View Filing Data

Income Before Income Taxes

254

209

Interest income, net

^[1]

256

211

Income tax provision

(76)

(62)

Net income – including noncontrolling interests

180

149

Net income – noncontrolling interests

Net Income – Yum China Holdings, Inc.

$ 175

$ 145

Basic Earnings Per Common Share

$ 0.45

$ 0.40

Diluted Earnings Per Common Share

$ 0.44

$ 0.40

[1]	Amounts have not been allocated to any segment for performance reporting purposes.

Condensed Consolidated and Combined Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	2 Months Ended
	Feb. 28, 2017	Feb. 29, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net income - including noncontrolling interests	$ 180	$ 149
Other comprehensive income, net of tax of nil:
Foreign currency gains (losses) arising during the period	22	(22)
Comprehensive income - including noncontrolling interests	202	127
Comprehensive income - noncontrolling interests	6	4
Comprehensive Income - Yum China Holdings, Inc.	$ 196	$ 123

Condensed Consolidated and Combined Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	2 Months Ended
	Feb. 28, 2017	Feb. 29, 2016
Cash Flows – Operating Activities
Net income - including noncontrolling interests	$ 180	$ 149
Depreciation and amortization	64	68
Refranchising gain	(1)	(3)
Deferred income taxes	(1)	(19)
Equity income from investments in unconsolidated affiliates	(17)	(16)
Share-based compensation expense	3	3
Changes in accounts receivable	8	(8)
Changes in inventories	40	17
Changes in prepaid expenses and other current assets	5	7
Changes in accounts payable and other current liabilities	31	113
Changes in income taxes payable	51	56
Other, net	(6)	6
Net Cash Provided by Operating Activities	357	373
Cash Flows – Investing Activities
Capital spending	(74)	(80)
Purchases of short-term investments	(100)	(54)
Proceeds from refranchising of restaurants	2	7
Other, net	(1)	(1)
Net Cash Used in Investing Activities	(173)	(128)
Cash Flows – Financing Activities
Net transfers from Parent		7
Payment of capital lease obligation	(1)
Net Cash (Used in) Provided by Financing Activities	(1)	7
Effect of Exchange Rates on Cash and Cash Equivalents	6	(5)
Net Increase in Cash and Cash Equivalents	189	247
Cash and Cash Equivalents - Beginning of Period	885	425
Cash and Cash Equivalents - End of Period	1,074	672
Supplemental Cash Flow Data
Cash paid for income tax	$ 25	$ 23

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Feb. 28, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents	$ 1,074	$ 885
Short-term investments	180	79
Accounts receivable, net	68	74
Inventories, net	231	268
Prepaid expenses and other current assets	169	120
Total Current Assets	1,722	1,426
Property, plant and equipment, net	1,627	1,647
Goodwill	80	79
Intangible assets, net	87	88
Investments in unconsolidated affiliates	37	71
Other assets	261	254
Deferred income taxes	163	162
Total Assets	3,977	3,727
Current Liabilities
Accounts payable and other current liabilities	984	971
Income taxes payable	84	33
Total Current Liabilities	1,068	1,004
Capital lease obligations	28	28
Other liabilities and deferred credits	251	252
Total Liabilities	1,347	1,284
Equity
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 384,311,143 shares and 383,344,835.42 shares issued and outstanding at February 28, 2017 and December 31, 2016, respectively	4	4
Treasury Stock	(20)	(20)
Additional paid-in capital	2,359	2,352
Retained earnings	215	40
Accumulated other comprehensive income	22	1
Total Equity – Yum China Holdings, Inc.	2,580	2,377
Noncontrolling interests	50	66
Total Equity	2,630	2,443
Total Liabilities and Equity	$ 3,977	$ 3,727

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Feb. 28, 2017	Dec. 31, 2016
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000	1,000,000,000
Common stock, shares issued	384,311,143	383,344,835.42
Common stock, shares outstanding	384,311,143	383,344,835.42

Description of the Business	2 Months Ended
Description of the Business	Feb. 28, 2017
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Description of the Business	Note 1 – Description of the Business Yum China Holdings, Inc. (“Yum China” and, together with its subsidiaries, the “Company,” “we,” “us,” and “our”) was incorporated in Delaware on April 1, 2016. The Company separated from Yum! Brands, Inc. (“YUM” or the “Parent”) on October 31, 2016 (the “separation”), becoming an independent publicly traded company as a result of a pro rata distribution (the “distribution”) of all outstanding shares of Yum China common stock to shareholders of YUM. On October 31, 2016, YUM’s shareholders of record as of 5:00 p.m. Eastern Time on October 19, 2016 received one share of Yum China common stock for every one share of YUM common stock held as of the record date. Yum China’s common stock began trading “regular way” under the ticker symbol “YUMC” on the New York Stock Exchange on November 1, 2016. The Company owns, franchises or has ownership in entities that own and operate restaurants under the KFC, Pizza Hut Casual Dining, Pizza Hut Home Service, Taco Bell, East Dawning and Little Sheep concepts (collectively, the “Concepts”). In connection with the separation of the Company from YUM, Yum! Restaurants Asia Pte. Ltd., a wholly-owned indirect subsidiary of YUM, and Yum Restaurants Consulting (Shanghai) Company Limited (“YCCL”), a wholly-owned indirect subsidiary of Yum China, entered into a 50-year master license agreement with automatic renewals for additional consecutive renewal terms of 50 years each, subject only to YCCL being in “good standing” and unless YCCL gives notice of its intent not to renew, for the exclusive right to use and sub-license the use of intellectual property owned by YUM and its subsidiaries for the development and operation of the KFC, Pizza Hut and, subject to achieving certain agreed-upon milestones, Taco Bell brands and their related marks and other intellectual property rights for restaurant services in the People’s Republic of China excluding Hong Kong, Taiwan and Macau (the “PRC” or “China”). In exchange, we pay a license fee to YUM equal to 3% of net system sales from both our Company and franchise restaurants. We own the East Dawning and Little Sheep intellectual property and pay no license fee related to these concepts. The operations of each Concept represent an operating segment of the Company. We have two reportable segments: KFC and Pizza Hut Casual Dining. Our remaining operating segments, including the operations of Pizza Hut Home Service, East Dawning, Little Sheep and Taco Bell, are combined and referred to as All Other Segments, as those operating segments are insignificant both individually and in the aggregate.

