Revenue Recognition Accounting Policy

9 Months Ended

Sep. 30, 2021

Revenue Recognition and Deferred Revenue [Abstract]

Revenue Recognition

Revenue Recognition

Disaggregation of Total Revenues

The following tables disaggregate revenue by Concept, for our two most significant markets based on Operating Profit and for all other markets. We believe this disaggregation best reflects the extent to which the nature, amount, timing and uncertainty of our revenues and cash flows are impacted by economic factors.

	Quarter ended 9/30/2021
		KFC Division		Pizza Hut Division		Taco Bell Division		Habit Burger Grill Division		Total
U.S.
Company sales		$	15	$	5	$	225	$	132	$	377
Franchise revenues		46		63		156		1		266
Property revenues		3		2		11		—		16
Franchise contributions for advertising and other services		7		70		130		—		207
China
Franchise revenues		61		16		—		—		77
Other
Company sales		128		8		—		—		136
Franchise revenues		265		66		10		—		341
Property revenues		16		—		—		—		16
Franchise contributions for advertising and other services		151		17		2		—		170
		$	692	$	247	$	534	$	133	$	1,606

	Quarter ended 9/30/2020
	KFC Division		Pizza Hut Division		Taco Bell Division		Habit Burger Grill Division		Total
U.S.
Company sales	$	14	$	5	$	218	$	118	$	355
Franchise revenues	44		62		148		—		254
Property revenues	4		1		10		—		15
Franchise contributions for advertising and other services	4		76		117		—		197
China
Franchise revenues	56		15		—		—		71
Other
Company sales	116		15		—		—		131
Franchise revenues	219		55		7		—		281
Property revenues	17		1		—		—		18
Franchise contributions for advertising and other services	112		13		1		—		126
	$	586	$	243	$	501	$	118	$	1,448

	Year to date 9/30/2021
		KFC Division		Pizza Hut Division		Taco Bell Division		Habit Burger Grill Division		Total
U.S.
Company sales		$	45	$	15	$	656	$	391	$	1,107
Franchise revenues		138		197		460		3		798
Property revenues		10		4		31		—		45
Franchise contributions for advertising and other services		20		223		375		—		618
China
Franchise revenues		181		48		—		—		229
Other
Company sales		378		24		—		—		402
Franchise revenues		750		185		27		—		962
Property revenues		45		1		—		—		46
Franchise contributions for advertising and other services		432		50		5		—		487
		$	1,999	$	747	$	1,554	$	394	$	4,694

	Year to date 9/30/2020
		KFC Division		Pizza Hut Division		Taco Bell Division		Habit Burger Grill Division		Total
U.S.
Company sales		$	43	$	15	$	610	$	231	$	899
Franchise revenues		126		190		411		1		728
Property revenues		11		4		31		—		46
Franchise contributions for advertising and other services		13		224		331		—		568
China
Franchise revenues		150		37		—		—		187
Other
Company sales		303		42		—		—		345
Franchise revenues		577		160		18		—		755
Property revenues		42		2		—		—		44
Franchise contributions for advertising and other services		296		39		2		—		337
		$	1,561	$	713	$	1,403	$	232	$	3,909

Contract Liabilities

Our contract liabilities are comprised of unamortized upfront fees received from franchisees. A summary of significant changes to the contract liability balance during 2021 is presented below.

	Deferred Franchise Fees
Balance at December 31, 2020	$	415
Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period	(53)
Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period	52
Other(a)	(3)
Balance at September 30, 2021	$	411

(a)    Primarily includes impact of foreign currency translation.

We expect to recognize contract liabilities as revenue over the remaining term of the associated franchise agreement as follows:

Less than 1 year	$	66
1 - 2 years	60
2 - 3 years	56
3 - 4 years	49
4 - 5 years	43
Thereafter	137
Total	$	411

^[1]

[1] (a)    Primarily includes impact of foreign currency translation.