Revenue Recognition

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Contract Liabilities

Contract liabilities consist of deferred revenue resulting from initial and renewal franchise fees paid by franchisees, as well as upfront fees paid by master franchisees, which are generally recognized on a straight-line basis over the term of the underlying agreement. We may recognize unamortized upfront fees when a contract with a franchisee or master franchisee is modified and is accounted for as a termination of the existing contract. We classify these contract liabilities as Other liabilities, net in our condensed consolidated balance sheets. The following table reflects the change in contract liabilities between December 31, 2019 and June 30, 2020 (in millions):

Contract Liabilities	TH		BK		PLK		Consolidated
Balance at December 31, 2019	$	64	$	449	$	28	$	541
Recognized during period and included in the contract liability balance at the beginning of the year	(4)		(41)		(1)		(46)
Increase, excluding amounts recognized as revenue during the period	3		9		5		17
Impact of foreign currency translation	(2)		—		—		(2)
Balance at June 30, 2020	$	61	$	417	$	32	$	510

The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2020 (in millions):

Contract liabilities expected to be recognized in	TH		BK		PLK		Consolidated
Remainder of 2020	$	4	$	17	$	1	$	22
2021	8		33		2		43
2022	7		32		2		41
2023	7		31		2		40
2024	7		30		2		39
Thereafter	28		274		23		325
Total	$	61	$	417	$	32	$	510

Disaggregation of Total Revenues

Total revenues consist of the following (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Sales	$	406	$	589	$	909	$	1,111
Royalties	469		576		995		1,104
Property revenues	158		214		336		413
Franchise fees and other revenue	15		21		33		38
Total revenues	$	1,048	$	1,400	$	2,273	$	2,666