UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to _________________
Commission file number
(Exact Name of Registrant as Specified in Its Charter)
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(State or Other Jurisdiction of |
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(I.R.S. Employer |
Incorporation or Organization) |
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Identification No.) |
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(Address, Including Zip Code, of Principal Executive Offices)
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(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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The Stock Exchange of Hong Kong Limited |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares outstanding of the registrant’s common stock as of August 2, 2024 was
Yum China Holdings, Inc.
INDEX
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income (Unaudited)
Yum China Holdings, Inc.
(in US$ millions, except per share data)
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Quarter Ended |
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Year to Date Ended |
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Revenues |
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6/30/2024 |
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6/30/2023 |
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6/30/2024 |
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6/30/2023 |
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Company sales |
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$ |
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$ |
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$ |
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$ |
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Franchise fees and income |
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Revenues from transactions with franchisees |
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Other revenues |
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Total revenues |
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Costs and Expenses, Net |
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Company restaurants |
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Food and paper |
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Payroll and employee benefits |
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Occupancy and other operating expenses |
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Company restaurant expenses |
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General and administrative expenses |
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Franchise expenses |
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Expenses for transactions with franchisees |
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Other operating costs and expenses |
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Closures and impairment expenses, net |
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Other (income) expenses, net |
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— |
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— |
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( |
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Total costs and expenses, net |
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Operating Profit |
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Interest income, net |
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Investment gain (loss) |
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( |
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Income Before Income Taxes and Equity in |
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Income tax provision |
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( |
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( |
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( |
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( |
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Equity in net earnings (losses) from equity method investments |
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— |
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( |
) |
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— |
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— |
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Net income – including noncontrolling interests |
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Net income – noncontrolling interests |
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Net Income – Yum China Holdings, Inc. |
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$ |
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$ |
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$ |
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$ |
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Weighted-average common shares outstanding (in millions): |
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Basic |
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Diluted |
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Basic Earnings Per Common Share |
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$ |
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$ |
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$ |
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$ |
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Diluted Earnings Per Common Share |
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$ |
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$ |
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$ |
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$ |
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See accompanying Notes to Condensed Consolidated Financial Statements.
3
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Yum China Holdings, Inc.
(in US$ millions)
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Quarter Ended |
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Year to Date Ended |
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6/30/2024 |
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6/30/2023 |
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6/30/2024 |
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6/30/2023 |
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Net income – including noncontrolling interests |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive loss, net of tax of nil: |
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Foreign currency translation adjustments |
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( |
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( |
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( |
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( |
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Comprehensive income (loss) – including noncontrolling interests |
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( |
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Comprehensive income (loss) – noncontrolling interests |
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Comprehensive Income (Loss) – Yum China Holdings, Inc. |
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$ |
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$ |
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$ |
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$ |
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See accompanying Notes to Condensed Consolidated Financial Statements.
4
Condensed Consolidated Statements of Cash Flows (Unaudited)
Yum China Holdings, Inc.
(in US$ millions)
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Year to Date Ended |
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6/30/2024 |
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6/30/2023 |
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Cash Flows – Operating Activities |
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Net income – including noncontrolling interests |
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$ |
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$ |
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Depreciation and amortization |
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Non-cash operating lease cost |
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Closures and impairment expenses |
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Investment (gain) loss |
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( |
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Equity in net (earnings) losses from equity method investments |
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— |
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— |
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Distributions of income received from equity method investments |
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Deferred income taxes |
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( |
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Share-based compensation expense |
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Changes in accounts receivable |
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( |
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Changes in inventories |
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Changes in prepaid expenses, other current assets and value-added tax assets |
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( |
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Changes in accounts payable and other current liabilities |
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Changes in income taxes payable |
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Changes in non-current operating lease liabilities |
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( |
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( |
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Other, net |
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( |
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( |
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Net Cash Provided by Operating Activities |
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Cash Flows – Investing Activities |
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Capital spending |
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( |
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( |
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Purchases of short-term investments, long-term bank deposits and notes |
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( |
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( |
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Maturities of short-term investments, long-term bank deposits and notes |
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Other, net |
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Net Cash Used in Investing Activities |
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( |
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( |
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Cash Flows – Financing Activities |
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Proceeds from short-term borrowings |
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— |
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Repayment of short-term borrowings |
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( |
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— |
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Repurchase of shares of common stock |
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( |
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( |
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Cash dividends paid on common stock |
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( |
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( |
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Dividends paid to noncontrolling interests |
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( |
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( |
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Contributions from noncontrolling interests |
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— |
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Payment of acquisition related holdback |
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— |
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( |
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Other, net |
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( |
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( |
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Net Cash Used in Financing Activities |
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( |
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( |
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Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash |
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( |
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( |
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Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash |
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( |
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Cash, Cash Equivalents, and Restricted Cash - Beginning of Period |
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Cash, Cash Equivalents, and Restricted Cash - End of Period |
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$ |
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$ |
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Supplemental Cash Flow Data |
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Cash paid for income tax |
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Cash paid for interest |
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— |
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Non-cash Investing and Financing Activities |
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Capital expenditures included in accounts payable and other current liabilities |
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See accompanying Notes to Condensed Consolidated Financial Statements.
