10-Q 1 yumc-20240930.htm 10-Q 10-Q
0001673358falseQ3--12-31three yearshttp://fasb.org/us-gaap/2024#OperatingLeaseRightOfUseAssethttp://fasb.org/us-gaap/2024#OperatingLeaseRightOfUseAssethttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentNethttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentNethttp://fasb.org/us-gaap/2024#AccountsPayableAndAccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#AccountsPayableAndAccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#AccountsPayableAndAccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#AccountsPayableAndAccruedLiabilitiesCurrenthttp://www.yumchina.com/20240930#ClosureAndImpairmentIncomeExpensesNethttp://www.yumchina.com/20240930#ClosureAndImpairmentIncomeExpensesNethttp://www.yumchina.com/20240930#ClosureAndImpairmentIncomeExpensesNethttp://www.yumchina.com/20240930#ClosureAndImpairmentIncomeExpensesNethttp://www.yumchina.com/20240930#RestaurantsMemberhttp://www.yumchina.com/20240930#RestaurantsMember0001673358us-gaap:MachineryAndEquipmentMember2023-12-310001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMember2023-07-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:OtherRevenueMemberyumc:KFCMember2023-07-012023-09-300001673358yumc:ModificationOrOtherReassessmentEventsMember2024-01-012024-09-300001673358yumc:PrivilegeMembershipProgramsMember2023-12-310001673358yumc:PizzaHutMember2024-09-300001673358us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001673358us-gaap:FairValueInputsLevel3Memberyumc:RestaurantsMemberus-gaap:FairValueMeasurementsNonrecurringMember2024-07-012024-09-300001673358yumc:CustomerRelatedAssetsMember2023-12-310001673358us-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMemberus-gaap:AllOtherSegmentsMember2023-01-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMemberyumc:KFCMember2024-07-012024-09-300001673358us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-01-012023-09-300001673358us-gaap:CorporateNonSegmentMember2023-07-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMemberus-gaap:AllOtherSegmentsMember2023-01-012023-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMember2024-01-012024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMember2024-09-300001673358yumc:FoodAndNonFoodRevenuesFromSalesMember2024-07-012024-09-300001673358yumc:LavazzaJointVentureMember2020-06-300001673358yumc:PizzaHutMember2023-12-310001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:OtherRevenueMember2023-07-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMemberus-gaap:AllOtherSegmentsMember2024-01-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:InterSegmentRevenueMemberus-gaap:AllOtherSegmentsMember2023-01-012023-09-300001673358yumc:PizzaHutMember2024-07-012024-09-300001673358yumc:TransactionsWithFranchiseesMemberus-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2024-07-012024-09-300001673358us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001673358yumc:KFCMember2024-01-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMemberyumc:KFCMember2024-07-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMemberus-gaap:AllOtherSegmentsMember2024-07-012024-09-300001673358srt:MinimumMember2024-01-012024-09-300001673358yumc:PizzaHutMember2024-01-012024-09-300001673358yumc:RedeemableNoncontrollingInterestMember2022-12-310001673358us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300001673358us-gaap:TrademarksMemberyumc:LittleSheepMember2023-12-310001673358yumc:OthersMember2023-12-310001673358yumc:FujianSunnerDevelopmentCoLtdMemberus-gaap:FiniteLivedIntangibleAssetsMember2023-12-310001673358yumc:DollarTwoMillionSettledSubsequentToJuneThirtyTwoThousandTwentyThreeMember2024-01-012024-09-300001673358us-gaap:BankTimeDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358us-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMemberyumc:KFCMember2023-01-012023-09-300001673358yumc:DollarThreeMillionSettledSubsequentToJuneThirtyTwoThousandTwentyFourMember2023-01-012023-09-300001673358yumc:OthersMember2024-09-300001673358yumc:InvestmentInEquitySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358us-gaap:ShortTermDebtMember2024-09-300001673358yumc:RevenueFromExternalCustomersMemberyumc:OperatingSegmentsAndCorporateNonSegmentMember2024-07-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:FranchiseFeesAndIncomeMember2024-01-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:TransactionsWithFranchiseesMemberyumc:KFCMember2023-07-012023-09-300001673358us-gaap:IntersegmentEliminationMember2024-01-012024-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMemberus-gaap:AllOtherSegmentsMember2023-07-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:OtherRevenueMemberus-gaap:AllOtherSegmentsMember2024-07-012024-09-300001673358us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FixedIncomeSecuritiesMember2024-09-300001673358yumc:FujianSunnerDevelopmentCoLtdMemberus-gaap:FiniteLivedIntangibleAssetsMember2024-09-300001673358us-gaap:FairValueInputsLevel3Memberyumc:RestaurantsMemberus-gaap:FairValueMeasurementsNonrecurringMember2023-07-012023-09-300001673358srt:MaximumMember2024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:OtherRevenueMember2024-07-012024-09-300001673358yumc:RevenueFromExternalCustomersMemberyumc:OperatingSegmentsAndCorporateNonSegmentMember2024-01-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:OtherRevenueMember2023-07-012023-09-300001673358us-gaap:RetainedEarningsMember2023-01-012023-09-300001673358us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FixedIncomeSecuritiesMember2024-09-300001673358yumc:CustomerLoyaltyProgramsMember2024-09-300001673358us-gaap:RetainedEarningsMember2022-12-310001673358yumc:HangzhouMemberyumc:OwnerAndOperatorOfKFCMemberyumc:KFCMember2024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMember2024-07