Basis of Presentation	2 Months Ended
Basis of Presentation	Feb. 28, 2017
Accounting Policies [Abstract]
Basis of Presentation	Note 2 – Basis of Presentation In connection with our separation from YUM, the direct and indirect equity interests of all of our operating subsidiaries and intermediate holding companies were transferred from YUM to Yum China, when Yum China was still one of YUM’s subsidiaries, through a series of transactions, which were completed in August 2016. The Company separated from YUM on October 31, 2016, becoming an independent publicly traded company as a result of a pro rata distribution of all outstanding shares of Yum China common stock to shareholders of YUM. The financial statements presented herein represent (i) for periods prior to October 31, 2016, the combined financial statements of YUM’s China businesses and operations when Yum China was a wholly owned subsidiary of YUM (referred to as “Condensed Combined Financial Statements”) and (ii) for periods subsequent to October 31, 2016, the consolidated financial statements of the Company as a separate publicly traded company following its separation from YUM (referred to as “Condensed Consolidated Financial Statements” and, together with the Condensed Combined Financial Statements, referred to as the “Condensed Consolidated and Combined Financial Statements”). Our preparation of the accompanying Condensed Consolidated and Combined Financial Statements in conformity with Generally Accepted Accounting Principles in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The accompanying Condensed Combined Financial Statements have been prepared on a standalone basis and are derived from YUM’s consolidated financial statements and underlying accounting records. Transactions between the Company and YUM that were not cash settled were considered to be effectively settled at the time the transactions are recorded. The Condensed Combined Financial Statements include all revenues, costs, assets and liabilities directly attributable to the Company either through specific identification or allocation. The Condensed Combined Statements of Income include allocations for certain of YUM’s Corporate functions which provided a direct benefit to the Company. These costs have been allocated based on Company system sales relative to YUM’s global system sales. System sales includes the sales results of all restaurants regardless of ownership. All allocated costs have been deemed to have been paid to YUM in the period in which the costs were recorded. The Company considers the cost allocation methodology and results to be reasonable for the periods prior to October 31, 2016. However, the allocations may not be indicative of the actual expense that would have been incurred had the Company operated as an independent, publicly traded company for the periods prior to October 31, 2016. Upon the separation, Parent Company Investment was adjusted as a result of settlement of certain assets and liabilities with YUM and formed the Company’s common stock and additional paid-in capital. See Note 3 for further discussion. We have prepared the Condensed Consolidated and Combined Financial Statements in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Condensed Consolidated and Combined Financial Statements include all normal and recurring adjustments considered necessary to present fairly our financial position as of February 28, 2017, and the results of our operations, comprehensive income and cash flows for the quarters ended February 28, 2017 and February 29, 2016. Our results of operations, comprehensive income and cash flows for these interim periods are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Consolidated and Combined Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K as filed with the SEC on March 8, 2017. Certain comparative items in the Condensed Consolidated and Combined Financial Statements have been reclassified to conform to the current period’s presentation to facilitate comparison. Our fiscal year ends on December 31. The Company operates on a fiscal monthly calendar, with two months in the first quarter, three months in the second and third quarters and four months in the fourth quarter.

Transactions with YUM

2 Months Ended

Feb. 28, 2017

Transactions with YUM

Note 3 – Transactions with YUM

Prior to the separation, there existed a parent-subsidiary relationship between YUM and the Company. We had the following transactions with YUM for the quarter ended February 29, 2016:

Allocation of Corporate Expenses

YUM historically performed centralized corporate functions on our behalf prior to October 31, 2016. Accordingly, certain YUM costs have been allocated to the Company and reflected as expenses in the Condensed Combined Financial Statements. Management considers the allocation methodologies used to be reasonable and appropriate reflections of the historical expenses attributable to the Company. The expenses reflected in the Condensed Combined Financial Statements may not be indicative of the actual expenses that would have been incurred during the periods presented if we had operated as a separate, standalone entity.

Corporate expense allocations primarily relate to centralized corporate functions, including finance, accounting, treasury, tax, legal, internal audit and risk management functions. In addition, corporate expense allocations include, among other costs, IT maintenance, professional fees for legal services and expenses related to litigation, investigations or similar matters. Corporate allocations of $3 million were allocated to the Company during the quarter ended February 29, 2016, and have been included in general and administrative (“G&A”) expenses in the Condensed Combined Statements of Income. All of the corporate allocations of costs are deemed to have been incurred and settled through Parent Company Investment in the Condensed Combined Balance Sheets in the period where the costs were recorded. Following the separation from YUM, we perform these functions using our own resources or purchased services.

