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ArtMarket.com – 24 October 2023: How the Art Market Saves the World From Economic and Financial Apocalypse

PARIS, Nov. 1, 2019 /PRNewswire/ — Artprice by Art Market invited a number of social science fiction authors to write near-term finance-fiction, as a prospective experiment including the Art Market.

Salvator Mundi ©2019 thierry Ehrmann - courtesy of Organ Museum / Abode of Chaos


Salvator Mundi ©2019 thierry Ehrmann – courtesy of Organ Museum / Abode of Chaos

It is Tuesday, 24 October 2023… here is the economic column by the editorial team of “Protect your Money”:

The French government has just issued 45 billion euros of long-term debt in a single day at negative rates. This is the second time France has issued tens of billions worth of 30-yr bonds at negative rates. The issue rate on its long-term debt has risen from -1.10% to -1.15% today.

Like every EU country, France is now borrowing at negative rates on short, medium and long-term debt. In the United States, President Trump’s insistent demands in 2019 that the Fed adopt negative rates were heard after his re-election in 2020. Meanwhile… Larry Gagosian – America’s wealthiest man – has been appointed as Donald Trump’s personal advisor. His acquisition, for $4.8 billion, of Leonardo da Vinci’s Salvator Mundi, now hanging in the Oval Office, undoubtedly played a role in his nomination.

Salvator Mundi ©2019 thierry Ehrmann – courtesy of Organ Museum / Abode of Chaos

[http://imgpublic.artprice.com/img/wp/sites/11/2019/10/salvator-mundi-999-thierry-ehrmann.jpg]

In stark defiance of rationality, investors looking for safe investments are ready to lend more and more money at a loss… a paradox that masks the fundamental reality that many financiers are actually gambling on an abysmal pursuit of negative rates throughout the world.

Numerous economists and commentators have alerted policy-makers to this practice, which is contrary to the fundamental rules of money-lending that have governed the global economy since time began. They point to the growing danger that the longer negative rates become the norm, the harder it will be to return to the healthier and sounder foundation of positive interest rates.

In his editorial in the New York Times, Chinese economist Wan Huan Xi – this year’s Nobel Prize winner for Economics – says This process is irreversibleIt basically signals the death of the banking system as we know it, adding… The only way out is the concentration of the banking system… a planetary ‘nationalization’ by global supra-central regulatory authorities.

Faced with the destructive spiral that savings and capital have entered, a number of bold and enlightened investors have been exploring successful alternative investment paths for several years:

  • Cryptocurrencies,
  • Gold,
  • Art.

Cryptocurrencies had the wind in their sails in the late 2020s, but demand tailed off because the crash of a “helicopter money” causes massive dilution that destroys its value. Eurobit, for example, lost 44% of its value last week, triggering a major panic amongst savers, investors and central banks alike. A joint statement from the ECB and the FED has announced a cryptocurrency rescue plan with negative rates of up to -3.6% and an immediate restart of QE (Quantitative Easing). The CEO of the startup Bitcoin Europa admitted that the risk is increasing every day. If the helicopter money strategy continues, we fear a collapse of prices… since cryptocurrencies essentially obey the same economic rules as physical currencies… they devalue with each new issue.

Moreover, we urgently need to reiterate our warnings about the permanent associated IT risk, the likes of which we saw in October 2021 when a complete paralysis of trading and trading systems for five days led to the first full-scale crash on cryptocurrency markets.

Gold has always been a safe haven and its value peaked not long ago. However, since the Chinese quantum calculator World Master defined the basis of an alchemical equation that is reasonably foreseeable in the near-term, gold prices have contracted substantially on profit-taking and are down 35% versus their peaks.

According to the Icelandic chemical engineer, Ragnar Eriksson, who participated in an international team to develop the Chinese World Master programme, conversion to gold is no longer a dream. We know how to produce gold using a reasonable amount of energy and producing a metal that fetches USD 450 an ounce.

Our advice on gold is now ‘neutral’ given that we can now envisage its industrial production under controlled costs.

Art has maintained its values for 25 years. In fact, it’s the big winner from globalization and dematerialization. As Artmarket.com (formerly Artprice) – a global player in the Art Market – points out, we have stable returns on Old Master Art and growing returns on Modern and Contemporary Art.

The “Artprice 100” art investment fund managed by Artmarket.com – whose assets are steadily growing with new subscriptions from investors and savers – generates an annual yield of 27% on Contemporary Art. Indeed, people all over the world, seduced by its novelty and originality, are turning towards art as a means of social distinction. Today Artmarket has 18 representatives of the largest banks in North America, Europe and Asia on its supervisory board.

Regularly cited by the IMF and the World Bank, the Artmarket conglomerate has become the standard reference to which savers and investors burned by repeated disasters turn for stability, growth and security in the Art Market. The Art market is now controlled by Artmarket via its presence on five continents.

thierry Ehrmann, founder/CEO of Artmarket.com, the world’s leading Art Market reference, says: We knew the Art Market would be a haven, but the reality has far exceeded our most ambitious forecasts. The rush towards art has been so strong we are now receiving offers from the GAFAs almost every day… because they understand that our knowledge goes back almost three centuries, with the largest collection of scrolls, manuscripts and catalogues tracing the history of artworks in an ultra-secure bunker in a secret location. (However, the Wall Street Journal / Wired says that reliable sources, in secret collaboration with the Icelandic government, have located the bunker in a militarized zone in the middle of the volcanic island…). Our ultra-secure servers based on Artificial Intelligence hold all of the meta-data without which any investment in Art would be similar to Russian Roulette.

thierry Ehrmann concludes… “Since 1999 we have understood that the Art Market is essentially the oldest in the world… Man exchanged artworks commercially before money was ever minted… In this time of global financial and economic chaos, we are holding the key to the world’s financial salvation.

Artprice by Art Market invited social science fiction authors to write near-term finance-fiction as a prospective experiment. Naturally, because of its fictional nature, this press release cannot be interpreted in any shape or form as an element of legal, financial or economic information.

Copyright 1987-2019 thierry Ehrmann www.artprice.com – www.artmarket.com

About Artmarket:

Artmarket.com is listed on Eurolist by Euronext Paris, SRD long only and Euroclear: 7478 – Bloomberg: PRC – Reuters: ARTF.

Discover Artmarket and its Artprice department on video: http://en.artprice.com/video

Artmarket and its Artprice department was founded in 1997 by its CEO, thierry Ehrmann. Artmarket and its Artprice department is controlled by Groupe Serveur, created in 1987.

See certified biography in Who’s who ©:

http://imgpublic.artprice.com/img/wp/sites/11/2019/10/biographie_oct2019_WhosWho_thierryEhrmann.pdf

Artmarket is a global player in the Art Market with, among other structures, its Artprice department, world leader in the accumulation, management and exploitation of historical and current art market information in databanks containing over 30 million indices and auction results, covering more than 700,000 artists.

Artprice Images® allows unlimited access to the largest Art Market image bank in the world: no less than 180 million digital images of photographs or engraved reproductions of artworks from 1700 to the present day, commented by our art historians.

Artmarket with its Artprice department accumulates data on a permanent basis from 6300 Auction Houses and produces key Art Market information for the main press and media agencies (7,200 publications). Its 4.5 million ‘members log in’ users have access to ads posted by other members, a network that today represents the leading Global Standardized Marketplace® to buy and sell artworks at a fixed or bid price (auctions regulated by paragraphs 2 and 3 of Article L 321.3 of France’s Commercial Code).

Artmarket with its Artprice department, has been awarded the State label “Innovative Company” by the Public Investment Bank (BPI) (for the second time in November 2018 for a new period of 3 years) which is supporting the company in its project to consolidate its position as a global player in the market art.

Artprice by Artmarket’s 2018 Global Art Market Report published in March 2019: http://fr.artprice.com/artprice-reports/le-marche-de-lart-en-2018

Index of press releases posted by Artmarket with its Artprice department:

http://serveur.serveur.com/press_release/pressreleasefr.htm

Follow all the Art Market news in real time with Artmarket and its Artprice department on Facebook and Twitter:

https: // www .facebook.com / artpricedotcom  (4.5 million followers)

http://twitter.com/artmarketdotcom

http://twitter.com/artpricedotcom

Discover the alchemy and universe of Artmarket and its artprice department http: //web.artprice.com/video headquartered at the famous Organe Contemporary Art Museum “The Abode of Chaos” (dixit The New York Times): http://issuu.com/demeureduchaos/docs/demeureduchaos-abodeofchaos-opus-ix-1999-2013

L’Obs – The Museum of the Future: http://youtu.be/29LXBPJrs-o

http://www.facebook.com/la.demeure.du.chaos.theabodeofchaos999  
(4 million followers)

http://vimeo.com/124643720

http://www.facebook.com/the.demeure.du.chaos.theabodeofchaos999

Contact Artmarket.com and its Artprice department

Contact: Thierry Ehrmann, ir@artmarket.com

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#dltledgers executes First ever Digital Avalisation on blockchain for IFFCO with Standard Chartered.

ISPL has developed a state of the art blockchain platform with #dltledgers for an end to end digital process in Agro-commodities value chain bringing the key ecosystem partners in a single network enabling an easier, faster and a more efficient digital transaction. A key differentiator of this transaction was that the transaction involved world’s first Digital execution of the Avalisation of Bill of Exchange, which is a specific endorsement by the importer’s bank digitally to guarantee payment of the bill at maturity if the importer defaults.