-012024-09-300001673358yumc:BuildingsAndImprovementsAndConstructionInProgressMember2023-12-310001673358yumc:TransactionsWithFranchiseesMember2024-07-012024-09-300001673358us-gaap:IntersegmentEliminationMemberyumc:OtherRevenueMember2023-07-012023-09-300001673358us-gaap:AdditionalPaidInCapitalMember2022-12-310001673358yumc:ReacquiredFranchiseRightsMember2023-12-310001673358us-gaap:IntersegmentEliminationMember2024-07-012024-09-300001673358yumc:FujianSunnerDevelopmentCoLtdMember2024-01-012024-09-300001673358us-gaap:AllOtherSegmentsMember2024-01-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMember2023-07-012023-09-300001673358yumc:HangzhouCateringMemberyumc:HangzhouKFCMember2021-12-310001673358us-gaap:OperatingSegmentsMemberyumc:KFCMember2024-07-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:RevenueFromExternalCustomersMember2023-01-012023-09-300001673358us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001673358us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMemberyumc:InterSegmentRevenueMember2023-07-012023-09-300001673358yumc:CompanyRestaurantExpensesMember2024-01-012024-09-300001673358yumc:HangzhouCateringMember2021-12-310001673358us-gaap:RetainedEarningsMember2023-06-300001673358yumc:MeituanDianpingMember2020-06-300001673358yumc:FranchiseFeesAndIncomeMember2024-01-012024-09-300001673358us-gaap:AdditionalPaidInCapitalMember2023-12-310001673358us-gaap:TreasuryStockCommonMember2024-01-012024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:OtherRevenueMember2024-01-012024-09-300001673358yumc:GlobalOfferingMember2020-09-102020-09-100001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:RevenueFromExternalCustomersMember2023-07-012023-09-300001673358us-gaap:NoncontrollingInterestMember2024-09-300001673358us-gaap:NoncontrollingInterestMember2024-07-012024-09-300001673358yumc:CompanyRestaurantExpensesMember2023-07-012023-09-300001673358us-gaap:NoncontrollingInterestMember2022-12-310001673358yumc:TransactionsWithFranchiseesMember2023-07-012023-09-300001673358us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001673358yumc:FujianSunnerDevelopmentCoLtdMember2023-01-012023-09-300001673358yumc:CompanyRestaurantExpensesMember2024-07-012024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMember2023-07-012023-09-300001673358yumc:UnconsolidatedAffiliatesMemberyumc:HangzhouCateringMember2024-09-3000016733582023-01-012023-12-310001673358us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FixedIncomeSecuritiesMember2024-09-300001673358yumc:KFCMember2023-01-012023-09-300001673358us-gaap:FairValueMeasurementsRecurringMemberyumc:VariableReturnInvestmentsMember2024-09-300001673358yumc:CorporateAndUnallocatedMemberyumc:TransactionsWithFranchiseesMemberus-gaap:OperatingSegmentsMember2024-07-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:FranchiseFeesAndIncomeMember2023-07-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:OtherRevenueMemberyumc:KFCMember2023-01-012023-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMember2024-07-012024-09-300001673358us-gaap:ShortTermDebtMember2023-12-310001673358us-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMemberus-gaap:AllOtherSegmentsMember2024-07-012024-09-300001673358us-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358us-gaap:TreasuryStockCommonMember2024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMemberyumc:KFCMember2024-01-012024-09-300001673358us-gaap:TreasuryStockCommonMember2024-06-300001673358yumc:TransactionsWithFranchiseesMemberyumc:OperatingSegmentsAndCorporateNonSegmentMember2023-07-012023-09-300001673358us-gaap:CommonStockMember2024-09-300001673358yumc:FranchiseFeesAndIncomeMember2024-07-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMemberus-gaap:AllOtherSegmentsMember2023-07-012023-09-300001673358us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001673358us-gaap:RelatedPartyMemberus-gaap:AccountsPayableAndAccruedLiabilitiesMemberyumc:FujianSunnerDevelopmentCoLtdMember2023-12-310001673358yumc:RedeemableNoncontrollingInterestMember2024-06-300001673358srt:MaximumMember2024-01-012024-09-300001673358us-gaap:RetainedEarningsMember2024-01-012024-09-300001673358us-gaap:CommonStockMember2024-01-012024-09-300001673358yumc:TransactionsWithFranchiseesMember2023-01-012023-09-3000016733582023-09-300001673358yumc:CorporateAndUnallocatedMemberyumc:TransactionsWithFranchiseesMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300001673358yumc:BuildingsAndImprovementsAndConstructionInProgressMember2024-09-300001673358us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001673358us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001673358yumc:OtherRevenueMember2023-07-012023-09-300001673358us-gaap:RetainedEarningsMember2024-07-012024-09-300001673358us-gaap:FairValueInputsLevel3Memberyumc:RestaurantsMemberus-gaap:FairValueMeasurementsNonrecurringMember2023-01-012023-09-300001673358us-gaap:CorporateNonSegmentMember2024-09-300001673358us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-12-3100016733582024-07-012024-09-300001673358yumc:NonCashTransactionsMember2024-01-012024-09-300001673358yumc:UpfrontFranchiseFeesMember2023-12-310001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMember2023-01-012023-09-300001673358us-gaap:TrademarksMemberyumc:HuangJiHuangGroupMember2023-12-310001673358us-gaap:BankTimeDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-3000016733582024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:InterSegmentRevenueMember2023-07-012023-09-300001673358us-gaap:CommonStockMember2024-07-012024-09-300001673358yumc:HangzhouKfc1Member2021-12-310001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMember2023-07-012023-09-300001673358yumc:FujianSunnerDevelopmentCoLtdMember2024-07-012024-09-300001673358yumc:ReacquiredFranchiseRightsMember2024-09-300001673358us-gaap