| Segment Reporting |
Note 14 – Segment Reporting We have two reportable segments: KFC and Pizza Hut. Our non-reportable operating segments, including the operations of Lavazza, Huang Ji Huang, Little Sheep, Taco Bell and our delivery operating segment, are combined and referred to as All Other Segments, as these operating segments are insignificant both individually and in the aggregate. The Company’s chief operating decision maker (“CODM”) is the chief executive officer, who reviews the financial information of each operating segment when making decisions about allocating resources and assessing the performance of the segment.
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|
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Quarter Ended 9/30/2026 |
|
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other
Segments |
|
|
Corporate and Unallocated(a) |
|
|
Combined |
|
|
Elimination |
|
|
Consolidated |
|
Revenue from external customers |
|
$ |
2,597 |
|
|
$ |
665 |
|
|
$ |
62 |
|
|
$ |
153 |
|
(b) |
$ |
3,477 |
|
|
$ |
— |
|
|
$ |
3,477 |
|
Inter-segment revenue(c) |
|
|
— |
|
|
|
— |
|
|
|
245 |
|
|
|
— |
|
|
|
245 |
|
|
|
(245 |
) |
|
|
— |
|
|
|
|
2,597 |
|
|
|
665 |
|
|
|
307 |
|
|
|
153 |
|
|
|
3,722 |
|
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|
(245 |
) |
|
|
3,477 |
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|
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|
|
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Less: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Food and paper |
|
|
783 |
|
|
|
224 |
|
|
|
4 |
|
|
|
— |
|
|
|
1,011 |
|
|
|
— |
|
|
|
1,011 |
|
Payroll and employee benefits |
|
|
673 |
|
|
|
176 |
|
|
|
3 |
|
|
|
— |
|
|
|
852 |
|
|
|
(1 |
) |
|
|
851 |
|
Occupancy and other operating
expenses |
|
|
618 |
|
|
|
154 |
|
|
|
6 |
|
|
|
— |
|
|
|
778 |
|
|
|
— |
|
|
|
778 |
|
General and administrative
expenses |
|
|
66 |
|
|
|
31 |
|
|
|
7 |
|
|
|
51 |
|
|
|
155 |
|
|
|
— |
|
|
|
155 |
|
Franchise expenses |
|
|
12 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
13 |
|
|
|
— |
|
|
|
13 |
|
Expenses for transactions with
franchisees |
|
|
17 |
|
|
|
2 |
|
|
|
28 |
|
|
|
125 |
|
(b) |
|
172 |
|
|
|
— |
|
|
|
172 |
|
Other operating costs and
expenses |
|
|
— |
|
|
|
4 |
|
|
|
256 |
|
(c) |
|
26 |
|
|
|
286 |
|
|
|
(244 |
) |
|
|
42 |
|
Closures and impairment
expenses, net |
|
|
3 |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit (Loss) |
|
|
425 |
|
|
|
73 |
|
|
|
2 |
|
|
|
(49 |
) |
|
|
451 |
|
|
|
— |
|
|
|
451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Interest income(a) |
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|
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|
|
|
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|
12 |
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|
|
|
|
|
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|
|
12 |
|
Interest expense(a) |
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|
|
|
|
|
|
|
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(5 |
) |
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(5 |
) |
Investment gain(a) |
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|
5 |
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|
5 |
|
Income Before Income Taxes and
Equity in Net Earnings (Losses)
from Equity Method Investments |
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$ |