SINGAPORE, Oct. 31, 2019 /PRNewswire/ — IFFCO Singapore Pte Ltd (ISPL), regional arm of the IFFCO Group based in UAE has announced the launch of its new and innovative enterprise grade blockchain platform in collaboration with #dltledgers, an award winning blockchain platform developer based in Singapore. ISPL today reported completion of its first live end-to-end trade in blockchain, moving cross border goods on Palm Oil and its extracts, which is USD100Mn worth of business annually for IFFCO Group from Malaysia/Indonesia to the Middle east. ISPL has pioneered the digital flow running an end to end blockchain trade finance transaction using Invoice Financing on the Buy Side and Digital Avalisation for Document against Acceptance (DA) on the Sell side of the trade in the live production platform of #dltledgers. The digital endorsement of the Bill of Exchange by Buyer Bank is the first of its kind in a live blockchain environment proving the dynamic consensus mechanism using blockchain as a powerful feature- functionality that banks will adopt in the future to ensure authenticity and security in trade finance transactions.

The end to end fully digitised trade execution and trade finance transaction, involving both import and export processes and multiple parties was executed in 3 hours as against a 10-day paper process otherwise in a seamless flow with digital connectivity on #dltledgers blockchain platform. ISPL could execute multiple transactions in a day via the #dltledgers blockchain platform improving their process efficiency and realised margins in dollar value terms.

“This move to a digital system based on #dltledgers blockchain is part of our business strategy to enter the digital space to leverage on innovative emerging technologies involving smart contracts, smart documentation and digital consensus in blockchain, we are able to access earlier financing from bank as the documentation flow is much closer to real-time,” says P R Thakore, CEO, IFFCO Singapore (ISPL).

“The real value lies in potentially having more transactions and having real reduction in  our financing costs by at least 20-25% by using #dltledgers blockchain technology. We have taken a phased approach and have seen a reduction in cycle time from 10 days to 2 days, saving of 8 days in the end to end execution process via #dltledgers platform which is humungous,” says Anupam Basak, HeadRegional Finance, IFFCO Singapore (ISPL).

Samuel Mathew, MD, Global head of documentary Trade, Trade digitisation and Chief Product Owner Trade Platform Transformation in Singapore said, “Standard Chartered is a key player in the digital transformation space. We are seeing a strong adoption by Corporate clients like ISPL for #dltledgers blockchain platform for cross-border trade. We are excited to be part of the execution of World’s first Digital Avalisation on Blockchain. Being part of this digital space has helped banks with more visibility into the customers operations, increasing transparency of the trade. This will surely reduce fraud and related risk and build cross border interconnectivity helping bank to move away from paper-based manual complex transactions involving multiple buys and sell into a seamless, more secure and efficient flow.

In one of the many ISPL transaction executed on the platform it had 50 plus documents and 8 Bill of Ladings (BLs). Such complex transactions involving multi parties involves a lot of paper-intensive manual activities which are now streamlined on the #dltledgers blockchain platform. Digitisation of all parties and a secure repository of digital documents which are in a trade life cycle are of immense value for trading houses and companies involved in huge turnovers and experience higher trade volumes. The digitalisation of the post trade execution reduces cycle times, allowing fulfilment of more orders. The various transaction by ISPL on the #dltledgers blockchain platform involved multiple parties in different geographies – Singapore, Indonesia, Malaysia, South Korea and UAE. ISPL has created a private network on blockchain of their 100 plus existing suppliers in South East Asia Region, multiple banks, Logistics and Insurance companies generating a truly blockchain experience.

#dltledgers blockchain platform provides ISPL with end-to-end trade visibility across the entire life cycle of post trade execution with authenticated and consented digitized documents at every step of the trade execution with multiple ecosystem partners. With the deployment of ISPL’s private network powered by #dltledgers, ISPL has become the first enterprise to do a digital end-to-end trade finance digitisation with digital avalisation of Document Against Acceptance (DA) enabling “Aval Bank” digital authentication and digital endorsement using #dltledgers blockchain platform improving efficiencies and access to faster cash in digital cross-border trade.

“This journey is undertaken with the objective of not just process efficiency, ISPL has a strategic objective of ensuring that all company produces are sourced sustainability and develop a virtual registry of provenance with trajectory of product blockchained for a fool-proof system to track n trace goods. ISPL believes that this will open up new revenue streams and multi-fold business benefits that may not even be envisaged at present within the industry,” adds Anupam Basak, Head-Regional Finance.

As trades intertwine and evolve, demands for a networked and collaborative model will intensify. Not only do transactions need to be seamless and safe, clients are increasingly looking for innovative solutions that save them time and costs.

“#dltledgers platform capabilities (dynamic consensus engine, digital assets engine, control trigger table, trade execution engine, network collaboration, digital trade documents engine, digital file cabinet, financial institution integration engine, Integrated API layer, digital identity engine, BC Link integration w ERP layer) will add strengths to digital leadership and create their private multi party network with unique nodal architecture, reliant on the easy availability and robustness of financing mechanisms. Considering that trade finance is widely viewed as the fuel for global commerce, it’s easy to see why customer centric blockchain platforms like ours is dominating conversations in the trade finance world. We will continue to grow and expand,” says Samir Neji, CEO, #dltledgers.

“#dltledgers is a blockchain platform that has been built from the point of view of a Trader/Trading house. The adoption of production live blockchain based solutions like #dltledgers, which is on Hyperledger fabric is recording strong growth this year and we believe that customers like ISPL has started seeing the immense value add in using #dltledgers blockchain platform. We will continue to penetrate the market with our offerings and expanding into new markets. We are opening our office in UAE and this is part of our deliberate strategy to enter where the Trader/Trading houses needs such Blockchain based Solution to grow and prosper their business by creating Trust and authenticity in the value chain,” added Samir Neji, CEO, #dltledgers.

About dltledgers:

dltledgers is a global platform company with Singapore as its HQ. We are a customer centric platform for cross border trade execution. Several regional and global banks have signed up and operate as network partners in offering trade financing services in the platform. Apart from counter party assignment in blockchain, we network shipping, logistics, ports and other network partners into a trusted trade network for our customers.

With digitisation and blockchain, Cross border trade is being transformed like never before. #dltledgers blockchain platform leads the pack with over 400+ global traders, USD 1 billion+ trade executed across 30+ banks and a wider network which is growing on a global scale.

Each step in executing cross-border trade may involve so many documents, contracts, movement of money and complex supply-chain. A lot of aspects of the business is performed across multiple parties who are trustless – strangers dealing with strangers Its natural that the process is mired with issues like mistrust, failed promises, & inefficiencies in several aspects of contracts, finance, goods mismanagement, and fraud. Our customers benefit from our blockchain innovation in 12 core modules and 68 code bases, which resolves and builds a trusted trade network for private, permissible and secure trade.

About ISPL: IFFCO Group is a leading Food manufacture HQ in UAE with many winning brands in its portfolio and spanning the middle east and Africa markets. The group is part of the Allana Holdings who established their business in UAE in the 1970’s. They have expanded over the years in to multiple geographies.

Micheal_Ludwig__Peter_Hanke__Norbert_Kettner

New Era for Tourism: Vienna Presents Visitor Economy Strategy 2025

VIENNA, Oct. 31, 2019 /PRNewswire/ — Building on its tourism concepts of recent years, the City of Vienna is now unveiling its Visitor Economy Strategy 2025, under the aegis of the Vienna Tourist Board. Guided by “Shaping Vienna”, it completely redefines tourism and its effect on the destination, while targeting sustainable development and balancing the needs of residents and visitors. 

Mayor of Vienna Michael Ludwig (centre), Executive City Councilor of Finance, Business, Digital Innovation and International Affairs Peter Hanke (right) and Director of Tourism Norbert Kettner (left) presented Vienna's Visitor Economy Strategy 2025. © PID/David Bohmann


Mayor of Vienna Michael Ludwig (centre), Executive City Councilor of Finance, Business, Digital Innovation and International Affairs Peter Hanke (right) and Director of Tourism Norbert Kettner (left) presented Vienna’s Visitor Economy Strategy 2025. © PID/David Bohmann

The new approach means continuing to provide top offerings and services for guests while equally targeting added value from tourism for the whole city, resident satisfaction and added value for businesses. The following goals have been defined for 2025, with 2018 as the baseline:

  • Contribution of tourism to Vienna’s GDP to increase from EUR 4bn to EUR 6bn
  • Revenue from overnight stays to advance from EUR 900m to EUR 1.5bn
  • Visitor satisfaction levels to remain at their current high level, with nine out of ten guests recommending Vienna
  • Attitudes to tourism to stay overwhelmingly positive, with nine out of ten residents seeing tourism in a positive light
  • Number of tourism providers certified with the “Österreichisches Umweltzeichen” ecolabel to double from 112 to 224
  • Proportion of arrivals by train (21%) and car (26%) to be reversed

“Our participative approach represents a completely new management approach internationally: when drawing up the strategy, we gathered feedback from the tourism industry, as well as residents, international experts and numerous representatives of different areas of activity in the city,” explained Mayor of Vienna Michael Ludwig. All of the measures in the Vienna Visitor Economy Strategy 2025, developed under Executive City Councilor for Business and President of the Vienna Tourist Board Peter Hanke and Director of Tourism Norbert Kettner, are described at www.shaping.vienna.info.