:AllOtherSegmentsMember2023-12-310001673358yumc:CustomerLoyaltyProgramsMember2023-12-310001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:OtherRevenueMember2023-01-012023-09-300001673358us-gaap:AllOtherSegmentsMember2023-07-012023-09-300001673358us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMemberus-gaap:AllOtherSegmentsMember2023-01-012023-09-300001673358us-gaap:CommonStockMember2024-06-300001673358yumc:RedeemableNoncontrollingInterestMember2023-01-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:KFCMember2024-09-300001673358us-gaap:CommonStockMember2023-06-300001673358us-gaap:OperatingSegmentsMemberyumc:KFCMember2023-12-310001673358us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-07-012023-09-3000016733582024-06-300001673358yumc:RedeemableNoncontrollingInterestMember2023-06-300001673358us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300001673358us-gaap:AdditionalPaidInCapitalMember2024-01-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:FranchiseFeesAndIncomeMember2024-07-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:InterSegmentRevenueMemberus-gaap:AllOtherSegmentsMember2024-07-012024-09-300001673358us-gaap:NoncontrollingInterestMember2023-07-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMemberus-gaap:AllOtherSegmentsMember2023-07-012023-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:FoodAndNonFoodRevenuesFromSalesMember2023-01-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMemberyumc:KFCMember2023-07-012023-09-300001673358us-gaap:TrademarksMemberyumc:LittleSheepMember2024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:OtherRevenueMemberus-gaap:AllOtherSegmentsMember2024-01-012024-09-300001673358yumc:InvestmentInEquitySecuritiesMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001673358yumc:CustomerRelatedAssetsMember2024-09-300001673358us-gaap:RetainedEarningsMember2024-06-300001673358yumc:RedeemableNoncontrollingInterestMember2023-09-300001673358yumc:PizzaHutMembersrt:MinimumMember2024-09-300001673358us-gaap:RetainedEarningsMember2023-07-012023-09-300001673358yumc:PizzaHutMemberyumc:TransactionsWithFranchiseesMemberus-gaap:OperatingSegmentsMember2024-01-012024-09-300001673358yumc:InvestmentInEquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001673358yumc:OthersFiniteLivedIntangibleAssetsMember2023-12-310001673358us-gaap:RetainedEarningsMember2024-09-300001673358yumc:TransactionsWithFranchiseesMemberyumc:OperatingSegmentsAndCorporateNonSegmentMember2024-01-012024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMember2024-01-012024-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMemberyumc:OtherRevenueMember2023-07-012023-09-300001673358us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMember2024-07-012024-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMemberyumc:OtherRevenueMember2024-01-012024-09-300001673358yumc:TransactionsWithFranchiseesMemberus-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-07-012023-09-300001673358yumc:ShanghaiMemberyumc:OwnerAndOperatorOfKFCMemberyumc:KFCMember2024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:FoodAndNonFoodRevenuesFromSalesMember2024-01-012024-09-300001673358us-gaap:AllOtherSegmentsMember2023-01-012023-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMember2024-01-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMemberyumc:KFCMember2024-01-012024-09-3000016733582015-02-012015-02-280001673358us-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMemberus-gaap:AllOtherSegmentsMember2024-01-012024-09-300001673358yumc:OwnerAndOperatorOfKFCMemberyumc:WuxiMemberyumc:KFCMember2024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:FranchiseFeesAndIncomeMember2023-01-012023-09-300001673358yumc:SuzhouMemberyumc:OwnerAndOperatorOfKFCMemberyumc:KFCMember2024-09-300001673358us-gaap:NoncontrollingInterestMember2023-01-012023-09-300001673358us-gaap:FairValueMeasurementsNonrecurringMember2024-09-300001673358us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300001673358us-gaap:CorporateNonSegmentMember2024-01-012024-09-3000016733582023-12-310001673358us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2024-07-012024-09-300001673358us-gaap:NoncontrollingInterestMember2023-12-310001673358us-gaap:NoncontrollingInterestMember2024-01-012024-09-300001673358srt:MinimumMemberyumc:KFCMember2024-09-300001673358yumc:RedeemableNoncontrollingInterestMember2023-12-3100016733582022-08-012022-08-310001673358srt:MaximumMemberyumc:HuangJiHuangMember2024-01-012024-09-300001673358us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FixedIncomeSecuritiesMember2023-12-310001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300001673358yumc:TransactionsWithFranchiseesMemberyumc:OperatingSegmentsAndCorporateNonSegmentMember2024-07-012024-09-300001673358us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2024-09-300001673358yumc:KFCMember2023-01-012023-12-3100016733582024-11-0400016733582022-12-310001673358yumc:RevenueFromExternalCustomersMember2024-01-012024-09-300001673358us-gaap:AdditionalPaidInCapitalMember2023-06-300001673358us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2024-01-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMember2023-01-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:TransactionsWithFranchiseesMemberyumc:KFCMember2024-07-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:FoodAndNonFoodRevenuesFromSalesMember2024-07-012024-09-300001673358yumc:PizzaHutMemberyumc:TransactionsWithFranchiseesMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300001673358yumc:TacoBellMember2024-01-012024-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMemberyumc:OtherRevenueMember2023-01-012023-09-300001673358yumc:InvestmentInEquitySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358yumc:FujianSunnerDevelopmentCoLtdMember