Revenue

12 Months Ended

Dec. 31, 2020

Revenue From Contract With Customer [Abstract]

Revenue

Note 3 – Revenue

The following table presents revenue disaggregated by types of arrangements and segments:

	2020
Revenues	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated		Combined		Elimination			Consolidated
Company sales	$	5,633	$	1,721	$	42	$	—	$	7,396	$	—		$	7,396
Franchise fees and income		125		5		18		—		148		—			148
Revenues from transactions with franchisees and unconsolidated affiliates		61		4		49		533		647		—			647
Other revenues		2		—		96		32		130		(58	)		72
Total revenues	$	5,821	$	1,730	$	205	$	565	$	8,321	$	(58	)	$	8,263

	2019
Revenues	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated		Combined		Elimination			Consolidated
Company sales	$	5,839	$	2,045	$	41	$	—	$	7,925	$	—		$	7,925
Franchise fees and income		136		4		8		—		148		—			148
Revenues from transactions with franchisees and unconsolidated affiliates		64		4		28		558		654		—			654
Other revenues		1		1		81		4		87		(38	)		49
Total revenues	$	6,040	$	2,054	$	158	$	562	$	8,814	$	(38	)	$	8,776

	2018
Revenues	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated (a)		Combined		Elimination			Consolidated
Company sales	$	5,495	$	2,106	$	32	$	—	$	7,633	$	—		$	7,633
Franchise fees and income		132		3		6		—		141		—			141
Revenues from transactions with franchisees and unconsolidated affiliates		61		2		26		514		603		—			603
Other revenues		—		—		51		3		54		(16	)		38
Total revenues	$	5,688	$	2,111	$	115	$	517	$	8,431	$	(16	)	$	8,415

(a) As COFFii & JOY and our e-commerce business became operating segments starting from the first quarter of 2019, revenue by segment information for 2018 has been recast to align with the change in segment reporting. Additional details on our reportable segments are included in Note 17.

Franchise Fees and Income

	2020		2019		2018
Initial fees, including renewal fees	$	8	$	8	$	7
Continuing fees and rental income		140		140		134
Franchise fees and income	$	148	$	148	$	141

Costs to Obtain Contracts

Costs to obtain contracts consist of upfront franchise fees that we paid to YUM prior to the separation in relation to initial fees or renewal fees we received from franchisees and unconsolidated affiliates, as well as license fees that are payable to YUM in relation to our deferred revenue of prepaid stored-value products, privilege membership programs and customer loyalty programs. They meet the requirements to be capitalized as they are incremental costs of obtaining contracts with customers and the Company expects to generate future economic benefits from such costs incurred. Such costs to obtain contracts are included in Other assets in the Consolidated Balance Sheets and are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the assets relate. Subsequent to the separation, we are no longer required to pay YUM initial or renewal fees that we receive from franchisees and unconsolidated affiliates. The Company did not incur any impairment losses related to costs to obtain contracts during any of the periods presented. Costs to obtain contracts were $9 million at both December 31, 2020 and 2019.

Contract Liabilities

Contract liabilities at December 31, 2020 and 2019 were as follows:

	2020		2019
Contract liabilities
- Deferred revenue related to prepaid stored-value products	$	117	$	86
- Deferred revenue related to upfront franchise fees		38		39
- Deferred revenue related to customer loyalty programs		23		24
- Deferred revenue related to privilege membership programs		27		16
- Others		1		3
Total	$	206	$	168

Contract liabilities primarily consist of deferred revenue related to prepaid stored-value products, privilege membership programs, customer loyalty programs and upfront franchise fees. Deferred revenue related to prepaid stored-value products, privilege membership programs, and customer loyalty programs is included in Accounts payable and other current liabilities in the Consolidated Balance Sheets. Deferred revenue related to upfront franchise fees that we expect to recognize as revenue in the next 12 months is included in Accounts payable and other current liabilities, and the remaining balance is included in Other liabilities in the Consolidated Balance Sheets. Revenue recognized that was included in the contract liability balance at the beginning of the year amounted to $95 million and $68 million in 2020 and 2019, respectively. Changes in contract liability balances were not materially impacted by business acquisition, change in estimate of transaction price or any other factors during any of the years presented.

The Company has elected, as a practical expedient, not to disclose the value of remaining performance obligations associated with sales-based royalty promised to franchisees in exchange for franchise right and other related services. The remaining duration of the performance obligation is the remaining contractual term of each franchise agreement. We recognize continuing franchisee fees and revenues from advertising services and other services provided to franchisees and unconsolidated affiliates based on certain percentage of sales, as those sales occur.