Revenue Recognition Accounting Policy

9 Months Ended

Sep. 30, 2023

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 9/30/2023
		KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger Grill Division		Total
U.S.
Company sales		$	15	$	256	$	2	$	135	$	408
Franchise revenues		48		196		64		1		309
Property revenues		4		9		1		1		15
Franchise contributions for advertising and other services		9		152		72		—		233
China
Franchise revenues		66		—		18		—		84
Other
Company sales		102		—		—		—		102
Franchise revenues		296		13		67		—		376
Property revenues		12		—		—		—		12
Franchise contributions for advertising and other services		148		3		18		—		169
		$	700	$	629	$	242	$	137	$	1,708

	Quarter ended 9/30/2022
	KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger Grill Division		Total
U.S.
Company sales	$	16	$	234	$	4	$	129	$	383
Franchise revenues	47		173		65		—		285
Property revenues	4		10		1		1		16
Franchise contributions for advertising and other services	7		136		72		1		216
China
Franchise revenues	61		—		17		—		78
Other
Company sales	96		—		—		—		96
Franchise revenues	291		13		62		—		366
Property revenues	15		—		—		—		15
Franchise contributions for advertising and other services	167		2		16		—		185
	$	704	$	568	$	237	$	131	$	1,640

	Year to date 9/30/2023
		KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger Grill Division		Total
U.S.
Company sales		$	48	$	738	$	11	$	404	$	1,201
Franchise revenues		143		568		200		4		915
Property revenues		10		29		3		2		44
Franchise contributions for advertising and other services		25		440		224		1		690
China
Franchise revenues		193		—		52		—		245
Other
Company sales		294		—		—		—		294
Franchise revenues		870		40		198		—		1,108
Property revenues		38		—		1		—		39
Franchise contributions for advertising and other services		448		7		49		—		504
		$	2,069	$	1,822	$	738	$	411	$	5,040

	Year to date 9/30/2022
		KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger Grill Division		Total
U.S.
Company sales		$	47	$	691	$	14	$	390	$	1,142
Franchise revenues		139		508		193		3		843
Property revenues		10		31		3		1		45
Franchise contributions for advertising and other services		20		401		216		1		638
China
Franchise revenues		170		—		46		—		216
Other
Company sales		306		—		—		—		306
Franchise revenues		834		35		195		—		1,064
Property revenues		42		—		1		—		43
Franchise contributions for advertising and other services		473		5		48		—		526
		$	2,041	$	1,671	$	716	$	395	$	4,823

Contract Liabilities

Our contract liabilities are comprised of unamortized upfront fees received from franchisees and are presented within Accounts payable and other current liabilities and Other liabilities and deferred credits in our Condensed Consolidated Balance Sheets. A summary of significant changes to the contract liability balance during 2023 is presented below.

	Deferred Franchise Fees
Balance at December 31, 2022	$	434
Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period	(62)
Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period	58
Other(a)	(14)
Balance at September 30, 2023	$	416

(a)    Includes impact of foreign currency translation as well as the recognition of deferred franchise fees into Refranchising (gain) loss upon the termination of existing franchise agreements when entering into master franchise agreements.

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

Less than 1 year	$	71
1 - 2 years	61
2 - 3 years	56
3 - 4 years	50
4 - 5 years	42
Thereafter	136
Total	$	416