2024-09-300001673358yumc:TransactionsWithFranchiseesMemberus-gaap:OperatingSegmentsMemberyumc:KFCMember2023-01-012023-09-300001673358us-gaap:CorporateNonSegmentMember2023-12-310001673358yumc:KFCMember2023-12-310001673358us-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMemberyumc:KFCMember2023-07-012023-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMember2023-07-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMemberus-gaap:AllOtherSegmentsMember2024-07-012024-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMember2024-01-012024-09-300001673358us-gaap:FairValueInputsLevel3Memberyumc:RestaurantsMemberus-gaap:FairValueMeasurementsNonrecurringMember2024-01-012024-09-300001673358yumc:FujianSunnerDevelopmentCoLtdMember2023-01-012023-12-310001673358yumc:PizzaHutMember2023-07-012023-09-300001673358yumc:HangzhouCateringMember2024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMember2024-07-012024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMember2023-01-012023-09-300001673358us-gaap:AdditionalPaidInCapitalMember2024-06-300001673358yumc:HangzhouCateringMember2023-12-310001673358yumc:MeituanDianpingMember2023-01-012023-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:InterSegmentRevenueMember2023-01-012023-09-300001673358yumc:UpfrontFranchiseFeesMember2024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:OtherRevenueMember2023-01-012023-09-300001673358yumc:HuangJiHuangGroupMember2023-12-310001673358srt:MinimumMemberyumc:HuangJiHuangMember2024-01-012024-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMember2023-01-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMemberyumc:KFCMember2024-07-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:OtherRevenueMemberyumc:KFCMember2024-01-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:OtherRevenueMemberyumc:KFCMember2024-07-012024-09-300001673358us-gaap:AllOtherSegmentsMember2023-01-012023-12-310001673358srt:MaximumMember2024-07-012024-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMemberyumc:InterSegmentRevenueMember2023-07-012023-09-300001673358yumc:FujianSunnerDevelopmentCoLtdMember2023-07-012023-09-300001673358yumc:TheStockExchangeOfHongKongLimitedMember2024-01-012024-09-300001673358yumc:FinanceLeasesPrimarilyBuildingsMember2024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMemberyumc:KFCMember2023-01-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMemberyumc:KFCMember2023-01-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:OtherRevenueMemberus-gaap:AllOtherSegmentsMember2023-01-012023-09-300001673358yumc:OwnerAndOperatorOfKFCMemberyumc:BeijingMemberyumc:KFCMember2024-09-300001673358us-gaap:TrademarksMemberyumc:HuangJiHuangGroupMember2024-09-300001673358us-gaap:IntersegmentEliminationMemberyumc:OtherRevenueMember2024-01-012024-09-300001673358yumc:PrepaidStoredValueProductsMember2023-12-310001673358us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001673358us-gaap:CommonStockMember2023-07-012023-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMember2024-01-012024-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMemberyumc:OtherRevenueMember2024-07-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:OtherRevenueMember2024-01-012024-09-300001673358us-gaap:CommonStockMember2023-01-012023-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:InterSegmentRevenueMember2024-01-012024-09-300001673358us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001673358us-gaap:FairValueMeasurementsRecurringMemberyumc:VariableReturnInvestmentsMember2023-12-310001673358us-gaap:AdditionalPaidInCapitalMember2023-09-3000016733582023-06-300001673358us-gaap:OperatingSegmentsMemberyumc:KFCMember2024-01-012024-09-300001673358dei:OtherAddressMember2024-01-012024-09-300001673358yumc:FoodAndNonFoodRevenuesFromSalesMember2024-01-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:TransactionsWithFranchiseesMemberus-gaap:AllOtherSegmentsMember2024-01-012024-09-300001673358us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001673358us-gaap:AllOtherSegmentsMember2024-07-012024-09-300001673358yumc:LittleSheepMember2024-01-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMemberyumc:KFCMember2024-01-012024-09-300001673358yumc:OtherRevenueMember2024-01-012024-09-300001673358yumc:TransactionsWithFranchiseesMemberus-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2023-01-012023-09-300001673358yumc:FranchiseFeesAndIncomeMember2023-01-012023-09-300001673358yumc:HangzhouCateringMember2023-01-012023-12-310001673358us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358us-gaap:FairValueMeasurementsNonrecurringMember2023-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300001673358yumc:HuangJiHuangGroupMember2024-09-300001673358us-gaap:IntersegmentEliminationMember2023-07-012023-09-300001673358us-gaap:TreasuryStockCommonMember2024-07-012024-09-300001673358yumc:OtherRevenueMember2024-07-012024-09-300001673358yumc:OtherRevenueMember2023-01-012023-09-300001673358us-gaap:AdditionalPaidInCapitalMember2024-09-300001673358us-gaap:CommonStockMember2022-12-310001673358us-gaap:IntersegmentEliminationMemberyumc:OtherRevenueMember2023-01-012023-09-300001673358yumc:O2024Q4DividendsMember2024-11-042024-11-040001673358yumc:RevenueFromExternalCustomersMember2023-01-012023-09-300001673358yumc:FoodAndNonFoodRevenuesFromSalesMember2023-01-012023-09-300001673358us-gaap:CorporateNonSegmentMember2023-01-012023-09-300001673358yumc:NonCashTransactionsMember2023-01-012023-09-300001673358us-gaap:FairValueMeasurementsRecurringMember2024-09-300001673358us-gaap:FairValueInputsLevel2Memberyumc:StructuredDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMember2023-01-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:KFCMember2023-01-012023-09-3000016733582024-01-012024-09-300001673358us-gaap:CommonStockMember2023