Items Affecting Comparability of Net Income and Cash Flows (Tables)

12 Months Ended

Dec. 31, 2016

Refranchising (Gain) Loss

The Refranchising (gain) loss by reportable segment is presented below. We do not allocate such gains and losses to our segments for performance reporting purposes.



	Refranchising (gain) loss
	2016			2015			2014
KFC Division^(a)	$	(20	)	$	33		$	(18	)
Pizza Hut Division^(a)(b)	(50		)	55			6
Taco Bell Division	(71		)	(65		)	(4		)
Worldwide	$	(141	)	$	23		$	(16	)

(a)

In 2010, we refranchised our then-remaining Company-operated restaurants in Mexico. To the extent we owned it, we did not sell the real estate related to certain of these restaurants, instead leasing it to the franchisee. During 2015, we sold the real estate for approximately $58 million. While these proceeds exceeded the book value of the real estate, the sale represented a substantial liquidation of our Mexican foreign entities under GAAP. As such, the accumulated translation losses associated with our Mexican business were included in our loss on the sale. We recorded charges of $80 million representing the excess of the sum of the book value of the real estate and other related assets and our accumulated translation losses over the sales price. Consistent with the classification of the original Mexico market-wide refranchising transaction, these charges were classified as Refranchising (gain) loss. Refranchising losses of $40 million were associated with both the KFC and Pizza Hut Divisions.

We continue to earn U.S. dollar-denominated franchise fees, most of which are sales-based royalties, under our existing franchise contracts with our Mexico franchisee.


(b)	In 2016, we recognized a net gain of $11 million related to the reclassification of accumulated translation adjustments associated with Pizza Hut Australia upon entering into a master franchising agreement for that business that was deemed a complete liquidation of the Pizza Hut Australia foreign entity.

Closures and impairment (income) expenses

Facility Actions [Line Items]

Facility Actions

Store Closure and Impairment Activity

Store closure (income) costs and Store impairment charges by reportable segment are presented below.



	2016
	KFC		Pizza Hut			Taco Bell		Worldwide
Store closure (income) costs^(a)	$	3	$	(4	)	$	—	$	(1	)
Store impairment charges	8		4			3		15
Closure and impairment (income) expenses	$	11	$	—		$	3	$	14



	2015
	KFC		Pizza Hut			Taco Bell			Worldwide
Store closure (income) costs^(a)	$	1	$	(2	)	$	(1	)	$	(2	)
Store impairment charges	8		5			4			17
Closure and impairment (income) expenses	$	9	$	3		$	3		$	15



	2014
	KFC		Pizza Hut		Taco Bell		Worldwide
Store closure (income) costs^(a)	$	2	$	1	$	—	$	3
Store impairment charges	8		4		3		15
Closure and impairment (income) expenses	$	10	$	5	$	3	$	18

(a)

Store closure (income) costs include the net gain or loss on sales of real estate on which we formerly operated a Company-owned restaurant that was closed, lease reserves established when we cease using a property under an operating lease and subsequent adjustments to those reserves and other facility-related expenses from previously closed stores. Remaining lease obligations for closed stores were not material at December 31, 2016 or December 26, 2015.