Exhibit 99.1

 

Yum China Holdings, Inc.

Recast Consolidated and Combined Statements of Income

(in US$ millions, except for per share data)

(unaudited)

 

 

2017

 

 

2016

 

 

 

Quarter

Ended

March 31

 

 

Quarter

Ended

June 30

 

 

Quarter

Ended

September 30

 

 

Quarter

Ended

December 31

 

 

Year

Ended

December 31

 

 

Year

Ended

December 31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company sales

 

$

1,738

 

 

$

1,664

 

 

$

1,924

 

 

$

1,667

 

 

$

6,993

 

 

$

6,622

 

Franchise fees and rental income

 

 

36

 

 

 

33

 

 

 

38

 

 

 

34

 

 

 

141

 

 

 

129

 

Revenues from transactions with

   franchisees and unconsolidated affiliates

 

 

147

 

 

 

141

 

 

 

160

 

 

 

151

 

 

 

599

 

 

 

299

 

Other revenues

 

 

5

 

 

 

3

 

 

 

8

 

 

 

20

 

 

 

36

 

 

 

25

 

Total revenues

 

 

1,926

 

 

 

1,841

 

 

 

2,130

 

 

 

1,872

 

 

 

7,769

 

 

 

7,075

 

Costs and Expenses, Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company restaurants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Food and paper

 

 

486

 

 

 

483

 

 

 

560

 

 

 

505

 

 

 

2,034

 

 

 

1,921

 

Payroll and employee benefits

 

 

368

 

 

 

366

 

 

 

403

 

 

 

406

 

 

 

1,543

 

 

 

1,432

 

Occupancy and other operating expenses

 

 

530

 

 

 

539

 

 

 

614

 

 

 

562

 

 

 

2,245

 

 

 

2,259

 

Company restaurant expenses

 

 

1,384

 

 

 

1,388

 

 

 

1,577

 

 

 

1,473

 

 

 

5,822

 

 

 

5,612

 

General and administrative expenses

 

 

98

 

 

 

118

 

 

 

123

 

 

 

156

 

 

 

495

 

 

 

429

 

Franchise expenses

 

 

18

 

 

 

17

 

 

 

19

 

 

 

17

 

 

 

71

 

 

 

72

 

Expenses for transactions with

   franchisees and unconsolidated affiliates

 

 

147

 

 

 

137

 

 

 

159

 

 

 

149

 

 

 

592

 

 

 

295

 

Other operating costs

 

 

3

 

 

 

3

 

 

 

8

 

 

 

14

 

 

 

28

 

 

 

15

 

Closures and impairment expenses, net

 

 

 

 

 

18

 

 

 

2

 

 

 

27

 

 

 

47

 

 

 

78

 

Refranchising gain, net

 

 

(1

)

 

 

 

 

 

(1

)

 

 

(3

)

 

 

(5

)

 

 

(11

)

Other income, net

 

 

(19

)

 

 

(11

)

 

 

(21

)

 

 

(8

)

 

 

(59

)

 

 

(49

)

Total costs and expenses, net

 

 

1,630

 

 

 

1,670

 

 

 

1,866

 

 

 

1,825

 

 

 

6,991

 

 

 

6,441

 

Operating Profit

 

 

296

 

 

 

171

 

 

 

264

 

 

 

47

 

 

 

778

 

 

 

634

 

Interest income, net

 

 

4

 

 

 

4

 

 

 

8

 

 

 

9

 

 

 

25

 

 

 

11

 

Changes in fair value of financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21

 

Income Before Income Taxes

 

 

300

 

 

 

175

 

 

 

272

 

 

 

56

 

 

 

803

 

 

 

666

 

Income tax provision

 

 

(90

)

 

 

(43

)

 

 

(87

)

 

 

(159

)

 

 

(379

)

 

 

(156

)

Net income (loss) – including

   noncontrolling interests

 

 

210

 

 

 

132

 

 

 

185

 

 

 

(103

)

 

 

424

 

 

 

510

 

Net income – noncontrolling interests

 

 

6

 

 

 

7

 

 

 

9

 

 

 

4

 

 

 

26

 

 

 

12

 

Net Income (Loss) – Yum China Holdings, Inc.