-12-310001673358yumc:PizzaHutMember2023-01-012023-09-300001673358yumc:MeituanDianpingMember2024-07-012024-09-300001673358yumc:PrepaidStoredValueProductsMember2024-09-300001673358us-gaap:BankTimeDepositsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358yumc:CorporateAndUnallocatedMemberyumc:TransactionsWithFranchiseesMemberus-gaap:OperatingSegmentsMember2023-01-012023-09-300001673358yumc:FranchiseFeesAndIncomeMember2023-07-012023-09-300001673358us-gaap:RetainedEarningsMember2023-12-310001673358yumc:FujianSunnerDevelopmentCoLtdMember2021-03-310001673358yumc:HangzhouCateringMember2021-10-012021-12-310001673358us-gaap:IntersegmentEliminationMember2023-01-012023-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMember2023-12-310001673358yumc:KFCMember2023-07-012023-09-300001673358yumc:TransactionsWithFranchiseesMemberyumc:OperatingSegmentsAndCorporateNonSegmentMember2023-01-012023-09-300001673358yumc:KfcAndPizzaHutMember2024-01-012024-09-300001673358yumc:KFCMember2024-07-012024-09-300001673358yumc:FinanceLeasesPrimarilyBuildingsMember2023-12-310001673358yumc:RedeemableNoncontrollingInterestMember2023-07-012023-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:TransactionsWithFranchiseesMember2023-01-012023-09-300001673358yumc:MeituanDianpingMember2024-01-012024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMember2023-07-012023-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMember2024-07-012024-09-300001673358yumc:MeituanDianpingMember2023-07-012023-09-300001673358yumc:CorporateAndUnallocatedMemberus-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMember2024-01-012024-09-300001673358yumc:DaojiaPlatformMember2024-09-3000016733582023-01-012023-09-300001673358us-gaap:MachineryAndEquipmentMember2024-09-300001673358yumc:FujianSunnerDevelopmentCoLtdMember2023-12-310001673358us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-09-300001673358us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberyumc:VariableReturnInvestmentsMember2023-12-310001673358us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001673358us-gaap:NoncontrollingInterestMember2023-09-300001673358us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300001673358us-gaap:FairValueInputsLevel2Memberyumc:StructuredDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358yumc:StructuredDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001673358us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001673358yumc:CompanyRestaurantExpensesMember2023-01-012023-09-300001673358us-gaap:RelatedPartyMemberus-gaap:AccountsPayableAndAccruedLiabilitiesMemberyumc:FujianSunnerDevelopmentCoLtdMember2024-09-300001673358yumc:MeituanDianpingMember2018-09-300001673358yumc:RevenueFromExternalCustomersMember2023-07-012023-09-300001673358yumc:OthersFiniteLivedIntangibleAssetsMember2024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:TransactionsWithFranchiseesMember2024-07-012024-09-300001673358yumc:DaojiaPlatformMember2023-12-310001673358us-gaap:NoncontrollingInterestMember2024-06-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:RevenueFromExternalCustomersMember2024-07-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:OtherRevenueMember2024-07-012024-09-300001673358us-gaap:CommonStockMember2023-09-300001673358yumc:TransactionsWithFranchiseesMember2024-01-012024-09-300001673358us-gaap:NoncontrollingInterestMember2023-06-300001673358yumc:StructuredDepositsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358us-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMemberus-gaap:AllOtherSegmentsMember2024-01-012024-09-300001673358us-gaap:AllOtherSegmentsMember2024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:FoodAndNonFoodRevenuesFromSalesMember2023-07-012023-09-300001673358us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001673358us-gaap:OperatingSegmentsMemberyumc:FoodAndNonFoodRevenuesFromSalesMemberyumc:KFCMember2023-07-012023-09-300001673358yumc:PrivilegeMembershipProgramsMember2024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:InterSegmentRevenueMemberus-gaap:AllOtherSegmentsMember2024-01-012024-09-300001673358us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FixedIncomeSecuritiesMember2023-12-3100016733582023-07-012023-09-300001673358yumc:RedeemableNoncontrollingInterestMember2024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:TransactionsWithFranchiseesMemberyumc:KFCMember2024-01-012024-09-300001673358srt:MaximumMember2023-07-012023-09-300001673358yumc:ModificationOrOtherReassessmentEventsMember2023-01-012023-09-300001673358us-gaap:OperatingSegmentsMemberyumc:OtherRevenueMemberus-gaap:AllOtherSegmentsMember2023-07-012023-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMemberyumc:InterSegmentRevenueMember2024-07-012024-09-300001673358yumc:PizzaHutMemberus-gaap:OperatingSegmentsMemberyumc:FranchiseFeesAndIncomeMember2024-01-012024-09-300001673358yumc:OperatingSegmentsAndCorporateNonSegmentMember2024-07-012024-09-300001673358us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberyumc:VariableReturnInvestmentsMember2024-09-300001673358yumc:HangzhouCateringMember2024-01-012024-09-300001673358us-gaap:OperatingSegmentsMemberyumc:KFCMember2023-07-012023-09-300001673358yumc:KFCMember2024-09-300001673358us-gaap:CorporateNonSegmentMember2024-07-012024-09-300001673358us-gaap:RetainedEarningsMember2023-09-300001673358us-gaap:IntersegmentEliminationMemberyumc:OtherRevenueMember2024-07-012024-09-300001673358yumc:CorporateAndUnallocatedMemberyumc:TransactionsWithFranchiseesMemberus-gaap:OperatingSegmentsMember2024-01-012024-09-300001673358us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FixedIncomeSecuritiesMember2023-12-310001673358yumc:FoodAndNonFoodRevenuesFromSalesMember2023-07-012023-09-30iso4217:USDxbrli:sharesxbrli:pureyumc:Segmentxbrli:sharesyumc:Restaurantiso4217:USD