License Fee

The Condensed Combined Statements of Income include a fee that was historically paid to YUM comprised of initial fees and continuing fees equal to 3% of our Company and franchise sales prior to October 31, 2016. License fees due to YUM for our Company-owned stores are included within restaurant margin in Occupancy and other operating expenses in the Condensed Consolidated and Combined Statements of Income. License fees due to YUM on franchise sales are included in Franchise expenses. Total license fees paid during the quarter ended February 29, 2016 are reflected in the table below:

	Quarter ended
	2/29/2016
Initial fees - Company	$	2
Initial fees - Franchise		—
Continuing Fees - Company		38
Continuing Fees - Franchise		10
Total	$	50

Cash Management and Treasury

The Company funds its operations through cash generated from the operation of its Company-owned stores, franchise operations and dividend payments from unconsolidated affiliates. Prior to October 31, 2016, excess cash has historically been repatriated to YUM through intercompany loans or dividends. Transfers of cash both to and from YUM are included within Parent Company Investment in the Condensed Combined Balance Sheets. YUM has issued debt for general corporate purposes but in no case has any such debt been guaranteed or assumed by the Company or otherwise secured by the assets of the Company. As YUM’s debt and related interest is not directly attributable to the Company, no such amounts have been allocated to the Condensed Combined Financial Statements.

Earnings Per Common Share ("EPS")

2 Months Ended

Feb. 28, 2017

Earnings Per Share [Abstract]

Earning Per Common Share (EPS)

Note 4 – Earnings Per Common Share (“EPS”)

On October 31, 2016, YUM’s shareholders of record as of October 19, 2016 received one share of Yum China common stock for every one share of YUM’s common stock held as of the record date. For periods ended October 31, 2016 and prior, basic and diluted earnings per share were computed using the number of shares of Yum China common stock outstanding as of October 31, 2016, the date on which Yum China common stock was distributed to YUM’s shareholders. The same number of shares was used to calculate basic and diluted earnings per share for the quarter ended February 29, 2016 since there were no dilutive securities until after the separation.

The following table summarizes the components of basic and diluted earnings per share:

	Quarter ended
	2/28/2017		2/29/2016
Net Income – Yum China Holdings, Inc.	$	175	$	145
Weighted-average common shares outstanding (for basic calculation)^(a)		387,525,034		363,758,219
Effect of dilutive share-based employee compensation^(a)		7,821,987		—
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation)		395,347,021		363,758,219
Basic Earnings Per Share	$	0.45	$	0.40
Diluted Earnings Per Share	$	0.44	$	0.40
Employee stock options, stock appreciation rights and warrants excluded from the diluted EPS computation^(b)		18,448,360		—

(a)

As a result of the separation, shares of Yum China common stock were distributed to YUM’s shareholders of record as of October 19, 2016 and included in the calculated weighted-average common shares outstanding. Holders of outstanding YUM equity awards generally received both adjusted YUM awards and Yum China awards, or adjusted awards on shares of common stock of either YUM or Yum China in their entirety. Any subsequent exercise of these awards, whether held by the Company’s employees or YUM’s employees, would increase the number of common shares outstanding. The outstanding equity awards are included in the computation of diluted EPS, if there is dilutive effect.

(b)	These unexercised employee stock options, stock appreciation rights and warrants were not included in the computation of diluted EPS because to do so would have been antidilutive for the quarters presented.

Accumulated Other Comprehensive Income ("AOCI")	2 Months Ended
Accumulated Other Comprehensive Income ("AOCI")	Feb. 28, 2017
Stockholders Equity Note [Abstract]
Accumulated Other Comprehensive Income ("AOCI")	Note 5 – Accumulated Other Comprehensive Income (“AOCI”) The Company’s other comprehensive income for the quarters ended February 28, 2017 and February 29, 2016 and AOCI balances as of February 28, 2017 and December 31, 2016 were comprised solely of foreign currency translation adjustments. We recognized other comprehensive income of $22 million and other comprehensive loss of $22 million for the quarters ended February 28, 2017 and February 29, 2016, respectively. The accumulated balances reported in AOCI on the Condensed Consolidated Balance Sheets for currency translation adjustments were $22 million and $1 million as of February 28, 2017 and December 31, 2016, respectively. There was no tax effect related to the components of other comprehensive income for all periods presented.

- Definition

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=66004124&loc=d3e689-108580

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 220
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-Section 45
-Paragraph 1A
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

+ Details

Items Affecting Comparability of Net Income and Cash Flows

2 Months Ended

Feb. 28, 2017

Items Affecting Comparability Of Net Income And Cash Flows [Abstract]

Comparability of Prior Year Financial Data

Note 6 – Items Affecting Comparability of Net Income and Cash Flows

Refranchising Gain, net

The Refranchising gain, net by reportable segment and All Other Segments is presented below. We do not allocate such gains and losses to our segments for performance reporting purposes.