Long version of the press release: http://bit.ly/2JgkWAb

Picture: http://www.apimages.com

Contact: 
Vienna Tourist Board 
Isabella Rauter 
+43-1-21114-301 
media.rel@vienna.info 
www.vienna.info 
www.b2b.vienna.info

The City of Vienna (C) Vienna Tourist Board/Christian Stemper


The City of Vienna (C) Vienna Tourist Board/Christian Stemper

Photo – http://mma.prnewswire.com/media/1019688/Micheal_Ludwig__Peter_Hanke__Norbert_Kettner.jpg
Photo – http://mma.prnewswire.com/media/1019689/The_City_of_Vienna.jpg

Related Links :

http://www.wien.info/en

International Alliance AAE Files Lawsuit Against Brazilian Electricity Giant Eletrobras in Federal Court in New York

FRANKFURT, Germany, Oct. 31, 2019 /PRNewswire/ — AAE Management for Energy Equipment LLC (“AAE”), a company of the Al Mazrouei Group, one of the most important business groups in the United Arab Emirates, along with its North American affiliate Eagle Equity Funds LLC, and German affiliate AHG Vermögensverwaltung, has filed a lawsuit in the United States District Court of the Southern District of New York (No.  19-cv-09344) against Centrais Elétricas Brasileiras S/A – Eletrobrás (“Eletrobras”), the largest producer and distributor of electric and nuclear energy in South America, and several of its officers/directors, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and accompanying regulations, as well as state law.

694 Bearer Bonds, worth more than U.S. $5.2 billion

AAE’s claims arise out of statements in Eletrobras’ filings with the United States Securities and Exchange Commission (“SEC”) regarding Eletrobras’ obligations under certain Bearer Bonds and other obligations that were issued under Brazil’s Compulsory Loan Program. AAE and its affiliates are the holders of 694 of these Bearer Bonds, which are worth more than U.S. $5.2 billion. Eletrobras has refused to honor or convert these Bearer Bonds into shares, pursuant to the terms of the Bonds. The lawsuit alleges that Eletrobras has misrepresented in its SEC filings and other public statements that the Bearer Bonds are unenforceable, thereby omitting billions of dollars in liability under those Bonds from its balance sheet, and has minimized billions of dollars more in other obligations under the Compulsory Loan Program. By doing so, AAE alleges that Eletrobras has devalued the Bearer Bonds and has inflated the value of its stock.

In 2015, as a result of facts uncovered during the “Operation Carwash” investigation of the other state-run Brazilian oil company PetróleoBrasileiro S.A. (“Petrobras”), Eletrobras commenced an internal investigation, which did not conclude until April 2018. As a result of these issues, Eletrobras was not able to timely file its 2014 or 2015 annual reports and, as a result, the New York Stock Exchange suspended trading in Eletrobras’ ADRs and commenced de-listing procedures in May 2016. Although trading in Eletrobras’ ADRs ultimately resumed on October 12, 2016, Eletrobras acknowledged as a result of the investigation that it did not have adequate internal controls. Eletrobras later settled a securities class action in the Southern District of New York in connection with its involvement in that fraud for $14.75 million, and shortly thereafter, in December 2018, Eletrobras agreed to pay an additional U.S. $2.5 million in civil penalties in a settlement with the SEC for “inadequate internal controls” and violations of the Foreign Corrupt Practices Act in connection with Operation Carwash.

AAE is represented by Kahn Swick & Foti, LLC

AAE is represented by Lewis Kahn, Michael Palestina, and Melissa Harris of Kahn Swick & Foti, LLC, one of the United States’ premier boutique securities litigation law firms. Among the many federal securities fraud and shareholder derivative lawsuits around the country in which they have achieved substantial recoveries, KSF was Co-Lead Counsel in In Re Eletrobras Securities Litigation, Case No. 1:15-cv-05754 (Consolidated) (S.D.N.Y.) against Eletrobras and several of its former directors and officers. KSF represented U.S. investors after the company reported large losses related to a sprawling corruption scandal in Brazil. After nearly three years of protracted litigation, KSF achieved a settlement of $14.75 million for investors. In In re Petrobras Securities Litigation, No. 1:14-cv-9662 (S.D.N.Y.), KSF was a Member of the Plaintiffs’ Steering Committee for the Individual Actions (“PSC”), in coordination with the federal securities class action against Brazil’s state-controlled petrochemical company arising from “Operação Lava Jato,” the largest corruption scandal in the history of Latin America, whereby Plaintiffs alleged Defendants deliberately overpaid on various construction contracts in return for kickbacks. As a Member of the PSC, KSF was found by the Court to have “made a substantial contribution to the class,” June 22, 2018 Opinion and Order at 39 (D.E. 834), the result of which was a settlement of $3 billion for investors, which returned approximately 65% more to shareholders than received in other individual actions.

MGM China Reports 2019 Third Quarter Financial Data

MGM China Adjusted EBITDA Grew 39% Year-on-Year MGM COTAI Continues to Ramp

HONG KONG, Oct. 31, 2019 /PRNewswire/ — MGM China Holdings Limited (“MGM China” or the “Company”; SEHK Stock Code: 2282) today announced the selected unaudited financial data of the Company and its subsidiaries (the “Group”) for the three months and nine months ended September 30, 2019.

  • During the third quarter, MGM China saw adjusted EBITDA up 39% year-on-year to approximately HK$1.5 billion. Total revenue grew by 22% year-on-year to approximately HK$5.8 billion. While MGM COTAI continues to ramp and improve efficiency, adjusted EBITDA margin improved to 26.8% from 23.5% a year ago.
  • Overall occupancy reached 93.7% (2018: 92.0%).
  • While Macau market saw third-quarter gross gaming revenue (GGR) down by 4% year-on-year, MGM China’s GGR was up by 25% from a year ago. MGM China gained market share to approximately 9.9% in the third quarter from 7.9% last year.
  • For the period, main floor table games win for the Group increased 47% year-on-year to approximately HK$3.9 billion. Slot win was up 3% to approximately HK$572 million. VIP table games win was up 4% to approximately HK$2.5 billion.
  • MGM China sees approximately 86% of profit from non-VIP businesses for the period.
  • MGM COTAI continues to grow since the property opened in February 2018. It recorded growth across all business segments. Adjusted EBITDA was up 433% to HK$693 million from a year ago. Main floor table games win was up 84% year-on-year to approximately HK$1.9 billion. Slot win was up 56% to HK$276 million. VIP table games win was up 1723% to approximately HK$1.2 billion.
  • All villas at The Mansion were opened before October Golden Week and have been receiving highly positive feedbacks. Our unique high-end offerings and our premium services boosted player retention and new player acquisition.
  • MGM COTAI has currently more authentic dining options directly on the gaming floor. They are well received by the players with prolonged gaming hours on the gaming floor.
  • Meanwhile, MGM MACAU recorded adjusted EBITDA of approximately of HK$856 million (2018: HK$987 million) for the period. Main floor table games win up 22% to approximately HK$2.0 billion (2018: HK$1.6 billion). Slot win was approximately HK$297 million (2018: HK$380 million). VIP table games win was down by 44% to approximately HK$1.3 billion amid headwinds and uncertainties in the market.

Grant Bowie, Chief Executive Officer and Executive Director of MGM China said: “We are encouraged to see profit at MGM COTAI reaching new high. MGM COTAI continues to ramp with solid sequential growth amid market uncertainties.

“We embrace the growth opportunities in the market especially in the mass segment. We constantly evaluate our strategies, gaming as well as non-gaming offerings to offer unique MGM experiences, supporting our government’s vision to develop Macau as the World Center of Tourism and Leisure.”

About MGM China Holdings Limited

MGM China Holdings Limited (HKEx: 2282) is a leading developer, owner and operator of gaming and lodging resorts in the Greater China region. We are the holding company of MGM Grand Paradise, SA which holds one of the six gaming concessions/subconcessions to run casino games in Macau. MGM Grand Paradise, SA owns and operates MGM MACAU, the award-winning premium integrated resort located on the Macau Peninsula and MGM COTAI, a contemporary luxury integrated resort in Cotai, which opened in early 2018 and more than doubles our presence in Macau.

MGM China is majority owned by MGM Resorts International (NYSE: MGM) one of the world’s leading global hospitality companies, operating a portfolio of destination resort brands including Bellagio, MGM Grand, Mandalay Bay and The Mirage. For more information about MGM Resorts International, visit the Company’s website at www.mgmresorts.com.

Related Links :

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Suning.com Reports Strong Growth with Revenue Over 200 billion Until Q3

NANJING, China, Oct. 31, 2019 /PRNewswire/ — On the evening of October 30, Suning.com (002024.SZ), China’s leading O2O smart retailer, owned by Suning Holdings Group, released its 2019 Q3 financial result. According to the report, the company achieved revenue of RMB 201 billion in the previous three quarter of 2019; the sales volume of omni-channel commodities was RMB 275.9 billion, among which sales volume from online platforms was RMB 171.43 billion, increased by 24.27% year-on-year; the net income attributed to shareholders was RMB 11.9 billion.

Suning.com continues to enhance the ability to acquire customers online and offline. As of September 30, the number of registered members of Suning.com retail platform reached 470 million; Suning.com has a total of 8,407 self-operated and franchised stores. During the reporting period, the number of active users of Suning.com increased by 48.29% year-on-year, and Suning.com online product orders (excluding Suning.com Tmall flagship store) increased by 61.83%.

Following the acquisition of Wanda department store and Carrefour China, the company further enhanced its full-scenarios layout, and gradually built in the most comprehensive business format in retail industry in China.

At the end of September, Suning.com officially completed the acquisition of 80% stake of Carrefour China, which marks a milestone of the company’s effort in complete the supply chain construction in Fast Moving Consumer Goods (FMCG) sectors. It has now formed a full-scenario network coverage of Suning supermarket, offline Carrefour supermarket, SuFresh boutique supermarket and Suning Xiaodian (neighborhood convenience store). As a new member of the Suning family, 210 stores of Carrefour China nationwide will launch a full upgrade by the end of the year. The introduction of Carrefour’s supply chain capabilities will effectively leverage the advantages of large-scale procurement, and help establish an efficient warehouse allocation system to promote the rapid development of Suning.com’s FMCG categories.