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2024

 

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 001-37762

 

 

Yum China Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware

 

81-2421743

(State or Other Jurisdiction of

 

(I.R.S. Employer

Incorporation or Organization)

 

Identification No.)

 

 

 

101 East Park Boulevard, Suite 805

Plano, Texas 75074

United States of America

 

Yum China Building

20 Tian Yao Qiao Road

Shanghai 200030

People’s Republic of China

 

(Address, Including Zip Code, of Principal Executive Offices)

(469) 980-2898

(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

Common Stock, par value $0.01 per share

YUMC

New York Stock Exchange

9987

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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.

 

Large accelerated filer

☒

Accelerated filer

☐

 

 

 

 

 

 

 

Non-accelerated filer

☐

Smaller reporting company

☐

 

 

 

 

 

 

 

 

 

 

 

Emerging growth company

 

☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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 November 4, 2024 was 379,764,211 shares.

 

 

 

 

Yum China Holdings, Inc.

INDEX

 

 

Page

 

 

No.

 

 

 

Part I.

Financial Information

 

 

 

 

 

Item 1 – Financial Statements

3

 

 

 

 

Condensed Consolidated Statements of Income – Quarters and Years to Date Ended September 30, 2024 and 2023 (Unaudited)

3

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income – Quarters and Years to Date Ended September 30, 2024 and 2023 (Unaudited)

4

 

 

 

 

Condensed Consolidated Statements of Cash Flows – Years to Date Ended September 30, 2024 and 2023 (Unaudited)

5

 

 

 

 

Condensed Consolidated Balance Sheets – September 30, 2024 (Unaudited) and December 31, 2023

6

 

 

 

 

Condensed Consolidated Statements of Equity – Quarters and Years to Date Ended September 30, 2024 and 2023 (Unaudited)

7

 

 

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

9

 

 

 

 

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

25

 

 

 

 

Item 3 – Quantitative and Qualitative Disclosures About Market Risk

43

 

 

 

 

Item 4 – Controls and Procedures

43

 

 

 

Part II.

Other Information

 

 

 

 

 

Item 1 – Legal Proceedings

44

 

 

 

 

Item 1A – Risk Factors

44

 

 

 

 

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

44

 

 

 

 

Item 5 – Other Information

44

 

 

 

 

Item 6 – Exhibits

45

 

 

 

 

Signatures

46

 

 

 

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)

 

 

 

Quarter Ended

 

 

Year to Date Ended

 

Revenues

 

9/30/2024

 

 

9/30/2023

 

 

9/30/2024

 

 

9/30/2023

 

Company sales

 

$

2,895

 

 

$

2,759

 

 

$

8,217

 

 

$

8,048

 

Franchise fees and income

 

 

25

 

 

 

23

 

 

 

72

 

 

 

69

 

Revenues from transactions with franchisees

 

 

116

 

 

 

100

 

 

 

319

 

 

 

282

 

Other revenues

 

 

35

 

 

 

32

 

 

 

100

 

 

 

86

 

Total revenues

 

 

3,071

 

 

 

2,914

 

 

 

8,708

 

 

 

8,485

 

Costs and Expenses, Net

 

 

 

 

 

 

 

 

 

 

 

 

Company restaurants

 

 

 

 

 

 

 

 

 

 

 

 

Food and paper

 

 

918

 

 

 

858

 

 

 

2,611

 

 

 

2,466

 

Payroll and employee benefits

 

 

728

 

 

 

699

 

 

 

2,102

 

 

 

2,047

 

Occupancy and other operating expenses

 

 

755

 

 

 

732

 

 

 

2,126

 

 

 

2,098

 

Company restaurant expenses

 

 

2,401

 

 

 

2,289

 

 

 

6,839

 

 

 

6,611

 

General and administrative expenses

 

 

139

 

 

 

169

 

 

 

412

 

 

 

485

 

Franchise expenses

 

 

10

 

 

 

9

 

 

 

29

 

 

 

28

 

Expenses for transactions with franchisees

 

 

110

 

 

 

95

 

 

 

306

 

 

 

270

 

Other operating costs and expenses

 

 

32

 

 

 

29

 

 

 

90

 

 

 

77

 

Closures and impairment expenses, net

 

 

8

 

 

 

—

 

 

 

22

 

 

 

17

 

Other (income) expenses, net

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

1

 

Total costs and expenses, net

 

 

2,700

 

 

 

2,591

 

 

 

7,697

 

 

 

7,489

 

Operating Profit

 

 

371

 

 

 

323

 

 

 

1,011

 

 

 

996

 

Interest income, net

 

 

31

 

 

 

46

 

 

 

100

 

 

 

124

 

Investment gain (loss)

 

 

34

 

 

 

(4

)

 

 

50

 

 

 

(32

)

Income Before Income Taxes and Equity in
   Net Earnings (Losses) from Equity Method Investments

 

 

436

 

 

 

365

 

 

 

1,161

 

 

 

1,088

 

Income tax provision

 

 

(119

)

 

 

(100

)

 

 

(309

)

 

 

(296

)

Equity in net earnings (losses) from equity method investments

 

 

2

 

 

 

2

 

 

 

2

 

 

 

2

 

Net income – including noncontrolling interests

 

 

319

 

 

 

267

 

 

 

854

 

 

 

794

 

Net income – noncontrolling interests

 

 

22

 

 

 

23

 

 

 

58

 

 

 

64

 

Net Income – Yum China Holdings, Inc.