	Quarter ended
	2/28/2017		2/29/2016
KFC	$	1	$	3
Pizza Hut Casual Dining		—		—
All Other Segments		—		—
Total Company	$	1	$	3

Store Closure and Impairment Activity

Store closure income and Store impairment charges by reportable segment and All Other Segments are presented below:

	Quarter ended
	2/28/2017
	Total Company			KFC			Pizza Hut Casual Dining		All Other Segments
Store closure income ^(a)	$	2		$	1		$	1	$	—
Store impairment charges		(2	)		(2	)		—		—
Closure and impairment expenses	$	—		$	(1	)	$	1	$	—

	Quarter ended
	2/29/2016
	Total Company			KFC			Pizza Hut Casual Dining		All Other Segments
Store closure income^(a)	$	2		$	2		$	—	$	—
Store impairment charges		(2	)		(2	)		—		—
Closure and impairment expenses	$	—		$	—		$	—	$	—

(a)

Store closure income include proceeds from forced store closures, lease reserves established when we cease using a property under an operating lease and subsequent adjustments to those reserves and other facility-related expenses from previously closed stores. Remaining lease obligations for closed stores were not material at February 28, 2017 or December 31, 2016.

Other Income, Net

2 Months Ended

Feb. 28, 2017

Other Income And Expenses [Abstract]

Other Income, Net

Note 7 – Other Income, net

	Quarter ended
	2/28/2017		2/29/2016
Equity income from investments in unconsolidated affiliates	$	17	$	16
Foreign exchange net loss and other		—		(1	)
Other income, net	$	17	$	15

Supplemental Balance Sheet Information

2 Months Ended

Feb. 28, 2017

Supplemental Balance Sheet Information Disclosure [Abstract]

Supplemental Balance Sheet Information

Note 8 – Supplemental Balance Sheet Information

Accounts Receivable, net	2/28/2017			12/31/2016
Accounts receivable, gross	$	70		$	76
Allowance for doubtful accounts		(2	)		(2	)
Accounts receivable, net	$	68		$	74

Prepaid Expenses and Other Current Assets	2/28/2017		12/31/2016
Prepaid rent	$	40	$	39
Other prepaid expenses and current assets^(a)		129		81
Prepaid expenses and other current assets	$	169	$	120

(a)	Includes receivables of $8 million and $16 million due from payment processors or aggregators as of February 28, 2017 and December 31, 2016, respectively.

Property, Plant and Equipment	2/28/2017			12/31/2016
Buildings and improvements	$	2,072		$	2,029
Capital leases, primarily buildings		30			29
Machinery and equipment		1,075			1,081
Property, plant and equipment, gross		3,177			3,139
Accumulated depreciation and amortization		(1,550	)		(1,492	)
Property, plant and equipment, net	$	1,627		$	1,647

Accounts Payable and Other Current Liabilities	2/28/2017		12/31/2016
Accounts payable	$	509		480
Accrued capital expenditures		99		132
Accrued compensation and benefits		156		191
Accrued taxes, other than income taxes		24		14
Dividends payable		22		—
Other current liabilities		174		154
Accounts payable and other current liabilities	$	984	$	971

Other Liabilities and Deferred Credits	2/28/2017		12/31/2016
Deferred escalating minimum rent	$	155	$	153
Other noncurrent liabilities and deferred credits		96		99
Other liabilities and deferred credits	$	251	$	252

Noncontrolling Interests

Noncontrolling interests represent the ownership interests of minority shareholders of the entities that operate KFC restaurants in Beijing and Shanghai, China. A reconciliation of the beginning and ending carrying amount of the equity attributable to noncontrolling interests is as follows:

	Noncontrolling Interests
Balance at December 31, 2016	$	66
Net income – noncontrolling interests		5
Dividends declared		(22	)
Currency translation adjustments		1
Balance at February 28, 2017	$	50

Fair Value Measurements	2 Months Ended
Fair Value Measurements	Feb. 28, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements	Note 9 – Fair Value Measurements As of February 28, 2017, the carrying values of cash and cash equivalents, short-term investments, accounts receivable and accounts payable approximated their fair values because of the short-term nature of these instruments. In addition, certain of the Company’s assets, such as property, plant and equipment, goodwill and intangible assets, are measured at fair value on a non-recurring basis, if determined to be impaired. During the quarter ended February 28, 2017, we recorded restaurant-level impairment (Level 3) of $2 million. The remaining net book value of the assets measured at fair value as of February 28, 2017, subsequent to these impairments, was not significant.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Income Taxes

2 Months Ended

Feb. 28, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Note 10 – Income Taxes

	Quarter ended
	2/28/2017			2/29/2016
Income tax provision	$	76		$	62
Effective tax rate		29.9	%		29.5	%

Our effective tax rate is generally lower than the U.S. federal statutory rate of 35% due to the majority of our income being earned in China where the tax rate is lower than the U.S. rate. The slightly higher effective tax rate for the first quarter of 2017 was due to non-deductibility of certain expense items.

Reportable Operating Segments

2 Months Ended

Feb. 28, 2017

Segment Reporting [Abstract]

Reportable Operating Segments

Note 11 – Reportable Operating Segments

We have two reportable operating segments: KFC and Pizza Hut Casual Dining. We also have four non-reportable operating segments, Pizza Hut Home Service, East Dawning, Little Sheep and Taco Bell, which are combined and referred to as All Other Segments, as these operating segments are insignificant both individually and in the aggregate. The following tables summarize Revenues and Operating Profit for each of our reportable operating segments:

	Quarter ended
Revenues	2/28/2017		2/29/2016
KFC	$	896	$	921
Pizza Hut Casual Dining		339		328
All Other Segments		49		54
Total	$	1,284	$	1,303

	Quarter ended
Operating Profit	2/28/2017			2/29/2016
KFC^(a)	$	207		$	191
Pizza Hut Casual Dining		65			39
All Other Segments		4			—
Unallocated and corporate expenses^(b)		(23	)		(24	)
Unallocated Refranchising gain^(b)		1			3
Operating Profit	$	254		$	209
Interest income, net^(b)		2			2
Income Before Income Taxes	$	256		$	211

(a)	Includes equity income from investments in unconsolidated affiliates of $17 million and $16 million for the quarters ended February 28, 2017 and February 29, 2016, respectively.