 

 

204

 

 

 

125

 

 

 

176

 

 

 

(107

)

 

 

398

 

 

 

498

 

Weighted-average common shares outstanding:

   (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

388

 

 

 

387

 

 

 

386

 

 

 

386

 

 

 

387

 

 

 

368

 

Diluted

 

 

395

 

 

 

399

 

 

 

398

 

 

 

386

 

 

 

398

 

 

 

369

 

Basic Earnings (Loss) Per Common Share

 

 

0.53

 

 

 

0.32

 

 

 

0.46

 

 

 

(0.28

)

 

 

1.03

 

 

 

1.35

 

Diluted Earnings (Loss) Per Common Share

 

 

0.52

 

 

 

0.31

 

 

 

0.44

 

 

 

(0.28

)

 

 

1.00

 

 

 

1.35

 

 

 


Yum China Holdings, Inc.

Recast Consolidated Balance Sheets

(in US$ millions)

(unaudited)

 

 

12/31/2017

 

12/31/2016

ASSETS

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,059

 

 

 

$

885

 

 

Short-term investments

 

 

205

 

 

 

 

79

 

 

Accounts receivable, net

 

 

81

 

 

 

 

74

 

 

Inventories, net

 

 

297

 

 

 

 

268

 

 

Prepaid expenses and other current assets

 

 

160

 

 

 

 

120

 

 

Total Current Assets

 

 

1,802

 

 

 

 

1,426

 

 

Property, plant and equipment, net

 

 

1,691

 

 

 

 

1,647

 

 

Goodwill

 

 

108

 

 

 

 

79

 

 

Intangible assets, net

 

 

101

 

 

 

 

88

 

 

Investments in unconsolidated affiliates

 

 

95

 

 

 

 

77

 

 

Other assets

 

 

385

 

 

 

 

267

 

 

Deferred income taxes

 

 

105

 

 

 

 

166

 

 

Total Assets

 

$

4,287

 

 

 

$

3,750

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

Accounts payable and other current liabilities

 

$

979

 

 

 

$

971

 

 

Income taxes payable

 

 

39

 

 

 

 

33

 

 

Total Current Liabilities

 

 

1,018

 

 

 

 

1,004

 

 

Capital lease obligations

 

 

28

 

 

 

 

28

 

 

Other liabilities and deferred credits

 

 

394

 

 

 

 

285

 

 

Total Liabilities

 

 

1,440

 

 

 

 

1,317

 

 

Redeemable Noncontrolling Interest

 

 

5

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

Common stock,  $0.01 par value; 1,000 million shares authorized;

   389 million shares and 383 million shares issued at December 31, 2017

   and 2016, respectively; 385 million shares and 383 million shares outstanding

   at December 31, 2017 and 2016, respectively

 

 

4

 

 

 

 

4

 

 

Treasury stock

 

 

(148

)

 

 

 

(20

)

 

Additional paid-in capital

 

 

2,375

 

 

 

 

2,345

 

 

Retained earnings

 

 

397

 

 

 

 

38

 

 

Accumulated other comprehensive income

 

 

137

 

 

 

 

 

 

Total Equity – Yum China Holdings, Inc.

 

 

2,765

 

 

 

 

2,367

 

 

Noncontrolling interests

 

 

77

 

 

 

 

66

 

 

Total Equity

 

 

2,842

 

 

 

 

2,433

 

 

Total Liabilities, Redeemable Noncontrolling Interest and Equity

 

$

4,287

 

 

 

$

3,750

 

 

 

2


Yum China Holdings, Inc.

