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

3 Months Ended

Mar. 31, 2018

Items Affecting Comparability of Net Income and Cash Flows [Abstract]

Revenue Recognition adjustments made to Condensed Consolidated Balance Sheet [Table Text Block]

As a result, the following adjustments were made to the Condensed Consolidated Balance Sheet as of January 1, 2018:



CONDENSED CONSOLIDATED BALANCE SHEET
	As Reported 12/31/2017			Adjustments				Balances with Adoption of Topic 606 1/1/2018
ASSETS
Current Assets
Cash and cash equivalents	$	1,522		$	11			$	1,533
Accounts and notes receivable, net	400			112				512
Prepaid expenses and other current assets	384			76			^(a)	460
Advertising cooperative assets, restricted	201			(201		)		—
Total Current Assets	2,507			(2		)		2,505

Property, plant and equipment, net	1,697			11				1,708
Goodwill	512			—				512
Intangible assets, net	110			—				110
Other assets	346			118				464
Deferred income taxes	139			26				165
Total Assets	$	5,311		$	153			$	5,464

LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and other current liabilities	$	813		$	220			$	1,033
Income taxes payable	123			—				123
Short-term borrowings	375			—				375
Advertising cooperative liabilities	201			(201		)		—
Total Current Liabilities	1,512			19				1,531

Long-term debt	9,429			—				9,429
Other liabilities and deferred credits	704			353				1,057
Total Liabilities	11,645			372				12,017

Shareholders’ Deficit
Accumulated deficit	(6,063		)	(240		)		(6,303		)
Accumulated other comprehensive loss	(271		)	21				(250		)
Total Shareholders’ Deficit	(6,334		)	(219		)		(6,553		)
Total Liabilities and Shareholders’ Deficit	$	5,311		$	153			$	5,464

(a)

Includes $58 million of restricted cash related to advertising cooperatives. These balances can only be used to settle obligations of the respective cooperatives.



CONDENSED CONSOLIDATED BALANCE SHEET
	As Reported 3/31/2018			Impact			Balances without Adoption of Topic 606 3/31/2018
ASSETS
Current Assets
Cash and cash equivalents	$	982		$	(20	)	$	962
Accounts and notes receivable, net	501			(109		)	392
Prepaid expenses and other current assets	406			(71		)	335
Advertising cooperative assets, restricted	—			197			197
Total Current Assets	1,889			(3		)	1,886

Property, plant and equipment, net	1,651			(13		)	1,638
Goodwill	514			—			514
Intangible assets, net	105			—			105
Other assets	490			(118		)	372
Deferred income taxes	187			(24		)	163
Total Assets	$	4,836		$	(158	)	$	4,678

LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and other current liabilities	$	924		$	(235	)	$	689
Income taxes payable	124			—			124
Short-term borrowings	61			—			61
Advertising cooperative liabilities	—			197			197
Total Current Liabilities	1,109			(38		)	1,071

Long-term debt	9,419			—			9,419
Other liabilities and deferred credits	1,062			(339		)	723
Total Liabilities	11,590			(377		)	11,213

Shareholders’ Deficit
Accumulated deficit	(6,539		)	242			(6,297		)
Accumulated other comprehensive loss	(215		)	(23		)	(238		)
Total Shareholders’ Deficit	(6,754		)	219			(6,535		)
Total Liabilities and Shareholders’ Deficit	$	4,836		$	(158	)	$	4,678

Impact of adopting Topic 606 on our Condensed Consolidated Statements of Income [Table Text Block]

The following tables reflect the impact of adopting Topic 606 on our Condensed Consolidated Statement of Income for the quarter ended March 31, 2018 and our Condensed Consolidated Balance Sheet as of March 31, 2018 as well as the amounts as if the guidance that was in effect prior to adoption were applied:



CONDENSED CONSOLIDATED STATEMENT OF INCOME
	Quarter ended 3/31/2018
Revenues	As Reported			Impact				Balances without Adoption of Topic 606
Company sales	$	512		$	—			$	512
Franchise and property revenues	584			5				589
Franchise contributions for advertising and other services	275			(275		)		—
Total revenues	1,371			(270		)		1,101
Costs and Expenses, Net
Company restaurant expenses	438			—				438
General and administrative expenses	219			—				219
Franchise and property expenses	47			6				53
Franchise advertising and other services expense	272			(272		)		—
Refranchising (gain) loss	(156		)	—				(156		)
Other (income) expense	(2		)	—				(2		)
Total costs and expenses, net	818			(266		)		552
Operating Profit	553			(4		)	^(a)	549
Investment (income) expense, net	(66		)	—				(66		)
Other pension (income) expense	3			—				3
Interest expense, net	107			—				107
Income before income taxes	509			(4		)		505
Income tax provision	76			(1		)		75
Net Income	$	433		$	(3	)		$	430

Basic Earnings Per Common Share	$	1.30		$	(0.01	)		$	1.29

Diluted Earnings Per Common Share	$	1.27		$	(0.01	)		$	1.26


(a)	Includes $4 million of franchise incentive payments related to the KFC U.S. Acceleration Agreement and the Pizza Hut U.S. Transformation Agreement that would have been expensed immediately and that we would not have allocated to the KFC Division or the Pizza Hut Division under Legacy GAAP. Upon the adoption of Topic 606, these payments have been capitalized as assets.