(b)	Amounts have not been allocated to any segment for performance reporting purposes.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=68060357&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Contingencies	2 Months Ended
Contingencies	Feb. 28, 2017
Commitments And Contingencies Disclosure [Abstract]
Contingencies	Note 12 – Contingencies Indemnification of China Tax on Indirect Transfers of Assets In February 2015, the Chinese State Administration of Taxation (“SAT”) issued Bulletin 7 on Income arising from Indirect Transfers of Assets by Non-Resident Enterprises. Pursuant to Bulletin 7, an “indirect transfer” of Chinese taxable assets, including equity interests in a Chinese resident enterprise, by a non-resident enterprise, may be recharacterized and treated as a direct transfer of Chinese taxable assets, if such arrangement does not have reasonable commercial purpose and the transferor has avoided payment of Chinese enterprise income tax. As a result, gains derived from such an indirect transfer may be subject to Chinese enterprise income tax at a rate of 10%. YUM concluded and we concurred that it is more likely than not that YUM will not be subject to this tax with respect to the distribution. However, given how recently Bulletin 7 was promulgated, there are significant uncertainties regarding what constitutes a reasonable commercial purpose, how the safe harbor provisions for group restructurings are to be interpreted and how the taxing authorities will ultimately view the distribution. As a result, YUM’s position could be challenged by Chinese tax authorities resulting in a 10% tax assessed on the difference between the fair market value and the tax basis of the separated China business. As YUM’s tax basis in the China business is minimal, the amount of such tax could be significant. Any tax liability arising from the application of Bulletin 7 to the distribution is expected to be settled in accordance with the tax matters agreement between the Company and YUM. Pursuant to the tax matters agreement, to the extent any Chinese indirect transfer tax pursuant to Bulletin 7 is imposed, such tax and related losses will be allocated between YUM and the Company in proportion to their respective share of the combined market capitalization of YUM and the Company during the thirty trading days after the separation. Such a settlement could be significant and have a material adverse effect on our results of operations and our financial condition. At the inception of the tax indemnity being provided to YUM, the fair value of the non-contingent obligation to stand ready to perform was insignificant and the liability for the contingent obligation to make payment was not probable or estimable. Unconsolidated Affiliates Guarantees From time to time we have guaranteed certain lines of credit and loans of unconsolidated affiliates. As of February 28, 2017, there were no guarantees outstanding for unconsolidated affiliates. Our unconsolidated affiliates had total revenues of approximately $222 million and $250 million for the quarters ended February 28, 2017 and February 29, 2016, respectively, and assets and liabilities of approximately $320 million and $242 million, respectively, at February 28, 2017. Legal Proceedings The Company is subject to various lawsuits covering a variety of allegations from time to time. The Company believes that the ultimate liability, if any, in excess of amounts already provided for these matters in the Condensed Consolidated and Combined Financial Statements, is not likely to have a material adverse effect on the Company’s annual results of operations, financial condition or cash flows. Matters faced by the Company from time to time include, but are not limited to, claims from landlords, employees, customers and others related to operational, contractual or employment issues.

Basis of Presentation (Policies)	2 Months Ended
Basis of Presentation (Policies)	Feb. 28, 2017
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation In connection with our separation from YUM, the direct and indirect equity interests of all of our operating subsidiaries and intermediate holding companies were transferred from YUM to Yum China, when Yum China was still one of YUM’s subsidiaries, through a series of transactions, which were completed in August 2016. The Company separated from YUM on October 31, 2016, becoming an independent publicly traded company as a result of a pro rata distribution of all outstanding shares of Yum China common stock to shareholders of YUM. The financial statements presented herein represent (i) for periods prior to October 31, 2016, the combined financial statements of YUM’s China businesses and operations when Yum China was a wholly owned subsidiary of YUM (referred to as “Condensed Combined Financial Statements”) and (ii) for periods subsequent to October 31, 2016, the consolidated financial statements of the Company as a separate publicly traded company following its separation from YUM (referred to as “Condensed Consolidated Financial Statements” and, together with the Condensed Combined Financial Statements, referred to as the “Condensed Consolidated and Combined Financial Statements”). Our preparation of the accompanying Condensed Consolidated and Combined Financial Statements in conformity with Generally Accepted Accounting Principles in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The accompanying Condensed Combined Financial Statements have been prepared on a standalone basis and are derived from YUM’s consolidated financial statements and underlying accounting records. Transactions between the Company and YUM that were not cash settled were considered to be effectively settled at the time the transactions are recorded. The Condensed Combined Financial Statements include all revenues, costs, assets and liabilities directly attributable to the Company either through specific identification or allocation. The Condensed Combined Statements of Income include allocations for certain of YUM’s Corporate functions which provided a direct benefit to the Company. These costs have been allocated based on Company system sales relative to YUM’s global system sales. System sales includes the sales results of all restaurants regardless of ownership. All allocated costs have been deemed to have been paid to YUM in the period in which the costs were recorded. The Company considers the cost allocation methodology and results to be reasonable for the periods prior to October 31, 2016. However, the allocations may not be indicative of the actual expense that would have been incurred had the Company operated as an independent, publicly traded company for the periods prior to October 31, 2016. Upon the separation, Parent Company Investment was adjusted as a result of settlement of certain assets and liabilities with YUM and formed the Company’s common stock and additional paid-in capital. See Note 3 for further discussion. We have prepared the Condensed Consolidated and Combined Financial Statements in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The Condensed Consolidated and Combined Financial Statements include all normal and recurring adjustments considered necessary to present fairly our financial position as of February 28, 2017, and the results of our operations, comprehensive income and cash flows for the quarters ended February 28, 2017 and February 29, 2016. Our results of operations, comprehensive income and cash flows for these interim periods are not necessarily indicative of the results to be expected for the full year. These statements should be read in conjunction with the Consolidated and Combined Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K as filed with the SEC on March 8, 2017. Certain comparative items in the Condensed Consolidated and Combined Financial Statements have been reclassified to conform to the current period’s presentation to facilitate comparison. Our fiscal year ends on December 31. The Company operates on a fiscal monthly calendar, with two months in the first quarter, three months in the second and third quarters and four months in the fourth quarter.

