View Filing Data

$ 8,415

$ 7,769

$ 7,075

General and administrative expenses

456

495

429

Other operating costs and expenses

Closures and impairment expenses, net

Other income, net

(152)

(64)

(60)

Total costs and expenses, net

7,474

6,991

6,441

941

778

634

Interest income, net

^[1]

Investment loss

^[1]

(27)

Income Before Income Taxes

^[1]

950

803

666

Income tax provision

(214)

(379)

(156)

Net income – including noncontrolling interests

736

424

510

Net income – noncontrolling interests

Net Income – Yum China Holdings, Inc.

$ 708

$ 398

$ 498

Weighted-average common shares outstanding (in millions):

Basic

^[2]

384

387

368

Diluted

395

398

369

Basic Earnings Per Common Share

$ 1.84

$ 1.03

$ 1.35

Diluted Earnings Per Common Share

1.79

1.00

$ 1.35

Cash Dividends Declared Per Common Share

$ 0.42

$ 0.10

Company Sales [Member]

Revenues

$ 7,633

$ 6,993

$ 6,622

Franchise [Member]

Revenues

141

129

Cost of goods and services sold

Transactions With Franchisees and Unconsolidated Affiliates [Member]

Revenues

603

599

299

Cost of goods and services sold

595

592

295

Other Revenues [Member]

Revenues

Company Restaurant Expenses [Member]

Payroll and employee benefits

Food and paper

2,326

2,034

1,921

1,714

1,543

1,432

Occupancy and other operating expenses

2,394

2,245

2,259

Cost of goods and services sold

$ 6,434

$ 5,822

$ 5,612

[1]

Amounts have not been allocated to any segment for performance reporting purposes.

[2]

As a result of the separation, shares of Yum China common stock were distributed to YUM’s shareholders of record as of October 19, 2016 and included in the calculated weighted-average common shares outstanding. Holders of outstanding YUM equity awards generally received both adjusted YUM awards and Yum China awards, or adjusted awards of either YUM or Yum China in their entirety, to maintain the pre-separation intrinsic value of the awards. Any subsequent exercise of these awards, whether held by the Company’s employees or YUM’s employees, would increase the number of common shares outstanding. The outstanding equity awards are included in the computation of diluted EPS, if there is dilutive effect. See Note 15 for a further discussion of share-based compensation.

Consolidated and Combined Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net income - including noncontrolling interests	$ 736	$ 424	$ 510
Other comprehensive income (loss), net of tax of nil
Foreign currency gain (loss) arising during the year	(160)	142	(133)
Comprehensive income - including noncontrolling interests	576	566	377
Comprehensive income - noncontrolling interests	22	31	9
Comprehensive Income - Yum China Holdings, Inc.	$ 554	$ 535	$ 368

Net income - including noncontrolling interests

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=114867106&loc=SL7669619-108580

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (a)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=114867106&loc=SL7669625-108580

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (c)(1)
-URI http://asc.fasb.org/extlink&oid=109239629&loc=SL4573702-111684

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8736-108599

Reference 6: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4J
-URI http://asc.fasb.org/extlink&oid=84234705&loc=SL4591551-111686

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=109223946&loc=d3e3000-108585

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 45
-Paragraph 19
-URI http://asc.fasb.org/extlink&oid=108774443&loc=SL4569616-111683

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=115929826&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4K
-URI http://asc.fasb.org/extlink&oid=84234705&loc=SL4591552-111686

+ Details

Consolidated and Combined Statements of Cash Flows - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Cash Flows – Operating Activities

$ 736

$ 424

$ 510

Closures and impairment expenses

445

409

402

Gain from re-measurement of equity interest upon acquisition

^[1]

(98)

Investment loss

^[2]

Equity income from investments in unconsolidated affiliates

(21)

(65)

(54)

Distributions of income received from unconsolidated affiliates

Deferred income taxes

(42)

Share-based compensation expense

Changes in accounts receivable

(13)

(54)

Changes in inventories

(23)

(11)

(96)

Changes in prepaid expenses and other current assets

(22)

(15)

Changes in accounts payable and other current liabilities

254

(56)

123

Changes in income taxes payable

Other, net

(86)

(44)

Net Cash Provided by Operating Activities

1,333

884

866

Cash Flows – Investing Activities

Capital spending

(470)

(415)

(436)

Purchases of short-term investments

(604)

(596)

(136)

Maturities of short-term investments

680

479

Proceeds from disposal of aircraft

Acquisition of business, net of cash acquired

(91)

(25)

Investment in equity securities

(74)

Other, net

Net Cash Used in Investing Activities

(552)

(557)

(471)

Cash Flows – Financing Activities

Net transfers to Parent

(357)

Proceeds from issuance of common stock and warrants

460

Repurchase of shares of common stock

(307)

(128)

Cash dividends paid on common stock

(161)

(38)

Dividends paid to noncontrolling interests

(36)

(22)

(7)

Other, net

(14)

(3)

Net Cash (Used in) Provided by Financing Activities

(518)

(185)

Effect of Exchange Rates on Cash and Cash Equivalents

(56)

(28)

Net Increase in Cash and Cash Equivalents

207

174

460

Cash and Cash Equivalents – Beginning of Year

1,059

885

425

Cash and Cash Equivalents – End of Year

1,266

1,059

885

Supplemental Cash Flow Data

Cash paid for income tax

$ 208

$ 232

$ 182

[1]	As a result of the acquisition of Wuxi KFC in the first quarter of 2018, as disclosed in Note 6, the Company recognized a gain of $98 million from the re-measurement of our previously held 47% equity interest at fair value, which was not allocated to any segment for performance reporting purposes.
[2]	Amounts have not been allocated to any segment for performance reporting purposes.

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 1,266	$ 1,059
Short-term investments	122	205
Accounts receivable, net	80	79
Inventories, net	307	297
Prepaid expenses and other current assets	177	162
Total Current Assets	1,952	1,802
Property, plant and equipment, net	1,615	1,691
Goodwill	266	108
Intangible assets, net	116	101
Deferred income taxes	89	105
Investments in unconsolidated affiliates	81	95
Other assets	491	385
Total Assets	4,610	4,287
Current Liabilities
Accounts payable and other current liabilities	1,199	985
Income taxes payable	54	39
Total Current Liabilities	1,253	1,024
Capital lease obligations	25	28
Other liabilities	355	388
Total Liabilities	1,633	1,440
Redeemable Noncontrolling Interest	1	5
Equity
Common stock, $0.01 par value; 1,000 million shares authorized; 392 million shares and 389 million shares issued at December 31, 2018 and 2017, respectively; 379 million shares and 385 million shares outstanding at December 31, 2018 and 2017, respectively	4	4
Treasury stock	(460)	(148)
Additional paid-in capital	2,402	2,375
Retained earnings	944	397
Accumulated other comprehensive (loss) income	(17)	137
Total Equity – Yum China Holdings, Inc.	2,873	2,765
Noncontrolling interests	103	77
Total Equity	2,976	2,842
Total Liabilities, Redeemable Noncontrolling Interest and Equity	$ 4,610	$ 4,287

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017	Oct. 31, 2016
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	1,000,000,000	1,000,000,000	1,000,000,000
Common stock, shares issued	392,000,000	389,000,000	363,758,219
Common stock, shares outstanding	379,000,000	385,000,000	363,758,219

Consolidated and Combined Statements of Equity - USD ($)
shares in Millions, $ in Millions

Total

Common Stock [Member]

Additional Paid-in Capital [Member]

Retained Earnings [Member]

Accumulated Other Comprehensive Income (Loss) [Member]

Noncontrolling Interests [Member]

Treasury Stock [Member]

Strategic Investors [Member]

Total equity Including Noncontrolling Interest [Member]

Strategic Investors [Member]

Redeemable Noncontrolling Interest [Member]

After Spin-Off [Member]

Retained Earnings [Member]

Parent Company Investment [Member]

Balance at Dec. 31, 2015

$ 130

$ 58

$ 1,979

$ 6

$ 1,791

Net Income

$ 510

517

$ 37

461

Noncontrolling interest loss upon redemption

(8)

Foreign currency translation adjustment

(133)

(130)

(4)

(134)

Comprehensive income - including noncontrolling interests

377

383

(6)

Dividends declared

(7)

Net transfers to Parent

(360)

Capitalization at separation

$ 4

$ 1,881

(1,885)

Capitalization at separation (in shares)

364.0

Issuance of common stock to Investors

364

Issuance of common stock to Investors (in shares)

19.0

Reclassification of warrants issued to Investors

Stock repurchased

^[1]

$ (20)

Stock repurchased (in shares)

^[1]

(1.0)

Share-based compensation

Cumulative effect of accounting change

(7)

$ (7)

Balance at Dec. 31, 2016

$ 4

2,344

$ 37

$ (20)

2,431

Balance (in shares) at Dec. 31, 2016

383.0

(1.0)

Net Income

424

398

424

Foreign currency translation adjustment

142

137

142

Comprehensive income - including noncontrolling interests

566

Dividends declared

(22)

Cash dividends declared

(38)

Acquisition of business

Stock repurchased

$ (128)

(128)

Stock repurchased (in shares)

(3.4)

(3.0)

Exercise and vesting of share-based awards

Exercise and vesting of share-based awards (in shares)

6.0

Share-based compensation

Balance at Dec. 31, 2017

$ 2,842

$ 4

2,375

397

137

$ (148)

2,842

Balance (in shares) at Dec. 31, 2017

389.0

(4.0)

Net Income

736

708

737

(1)

Foreign currency translation adjustment

(160)

(154)

(6)

(160)

Comprehensive income - including noncontrolling interests

576

577

(1)

Dividends declared

(33)

Cash dividends declared

(161)

Acquisition of business

Stock repurchased

$ (312)

(312)

Stock repurchased (in shares)

(9.0)

Exercise and vesting of share-based awards (in shares)

3.0

Share-based compensation

Revaluation of redeemable

(3)

Balance at Dec. 31, 2018

$ 2,976

$ 4

$ 2,402

$ 944

$ (17)

$ 103

$ (460)

$ 2,976

$ 1

Balance (in shares) at Dec. 31, 2018

392.0

(13.0)

[1]

Pursuant to the investment agreement with the Investors, 19,145,169.42 shares issued on November 1, 2016 were subject to Post-Closing Adjustment on December 30, 2016, and 784,686.42 shares were subsequently repurchased on January 9, 2017. The repurchased shares were treated as treasury stock as of December 31, 2016. See Note 11.

Consolidated and Combined Statements of Equity (Parenthetical) - $ / shares			1 Months Ended	12 Months Ended
	Jan. 09, 2017	Nov. 01, 2016	Dec. 30, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash Dividends Declared Per Common Share				$ 0.42	$ 0.10
Shares repurchased from strategic investors				9,000,000	3,400,000
Treasury Stock [Member]
Shares repurchased from strategic investors	784,686.42			9,000,000	3,000,000
Common Stock [Member]
Shares repurchased from strategic investors			784,686.42
Shares issued subject to post-closing adjustment		19,145,169.42				19,000,000

Description of Business

12 Months Ended

Dec. 31, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Business

Note 1 – Description of Business

Yum China Holdings, Inc. (“Yum China” and, together with its subsidiaries, the “Company,” “we,” “us,” and “our”) was incorporated in Delaware on April 1, 2016. The Company separated from Yum! Brands, Inc. (“YUM” or the “Parent”) on October 31, 2016 (the “separation”), becoming an independent publicly traded company as a result of a pro rata distribution (the “distribution”) of all outstanding shares of Yum China common stock to shareholders of YUM. On October 31, 2016, YUM’s shareholders of record as of 5:00 p.m. Eastern Time on October 19, 2016 received one share of Yum China common stock for every one share of YUM common stock held as of the record date. Yum China’s common stock began trading “regular way” under the ticker symbol “YUMC” on the New York Stock Exchange on November 1, 2016.

The Company owns, franchises or has ownership in entities that own and operate restaurants (also referred to as “stores”) under the KFC, Pizza Hut, Taco Bell, East Dawning, Little Sheep and COFFii & JOY concepts (collectively, the “concepts”). In connection with the separation of the Company from YUM, Yum! Restaurants Asia Pte. Ltd., a wholly-owned indirect subsidiary of YUM, and Yum Restaurants Consulting (Shanghai) Company Limited (“YCCL”), a wholly-owned indirect subsidiary of the Company, entered into a 50-year master license agreement with automatic renewals for additional consecutive renewal terms of 50 years each, subject only to YCCL being in “good standing” and unless YCCL gives notice of its intent not to renew, for the exclusive right to use and sublicense the use of intellectual property owned by YUM and its subsidiaries for the development and operation of the KFC, Pizza Hut and, subject to achieving certain agreed upon milestones, Taco Bell brands and their related marks and other intellectual property rights for restaurant services in the People’s Republic of China (the “PRC” or “China”), excluding Hong Kong, Taiwan and Macau. In exchange, we pay a license fee to YUM equal to 3% of net system sales from both our Company and franchise restaurants. We own the intellectual property of East Dawning, Little Sheep and COFFii & JOY and pay no license fee related to these concepts.

In 1987, KFC was the first quick-service restaurant brand to enter China. As of December 31, 2018, there are over 5,900 KFCs in China. We maintain a 58% and 70% controlling interest in the entities that own and operate the KFCs in Shanghai and Beijing, respectively. During the first quarter of 2018, the Company completed the acquisition of an additional 36% equity interest in an unconsolidated affiliate that operates KFC stores in Wuxi, China (“Wuxi KFC”), for cash consideration of approximately $98 million, increasing the Company’s equity interest to 83%, allowing the Company to consolidate the entity. The acquisition was considered immaterial. We began consolidating Wuxi KFC upon the completion of acquisition. We have a 47% noncontrolling ownership in each of our unconsolidated affiliates that own and operate KFCs in Hangzhou and Suzhou.

The first Pizza Hut in China opened in 1990. As of December 31, 2018, there are over 2,200 Pizza Hut restaurants in China.

In 2017, the Company completed the acquisition of a controlling interest in the holding company of DAOJIA.com.cn (“Daojia”), an established online food delivery service provider. The Company agreed to pay cash consideration of $36.7 million to the sellers and made a concurrent capital contribution of $25.0 million to Daojia. As of the completion of the acquisition, the Company held 90% of Daojia’s outstanding shares of common stock, or 80% of its equity interests on a fully-diluted basis. Daojia became an operating segment of the Company. The acquisition was considered immaterial.

During the second quarter of 2017, Pizza Hut Casual Dining and Pizza Hut Home Service were combined and reported together as the Pizza Hut reportable segment. As a result, the Company has two reportable segments: KFC, which remains unchanged, and Pizza Hut. Our remaining operating segments, including the operations of East Dawning, Little Sheep, Taco Bell and Daojia, are combined and referred to as All Other Segments, as those operating segments are insignificant both individually and in the aggregate. As COFFii & JOY is a concept recently developed in 2018, the financial results of COFFii & JOY were not regularly reviewed by the Company’s chief operating decision maker, and COFFii & JOY did not represent an operating segment. Segment financial information for prior years has been recast to align with this change in segment reporting. There was no impact to the consolidated and combined financial statements of the Company as a result of this change. Additional details on our reportable operating segments are included in Note 18.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

In connection with our separation from YUM, the direct and indirect equity interests of all of our operating subsidiaries and intermediate holding companies were transferred from YUM to Yum China, when Yum China was still one of YUM’s subsidiaries, through a series of transactions, which were completed in August 2016. The Company separated from YUM on October 31, 2016, becoming an independent publicly traded company as a result of a pro rata distribution of all outstanding shares of Yum China common stock to shareholders of YUM.

The financial statements presented herein represent (i) prior to October 31, 2016, the Combined Financial Statements of YUM’s China businesses and operations when the Company was a wholly-owned subsidiary of YUM and (ii) subsequent to October 31, 2016, the Consolidated Financial Statements of the Company as a separate publicly traded company following its separation from YUM.

Our preparation of the accompanying Consolidated and Combined Financial Statements in conformity with Generally Accepted Accounting Principles in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Basis of Preparation and Principles of Consolidation. The accompanying Combined Financial Statements have been prepared on a standalone basis and are derived from YUM’s consolidated financial statements and underlying accounting records. Transactions between the Company and YUM that were not cash settled were considered to be effectively settled at the time the transactions are recorded. The Combined Financial Statements include all revenues, costs, assets and liabilities directly attributable to the Company either through specific identification or allocation. The Consolidated and Combined Statements of Income include allocations for certain of YUM’s Corporate functions which provided a direct benefit to the Company. These costs have been allocated based on Company system sales relative to YUM’s global system sales. System sales include the sales results of all restaurants regardless of ownership. All allocated costs have been deemed to have been paid to YUM in the period in which the costs were recorded. The Company considers the cost allocation methodology and results to be reasonable for the periods prior to October 31, 2016. However, the allocations may not be indicative of the actual expense that would have been incurred had the Company operated as an independent, publicly traded company for the periods prior to October 31, 2016. Upon the separation from YUM, Parent Company Investment was adjusted as a result of settlement of certain assets and liabilities with YUM and formed Yum China’s common stock and additional paid-in capital. See Note 4 for further discussion.

Intercompany accounts and transactions have been eliminated in consolidation. We consolidate entities in which we have a controlling financial interest, the usual condition of which is ownership of a majority voting interest. We also consider for consolidation an entity, in which we have certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it.

Our most significant variable interests are in entities that operate restaurants under franchise arrangements. We do not generally have an equity interest in our franchisee businesses with the exception of certain entities discussed below. Additionally, we do not typically provide significant financial support such as loans or guarantees to our franchisees. We have variable interests in certain entities that operate restaurants under franchise agreements through real estate lease arrangements with them to which we are a party. At December 31, 2018, the Company had future lease payments due from franchisees, on a nominal basis, of approximately $59 million. As our franchise arrangements provide our franchisee entities the power to direct the activities that most significantly impact their economic performance, we do not consider ourselves the primary beneficiary of any such entity that might otherwise be considered a VIE.

Through the acquisition of Daojia, the Company also acquired a VIE and subsidiaries of the VIE effectively controlled by Daojia. There exists a parent-subsidiary relationship between Daojia and its VIE as a result of certain exclusive agreements that require Daojia to consolidate its VIE and subsidiaries of the VIE because Daojia is the primary beneficiary that possesses the power to direct the activities of the VIE that most significantly impact its economic performance, and is entitled to substantially all of the profits and has the obligation to absorb all of the expected losses of the VIE. The acquired VIE and its subsidiaries were considered immaterial, both individually and in the aggregate. The results of Daojia’s operations have been included in the Company’s Consolidated and Combined Financial Statements since the acquisition date.

We consolidate the entities that operate KFCs in Shanghai, Beijing and Wuxi where we have controlling interests of 58%, 70% and 83%, respectively. We report Net income attributable to noncontrolling interests, which includes the minority shareholders of the entities, separately on the face of our Consolidated and Combined Statements of Income. The portion of equity not attributable to the Company for these entities is reported within equity, separately

from the Company’s equity on the Consolidated Balance Sheets.

We have a noncontrolling 47% interest in each of the entities that operate the KFCs in Hangzhou and Suzhou. These entities are not VIEs and our lack of majority voting rights precludes us from controlling these affiliates. Thus, we do not consolidate these affiliates. Instead, we account for them under the equity method. Our share of the net income or loss of these unconsolidated affiliates is included in Other income, net.

Comparative Information. Certain comparative items in the Consolidated and Combined Financial Statements have been reclassified to conform to the current year’s presentation to facilitate comparison.