In the previous three quarters of the year, Suning.com continued to increase investment in logistics, technology and building of other core capacities to lay a solid foundation for growth over the next decade.

In terms of logistics infrastructure, by the end of September 2019, the total area of warehousing and related support facilities for Suning Logistics was over 11 million square meters. There are 50 logistics bases in 41 cities are under operation, and 23 logistics bases are under construction and expansion in 17 cities. Together with the newly integrated 8 large distribution center of Carrefour China, Suning’s logistics supply chain competitiveness has been greatly enhanced. .

Based on the strong logistics capability of Suning.com, this year’s 11/11 shopping festival, Suning.com announced “One-Hour-Scenario Life Circle” plan to enable customers in selected regions to get their purchases delivered within half an hour to one hour.

In terms of technology, Suning strengthened its technology support capabilities and built supply cloud, user cloud, marketing cloud, logistics cloud and financial cloud to create a smart retail OS, which promoted the rapid development of Suning’s self-operated business and smart retail capability. From January to September this year, Suning invested more than RMB 2.4 billion in research and development, saw a year-on-year increase of 61.14%.

End –

About Suning Holdings Group

Founded in 1990, Suning is one of the leading commercial enterprises in China with two public companies in China and Japan. In 2019, Suning Holdings Group ranked as the top three brands among the top 500 non-state owned enterprises in China with annual revenues of RMB 602.5 billion (approximately EURO 77.24 billion) and continued to top the list of Internet retailing category. Adhering to the enterprise mission of “Leading the Ecosystem across Industries by Creating Elite Quality of Life for All”, Suning has strengthened and expanded its core business as retail through a corporate ecosystem comprised by multiple vertical industries, including commercial real estate, financial services and sports. Suning.com, the main subsidiary pioneering in online and offline retailing, has been listed in the Fortune Global 500 for three successive years from 2017 to 2019.

ATC Drivetrain Continues to Expand Global Presence by Establishing Joint Venture in China

OKLAHOMA CITY, Oct. 30, 2019 /PRNewswire/ — ATC Drivetrain (“ATC”), a leading independent global remanufacturer of automotive drivetrain components, announced today that it has launched a joint venture with Luwote (Zhangjiagang) Power Remanufacturing Technology Co., Ltd. (“Luwote”) in Zhangjiagang, China.

The joint venture will focus on providing a local solution for the remanufacturing of automotive engines and transmissions for ATC’s existing global customer base in China as well providing local automobile manufactures with the highest quality remanufactured engines and transmissions in the China market.  ATC is the majority partner in the JV with a 72.5% ownership stake and brings over 80 years of remanufacturing experience as well as state of the art manufacturing processes and engineering knowledge to the joint venture.  Luwote will own 27.5% of the joint venture and provides local market expertise.

Greg Heald, ATC’s President and CEO and a member of its board of directors, said, “The teams at ATC and our private equity sponsor, Crestview Partners, have been relentlessly focused on expanding our global presence and product offerings in support of our customers’ evolving needs.  This joint venture in China is a strategic move for us to ensure the worldwide support of our customers and continue to position us a global leader in the remanufacturing industry.”

Alex Rose, Partner and Co-Head of Industrials at Crestview Partners, said, “Since our acquisition of ATC in February 2018, ATC’s leadership team and board have been focused on pursuing global expansion and technology diversification in support of ATC’s customers’ needs.  The expansion into China furthers ATC’s ability to provide products and services to the company’s growing customer base around the world.”

About ATC Drivetrain:
ATC Drivetrain is a global remanufacturer of powertrain, electronic and mechatronic products for both OEM and aftermarket sectors.  The company’s services include process and salvage engineering, warranty root cause analysis and testing, diagnostics systems, machining for repair and salvage of components, as well as recycling of non-reclaimable material.  ATC Drivetrain serves automotive original equipment manufacturers (OEM) for both in-warranty and out of warranty products and services in North America, Europe and Asia.  For more information, please visit www.atcdrivetrain.com.

About Crestview Partners:
Founded in 2004, Crestview is a value-oriented private equity firm focused on the middle market. The firm is based in New York and manages funds with approximately $9 billion of aggregate capital commitments. The firm is led by a group of partners who have complementary experience and distinguished backgrounds in private equity, finance, operations and management. Crestview has senior investment professionals focused on sourcing and managing investments in each of the specialty areas of the firm: industrials, media, energy and financial services. For more information, please visit www.crestview.com.

Media Relations Contacts
Jeffrey Taufield / Daniel Yunger
Kekst CNC
212-521-4800
jeffrey.taufield@kekstcnc.com 
daniel.yunger@kekstcnc.com

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(from left) On September 30, YoungSang Ryu, EVP (Head of MNO Biz. Division) of SK Telecom; Hanwoo Park, President & CEO of Kia Motors; Chang-hyun Song, CEO of CODE42; I.P. Park, President and CTO of LG Electronics; and KyungMook Lim, Chief Strategy Officer of CJ Corporation met at the SERVEONE Building in Gangnam-gu Seoul, South Korea to attend the CODE42 Investment Signing Ceremony.

Autonomous Transportation-As-A-Service Startup CODE42 Raises USD 25 Million in Pre-A Funding

SEOUL, South Korea, Oct. 30, 2019 /PRNewswire/ — CODE42, an autonomous transportation-as-a-service startup established last March, announced today that it raised USD 25 million (KRW 30 billion) in Pre-A funding, with investment by major Korean conglomerates Kia Motors, SK, LG, and CJ. CODE42 previously raised a seed stage investment of USD 1.7 million (KRW 2 billion) from Hyundai Motor Company in March.

(from left) On September 30, YoungSang Ryu, EVP (Head of MNO Biz. Division) of SK Telecom; Hanwoo Park, President & CEO of Kia Motors; Chang-hyun Song, CEO of CODE42; I.P. Park, President and CTO of LG Electronics; and KyungMook Lim, Chief Strategy Officer of CJ Corporation met at the SERVEONE Building in Gangnam-gu Seoul, South Korea to attend the CODE42 Investment Signing Ceremony.


(from left) On September 30, YoungSang Ryu, EVP (Head of MNO Biz. Division) of SK Telecom; Hanwoo Park, President & CEO of Kia Motors; Chang-hyun Song, CEO of CODE42; I.P. Park, President and CTO of LG Electronics; and KyungMook Lim, Chief Strategy Officer of CJ Corporation met at the SERVEONE Building in Gangnam-gu Seoul, South Korea to attend the CODE42 Investment Signing Ceremony.

As lead investor, Kia Motors contributed USD 12.5 million to the deal. The USD 25 million investment marks one of the largest Pre-A rounds of funding for the Korean startup market, with past references typically ranging under USD 10 million.

The newly raised funds will be utilized to complete development of CODE42’s core UMOS (Urban Mobility Operating System) platform, as well as establish the global autonomous transportation-as-a-service ecosystem UMOS Connect. Promising to serve as the enabler of autonomous transportation-as-a-service, the UMOS platform aims to integrate various future mobilities such as autonomous vehicles, drones, and delivery robots to encompass all phases of mobility and logistics services from ride-hailing to robo-taxis to smart logistics and e-commerce.

“The investment demonstrates investor trust in our industry-best technology and enables us to leverage the strength of our partners’ infrastructure and service capabilities to establish a next-generation mobility and logistics service platform,” said Chang-Hyeon Song, CEO of CODE42. “We will be working closely with investor companies in autonomous driving and mapping technology, dispatching, fleet management, next-generation in-vehicle infotainment and associated connectivity.”

CODE42, established in March 2019, is an autonomous transportation-as-a-service startup headquartered in Seoul, South Korea, founded by former Naver CTO, Chang-Hyeon Song. Having built a track record of innovative software engineering with multinational IT companies including HP, Microsoft and Apple, Mr. Song, in his roles as CTO of Naver, and CEO of Naver Lab, successfully led a variety of innovative projects including the AI speaker Clova, in-vehicle-infotainment service AWAY, Papago, self-driving technology, HD mapping and robotics solutions, as demonstrated at CES 2019.

Photo – http://photos.prnasia.com/prnh/20191025/2622305-1?lang=0

Jungle Ventures Raises $240 Million for Southeast Asia Tech Category Leaders

More Than Double Amount Raised for Previous Fund

Nearly 60% of Capital Came from Outside Asia

SINGAPORE, Oct. 30, 2019 /PRNewswire/ — Jungle Ventures, one of Southeast Asia’s largest early stage venture capital firms, today announced that it closed its third fund, Jungle Ventures III. The firm raised a total of $240 million, which includes $40 million raised in separately managed account commitments, for investments in innovative technology and digital-driven consumer businesses across Southeast Asia.

Jungle raised more than double the amount of its previous fund, Jungle Ventures II (2016), with nearly 60% of committed capital coming from outside Asia. More than 90% of the capital came from institutional investors spanning North America, Europe, Middle East and Asia, with new investors accounting for nearly 70% of the fundraise, and returning investors for the rest.

Investors range from endowments, funds of funds, and development financial institutions to strategic family offices and leading technology players. Investors include DEG, Germany’s development finance institution; IFC, a member of the World Bank Group; Bualuang Ventures, a corporate venture capital fund of Bangkok Bank; Dutch development bank FMO; Cisco Investments; and Singapore’s Temasek, among others.