Transactions with YUM (Tables)

2 Months Ended

Feb. 28, 2017

Schedule of License Fees Paid

Total license fees paid during the quarter ended February 29, 2016 are reflected in the table below:

	Quarter ended
	2/29/2016
Initial fees - Company	$	2
Initial fees - Franchise		—
Continuing Fees - Company		38
Continuing Fees - Franchise		10
Total	$	50

Earnings Per Common Share ("EPS") (Tables)

2 Months Ended

Feb. 28, 2017

Earnings Per Share [Abstract]

Earnings Per Common Share

The following table summarizes the components of basic and diluted earnings per share:

	Quarter ended
	2/28/2017		2/29/2016
Net Income – Yum China Holdings, Inc.	$	175	$	145
Weighted-average common shares outstanding (for basic calculation)^(a)		387,525,034		363,758,219
Effect of dilutive share-based employee compensation^(a)		7,821,987		—
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation)		395,347,021		363,758,219
Basic Earnings Per Share	$	0.45	$	0.40
Diluted Earnings Per Share	$	0.44	$	0.40
Employee stock options, stock appreciation rights and warrants excluded from the diluted EPS computation^(b)		18,448,360		—

(a)

(b)	These unexercised employee stock options, stock appreciation rights and warrants were not included in the computation of diluted EPS because to do so would have been antidilutive for the quarters presented.

Items Affecting Comparability of Net Income and Cash Flows (Tables)

2 Months Ended

Feb. 28, 2017

Refranchising Gain, Net [Member]

Closures and Impairment (Income) Expenses [Member]

Facility Actions

Refranchising Gain, net

The Refranchising gain, net by reportable segment and All Other Segments is presented below. We do not allocate such gains and losses to our segments for performance reporting purposes.

	Quarter ended
	2/28/2017		2/29/2016
KFC	$	1	$	3
Pizza Hut Casual Dining		—		—
All Other Segments		—		—
Total Company	$	1	$	3

Other Income And Expenses [Abstract]

Facility Actions

Store Closure and Impairment Activity

Store closure income and Store impairment charges by reportable segment and All Other Segments are presented below:

	Quarter ended
	2/28/2017
	Total Company			KFC			Pizza Hut Casual Dining		All Other Segments
Store closure income ^(a)	$	2		$	1		$	1	$	—
Store impairment charges		(2	)		(2	)		—		—
Closure and impairment expenses	$	—		$	(1	)	$	1	$	—

	Quarter ended
	2/29/2016
	Total Company			KFC			Pizza Hut Casual Dining		All Other Segments
Store closure income^(a)	$	2		$	2		$	—	$	—
Store impairment charges		(2	)		(2	)		—		—
Closure and impairment expenses	$	—		$	—		$	—	$	—

(a)

Other Income, Net (Tables)

2 Months Ended

Feb. 28, 2017

Other Income, Net Table

	Quarter ended
	2/28/2017		2/29/2016
Equity income from investments in unconsolidated affiliates	$	17	$	16
Foreign exchange net loss and other		—		(1	)
Other income, net	$	17	$	15

Supplemental Balance Sheet Information (Tables)

2 Months Ended

Feb. 28, 2017

Supplemental Balance Sheet Information Disclosure [Abstract]

Accounts Receivable, Net

Accounts Receivable, net	2/28/2017			12/31/2016
Accounts receivable, gross	$	70		$	76
Allowance for doubtful accounts		(2	)		(2	)
Accounts receivable, net	$	68		$	74

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets	2/28/2017		12/31/2016
Prepaid rent	$	40	$	39
Other prepaid expenses and current assets^(a)		129		81
Prepaid expenses and other current assets	$	169	$	120

(a)	Includes receivables of $8 million and $16 million due from payment processors or aggregators as of February 28, 2017 and December 31, 2016, respectively.

