Reportable Operating Segments (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

Reportable Operating Segments

We identify our operating segments based on management responsibility. The following tables summarize Revenues and Operating Profit for each of our reportable operating segments:

	Quarter ended
Revenues	2023		2022
KFC Division	$	687	$	660
Taco Bell Division	572		517
Pizza Hut Division	254		244
Habit Burger Grill Division	132		126
	$	1,645	$	1,547

	Quarter ended
Operating Profit	2023		2022
KFC Division	$	305	$	291
Taco Bell Division	204		185
Pizza Hut Division	104		102
Habit Burger Grill Division	(5)		(8)
Corporate and unallocated G&A expenses(a)	(84)		(71)
Unallocated Franchise and property expenses(a)	(1)		—
Unallocated Refranchising gain (loss)	4		4
Unallocated Other income (expense)(a)	(4)		6
Operating Profit	$	523	$	509
Investment income (expense), net(b)	(24)		7
Other pension income (expense)	2		—
Interest expense, net	(130)		(118)
Income before income taxes	$	371	$	398

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)Our operating results presented herein reflect revenues from and expenses to support the Russian operations for KFC for the entire quarter ended March 31, 2023, as well as for both Pizza Hut and KFC for the quarter ended March 31, 2022 (see Note 1), within their historical financial statement line items and operating segments. However, given our decision to exit Russia and our pledge to direct any future net profits attributable to Russia subsequent to the date of invasion to humanitarian efforts, we reclassed such net profits and losses from the Division segment results in which they were earned to Unallocated Other income (expense). As a result, we reclassed net operating losses of $1 million and net operating profit of $2 million from KFC Division Other income (expense) to Unallocated Other income (expense) during the quarters ended March 31, 2023 and 2022, respectively. Also, included in Unallocated Other income (expense) for the quarter ended March 31, 2022, were $5 million in foreign exchange gains attributable to fluctuations in the value of the Russian Ruble. Additionally, we recorded charges of $1 million to Corporate and unallocated G&A expenses and $1 million to Unallocated Franchise and property expenses during the quarter ended March 31, 2023 for certain expenses related to the transfer of the business and other costs related to our exit from Russia.

(b)Includes changes in the value of our investment in Devyani International Limited (see Note 12).