Yum China Holdings, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Yum China Holdings, Inc. has submitted its 2023 10-K filing, providing a comprehensive overview of its financial performance and business operations for the fiscal year ending December 31, 2023.</b>

AI Summary

Yum China Holdings, Inc. (YUMC) filed a Annual Report (10-K) with the SEC on February 29, 2024. Yum China Holdings, Inc. filed its 2023 Annual Report on Form 10-K on February 29, 2024. The filing covers the fiscal year ending December 31, 2023. The company's principal business is in the RETAIL-EATING PLACES sector (SIC 5812). Key financial statement items referenced include Property, Plant and Equipment Net, Accounts Payable and Accrued Liabilities Current, and Revenue from External Customers. The report details various segments including KFC, Pizza Hut, and other segments, with specific references to franchise fees and food/non-food revenues.

Why It Matters

For investors and stakeholders tracking Yum China Holdings, Inc., this filing contains several important signals. This 10-K filing is crucial for investors and analysts to assess Yum China's financial health, operational performance, and strategic direction for the past fiscal year. The detailed segment reporting and financial data within the filing allow for a granular understanding of revenue streams, profitability, and asset management across its various restaurant brands and operations.

Risk Assessment

Risk Level: medium — Yum China Holdings, Inc. shows moderate risk based on this filing. The filing is a standard 10-K, which is a comprehensive but routine disclosure. The risk is medium due to the inherent complexities and potential for detailed financial disclosures that could reveal specific challenges or opportunities.

Analyst Insight

Review the detailed segment performance data and financial statements within the 10-K to identify trends in revenue growth, profitability, and operational efficiency across Yum China's brands.

Revenue Breakdown

Key Numbers

• 2023-12-31 — Fiscal Year End (Period covered by the 10-K filing)
• 2024-02-29 — Filing Date (Date the 10-K was filed)
• 5812 — SIC Code (Standard Industrial Classification for RETAIL-EATING PLACES)

Key Players & Entities

• Yum China Holdings, Inc. (company) — Filer of the 10-K
• Yum! China Holding, Inc. (company) — Former company name
• KFC (company) — Restaurant brand mentioned
• Pizza Hut (company) — Restaurant brand mentioned

FAQ

Risk Factors

• Closure and Impairment Income Expenses Net [medium — financial]: Details on closure and impairment expenses are included in the filing.
• Restaurants [medium — operational]: Information related to restaurant operations, including fair value measurements, is present.

Key Dates

• 2023-12-31: Fiscal Year End — The period for which the 10-K financial statements are reported.
• 2024-02-29: Filing Date — The date Yum China Holdings, Inc. submitted its 10-K filing.

Glossary

Property Plant and Equipment Net

The net book value of a company's tangible assets used in operations. (Indicates the company's investment in physical assets for its restaurant operations.)

Key Financial Figures

• $0.01 — ch Registered Common Stock, Par Value $0.01 Per Share YUMC New York Stock Excha
• $11 billion — a in terms of 2023 system sales. We had $11 billion of revenues in 2023 and 14,644 restaura
• $9 b — g guest loyalty. Digital sales exceeded $9 billion, with digital ordering accounted

Filing Documents

• yumc-20231231.htm (10-K) — 5649KB
• yumc-ex21_1.htm (EX-21.1) — 103KB
• yumc-ex23_1.htm (EX-23.1) — 4KB
• yumc-ex31_1.htm (EX-31.1) — 13KB
• yumc-ex31_2.htm (EX-31.2) — 13KB
• yumc-ex32_1.htm (EX-32.1) — 8KB
• yumc-ex32_2.htm (EX-32.2) — 8KB
• yumc-ex97_1.htm (EX-97.1) — 34KB
• img189459321_0.jpg (GRAPHIC) — 37KB
• 0000950170-24-023147.txt (&nbsp;) — 21566KB
• yumc-20231231.xsd (EX-101.SCH) — 2421KB
• yumc-20231231_htm.xml (XML) — 4681KB

Business

Business 2 Information about our Executive Officers 20 Item 1A.