Property, Plant and Equipment

Property, Plant and Equipment	2/28/2017			12/31/2016
Buildings and improvements	$	2,072		$	2,029
Capital leases, primarily buildings		30			29
Machinery and equipment		1,075			1,081
Property, plant and equipment, gross		3,177			3,139
Accumulated depreciation and amortization		(1,550	)		(1,492	)
Property, plant and equipment, net	$	1,627		$	1,647

Accounts Payable and Other Current Liabilities

Accounts Payable and Other Current Liabilities	2/28/2017		12/31/2016
Accounts payable	$	509		480
Accrued capital expenditures		99		132
Accrued compensation and benefits		156		191
Accrued taxes, other than income taxes		24		14
Dividends payable		22		—
Other current liabilities		174		154
Accounts payable and other current liabilities	$	984	$	971

Other Liabilities and Deferred Credits

Other Liabilities and Deferred Credits	2/28/2017		12/31/2016
Deferred escalating minimum rent	$	155	$	153
Other noncurrent liabilities and deferred credits		96		99
Other liabilities and deferred credits	$	251	$	252

Equity Attributable to Noncontrolling Interests, rollforward

A reconciliation of the beginning and ending carrying amount of the equity attributable to noncontrolling interests is as follows:

	Noncontrolling Interests
Balance at December 31, 2016	$	66
Net income – noncontrolling interests		5
Dividends declared		(22	)
Currency translation adjustments		1
Balance at February 28, 2017	$	50

Income Taxes (Tables)

2 Months Ended

Feb. 28, 2017

Income Tax Disclosure [Abstract]

Income Tax And Effective Tax Rate

	Quarter ended
	2/28/2017			2/29/2016
Income tax provision	$	76		$	62
Effective tax rate		29.9	%		29.5	%

Reportable Operating Segments (Tables)

2 Months Ended

Feb. 28, 2017

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

The following tables summarize Revenues and Operating Profit for each of our reportable operating segments:

	Quarter ended
Revenues	2/28/2017		2/29/2016
KFC	$	896	$	921
Pizza Hut Casual Dining		339		328
All Other Segments		49		54
Total	$	1,284	$	1,303

	Quarter ended
Operating Profit	2/28/2017			2/29/2016
KFC^(a)	$	207		$	191
Pizza Hut Casual Dining		65			39
All Other Segments		4			—
Unallocated and corporate expenses^(b)		(23	)		(24	)
Unallocated Refranchising gain^(b)		1			3
Operating Profit	$	254		$	209
Interest income, net^(b)		2			2
Income Before Income Taxes	$	256		$	211

(a)	Includes equity income from investments in unconsolidated affiliates of $17 million and $16 million for the quarters ended February 28, 2017 and February 29, 2016, respectively.

(b)	Amounts have not been allocated to any segment for performance reporting purposes.

Description of the Business - Narrative (Details)		2 Months Ended
Description of the Business - Narrative (Details)	Oct. 31, 2016	Feb. 28, 2017 Segment
Segment Reporting Information [Line Items]
Entity, date of incorporation		Apr. 01, 2016
Entity incorporation, state name		Delaware
Expiration term of master license agreement		50 years
Additional consecutive renewal terms of license agreement		50 years
Percentage of license fees on net sales		3.00%
Number of reportable segments		2
Yum Brands, Inc. [Member]
Segment Reporting Information [Line Items]
Exchange ratio of shares	1

Transactions With YUM (Details) - USD ($) $ in Millions	2 Months Ended	10 Months Ended
Transactions With YUM (Details) - USD ($) $ in Millions	Feb. 29, 2016	Oct. 31, 2016
Related Party Transaction [Line Items]
Percentage of initial fees and continuing fees to company and franchise sales		3.00%
General and administrative expenses [Member]
Related Party Transaction [Line Items]
Corporate expense allocations	$ 3

Transactions With YUM (Details 2) $ in Millions	2 Months Ended
Transactions With YUM (Details 2) $ in Millions	Feb. 29, 2016 USD ($)
Transactions With Parent [Abstract]
Initial fees - Company	$ 2
Continuing Fees - Company	38
Continuing Fees - Franchise	10
Total	$ 50

Earnings Per Common Share ("EPS") - Narrative (Details)	Oct. 31, 2016
Yum Brands, Inc. [Member]
Earnings Per Share [Line Items]
Exchange ratio of shares	1

Earnings Per Common Share ("EPS") (Details) - USD ($)
$ / shares in Units, $ in Millions

2 Months Ended

Feb. 28, 2017

Feb. 29, 2016

Earnings Per Share [Abstract]

Net Income – Yum China Holdings, Inc.

$ 175

$ 145

Weighted-average common shares outstanding (for basic calculation)

^[1]

387,525,034

363,758,219

Effect of dilutive share-based employee compensation

^[1]

7,821,987

Weighted-average common and dilutive potential common shares outstanding (for diluted calculation)

395,347,021

363,758,219

Basic Earnings Per Share

$ 0.45

$ 0.40

Diluted Earnings Per Share

$ 0.44

$ 0.40

Employee stock options, stock appreciation rights and warrants excluded from the diluted EPS computation

^[2]

18,448,360

[1]

[2]

These unexercised employee stock options, stock appreciation rights and warrants were not included in the computation of diluted EPS because to do so would have been antidilutive for the quarters presented.