 

$

297

 

 

$

244

 

 

$

796

 

 

$

730

 

Weighted-average common shares outstanding (in millions):

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

384

 

 

 

416

 

 

 

391

 

 

 

417

 

Diluted

 

 

385

 

 

 

420

 

 

 

393

 

 

 

421

 

Basic Earnings Per Common Share

 

$

0.77

 

 

$

0.59

 

 

$

2.04

 

 

$

1.75

 

Diluted Earnings Per Common Share

 

$

0.77

 

 

$

0.58

 

 

$

2.03

 

 

$

1.73

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

3

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Yum China Holdings, Inc.

(in US$ millions)

 

 

 

Quarter Ended

 

 

Year to Date Ended

 

 

 

9/30/2024

 

 

9/30/2023

 

 

9/30/2024

 

 

9/30/2023

 

Net income – including noncontrolling interests

 

$

319

 

 

$

267

 

 

$

854

 

 

$

794

 

Other comprehensive income (loss), net of tax of nil:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

167

 

 

 

(29

)

 

 

56

 

 

 

(274

)

Comprehensive income – including noncontrolling interests

 

 

486

 

 

 

238

 

 

 

910

 

 

 

520

 

Comprehensive income – noncontrolling interests

 

 

42

 

 

 

20

 

 

 

64

 

 

 

29

 

Comprehensive Income – Yum China Holdings, Inc.

 

$

444

 

 

$

218

 

 

$

846

 

 

$

491

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

4

Condensed Consolidated Statements of Cash Flows (Unaudited)

Yum China Holdings, Inc.

(in US$ millions)

 

 

 

Year to Date Ended

 

 

9/30/2024

 

9/30/2023

 Cash Flows – Operating Activities

 

 

 

 

 

 

 

 

 Net income – including noncontrolling interests

 

$

854

 

 

 

$

794

 

 

 Depreciation and amortization

 

 

355

 

 

 

 

339

 

 Non-cash operating lease cost

 

 

305

 

 

 

 

301

 

 

 Closures and impairment expenses

 

 

22

 

 

 

 

17

 

 

 Investment (gain) loss

 

 

(50

)

 

 

 

32

 

 

 Equity in net (earnings) losses from equity method investments

 

 

(2

)

 

 

 

(2

)

 

 Distributions of income received from equity method investments

 

 

7

 

 

 

 

8

 

 

 Deferred income taxes

 

 

(4

)

 

 

 

(6

)

 

 Share-based compensation expense

 

 

32

 

 

 

 

46

 

 

 Changes in accounts receivable

 

 

(4

)

 

 

 

(2

)

 

 Changes in inventories

 

 

69

 

 

 

 

(25

)

 

 Changes in prepaid expenses, other current assets and value-added tax assets

 

 

3

 

 

 

 

(10

)

 

 Changes in accounts payable and other current liabilities

 

 

(83

)

 

 

 

112

 

 

 Changes in income taxes payable

 

 

67

 

 

 

 

71

 

 

 Changes in non-current operating lease liabilities

 

 

(303

)

 

 

 

(295

)

 

 Other, net

 

 

(16

)

 

 

 

(46

)

 

 Net Cash Provided by Operating Activities

 

 

1,252

 

 

 

 

1,334

 

 

 Cash Flows – Investing Activities

 

 

 

 

 

 

 

 

 Capital spending

 

 

(523

)

 

 

 

(499

)

 

 Purchases of short-term investments, long-term bank deposits and notes

 

 

(3,330

)

 

 

 

(3,287

)

 

 Maturities of short-term investments, long-term bank deposits and notes

 

 

3,821

 

 

 

 

2,730

 

 

 Other, net

 

 

4

 

 

 

 

4

 

 

 Net Cash Used in Investing Activities

 

 

(28

)

 

 

 

(1,052

)

 

 Cash Flows – Financing Activities

 

 

 

 

 

 

 

 

 Proceeds from short-term borrowings

 

 

307

 

 

 

 

212

 

 

 Repayment of short-term borrowings

 

 

(167

)

 

 

 

—

 

 

 Repurchase of shares of common stock

 

 

(1,057

)

 

 

 

(280

)

 

 Cash dividends paid on common stock

 

 

(187

)

 

 

 

(162

)

 

 Dividends paid to noncontrolling interests

 

 

(36

)

 

 

 

(37

)

 

 Contributions from noncontrolling interests

 

 

—

 

 

 

 

35

 

 

 Payment of acquisition related holdback

 

 

—

 

 

 

 

(3

)

 

 Other, net

 

 

(19

)

 

 

 

(5

)

 

 Net Cash Used in Financing Activities

 

 

(1,159

)

 

 

 

(240

)

 

 Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash

 

 

—

 

 

 

 

(41

)

 

 Net Increase in Cash, Cash Equivalents and Restricted Cash

 

 

65

 

 

 

 

1

 

 

 Cash, Cash Equivalents, and Restricted Cash - Beginning of Period

 

 

1,128

 

 

 

 

1,130

 

 

 Cash, Cash Equivalents, and Restricted Cash - End of Period

 

$

1,193

 

 

 

$

1,131

 

 

 

Supplemental Cash Flow Data

 

 

 

 

 

 

 

Cash paid for income tax

 

 

263

 

 

 

245

 

 

Cash paid for interest

 

 

4

 

 

 

3

 

 

Non-cash Investing and Financing Activities

 

 

 

 

 

 

 

Capital expenditures included in accounts payable and other current liabilities

 

 

167

 

 

 

180

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

5

Condensed Consolidated Balance Sheets

Yum China Holdings, Inc.