463 |
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|
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|
|
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|
|
Quarter Ended 9/30/2025 |
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|
|
KFC |
|
|
Pizza Hut |
|
|
All Other
Segments |
|
|
Corporate and Unallocated(a) |
|
|
Combined |
|
|
Elimination |
|
|
Consolidated |
|
Revenue from external customers |
|
$ |
2,404 |
|
|
$ |
635 |
|
|
$ |
52 |
|
|
$ |
115 |
|
(b) |
$ |
3,206 |
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|
$ |
— |
|
|
$ |
3,206 |
|
Inter-segment revenue(c) |
|
|
— |
|
|
|
— |
|
|
|
220 |
|
|
|
— |
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|
220 |
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|
|
(220 |
) |
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|
— |
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|
2,404 |
|
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|
635 |
|
|
|
272 |
|
|
|
115 |
|
|
|
3,426 |
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(220 |
) |
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|
3,206 |
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Less: |
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|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
Food and paper |
|
|
725 |
|
|
|
210 |
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|
|
4 |
|
|
|
— |
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|
|
939 |
|
|
|
— |
|
|
|
939 |
|
Payroll and employee benefits |
|
|
616 |
|
|
|
166 |
|
|
|
3 |
|
|
|
— |
|
|
|
785 |
|
|
|
— |
|
|
|
785 |
|
Occupancy and other operating
expenses |
|
|
586 |
|
|
|
164 |
|
|
|
5 |
|
|
|
— |
|
|
|
755 |
|
|
|
— |
|
|
|
755 |
|
General and administrative
expenses |
|
|
66 |
|
|
|
27 |
|
|
|
7 |
|
|
|
43 |
|
|
|
143 |
|
|
|
— |
|
|
|
143 |
|
Franchise expenses |
|
|
9 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
|
11 |
|
|
|
— |
|
|
|
11 |
|
Expenses for transactions with
franchisees |
|
|
15 |
|
|
|
2 |
|
|
|
21 |
|
|
|
96 |
|
(b) |
|
134 |
|
|
|
— |
|
|
|
134 |
|
Other operating costs and
expenses |
|
|
1 |
|
|
|
6 |
|
|
|
230 |
|
(c) |
|
18 |
|
|
|
255 |
|
|
|
(220 |
) |
|
|
35 |
|
Closures and impairment
expenses, net |
|
|
2 |
|
|
|
2 |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit (Loss) |
|
|
384 |
|
|
|
57 |
|
|
|
1 |
|
|
|
(42 |
) |
|
|
400 |
|
|
|
— |
|
|
|
400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income(a) |
|
|
|
|
|
|
|
|
|
|
|
24 |
|
|
|
|
|
|
|
|
|
24 |
|
Interest expense(a) |
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
(1 |
) |
Investment loss(a) |
|
|
|
|
|
|
|
|
|
|
|
(10 |
) |
|
|
|
|
|
|
|
|
(10 |
) |
Income Before Income Taxes and
Equity in Net Earnings (Losses)
from Equity Method Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
413 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year to Date Ended 9/30/2026 |
|
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other
Segments |
|
|
Corporate and Unallocated(a) |
|
|
Combined |
|
|
Elimination |
|
|
Consolidated |
|
Revenue from external customers |
|
$ |
7,388 |
|
|
$ |
1,913 |
|
|
$ |
168 |
|
|
$ |
417 |
|
(b) |
$ |
9,886 |
|
|
$ |
— |
|
|
$ |
9,886 |
|
Inter-segment revenue(c) |
|
|
— |
|
|
|
— |
|
|
|
701 |
|
|
|
— |
|
|
|
701 |
|
|
|
(701 |
) |
|
|
— |
|
|
|
|
7,388 |
|
|
|
1,913 |
|
|
|
869 |
|
|
|
417 |
|
|
|
10,587 |
|
|
|
(701 |