Recast Annual Segment Operating Results

(in US$ millions)

(unaudited)

 

 

Year Ended 12/31/2017

 

 

 

KFC

 

 

Pizza Hut

 

 

All Other

Segments

 

 

Corporate &

Unallocated(1)

 

 

Total

 

Total revenues

 

 

5,066

 

 

 

2,093

 

 

 

106

 

 

 

504

 

 

 

7,769

 

Company restaurant expenses

 

 

3,986

 

 

 

1,798

 

 

 

38

 

 

 

 

 

 

5,822

 

General and administrative expenses

 

 

176

 

 

 

108

 

 

 

26

 

 

 

185

 

 

 

495

 

Franchise expenses

 

 

69

 

 

 

2

 

 

 

 

 

 

 

 

 

71

 

Expenses for transactions with

   franchisees and unconsolidated affiliates

 

 

70

 

 

 

1

 

 

 

21

 

 

 

500

 

 

 

592

 

Other operating costs

 

 

 

 

 

 

 

 

28

 

 

 

 

 

 

28

 

Closures and impairment expenses, net

 

 

20

 

 

 

27

 

 

 

 

 

 

 

 

 

47

 

Refranchising gain, net

 

 

 

 

 

 

 

 

 

 

 

(5

)

 

 

(5

)

Other (income) expenses, net

 

 

(57

)

 

 

 

 

 

2

 

 

 

(4

)

 

 

(59

)

Total costs and expenses, net

 

 

4,264

 

 

 

1,936

 

 

 

115

 

 

 

676

 

 

 

6,991

 

Operating Profit (Loss)

 

 

802

 

 

 

157

 

 

 

(9

)

 

 

(172

)

 

 

778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended 12/31/2016

 

 

 

KFC

 

 

Pizza Hut

 

 

All Other

Segments

 

 

Corporate &

Unallocated(1)

 

 

Total

 

Total revenues

 

 

4,757

 

 

 

1,996

 

 

 

100

 

 

 

222

 

 

 

7,075

 

Company restaurant expenses

 

 

3,829

 

 

 

1,727

 

 

 

57

 

 

 

(1

)

 

 

5,612

 

General and administrative expenses

 

 

162

 

 

 

99

 

 

 

15

 

 

 

153

 

 

 

429

 

Franchise expenses

 

 

69

 

 

 

3

 

 

 

 

 

 

 

 

 

72

 

Expenses for transactions with

   franchisees and unconsolidated affiliates

 

 

61

 

 

 

1

 

 

 

14

 

 

 

219

 

 

 

295

 

Other operating costs

 

 

 

 

 

 

 

 

15

 

 

 

 

 

 

15

 

Closures and impairment expenses, net

 

 

41

 

 

 

17

 

 

 

3

 

 

 

17

 

 

 

78

 

Refranchising gain, net

 

 

 

 

 

 

 

 

 

 

 

(11

)

 

 

(11

)

Other (income) expenses, net

 

 

(46

)

 

 

 

 

 

1

 

 

 

(4

)

 

 

(49

)

Total costs and expenses, net

 

 

4,116

 

 

 

1,847

 

 

 

105

 

 

 

373

 

 

 

6,441

 

Operating Profit (Loss)

 

 

641

 

 

 

149

 

 

 

(5

)

 

 

(151

)

 

 

634

 

 

(1)

Amount includes revenues and expenses associated with transactions with franchisees and unconsolidated affiliates such as inventory procurement and other services provided to franchisees and unconsolidated affiliates.

3


Yum China Holdings, Inc.