Risk Factors

Risk Factors 23 Item 1B. Unresolved Staff Comments 60 Item 1C. Cybersecurity 60 Item 2.

Properties

Properties 61 Item 3.

Legal Proceedings

Legal Proceedings 61 Item 4. Mine Safety Disclosures 61 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 62 Item 6. [RESERVED] 63 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 64 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 84 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 85 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 129 Item 9A.

Controls and Procedures

Controls and Procedures 129 Item 9B. Other Information 129 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 129 PART III Item 10. Directors, Executive Officers and Corporate Governance 130 Item 11.

Executive Compensation

Executive Compensation 130 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 130 Item 13. Certain Relationships and Related Transactions, and Director Independence 130 Item 14. Principal Accountant Fees and Services 130 PART IV Item 15. Exhibits and Financial Statement Schedules 131 Item 16. Form 10-K Summary 135

Signatures

Signatures 136

Forward-Looking Statements

Forward-Looking Statements This annual report on Form 10-K (this "Form 10-K") includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend all forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These statements often include words such as "may," "will," "estimate," "intend," "seek," "expect," "project," "anticipate," "believe," "plan," "could," "target," "predict," "likely," "should," "forecast," "outlook," "model," "continue," "ongoing" or other similar terminology. Forward-looking statements are based on our current expectations, estimates, assumptions or projections concerning future results or events, including, without limitation, statements regarding our strategies to expand our restaurant network and restaurant portfolio, our strategies to improve store performance and develop new sources of revenue, plans relating to our share repurchase activity, declaration of dividends, and plans for returning capital to our stockholders, plans to invest in technology and high-quality assets, plans to enhance digital and delivery capabilities, franchise development, logistics and supply chain management, our sustainability goals and anticipated effects of population and macroeconomic trends. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause our actual results and events to differ materially from those indicated by those forward-looking statements. We cannot assure you that any of our expectations, estimates, assumptions or projections will be achieved. Factors

B usiness

Item 1. B usiness. References to "Yum China" mean Yum China Holdings, Inc. and references to the "Company," "we," "us," and "our" mean Yum China and its subsidiaries. "U.S. dollars," "$" or "US$" refers to the legal currency of the United States, and "RMB" or "Renminbi" refers to the legal currency of the People's Republic of China (the "PRC" or "China"). The KFC, Pizza Hut, Lavazza, Huang Ji Huang, Little Sheep and Taco Bell brands are collectively referred to as the "brands" or "concepts." Throughout this Form 10-K, the terms "brands" and "concepts" are used interchangeably and "restaurants," "stores" and "units" are used interchangeably. General Yum China is the largest restaurant company in China in terms of 2023 system sales. We had $11 billion of revenues in 2023 and 14,644 restaurants as of December 31, 2023. Our growing restaurant network consists of our flagship KFC and Pizza Hut brands, as well as emerging brands such as Lavazza, Huang Ji Huang, Little Sheep and Taco Bell. We have the exclusive right to operate and sublicense the KFC, Pizza Hut and, subject to achieving certain agreed-upon milestones, Taco Bell brands in China, excluding Hong Kong, Macau and Taiwan. We own the intellectual property of the Little Sheep and Huang Ji Huang concepts outright. KFC was the first major global restaurant brand to enter China in 1987. With more than 35 years of operations, we have developed extensive operating experience in the China market. We have since grown to become the largest restaurant company in China in terms of 2023 system sales, with 14,644 restaurants covering over 2,000 cities primarily in China as of December 31, 2023. We believe that there are significant opportunities to further expand within China, and we intend to focus our efforts on increasing our geographic footprint in both existing and new cities. As of December 31, 2023, we owned and operated approximately 86% of our restaurants. Franchisees contribute to our revenue through t