Revenue Recognition Accounting Policy

3 Months Ended

Mar. 31, 2024

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 3/31/2024
		KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger Grill Division		Total
U.S.
Company sales		$	14	$	240	$	2	$	127	$	383
Franchise revenues		43		188		68		1		300
Property revenues		3		9		1		1		14
Franchise contributions for advertising and other services		10		146		73		1		230
China
Franchise revenues		68		—		17		—		85
Other
Company sales		91		—		—		—		91
Franchise revenues		272		13		62		—		347
Property revenues		11		—		—		—		11
Franchise contributions for advertising and other services		120		2		15		—		137
		$	632	$	598	$	238	$	130	$	1,598

	Quarter ended 3/31/2023
	KFC Division		Taco Bell Division		Pizza Hut Division		Habit Burger Grill Division		Total
U.S.
Company sales	$	16	$	229	$	5	$	130	$	380
Franchise revenues	46		178		70		1		295
Property revenues	3		10		1		1		15
Franchise contributions for advertising and other services	8		140		78		—		226
China
Franchise revenues	66		—		18		—		84
Other
Company sales	94		—		—		—		94
Franchise revenues	284		13		66		—		363
Property revenues	13		—		—		—		13
Franchise contributions for advertising and other services	157		2		16		—		175
	$	687	$	572	$	254	$	132	$	1,645

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 2024 is presented below.

	Deferred Franchise Fees
Balance at December 31, 2023	$	444
Revenue recognized that was included in unamortized upfront fees received from franchisees at the beginning of the period	(20)
Increase for upfront fees associated with contracts that became effective during the period, net of amounts recognized as revenue during the period	19
Other(a)	(3)
Balance at March 31, 2024	$	440

(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	$	72
1 - 2 years	65
2 - 3 years	59
3 - 4 years	53
4 - 5 years	44
Thereafter	147
Total	$	440