“Our team is honored to have received such enthusiastic support from our investors,” said Amit Anand, Co-Founder and Managing Partner of Jungle Ventures. “Our understanding of growing consumer demand in Southeast Asia gives us an unmatched advantage as we deploy early stage investment capital to businesses with enormous growth potential.”

“The traditional view of Southeast Asia is that it’s a fragmented region of countries with more differences than similarities,” explained Mr. Anand. “Thanks to rising internet penetration, demographic shifts and mobile-technology adoption over the last decade, the region is now home to a fairly homogenous addressable market of more than 250 million cyber-sophisticated young people comparable to any ‘developed’ market. We saw the tide shifting and focused on companies that demonstrated an early leadership position in one market,” he said. “Then we supported these companies with capital, expertise and resources to help them become regional category leaders.”

Jungle Ventures was the earliest institutional investor in a number of category leaders in Southeast Asia, including: travel and hospitality startup RedDoorz, which in August announced a $70 million series C funding round; fashion e-tailer Pomelo Fashion, which announced a $52 million Series C funding round in September; and Kredivo, Indonesia’s largest online consumer lending and payments platform, which raised $30 million in series B funding last year. Jungle also won the AVCJ 2018 Deal of the Year for early stage technology for leading a $60 million investment in Deskera. Jungle Ventures III has already invested in Sociolla, KiotViet, WareSix, SweetEscape and Engineer.ai.

“We’re proud of our track record of recognizing, investing in and supporting high potential companies from the region,” said Jungle Ventures Co-Founder and Managing Partner Anurag Srivastava. “Seven of our early stage investments from our second fund, Jungle Ventures II, have grown to over $2 billion in portfolio valuation, up more than 10-fold over the last 4 years. This is noteworthy because we make only 10 to 15 key investments in each fund and no single company is responsible for delivering a disproportionate share of this growth,” added Mr. Srivastava.

To learn more about the close of Jungle Ventures III and Jungle Ventures’ approach to venture capital success in Southeast Asia, please check out our blog post here.

About Jungle Ventures

Jungle Ventures is one of the largest early stage venture capital firms in Southeast Asia. We strive to be the first to champion teams with the ambition to build lasting, impactful companies in the region. Our portfolio broadly covers three verticals: consumer brands for the digitally native; digital platforms for transforming SMEs; global technology leaders born in Asia.

Media Contacts:

Tom Vogel & Doug Allen
Dukas Linden Public Relations
New York, NY
Jungle@dlpr.com
+1-646-808-3663 / +1-646-722-6530

Logo – http://photos.prnasia.com/prnh/20191025/2622143-1logo?lang=0

Related Links :

http://www.jungle-ventures.com

Cision

Yum China Reports Third Quarter 2019 Results

Total revenues grew 5% or 8% in constant currency;

Total system sales grew 8% and same-store sales grew 2% in constant currency

SHANGHAI, Oct. 30, 2019 /PRNewswire/ — Yum China Holdings, Inc. (the “Company” or “Yum China”) (NYSE: YUMC) today reported unaudited results for the third quarter ended September 30, 2019. Reported GAAP results include Special Items, which are excluded from adjusted measures.  Special Items are not allocated to any segment and therefore only impact reported GAAP results of Yum China.  See “Reconciliation of Reported GAAP Results to Adjusted Measures” within this release.

Third Quarter Highlights

  • Total revenues increased 5% year over year to $2.3 billion from $2.2 billion (8% year over year increase excluding foreign currency translation (“F/X”)).
  • Total system sales grew 8% year over year, with growth of 10% at KFC and 3% at Pizza Hut, excluding F/X.
  • Same-store sales grew 2% year over year, with a 3% increase at KFC and a 1% increase at Pizza Hut, excluding F/X.
  • Restaurant margin was 17.7%, compared with 17.6% in the prior year period.
  • Operating Profit increased 11% year over year to $300 million from $269 million (14% year over year increase excluding F/X).
  • Effective tax rate was 26.9%.
  • Net Income increased 11% to $223 million from $203 million in the prior year period, primarily due to the increase in operating profit and mark to market gain from our equity investment in Meituan Dianping.
  • Diluted EPS increased 14% to $0.58 from $0.51 in the prior year period (8% year over year increase excluding the $0.03 per share mark to market gain from our equity investment in Meituan Dianping).
  • Opened 231 new restaurants during the quarter, bringing total store count to 8,917 across more than 1,300 cities.

Key Financial Results

Third Quarter 2019

Year to Date Ended 9/30/2019

% Change

% Change

System Sales

Same-Store
Sales

Net New
Units

Operating
Profit

System Sales

Same-Store
Sales

Net New
Units

Operating
Profit

Yum China

+8

+2

+7

+11

+9

+4

+7

(6)

 KFC

+10

+3

+9

+12

+11

+4

+9

+4

 Pizza Hut

+3

+1

+2

(29)

+3

+1

+2

+9

Third Quarter

Year to Date Ended 9/30

(in US$ million, except

% Change

% Change

for per share data and percentages)

2019

2018

Reported

Ex F/X

2019

2018

Reported

Ex F/X

Operating Profit

$

300

$

269

+11

+14

$

807

$

857

(6)

(1)

Adjusted Operating Profit[1]

$

300

$

269

+11

+14

$

807

$

759

+6

+12

Net Income

$

223

$

203

+11

+14

$

623

$

634

(2)

+4

Adjusted Net Income[1]

$

223

$

203

+11

+14

$

631

$

560

+13

+19

Basic Earnings Per Common Share

$

0.59

$

0.53

+11

+15

$

1.65

$

1.64

+1

+6

Adjusted Basic Earnings Per

 Common Share[1]

$

0.59

$

0.53

+11

+15

$

1.67

$

1.45

+15

+21

Diluted Earnings Per Common Share

$

0.58

$

0.51

+14

+16

$

1.60

$

1.59

+1

+6

Adjusted Diluted Earnings Per

 Common Share[1]

$

0.58

$

0.51

+14

+16

$

1.62

$

1.41

+15

+21

[1]See “Reconciliation of Reported GAAP Results to Adjusted Measures” included in the accompanying tables of this release for further details.

Note:  All comparisons are versus the same period a year ago.

NM refers to changes over 100%, from negative to positive amounts or from zero to an amount.

Percentages may not recompute due to rounding.

System sales and same-store sales percentages exclude the impact of F/X.

CEO and CFO Comments

Joey Wat, CEO of Yum China, commented, “We are pleased with our continued strong performance in the third quarter, which was driven by our competitive positioning, leading digital capabilities and ongoing innovation across the business. We achieved our 12th consecutive quarter of system sales growth since the spin-off, highlighting the strength of our business model and demonstrating our ability to effectively adapt to changing market conditions. KFC delivered solid sales and profit growth as we strategically decreased promotion intensity to protect margins. Pizza Hut maintained positive sales momentum with a decline in margin during the quarter due to the important and necessary long-term investments in the revitalization program.”

“We will continue to build on KFC’s resilient business model, cement the revitalization of Pizza Hut, invest in the growth of our smaller brands and sharpen our industry-leading digital ecosystem, which enables us to meet customer demands and manage the business effectively,” continued Ms. Wat. “We are cautiously optimistic about the future because we see significant growth opportunities in China, and we will focus on leveraging our competitive advantages to succeed in this dynamic environment.”

Andy Yeung, CFO of Yum China, added, “I am very excited to have joined the Yum China team and am pleased to be reporting another strong set of quarterly results, which highlight Yum China’s strength in many areas. We continued rapid expansion of our store network and maintained very healthy cash payback for our new stores. We also delivered strong sales, operating profit and EPS growth despite continued pressure from higher chicken and labor costs. In addition, we returned $109 million to shareholders through dividends and share repurchases in the quarter. Looking ahead, we will continue to focus on driving sales and managing costs while making prudent investments to drive long-term growth. As always, we remain committed to driving significant overall value to our shareholders.”

Dividend and Share Repurchase

  • The Board of Directors declared a cash dividend of $0.12 per share on Yum China’s common stock, payable as of the close of business on December 17, 2019 to shareholders of record as of the close of business on November 26, 2019.
  • During the third quarter, we repurchased approximately 1.4 million shares of Yum China common stock for $64.0 million at an average price of $44.70 per share.

Digital and Delivery 

  • As of September 30, 2019, the KFC loyalty program had over 200 million members and the Pizza Hut loyalty program had over 65 million members, an increase of 55 million and 15 million, respectively, year over year.
  • Digital payments accounted for 91% of Company sales in the quarter, an increase of 9 percentage points year over year.
  • Delivery contributed to 20% of Company sales in the third quarter of 2019, an increase of 3 percentage points year over year. Delivery services are now available in 1,225 cities, up from 1,063 cities at the end of the prior year period.

New-Unit Development and Asset Upgrade

  • The Company opened 231 new restaurants and remodeled 222 restaurants in the third quarter of 2019.

New Units

Restaurant Count

Third Quarter

Year to Date

As of 9/30

2019

Ended 9/30/2019

2019

2018

Yum China

231

646

8,917

8,313

 KFC

174

501

6,324

5,800

 Pizza Hut

24

84

2,255

2,215

 Others[2]

33

61

338

298

[2] Others include Little Sheep, East Dawning, Taco Bell and COFFii & JOY.

Restaurant Margin

  • In the third quarter of 2019, Yum China restaurant margin was 17.7%, as compared with 17.6% in the prior year period, primarily attributable to sales leverage, productivity improvement and other cost savings, partially offset by wage and commodity inflation and promotional activities.