Fiscal Calendar. Our fiscal year ends on December 31. Effective at the beginning of fiscal 2018, the Company changed its fiscal calendar from two months in the first quarter, three months in the second and third quarters and four months in the fourth quarter, to four three-month quarters ending on March 31, June 30, September 30 and December 31 of each year. The change was made to align with how management now measures performance internally and to facilitate the comparability of our results with peers using calendar quarters. Unaudited quarterly results of all prior financial periods presented have been recast as if they had been reported under our new fiscal calendar (See Note 20).

Foreign Currency. Our functional currency for the operating entities in China is the Chinese Renminbi (“RMB”), the currency of the primary economic environment in which they operate. Income and expense accounts for our operations are then translated into U.S. dollars at the average exchange rates prevailing during the period. Assets and liabilities are then translated into U.S. dollars at exchange rates in effect at the balance sheet date. As of December 31, 2018, net cumulative translation adjustment loss of $17 million was recorded in Accumulated other comprehensive (loss) income on the Consolidated Balance Sheets. Gains and losses arising from the impact of foreign currency exchange rate fluctuations on transactions in foreign currency, to the extent they arise, are included in Other income, net in our Consolidated and Combined Statements of Income.

Franchise Operations. We execute agreements which set out the terms of our arrangement with franchisees. Our franchise agreements typically require the franchisee to pay an initial, non-refundable fee and continuing fees based upon a percentage of sales. Subject to our approval and their payment of a renewal fee, a franchisee may generally renew the franchise agreement upon its expiration.

The 3% license fees we pay to YUM for the right to sublicense the KFC, Pizza Hut and Taco Bell intellectual property to franchisees and unconsolidated affiliates are recorded in Franchise expenses.

License fees due to YUM for our Company-owned stores are included within restaurant margin in Occupancy and other operating expenses. Total license fees paid to YUM were $263 million, $245 million and $249 million during the years ended December 31, 2018, 2017 and 2016, respectively.

Certain direct costs of our franchise operations are charged to Franchise expenses. These costs include provisions for estimated uncollectible fees, rent or depreciation expense associated with restaurants we sublease to franchisees, and certain other direct incremental franchise support costs.

We also have certain transactions with franchisees and unconsolidated affiliates consist primarily of sales of food and paper products, advertising services and other services provided to franchisees and unconsolidated affiliates. Related expenses are included in Expenses for transactions with franchisees and unconsolidated affiliates.

Revenue Recognition.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”), to provide principles within a single framework for revenue recognition of transactions involving contracts with customers across all industries. The standard allows for either a full retrospective or modified retrospective transition method. In March, April and May 2016, the FASB issued the following amendments to clarify the implementation guidance: ASU No. 2016-04, Liabilities-Extinguishments of liabilities (Subtopic 450-20): Revenue of Breakage for Certain Prepaid Stored-Value Products (a consensus of the FASB Emerging Issues Task Force), ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing and ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The Company adopted these standards on January 1, 2018, and applied the full retrospective approach.

The Company’s revenues primarily include Company sales, Franchise fees and income and Revenues from transactions with franchisees and unconsolidated affiliates.

Company Sales

Revenues from Company-owned restaurants are recognized when a customer takes possession of the food and tenders payment, which is when our obligation to perform is satisfied. The Company presents sales net of sales-related taxes. We also offer our customers delivery through both our own mobile applications and third-party aggregators’ platforms. For delivery orders placed through our mobile applications, we use our dedicated riders, while for orders placed through third-party aggregators’ platforms, we use either our dedicated riders or aggregators’ delivery staff. With respect to delivery orders delivered by our dedicated riders, we control and determine the price for the delivery service and generally recognize revenue, including delivery fees, when a customer takes possession of the food. In other cases when orders are fulfilled by the delivery staff of aggregators, who control and determine the price for the delivery service, we recognize revenue, excluding delivery fees, when control of the food is transferred to aggregators’ delivery staff. The payment terms with respect to these sales are short-term in nature.

We recognize revenues from prepaid stored-value products, including gift cards and product vouchers, when they are redeemed by the customer. Prepaid gift cards sold at any given point generally expire over the next 36 months, and product vouchers generally expire over a period of up to 12 months. We recognize breakage revenue, which is the amount of prepaid stored-value products that is not expected to be redeemed, either (1) proportionally in earnings as redemptions occur, in situations where the Company expects to be entitled to a breakage amount, or (2) when the likelihood of redemption is remote, in situations where the Company does not expect to be entitled to breakage, provided that there is no requirement for remitting balances to government agencies under unclaimed property laws. The Company reviews its breakage estimates at least annually based upon the latest available information regarding redemption and expiration patterns. Our privilege membership program launched in July 2018 offers privilege members benefits, such as free delivery and discounts on coffee or breakfast items. The associated membership fee is recognized ratably over the membership period.

Franchise Fees and Income

Franchise fees and income primarily include upfront fees, such as initial fees and renewal fees, and continuing fees. We have determined that the services we provide in exchange for upfront fees and continuing fees are highly interrelated with the franchise right. We recognize upfront fees received from a franchisee as revenue over the term of the franchise agreement or the renewal agreement because the franchise rights are accounted for as rights to access our symbolic intellectual property in accordance with ASC 606. The franchise agreement term is generally 10 years for KFC and Pizza Hut, and 5 or 10 years for Little Sheep. We recognize continuing fees, which are based upon a percentage of franchisee sales, as those sales occur.

Revenues from Transactions with Franchisees and Unconsolidated Affiliates

Revenues from transactions with franchisees and unconsolidated affiliates consist primarily of sales of food and paper products, advertising services and other services provided to franchisees and unconsolidated affiliates.

The Company centrally purchases substantially all food and paper products from suppliers for substantially all of our restaurants, including franchisees and unconsolidated affiliates, and then sells and delivers them to the restaurants. The performance obligation arising from such transactions is considered distinct from the franchise agreement as it is not highly dependent on the franchise agreement and the customer can benefit from the procurement service on its own. We consider ourselves the principal in this arrangement as we have the ability to control a promised good or service before transferring that good or service to the franchisees and unconsolidated affiliates. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the franchisees and unconsolidated affiliates.

For advertising services, the Company often engages third parties to provide services and acts as a principal in the transaction based on our responsibilities of defining the nature of the services and administering and directing all marketing and advertising programs in accordance with the provisions of our franchise agreements. The Company collects advertising contributions, which are generally based on certain percentage of sales from substantially all of our restaurants, including franchisees and unconsolidated affiliates. Other services provided to franchisees and unconsolidated affiliates consist primarily of customer support and technology support services. Advertising services and other services provided are highly interrelated to franchise right, and are not considered individually distinct. We recognize revenue when the related sales occur.

Loyalty Programs.

Each of the Company’s reportable segments, KFC and Pizza Hut, operates a loyalty program that allows registered members to earn points for each qualifying purchase. Points, which generally expire 18 months after being earned, may be redeemed for future purchases of KFC or Pizza Hut branded products or other products for free or at a discounted price. Points cannot be redeemed or exchanged for cash. The estimated value of points earned by the loyalty program members is recorded as a reduction of revenue at the time the points are earned, based on the percentage of points that are projected to be redeemed, with a corresponding deferred revenue liability included in Accounts payable and other current liabilities on the Consolidated Balance Sheets and subsequently recognized into revenue when the points are redeemed or expired. The Company estimates the value of the future redemption obligations based on the estimated value of the product for which points are expected to be redeemed and historical redemption patterns, including an estimate of the breakage for points that members will never redeem. The Company reviews the estimated value of points at least annually based upon the latest available information regarding redemption and expiration patterns.

Direct Marketing Costs. We charge direct marketing costs to expense ratably in relation to revenues over the year in which incurred and, in the case of advertising production costs, in the year the advertisement is first shown. Deferred direct marketing costs, which are classified as prepaid expenses, consist of media and related advertising production costs which will generally be used for the first time in the next fiscal year and have historically not been significant. Our direct marketing expenses incurred for Company-owned restaurants were $341 million, $333 million and $332 million in 2018, 2017 and 2016, respectively, and were included in Occupancy and other operating expenses. In addition, the direct marketing costs incurred for franchisees and unconsolidated affiliates were $62 million, $69 million and $61 million in 2018, 2017 and 2016, respectively, and were recorded in Expenses for transactions with franchisees and unconsolidated affiliates.

Research and Development Expenses. Research and development expenses, which are expensed as incurred, are reported in G&A expenses. Research and development expenses were $4 million in 2018 and $5 million in each of 2017 and 2016.

Share-Based Compensation. Prior to the separation, all employee equity awards were granted by YUM. Upon the separation, holders of outstanding YUM equity awards generally received both adjusted YUM awards and Yum China awards, or adjusted awards of either YUM or Yum China in their entirety, to maintain the pre-separation intrinsic value of the awards. The modified equity awards have the same terms and conditions as the awards held immediately before the separation, except the number of shares and the price were adjusted. The incremental compensation cost, measured as the excess of the fair value of the award immediately after the modification over the fair value of the award immediately before the modification, based on Black-Scholes option-pricing model was immaterial, and YUM and the Company continue to recognize the unamortized fair value of the awards over the remaining requisite service period as their respective employees continue to provide services. All awards granted following the separation were granted under the Company’s Long Term Incentive Plan (the “2016 Plan”). We recognize all share-based payments to employees and directors, including grants of stock options, restricted stock units (“RSUs”), stock appreciation rights (“SARs”) and performance share units (“PSUs”), in the Consolidated and Combined Financial Statements as compensation cost over the service period based on their fair value on the date of grant. This compensation cost is recognized over the service period on a straight-line basis for awards that actually vest. We present this compensation cost consistent with the other compensation costs for the employee recipient in either payroll and employee benefits or G&A expenses. Share-based compensation expense includes an allocation of amounts incurred by YUM for services provided on our behalf prior to the separation. See Note 15 for further discussion of YUM’s share-based compensation plans.

Impairment or Disposal of Property, Plant and Equipment. Property, plant and equipment (“PP&E”) is tested for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The assets are not recoverable if their carrying value is less than the undiscounted cash flows we expect to generate from such assets. If the assets are not deemed to be recoverable, impairment is measured based on the excess of their carrying value over their fair value.

For purposes of impairment testing for our restaurants, we have concluded that an individual restaurant is the lowest level of independent cash flows unless our intent is to refranchise restaurants as a group. We review our long-lived assets of such individual restaurants (primarily PP&E and allocated intangible assets subject to amortization) semi-annually for impairment, or whenever events or changes in circumstances indicate that the carrying amount of a restaurant may not be recoverable. We use two consecutive years of operating losses after a restaurant has been open for three years as our primary indicator of potential impairment for our semi-annual impairment testing of these restaurant assets. We evaluate the recoverability of these restaurant assets by comparing the estimated undiscounted future cash flows, which are based on our entity-specific assumptions, to the carrying value of such assets. Our impairment indicator and recoverability tests did not include a deduction for license fees paid to YUM when we performed impairment test before the separation on October 31, 2016. However, such license fee paid to YUM is included in the impairment indicator and recoverability tests after the separation, as our relationship with YUM changed from the one between a subsidiary and its parent prior to the separation to the one between a licensee and a third-party licensor after the separation. As a result of including license fees paid to YUM, we performed an additional impairment assessment as of November 1, 2016 and recognized incremental restaurant-level impairment of $17 million in 2016. For restaurant assets that are not deemed to be recoverable, we write down an impaired restaurant to its estimated fair value, which becomes its new cost basis. Fair value is an estimate of the price a franchisee would pay for the restaurant and its related assets and is determined by discounting the estimated future after-tax cash flows of the restaurant, which include a deduction for royalties we would receive under a franchise agreement with terms substantially at market. The after-tax cash flows incorporate reasonable assumptions we believe a franchisee would make such as sales growth and margin improvement. The discount rate used in the fair value calculation is our estimate of the required rate-of-return that a franchisee would expect to receive when purchasing a similar restaurant and the related long-lived assets. The discount rate incorporates rates of returns for historical refranchising market transactions and is commensurate with the risks and uncertainty inherent in the forecasted cash flows.

When we believe it is more likely than not a restaurant or groups of restaurants will be refranchised for a price less than their carrying value, but do not believe the restaurant(s) have met the criteria to be classified as held for sale, we review the restaurants for impairment. We evaluate the recoverability of these restaurant assets by comparing estimated sales proceeds plus holding period cash flows, if any, to the carrying value of the restaurant or group of restaurants. For restaurant assets that are not deemed to be recoverable, we recognize impairment for any excess of carrying value over the fair value of the restaurants, which is based on the expected net sales proceeds. To the extent ongoing agreements to be entered into with the franchisee simultaneous with the refranchising are expected to contain terms, such as royalty rates, not at prevailing market rates, we consider the off-market terms in our impairment evaluation. We recognize any such impairment charges in Refranchising gain. Refranchising gain includes the gains or losses from the sales of our restaurants to new and existing franchisees, including any impairment charges discussed above. We recognize gains on restaurant refranchising when the sale transaction closes, the franchisee has a minimum amount of the purchase price in at-risk equity and we are satisfied that the franchisee can meet its financial obligations.

When we decide to close a restaurant, it is reviewed for impairment and depreciable lives are adjusted based on the expected disposal date. Other costs incurred when closing a restaurant such as costs of disposing of the assets as well as other facility-related expenses are generally expensed as incurred. Additionally, at the date we cease using a property under an operating lease, we record a liability for the net present value of any remaining lease obligations, net of estimated sublease income, if any. Any costs recorded upon store closure as well as any subsequent adjustments to liabilities for remaining lease obligations as a result of lease termination or changes in estimates of sublease income are recorded in Closures and impairment expenses. In the event we are forced to close a store and receive compensation for such closure, that compensation is recorded in Closures and impairment expenses. To the extent we sell assets associated with a closed store, any gain or loss upon that sale is also recorded in Closures and impairment expenses.

Considerable management judgment is necessary to estimate future cash flows, including cash flows from continuing use, terminal value, sublease income and refranchising proceeds. Accordingly, actual results could vary significantly from our estimates.

Government Subsidies. Government subsidies primarily consist of financial subsidies received from provincial and local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. There are no defined rules and regulations to govern the criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the relevant government authorities. Government subsidies are recognized when it is probable that the Company will comply with the conditions attached to them, and the subsidies are received. If the subsidy is related to an expense item, it is recognized as a reduction to the related expense to match the subsidy to the costs that it is intended to compensate. If the subsidy is related to an asset, it is deferred and recorded in other liabilities and then recognized ratably over the expected useful life of the related asset in the Consolidated and Combined Statements of Income.

Income Taxes. Prior to October 31, 2016, our operations have historically been included in the U.S. federal and U.S. state income tax returns filed by YUM. Our foreign income tax returns, primarily those filed by our China subsidiaries, are filed on an individual entity basis. Income tax expense and other income tax related information contained in our Consolidated and Combined Financial Statements are presented on a separate return basis as if we filed our own U.S. federal and U.S. state tax returns rather than having been included in these YUM tax returns. The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if we were a separate taxpayer and a standalone enterprise for the periods presented prior to October 31, 2016. The calculation of our income taxes on a separate return basis requires a considerable amount of judgment and the use of both estimates and allocations. Current income tax liabilities related to our operations under the separate return method as of October 31, 2016 are assumed to be immediately settled with YUM and are relieved through the Parent Company Investment account and the net transfers to parent in the Consolidated and Combined Statements of Cash Flows. Subsequent to October 31, 2016, the Company became a separate taxpayer and started preparing its own consolidated U.S. federal income tax return and U.S. state income tax filings.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law effective for tax years beginning after December 31, 2017. The Tax Act requires complex computations with significant estimates to be performed, significant judgments to be made in interpretation of the provisions, and the preparation and analysis of information not previously relevant or regularly produced. The U.S. Treasury Department, the IRS, the SEC and other standard-setting bodies could interpret or issue guidance on how provisions of the Tax Act will be applied or otherwise administered that is different from our current interpretation. We completed our analysis of the Tax Act in the fourth quarter of 2018 according to guidance released by the U.S. Treasury Department and the IRS as of December 2018 and made an adjustment of $36 million to reduce the provisional amount for transition tax recorded in 2017 accordingly. The U.S. Treasury Department and the IRS released the final transition tax regulations on January 15, 2019, which was published in the Federal Register on February 5, 2019. We are evaluating the impact on our transition tax computation. Any impact resulting from the final regulations would be accounted for in a subsequent period.

As a matter of course, we are regularly subject to tax audits and examination by federal, state and foreign tax authorities. We recognize the benefit of positions taken or expected to be taken in our tax returns when it is more likely than not that the position would be sustained upon examination by these tax authorities. A recognized tax position is then measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. We evaluate unrecognized tax benefits, including interest thereon, on a quarterly basis to ensure that they have been appropriately adjusted for events, including audit settlements, which may impact our ultimate payment for such exposures.

We record deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as operating loss, capital loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences or carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Additionally, in determining the need for recording a valuation allowance against the carrying amount of deferred tax assets, we consider the amount of taxable income and periods over which it must be earned, actual levels of past taxable income and known trends and events or transactions that are expected to affect future levels of taxable income. Where we determine that it is more likely than not that all or a portion of an asset will not be realized, we record a valuation allowance.

We have investments in our foreign subsidiaries where the carrying values for financial reporting exceed the tax basis. We have not provided deferred tax on the portion of the excess that we believe is indefinitely reinvested, as we have the ability and intent to indefinitely postpone the basis differences from reversing with a tax consequence. The Company’s separation from YUM was intended to qualify as a tax-free reorganization for U.S. income tax purposes resulting in the excess of financial reporting basis over tax basis in our investment in the China business continuing to be indefinitely reinvested. The excess of financial reporting basis over tax basis as of December 31 2017 was subject to the one-time transition tax under the Tax Act as a deemed repatriation of accumulated undistributed earnings from the foreign subsidiaries. However, we continue to believe that the portion of the excess of financial reporting basis over tax basis (including earnings and profits subject to the one-time transition tax) is indefinitely reinvested in our foreign subsidiaries for foreign withholding tax purposes.

Pursuant to the EIT Law, a 10% PRC withholding tax is generally levied on dividends declared by companies in China to their non-resident enterprise investors unless otherwise reduced according to treaties or arrangements between the Chinese central government and the governments of other countries or regions where the non-China resident enterprises are incorporated. Hong Kong has a tax arrangement with mainland China that provides for a 5% withholding tax on dividends distributed to a Hong Kong resident enterprise, upon meeting certain conditions and requirements, including, among others, that the Hong Kong resident enterprise own at least 25% equity interest of the Chinese enterprise and is a “beneficial owner” of the dividends, subject to certain post filing review by the Chinese local tax authority. We believe that our Hong Kong subsidiary, which is the equity holder of our Chinese subsidiaries, met the relevant requirements pursuant to the tax arrangement between mainland China and Hong Kong in 2018 and is expected to meet the requirements in the subsequent years; thus, it is more likely than not that our dividends declared or earnings expected to be repatriated since 2018 are subject to the reduced withholding tax of 5%.

See Note 17 for a further discussion of our income taxes.

Fair Value Measurements. Fair value is the price we would receive to sell an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants. For those assets and liabilities we record or disclose at fair value, we determine fair value based upon the quoted market price, if available. If a quoted market price is not available for identical assets, we determine fair value based upon the quoted market price of similar assets or the present value of expected future cash flows considering the risks involved, including counterparty performance risk if appropriate, and using discount rates appropriate for the duration. The fair values are assigned a level within the fair value hierarchy, depending on the source of the inputs into the calculation.


