v3.26.1
Reportable Operating Segments
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Reportable Operating Segments Reportable Operating Segments
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 6/30/2026
KFC DivisionTaco Bell DivisionPizza Hut DivisionHabit Burger & Grill DivisionTotal
Company Sales
$275 $396 $31 $135 $837 
Franchise and property revenues
477 271 143 3 895 
Franchise contributions for advertising and other services
172 185 80 1 438 
924 853 254 139 2,169 
Less:
Company restaurant expenses242 294 30 121 687 
General and administrative expenses88 53 56 12 210 
Franchise and property expenses18 9 13 1 41 
Franchise advertising and other services expense169 187 87 1 444 
Other (income) expense(2)(1)(3)6 — 
Division Operating Profit (Loss)
$410 $311 $70 $(4)$787 
Unallocated amounts:(a)
Corporate and unallocated G&A expenses(b)
$(114)
Unallocated Company restaurant expenses(c)
(13)
Unallocated Refranchising gain (loss)1 
Unallocated Other income (expense)(6)
Consolidated Operating Profit655 
Investment income (expense), net6 
Other pension income (expense)— 
Interest expense, net(128)
Income before income taxes$533 

Other Segment Disclosures
KFC DivisionTaco Bell DivisionPizza Hut DivisionHabit Burger & Grill DivisionCorporate and UnallocatedTotal
Depreciation and Amortization(e)
$13 $29 $5 $7 $6 $60 
Capital Spending25 39 2 20 13 100 
Revenue Recognition 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 6/30/2026
KFC DivisionTaco Bell DivisionPizza Hut Division
Habit Burger & Grill Division
Total
U.S.
Company sales$28 $393 $13 $135 $569 
Franchise revenues43 245 58 2 348 
Property revenues3 8 1 1 13 
Franchise contributions for advertising and other services11 180 64 1 256 
China
Franchise revenues73 — 18 — 92 
Other
Company sales247 3 18 — 268 
Franchise revenues346 18 66 — 429 
Property revenues12 — — — 13 
Franchise contributions for advertising and other services160 5 16 — 181 
$924 $853 $254 $139 $2,169 

Quarter ended 6/30/2025
KFC DivisionTaco Bell DivisionPizza Hut Division
Habit Burger & Grill Division
Total
U.S.
Company sales$24 $285 $7 $130 $446 
Franchise revenues43 225 63 2 332 
Property revenues3 8 1 1 13 
Franchise contributions for advertising and other services11 173 67 1 252 
China
Franchise revenues65 — 17 — 82 
Other
Company sales222 2 — — 224 
Franchise revenues315 15 67 — 397 
Property revenues11 — — — 11 
Franchise contributions for advertising and other services156 3 17 — 177 
$849 $711 $239 $134 $1,933 
Year to date 6/30/2026
KFC DivisionTaco Bell DivisionPizza Hut Division
Habit Burger & Grill Division
Total
U.S.
Company sales$53 $762 $26 $260 $1,101 
Franchise revenues85 472 114 4 675 
Property revenues6 16 2 2 25 
Franchise contributions for advertising and other services22 351 129 2 505 
China
Franchise revenues150 — 38 — 188 
Other
Company sales477 7 37 — 521 
Franchise revenues673 34 131 — 838 
Property revenues24 — 1 — 25 
Franchise contributions for advertising and other services312 9 30 — 351 
$1,802 $1,650 $507 $269 $4,228 

Year to date 6/30/2025
KFC DivisionTaco Bell DivisionPizza Hut Division
Habit Burger & Grill Division
Total
U.S.
Company sales$47 $546 $10 $255 $858 
Franchise revenues85 436 126 4 650 
Property revenues6 17 2 2 27 
Franchise contributions for advertising and other services20 330 136 1 488 
China
Franchise revenues134 — 34 — 168 
Other
Company sales415 4 — — 419 
Franchise revenues598 29 128 — 755 
Property revenues21 — 1 — 22 
Franchise contributions for advertising and other services296 6 33 — 335 
$1,622 $1,368 $470 $262 $3,721 
(a)
(a)    Does not include a charge of $1 million to Unallocated Franchise revenues during the year to date ended June 30, 2025.

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 2026 is presented below.
Deferred Franchise Fees
Balance at December 31, 2025
$443 
Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period(43)
Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period30 
Deferred franchise fees related to Pizza Hut reclassified to Liabilities held for sale (see Note 3)(61)
Other(a)
(1)
Balance at June 30, 2026
$367 

(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$62 
1 - 2 years55 
2 - 3 years49 
3 - 4 years43 
4 - 5 years37 
Thereafter121 
Total$367