Third Quarter

Year to Date Ended 9/30

2019

2018

% pts change

2019

2018

% pts change

Yum China

17.7

%

17.6

%

+0.1

17.0

%

16.9

%

+0.1

 KFC

20.1

%

19.2

%

+0.9

18.8

%

19.0

%

(0.2)

 Pizza Hut

11.4

%

13.8

%

(2.4)

12.4

%

11.8

%

+0.6

2019 Outlook

  • The Company continues to expect fiscal year 2019 targets as follows:
    • Between 800 and 850 gross new units.
    • Capital expenditures between $475 million and $525 million.
    • Effective tax rate below 28%, excluding any impact from the Company’s equity investment in Meituan Dianping.

The Company provides its effective tax rate outlook excluding any impact from its investment in Meituan Dianping, which will be subject to mark to market accounting and may be significant.

Conference Call

Yum China’s management will hold an earnings conference call at 8:00 p.m. U.S. Eastern Time on Tuesday, October 29, 2019 (8:00 a.m. Beijing/Hong Kong Time on Wednesday, October 30, 2019). A copy of the presentation will be available on the Yum China Holdings, Inc. website, http://ir.yumchina.com.

U.S.:                          +1 845 675 0437
Mainland China:        400 620 8038 or 800 819 0121
Hong Kong:               +852 3018 6771
U.K.:                          +44 20 36214779
International:             +65 6713 5090
Password:                 Yum China

A replay of the conference call will be available two hours after the call ends until 8:00 a.m. U.S. Eastern Time on Wednesday, November 6, 2019 (9:00 p.m. Beijing/Hong Kong Time on Wednesday, November 6, 2019) and may be accessed by phone at the following numbers:

U.S.:                          +1 855 452 5696
International:             +61 2 9003 4211
Passcode:                 7952028

Additionally, a live webcast and an archived webcast of this conference call will be available at http://ir.yumchina.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including under “2019 Outlook.” 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 generally can be identified by the fact that they do not relate strictly to historical or current facts and by the use of forward-looking words such as “expect,” “expectation,” “believe,” “anticipate,” “may,” “could,” “intend,” “belief,” “plan,” “estimate,” “target,” “predict,” “project,” “likely,” “will,” “continue,” “should,” “forecast,” “outlook” or similar terminology. These statements are based on current estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we believe are appropriate and reasonable under the circumstances, but there can be no assurance that such estimates and assumptions will prove to be correct. Forward-looking statements include, without limitation, statements regarding the future strategies, business plans, investment plans, earnings, performance and returns of Yum China, statements regarding the revitalization of Pizza Hut, anticipated effects of population and macroeconomic trends, the capital structure and effective tax rate of Yum China, the anticipated effects of our digital and delivery capabilities on growth and beliefs regarding the long-term drivers of Yum China’s business. Forward-looking statements are not guarantees of performance and are inherently subject to known and unknown risks and uncertainties that are difficult to predict and could cause our actual results or events to differ materially from those indicated by those statements. We cannot assure you that any of our expectations, estimates or assumptions will be achieved. The forward-looking statements included in this press release are only made as of the date of this press release, and we disclaim any obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances, except as required by law. Numerous factors could cause our actual results or events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: whether we are able to achieve development goals at the times and in the amounts currently anticipated, if at all, the success of our marketing campaigns and product innovation, our ability to maintain food safety and quality control systems, our ability to control costs and expenses, including tax costs, as well as changes in political, economic and regulatory conditions in China. In addition, other risks and uncertainties not presently known to us or that we currently believe to be immaterial could affect the accuracy of any such forward-looking statements. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. You should consult our filings with the Securities and Exchange Commission (including the information set forth under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K) for additional detail about factors that could affect our financial and other results.

About Yum China Holdings, Inc.

Yum China Holdings, Inc. is a licensee of Yum! Brands in mainland China. It has exclusive rights in mainland China to KFC, China’s leading quick-service restaurant brand, Pizza Hut, the leading casual dining restaurant brand in China, and Taco Bell, a California-based restaurant chain serving innovative Mexican-inspired food. Yum China also owns the Little Sheep, East Dawning and COFFii & JOY concepts outright. The Company had more than 8,900 restaurants in over 1,300 cities at the end of September 2019. In 2019, Yum China was named to the Bloomberg Gender-Equality Index and was certified as a Top Employer 2019 in China by the Top Employers Institute. For more information, please visit http://ir.yumchina.com.

Investor Relations Contact: 
 Tel: +86 21 2407 7556 
  IR@YumChina.com

Media Contact: 
 Tel: +86 21 2407 7510 
  Media@YumChina.com

Yum China Holdings, Inc.

Condensed Consolidated Statements of Income

(in US$ million, except per share data)

(unaudited)

Quarter Ended

% Change

Year to Date Ended

% Change

9/30/2019

9/30/2018

B/(W)

9/30/2019

9/30/2018

B/(W)

Revenues

Company sales

$

2,097

$

2,008

4

$

6,112

$

5,912

3

Franchise fees and income

38

36

7

113

110

3

Revenues from transactions with

 franchisees and unconsolidated affiliates

172

159

8

496

461

8

Other revenues

12

9

39

26

18

45

Total revenues

2,319

2,212

5

6,747

6,501

4

Costs and Expenses, Net

Company restaurants

Food and paper

651

610

(7)

1,896

1,775

(7)

Payroll and employee benefits

455

430

(6)

1,371

1,296

(6)

Occupancy and other operating expenses

619

615

(1)

1,804

1,841

2

Company restaurant expenses

1,725

1,655

(4)

5,071

4,912

(3)

General and administrative expenses

117

119

340

334

(2)

Franchise expenses

19

18

(3)

55

55

1

Expenses for transactions with

 franchisees and unconsolidated affiliates

167

156

(7)

488

454

(7)

Other operating costs and expenses

9

6

(56)

20

17

(21)

Closures and impairment (income) expenses, net

(1)

(1)

18

14

15

6

Other income, net

(17)

(10)

73

(48)

(143)

(67)

Total costs and expenses, net

2,019

1,943

(4)

5,940

5,644

(5)

Operating Profit

300

269

11

807

857

(6)

Interest income, net

10

10

6

29

28

4

Investment gain

12

NM

39

NM

Income Before Income Taxes

322

279

15

875

885

(1)

Income tax provision

(87)

(67)

(28)

(226)

(227)

1

Net income – including noncontrolling interests

235

212

11

649

658

(1)

Net income – noncontrolling interests

12

9

(26)

26

24

(6)

Net Income – Yum China Holdings, Inc.

$

223

$

203

11

$

623

$

634

(2)

Effective tax rate

26.9%

24.2%

(2.7)

ppts.

25.8%

25.%7

(0.1)

ppts.

Basic Earnings Per Common Share

$

0.59

$

0.53

$

1.65

$

1.64

Weighted average shares outstanding

 (in millions)

377

384

378

386

Diluted Earnings Per Common Share

$

0.58

$

0.51

$

1.60

$

1.59

Weighted average shares outstanding

 (in millions)

388

394

389

398

Cash Dividends Declared Per Common Share

$

0.12

$

0.10

$

0.36

$

0.30

Company sales

100.0%

100.0%

100.0%

100.0%

Food and paper

31.0

30.4

(0.6)

ppts.

31.0

30.0

(1.0)

ppts.

Payroll and employee benefits

21.7

21.4

(0.3)

ppts.

22.4

21.9

(0.5)

ppts.

Occupancy and other operating expenses

29.6

30.6

1.0

ppts.

29.6

31.2

1.6

ppts.

Restaurant margin

17.7%

17.6%

0.1

ppts.

17.0%

16.9%

0.1

ppts.

Operating margin

14.3%

13.4%

0.9

ppts.

13.2%

14.5%

(1.3)

ppts.

Percentages may not recompute due to rounding.

Yum China Holdings, Inc.

KFC Operating Results

(in US$ million)

(unaudited)

Quarter Ended

% Change

Year to Date Ended

% Change

9/30/2019

9/30/2018

B/(W)

9/30/2019

9/30/2018

B/(W)

Revenues

Company sales

$

1,546

$

1,452

6

$

4,495

$

4,248

6

Franchise fees and income

35

34

4

104

104

1

Revenues from transactions with

 franchisees and unconsolidated affiliates

16

15

9

48

47

3

Other revenues

1

NM

1

NM

Total revenues

1,598

1,501

6

4,648

4,399

6

Costs and Expenses, Net

Company restaurants

Food and paper

477

444

(7)

1,403

1,281

(10)

Payroll and employee benefits

311

297

(5)

942

879

(7)

Occupancy and other operating expenses

447

432

(3)

1,305

1,281

(2)

Company restaurant expenses

1,235

1,173

(5)

3,650

3,441

(6)

General and administrative expenses

50

44

(16)

148

135

(10)

Franchise expenses

18

17

(2)

53

53

Expenses for transactions with

 franchisees and unconsolidated affiliates

16

15

(4)

48

47

(2)

Closures and impairment expenses, net

NM

7

6

(7)

Other income, net

(16)

(12)

34

(46)

(42)

7

Total costs and expenses, net

1,303

1,237

(5)

3,860

3,640

(6)

Operating Profit

$

295

$

264

12

$

788

$

759

4

Company sales

100.0%

100.0%

100.0%

100.0%

Food and paper

30.9

30.6

(0.3)

ppts.

31.2

30.2

(1.0)

ppts.

Payroll and employee benefits

20.1

20.4

0.3

ppts.

21.0

20.7

(0.3)

ppts.

Occupancy and other operating expenses

28.9

29.8

0.9

ppts.

29.0

30.1

1.1

ppts.

Restaurant margin

20.1%

19.2%

0.9

ppts.