) |
|
|
9,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and paper |
|
|
2,239 |
|
|
|
641 |
|
|
|
12 |
|
|
|
— |
|
|
|
2,892 |
|
|
|
— |
|
|
|
2,892 |
|
Payroll and employee benefits |
|
|
1,946 |
|
|
|
515 |
|
|
|
9 |
|
|
|
— |
|
|
|
2,470 |
|
|
|
(2 |
) |
|
|
2,468 |
|
Occupancy and other operating
expenses |
|
|
1,741 |
|
|
|
457 |
|
|
|
17 |
|
|
|
— |
|
|
|
2,215 |
|
|
|
— |
|
|
|
2,215 |
|
General and administrative
expenses |
|
|
194 |
|
|
|
85 |
|
|
|
21 |
|
|
|
131 |
|
|
|
431 |
|
|
|
— |
|
|
|
431 |
|
Franchise expenses |
|
|
33 |
|
|
|
3 |
|
|
|
1 |
|
|
|
— |
|
|
|
37 |
|
|
|
— |
|
|
|
37 |
|
Expenses for transactions with
franchisees |
|
|
47 |
|
|
|
6 |
|
|
|
76 |
|
|
|
341 |
|
(b) |
|
470 |
|
|
|
— |
|
|
|
470 |
|
Other operating costs and
expenses |
|
|
1 |
|
|
|
9 |
|
|
|
730 |
|
(c) |
|
70 |
|
|
|
810 |
|
|
|
(699 |
) |
|
|
111 |
|
Closures and impairment
expenses, net |
|
|
13 |
|
|
|
2 |
|
|
|
1 |
|
|
|
— |
|
|
|
16 |
|
|
|
— |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit (Loss) |
|
|
1,174 |
|
|
|
195 |
|
|
|
2 |
|
|
|
(125 |
) |
|
|
1,246 |
|
|
|
— |
|
|
|
1,246 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income(a) |
|
|
|
|
|
|
|
|
|
|
|
41 |
|
|
|
|
|
|
|
|
|
41 |
|
Interest expense(a) |
|
|
|
|
|
|
|
|
|
|
|
(6 |
) |
|
|
|
|
|
|
|
|
(6 |
) |
Investment loss(a) |
|
|
|
|
|
|
|
|
|
|
|
(12 |
) |
|
|
|
|
|
|
|
|
(12 |
) |
Income Before Income Taxes and
Equity in Net Earnings (Losses)
from Equity Method Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year to Date Ended 9/30/2025 |
|
|
|
KFC |
|
|
Pizza Hut |
|
|
All Other
Segments |
|
|
Corporate and Unallocated(a) |
|
|
Combined |
|
|
Elimination |
|
|
Consolidated |
|
Revenue from external customers |
|
$ |
6,746 |
|
|
$ |
1,784 |
|
|
$ |
131 |
|
|
$ |
313 |
|
(b) |
$ |
8,974 |
|
|
$ |
— |
|
|
$ |
8,974 |
|
Inter-segment revenue(c) |
|
|
— |
|
|
|
— |
|
|
|
544 |
|
|
|
— |
|
|
|
544 |
|
|
|
(544 |
) |
|
|
— |
|
|
|
|
6,746 |
|
|
|
1,784 |
|
|
|
675 |
|
|
|
313 |
|
|
|
9,518 |
|
|
|
(544 |
) |
|
|
8,974 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and paper |
|
|
2,041 |
|
|
|
573 |
|
|
|
9 |
|
|
|
— |
|
|
|
2,623 |
|
|
|
— |
|
|
|
2,623 |
|
Payroll and employee benefits |
|
|
1,726 |
|
|
|
483 |
|
|
|
8 |
|
|
|
— |
|
|
|
2,217 |
|
|
|
(1 |
) |
|
|
2,216 |
|
Occupancy and other operating
expenses |
|
|
1,641 |
|
|
|
456 |
|
|
|
15 |
|
|
|
— |
|
|
|
2,112 |
|
|
|
— |
|
|
|
2,112 |
|
General and administrative
expenses |
|
|
186 |
|
|
|
79 |
|
|
|
23 |
|
|
|
124 |
|
|
|
412 |
|
|
|
— |
|
|
|
412 |
|
Franchise expenses |
|
|
28 |
|
|
|
3 |
|
|
|
1 |
|
|
|
— |
|
|
|
32 |
|
|
|
— |
|
|
|
32 |
|
Expenses for transactions with
franchisees |
|
|
44 |
|
|
|
5 |
|
|
|
54 |
|
|
|
258 |
|
(b) |
|
361 |
|
|
|
— |
|
|
|
361 |
|
Other operating costs and
expenses |
|
|
3 |
|
|
|
17 |
|
|
|
565 |
|
(c) |
|
52 |
|
|
|
637 |
|
|
|
(543 |
) |
|
|
94 |
|
Closures and impairment
expenses, net |
|
|
15 |
|
|
|
5 |
|
|
|
2 |
|
|
|
— |
|
|
|
22 |
|
|
|
— |
|
|
|
22 |
|
Other income, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit (Loss) |
|
|
1,062 |
|
|
|
163 |
|
|
|
(2 |
) |
|
|
(120 |
) |
|
|
1,103 |
|
|
|
— |
|
|
|
1,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income(a) |
|
|
|
|
|
|
|
|
|
|
|
77 |
|
|
|
|
|
|
|
|
|
77 |
|
Interest expense(a) |
|
|
|
|
|
|
|
|
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
(3 |
) |
Investment loss(a) |