Level 1		Inputs based upon quoted prices in active markets for identical assets.

Level 2		Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly.

Level 3		Inputs that are unobservable for the asset.

Cash and Cash Equivalents. Cash equivalents represent highly liquid investments with original maturities not exceeding three months and are primarily comprised of time deposits and money market funds. Cash and overdraft balances that meet the criteria for right to offset are presented net on our Consolidated Balance Sheets.

Short-term Investments. Short-term investments primarily represent time deposits with original maturities of over three months but less than one year when purchased.

Receivables. Receivables consist of trade receivables and royalties from franchisees and unconsolidated affiliates, and are generally due within 30 days of the period in which the corresponding sales occur and are classified as Accounts receivable on the Consolidated Balance Sheets. Our provision for uncollectible receivable balances is based upon pre-defined aging criteria or upon the occurrence of other events that indicate that we may not collect the balance due. Additionally, we monitor the financial condition of our franchisees and record provisions for estimated losses on receivables when we believe it probable that our franchisees will be unable to make their required payments. While we use the best information available in making our determination, the ultimate recovery of recorded receivables is also dependent upon future economic events and other conditions that may be beyond our control. Trade receivables that are ultimately deemed to be uncollectible, and for which collection efforts have been exhausted, are written off against the allowance for doubtful accounts. Receivables due from unconsolidated affiliates including trade receivables and dividend receivables were $65 million and $69 million as of December 31, 2018 and 2017, respectively.

Receivables from Payment Processors or Aggregators. Receivables from payment processors such as WeChat and Alipay or aggregators are cash due from them for clearing transactions and are included in Prepaid expenses and other current assets. The cash was paid by customers through these payment processors or aggregators for food provided by the Company. The Company considers and monitors the credit worthiness of the third-party payment processors and aggregators used. An allowance for doubtful accounts is recorded in the period in which a loss is determined to be probable. Receivable balances are written off after all collection efforts have been exhausted. As of December 31, 2018, no allowance for doubtful accounts was provided for such receivables.

Inventories. We value our inventories at the lower of cost (computed on the first-in, first-out method) or market.

Property, Plant and Equipment. We state PP&E at cost less accumulated depreciation and amortization. We calculate depreciation and amortization on a straight-line basis over the estimated useful lives of the assets as follows: 20 to 50 years for buildings, the lesser of estimated useful lives (5 to 10 years) and remaining lease term for leasehold improvements, 3 to 10 years for restaurant machinery and equipment and 3 to 5 years for capitalized software costs. We suspend depreciation and amortization on assets related to restaurants that are held for sale.

Leases and Leasehold Improvements. The Company leases land, buildings or both for its restaurants. The length of our lease terms, which generally do not have renewal options, is an important factor in determining the appropriate accounting for leases including the initial classification of the lease as capital or operating and the timing of recognition of rent expense over the duration of the lease. We include renewal option periods in determining the term of our leases when failure to renew the lease would impose a penalty on the Company in such an amount that a renewal appears to be reasonably assured at the inception of the lease. The primary penalty to which we are subject is the economic detriment associated with the existence of leasehold improvements which might be impaired if we choose not to continue the use of the leased property. Leasehold improvements are amortized over the shorter of their estimated useful lives or the lease term. We generally do not receive leasehold improvement incentives upon opening a store that is subject to a lease.

We expense rent associated with leased land or buildings while a restaurant is being constructed whether rent is paid or we are subject to a rent holiday. Additionally, certain of the Company’s operating leases contain predetermined fixed escalations of the minimum rent during the lease term. For leases with fixed escalating payments and/or rent holidays, we record rent expense on a straight-line basis over the lease term, including any option periods considered in the determination of that lease term. Contingent rentals are generally based on sales levels in excess of stipulated amounts, and thus are not considered minimum lease payments and are included in rent expense when attainment of the contingency is considered probable (e.g., when Company sales occur).

From time to time, we purchase the rights to use government-owned land and the building occupying the land for a fixed period of time. These land use rights and related buildings are recorded in Other Assets and Property, Plant and Equipment in our Consolidated Balance Sheets, and are amortized on a straight-line basis over the term of the land use right.

Internal Development Costs and Abandoned Site Costs. We capitalize direct costs associated with the site acquisition and construction of a Company unit on that site, including direct internal payroll and payroll-related costs. Only those site-specific costs incurred subsequent to the time that the site acquisition is considered probable are capitalized. If we subsequently make a determination that it is probable a site for which internal development costs have been capitalized will not be acquired or developed, any previously capitalized internal development costs are expensed and included in G&A expenses.

Goodwill and Intangible Assets. From time to time, the Company acquires restaurants from our existing franchisees or acquires another business. Goodwill from these acquisitions represents the excess of the cost of a business acquired over the net of the amounts assigned to assets acquired, including identifiable intangible assets and liabilities assumed. Goodwill is not amortized and has been assigned to reporting units for purposes of impairment testing. Our reporting units are our individual operating segments.

We evaluate goodwill for impairment on an annual basis or more often if an event occurs or circumstances change that indicate impairment might exist. We have selected the beginning of our fourth quarter as the date on which to perform our ongoing annual impairment test for goodwill. We may elect to perform a qualitative assessment for our reporting units to determine whether it is more likely than not that the fair value of the reporting unit is greater than its carrying value. If a qualitative assessment is not performed, or if as a result of a qualitative assessment it is not more likely than not that the fair value of a reporting unit exceeds its carrying value, then the reporting unit’s fair value is compared to its carrying value. Fair value is the price a willing buyer would pay for a reporting unit, and is generally estimated using discounted expected future after-tax cash flows from Company-owned restaurant operations and franchise royalties. The discount rate is our estimate of the required rate-of-return that a third-party buyer would expect to receive when purchasing a business from us that constitutes a reporting unit. We believe the discount rate is commensurate with the risks and uncertainty inherent in the forecasted cash flows. If the carrying value of a reporting unit exceeds its fair value, we will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit.

If we record goodwill upon acquisition of a restaurant(s) from a franchisee and such restaurant(s) is then sold within two years of acquisition, the goodwill associated with the acquired restaurant(s) is written off in its entirety. If the restaurant is refranchised two years or more subsequent to its acquisition, we include goodwill in the carrying amount of the restaurants disposed of based on the relative fair values of the portion of the reporting unit disposed of in the refranchising and the portion of the reporting unit that will be retained. The fair value of the portion of the reporting unit disposed of in a refranchising is determined by reference to the discounted value of the future cash flows expected to be generated by the restaurant and retained by the franchisee, which includes a deduction for the anticipated, future royalties the franchisee will pay us associated with the franchise agreement entered into simultaneously with the refranchising transition. The fair value of the reporting unit retained is based on the price a willing buyer would pay for the reporting unit and includes the value of franchise agreements. Appropriate adjustments are made if a franchise agreement includes terms that are determined to not be at prevailing market rates. As such, the fair value of the reporting unit retained can include expected cash flows from future royalties from those restaurants currently being refranchised, future royalties from existing franchise businesses and company restaurant operations. As a result, the percentage of a reporting unit’s goodwill that will be written off in a refranchising transaction will be less than the percentage of the reporting unit’s Company-owned restaurants that are refranchised in that transaction.

We evaluate the remaining useful life of an intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful life. If an intangible asset that is not being amortized is subsequently determined to have a finite useful life, we amortize the intangible asset prospectively over its estimated remaining useful life. Intangible assets that are deemed to have a definite life are generally amortized on a straight-line basis to their residual value.

We evaluate our indefinite-lived intangible assets for impairment on an annual basis or more often if an event occurs or circumstances change that indicate impairments might exist. We perform our annual test for impairment of our indefinite-lived intangible assets at the beginning of our fourth quarter. We may elect to perform a qualitative assessment to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is greater than its carrying value. If a qualitative assessment is not performed, or if as a result of a qualitative assessment it is not more likely than not that the fair value of an indefinite-lived intangible asset exceeds its carrying value, then the asset’s fair value is compared to its carrying value. Fair value is an estimate of the price a willing buyer would pay for the intangible asset and is generally estimated by discounting the expected future after-tax cash flows associated with the intangible asset.

Our definite-lived intangible assets that are not allocated to an individual restaurant are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the intangible asset may not be recoverable. An intangible asset that is deemed not recoverable on an undiscounted basis is written down to its estimated fair value, which is our estimate of the price a willing buyer would pay for the intangible asset based on discounted expected future after-tax cash flows. For purposes of our impairment analysis, we update the cash flows that were initially used to value the definite-lived intangible asset to reflect our current estimates and assumptions over the asset’s future remaining life. During the year ended December 31, 2018, we recorded an impairment charge of $12 million on intangible assets associated with the acquisition of the Daojia business.

Equity Investments. The Company’s equity investments include investments in unconsolidated affiliates and investments in equity securities with readily determinable fair value.

The Company applies the equity method to account for the investments in unconsolidated affiliates over which it has significant influence but does not control. Equity method investments are included as Investments in unconsolidated affiliates on our Consolidated Balance Sheets. Our share of the earnings or losses of equity method investees are included within Other income, net on our Consolidated and Combined Statements of Income. We record impairment charges related to an investment in an unconsolidated affiliate whenever events or circumstances indicate that a decrease in the fair value of an investment has occurred which is other than temporary. In addition, we evaluate our investments in unconsolidated affiliates for impairment when they have experienced two consecutive years of operating losses.

For our investments in equity securities with readily determinable fair value, over which the Company has neither significant influence nor control, they are measured at fair value with subsequent changes recognized in net income.

Financial Instruments. We account for derivative instruments and liability-classified equity contracts (e.g., warrants) as either assets or liabilities in the Consolidated Balance Sheets. The financial instruments are recorded at their respective fair value as determined on the day of issuance and subsequently adjusted to the fair value at each reporting date. Changes in the fair value of financial instruments are recognized periodically in the Consolidated and Combined Statements of Income. The estimated fair values of derivative instruments and liability-classified equity contracts are determined at discrete points in time using standard valuation techniques. See Note 13 for further discussion.

Guarantees. We account for guarantees in accordance with ASC Topic 460 (“ASC 460”), Guarantees. Accordingly, the Company evaluates its guarantees to determine whether (a) the guarantee is specifically excluded from the scope of ASC 460, (b) the guarantee is subject to ASC 460 disclosure requirements only, but not subject to the initial recognition and measurement provisions, or (c) the guarantee is required to be recorded in the financial statements at fair value. The Company provides: (i) indemnifications to certain investors and other parties for certain losses suffered or incurred by the indemnified party in connection with third-party claims; and (ii) indemnifications of officers and directors against third-party claims arising from the services they provide to the Company. To date, the Company has not incurred costs as a result of these obligations and does not expect to incur material costs in the future. Accordingly, the Company has not accrued any liabilities on the Consolidated Balance Sheets related to these indemnifications.

Asset Retirement Obligations. We recognize an asset and a liability for the fair value of a required asset retirement obligation (“ARO”) when such an obligation is incurred. The Company’s AROs are primarily associated with leasehold improvements which, at the end of the lease, the Company is contractually obligated to remove in order to comply with the lease agreement. As such, we amortize the asset on a straight-line basis over the lease term and accrete the liability to its nominal value using the effective interest method over the lease term.

Contingencies. The Company records accruals for certain of its outstanding legal proceedings or claims when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings or claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable. The Company discloses the amount of the accrual if it is material.

Retirement Plans. Certain of the Company’s employees participate in noncontributory defined benefit plans and post-retirement medical plans sponsored by YUM prior to October 31, 2016. For these plans, the Company considers them to be part of multi-employer plans. YUM has allocated expenses related to our employees’ participation in these plans in our Consolidated and Combined Statements of Income. However, our Combined Balance Sheets do not reflect any assets or liabilities related to these plans. We consider the expense allocation methodology and results to be reasonable for the periods prior to October 31, 2016. See Note 4 for additional information. Subsequent to the separation, employees participating in YUM’s plans were enrolled in the Yum China Holdings, Inc. Leadership Retirement Plan (“YCHLRP”), as discussed below.

For executives who were hired or re-hired after September 30, 2001, YUM has implemented the Leadership Retirement Plan (“YUM LRP”). This is an unfunded, unsecured account-based retirement plan which allocates a percentage of pay to an account payable to the executive following the executive’s separation of employment from YUM or attainment of age 55. The Company adopted YCHLRP upon the separation, and the terms of the YCHLRP are substantially similar to the terms of the YUM LRP. The Company also offers other defined contribution plans to employees. The total contribution for such employee benefits was expensed as incurred. The Company has no additional legal obligation or liabilities for the benefits beyond the paid and accrued amounts. See Note 14 for additional information.

PRC Value-Added Tax. On January 1, 2012, the Chinese State Council officially launched a retail tax structure reform program (“VAT pilot program” or “VAT reform”), applicable to businesses in selected industries, whereby entities in these industries would pay VAT instead of business tax (“BT”). Since January 1, 2012, the Chinese government has gradually expanded the scope of the VAT reform to cover most service sectors. Effective as of May 1, 2016, the Chinese government extended the VAT reform to all remaining sectors still subject to BT, including the catering sector. Thus, the Company has been subject to VAT within the normal course of its restaurant business nationwide since May 1, 2016.

Entities that are VAT general taxpayers are permitted to offset qualified input VAT paid to suppliers against their output VAT upon receipt of appropriate supplier VAT invoices on an entity by entity basis. When the output VAT exceeds the input VAT, the difference is remitted to tax authorities, usually on a monthly basis; whereas when the input VAT exceeds the output VAT, the difference is treated as an input VAT credit asset which can be carried forward indefinitely to offset future net VAT payables. VAT related to purchases and sales which have not been settled at the balance sheet date is disclosed separately as an asset and liability, respectively, on the Consolidated Balance Sheets. At each balance sheet date, the Company reviews the outstanding balance of any VAT credit asset for recoverability assessment. We evaluate the recoverability of the VAT credit asset based on our estimated operating results and capital spending, which inherently includes significant assumptions that are subject to change.

As of December 31, 2018, an input VAT credit asset of $226 million and payable of $5 million were recorded in Other assets and Accounts payable and other current liabilities, respectively, on the Consolidated Balance Sheets. The Company has not made an allowance for the recoverability of the input VAT credit asset, as the balance is expected to be utilized to offset against VAT payables more than one year from December 31, 2018. Any input VAT credit asset would be classified as Prepaid expenses and other current assets if the Company expected to use the credit within one year.

Earnings Per Share. Basic earnings per share represent net earnings to common stockholders divided by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares. See Note 5 for further information.

Common Stock Repurchases. We may repurchase shares of Yum China common stock under a program authorized by our board of directors from time to time in open market or privately negotiated transactions, including block trades, accelerated share repurchase transactions and the use of Rule 10b5-1 trading plans. Shares repurchased are included in treasury stock in the financial statements.

Parent Company Investment. Parent Company Investment represents YUM’s historical investment in the Company, the Company’s accumulated net earnings after taxes, and the net effect of transactions with and allocations from YUM prior to the separation from YUM on October 31, 2016. The Consolidated and Combined Statements of Equity include net cash transfers to and from YUM and the Company. All intercompany transactions that are not cash settled through Parent Company Investment in the accompanying Consolidated Balance Sheets are considered to be settled at the time the transaction is recorded. The total net effect of the settlement of these transactions is reflected in financing activities in the accompanying Consolidated and Combined Statements of Cash Flows. Upon the separation, Parent Company Investment was adjusted as a result of settlement of certain assets and liabilities with YUM and formed the Company’s common stock and additional paid-in capital.

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), to provide principles within a single framework for revenue recognition of transactions involving contracts with customers across all industries. The standard allows for either a full retrospective or modified retrospective transition method. In March, April and May 2016, the FASB issued the following amendments to clarify the implementation guidance: ASU No. 2016-04, Liabilities – Extinguishments of liabilities (Subtopic 450-20): Revenue of Breakage for Certain Prepaid Stored-Value Products (a consensus of the FASB Emerging Issues Task Force), ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU No. 2016-10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing and ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The Company adopted these standards on January 1, 2018 and applied the full retrospective approach and recast financial statements for 2017 and 2016. The cumulative adjustment to opening equity as of January 1, 2016 was immaterial.

The new standard did not have an impact on our recognition of revenue from Company-owned restaurants or our recognition of continuing fees from franchisees and unconsolidated affiliates; however, it changed the way we account for upfront fees. Upfront fees, such as initial and renewal fees from franchisees and unconsolidated affiliates were previously recognized as revenue when we performed substantially all initial services required by the franchise agreement, generally upon the opening of a store or when a renewal agreement with a franchisee became effective. We now recognize the upfront fees from franchisees and unconsolidated affiliates as revenue over the term of each franchise agreement as the franchise rights are accounted for as rights to access our symbolic intellectual property in accordance with the new standard. Any unamortized portion of fees received is accounted for as a contract liability.

The new standard also had an impact on certain transactions we entered into with franchisees and unconsolidated affiliates, such as sales of food and paper products and advertising services. These transactions were previously either not included or presented on a net basis in our statements of income or cash flows based on industry-specific guidance included in previous accounting guidance, which was superseded by the new standard. Under the new standard, we consider ourselves the principal in these arrangements as we have the ability to control a promised good or service before transferring that good or service to the customer. Therefore, we include such transactions in revenues and expenses in the Consolidated and Combined Statements of Income with no significant impact to Net income.

Adoption of this guidance impacted our previously reported results as follows (in millions, except per share data):

	2017				2016
	As Previously Reported		As Adjusted		As Previously Reported		As Adjusted
Total revenues	$	7,144	$	7,769	$	6,752	$	7,075
Total costs and expenses, net		6,359		6,991		6,112		6,441
Operating Profit		785		778		640		634
Net Income – Yum China Holdings, Inc.		403		398		502		498
Basic Earnings Per Common Share	$	1.04	$	1.03	$	1.36	$	1.35
Diluted Earnings Per Common Share	$	1.01	$	1.00	$	1.36	$	1.35

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 amends various aspects of the recognition, measurement, presentation and disclosure of financial instruments. Certain equity investments will be measured at fair value with changes recognized in net income. We adopted ASU 2016-01 on January 1, 2018. While the adoption did not have a material impact on our financial statements, the standard requires our equity investment in Meituan (see Note 6), which was consummated in September 2018, to be re-measured to fair value in each future reporting period with corresponding changes recorded in our Consolidated Statements of Income.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) (“ASU 2016-15”), which provides clarification regarding how certain cash receipts and cash payment are presented and classified in the statement of cash flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 is effective for annual and interim periods beginning after December 15, 2017, with early adoption permitted. We adopted ASU 2016-15 on January 1, 2018, and such adoption did not have a material impact on our financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (“ASU 2016-16”), which requires the recognition of the income tax consequences of an intra-entity transfer of an asset, other than inventory, when the transfer occurs. We adopted ASU 2016-16 on January 1, 2018, and such adoption did not have a material impact on our financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which requires that entities show the changes in total cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. We adopted ASU 2016-18 on January 1, 2018, and such adoption did not have a material impact on our financial statements.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which revises the definition of a business and provides new guidance in evaluating when a set of transferred assets and activities is a business. We adopted ASU 2017-01 on January 1, 2018, and such adoption did not have a material impact on our financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (“Topic 718”): Scope of Modification Accounting (“ASU 2017-09”), which clarifies that modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the changes in terms or conditions. We adopted ASU 2017-09 on January 1, 2018, and such adoption did not have a material impact on our financial statements.

