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Goodwill and Intangible Assets
 9 Months Ended
Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

Note 10 – Goodwill and Intangible Assets

 

The changes in the carrying amount of goodwill are as follows:

 

 

 

Total
Company

 

 

KFC

 

 

Pizza Hut

 

 

All Other
Segments

 

Balance as of December 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill, gross

 

$

2,379

 

 

$

1,893

 

 

$

19

 

 

$

467

 

Accumulated impairment losses(a)

 

 

(391

)

 

 

—

 

 

 

—

 

 

 

(391

)

Goodwill, net

 

 

1,988

 

 

 

1,893

 

 

 

19

 

 

 

76

 

Effect of currency translation adjustments

 

 

(109

)

 

 

(104

)

 

 

(1

)

 

 

(4

)

Balance as of September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill, gross

 

 

2,270

 

 

 

1,789

 

 

 

18

 

 

 

463

 

Accumulated impairment losses(a)

 

 

(391

)

 

 

—

 

 

 

—

 

 

 

(391

)

Goodwill, net

 

$

1,879

 

 

$

1,789

 

 

$

18

 

 

$

72

 

 

(a)
Accumulated impairment losses represent goodwill impairment attributable to the reporting units of Little Sheep and Daojia.

 

Intangible assets, net as of September 30, 2023 and December 31, 2022 are as follows:

 

 

 

9/30/2023

 

 

12/31/2022

 

 

 

Gross
Carrying
Amount(a)

 

 

Accumulated
Amortization(a)

 

 

Accumulated Impairment Losses(b)

 

 

Net Carrying Amount

 

 

Gross
Carrying
Amount

 

 

Accumulated
Amortization

 

 

Accumulated Impairment Losses(b)

 

 

Net Carrying Amount

 

Finite-lived intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reacquired franchise
    rights

 

$

261

 

 

$

(258

)

 

$

—

 

 

$

3

 

 

$

276

 

 

$

(271

)

 

$

—

 

 

$

5

 

Huang Ji Huang
    franchise related assets

 

 

20

 

 

 

(3

)

 

 

—

 

 

 

17

 

 

 

22

 

 

 

(3

)

 

 

—

 

 

 

19

 

Daojia platform

 

 

16

 

 

 

(4

)

 

 

(12

)

 

 

—

 

 

 

16

 

 

 

(4

)

 

 

(12

)

 

 

—

 

Customer-related assets

 

 

12

 

 

 

(10

)

 

 

(2

)

 

 

—

 

 

 

12

 

 

 

(9

)

 

 

(2

)

 

 

1

 

Others

 

 

8

 

 

 

(5

)

 

 

—

 

 

 

3

 

 

 

9

 

 

 

(5

)

 

 

—

 

 

 

4

 

 

 

$

317

 

 

$

(280

)

 

$

(14

)

 

$

23

 

 

$

335

 

 

$

(292

)

 

$

(14

)

 

$

29

 

Indefinite-lived intangible
   assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Little Sheep trademark

 

$

50

 

 

$

—

 

 

$

—

 

 

$

50

 

 

$

52

 

 

$

—

 

 

$

—

 

 

$

52

 

Huang Ji Huang
    trademark

 

 

74

 

 

 

—

 

 

 

—

 

 

 

74

 

 

 

78

 

 

 

—

 

 

 

—

 

 

 

78

 

 

 

$

124

 

 

$

—

 

 

$

—

 

 

$

124

 

 

$

130

 

 

$

—

 

 

$

—

 

 

$

130

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total intangible assets

 

$

441

 

 

$

(280

)

 

$

(14

)

 

$

147

 

 

$

465

 

 

$

(292

)

 

$

(14

)

 

$

159

 

 

(a)
Changes in gross carrying amount and accumulated amortization include the effect of currency translation adjustments.

 

(b)
Accumulated impairment losses represent impairment charges on intangible assets acquired from Daojia primarily attributable to the Daojia platform.

 

Amortization expense for finite-lived intangible assets was $1 million and $24 million for the quarters ended September 30, 2023 and 2022, respectively, and $4 million and $76 million for the years to date ended September 30, 2023 and 2022, respectively. The decrease in amortized expense for finite-lived intangible assets in 2023 was primarily due to certain reacquired franchise rights being substantially amortized as of December 31, 2022 (See Note 8 for details). As of September 30, 2023, expected amortization expense for the unamortized finite-lived intangible assets is approximately $1 million for the remainder of 2023, and $2 million in each of 2024, 2025, 2026 and 2027.