18.8%

19%.0

(0.2)

ppts.

Operating margin

19.1%

18.1%

1.0

ppts.

17.%5

17.8%

(0.3)

ppts.

Percentages may not recompute due to rounding.

Yum China Holdings, Inc.

Pizza Hut Operating Results

(in US$ million)

(unaudited)

Quarter Ended

% Change

Year to Date Ended

% Change

9/30/2019

9/30/2018

B/(W)

9/30/2019

9/30/2018

B/(W)

Revenues

Company sales

$

540

$

548

(1)

$

1,588

$

1,640

(3)

Franchise fees and income

1

1

NM

3

2

68

Revenues from transactions with

 franchisees and unconsolidated affiliates

1

1

NM

3

1

NM

Other revenues

NM

1

NM

Total revenues

542

550

(1)

1,595

1,643

(3)

Costs and Expenses, Net

Company restaurants

Food and paper

170

163

(5)

484

486

Payroll and employee benefits

140

130

(8)

420

410

(2)

Occupancy and other operating expenses

168

179

7

487

551

12

Company restaurant expenses

478

472

(1)

1,391

1,447

4

General and administrative expenses

25

24

(6)

76

80

5

Franchise expenses

1

1

(73)

2

2

(34)

Expenses for transactions with

 franchisees and unconsolidated affiliates

1

1

NM

3

1

NM

Other operating costs and expenses

NM

1

NM

Closures and impairment (income) expenses, net

(1)

(1)

77

5

9

38

Other income, net

NM

(2)

NM

Total costs and expenses, net

504

497

(2)

1,478

1,537

4

Operating Profit

$

38

$

53

(29)

$

117

$

106

9

Company sales

100.0%

100.0%

100.0%

100.0%

Food and paper

31.5

29.7

(1.8)

ppts.

30.5

29.6

(0.9)

ppts.

Payroll and employee benefits

26.0

23.8

(2.2)

ppts.

26.5

25.0

(1.5)

ppts.

Occupancy and other operating expenses

31.1

32.7

1.6

ppts.

30.6

33.6

3

ppts.

Restaurant margin

11.4%

13.8%

(2.4)

ppts.

12.4%

11.8%

0.6

ppts.

Operating margin

7.0%

9.8%

(2.8)

ppts.

7.4%

6.5%

0.9

ppts.

Percentages may not recompute due to rounding.

Yum China Holdings, Inc.

Condensed Consolidated Balance Sheets

(in US$ million)

9/30/2019

12/31/2018

(Unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

1,355

$

1,266

Short-term investments

364

122

Accounts receivable, net

79

80

Inventories, net

317

307

Prepaid expenses and other current assets

141

177

Total Current Assets

2,256

1,952

Property, plant and equipment, net

1,506

1,615

Operating lease right-of-use assets

1,893

Goodwill

256

266

Intangible assets, net

97

116

Deferred income taxes

89

89

Investments in unconsolidated affiliates

74

81

Other assets

539

491

Total Assets

6,710

4,610

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

Current Liabilities

Accounts payable and other current liabilities

1,566

1,199

Income taxes payable

82

54

Total Current Liabilities

1,648

1,253

Non-current operating lease liabilities

1,729

Capital lease obligations

23

25

Other liabilities

195

355

Total Liabilities

3,595

1,633

Redeemable Noncontrolling Interest

1

1

Equity

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

 394 million shares and 392 million shares issued at September 30, 2019 and December 31,

 2018, respectively; 376 million shares and 379 million shares outstanding at September 30,

 2019 and December 31, 2018, respectively

4

4

Treasury stock

(664)

(460)

Additional paid-in capital

2,423

2,402

Retained earnings

1,371

944

Accumulated other comprehensive loss

(109)

(17)

Total Equity – Yum China Holdings, Inc.

3,025

2,873

Noncontrolling interests

89

103

Total Equity

3,114

2,976

Total Liabilities, Redeemable Noncontrolling Interest and Equity

$

6,710

$

4,610

Yum China Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(in US$ million)

(unaudited)

Year to Date Ended

9/30/2019

9/30/2018

Cash Flows – Operating Activities

Net income – including noncontrolling interests

$

649

$

658

Depreciation and amortization

322

343

Amortization of operating lease right-of-use assets

251

Closures and impairment expenses

14

15

Gain from re-measurement of equity interest upon acquisition

(98)

Investment gain

(39)

Equity income from investments in unconsolidated affiliates

(56)

(52)

Distributions of income received from unconsolidated affiliates

50

51

Deferred income taxes

12

46

Share-based compensation expense

21

18

Changes in accounts receivable

(2)

2

Changes in inventories

(22)

14

Changes in prepaid expenses and other current assets

7

(13)

Changes in accounts payable and other current liabilities

118

184

Changes in income taxes payable

32

41

Changes in non-current operating lease liabilities

(280)

Other, net

(32)

(36)

Net Cash Provided by Operating Activities

1,045

1,173

Cash Flows – Investing Activities

Capital spending

(310)

(359)

Purchases of short-term investments

(619)

(513)

Maturities of short-term investments

366

513

Acquisition of business, net of cash acquired

(91)

Investment in equity securities

(74)

Other, net

10

(3)

Net Cash Used in Investing Activities

(553)

(527)

Cash Flows – Financing Activities

Repayment of short-term borrowings assumed from acquisition

(10)

Repurchase of shares of common stock

(207)

(161)

Cash dividends paid on common stock

(136)

(115)

Dividends paid to noncontrolling interests

(25)

(29)

Other, net

(3)

Net Cash Used in Financing Activities

(368)

(318)

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

(26)

(53)

Net Increase in Cash, Cash Equivalents and Restricted Cash

98

275

Cash, Cash Equivalents and Restricted Cash – Beginning of Period

1,266

1,059

Cash, Cash Equivalents and Restricted Cash – End of Period

$

1,364

$

1,334

In this press release:

  • The Company provides certain percentage changes excluding the impact of foreign currency translation (“F/X”). These amounts are derived by translating current year results at prior year average exchange rates. We believe the elimination of the F/X impact provides better year-to-year comparability without the distortion of foreign currency fluctuations.
  • System sales growth reflects the results of all restaurants regardless of ownership, including Company-owned, franchise and unconsolidated affiliate restaurants that operate our restaurant concepts, except for non-Company-owned restaurants for which we do not receive a sales-based royalty. Sales of franchise and unconsolidated affiliate restaurants typically generate ongoing franchise fees for the Company at a rate of approximately 6% of system sales. Franchise and unconsolidated affiliate restaurant sales are not included in Company sales in the Condensed Consolidated Statements of Income; however, the franchise fees are included in the Company’s revenues. We believe system sales growth is useful to investors as a significant indicator of the overall strength of our business as it incorporates all of our revenue drivers, Company and franchise same-store sales as well as net unit growth.
  • Effective January 1, 2018, the Company revised its definition of same-store sales growth to represent the estimated percentage change in sales of food of all restaurants in the Company system that have been open prior to the first day of our prior fiscal year. We refer to these as our “base” stores. Previously, same-store sales growth represented the estimated percentage change in sales of all restaurants in the Company system that have been open for one year or more, and the base stores changed on a rolling basis from month to month. This revision was made to align with how management measures performance internally and focuses on trends of a more stable base of stores.
  • Company Restaurant profit (“Restaurant profit”) is defined as Company sales less expenses incurred directly by our Company-owned restaurants in generating Company sales. Company restaurant margin percentage is defined as Restaurant profit divided by Company sales.

Reconciliation of Reported GAAP Results to Adjusted Measures
(in millions, except per share data)
(unaudited)

In addition to the results provided in accordance with US Generally Accepted Accounting Principles (“GAAP”) in this press release, the Company provides measures adjusted for Special Items, which include Adjusted Operating Profit, Adjusted Net Income, Adjusted EPS, Adjusted Effective Tax Rate and Adjusted EBITDA, which we define as net income including noncontrolling interests adjusted for income tax, interest income, net, investment gain or loss, depreciation, amortization and other items, including store impairment charges and Special Items. The Special Item for the year to date ended September 30, 2019 represents the impact from the US Tax Cuts and Jobs Act (the “Tax Act”), as described in the accompanying notes. The Special Item for the year to date ended September 30, 2018 represents a gain recognized from the re-measurement of our previously held equity interest in Wuxi KFC at fair value upon acquisition, as described in the accompanying notes. The Company excludes impact from Special Items for the purpose of evaluating performance internally. Special Items are not included in any of our segment results. In addition, the Company provides Adjusted EBITDA because we believe that investors and analysts may find it useful in measuring operating performance without regard to items such as income tax, interest income, net, investment gain or loss, depreciation, amortization and other items, including store impairment charges and Special Items. These adjusted measures are not intended to replace the presentation of our financial results in accordance with GAAP.  Rather, the Company believes that the presentation of these adjusted measures provide additional information to investors to facilitate the comparison of past and present results, excluding those items that the Company does not believe are indicative of our ongoing operations due to their nature.  These adjusted measures should not be considered in isolation or as a substitute for GAAP financial results, but should be read in conjunction with the unaudited Condensed Consolidated Statements of Income and other information presented herein. A reconciliation of the most directly comparable GAAP measures to adjusted measures follows.

Quarter Ended

Year to Date Ended

9/30/2019

9/30/2018

9/30/2019

9/30/2018

Detail of Special Items

Gain from re-measurement of equity interest upon acquisition(b)

$

$

$

$

98

Special Items, Operating Profit

98

Tax effect on Special Items(c)

(24)

Impact from the Tax Act(d)

(8)

Special Items, net income – including noncontrolling interests

(8)

74

Special Items, net income – noncontrolling interests

Special Items, Net Income –Yum China Holdings, Inc.