Revenue

12 Months Ended

Dec. 31, 2018

Revenue From Contract With Customer [Abstract]

Revenue

Note 3 – Revenue

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

	2018
Revenues	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated^(a)		Combined		Elimination			Consolidated
Company sales	$	5,495	$	2,106	$	31	$	1	$	7,633	$	—		$	7,633
Franchise fees and income		132		3		6		—		141		—			141
Revenues from transactions with franchisees and unconsolidated affiliates		63		2		24		514		603		—			603
Other revenues		—		—		39		7		46		(8	)		38
Total revenues	$	5,690	$	2,111	$	100	$	522	$	8,423	$	(8	)	$	8,415

(a)	Company sales from Corporate and Unallocated represent sales from COFFii & JOY, a coffee concept recently developed by the Company in 2018.

	2017
Revenues	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated		Combined		Elimination		Consolidated
Company sales	$	4,863	$	2,090	$	40	$	—	$	6,993	$	—	$	6,993
Franchise fees and income		134		2		5		—		141		—		141
Revenues from transactions with franchisees and unconsolidated affiliates		69		1		25		504		599		—		599
Other revenues		—		—		36		—		36		—		36
Total revenues	$	5,066	$	2,093	$	106	$	504	$	7,769	$	—	$	7,769

	2016
Revenues	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated		Combined		Elimination		Consolidated
Company sales	$	4,572	$	1,993	$	57	$	—	$	6,622	$	—	$	6,622
Franchise fees and income		124		2		3		—		129		—		129
Revenues from transactions with franchisees and unconsolidated affiliates		61		1		15		222		299		—		299
Other revenues		—		—		25		—		25		—		25
Total revenues	$	4,757	$	1,996	$	100	$	222	$	7,075	$	—	$	7,075

Franchise Fees and Income

	2018		2017		2016
Initial fees, including renewal fees	$	7	$	6	$	5
Continuing fees and rental income		134		135		124
Franchise fees and income	$	141	$	141	$	129

Costs to Obtain Contracts

Costs to obtain contracts represent the portion of upfront license 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. They meet the requirements to be capitalized as the Company expects to generate future economic benefits from such costs incurred, which allow us to enter into franchise agreements and collect fees. Such costs to obtain contracts are included in Other assets in the Consolidated Balance Sheets and are amortized over the term of the franchise agreement. Subsequent to the separation, we are no longer required to pay YUM any upfront 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 $8 million and $12 million at December 31, 2018 and 2017, respectively.

Contract Liabilities

Contract liabilities at December 31, 2018 and 2017 were as follows:

	2018		2017

Contract liabilities
- Deferred revenue related to prepaid stored-value products	$	73	$	50
- Deferred revenue related to customer loyalty programs		17		16
- Deferred revenue related to upfront fees		37		39
Total	$	127	$	105

Contract liabilities consist of deferred revenue related to prepaid stored-value products, customer loyalty programs and upfront fees. Deferred revenue related to prepaid stored-value products and customer loyalty programs is included in Accounts payable and other current liabilities in the Consolidated Balance Sheets. Deferred revenue related to upfront 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 $46 million and $30 million in 2018 and 2017, 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 periods 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.

Transactions with Parent

12 Months Ended

Dec. 31, 2018

Transactions With Parent [Abstract]

Transactions with Parent

Note 4 – Transactions with Parent

Prior to the separation, there existed a parent-subsidiary relationship between YUM and the Company. We had the following transactions with YUM for the ten months ended October 31, 2016:

Allocation of Corporate Expenses

YUM historically performed centralized corporate functions on our behalf prior to October 31, 2016. Accordingly, certain YUM costs have been allocated to the Company and reflected as expenses in the Combined Financial Statements. Management considers the allocation methodologies used to be reasonable and appropriate reflections of the historical expenses attributable to the Company. The expenses reflected in the Combined Financial Statements may not be indicative of the actual expenses that would have been incurred during the periods presented if we had operated as a separate, standalone entity.

Corporate expense allocations primarily relate to centralized corporate functions, including finance, accounting, treasury, tax, legal, internal audit and risk management functions. In addition, corporate expense allocations include, among other costs, IT maintenance, professional fees for legal services and expenses related to litigation, investigations, or similar matters. Corporate allocations of $11 million were allocated to the Company during the ten months ended October 31, 2016, and have been included in G&A expenses in the Consolidated and Combined Statements of Income. All of the corporate allocations of costs are deemed to have been incurred and settled through Parent Company Investment in the Consolidated Balance Sheets in the period where the costs were recorded. Following the separation from YUM, we perform these functions using our own resources or purchased services.

License Fee

The Consolidated and Combined Statements of Income include a fee that was historically paid to YUM comprised of initial fees and continuing fees equal to 3% of our Company and franchise sales prior to October 31, 2016. Total license fees paid to YUM during the ten months ended October 31, 2016 are reflected in the table below:

	10 months ended
	October 31,
	2016
Initial fees – Company	$	9
Initial fees – Franchisees		2
Continuing fees – Company		163
Continuing fees – Franchisees		42
Total	$	216

Upon adoption of ASC 606, the upfront license 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 were recast and capitalized as Cost to obtain contracts and amortized over the term of the franchise agreement. The recast amount for the ten months ended October 31, 2016 was not material to the total license fee paid.

Cash Management and Treasury

The Company funds its operations through cash generated from the operation of its Company-owned stores, franchise operations and dividend payments from unconsolidated affiliates. Prior to October 31, 2016, excess cash has historically been repatriated to YUM through intercompany loans or dividends. YUM has issued debt for general corporate purposes but in no case has any such debt been guaranteed or assumed by the Company or otherwise secured by the assets of the Company. As YUM’s debt and related interest is not directly attributable to the Company, no such amounts have been allocated to the Consolidated and Combined Financial Statements.

Earnings Per Common Share ("EPS")

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Earning Per Common Share (EPS)

Note 5 – Earnings Per Common Share (“EPS”)

On October 31, 2016, YUM’s shareholders of record as of October 19, 2016 received one share of Yum China common stock for every one share of YUM’s common stock held as of the record date. For periods ended October 31, 2016 and prior, basic and diluted earnings per share were computed using the number of shares of Yum China common stock outstanding as of October 31, 2016, the date on which the Yum China common stock was distributed to YUM’s shareholders.

The following table summarizes the components of basic and diluted earnings per share (in millions, except for per share data):

	2018		2017		2016
Net Income – Yum China Holdings, Inc.	$	708	$	398	$	498
Weighted-average common shares outstanding (for basic calculation)^(a)		384		387		368
Effect of dilutive share-based awards^(a)		9		10		1
Effect of dilutive warrants^(b)		2		1		—
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation)		395		398		369
Basic Earnings Per Share	$	1.84	$	1.03	$	1.35
Diluted Earnings Per Share	$	1.79	$	1.00	$	1.35
Share-based awards and warrants excluded from the diluted EPS computation^(c)		6		10		17

(a)

(b)

Pursuant to the investment agreements dated September 1, 2016, Yum China issued to strategic investors two tranches of warrants on January 9, 2017, with each tranche providing the right to purchase 8,200,405 shares of Yum China common stock, at an exercise price of $31.40 and $39.25 per share, respectively, subject to customary anti-dilution adjustments. The warrants may be exercised at any time through October 31, 2021. The outstanding warrants are included in the computation of diluted EPS, if there is dilutive effect when the average market price of Yum China common stock for the year exceeds the applicable exercise price of the warrants.

(c)	These outstanding employee stock options, stock appreciation rights, RSUs, PSUs and warrants were not included in the computation of diluted EPS because to do so would have been antidilutive for the years presented.

Items Affecting Comparability of Net Income and Cash Flows

12 Months Ended

Dec. 31, 2018

Items Affecting Comparability Of Net Income And Cash Flows [Abstract]

Comparability of Prior Year Financial Data

Note 6 – Items Affecting Comparability of Net Income and Cash Flows

Gain from re-measurement of equity interest upon acquisition

In the first quarter of 2018, the Company completed the acquisition of Wuxi KFC. In connection with the acquisition, the Company also recognized a gain of $98 million from the re-measurement of our previously held 47% equity interest at fair value using discounted cash flow valuation approach and incorporating assumptions and estimates that are not observable in the market. Key assumptions used in estimating future cash flows included projected revenue growth and operating expenses, which were based on internal projections, historical performance of stores, and the business environment, as well as the selection of an appropriate discount rate based on weighted-average cost of capital and company-specific risk premium. The gain was not allocated to any segment for performance reporting purposes.

Meituan Dianping (“Meituan”) investment

The Company subscribed for 8.4 million, or less than 1%, of the ordinary shares of Meituan, an e-commerce platform for services in China, for a total consideration of approximately $74 million, when it launched its initial public offering on the Hong Kong Stock Exchange in September 2018. The Company accounted for the equity securities at fair value with subsequent fair value changes recorded in our Consolidated Statements of Income. The fair value of the investment in Meituan is determined based on the closing market price for the shares at the end of each reporting period. The related unrealized loss recognized in 2018 was $27 million, and was included in Investment loss in our Consolidated Statements of Income.

Daojia impairment

During the year ended December 31, 2018, we recorded an impairment charge of $12 million on the intangible assets acquired from the Daojia business primarily attributable to the Daojia platform. The fair value was determined using a relief-from-royalty valuation approach that was based on unobservable inputs, including estimated future sales, royalty rates as well as the selection of an appropriate discount rate based on weighted-average cost of capital and company-specific risk premium, which are considered Level 3 inputs.

The impairment charge was included in Closures and impairment expenses in our Consolidated Statements of Income, but was not allocated to any segment for performance reporting purposes. We recorded tax benefit of $3 million associated with the impairment and allocated $1 million of the after-tax impairment charge to Net Income - noncontrolling interests, which resulted in a net impairment charge of $8 million allocated to Net Income – YUM China Holdings, Inc.

Incremental Restaurant-Level Impairment upon Separation

Incremental restaurant-level impairment represents additional impairment as a result of including the impact from the license fee paid to YUM on the individual restaurants future cash flow, which is equal to 3% of net system sales. Such license fee did not impact the impairment assessment prior to the separation as it was considered an intercompany charge at the time, whereas it became a charge from a third party after the separation and has been considered in the impairment assessment. See Note 13 for additional information.

Redeemable Noncontrolling Interest

At December 31, 2015, the redeemable noncontrolling interest comprised the 7% ownership interest in Little Sheep held by the Little Sheep founding shareholders, and was classified outside of permanent equity on our Consolidated and Combined Balance Sheets due to redemption rights held by the founding Little Sheep shareholders. During the year ended December 31, 2016, the Little Sheep founding shareholders sold their remaining 7% Little Sheep ownership interest to the Company pursuant to their redemption rights. The difference between the purchase price of less than $1 million, which was determined using a non-fair value based formula pursuant to the agreement governing the redemption rights, and the carrying value of their redeemable noncontrolling interest was recorded as an $8 million loss attributable to noncontrolling interests during the year ended December 31, 2016.

During 2017, in connection with acquisition of Daojia, the redeemable noncontrolling interest was initially measured at fair value and classified outside of permanent equity on our Consolidated Balance Sheets due to redemption rights held by the minority shareholder. In 2018, we allocated $1 million of the after-tax impairment charge to Net Income - noncontrolling interests as a result of the Daojia impairment.

Losses Associated with Sale of Aircraft

During 2015, we made the decision to dispose of a corporate aircraft in China and recognized a loss of $15 million associated with the sale of the aircraft for the year ended December 31, 2015. We completed the sale during 2016. The sale proceeds of $19 million was greater than the net book value of $17 million of the aircraft at the time of disposal, which resulted in a reversal of $2 million of the previously recognized loss.

Investment Agreements with Strategic Investors

In connection with the investment agreement with strategic investors entered into on September 1, 2016, Yum China issued 19,145,169.42 shares of common stock on November 1, 2016, subject to Post-Closing Adjustments by December 30, 2016, and warrants to purchase additional shares of common stock. The Post-Closing Adjustment and the warrants were accounted for as derivative instruments and liability-classified equity contracts, respectively. These financial instruments were initially measured at fair value on the date of issuance, with subsequent changes in fair value of $21 million included in earnings during the year ended December 31, 2016. No subsequent fair value measurements were recognized after December 30, 2016. See Note 11 for additional information.

Income Taxes

During the year ended December 31, 2016, the Company recorded a tax benefit of $26 million as a result of Little Sheep legal entity restructuring completed prior to the separation.

The Company recorded $163.9 million as an additional income tax expense in the fourth quarter of 2017, the period in which the Tax Act was enacted. It includes an estimated one-time transition tax of $129.8 million on the deemed repatriation of accumulated undistributed foreign earnings, $4.5 million primarily related to the re-measurement of certain deferred tax assets based on the rates at which they are expected to reverse in the future, and the valuation allowance of $29.6 million for certain deferred tax assets. We completed our analysis of the Tax Act in the fourth quarter of 2018 according to guidance released by the U.S. Treasury Department and IRS as of December 2018 and made an adjustment of $36 million to reduce the provisional amount for transition tax recorded in 2017 accordingly.

Other Income, Net

12 Months Ended

Dec. 31, 2018

Other Income And Expenses [Abstract]

Other Income, Net

Note 7 – Other Income, net

	2018			2017			2016
Equity income from investments in unconsolidated affiliates	$	65		$	65		$	54
Gain from re-measurement of equity interest upon acquisition^(a)		98			—			—
Foreign exchanges and other		(11	)		(1	)		6
Other income, net	$	152		$	64		$	60

(a)	As a result of the acquisition of Wuxi KFC in the first quarter of 2018, as disclosed in Note 6, the Company recognized a gain of $98 million from the re-measurement of our previously held 47% equity interest at fair value, which was not allocated to any segment for performance reporting purposes.

Supplemental Balance Sheet Information

12 Months Ended

Dec. 31, 2018

Balance Sheet Related Disclosures [Abstract]

Supplemental Balance Sheet Information

Note 8 – Supplemental Balance Sheet Information

Accounts Receivables, net	2018			2017
Accounts receivables, gross	$	81		$	81
Allowance for doubtful accounts		(1	)		(2	)
Accounts receivables, net	$	80		$	79

Prepaid Expenses and Other Current Assets	2018		2017
Prepaid rent	$	42	$	41
Receivables from payment processors and aggregators		49		40
Dividends receivable from unconsolidated affiliates		20		21
Other prepaid expenses and current assets		66		60
Prepaid expenses and other current assets	$	177	$	162

Property, Plant and Equipment	2018			2017
Buildings and improvements	$	2,121		$	2,184
Capital leases, primarily buildings		26			28
Machinery and equipment and construction in progress		1,201			1,204
Property, plant and equipment, gross		3,348			3,416
Accumulated depreciation and amortization		(1,733	)		(1,725	)
Property, plant and equipment, net	$	1,615		$	1,691

Depreciation and amortization expense related to property, plant and equipment was $414 million, $391 million and $385 million in 2018, 2017 and 2016, respectively.

Other Assets	2018		2017
VAT assets	$	226	$	176
Land use right		138		131
Long-term deposits		64		56
Investment in equity securities		47		—
Costs to obtain contracts		8		12
Others		8		10
Other Assets	$	491	$	385

Amortization expense related to land use right was $5 million, $4 million and $5 million in 2018, 2017 and 2016, respectively.

Accounts Payable and Other Current Liabilities	2018		2017
Accounts payable	$	619	$	420
Accrued compensation and benefits		200		219
Accrued capital expenditures		137		142
Contract liabilities		96		72
Accrued marketing expenses		32		28
Other current liabilities		115		104
Accounts payable and other current liabilities	$	1,199	$	985

Other Liabilities	2018		2017
Deferred escalating minimum rent	$	144	$	162
Contract liabilities		31		33
Accrued income tax payable		71		112
Deferred income tax liabilities		65		32
Other noncurrent liabilities		44		49
Other liabilities	$	355	$	388

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 9 – Goodwill and Intangible Assets

The changes in the carrying amount of goodwill are as follows:

	Total Company			KFC			Pizza Hut		All Other Segments
Balance as of December 31, 2016
Goodwill, gross	$	461		$	70		$	9	$	382
Accumulated impairment losses^(a)		(382	)		—			—		(382	)
Goodwill, net		79			70			9		—
Goodwill acquired and allocated		23			5			9		9
Effect of currency translation adjustment and other		6			5			1		—
Balance as of December 31, 2017
Goodwill, gross		490			80			19		391
Accumulated impairment losses^(a)		(382	)		—			—		(382	)
Goodwill, net		108			80			19		9
Goodwill acquired^(b)		175			175			—		—
Effect of currency translation adjustment and other		(17	)		(17	)		—		—
Balance as of December 31, 2018
Goodwill, gross		648			238			19		391
Accumulated impairment losses^(a)		(382	)		—			—		(382	)
Goodwill, net	$	266		$	238		$	19	$	9

(a)	Accumulated impairment losses represent Little Sheep goodwill related impairment.

(b)	Goodwill acquired resulted from the acquisition of Wuxi KFC. (Note 1).

Intangible assets, net as of December 31, 2018 and 2017 are as follows:

	2018										2017
	Gross Carrying Amount^(b)		Accumulated Amortization			Accumulated Impairment Losses^(c)			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Definite-lived intangible assets
Reacquired franchise rights^(a)	$	150	$	(100	)	$	—		$	50	$	100	$	(87	)	$	13
Daojia platform		16		(3	)		(10	)		3		18		(1	)		17
Customer-related assets		12		(8	)		(2	)		2		12		(6	)		6
Other		17		(9	)		—			8		19		(10	)		9
	$	195	$	(120	)	$	(12	)	$	63	$	149	$	(104	)	$	45
Indefinite-lived intangible assets
Little Sheep trademark	$	53	$	—		$	—		$	53	$	56	$	—		$	56

Total intangible assets	$	248	$	(120	)	$	(12	)	$	116	$	205	$	(104	)	$	101

Amortization expense for definite-lived intangible assets was $26 million in 2018, $14 million in 2017 and $12 million in 2016. Amortization expense for definite-lived intangible assets is expected to approximate $17 million in 2019, $13 million in 2020, $13 million in 2021, $13 million in 2022 and $3 million in 2023.

(a)	Increase in gross carrying amount of reacquired franchise rights in 2018 primarily resulted from the acquisition of Wuxi KFC.

(b)	Changes in gross carrying amount include effect of currency translation adjustment.

(c)	In 2018, we recorded an impairment charge of $12 million on intangible assets acquired from Daojia primarily attributable to the Daojia platform. See Note 6 for details.

Credit Facilities

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Credit Facilities

Note 10 – Credit Facilities

As of December 31, 2018, the Company had credit facilities of RMB2,876 million (approximately $418 million), comprised of onshore credit facilities of RMB1,500 million (approximately $218 million) in the aggregate and offshore credit facilities of $200 million in the aggregate.

The credit facilities had remaining terms of one year or less as of December 31, 2018. Each credit facility bears interest based on the prevailing rate stipulated by the People’s Bank of China or London Interbank Offered Rate (LIBOR) administered by the ICE Benchmark Administration. Each credit facility contains a cross-default provision whereby our failure to make any payment on a principal amount from any credit facility will constitute a default on other credit facilities. Some of the credit facilities contain financial covenants including, among other things, limitations on certain additional indebtedness and liens, and certain other transactions specified in the respective agreement. Interest on any outstanding borrowings is due at least monthly. As of December 31, 2018, the full amount of borrowings was available to us under each credit facility.

