			41			50
Other income, net		(15	)		(14	)		(8	)		(16	)		(7	)		(45	)		(33	)
Total costs and expenses, net		689			730			998			1,059			1,265			4,052			4,269
Operating Profit		207			191			109			238			106			644			499

Company sales		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Food and paper		28.9			30.7			30.5			29.0			30.1			30.0			32.5
Payroll and employee benefits		19.3			17.7			20.7			19.2			23.1			20.4			19.4
Occupancy and other operating expenses		28.2			30.4			35.0			32.1			35.1			33.3			34.7
Restaurant margin		23.6	%		21.2	%		13.8	%		19.7	%		11.7	%		16.3	%		13.3	%
Operating margin		23.8	%		21.3	%		10.1	%		18.8	%		7.9	%		14.1	%		10.7	%

Percentages may not recompute due to rounding.

Yum China Holdings, Inc.

Pizza Hut Operating Results

(in US$ millions)

(unaudited)

	Quarter Ended			Quarter Ended												Year Ended			Year Ended
	2/28/2017			2/29/2016			5/31/2016			8/31/2016			12/31/2016			12/31/2016			12/31/2015
Revenues
Company sales		379			367			465			573			588			1,993			2,040
Franchise fees and income		—			—			1			1			—			2			1
Total revenues		379			367			466			574			588			1,995			2,041
Costs and Expenses, Net
Company restaurants
Food and paper		92			105			127			144			151			527			611
Payroll and employee benefits		88			82			115			129			157			483			457
Occupancy and other operating expenses		116			126			175			192			223			716			735
Company restaurant expenses		296			313			417			465			531			1,726			1,803
General and administrative expenses		17			17			26			25			32			100			91
Franchise expenses		—			—			—			1			2			3			—
Closures and impairment expenses (income), net		(1	)		(1	)		11			1			6			17			8
Total costs and expenses, net		312			329			454			492			571			1,846			1,902
Operating Profit		67			38			12			82			17			149			139

Company sales		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Food and paper		24.1			28.6			27.5			25.1			25.6			26.4			29.9
Payroll and employee benefits		23.1			22.6			24.4			22.6			26.8			24.3			22.4
Occupancy and other operating expenses		30.9			34.0			37.7			33.6			37.8			35.9			36.1
Restaurant margin		21.9	%		14.8	%		10.4	%		18.7	%		9.8	%		13.4	%		11.6	%
Operating margin		17.7	%		10.4	%		2.7	%		13.9	%		3.4	%		7.5	%		6.8	%

Percentages may not recompute due to rounding.

Yum China Holdings, Inc.

Recast Quarterly System and Same-Store Sales Growth

(unaudited)¹

2017

	Quarter Ended 2/28/2017
	KFC			Pizza Hut			All Other Segments			Total
System Sales (Decline) Growth		(2	)%		3	%		(44	)%		(1	)%
System Sales Growth (Decline), excluding F/X		3	%		9	%		(41	)%		4	%
Same-Store Sales Growth (Decline)		1	%		2	%		(14	)%		1	%

2016

	Quarter Ended 2/29/2016
	KFC			Pizza Hut			All Other Segments			Total
System Sales Growth (Decline)		10	%		(5	)%		(43	)%		6	%
System Sales Growth (Decline), excluding F/X		16	%		—	%		(40	)%		11	%
Same-Store Sales Growth (Decline)		12	%		(12	)%		(3	)%		6	%



	Quarter Ended 5/31/2016
	KFC			Pizza Hut			All Other Segments			Total
System Sales Growth (Decline)		1	%		(5	)%		(42	)%		(1	)%
System Sales Growth (Decline), excluding F/X		5	%		(1	)%		(40	)%		3	%
Same-Store Sales Growth (Decline)		3	%		(10	)%		(4	)%		—	%



	Quarter Ended 8/31/2016
	KFC			Pizza Hut			All Other Segments			Total
System Sales (Decline) Growth		(4	)%		1	%		(35	)%		(3	)%
System Sales Growth (Decline), excluding F/X		2	%		7	%		(31	)%		3	%
Same-Store Sales Decline		(1	)%		(4	)%		(1	)%		(1	)%



	Quarter Ended 12/31/2016
	KFC			Pizza Hut			All Other Segments			Total
System Sales (Decline) Growth		(3	)%		—	%		(41	)%		(2	)%
System Sales Growth (Decline), excluding F/X		4	%		7	%		(37	)%		4	%
Same-Store Sales Growth (Decline)		1	%		(3	)%		(4	)%		—	%

¹ The Company provides system sales growth (decline), excluding the impact of foreign currency translation (“F/X”). These amounts are derived by translating current year results at prior year average exchange rates. The Company believes the elimination of the F/X impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.

Yum China Holdings, Inc.

Recast Annual System and Same-Store Sales Growth

(unaudited)

2016

	Year Ended 12/31/2016
	KFC			Pizza Hut			All Other Segments			Total
System Sales Growth (Decline)		—	%		(2	)%		(41	)%		(1	)%
System Sales Growth (Decline), excluding F/X		6	%		4	%		(37	)%		5	%
Same-Store Sales Growth (Decline)		3	%		(7	)%		(3	)%		—	%

2015

	Year Ended 12/31/2015
	KFC			Pizza Hut			All Other Segments			Total
System Sales (Decline) Growth		(2	)%		9	%		(41	)%		—	%
System Sales Growth (Decline), excluding F/X		—	%		11	%		(40	)%		2	%
Same-Store Sales Decline		(4	)%		(4	)%		(10	)%		(4	)%

Yum China Holdings, Inc.

Recast Unit Activity

(unaudited)

KFC
	Company-owned			Unconsolidated affiliates		Franchise			Total
As of 12/31/2014		3,732			757		339			4,828

Net Unit Change
2015		89			39		47			175

As of 12/31/2015		3,821			796		386			5,003

Net Unit Change
Q1 2016		(6	)		7		15			16
Q2 2016		—			8		12			20
Q3 2016		17			1		30			48
Q4 2016		81			24		32			137

As of 12/31/2016		3,913			836		475			5,224

Net Unit Change
Q1 2017		45			12		(5	)		52

As of 2/28/2017		3,958			848		470			5,276

Yum China Holdings, Inc.

Recast Unit Activity

(unaudited)

Pizza Hut
	Company-owned		Franchise		Total
As of 12/31/2014		1,569		3		1,572

Net Unit Change
2015		318		13		331

As of 12/31/2015		1,887		16		1,903

Net Unit Change
Q1 2016		23		—		23
Q2 2016		22		1		23
Q3 2016		41		3		44
Q4 2016		84		4		88

As of 12/31/2016		2,057		24		2,081

Net Unit Change
Q1 2017		26		3		29

As of 2/28/2017		2,083		27		2,110

All Other Segments
	Company-owned			Franchise			Total
As of 12/31/2014
		116			199			315
Net Unit Change
2015		(56	)		11			(45	)

As of 12/31/2015		60			210			270

Net Unit Change
Q1 2016		(6	)		(4	)		(10	)
Q2 2016		(1	)		(1	)		(2	)
Q3 2016		(11	)		3			(8	)
Q4 2016		(4	)		11			7

As of 12/31/2016		38			219			257

Net Unit Change
Q1 2017		1			19			20

As of 2/28/2017		39			238			277

Yum China Holdings, Inc. - FORM 8-K - EX-99.1 - June 6, 2017

Attached files

Yum China Holdings, Inc. Reports