YUM · 10-Q · 2026Q3 · Full report
Income Tax Rate Changes
YUM BRANDS INC · 2026-11-06 · Importance null · Surprise 64 · In source text
The year-to-date 2026 effective tax rate was 10.3%, compared with 30.3% in 2025; the third-quarter 2026 rate was 26.1%. The third-quarter 2026 rate was unfavorably affected by tax expense recorded on the Pizza Hut divestitures, but the amount is not legible in the supplied text. Year-to-date 2026 tax effects also included a deferred tax benefit recognized in the second quarter, tax benefits from the Pizza Hut legal-entity reorganization, and favorable effects from newly effective provisions of the One Big Beautiful Bill Act; the individual dollar amounts are not legible. The 2025 comparison included tax expenses related to U.S. foreign tax credit deferred tax assets and a Mexican tax dispute, partially offset by a tax benefit from an audit resolution.
Key facts
- YUM recorded $466 million of tax expense upon the Pizza Hut business sales in the quarter ended September 30, 2026. source
- YUM's year-to-date 2026 tax impacts included a $359 million net deferred tax benefit from recognizing tax basis in entities expected to be sold with Pizza Hut after definitive agreements were entered into in the quarter ended June 30, 2026. source
- YUM recorded $113 million in year-to-date 2026 tax benefits from an internal reorganization of Pizza Hut legal entities and assets. source
- YUM's year-to-date effective tax rate was 10.3% through September 30, 2026, versus 30.3% in 2025, a decrease of 20.0 percentage points. source
- YUM's year-to-date 2026 effective tax rate reflected favorable impacts from newly effective provisions of the One Big Beautiful Bill Act. source
- YUM's effective tax rate was 26.1% for the quarter ended September 30, 2026, versus 26.7% in the prior-year quarter, a decrease of 0.6 percentage points. source
- YUM's effective tax rate excluding Special Items was 20.9% for the 2026 quarter and 20.5% year to date, versus 20.8% and 21.4% in the comparable 2025 periods. source
- YUM's third-quarter and year-to-date 2026 effective tax rates were 26.1% and 10.3%, respectively. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| net_income | negative | realized | -22.7% | YUM recorded $466 million of tax expense upon the Pizza Hut business sales in the quarter ended September 30, 2026. |
| net_income | positive | realized | +17.5% | YUM's year-to-date 2026 tax impacts included a $359 million net deferred tax benefit from recognizing tax basis in entities expected to be… |
| net_income | positive | realized | +5.5% | YUM recorded $113 million in year-to-date 2026 tax benefits from an internal reorganization of Pizza Hut legal entities and assets. |