Investment Agreements with Strategic Investors

12 Months Ended

Dec. 31, 2018

Stockholders Equity Note [Abstract]

Investment Agreements with Strategic Investors

Note 11 – Investment Agreements with Strategic Investors

On September 1, 2016, YUM and the Company entered into investment agreements (the “Investment Agreements”) with each of Pollos Investment L.P., an affiliate of Primavera Capital Group (“Primavera”), and API (Hong Kong) Investment Limited, an affiliate of Zhejiang Ant Small and Micro Financial Services Group Co., Ltd. (“Ant Financial” and, together with Primavera, the “Investors”). Pursuant to the Investment Agreements, on November 1, 2016 (“Closing Date”), Primavera and Ant Financial invested $410 million and $50 million, respectively, for a collective $460 million investment (the “Investment”) in the Company in exchange for: (i) shares of Yum China common stock representing in the aggregate 5% of Yum China common stock issued and outstanding immediately following the separation subject to Post-Closing Adjustment for a final aggregate ownership of between 4.3% and 5.9% in Yum China and (ii) two tranches of warrants (the “Warrants”), which will be issued to the Investors approximately 70 days after the separation, exercisable by the Investors for an approximate additional 4% ownership, in the aggregate, of Yum China common stock issued and outstanding after the separation, taking into account the shares previously issued to the Investors. Immediately before the closing of the Investment, Yum China had 363,758,219 shares of common stock issued and outstanding, with a par value US$0.01 per share. Pursuant to the Investment Agreements, on November 1, 2016, Yum China issued 17,064,172.74 and 2,080,996.68 shares of common stock (the “Closing Shares”) at US$24.03 per share (“Closing Price”) to Primavera and Ant Financial, respectively, subject to adjustment as described below.

Pursuant to the Investment Agreements, the Investors and the Company determined the volume weighted-average trading price (“VWAP”) per share of Company common stock over the trading days occurring over the period from December 1, 2016 to December 30, 2016 (the “Measurement Period”), and discounted such VWAP by 8% (the “Adjusted VWAP Price Per Share”).

Since the Adjusted VWAP Price Per Share of $25.05 exceeded the Closing Price of US$24.03 paid by the Investors at the Closing Date, on January 9, 2017, the Company repurchased from Primavera and Ant Financial 699,394.74 and 85,291.68 shares of common stock, respectively, at par value of $0.01 per share, based on the Adjusted VWAP Price Per Share as determined on December 30, 2016. The repurchased shares were included in Treasury Stock as of December 31, 2016 in the Consolidated and Combined Financial Statements.

In addition, pursuant to the terms of the Investment Agreements, on January 9, 2017, Yum China issued to each of the Investors two tranches of Warrants. Upon exercise, the first tranche of Warrants provide Primavera and Ant Financial with the right to purchase 7,309,057 and 891,348 shares of Yum China common stock, respectively, at an exercise price of $31.40 per share. The second tranche of Warrants provide Primavera and Ant Financial with the right to purchase the same number of shares of Yum China common stock purchasable by Primavera and Ant Financial under the first tranche of Warrants, at an exercise price of $39.25 per share. The exercise price for the Warrants was based on $12 billion and $15 billion for the first tranche and second tranche, respectively, divided by the number of shares of common stock, including the Closing Shares after the Post-Closing Adjustment, issued and outstanding as of the Closing Date. The Warrants may be exercised at any time through October 31, 2021 and contain customary anti-dilution protections.

As a result of the issuance of the Closing Shares and the Post-Closing Adjustment (excluding shares issuable upon exercise of the Warrants), Primavera and Ant Financial collectively beneficially owned approximately 4.8% of the outstanding shares of Yum China common stock as of January 9, 2017, or approximately 8.7% of the outstanding shares of Yum China common stock as of January 9, 2017 assuming the full exercise of both tranches of Warrants by each of the Investors.

The Post-Closing Adjustment was accounted for as a combination of a purchased call and a written put. In accordance with ASC Topic 480 (“ASC 480”), Distinguishing Liabilities from Equity, the feature should be accounted for as a liability or an asset, as the monetary value of the obligation varies inversely in relation to changes in the fair value of Yum China common stock and Yum China can net share settle the contract. Therefore, the Post-Closing Adjustment was measured as a derivate asset at a fair value of $1.3 million on November 1, 2016, with the subsequent increase in fair value of $19.2 million included in earnings until December 30, 2016. As the Post-Closing Adjustment was effectively settled and included in Treasury Stock on December 30, 2016, no subsequent fair value measurement was required.

The Warrants were recorded as liability-classified equity contracts in accordance with ASC Topic 815 (“ASC 815”), Derivatives and Hedging, as the number of Warrants cannot be determined until the Post-Closing Adjustment is made and, therefore, the settlement amount is not fixed. They were measured at fair value of $97.1 million as of November 1, 2016, with subsequent decrease in fair value of $2.1 million included in earnings until December 30, 2016, when the Warrants were reclassified to equity at the then fair value of $95 million. After the Post-Closing Adjustment was resolved, the number of Warrants to be issued became fixed, and the Warrants were considered indexed to the Yum China’s own stock. As share settlement is within Yum China’s control, the Warrants met the equity classification criteria on December 30, 2016 and no subsequent fair value measurement was required.

Total cash proceeds of $460 million from the closing of the Investment were first allocated to the Post-Closing Adjustment and Warrants based on their fair value on November 1, 2016, with the residual value of $364 million allocated to the shares of common stock issued.

In connection with and at the closing of the Investment, on November 1, 2016, Yum China and the Investors entered into a shareholders agreement, relating to rights and obligations of the Investors as holders of Yum China common stock and Warrants. Under the terms of the shareholders agreement, Primavera is entitled to designate one member of Yum China’s board of directors and has the right to designate one non-voting board observer to Yum China’s board of directors. In addition, Ant Financial also has the right to designate one non-voting board observer to Yum China’s board of directors. If Primavera no longer meets certain shareholding requirements, then three years after such time, Ant Financial will lose its right to designate a board observer (unless such right has been previously terminated pursuant to the terms of the shareholders agreement).

Leases

12 Months Ended

Dec. 31, 2018

Leases [Abstract]

Leases

Note 12 – Leases

At December 31, 2018, we operated more than 6,800 restaurants, leasing the underlying land and/or building, with our commitments expiring within 20 years from the inception of the lease. In addition, the Company subleases approximately 170 properties to franchisees. Most leases require us to pay related executory costs, which mainly include common area maintenance.

We also lease office space for headquarters, regional offices and support functions, as well as certain office and restaurant equipment.

Future minimum commitments, which include executory costs, and amounts to be received as lessor or sublessor under non-cancelable leases are set forth below:

	Commitments				Lease Receivables
	Capital		Operating		Operating
2019	$	3	$	466	$	15
2020		3		440		13
2021		3		394		10
2022		3		336		8
2023		3		275		6
Thereafter		22		864		7
	$	37	$	2,775	$	59

At December 31, 2018 and 2017, the present value of minimum payments under capital leases was $27 million and $29 million, respectively. The current portion of capital lease obligations was $2 million and $1 million in 2018 and 2017, respectively, and is classified in Accounts payable and other current liabilities.

The details of rental expense and income are set forth below:

	2018		2017		2016
Rental expense
Minimum	$	467	$	496	$	470
Contingent		304		292		250
	$	771	$	788	$	720
Rental income	$	27	$	28	$	26

Fair Value Measurements and Disclosures

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Disclosures

Note 13 – Fair Value Measurements and Disclosures

The Company’s financial assets and liabilities primarily consist of cash and cash equivalents, short-term investments, accounts receivable and accounts payable, and the carrying values of these assets and liabilities approximate their fair value in general.

The Company accounts for its investment in the equity securities of Meituan at fair value, which is determined based on the closing market price for the shares at the end of each reporting period, with subsequent fair value changes recorded in our Consolidated Statements of Income.

The following table is a summary of our financial assets measured on a recurring basis or disclosed at fair value and the level within the fair value hierarchy in which the measurement falls. The Company classifies its cash equivalents, short-term investments and investment in equity securities within Level 1 or Level 2 in the fair value hierarchy because it uses quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value, respectively. No transfers among the levels within the fair value hierarchy occurred in 2018.

	Balance at December 31,		Fair Value Measurement or Disclosure at December 31, 2018
	2018		Level 1		Level 2		Level 3
Cash equivalents:
Time deposits	$	570	$	—	$	570	$	—
Money market funds		226		226
Fixed rate debt securities^(a)		153		153
Total cash equivalents		949		379		570		—
Short-term investments:
Time deposits		122				122
Total short-term investments		122		—		122		—
Other assets:
Investment in equity securities		47		47
Total	$	1,118	$	426	$	692	$	—

	Balance at December 31,		Fair Value Measurement or Disclosure at December 31, 2017
	2017		Level 1		Level 2		Level 3
Cash equivalents:
Time deposits	$	635			$	635
Money market funds		93		93
Total cash equivalents		728		93		635		—
Short-term investments:
Time deposits		143				143
Fixed rate debt securities^(a)		62		62
Total short-term investments		205		62		143		—
Total	$	933	$	155	$	778	$	—

(a) Classified as held-to-maturity investments and measured at amortized cost.

Non-recurring fair value measurements

In addition, certain of the Company’s assets, such as property, plant and equipment, goodwill and intangible assets, are measured at fair value on a nonrecurring basis, if determined to be impaired. The financial instruments are measured at fair value on a non-recurring basis, as they were issued and reclassified into equity within the same year of 2016.

The following table presents amounts recognized from all non-recurring fair value measurements during the years ended December 31, 2018, 2017 and 2016. All fair value measurements were based on unobservable inputs (Level 3). These amounts exclude fair value measurements made for restaurants that were subsequently closed or refranchised prior to those respective year-end dates.

	2018		2017			2016
Daojia impairment^(a)		12		—			—
Restaurant-level impairment^(b)		27		41			58
Incremental restaurant-level impairment upon separation^(c)		—		—			17
Changes in fair value of financial instruments^(d)		—		—			(21	)
Income from the reversal of contingent consideration^(e)		—		(3	)		—
Total	$	39	$	38		$	54

(a)	See Note 6 for further discussion.

(b)Restaurant-level impairment charges are recorded in Closures and impairment expenses, net and resulted primarily from our semi-annual impairment evaluation of long-lived assets of individual restaurants that were being operated at the time of impairment and had not been offered for refranchising. The fair value measurements used in these impairment evaluations were based on discounted cash flow estimates using unobservable inputs (Level 3). The remaining net book value of assets measured at fair value during the years ended December 31, 2018, 2017 and 2016 was insignificant.

(c)

Incremental restaurant-level impairment represents additional impairment as a result of including the impact from the license fee paid to YUM on the individual restaurants’ future cash flow, which is equal to 3% of net system sales. Such license fee did not impact the impairment assessment prior to the separation as it was considered an intercompany charge at the time, whereas it became a charge from a third party after the separation and therefore should be considered in the impairment assessment. The remaining net book value of assets measured at fair value during the year ended December 31, 2018 was insignificant.

(d)

The Post-Closing Adjustment and the Warrants from the investment with strategic investors were accounted for as derivative instruments and liability-classified equity contracts, respectively (see Note 11). These financial instruments were initially measured at fair value as of November 1, 2016, the date when shares of common stock were issued, and subject to subsequent fair value measurement until December 30, 2016. They are classified within Level 3 because their fair values are based on inputs that are unobservable in the market. The Company adopted the Monte-Carlo Simulation model (the “MCS” model) and Black-Scholes option-pricing model (the “BS” model) in deriving the initial fair values of the Post-Closing Adjustment and the Warrants, respectively. On December 30, 2016, when the Adjusted VWAP Price Per Share was determined, the Post-Closing Adjustment was re-measured at fair value of $20.5 million based on 784,686.42 shares of common stock to be repurchased from the Investors at the closing price of $26.12 per share. The Warrants were re-measured at fair value of $95 million using the BS option-pricing model with assumptions as of December 30, 2016. The key assumptions for the MCS model and the BS model as of November 1, 2016 and December 30, 2016, respectively, are as follows:

	November 1, 2016						December 30, 2016
	Post-Closing Adjustment			Warrants			Warrants
Fair market value of common stock	$	26.19		$	26.19		$	26.12
Expected term	60 days			5 years			5 years
Average risk-free rate-of-return		0.27	%		1.31	%		1.93	%
Expected volatility		33	%		34	%		33	%
Expected dividend yield		—	%		—	%		—	%

The Adjusted VWAP Price Per Share for the Post-Closing Adjustment and the exercise price of the Warrants are estimated based on simulated paths. Since we became a publicly traded company after the separation and did not have sufficient historical trading data to estimate the expected volatility, we estimated the expected volatility of our common stock based on the historical price volatility of the publicly traded shares of comparable companies in the same business as the Company over the periods equal to the expected term of these financial instruments. The risk-free interest rate was based on the U.S. Treasury zero-coupon yield in effect with maturity terms equal to the expected term of the financial instruments. The dividend yield was estimated to be zero.

(e)	During 2017, we recognized income of $3 million from the reversal of contingent consideration previously recorded for a business combination (Level 3), as the fair value of such contingent consideration is considered to be nil given the remote likelihood of the payment obligation.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

Compensation And Retirement Disclosure [Abstract]

Retirement Plans

12 Months Ended

Dec. 31, 2018

Retirement Plans

Note 14 –Retirement Plans

Certain of the Company’s employees participate in noncontributory defined benefit plans and post-retirement medical plans sponsored by YUM prior to October 31, 2016. The Company has considered these plans to be part of multi-employer plans. YUM has allocated expenses related to our employees’ participation in our Consolidated and Combined Statements of Income. However, our Consolidated Balance Sheets do not reflect any assets or the liabilities related to these plans. We consider the expense allocation methodology and results to be reasonable for the periods prior to October 31, 2016. Subsequent to the separation, employees who participated in YUM’s plans were enrolled in YCHLRP, as discussed below.

For executives who were hired or re-hired after September 30, 2001, YUM has implemented the YUM LRP. This is an unfunded, unsecured account-based retirement plan which allocates a percentage of pay to an account payable to the executive following the executive’s separation of employment from YUM or attainment of age 55. The Company adopted the YCHLRP upon separation while the assets and liabilities associated with these employees under YUM LRP were transferred to YCHLRP. YCHLRP will continue to be in effect until terminated by the Company’s board of directors. The terms of the YCHLRP are substantially similar to the terms of the YUM LRP. Under the YCHLRP, certain executives who are at least age 21, who are classified as salary level 12, who are not eligible to participate in a tax-qualified defined benefit plan, and who satisfy certain additional requirements as to work location and assignment, are eligible to participate in the YCHLRP if selected for participation by the Company. The YCHLRP is an unfunded, unsecured account-based retirement plan that allocates a percentage of pay to an account payable to an executive following the later to occur of the executive’s separation of employment from the Company or attainment of age 55. Under the YCHLRP, participants aged 55 or older are entitled to a lump sum distribution of their account balance on the last day of the calendar quarter that occurs on or follows their separation of employment. The liabilities of $4.4 million and $4.2 million attributable to our employees under the YCHLRP as of December 31, 2018 and 2017, respectively, are included in our Consolidated Balance Sheets.

YUM offers certain of the Company’s executives working in China retirement benefits under the Bai Sheng Restaurants (Hong Kong) Ltd. Retirement Scheme. Under this defined contribution plan, YUM provides a company funded contribution ranging from 5% to 10% of an executive’s base salary. Upon termination, participants will receive a lump sum equal to a percentage of the Company’s contributions inclusive of investment return. This percentage is based on a vesting schedule that provides participants with a vested 30% interest upon completion of a minimum of 3 years of service, and an additional 10% vested interest for each additional completed year, up to a maximum of 100%. The Company adopted the same plan after the separation and the contribution amount to the plan for the years ended December 31, 2018, 2017 and 2016 was insignificant.

As stipulated by Chinese state regulations, the Company participates in a government-sponsored defined contribution retirement plan. Substantially all employees are entitled to an annual pension equal to a fixed proportion of the average basic salary amount of the geographical area of their last employment at their retirement date. We are required to make contributions to the local social security bureau between 10% and 22% of the previous year’s average basic salary amount of the geographical area where the employees are under our employment. Contributions are recorded in the Consolidated and Combined Statements of Income as they become payable. We have no obligation for the payment of pension benefits beyond the annual contributions as set out above. The Company contributed $174 million, $157 million and $148 million to the government-sponsored plan for 2018, 2017 and 2016, respectively.

Share-Based Compensation

12 Months Ended

Dec. 31, 2018

Share-Based Compensation

Note 15 – Share-Based Compensation

Overview

Prior to the separation, certain of the Company’s employees were eligible to participate in YUM’s Long-term Incentive Plan (the “YUM Plan”), pursuant to which they were granted awards of YUM common stock, including stock options, restricted stock units (“RSUs”) and stock appreciation rights (“SARs”). YUM recognized stock-based compensation costs, net of estimated forfeitures, for only those shares expected to vest on a straight-line basis over the requisite service period of the award. Accordingly, certain costs related to the YUM Plan have been allocated to the Company and are reflected in the Consolidated and Combined Statements of Income in G&A expenses prior to the separation.

Upon the separation, holders of outstanding YUM equity awards generally received both adjusted YUM awards and Yum China awards, or adjusted awards of either YUM or Yum China in their entirety, to maintain the pre-separation intrinsic value of the awards. Depending on the tax laws of the country of employment, awards were modified using either the shareholder method or the employer method. Share issuances for Yum China awards held by YUM’s employees will be satisfied by Yum China. Share issuances for YUM awards held by the Company’s employees will be satisfied by YUM. The shareholder method was based on the premise that employees holding YUM awards prior to the separation should receive an equal number of awards of both YUM and Yum China. Under the employer method, employees holding YUM awards prior to the separation had their awards converted into awards of the company that they worked for subsequent to the separation. As a result, Yum China may issue shares of common stock to YUM’s employees upon exercise or vesting of various types of awards, including stock options, SARs, RSUs, and awards from the executive income deferral plan.

The modified equity awards have the same terms and conditions as the awards held immediately before the separation, except that the number of shares and the price were adjusted. In accordance with ASC 718, the Company compared the fair value of the awards immediately prior to the separation to the fair value immediately after the separation to measure the incremental compensation cost, using the BS model. The incremental compensation cost was insignificant, and YUM and the Company continue to recognize the unamortized original grant-date fair value of the modified awards over the remaining requisite service period as their respective employees continue to provide services. Share-based compensation for the Company’s employees is based on both YUM awards and Yum China awards held by those employees.

Effective October 31, 2016, the Company adopted the Yum China Holdings, Inc. Long Term Incentive Plan (the “2016 Plan”). The Company has reserved for issuance under the 2016 Plan of 45,000,000 shares of our common stock. Under this plan, the exercise price of stock options and SARs granted must be equal to or greater than the fair market value of the Company’s stock on the date of grant.