$

$

$

(8)

$

74

Weighted Average Diluted Shares Outstanding

388

394

389

398

Special Items, Diluted Earnings Per Common Share

$

$

$

(0.02)

$

0.18

Reconciliation of Operating Profit to Adjusted Operating Profit

Operating Profit

$

300

$

269

$

807

$

857

Special Items, Operating Profit

98

Adjusted Operating Profit

$

300

$

269

$

807

$

759

Reconciliation of Net Income to Adjusted Net Income

Net Income – Yum China Holdings, Inc.

$

223

$

203

$

623

$

634

Special Items, Net Income –Yum China Holdings, Inc.

(8)

74

Adjusted Net Income – Yum China Holdings, Inc.

$

223

$

203

$

631

$

560

Reconciliation of EPS to Adjusted EPS

Basic Earnings Per Common Share

$

0.59

$

0.53

$

1.65

$

1.64

Special Items, Basic Earnings Per Common Share

(0.02)

0.19

Adjusted Basic Earnings Per Common Share

$

0.59

$

0.53

$

1.67

$

1.45

Diluted Earnings Per Common Share

$

0.58

$

0.51

$

1.6

$

1.59

Special Items, Diluted Earnings Per Common Share

(0.02)

0.18

Adjusted Diluted Earnings Per Common Share

$

0.58

$

0.51

$

1.62

$

1.41

Reconciliation of Effective Tax Rate to Adjusted Effective Tax Rate

Effective tax rate

26.9%

24.2%

25.8%

25.7%

Impact on effective tax rate as a result of Special Items

0.9%

(0.1)%

Adjusted effective tax rate

26.9%

24.2%

24.9%

25.8%

Notes to the Condensed Consolidated Statements of Income, Condensed Consolidated Balance Sheets,
Condensed Consolidated Statements of Cash Flows and Reconciliation of Reported GAAP Results to Adjusted Measures
(in US$ million)
(unaudited)

(a)      Amounts presented as of and for the quarters and years to date ended September 30, 2019 and 2018 are unaudited.
(b)      As a result of the acquisition of Wuxi KFC in the first quarter of 2018, the Company recognized a gain of $98 million from the re-measurement of our previously held 47% equity interest at fair value, which was not allocated to any segment for performance reporting purposes.
(c)      The tax expense was determined based upon the nature, as well as the jurisdiction, of each Special Item at the applicable tax rate.
(d)      We completed the evaluation of the impact on our transition tax computation based on the final regulations released by the US Treasury Department and the IRS in the first quarter of 2019 and recorded an additional amount of $8 million for the transition tax accordingly.

Reconciliation of Net Income to Adjusted EBITDA

(in US$ million)

(unaudited)

Net income, along with the reconciliation to Adjusted EBITDA, is presented below.

Quarter Ended

Year to Date Ended

9/30/2019

9/30/2018

9/30/2019

9/30/2018

Reconciliation of Net Income to Adjusted EBITDA

Net Income – Yum China Holdings, Inc.

$

223

$

203

$

623

$

634

Net income – noncontrolling interests

12

9

26

24

Income tax provision

87

67

226

227

Interest income, net

(10)

(10)

(29)

(28)

Investment gain

(12)

(39)

Operating Profit

300

269

807

857

Special Items, Operating Profit

(98)

Adjusted Operating Profit

300

269

807

759

Depreciation and amortization

105

108

322

343

Store impairment charges

2

2

27

23

Adjusted EBITDA

$

407

$

379

$

1,156

$

1,125

Unit Count by Brand

KFC

12/31/2018

New Builds

Closures

Refranchised

9/30/2019

Company-owned

4,597

398

(62)

(8)

4,925

Unconsolidated affiliates

811

69

(17)

863

Franchisees

502

34

(8)

8

536

Total

5,910

501

(87)

6,324

Pizza Hut

12/31/2018

New Builds

Closures

Refranchised

9/30/2019

Company-owned

2,188

75

(68)

(30)

2,165

Franchisees

52

9

(1)

30

90

Total

2,240

84

(69)

2,255

Others

12/31/2018

New Builds

Closures

Refranchised

9/30/2019

Company-owned

47

38

(2)

(2)

81

Franchisees

287

23

(55)

2

257

Total

334

61

(57)

338

Yum China Holdings, Inc.

Segment Results

(in US$ million)

(unaudited)

Quarter Ended 9/30/2019

KFC

Pizza Hut

All Other
Segments(1)

Corporate

and

Unallocated(2)

Elimination

Total

Company sales

$

1,546

$

540

$

11

$

$

$

2,097

Franchise fees and income

35

1

2

38

Revenues from transactions with

 franchisees and unconsolidated affiliates

16

1

8

147

172

Other revenues

1

19

1

(9)

12

Total revenues

$

1,598

$

542

$

40

$

148

$

(9)

$

2,319

Company restaurant expenses

1,235

478

12

1,725

General and administrative expenses

50

25

8

34

117

Franchise expenses

18

1

19

Expenses for transactions with

 franchisees and unconsolidated affiliates

16

1

5

145

167

Other operating costs and expenses

17

1

(9)

9

Closures and impairment income, net

(1)

(1)

Other income, net

(16)

(1)

(17)

Total costs and expenses, net

1,303

504

42

179

(9)

2,019

Operating Profit (Loss)

$

295

$

38

$

(2)

$

(31)

$

$

300

Quarter Ended 9/30/2018

KFC

Pizza Hut

All Other
Segments(1)

Corporate

and

Unallocated(2)

Elimination

Total

Company sales

$

1,452

$

548

$

8

$

$

$

2,008

Franchise fees and income

34

1

1

36

Revenues from transactions with

 franchisees and unconsolidated affiliates

15

1

7

136

159

Other revenues

14

1

(6)

9

Total revenues

$

1,501

$

550

$

30

$

137

$

(6)

$

2,212

Company restaurant expenses

1,173

472

9

1

1,655

General and administrative expenses

44

24

9

42

119

Franchise expenses

17

1

18

Expenses for transactions with

 franchisees and unconsolidated affiliates

15

1

5

135

156

Other operating costs and expenses

13

(7)

6

Closures and impairment income, net

(1)

(1)

Other income, net

(12)

2

(10)

Total costs and expenses, net

1,237

497

36

179

(6)

1,943

Operating Profit (Loss)

$

264

$

53

$

(6)

$

(42)

$

$

269

Year to Date Ended 9/30/2019

KFC

Pizza Hut

All Other
Segments(1)

Corporate

and

Unallocated(2)

Elimination

Total

Company sales

$

4,495

$

1,588

$

29

$

$

$

6,112

Franchise fees and income

104

3

6

113

Revenues from transactions with

 franchisees and unconsolidated affiliates

48

3

20

425

496

Other revenues

1

1

49

3

(28)

26

Total revenues

$

4,648

$

1,595

$

104

$

428

$

(28)

$

6,747

Company restaurant expenses

3,650

1,391

31

(1)

5,071

General and administrative expenses

148

76

24

92

340

Franchise expenses

53

2

55

Expenses for transactions with

 franchisees and unconsolidated affiliates

48

3

16

421

488

Other operating costs and expenses

1

43

3

(27)

20

Closures and impairment expenses, net

7

5

2

14

Other income, net

(46)

(2)

(48)

Total costs and expenses, net

3,860

1,478

116

514

(28)

5,940

Operating Profit (Loss)

$

788

$

117

$

(12)

$

(86)

$

$

807

Year to Date Ended 9/30/2018

KFC

Pizza Hut

All Other
Segments(1)

Corporate

and

Unallocated(2)

Elimination

Total

Company sales

$

4,248

$

1,640

$

24

$

$

$

5,912

Franchise fees and income

104

2

4

110

Revenues from transactions with

 franchisees and unconsolidated affiliates

47

1

18

395

461

Other revenues

25

2

(9)

18

Total revenues

$

4,399

$

1,643

$

71

$

397

$

(9)

$

6,501

Company restaurant expenses

3,441

1,447

25

(1)

4,912

General and administrative expenses

135

80

25

94

334

Franchise expenses

53

2

55

Expenses for transactions with

 franchisees and unconsolidated affiliates

47

1

14

392

454

Other operating costs and expenses

24

1

(8)

17

Closures and impairment expenses, net

6

9

15

Other income, net

(42)

(2)

(1)

(98)

(143)

Total costs and expenses, net

3,640

1,537

87

389

(9)

5,644

Operating Profit (Loss)

$

759

$

106

$

(16)

$

8

$

$

857

The above tables reconcile segment information, which is based on management responsibility, with our Condensed Consolidated
Statements of Income. 

(1) Starting from the first quarter of 2019, our newly developed COFFii & JOY concept and e-commerce business became
operating segments, as their financial results started being regularly reviewed by the Company’s chief operating decision maker.
Accordingly, our six non-reportable operating segments, reflecting the operations of East Dawning, Little Sheep, Taco Bell,
Daojia, COFFii & JOY and our e-commerce business, are combined and referred to as All Other Segments, as those operating
segments are insignificant both individually and in the aggregate. Segment financial information for prior quarters has been
recast to align with this change in segment reporting. There was no impact on the condensed consolidated financial statements
of the Company as a result of this change.

(2) Corporate and unallocated expenses comprise items that are not allocated to segments for performance reporting purposes.
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. The Corporate and Unallocated
column in the above tables includes, among other amounts, all amounts that we have deemed Special Items. See “Reconciliation
of Reported GAAP Results to Adjusted Measures”.

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