(in US$ millions)

 

 

 

9/30/2024

 

 

12/31/2023

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,193

 

 

$

1,128

 

Short-term investments

 

 

1,338

 

 

 

1,472

 

Accounts receivable, net

 

 

79

 

 

 

68

 

Inventories, net

 

 

359

 

 

 

424

 

Prepaid expenses and other current assets

 

 

348

 

 

 

339

 

Total Current Assets

 

 

3,317

 

 

 

3,431

 

Property, plant and equipment, net

 

 

2,431

 

 

 

2,310

 

Operating lease right-of-use assets

 

 

2,215

 

 

 

2,217

 

Goodwill

 

 

1,955

 

 

 

1,932

 

Intangible assets, net

 

 

150

 

 

 

150

 

Long-term bank deposits and notes

 

 

933

 

 

 

1,265

 

Equity investments

 

 

388

 

 

 

332

 

Deferred income tax assets

 

 

145

 

 

 

129

 

Other assets

 

 

267

 

 

 

265

 

Total Assets

 

 

11,801

 

 

 

12,031

 

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable and other current liabilities

 

 

2,103

 

 

 

2,164

 

Short-term borrowings

 

 

315

 

 

 

168

 

Income taxes payable

 

 

160

 

 

 

90

 

Total Current Liabilities

 

 

2,578

 

 

 

2,422

 

Non-current operating lease liabilities

 

 

1,880

 

 

 

1,899

 

Non-current finance lease liabilities

 

 

51

 

 

 

44

 

Deferred income tax liabilities

 

 

406

 

 

 

390

 

Other liabilities

 

 

158

 

 

 

157

 

Total Liabilities

 

 

5,073

 

 

 

4,912

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interest

 

 

13

 

 

 

13

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Common stock, $0.01 par value; 1,000 million shares authorized; 382 million shares
      and 407 million shares issued at September 30, 2024 and December 31, 2023, respectively;
      381 million shares and 407 million shares outstanding at September 30, 2024 and
      December 31, 2023, respectively.

 

 

4

 

 

 

4

 

Treasury stock

 

 

(18

)

 

 

—

 

Additional paid-in capital

 

 

4,053

 

 

 

4,320

 

Retained earnings

 

 

2,156

 

 

 

2,310

 

Accumulated other comprehensive loss

 

 

(179

)

 

 

(229

)

Total Yum China Holdings, Inc. Stockholders' Equity

 

 

6,016

 

 

 

6,405

 

Noncontrolling interests

 

 

699

 

 

 

701

 

Total Equity

 

 

6,715

 

 

 

7,106

 

Total Liabilities, Redeemable Noncontrolling Interest and Equity

 

$

11,801

 

 

$

12,031

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

 

6

Condensed Consolidated Statements of Equity (Unaudited)

Yum China Holdings, Inc.

(in US$ millions)

 

 

 

Yum China Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common

 

 

Additional

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable

 

 

 

Stock

 

 

Paid-in

 

 

Retained

 

 

Comprehensive

 

 

Treasury Stock

 

 

Noncontrolling

 

 

Total

 

 

Noncontrolling

 

 

 

Shares*

 

 

Amount

 

 

Capital

 

 

Earnings

 

 

Loss

 

 

Shares

 

 

Amount

 

 

Interests

 

 

Equity

 

 

Interest

 

Balance at June 30, 2024

 

 

387

 

 

$

4

 

 

$

4,103

 

 

$

2,048

 

 

$

(326

)

 

 

(1

)

 

$

(17

)

 

$

657

 

 

$

6,469

 

 

$

13

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

297

 

 

 

 

 

 

 

 

 

 

 

 

22

 

 

 

319

 

 

 

—

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

147

 

 

 

 

 

 

 

 

 

20

 

 

 

167

 

 

 

—

 

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

486

 

 

 

—

 

Cash dividends declared
   ($0.16 per common share)

 

 

 

 

 

 

 

 

 

 

 

(61

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(61

)

 

 

 

Distributions to/contributions from
  noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

—

 

 

 

 

Repurchase and retirement of shares

 

 

(6

)

 

 

—

 

 

 

(59

)

 

 

(128

)

 

 

 

 

 

—

 

 

 

(1

)

 

 

 

 

 

(188

)

 

 

 

Exercise and vesting of share-based awards

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

9

 

 

 

 

Balance at September 30, 2024

 

 

382

 

 

$

4

 

 

$

4,053

 

 

$

2,156

 

 

$

(179

)

 

 

(1

)

 

$

(18

)

 

$

699

 

 

$

6,715

 

 

$

13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at June 30, 2023

 

 

417

 

 

$

4

 

 

$

4,396

 

 

$

2,465

 

 

$

(316

)

 

 

—

 

 

$

—

 

 

$

656

 

 

$

7,205

 

 

$

12

 

Net Income

 

 

 

 

 

 

 

 

 

 

 

244

 

 

 

 

 

 

 

 

 

 

 

 

23

 

 

 

267

 

 

 

1

 

Foreign currency translation adjustments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(25

)

 

 

 

 

 

 

 

 

(4

)

 

 

(29

)

 

 

—

 

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

238

 

 

 

1

 

Cash dividends declared
   ($0.13 per common share)

 

 

 

 

 

 

 

 

 

 

 

(54

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(54

)

 

 

 

Distributions to/contributions from
  noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

—

 

 

 

 

Repurchase and retirement of shares

 

 

(3

)

 

 

—

 

 

 

(31

)

 

 

(129

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(160

)

 

 

 

Exercise and vesting of share-based awards

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—

 

 

 

17

 

 

 

 

Balance at September 30, 2023

 

 

415

 

 

$

4

 

 

$

4,382

 

 

$