Potential awards to employees and non-employee directors under the 2016 Plan include stock options, incentive options, SARs, restricted stock, stock units, RSUs, performance shares, performance units, and cash incentive awards. We have issued only stock options, SARs, RSUs and PSUs under the 2016 Plan. While awards under the 2016 Plan can have varying vesting provisions and exercise periods, outstanding awards under the 2016 Plan vest in periods ranging from three to five years. Stock options and SARs expire ten years after grant. The Company recognizes all share-based payments to employees and non-employee directors in the Consolidated and Combined Financial Statements as compensation cost on a straight-line basis over the service period based on their fair value on the date of grant, for awards that actually vest. If no substantive service condition exists, the grant-date fair value is fully recognized as expense upon grant. Certain awards are subject to specific retirement conditions, which allow the awards to fully vest as long as the employee is actively employed for at least one year following the grant date, provides at least six months notification of intention to retire, and signs non-solicitation and non-compete agreements. Under such circumstances, the grant-date fair value of the award is recognized as expense on a straight-line basis over the one-year service period from the grant date.

Award Valuation

YUM and the Company estimated the fair value of each stock option and SAR award granted to the Company’s employees as of the date of grant, using the BS model with the following assumptions:

	2018			2017			2016
Risk-free interest rate		2.5	%		1.9	%	1.3% - 1.4%
Expected term (years)		6.50			6.75		6.5 - 6.75
Expected volatility		33.0	%		34.0	%	27.0% - 35.0%
Expected dividend yield		1.0	%		0.0	%	0% - 2.6%

Awards granted to employees typically have a graded vesting schedule of 25% per year over four years and expire 10 years after grant. Both YUM and the Company use a single weighted-average term for awards that have a graded vesting schedule. Based on analysis of the historical exercise and post-vesting termination behavior, YUM and the Company determined that employees exercised the awards on average after 6.5 years. Forfeitures were estimated based on historical experience. Historical data used to estimate the expected term and forfeiture rate were based on data associated with the Company’s employees who were granted share-based awards by YUM prior to the separation.

For those awards granted by YUM prior to the separation, when determining expected volatility, YUM considered both historical volatility of its stock as well as implied volatility associated with its publicly traded options. The expected dividend yield is based on the annual dividend yield at the time of grant. For those awards granted by the Company after the separation, the Company considered the volatility of common shares of comparable companies in the same business as the Company. The Company had no plan to pay dividends at the time of the grant in 2017 and 2016. On October 4, 2017, the board of directors approved a regular quarterly cash dividend program, and declared an initial cash dividend of $0.10 per share on Yum China’s common stock. In 2018, the dividend yield was estimated based on the Company’s dividend policy.

RSU awards generally vest over a three-year period with a majority of the awards vesting at 100% on the third grant anniversary. The fair values of RSU awards are based on the closing price of YUM stock or the Company’s stock on the date of grant.

During 2018, the Company granted PSUs that are subject to market conditions, in addition to service vesting conditions. The number of shares to be distributed is based on Yum China’s total shareholder return performance relative to its peer group in the MSCI International China Index, measured over a three-year period from the beginning of 2018 to the end of 2020. The fair value of PSU awards with market-based conditions was valued based on the outcome of the MCS model and amortized on a straight-line basis over the three-year period. The PSUs had a grant date fair value of $41.75 per share. The total amount of fair value for the PSUs granted in 2018 is immaterial.

On November 11, 2016, Yum China also granted annual awards of common stock to non-employee directors for their service on Yum China’s board of directors. The fair value of these awards is based on the closing price per share of Yum China common stock on the date of grant. The shares were issued outright to the directors on the date of grant, with no conditions attached. Therefore, the fair value of the awards was fully recognized as expenses upon grant. For the year ended December 31, 2018 and 2017, a total of 45,425 and 56,763 shares of Yum China common stock, respectively, were granted to non-employee directors and the grant-date fair value of $1.8 million and $2.3 million, respectively, was immediately recognized in full in the Consolidated and Combined Statements of Income.

Award Activity

Stock Options and SARs

	Shares (in thousands)				Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in millions)
Outstanding at the beginning of 2018		21,595				18.96
Granted		1,179				40.29
Exercised		(4,493	)			15.12
Forfeited or expired		(611	)			24.14
Outstanding at the end of 2018		17,670		^(a)		21.18		5.23		226
Exercisable at the end of 2018		12,407				18.64		4.20		185

(a)	Outstanding awards include 669,433 stock options and 17,000,656 SARs with weighted-average exercise prices of $16.35 and $21.37, respectively. Outstanding awards represent Yum China awards held by employees of both the Company and YUM.

The weighted-average grant-date fair value of SARs granted in 2018, 2017 and 2016 was $13.52, $10.19 and $12.78, respectively. The total intrinsic value of stock options and SARs exercised by the Company’s employees during the years ended December 31, 2018, 2017 and 2016 was $31 million, $44 million and $25 million, respectively.

As of December 31, 2018, $24 million of unrecognized compensation cost related to unvested stock options and SARs, which will be reduced by any forfeitures that occur, is expected to be recognized over a remaining weighted-average vesting period of approximately 1.69 years. This reflects unrecognized cost for both Yum China awards and YUM awards held by the Company’s employees. The total fair value at grant date or modification date of awards held by the Company’s employees that vested during 2018, 2017 and 2016 was $14 million, $11 million and $11 million, respectively.

RSUs and PSUs

	Shares (in thousands)			Weighted- Average Grant Date Fair Value
Unvested at the beginning of 2018		949			26.56
Granted		302			39.50
Vested		(183	)		25.03
Forfeited or expired		(80	)		28.93
Unvested at the end of 2018		988			30.60

As of December 31, 2018, there was $17 million of unrecognized compensation cost related to 987,998 unvested RSUs and PSUs.

Impact on Net Income

Share-based compensation expense was $24 million, $26 million and $16 million for 2018, 2017 and 2016, respectively. Deferred tax benefits of $1 million, $3 million, $3 million was recognized in 2018, 2017 and 2016, respectively.

Equity

12 Months Ended

Dec. 31, 2018

Stockholders Equity Note [Abstract]

Equity

Note 16 – Equity

On September 23, 2016, YUM’s board of directors approved the distribution of its shares of Yum China common stock to YUM’s stockholders on a pro rata basis. On October 31, 2016, YUM’s shareholders of record as of October 19, 2016 received one share of Yum China common stock for every one share of YUM’s common stock held as of the record date. On October 31, 2016, we completed the legal separation from YUM, and we began trading “regular way” under the ticker symbol “YUMC” on the New York Stock Exchange on November 1, 2016. Following the separation, YUM does not own any equity interest in us.

Immediately after the separation on October 31, 2016, Yum China authorized capital stock consisted of 1,000 million shares of common stock, par value $0.01 per share, and 364 million shares of Yum China common stock were issued and outstanding. As of December 31, 2018, 392 million shares of Yum China common stock were issued and 379 million shares were outstanding.

On October 27, 2016, a duly authorized committee of Yum China’s board of directors adopted a stockholder rights plan (the “Rights Plan”), pursuant to which the board declared a dividend, to Yum China’s sole stockholder of record as of October 27, 2016, of one preferred stock purchase right (a “Right”) for each of share of Yum China common stock. Before the Rights Plan expired on October 27, 2017, the Rights would trade with, and would be inseparable from, Yum China common stock. The original dividend of the Rights to the existing shareholder was recorded at fair value, which was insignificant given the contingent nature of the Rights. The embedded Rights were considered clearly and closely related to the underlying equity host and, therefore, did not require separate accounting.

Share Repurchase Program

The Company repurchased 9.0 million and 3.4 million shares of common stock at a total cost of $312 million and $128 million for the year ended December 31, 2018 and 2017, respectively. $960 million remained available for repurchase under current authorization.

Cash Dividend

On October 4, 2017, the board of directors approved a regular quarterly cash dividend program, and declared an initial cash dividend of $0.10 per share on Yum China’s common stock. Total cash dividends of $38 million were paid to shareholders in December 2017. The Company paid a cash dividend of $0.10 per share for each of the first three quarters of 2018 and $0.12 per share for the fourth quarter of 2018. Total cash dividends of $161 million were paid to shareholders in 2018.

Accumulated Other Comprehensive Income (“AOCI”)

The Company’s other comprehensive income (loss) for the years ended December 31, 2018, 2017, and 2016 and AOCI balances as of December 31, 2018 and 2017 were comprised solely of foreign currency translation adjustments. Other comprehensive loss was $160 million for the year ended December 31, 2018, other comprehensive gain was $142 million for the year ended December 31, 2017 and other comprehensive loss was $133 million for the years ended December 31, 2016. The accumulated balances reported in AOCI in the Consolidated Balance Sheets for currency translation adjustments were net loss of $17 million and net gain of $137 million as of December 31, 2018 and 2017, respectively. There was no tax effect related to the components of other comprehensive income for all years presented.

Restricted net assets

The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the Consolidated and Combined Financial Statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s subsidiaries.

In accordance with the PRC Regulations on Enterprises with Foreign Investment and the articles of association of the Company’s PRC subsidiaries, a foreign-invested enterprise established in the PRC is required to provide certain statutory reserves, namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A foreign-invested enterprise is required to allocate at least 10% of its annual after-tax profit to the general reserve until such reserve has reached 50% of its respective registered capital based on the enterprise’s PRC statutory accounts. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors for all foreign-invested enterprises. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.

As a result of these PRC laws and regulations subject to the limit discussed above that require annual appropriations of 10% of after-tax income to be set aside, prior to payment of dividends as general reserve fund, the Company’s PRC subsidiaries are restricted in their ability to transfer a portion of their net assets to the Company in the form of dividend payments, loans or advances. The restricted net assets of the PRC subsidiaries is approximately $624 million as of December 31, 2018.

Furthermore, cash transfers from the Company’s PRC subsidiaries to its subsidiaries outside of China are subject to PRC government control of currency conversion. Shortages in the availability of foreign currency may restrict the ability of the PRC subsidiaries to remit sufficient foreign currency to pay dividends or other payments to the Company, or otherwise satisfy their foreign currency-denominated obligations.

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Note 17 – Income Taxes

Prior to October 31, 2016, our operations have historically been included in the U.S. federal and U.S. state income tax returns filed by YUM. Our foreign income tax returns, primarily those filed by our China subsidiaries, are filed on an individual entity basis. The Company has calculated its provision using the separate return method in these Consolidated and Combined Financial Statements. Under this method, the Company is assumed to have filed hypothetical tax returns on a standalone basis separate from YUM in the relevant tax jurisdictions.

Subsequent to October 31, 2016, the Company became a separate taxpayer and started preparing its own consolidated U.S. federal income tax return and U.S. state income tax filings. As of December 31, 2018 and 2017, the current and deferred taxes, including carryforwards and tax credits, are reflective of the Company’s actual balances subsequent to the separation.

In December 2017, the U.S. enacted the Tax Act, which included a broad range of tax reforms, including, but not limited to, the establishment of a flat corporate income tax rate of 21%, the elimination or reduction of certain business deductions, and the imposition of tax on deemed repatriation of accumulated undistributed foreign earnings. The Tax Act has impacted Yum China in two material aspects: (1) in general, all of the foreign-source dividends received by Yum China from its foreign subsidiaries will be exempted from taxation starting from its tax year beginning after December 31, 2017 and (2) Yum China recorded additional income tax expense in the fourth quarter of 2017, including an estimated one-time transition tax on its deemed repatriation of accumulated undistributed foreign earnings and additional tax related to the revaluation of certain deferred tax assets.

Based on the information available, we made a reasonable estimate of the effects and recorded the provisional amount of $163.9 million as an additional income tax expense in the fourth quarter of 2017. This amount included an estimated one-time transition tax of $129.8 million on the deemed repatriation of accumulated undistributed foreign earnings, $4.5 million primarily related to the remeasurement of certain deferred tax assets based on the rates at which they are expected to reverse in the future, and the valuation allowance of $29.6 million for certain deferred tax assets. After utilizing existing qualified foreign tax credits, the total payable of the estimated one-time transition tax was $83.0 million as of December 31, 2017 of which $6.6 million was included in Income taxes payable and $76.4 million was included in Other liabilities.

We completed our analysis of the Tax Act in the fourth quarter of 2018 according to guidance released by the U.S. Treasury Department and the IRS as of December 2018 and made a reversal to provisional amount in the amount of $36 million for the transition tax recorded in 2017 accordingly.

The Tax Act requires a U.S. shareholder to be subject to tax on Global Intangible Low Taxed Income (“GILTI”) earned by certain foreign subsidiaries. We have elected the option to account for current year GILTI tax as a period cost as incurred.

U.S. and foreign income (loss) before taxes are set forth below:

	2018			2017			2016
U.S.	$	(3	)	$	(13	)	$	5
China		979			806			655
Other Foreign	$	(26	)		10			6
	$	950		$	803		$	666

The details of our income tax provision (benefit) are set forth below:

		2018			2017			2016
Current:	Federal	$	(33	)	$	85		$	(2	)
	Foreign		214			232			200
		$	181		$	317		$	198

Deferred:	Federal	$	—		$	77		$	(36	)
	Foreign		33			(15	)		(6	)
		$	33		$	62		$	(42	)
		$	214		$	379		$	156

The reconciliation of income taxes calculated at the U.S. federal statutory rate to our effective tax rate is set forth below:

	2018					2017					2016
U.S. federal statutory rate	$	199		21.0	%	$	281		35.0	%	$	233		35.0	%
Impact from the Tax Act		(36	)	(3.8	)		164		20.4			—		—
Statutory rate differential attributable to foreign operations		56		5.8			(60	)	(7.5	)		(55	)	(8.3	)
Adjustments to reserves and prior years		(4	)	(0.4	)		(1	)	(0.2	)		16		2.4
Change in valuation allowances		(4	)	(0.4	)		2		0.2			—		—
Tax benefit from Little Sheep restructuring		—		—			—		—			(26	)	(3.8	)
Other, net		3		0.4			(7	)	(0.7	)		(12	)	(1.8	)
Effective income tax rate	$	214		22.6	%	$	379		47.2	%	$	156		23.5	%

Statutory rate differential attributable to foreign operations. This item includes local taxes, withholding taxes, and shareholder-level taxes, net of foreign tax credits. A majority of our income is earned in China, which is generally subject to a 25% tax rate. The favorable impact in 2017 and 2016 is primarily attributable to the statutory income tax rate of 25% in China, which is lower than the historical U.S. federal statutory rate of 35%. The negative impact in 2018 is primarily due to the decrease of the U.S. federal statutory rate to 21%, which is lower than China’s statutory income tax rate.

Adjustments to reserves and prior years. This item includes: (1) changes in tax reserves, including interest thereon, established for potential exposure we may incur if a taxing authority takes a position on a matter contrary to our position; and (2) the effects of reconciling income tax amounts recorded in our Consolidated and Combined Statements of Income to amounts reflected on our tax returns, including any adjustments to the Consolidated Balance Sheets. The impact of certain effects or changes may offset items reflected in the ‘Statutory rate differential attributable to foreign operations’ line.

In 2016, this item was negatively impacted by the additional amount recorded for uncertain tax positions in China.

Change in valuation allowances. This item relates to changes for deferred tax assets generated or utilized during the current year and changes in our judgment regarding the likelihood of using deferred tax assets that existed at the beginning of the year. The change in valuation allowance as a result of the Tax Act in the amount of $29.6 million was included in ‘Impact from the Tax Act’. The impact of certain changes may offset items reflected in ‘Statutory rate differential attributable to foreign operations’.

Tax benefit from Little Sheep restructuring. In 2016, we recognized tax benefit of $26 million as a result of Little Sheep legal entity restructuring completed prior to the separation. The cash tax savings associated with this benefit will be realized as we recognize future U.S. taxable income. In 2017, this tax benefit was remeasured as a result of the Tax Act, and a valuation allowance of $19.5 million was recognized as part of valuation allowance recorded and reflected in ‘Impact from the Tax Act’.

Other. This item primarily includes the impact of permanent differences related to current year earnings as well as U.S. tax credits and deductions.

In 2016, this item was favorably impacted by non-taxable gain from changes in fair value of financial instruments associated with the Investors’ strategic investment in Yum China. See Note 13.

The details of 2018 and 2017 deferred tax assets (liabilities) are set forth below:

	2018			2017
Operating losses and tax credit carryforwards	$	28		$	43
Tax benefit from Little Sheep restructuring		18			20
Employee benefits		6			5
Share-based compensation		5			6
Deferred escalating minimum rent		41			45
Other liabilities		12			10
Deferred income and other		50			49
Gross deferred tax assets		160			178
Deferred tax asset valuation allowances		(50	)		(68	)
Net deferred tax assets	$	110		$	110
Intangible assets		(28	)		(25	)
Property, plant and equipment		(31	)		(2	)
Gain from re-measurement of equity interest upon acquisition		(23	)		—
Other		(4	)		(10	)
Gross deferred tax liabilities	$	(86	)	$	(37	)
Net deferred tax assets	$	24		$	73
Reported in Consolidated Balance Sheets as:
Deferred income taxes		89			105
Other liabilities		(65	)		(32	)
	$	24		$	73

We have investments in our foreign subsidiaries where the carrying values for financial reporting exceed the tax basis. We have not provided deferred tax on the portion of the excess that we believe is indefinitely reinvested, as we have the ability and intent to indefinitely postpone the basis differences from reversing with a tax consequence. The Company’s separation from YUM was intended to qualify as a tax-free reorganization for U.S. income tax purposes resulting in the excess of financial reporting basis over tax basis in our investment in the China business continuing to be indefinitely reinvested. The excess of financial reporting basis over tax basis as of December 31, 2017 was subject to the one-time transition tax under the Tax Act as a deemed repatriation of accumulated undistributed earnings from the foreign subsidiaries. However, we continue to believe that the portion of the excess of financial reporting basis over tax basis (including earnings and profits subject to the one-time transition tax) is indefinitely reinvested in our foreign subsidiaries for foreign withholding tax purposes. We estimate that our total temporary difference for which we have not provided foreign withholding taxes is approximately $2.4 billion at December 31, 2018. The foreign withholding tax rate on this amount is 5% or 10% depending on the manner of repatriation and the applicable tax treaties or tax arrangements.

At December 31, 2018, the Company had operating loss carryforwards of $111 million, primarily related to our Little Sheep and Daojia business, most of which will expire by 2023. These losses are being carried forward in jurisdictions where we are permitted to use tax losses from prior periods to reduce future taxable income.

Cash payments for tax liabilities on income tax returns filed in China were $208 million, $232 million and $182 million in 2018, 2017 and 2016, respectively.

We recognize the benefit of positions taken or expected to be taken in tax returns in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. A recognized tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2018			2017
Beginning of Year	$	28		$	26
Additions on tax positions		3			8
Reductions due to statute expiration		(9	)		(6	)
End of Year	$	22		$	28

In 2018 and 2017, we increased our unrecognized tax benefits by $3 million and $8 million, respectively, related to uncertainty with regard to the deductibility of certain business expenses incurred during the year. The unrecognized tax benefits balance as of December 31, 2018 was $22 million, all of which, if recognized upon audit settlement or statute expiration, would affect the effective tax rate. The Company believes it is reasonably possible its unrecognized tax benefits may decrease by approximately $7 million in the next 12 months, if recognized, would affect the 2019 effective tax rate. The accrued interest and penalties related to income taxes at December 31, 2018 and 2017 are set forth below:

		2018				2017
Accrued interest and penalties		$	6			$	7

During 2018, 2017 and 2016, a net benefit of $1 million and a net expense of $2 million and $3 million, respectively, for interest and penalties was recognized in our Consolidated and Combined Statements of Income as components of our income tax provision.

