Reportable Operating Segments (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Segment Reporting Information, by Segment

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


	Quarter ended				Year to date
Revenues	2021		2020		2021		2020
KFC Division	$	692	$	586	$	1,999	$	1,561
Pizza Hut Division	247		243		747		713
Taco Bell Division	534		501		1,554		1,403
Habit Burger Grill Division	133		118		394		232
	$	1,606	$	1,448	$	4,694	$	3,909


	Quarter ended				Year to date
Operating Profit	2021		2020		2021		2020
KFC Division	$	314	$	278	$	932	$	655
Pizza Hut Division	101		89		306		252
Taco Bell Division	184		186		560		484
Habit Burger Grill Division	1		(7)		6		(15)
Corporate and unallocated G&A expenses(a)	(70)		(81)		(183)		(229)
Unallocated Company restaurant expenses	—		1		—		—
Unallocated Franchise and property expenses	—		—		—		(3)
Unallocated Refranchising gain (loss)	(1)		9		21		30
Unallocated Other income (expense)(b)	(2)		(4)		(5)		(153)
Operating Profit	$	527	$	471	$	1,637	$	1,021
Investment income (expense), net(c)	51		10		52		67
Other pension income (expense)	(1)		(4)		(6)		(9)
Interest expense, net(d)	(126)		(161)		(416)		(411)
Income before income taxes	$	451	$	316	$	1,267	$	668

Our chief operating decision maker (“CODM”) does not consider the impact of Corporate and unallocated amounts when assessing Divisional segment performance. As such, we do not allocate such amounts to our Divisional segments for performance reporting purposes.

(a)Includes charges related to a resource optimization program initiated in the third quarter of 2020. This program is part of our efforts to optimize our resources, reallocating them toward critical areas of the business that will drive future growth. These critical areas include accelerating our digital, technology and innovation capabilities to deliver a modern, world-class team member and customer experience and improve unit economics. We recorded charges of $4 million and $32 million during the quarters ended September 30, 2021 and 2020, respectively, for this program. We recorded charges of $7 million and $32 million during the years to date ended September 30, 2021 and 2020, respectively, for this program. Also included in the year to date ended September 30, 2020, is a $50 million charitable contribution to Yum! Brands Foundation, Inc. (a standalone, not-for-profit organization that is not consolidated in the Company's results) in the second quarter of 2020 related to our “Unlocking Opportunity Initiative” and costs related to our acquisition of Habit Burger Grill of $9 million.

(b)Includes charges of $5 million and $144 million in the quarter and year to date ended September 30, 2020, respectively, related to the impairment of Habit Burger Grill goodwill. See Note 2.

(c)Includes changes in the value of our investment in Devyani International Limited (“Devyani”), an entity that operates KFC and Pizza Hut franchised units in India. During the quarter ended September 30, 2021, Devyani executed an initial public offering and subsequently the fair value of our investment became readily determinable. As a result, we began recording changes in fair value in Investment income (expense), net. In the quarter ended September 30, 2021, we recognized pre-tax investment income of $52 million related to changes in fair value of our investment in Devyani. See Note 13.

Also includes changes in the value of Grubhub, Inc. (“Grubhub”) common stock. For the quarter and year to date ended September 30, 2020, we recognized pre-tax investment income of $8 million and $69 million, respectively, related to changes in fair value of our investment in Grubhub common stock. In the quarter ended September 30, 2020, we sold our investment in Grubhub.

(d)Includes a $28 million call premium and $6 million of unamortized debt issuance costs written off related to the redemption of the 2026 Notes during the year to date ended September 30, 2021. See Note 11.

Also includes a $26 million call premium and $6 million of unamortized debt issuance costs written off associated with the early redemption of YUM Subsidiary Senior Unsecured Notes due in 2024 as well as $2 million of accrued and unpaid interest associated with the period of time from prepayment of the notes with the trustee to their redemption date during the quarter and year to date ended September 30, 2020.