Accumulated Other Comprehensive Income ("AOCI") - Narrative (Details) - USD ($)	2 Months Ended
	Feb. 28, 2017	Feb. 29, 2016	Dec. 31, 2016
Equity [Abstract]
Other comprehensive Income (loss)	$ 22,000,000	$ (22,000,000)
Accumulated other comprehensive income	22,000,000		$ 1,000,000
Tax effect related to components of other comprehensive income	$ 0	$ 0

Items Affecting Comparability of Net Income and Cash Flows (Details 1) - USD ($) $ in Millions	2 Months Ended
	Feb. 28, 2017	Feb. 29, 2016
Refranchising gain, net	$ 1	$ 3
KFC [Member]
Refranchising gain, net	$ 1	$ 3

Items Affecting Comparability of Net Income and Cash Flows (Details 2) - USD ($)
$ in Millions

2 Months Ended

Feb. 28, 2017

Feb. 29, 2016

Store closure income

^[1]

$ 2

Store impairment charges

(2)

KFC [Member]

Closure and impairment expenses

Store closure income

^[1]

Store impairment charges

(2)

$ (2)

(1)

Pizza Hut Casual Dining [Member]

Closure and impairment expenses

Store closure income

^[1]

$ 1

[1]

Other Income, Net (Details) - USD ($) $ in Millions	2 Months Ended
Other Income, Net (Details) - USD ($) $ in Millions	Feb. 28, 2017	Feb. 29, 2016
Other Income And Expenses [Abstract]
Equity income from investments in unconsolidated affiliates	$ 17	$ 16
Foreign exchange net loss and other		(1)
Other income, net	$ 17	$ 15

Supplemental Balance Sheet Information (Details) - USD ($)

Feb. 28, 2017

Dec. 31, 2016

Accounts Receivable, net

Accounts receivable, gross

$ 70,000,000

$ 76,000,000

Allowance for doubtful accounts

(2,000,000)

Accounts receivable, net

68,000,000

74,000,000

Prepaid Expenses and Other Current Assets

Prepaid rent

40,000,000

39,000,000

Other prepaid expenses and current assets

^[1]

129,000,000

81,000,000

Prepaid expenses and other current assets

169,000,000

120,000,000

Accounts Payable and Other Current Liabilities

Accounts payable

509,000,000

480,000,000

Accrued capital expenditures

99,000,000

132,000,000

Accrued compensation and benefits

156,000,000

191,000,000

Accrued taxes, other than income taxes

24,000,000

14,000,000

Dividends payable

22,000,000

Other current liabilities

174,000,000

154,000,000

Accounts payable and other current liabilities

984,000,000

971,000,000

Other Liabilities and Deferred Credits

Deferred escalating minimum rent

155,000,000

153,000,000

Other noncurrent liabilities and deferred credits

96,000,000

99,000,000

Other liabilities and deferred credits

$ 251,000,000

$ 252,000,000

[1]	Includes receivables of $8 million and $16 million due from payment processors or aggregators as of February 28, 2017 and December 31, 2016, respectively.

Supplemental Balance Sheet Information (Parenthetical) (Details) - USD ($) $ in Millions	Feb. 28, 2017	Dec. 31, 2016
Payment Processors or Aggregators [Member]
Supplemental Balance Sheet Information [Line Items]
Receivables due from third parties	$ 8	$ 16

Supplemental Balance Sheet Information (Details 1) - USD ($) $ in Millions	Feb. 28, 2017	Dec. 31, 2016
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 3,177	$ 3,139
Accumulated depreciation and amortization	(1,550)	(1,492)
Property, plant and equipment, net	1,627	1,647
Buildings and Improvements [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	2,072	2,029
Capital Leases, Primarily Buildings [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	30	29
Machinery and Equipment [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 1,075	$ 1,081

Supplemental Balance Sheet Information (Details 2) - USD ($) $ in Millions	2 Months Ended
	Feb. 28, 2017	Feb. 29, 2016
Minority Interest [Line Items]
Stockholders' Equity Attributable to Noncontrolling Interest, Beginning Balance	$ 66
Net income – noncontrolling interests	5	$ 4
Stockholders' Equity Attributable to Noncontrolling Interest, Ending Balance	50
Noncontrolling Interests [Member]
Minority Interest [Line Items]
Stockholders' Equity Attributable to Noncontrolling Interest, Beginning Balance	66
Net income – noncontrolling interests	5
Dividends declared	(22)
Currency translation adjustments	1
Stockholders' Equity Attributable to Noncontrolling Interest, Ending Balance	$ 50

Fair Value Measurements - Narrative (Details) $ in Millions	2 Months Ended
Fair Value Measurements - Narrative (Details) $ in Millions	Feb. 28, 2017 USD ($)
Fair Value, Measurements, Nonrecurring [Member] \| Fair Value, Inputs, Level 3 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Impairment of Long-Lived Assets Held-for-use	$ 2

Income Taxes (Details) - USD ($) $ in Millions	2 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Feb. 28, 2017	Feb. 29, 2016
Income Tax Disclosure [Abstract]
Income tax provision	$ 76	$ 62
Effective tax rate	29.90%	29.50%
Effective Income Tax Rate - Federal Statutory Income Tax Rate, Percent	35.00%

Reportable Operating Segments - Narrative (Details)	2 Months Ended
Reportable Operating Segments - Narrative (Details)	Feb. 28, 2017 Segment
Segment Reporting [Abstract]
Number of reportable segments	2
Number of non-reportable operating segments	4

Reportable Operating Segments (Details) - USD ($)
$ in Millions

2 Months Ended

Feb. 28, 2017

Feb. 29, 2016

$ 1,284

$ 1,303

Unallocated and corporate expenses

254

209

^[1]

(23)

(24)

Unallocated Refranchising gain

^[1]

Interest income, net

^[1]

Income Before Income Taxes

256

211

KFC [Member]

896

921

Pizza Hut Casual Dining [Member]

^[2]

207

191

339

328

All Other Segments [Member]

$ 54