The Company’s results are subject to examination in the U.S. federal jurisdiction as well as various U.S. state jurisdictions as part of YUM’s and our own income tax filings, and separately in foreign jurisdictions. Any liability arising from these examinations related to periods prior to the separation is expected to be settled among the Company, YCCL and YUM in accordance with the tax matters agreement we entered into in connection with the separation.

The Company’s operations in foreign jurisdictions generally remain subject to examination for tax years as far back as 2006, and some of which years are currently under audit by local tax authorities. Currently we are under a national audit on transfer pricing by the Chinese SAT regarding our related party transactions for the period from 2006 to 2015. It is reasonably possible that there could be significant development within the next 12 months. The ultimate assessment will depend upon further review of the information provided and ongoing discussions with the SAT and in-charge local tax authorities, and therefore it is not possible to estimate the potential impact. We will continue to defend our transfer pricing position. However, if the SAT prevails in the assessment of additional tax due based on its ruling, the assessed tax, interest and penalties, if any, could have a material adverse impact on our financial position, results of operations and cash flows.

Segment Reporting

12 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Segment Reporting

Note 18 –Segment Reporting

The Company has two reportable segments: KFC and Pizza Hut. We also have four non-reportable operating segments, East Dawning, Little Sheep, Taco Bell and Daojia, which are combined and referred to as All Other Segments, as these operating segments are insignificant both individually and in the aggregate. As COFFii & JOY is a concept recently developed in 2018, the financial results of COFFii & JOY were not regularly reviewed by the Company’s chief operating decision maker, and COFFii & JOY did not represent an operating segment. Segment financial information for prior years has been recast due to the adoption of ASC 606 standard. See Note 2.

	2018
	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated^(a)		Combined		Elimination			Consolidated
Revenues
Revenue from external customers	$	5,690	$	2,111	$	92	$	522	$	8,415	$	—		$	8,415
Inter-segment revenue		—		—		8		—		8		(8	)		—
Total	$	5,690	$	2,111	$	100	$	522	$	8,423	$	(8	)	$	8,415

	2017
	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated^(a)		Combined		Elimination		Consolidated
Revenues
Revenue from external customers	$	5,066	$	2,093	$	106	$	504	$	7,769	$	—	$	7,769
Inter-segment revenue		—		—		—		—		—		—		—
Total	$	5,066	$	2,093	$	106	$	504	$	7,769	$	—	$	7,769

	2016
	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated^(a)		Combined		Elimination		Consolidated
Revenues
Revenue from external customers	$	4,757	$	1,996	$	100	$	222	$	7,075	$	—	$	7,075
Inter-segment revenue		—		—		—		—		—		—		—
Total	$	4,757	$	1,996	$	100	$	222	$	7,075	$	—	$	7,075

Operating Profit	2018			2017			2016
KFC^(b)	$	895		$	802		$	641
Pizza Hut		98			157			149
All Other Segments		(12	)		(9	)		(5	)
Unallocated revenues from transactions with franchisees and unconsolidated affiliates^(c)		514			504			222
Unallocated Other revenues		7			—			—
Unallocated expenses for transactions with franchisees and unconsolidated affiliates^(c)		(512	)		(500	)		(219	)
Unallocated Other operating costs and expenses		(6	)		—			—
Unallocated and corporate G&A expenses		(129	)		(185	)		(153	)
Unallocated Closures and impairment expense^(d)		(12	)		—			(17	)
Unallocated Other income^(e)		98			9			16
Operating Profit		941			778			634
Interest income, net^(a)		36			25			11
Investment loss^(a)		(27	)		—			—
Changes in fair value of financial instruments^(a)		—			—			21
Income Before Income Taxes	$	950		$	803		$	666

	Depreciation and Amortization
	2018		2017		2016
KFC	$	296	$	265	$	266
Pizza Hut		129		126		120
All Other Segments		8		4		5
Corporate and Unallocated		12		14		11
	$	445	$	409	$	402

	Impairment Charges
	2018		2017		2016
KFC^(f)	$	14	$	27	$	48
Pizza Hut^(f)		26		31		19
All Other Segments		—		—		3
Corporate and Unallocated^(d)		12		—		17
	$	52	$	58	$	87

	Capital Spending
	2018		2017		2016
KFC	$	292	$	227	$	221
Pizza Hut		77		93		129
All Other Segments		5		2		1
Corporate and Unallocated		96		93		85
	$	470	$	415	$	436

	Total Assets
	2018		2017
KFC^(g)	$	1,745	$	1,544
Pizza Hut		558		668
All Other Segments		130		144
Corporate and Unallocated⁽^h⁾		2,177		1,931
	$	4,610	$	4,287

(a)	Amounts have not been allocated to any segment for performance reporting purposes.

(b)	Includes equity income from investments in unconsolidated affiliates of $65 million, $65 million and $54 million in 2018, 2017 and 2016, respectively.

(c)Primarily includes revenues and associated expenses of transactions with franchisee and unconsolidated affiliates derived from the Company’s central procurement model whereby the Company centrally purchases all food and paper products from suppliers then sells and delivers to all restaurants, including franchisees and unconsolidated affiliates. Amounts have not been allocated to any segment for purposes of making operating decisions or assessing financial performance as the transactions are deemed corporate revenues and expenses in nature.

(d)	Primarily includes 2018 impairment charges on intangible assets acquired from Daojia and 2016 incremental restaurant-level impairment charges. See Note 6.

(e)	Primarily includes gain from re-measurement of previously held equity interest in connection with the acquisition of Wuxi KFC. See Note 6.

(f)	Includes store closure impairment charges as well as restaurant-level impairment charges resulting from our semi-annual impairment evaluation (See Note 13).

(g)	Includes investments in unconsolidated affiliates.

(h)	Primarily includes cash and cash equivalents, short-term investments, inventories and investment in equity securities that are centrally managed.

As substantially all of the Company's revenue is derived from the PRC and substantially all of the Company's long-lived assets are located in the PRC, no geographical information is presented. In addition, revenue derived from and long-lived assets located in the U.S., the Company’s country of domicile, are immaterial.

Contingencies

12 Months Ended

Dec. 31, 2018

Commitments And Contingencies Disclosure [Abstract]

Contingencies

Note 19 – Contingencies

Indemnification of China Tax on Indirect Transfers of Assets

In February 2015, the SAT issued Bulletin 7 on Income arising from Indirect Transfers of Assets by Non-Resident Enterprises. Pursuant to Bulletin 7, an “indirect transfer” of Chinese taxable assets, including equity interests in a Chinese resident enterprise (“Chinese interests”), by a non-resident enterprise, may be recharacterized and treated as a direct transfer of Chinese taxable assets, if such arrangement does not have reasonable commercial purpose and the transferor has avoided payment of Chinese enterprise income tax. As a result, gains derived from such an indirect transfer may be subject to Chinese enterprise income tax at a rate of 10%.

YUM concluded and we concurred that it is more likely than not that YUM will not be subject to this tax with respect to the distribution. However, given how recently Bulletin 7 was promulgated, there are significant uncertainties regarding what constitutes a reasonable commercial purpose, how the safe harbor provisions for group restructurings are to be interpreted and how the taxing authorities will ultimately view the distribution. As a result, YUM’s position could be challenged by Chinese tax authorities resulting in a 10% tax assessed on the difference between the fair market value and the tax basis of the separated China business. As YUM’s tax basis in the China business is minimal, the amount of such a tax could be significant.

Any tax liability arising from the application of Bulletin 7 to the distribution is expected to be settled in accordance with the tax matters agreement between the Company and YUM. Pursuant to the tax matters agreement, to the extent any Chinese indirect transfer tax pursuant to Bulletin 7 is imposed, such tax and related losses will be allocated between YUM and the Company in proportion to their respective share of the combined market capitalization of YUM and the Company during the 30 trading days after the separation. Such a settlement could be significant and have a material adverse effect on our results of operations and our financial condition. At the inception of the tax indemnity being provided to YUM, the fair value of the non-contingent obligation to stand ready to perform was insignificant and the liability for the contingent obligation to make payment was not probable or estimable.

Guarantees for Franchisees and Unconsolidated Affiliates

From time to time we have guaranteed certain lines of credit and loans of franchisees and unconsolidated affiliates. As of December 31, 2018, we have provided guarantees of approximately $1 million on behalf of franchisees and there are no guarantees outstanding for unconsolidated affiliates.

Indemnification of Officers and Directors

The Company’s amended and restated certificate of incorporation and amended and restated bylaws include provisions that require the Company to indemnify directors or officers for monetary damages for actions taken as a director or officer of the Company or while serving at the Company’s request as a director or officer or another position at another corporation or enterprise, as the case may be. The Company purchases standard directors and officers insurance to cover claims or a portion of the claims made against its directors and officers. Since a maximum obligation is not explicitly stated in the Company’s bylaws or in the indemnification agreements and will depend on the facts and circumstances that arise out of any future claims, the overall maximum amount of the obligations cannot be reasonably estimated. The Company has not been required to make payments related to these obligations, and the fair value for these obligations is zero as of December 31, 2018.

Legal Proceedings

The Company is subject to various lawsuits covering a variety of allegations from time to time. The Company believes that the ultimate liability, if any, in excess of amounts already provided for these matters in the Consolidated and Combined Financial Statements, is not likely to have a material adverse effect on the Company’s annual results of operations, financial condition or cash flows. Matters faced by the Company from time to time include, but are not limited to, claims from landlords, employees, customers and others related to operational, contractual or employment issues.

Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Selected Quarterly Financial Data (Unaudited)

Note 20 – Selected Quarterly Financial Data (unaudited; in millions, except per share amounts)

	2018
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Total
Revenues:
Company sales	$	2,016	$	1,888	$	2,008	$	1,721	$	7,633
Franchise fees and income		40		34		36		31		141
Revenues from transactions with franchisees and unconsolidated affiliates		161		141		159		142		603
Other revenues		4		5		9		20		38
Total revenues		2,221		2,068		2,212		1,914		8,415
Restaurant profit		361		286		353		199		1,199
Operating Profit		395		193		269		84		941
Net Income – Yum China Holdings, Inc.		288		143		203		74		708
Basic earnings per common share	$	0.75	$	0.37	$	0.53	$	0.19	$	1.84
Diluted earnings per common share	$	0.72	$	0.36	$	0.51	$	0.19	$	1.79

	2017 (Recast)
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter			Total
Revenues:
Company sales	$	1,738	$	1,664	$	1,924	$	1,667		$	6,993
Franchise fees and income		36		33		38		34			141
Revenues from transactions with franchisees and unconsolidated affiliates		147		141		160		151			599
Other revenues		5		3		8		20			36
Total revenues		1,926		1,841		2,130		1,872			7,769
Restaurant profit		354		276		347		194			1,171
Operating Profit		296		171		264		47			778
Net Income (Loss) – Yum China Holdings, Inc.		204		125		176		(107	)		398
Basic earnings (loss) per common share	$	0.53	$	0.32	$	0.46	$	(0.28	)	$	1.03
Diluted earnings (loss) per common share	$	0.52	$	0.31	$	0.44	$	(0.28	)	$	1.00

Unaudited quarterly results presented for 2017 have been recast as if they had been reported under our current reporting calendar and also reflect the impact of the adoption of ASC 606 standard. See Note 2 for the change in our reporting calendar.

Subsequent Events

12 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

Note 21 – Subsequent Events

Cash Dividend

On January 31, 2019, the Company announced that the board of directors declared a cash dividend of $0.12 per share on Yum China’s common stock, payable as of the close of business on March 21, 2019, to stockholders of record as of the close of business on February 28, 2019. Total estimated cash dividend payable is approximately $47 million.

Share-Based Compensation

In February 2019, the Company’s board of directors approved grants of 125,718 RSUs and 1,468,569 SARs to the employees under the 2016 Plan. The estimated total grant-date fair value of these awards is $25.0 million, which will be recognized on a straight-line basis over the vesting periods. The Company also granted performance share units for a total fair value of $2.7 million, which will be earned subject to certain market-based conditions or performance-based conditions.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Preparation and Principles of Consolidation

from the Company’s equity on the Consolidated Balance Sheets.

Comparative Information

Fiscal Calendar

Foreign Currency

Franchise and License Operations

The 3% license fees we pay to YUM for the right to sublicense the KFC, Pizza Hut and Taco Bell intellectual property to franchisees and unconsolidated affiliates are recorded in Franchise expenses.

Revenue Recognition

Revenue Recognition.

The Company’s revenues primarily include Company sales, Franchise fees and income and Revenues from transactions with franchisees and unconsolidated affiliates.

Company Sales

Franchise Fees and Income

Revenues from Transactions with Franchisees and Unconsolidated Affiliates

Loyalty Programs

Loyalty Programs.

Direct Marketing Costs

Research and Development Expenses

Share-Based Compensation

Impairment or Disposal of Property, Plant and Equipment

Government Subsidies

Income Taxes

See Note 17 for a further discussion of our income taxes.

Fair Value Measurements


Level 1		Inputs based upon quoted prices in active markets for identical assets.

Level 2		Inputs other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly.

Level 3		Inputs that are unobservable for the asset.

Cash and Cash Equivalents

Short-term Investments

Short-term Investments. Short-term investments primarily represent time deposits with original maturities of over three months but less than one year when purchased.

Receivables

Receivables from Payment Processors or Aggregators

Inventories

Inventories. We value our inventories at the lower of cost (computed on the first-in, first-out method) or market.

Property, Plant and Equipment

Leases and Leasehold Improvements

Internal Development Costs and Abandoned Sites Costs

Goodwill and Intangible Assets

Equity Investments

Equity Investments. The Company’s equity investments include investments in unconsolidated affiliates and investments in equity securities with readily determinable fair value.

Financial Instruments

Guarantees

Asset Retirement Obligations

Common Stock Repurchases

Parent Company Investment

Recently Adopted Accounting Pronouncements

Adoption of this guidance impacted our previously reported results as follows (in millions, except per share data):

	2017				2016
	As Previously Reported		As Adjusted		As Previously Reported		As Adjusted
Total revenues	$	7,144	$	7,769	$	6,752	$	7,075
Total costs and expenses, net		6,359		6,991		6,112		6,441
Operating Profit		785		778		640		634
Net Income – Yum China Holdings, Inc.		403		398		502		498
Basic Earnings Per Common Share	$	1.04	$	1.03	$	1.36	$	1.35
Diluted Earnings Per Common Share	$	1.01	$	1.00	$	1.36	$	1.35

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Schedule of Impact of Adoption of New Revenue Standard

Adoption of this guidance impacted our previously reported results as follows (in millions, except per share data):

	2017				2016
	As Previously Reported		As Adjusted		As Previously Reported		As Adjusted
Total revenues	$	7,144	$	7,769	$	6,752	$	7,075
Total costs and expenses, net		6,359		6,991		6,112		6,441
Operating Profit		785		778		640		634
Net Income – Yum China Holdings, Inc.		403		398		502		498
Basic Earnings Per Common Share	$	1.04	$	1.03	$	1.36	$	1.35
Diluted Earnings Per Common Share	$	1.01	$	1.00	$	1.36	$	1.35

Revenue (Tables)

12 Months Ended

Dec. 31, 2018

Revenue From Contract With Customer [Abstract]

Schedule of Disaggregation of Revenue by Types of Arrangements and Segments

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

	2018
Revenues	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated^(a)		Combined		Elimination			Consolidated
Company sales	$	5,495	$	2,106	$	31	$	1	$	7,633	$	—		$	7,633
Franchise fees and income		132		3		6		—		141		—			141
Revenues from transactions with franchisees and unconsolidated affiliates		63		2		24		514		603		—			603
Other revenues		—		—		39		7		46		(8	)		38
Total revenues	$	5,690	$	2,111	$	100	$	522	$	8,423	$	(8	)	$	8,415

(a)	Company sales from Corporate and Unallocated represent sales from COFFii & JOY, a coffee concept recently developed by the Company in 2018.

	2017
Revenues	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated		Combined		Elimination		Consolidated
Company sales	$	4,863	$	2,090	$	40	$	—	$	6,993	$	—	$	6,993
Franchise fees and income		134		2		5		—		141		—		141
Revenues from transactions with franchisees and unconsolidated affiliates		69		1		25		504		599		—		599
Other revenues		—		—		36		—		36		—		36
Total revenues	$	5,066	$	2,093	$	106	$	504	$	7,769	$	—	$	7,769

	2016
Revenues	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated		Combined		Elimination		Consolidated
Company sales	$	4,572	$	1,993	$	57	$	—	$	6,622	$	—	$	6,622
Franchise fees and income		124		2		3		—		129		—		129
Revenues from transactions with franchisees and unconsolidated affiliates		61		1		15		222		299		—		299
Other revenues		—		—		25		—		25		—		25
Total revenues	$	4,757	$	1,996	$	100	$	222	$	7,075	$	—	$	7,075

Franchise Fees and Income

	2018		2017		2016
Initial fees, including renewal fees	$	7	$	6	$	5
Continuing fees and rental income		134		135		124
Franchise fees and income	$	141	$	141	$	129

Contract Liabilities

Contract liabilities at December 31, 2018 and 2017 were as follows:

	2018		2017

Contract liabilities
- Deferred revenue related to prepaid stored-value products	$	73	$	50
- Deferred revenue related to customer loyalty programs		17		16
- Deferred revenue related to upfront fees		37		39
Total	$	127	$	105

Transactions with Parent (Tables)

12 Months Ended

Dec. 31, 2018

Transactions With Parent [Abstract]

Schedule of License Fees Paid

Total license fees paid to YUM during the ten months ended October 31, 2016 are reflected in the table below:

	10 months ended
	October 31,
	2016
Initial fees – Company	$	9
Initial fees – Franchisees		2
Continuing fees – Company		163
Continuing fees – Franchisees		42
Total	$	216

Earnings Per Common Share ("EPS") (Tables)

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Earnings Per Common Share

The following table summarizes the components of basic and diluted earnings per share (in millions, except for per share data):

	2018		2017		2016
Net Income – Yum China Holdings, Inc.	$	708	$	398	$	498
Weighted-average common shares outstanding (for basic calculation)^(a)		384		387		368
Effect of dilutive share-based awards^(a)		9		10		1
Effect of dilutive warrants^(b)		2		1		—
Weighted-average common and dilutive potential common shares outstanding (for diluted calculation)		395		398		369
Basic Earnings Per Share	$	1.84	$	1.03	$	1.35
Diluted Earnings Per Share	$	1.79	$	1.00	$	1.35
Share-based awards and warrants excluded from the diluted EPS computation^(c)		6		10		17

(a)

(b)

(c)	These outstanding employee stock options, stock appreciation rights, RSUs, PSUs and warrants were not included in the computation of diluted EPS because to do so would have been antidilutive for the years presented.

Other Income, Net (Tables)

12 Months Ended

Dec. 31, 2018

Other Income And Expenses [Abstract]

Other Income, Net

	2018			2017			2016
Equity income from investments in unconsolidated affiliates	$	65		$	65		$	54
Gain from re-measurement of equity interest upon acquisition^(a)		98			—			—
Foreign exchanges and other		(11	)		(1	)		6
Other income, net	$	152		$	64		$	60

(a)	As a result of the acquisition of Wuxi KFC in the first quarter of 2018, as disclosed in Note 6, the Company recognized a gain of $98 million from the re-measurement of our previously held 47% equity interest at fair value, which was not allocated to any segment for performance reporting purposes.