5
Condensed Consolidated Balance Sheets
Yum China Holdings, Inc.
(in US$ millions)
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6/30/2024 |
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12/31/2023 |
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(Unaudited) |
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ASSETS |
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Current Assets |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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Accounts receivable, net |
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Inventories, net |
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Prepaid expenses and other current assets |
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Total Current Assets |
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Property, plant and equipment, net |
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Operating lease right-of-use assets |
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Goodwill |
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Intangible assets, net |
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Long-term bank deposits and notes |
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Equity investments |
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Deferred income tax assets |
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Other assets |
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Total Assets |
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LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY |
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Current Liabilities |
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Accounts payable and other current liabilities |
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Short-term borrowings |
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Income taxes payable |
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Total Current Liabilities |
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Non-current operating lease liabilities |
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Non-current finance lease liabilities |
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Deferred income tax liabilities |
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Other liabilities |
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Total Liabilities |
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Redeemable Noncontrolling Interest |
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Equity |
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Common stock, $ |
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Treasury stock |
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— |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
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( |
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Total Yum China Holdings, Inc. Stockholders' Equity |
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Noncontrolling interests |
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Total Equity |
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Total Liabilities, Redeemable Noncontrolling Interest and Equity |
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$ |
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$ |
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See accompanying Notes to Condensed Consolidated Financial Statements.
6
Condensed Consolidated Statements of Equity (Unaudited)
Yum China Holdings, Inc.
(in US$ millions)
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Yum China Holdings, Inc. |
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Accumulated |
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Common |
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Additional |
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Other |
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Redeemable |
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Stock |
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Paid-in |
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Retained |
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Comprehensive |
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Treasury Stock |
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Noncontrolling |
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Total |
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Noncontrolling |
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Shares* |
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Amount |
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Capital |
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Earnings |
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Loss |
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Shares |
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Amount |
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Interests |
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Equity |
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Interest |
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Balance at March 31, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
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( |
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$ |
( |
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$ |
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$ |
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$ |
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Net Income |
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— |
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Foreign currency translation adjustments |
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( |
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( |
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( |
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— |
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Comprehensive income |
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— |
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Cash dividends declared |
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( |
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( |
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Distributions to/contributions from |
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( |
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( |
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Repurchase and retirement of shares |
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( |
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— |
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( |
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( |
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( |
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Exercise and vesting of share-based awards |
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— |
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— |
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— |
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— |
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Share-based compensation |
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— |
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Balance at June 30, 2024 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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( |
) |
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$ |
( |
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$ |
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$ |
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$ |
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Balance at March 31, 2023 |
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$ |
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$ |
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$ |
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$ |
( |
) |
|
|
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Net Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||||||||
Foreign currency translation adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
||||||
Comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
||||||||
Cash dividends declared |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||||||
Contributions from / distributions to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||||||||
Repurchase and retirement of shares |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||
Exercise and vesting of share-based awards |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||||
Share-based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||||||||
Balance at June 30, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
|
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |