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Discontinued Operations
 12 Months Ended
Dec. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] Discontinued Operations

As discussed in Note 1, on October 31, 2016, the Company completed the Separation of our China business.

In connection with the Separation, the Company and Yum China entered into a Separation and Distribution Agreement as well as various other agreements that provide a framework for the relationships between the parties, including among others a Tax Matters Agreement, an Employee Matters Agreement, a Transition Services Agreement and a Master License Agreement. These agreements provided for the allocation between the Company and Yum China of assets, employees, liabilities and obligations (including investments, property, employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the Separation and govern certain relationships between the Company and Yum China after the Separation.

For all the periods prior to the Separation, the financial results of Yum China are presented as Income from discontinued operations, net of tax in the Consolidated Statements of Income and Cash flows from discontinued operations in our Consolidated Statements of Cash Flows.

The financial results of Yum China presented in discontinued operations reflect the results of the former China Division, an operating segment of the Company until the Separation, adjusted for the inclusion of certain G&A, non-cash impairment charges, refranchising gains, interest and income taxes that were previously not allocated to but were related to the former China Division's historical results of operations.

Additionally, these financial results reflect a deduction for royalties on sales of KFC and Pizza Hut Company-owned stores in China that prior to the Separation were paid, pursuant to an intercompany franchise agreement, by an entity of Yum China to a Company entity. This royalty expense was not reflected in our China Division results that were presented prior to the Separation, as it was then an intercompany transaction that was eliminated in consolidation, but has been reflected in our Company's discontinued operations as such royalty arrangement continued pursuant to the Master License Agreement. Additionally, our China Division results that were presented prior to the Separation have been adjusted to exclude the portion of the royalties paid by third-party franchisees in China that have historically and continue to be remitted to a Company entity. These adjustments to our previously presented China Division results in determining Income from discontinued operations, net of tax were offset by adjustments to our KFC and Pizza Hut Divisions' results such that there was no impact on total reported Net Income.

The following table presents the financial results of the Company’s discontinued operations:
 
 
2016(a)
Company sales
 
$
5,667

Franchise and property revenues
 
109

Company restaurant expenses
 
(4,766
)
G&A expenses(b)
 
(406
)
Franchise and property expenses
 
(45
)
Other income (expense)(c)
 
(8
)
Refranchising gain
 
12

Interest income, net
 
8

Income from discontinued operations before income taxes
 
571

Income tax benefit(d)
 
65

Income from discontinued operations - including noncontrolling interests
 
636

Income from discontinued operations - noncontrolling interests
 
(11
)
Income from discontinued operations, net of tax
 
$
625

 
 
 
(a)
Includes Yum China financial results from January 1, 2016 to October 31, 2016.

(b)
Includes costs incurred to execute the Separation of $68 million for 2016. Such costs primarily relate to transaction advisors, legal and other consulting fees.

(c)
Includes store closure and impairment expenses and equity income from KFC franchisees in which Yum China owns a minority interest.

(d)
During 2016, we recorded a tax benefit of $233 million related to previously recorded losses associated with our Little Sheep business. The tax benefit associated with these losses was able to be recognized as a result of legal entity restructuring completed in anticipation of the Separation.

Cash inflows from Yum China to the Company in 2018, 2017 and 2016, subsequent to the Separation, related to the Master License Agreement was $233 million, $217 million and $16 million, respectively, net of taxes paid and primarily related to royalty revenues.