|
|
|
|
|
|
|
|
|
|
|
(25 |
) |
|
|
|
|
|
|
|
|
(25 |
) |
Income Before Income Taxes and
Equity in Net Earnings (Losses)
from Equity Method Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Year to Date Ended |
|
Depreciation and Amortization |
|
9/30/2026 |
|
|
9/30/2025 |
|
|
9/30/2026 |
|
|
9/30/2025 |
|
KFC |
|
$ |
85 |
|
|
$ |
76 |
|
|
$ |
251 |
|
|
$ |
226 |
|
Pizza Hut |
|
|
23 |
|
|
|
26 |
|
|
|
69 |
|
|
|
73 |
|
All Other Segments |
|
|
2 |
|
|
|
2 |
|
|
|
5 |
|
|
|
5 |
|
Corporate and Unallocated |
|
|
11 |
|
|
|
10 |
|
|
|
33 |
|
|
|
29 |
|
|
|
$ |
121 |
|
|
$ |
114 |
|
|
$ |
358 |
|
|
$ |
333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Year to Date Ended |
|
Impairment Charges |
|
9/30/2026 |
|
|
9/30/2025 |
|
|
9/30/2026 |
|
|
9/30/2025 |
|
KFC(d) |
|
$ |
5 |
|
|
$ |
4 |
|
|
$ |
19 |
|
|
$ |
18 |
|
Pizza Hut(d) |
|
|
1 |
|
|
|
2 |
|
|
|
4 |
|
|
|
6 |
|
All Other Segments(d) |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
$ |
6 |
|
|
$ |
6 |
|
|
$ |
24 |
|
|
$ |
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Year to Date Ended |
|
Capital Spending |
|
9/30/2026 |
|
|
9/30/2025 |
|
|
9/30/2026 |
|
|
9/30/2025 |
|
KFC |
|
|
82 |
|
|
|
73 |
|
|
$ |
237 |
|
|
$ |
216 |
|
Pizza Hut |
|
|
23 |
|
|
|
20 |
|
|
|
75 |
|
|
|
64 |
|
All Other Segments |
|
|
2 |
|
|
|
— |
|
|
|
5 |
|
|
|
1 |
|
Corporate and Unallocated |
|
|
39 |
|
|
|
33 |
|
|
|
100 |
|
|
|
104 |
|
|
|
$ |
146 |
|
|
$ |
126 |
|
|
$ |
417 |
|
|
$ |
385 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
|
|
9/30/2026 |
|
|
12/31/2025 |
|
KFC |
|
$ |
5,632 |
|
|
$ |
5,560 |
|
Pizza Hut(e) |
|
|
2,249 |
|
|
|
952 |
|
All Other Segments |
|
|
315 |
|
|
|
308 |
|
Corporate and Unallocated(f) |
|
|
4,211 |
|
|
|
3,963 |
|
|
|
$ |
12,407 |
|
|
$ |
10,783 |
|
(a)Amounts have not been allocated to any segment for performance reporting purposes. (b)Amounts from corporate and unallocated primarily include revenues and associated expenses of transactions with franchisees derived from the Company’s central procurement model whereby the Company centrally purchases substantially all food and paper products from suppliers then sells and delivers to KFC and Pizza Hut restaurants, including franchisees. Amounts have not been allocated to any segment for purposes of making operating decisions or assessing financial performance as the transactions are deemed corporate revenues and expenses in nature. (c)Primarily includes revenues and associated costs generated from the delivery services that were provided to our Company-owned restaurants. (d)Primarily includes store closure impairment charges and restaurant-level impairment charges resulting from our semi-annual impairment evaluation. (e)Increase in total assets of Pizza Hut segment primarily results from the Pizza Hut Acquisition. Refer to Note 3 for detail. (f)Primarily includes cash and cash equivalents, short-term investments, long-term bank deposits and notes, equity investments, and inventories that are centrally managed and PP&E that are not specifically identifiable within each segment. As substantially all of the Company’s revenue is derived from the PRC and substantially all of the Company’s long-lived assets are located in the PRC, no geographical information is presented. In addition, revenue derived from and long-lived assets located in the U.S., the Company’s country of domicile, are immaterial.
|