Recast Quarterly Segment Operating Results

(in US$ millions)

(unaudited)

 

 

Quarter Ended 3/31/2017

 

 

 

KFC

 

 

Pizza Hut

 

 

All Other

Segments

 

 

Corporate &

Unallocated(1)

 

 

Total

 

Total revenues

 

 

1,250

 

 

 

528

 

 

 

23

 

 

 

125

 

 

 

1,926

 

Company restaurant expenses

 

 

950

 

 

 

423

 

 

 

11

 

 

 

 

 

 

1,384

 

General and administrative expenses

 

 

39

 

 

 

25

 

 

 

3

 

 

 

31

 

 

 

98

 

Franchise expenses

 

 

17

 

 

 

1

 

 

 

 

 

 

 

 

 

18

 

Expenses for transactions with

   franchisees and unconsolidated affiliates

 

 

17

 

 

 

 

 

 

5

 

 

 

125

 

 

 

147

 

Other operating costs

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Closures and impairment expenses (income), net

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Refranchising gain, net

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Other income, net

 

 

(19

)

 

 

 

 

 

 

 

 

 

 

 

(19

)

Total costs and expenses, net

 

 

1,005

 

 

 

448

 

 

 

22

 

 

 

155

 

 

 

1,630

 

Operating Profit (Loss)

 

 

245

 

 

 

80

 

 

 

1

 

 

 

(30

)

 

 

296

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended 6/30/2017

 

 

 

KFC

 

 

Pizza Hut

 

 

All Other

Segments

 

 

Corporate &

Unallocated(1)

 

 

Total

 

Total revenues

 

 

1,206

 

 

 

498

 

 

 

16

 

 

 

121

 

 

 

1,841

 

Company restaurant expenses

 

 

956

 

 

 

423

 

 

 

9

 

 

 

 

 

 

1,388

 

General and administrative expenses

 

 

38

 

 

 

26

 

 

 

4

 

 

 

50

 

 

 

118

 

Franchise expenses

 

 

17

 

 

 

 

 

 

 

 

 

 

 

 

17

 

Expenses for transactions with

   franchisees and unconsolidated affiliates

 

 

15

 

 

 

1

 

 

 

3

 

 

 

118

 

 

 

137

 

Other operating costs

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

Closures and impairment expenses, net

 

 

9

 

 

 

9

 

 

 

 

 

 

 

 

 

18

 

Other income, net

 

 

(11

)

 

 

 

 

 

 

 

 

 

 

 

(11

)

Total costs and expenses, net

 

 

1,024

 

 

 

459

 

 

 

19

 

 

 

168

 

 

 

1,670

 

Operating Profit (Loss)

 

 

182

 

 

 

39

 

 

 

(3

)

 

 

(47

)

 

 

171

 

 

(1)

Amount includes revenues and expenses associated with transactions with franchisees and unconsolidated affiliates such as inventory procurement and other services provided to franchisees and unconsolidated affiliates.

4


Yum China Holdings, Inc.

Recast Quarterly Segment Operating Results

(in US$ millions)

(unaudited)

 

 

Quarter Ended 9/30/2017

 

 

 

KFC

 

 

Pizza Hut

 

 

All Other

Segments

 

 

Corporate &

Unallocated(1)

 

 

Total

 

Total revenues

 

 

1,402

 

 

 

569

 

 

 

23

 

 

 

136

 

 

 

2,130

 

Company restaurant expenses

 

 

1,082

 

 

 

487

 

 

 

8

 

 

 

 

 

 

1,577

 

General and administrative expenses

 

 

44

 

 

 

27

 

 

 

9

 

 

 

43

 

 

 

123

 

Franchise expenses

 

 

19

 

 

 

 

 

 

 

 

 

 

 

 

19

 

Expenses for transactions with

   franchisees and unconsolidated affiliates

 

 

19

 

 

 

 

 

 

4

 

 

 

136

 

 

 

159

 

Other operating costs

 

 

 

 

 

 

 

 

8

 

 

 

 

 

 

8

 

Closures and impairment expenses, net

 

 

 

 

 

1

 

 

 

1

 

 

 

 

 

 

2

 

Refranchising gain, net

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Other income, net

 

 

(18

)

 

 

 

 

 

 

 

 

(3

)

 

 

(21

)

Total costs and expenses, net

 

 

1,146

 

 

 

515

 

 

 

30

 

 

 

175

 

 

 

1,866

 

Operating Profit (Loss)

 

 

256