Reportable Operating Segments

9 Months Ended

Sep. 30, 2025

The Company's operating segments maintain separate financial information, and our Chief Operating Decision Maker (“CODM”), the Company's Chief Executive Officer, evaluates the operating segments' operating results on a regular basis in deciding how to allocate resources among the segments and in assessing segment performance. The CODM evaluates the performance of the Company's segments based on Divisional Operating Profit and is involved in determining and reviewing forecasted Divisional Operating Profit as part of the annual plan process. Throughout the year, the CODM considers forecast to actual results and variances on a monthly and quarterly basis to allocate resources for the segments' operations. The CODM also considers this information in determining how to prioritize capital allocation, including investments in restaurant development, technology and human capital, while maintaining a strong and flexible balance sheet, offering a competitive dividend and returning excess cash to shareholders. Our CODM manages assets on a consolidated basis. Accordingly, segment assets are not reported to our CODM or used in his decisions to allocate resources or assess performance of the segments. Therefore, total segment assets and long-lived assets have not been disclosed. The significant expense categories and amounts presented in the tables below align with the segment-level information that is regularly provided to the CODM.


	Quarter ended 9/30/2025
	KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger & Grill Division		Total
Company Sales	$	259	$	298	$	9	$	130	$	697
Franchise and property revenues	459		254		146		3		861
Franchise contributions for advertising and other services	161		178		85		1		426
	879		730		240		134		1,983

Less:
Company restaurant expenses	224		227		10		121		583
General and administrative expenses	88		50		50		13		201
Franchise and property expenses	15		8		11		1		35
Franchise advertising and other services expense	160		177		89		1		427

Other (income) expense	—		—		(4)		—		(3)
Division Operating Profit (Loss)	$	392	$	267	$	84	$	(2)	$	741

Unallocated amounts:(a)
Corporate and unallocated G&A expenses(b)									$	(80)
Unallocated Company restaurant expenses(c)									(4)
Unallocated Franchise and property revenues									(4)

Unallocated Refranchising gain (loss)									17
Unallocated Other income (expense)									(3)
Consolidated Operating Profit									666
Investment income (expense), net									—
Other pension income (expense)									(1)
Interest expense, net									(124)
Income before income taxes									$	541

Other Segment Disclosures


	KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger & Grill Division		Corporate and Unallocated		Total
Depreciation and Amortization(d)	$	14	$	17	$	6	$	7	$	8	$	50
Capital Spending	34		26		8		14		12		94

Revenue Recognition

Disaggregation of Total Revenues

The following tables disaggregate revenue by Concept, for our two most significant markets based on Operating Profit and for all other markets. We believe this disaggregation best reflects the extent to which the nature, amount, timing and uncertainty of our revenues and cash flows are impacted by economic factors.


	Quarter ended 9/30/2025
		KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger & Grill Division		Total
U.S.
Company sales		$	26	$	296	$	9	$	130	$	461
Franchise revenues		46		229		59		2		335
Property revenues		3		8		1		1		13
Franchise contributions for advertising and other services		11		174		67		1		254

China
Franchise revenues		74		—		19		—		93

Other
Company sales		234		2		—		—		235
Franchise revenues		325		17		67		—		408
Property revenues		11		—		—		—		11
Franchise contributions for advertising and other services		150		4		18		—		172
		$	879	$	730	$	240	$	134	$	1,983	(a)

(a) Does not include a charge of $4 million to Unallocated Franchise revenues during the quarter ended September 30, 2025.


	Quarter ended 9/30/2024
	KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger & Grill Division		Total
U.S.
Company sales	$	17	$	267	$	1	$	133	$	418
Franchise revenues	44		211		66		2		323
Property revenues	4		8		1		1		14
Franchise contributions for advertising and other services	10		161		71		1		243

China
Franchise revenues	70		—		17		—		87

Other
Company sales	203		—		—		—		203
Franchise revenues	288		15		66		—		369
Property revenues	11		—		—		—		11
Franchise contributions for advertising and other services	138		4		16		—		158
	$	785	$	666	$	238	$	137	$	1,826


	Year to date 9/30/2025
		KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger & Grill Division		Total
U.S.
Company sales		$	72	$	843	$	20	$	385	$	1,320
Franchise revenues		130		664		185		5		985
Property revenues		9		25		3		2		40
Franchise contributions for advertising and other services		31		504		203		2		741

China
Franchise revenues		209		—		52		—		261

Other
Company sales		648		6		—		—		654
Franchise revenues		923		45		195		—		1,163
Property revenues		32		—		1		—		33
Franchise contributions for advertising and other services		447		10		51		—		508
		$	2,501	$	2,098	$	710	$	395	$	5,704	(a)

(a) Does not include a charge of $5 million to Unallocated Franchise revenues during the year to date ended September 30, 2025.


	Year to date 9/30/2024
		KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger & Grill Division		Total
U.S.
Company sales		$	45	$	775	$	5	$	399	$	1,224
Franchise revenues		134		608		200		5		947
Property revenues		10		27		3		2		42
Franchise contributions for advertising and other services		30		468		217		2		717

China
Franchise revenues		200		—		51		—		251

Other
Company sales		443		—		—		—		443
Franchise revenues		842		43		191		—		1,076
Property revenues		33		—		1		—		34
Franchise contributions for advertising and other services		397		9		47		—		453
		$	2,134	$	1,930	$	715	$	408	$	5,187

Contract Liabilities

Our contract liabilities are comprised of unamortized upfront fees received from franchisees and are presented within Accounts payable and other current liabilities and Other liabilities and deferred credits in our Condensed Consolidated Balance Sheets. A summary of significant changes to the contract liability balance during 2025 is presented below.


	Deferred Franchise Fees
Balance at December 31, 2024	$	438
Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period	(62)
Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period	49
Other(a)	6
Balance at September 30, 2025	$	431

(a) Primarily includes the impact of foreign currency translation.

We expect to recognize contract liabilities as revenue over the remaining term of the associated franchise agreement as follows:


Less than 1 year	$	75
1 - 2 years	67
2 - 3 years	58
3 - 4 years	50
4 - 5 years	43
Thereafter	138
Total	$	431

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

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+ Details

- 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.

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+ Details

YUM BRANDS INC 10-Q