Supplemental Balance Sheet Information (Tables)

12 Months Ended

Dec. 31, 2018

Balance Sheet Related Disclosures [Abstract]

Accounts Receivable, Net

Accounts Receivables, net	2018			2017
Accounts receivables, gross	$	81		$	81
Allowance for doubtful accounts		(1	)		(2	)
Accounts receivables, net	$	80		$	79

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets	2018		2017
Prepaid rent	$	42	$	41
Receivables from payment processors and aggregators		49		40
Dividends receivable from unconsolidated affiliates		20		21
Other prepaid expenses and current assets		66		60
Prepaid expenses and other current assets	$	177	$	162

Property, Plant and Equipment

Property, Plant and Equipment	2018			2017
Buildings and improvements	$	2,121		$	2,184
Capital leases, primarily buildings		26			28
Machinery and equipment and construction in progress		1,201			1,204
Property, plant and equipment, gross		3,348			3,416
Accumulated depreciation and amortization		(1,733	)		(1,725	)
Property, plant and equipment, net	$	1,615		$	1,691

Accounts Payable and Other Current Liabilities

Other Assets	2018		2017
VAT assets	$	226	$	176
Land use right		138		131
Long-term deposits		64		56
Investment in equity securities		47		—
Costs to obtain contracts		8		12
Others		8		10
Other Assets	$	491	$	385

Amortization expense related to land use right was $5 million, $4 million and $5 million in 2018, 2017 and 2016, respectively.

Accounts Payable and Other Current Liabilities	2018		2017
Accounts payable	$	619	$	420
Accrued compensation and benefits		200		219
Accrued capital expenditures		137		142
Contract liabilities		96		72
Accrued marketing expenses		32		28
Other current liabilities		115		104
Accounts payable and other current liabilities	$	1,199	$	985

Other Liabilities and Deferred Credits

Other Liabilities	2018		2017
Deferred escalating minimum rent	$	144	$	162
Contract liabilities		31		33
Accrued income tax payable		71		112
Deferred income tax liabilities		65		32
Other noncurrent liabilities		44		49
Other liabilities	$	355	$	388

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Changes in the Carrying Amount of Goodwill

The changes in the carrying amount of goodwill are as follows:

	Total Company			KFC			Pizza Hut		All Other Segments
Balance as of December 31, 2016
Goodwill, gross	$	461		$	70		$	9	$	382
Accumulated impairment losses^(a)		(382	)		—			—		(382	)
Goodwill, net		79			70			9		—
Goodwill acquired and allocated		23			5			9		9
Effect of currency translation adjustment and other		6			5			1		—
Balance as of December 31, 2017
Goodwill, gross		490			80			19		391
Accumulated impairment losses^(a)		(382	)		—			—		(382	)
Goodwill, net		108			80			19		9
Goodwill acquired^(b)		175			175			—		—
Effect of currency translation adjustment and other		(17	)		(17	)		—		—
Balance as of December 31, 2018
Goodwill, gross		648			238			19		391
Accumulated impairment losses^(a)		(382	)		—			—		(382	)
Goodwill, net	$	266		$	238		$	19	$	9

(a)	Accumulated impairment losses represent Little Sheep goodwill related impairment.

(b)	Goodwill acquired resulted from the acquisition of Wuxi KFC. (Note 1).

Schedule of Finite and Indefinite Lived Intangible Assets by Major Class

Intangible assets, net as of December 31, 2018 and 2017 are as follows:

	2018										2017
	Gross Carrying Amount^(b)		Accumulated Amortization			Accumulated Impairment Losses^(c)			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Definite-lived intangible assets
Reacquired franchise rights^(a)	$	150	$	(100	)	$	—		$	50	$	100	$	(87	)	$	13
Daojia platform		16		(3	)		(10	)		3		18		(1	)		17
Customer-related assets		12		(8	)		(2	)		2		12		(6	)		6
Other		17		(9	)		—			8		19		(10	)		9
	$	195	$	(120	)	$	(12	)	$	63	$	149	$	(104	)	$	45
Indefinite-lived intangible assets
Little Sheep trademark	$	53	$	—		$	—		$	53	$	56	$	—		$	56

Total intangible assets	$	248	$	(120	)	$	(12	)	$	116	$	205	$	(104	)	$	101

(a)	Increase in gross carrying amount of reacquired franchise rights in 2018 primarily resulted from the acquisition of Wuxi KFC.

(b)	Changes in gross carrying amount include effect of currency translation adjustment.

(c)	In 2018, we recorded an impairment charge of $12 million on intangible assets acquired from Daojia primarily attributable to the Daojia platform. See Note 6 for details.

Leases (Tables)

12 Months Ended

Dec. 31, 2018

Leases [Abstract]

Future Minimum Commitments, Which Include Executory Costs, and Amounts to be Received as Lessor or Sublessor under Non-cancelable Leases

Future minimum commitments, which include executory costs, and amounts to be received as lessor or sublessor under non-cancelable leases are set forth below:

	Commitments				Lease Receivables
	Capital		Operating		Operating
2019	$	3	$	466	$	15
2020		3		440		13
2021		3		394		10
2022		3		336		8
2023		3		275		6
Thereafter		22		864		7
	$	37	$	2,775	$	59

Details of rental expense and income

The details of rental expense and income are set forth below:

	2018		2017		2016
Rental expense
Minimum	$	467	$	496	$	470
Contingent		304		292		250
	$	771	$	788	$	720
Rental income	$	27	$	28	$	26

Fair Value Measurements and Disclosures (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Assets Measured or Disclosed at Fair Value on a Recurring Basis

	Balance at December 31,		Fair Value Measurement or Disclosure at December 31, 2018
	2018		Level 1		Level 2		Level 3
Cash equivalents:
Time deposits	$	570	$	—	$	570	$	—
Money market funds		226		226
Fixed rate debt securities^(a)		153		153
Total cash equivalents		949		379		570		—
Short-term investments:
Time deposits		122				122
Total short-term investments		122		—		122		—
Other assets:
Investment in equity securities		47		47
Total	$	1,118	$	426	$	692	$	—

	Balance at December 31,		Fair Value Measurement or Disclosure at December 31, 2017
	2017		Level 1		Level 2		Level 3
Cash equivalents:
Time deposits	$	635			$	635
Money market funds		93		93
Total cash equivalents		728		93		635		—
Short-term investments:
Time deposits		143				143
Fixed rate debt securities^(a)		62		62
Total short-term investments		205		62		143		—
Total	$	933	$	155	$	778	$	—

(a) Classified as held-to-maturity investments and measured at amortized cost.

Schedule of Amounts Recognized From Non-recurring Fair Value Measurements

	2018		2017			2016
Daojia impairment^(a)		12		—			—
Restaurant-level impairment^(b)		27		41			58
Incremental restaurant-level impairment upon separation^(c)		—		—			17
Changes in fair value of financial instruments^(d)		—		—			(21	)
Income from the reversal of contingent consideration^(e)		—		(3	)		—
Total	$	39	$	38		$	54

(a)	See Note 6 for further discussion.

(c)

(d)

	November 1, 2016						December 30, 2016
	Post-Closing Adjustment			Warrants			Warrants
Fair market value of common stock	$	26.19		$	26.19		$	26.12
Expected term	60 days			5 years			5 years
Average risk-free rate-of-return		0.27	%		1.31	%		1.93	%
Expected volatility		33	%		34	%		33	%
Expected dividend yield		—	%		—	%		—	%

(e)	During 2017, we recognized income of $3 million from the reversal of contingent consideration previously recorded for a business combination (Level 3), as the fair value of such contingent consideration is considered to be nil given the remote likelihood of the payment obligation.

Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2018

Assumptions Used in the BS Model

YUM and the Company estimated the fair value of each stock option and SAR award granted to the Company’s employees as of the date of grant, using the BS model with the following assumptions:

	2018			2017			2016
Risk-free interest rate		2.5	%		1.9	%	1.3% - 1.4%
Expected term (years)		6.50			6.75		6.5 - 6.75
Expected volatility		33.0	%		34.0	%	27.0% - 35.0%
Expected dividend yield		1.0	%		0.0	%	0% - 2.6%

Summary of award activity

	Shares (in thousands)				Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (in millions)
Outstanding at the beginning of 2018		21,595				18.96
Granted		1,179				40.29
Exercised		(4,493	)			15.12
Forfeited or expired		(611	)			24.14
Outstanding at the end of 2018		17,670		^(a)		21.18		5.23		226
Exercisable at the end of 2018		12,407				18.64		4.20		185

Summary of Restricted Stock Units and Performance Share Units

	Shares (in thousands)			Weighted- Average Grant Date Fair Value
Unvested at the beginning of 2018		949			26.56
Granted		302			39.50
Vested		(183	)		25.03
Forfeited or expired		(80	)		28.93
Unvested at the end of 2018		988			30.60

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income (Loss) Before Income Taxes

U.S. and foreign income (loss) before taxes are set forth below:

	2018			2017			2016
U.S.	$	(3	)	$	(13	)	$	5
China		979			806			655
Other Foreign	$	(26	)		10			6
	$	950		$	803		$	666

Details of Income Tax Provision (Benefit)

The details of our income tax provision (benefit) are set forth below:

		2018			2017			2016
Current:	Federal	$	(33	)	$	85		$	(2	)
	Foreign		214			232			200
		$	181		$	317		$	198

Deferred:	Federal	$	—		$	77		$	(36	)
	Foreign		33			(15	)		(6	)
		$	33		$	62		$	(42	)
		$	214		$	379		$	156

Effective Income Tax and Tax Rate Reconciliation

The reconciliation of income taxes calculated at the U.S. federal statutory rate to our effective tax rate is set forth below:

	2018					2017					2016
U.S. federal statutory rate	$	199		21.0	%	$	281		35.0	%	$	233		35.0	%
Impact from the Tax Act		(36	)	(3.8	)		164		20.4			—		—
Statutory rate differential attributable to foreign operations		56		5.8			(60	)	(7.5	)		(55	)	(8.3	)
Adjustments to reserves and prior years		(4	)	(0.4	)		(1	)	(0.2	)		16		2.4
Change in valuation allowances		(4	)	(0.4	)		2		0.2			—		—
Tax benefit from Little Sheep restructuring		—		—			—		—			(26	)	(3.8	)
Other, net		3		0.4			(7	)	(0.7	)		(12	)	(1.8	)
Effective income tax rate	$	214		22.6	%	$	379		47.2	%	$	156		23.5	%

Details of Deferred Tax Assets (Liabilities)

The details of 2018 and 2017 deferred tax assets (liabilities) are set forth below:

	2018			2017
Operating losses and tax credit carryforwards	$	28		$	43
Tax benefit from Little Sheep restructuring		18			20
Employee benefits		6			5
Share-based compensation		5			6
Deferred escalating minimum rent		41			45
Other liabilities		12			10
Deferred income and other		50			49
Gross deferred tax assets		160			178
Deferred tax asset valuation allowances		(50	)		(68	)
Net deferred tax assets	$	110		$	110
Intangible assets		(28	)		(25	)
Property, plant and equipment		(31	)		(2	)
Gain from re-measurement of equity interest upon acquisition		(23	)		—
Other		(4	)		(10	)
Gross deferred tax liabilities	$	(86	)	$	(37	)
Net deferred tax assets	$	24		$	73
Reported in Consolidated Balance Sheets as:
Deferred income taxes		89			105
Other liabilities		(65	)		(32	)
	$	24		$	73

Unrecognized Tax Benefits Reconciliation

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2018			2017
Beginning of Year	$	28		$	26
Additions on tax positions		3			8
Reductions due to statute expiration		(9	)		(6	)
End of Year	$	22		$	28

Summary of Income Tax Examinations

		2018				2017
Accrued interest and penalties		$	6			$	7

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment

	2018
	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated^(a)		Combined		Elimination			Consolidated
Revenues
Revenue from external customers	$	5,690	$	2,111	$	92	$	522	$	8,415	$	—		$	8,415
Inter-segment revenue		—		—		8		—		8		(8	)		—
Total	$	5,690	$	2,111	$	100	$	522	$	8,423	$	(8	)	$	8,415

	2017
	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated^(a)		Combined		Elimination		Consolidated
Revenues
Revenue from external customers	$	5,066	$	2,093	$	106	$	504	$	7,769	$	—	$	7,769
Inter-segment revenue		—		—		—		—		—		—		—
Total	$	5,066	$	2,093	$	106	$	504	$	7,769	$	—	$	7,769

	2016
	KFC		Pizza Hut		All Other Segments		Corporate and Unallocated^(a)		Combined		Elimination		Consolidated
Revenues
Revenue from external customers	$	4,757	$	1,996	$	100	$	222	$	7,075	$	—	$	7,075
Inter-segment revenue		—		—		—		—		—		—		—
Total	$	4,757	$	1,996	$	100	$	222	$	7,075	$	—	$	7,075

Operating Profit	2018			2017			2016
KFC^(b)	$	895		$	802		$	641
Pizza Hut		98			157			149
All Other Segments		(12	)		(9	)		(5	)
Unallocated revenues from transactions with franchisees and unconsolidated affiliates^(c)		514			504			222
Unallocated Other revenues		7			—			—
Unallocated expenses for transactions with franchisees and unconsolidated affiliates^(c)		(512	)		(500	)		(219	)
Unallocated Other operating costs and expenses		(6	)		—			—
Unallocated and corporate G&A expenses		(129	)		(185	)		(153	)
Unallocated Closures and impairment expense^(d)		(12	)		—			(17	)
Unallocated Other income^(e)		98			9			16
Operating Profit		941			778			634
Interest income, net^(a)		36			25			11
Investment loss^(a)		(27	)		—			—
Changes in fair value of financial instruments^(a)		—			—			21
Income Before Income Taxes	$	950		$	803		$	666

	Depreciation and Amortization
	2018		2017		2016
KFC	$	296	$	265	$	266
Pizza Hut		129		126		120
All Other Segments		8		4		5
Corporate and Unallocated		12		14		11
	$	445	$	409	$	402

	Impairment Charges
	2018		2017		2016
KFC^(f)	$	14	$	27	$	48
Pizza Hut^(f)		26		31		19
All Other Segments		—		—		3
Corporate and Unallocated^(d)		12		—		17
	$	52	$	58	$	87

	Capital Spending
	2018		2017		2016
KFC	$	292	$	227	$	221
Pizza Hut		77		93		129
All Other Segments		5		2		1
Corporate and Unallocated		96		93		85
	$	470	$	415	$	436

	Total Assets
	2018		2017
KFC^(g)	$	1,745	$	1,544
Pizza Hut		558		668
All Other Segments		130		144
Corporate and Unallocated⁽^h⁾		2,177		1,931
	$	4,610	$	4,287

(a)	Amounts have not been allocated to any segment for performance reporting purposes.

(b)	Includes equity income from investments in unconsolidated affiliates of $65 million, $65 million and $54 million in 2018, 2017 and 2016, respectively.

(d)	Primarily includes 2018 impairment charges on intangible assets acquired from Daojia and 2016 incremental restaurant-level impairment charges. See Note 6.

(e)	Primarily includes gain from re-measurement of previously held equity interest in connection with the acquisition of Wuxi KFC. See Note 6.

(f)	Includes store closure impairment charges as well as restaurant-level impairment charges resulting from our semi-annual impairment evaluation (See Note 13).

(g)	Includes investments in unconsolidated affiliates.

(h)	Primarily includes cash and cash equivalents, short-term investments, inventories and investment in equity securities that are centrally managed.

Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

	2018
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Total
Revenues:
Company sales	$	2,016	$	1,888	$	2,008	$	1,721	$	7,633
Franchise fees and income		40		34		36		31		141
Revenues from transactions with franchisees and unconsolidated affiliates		161		141		159		142		603
Other revenues		4		5		9		20		38
Total revenues		2,221		2,068		2,212		1,914		8,415
Restaurant profit		361		286		353		199		1,199
Operating Profit		395		193		269		84		941
Net Income – Yum China Holdings, Inc.		288		143		203		74		708
Basic earnings per common share	$	0.75	$	0.37	$	0.53	$	0.19	$	1.84
Diluted earnings per common share	$	0.72	$	0.36	$	0.51	$	0.19	$	1.79

	2017 (Recast)
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter			Total
Revenues:
Company sales	$	1,738	$	1,664	$	1,924	$	1,667		$	6,993
Franchise fees and income		36		33		38		34			141
Revenues from transactions with franchisees and unconsolidated affiliates		147		141		160		151			599
Other revenues		5		3		8		20			36
Total revenues		1,926		1,841		2,130		1,872			7,769
Restaurant profit		354		276		347		194			1,171
Operating Profit		296		171		264		47			778
Net Income (Loss) – Yum China Holdings, Inc.		204		125		176		(107	)		398
Basic earnings (loss) per common share	$	0.53	$	0.32	$	0.46	$	(0.28	)	$	1.03
Diluted earnings (loss) per common share	$	0.52	$	0.31	$	0.44	$	(0.28	)	$	1.00

Description of Business - Narrative (Details) $ in Millions		3 Months Ended		12 Months Ended
Description of Business - Narrative (Details) $ in Millions	Oct. 31, 2016	Mar. 31, 2018 USD ($)	May 31, 2017 Segment	Dec. 31, 2018 Restaurant Segment	Dec. 31, 2017 USD ($)	Dec. 31, 2016
Segment Reporting Information [Line Items]
Entity, date of incorporation				Apr. 01, 2016
Entity incorporation, state name				Delaware
Expiration term of master license agreement				50 years
Additional consecutive renewal terms of license agreement				50 years
Percentage of license fees on net sales				3.00%	3.00%	3.00%
Number of restaurants \| Restaurant				6,800
Number of reportable segments \| Segment			2	2
Wuxi KFC [Member]
Segment Reporting Information [Line Items]
Percentage of additional equity interest acquired		36.00%
Cash consideration paid to acquire interest		$ 98.0
Equity interest in acquiree, including subsequent acquisition, percentage		83.00%
Amount of cash consideration paid for the acquisition		$ 98.0
Daojia [Member]
Segment Reporting Information [Line Items]
Percentage of additional equity interest acquired					90.00%
Cash consideration paid to acquire interest					$ 36.7
Amount of cash consideration paid for the acquisition					$ 36.7
Percentage of equity interest acquired on a fully-diluted basis					80.00%
Additional capital					$ 25.0
KFC [Member] \| Minimum [Member]
Segment Reporting Information [Line Items]
Number of restaurants \| Restaurant				5,900
KFC [Member] \| Shanghai [Member] \| Owner and Operator of KFC [Member]
Segment Reporting Information [Line Items]
Controlling ownership percentage maintained				58.00%
KFC [Member] \| Beijing [Member] \| Owner and Operator of KFC [Member]
Segment Reporting Information [Line Items]
Controlling ownership percentage maintained				70.00%
KFC [Member] \| Hangzhou [Member] \| Owner and Operator of KFC [Member]
Segment Reporting Information [Line Items]
Non-controlling equity ownership interest owned				47.00%
KFC [Member] \| Suzhou [Member] \| Owner and Operator of KFC [Member]
Segment Reporting Information [Line Items]
Non-controlling equity ownership interest owned				47.00%
KFC [Member] \| Unconsolidated affiliates [Member] \| Hangzhou [Member] \| Owner and Operator of KFC [Member]
Segment Reporting Information [Line Items]
Non-controlling equity ownership interest owned				47.00%
KFC [Member] \| Unconsolidated affiliates [Member] \| Suzhou [Member] \| Owner and Operator of KFC [Member]
Segment Reporting Information [Line Items]
Non-controlling equity ownership interest owned				47.00%
Pizza Hut [Member] \| Minimum [Member]
Segment Reporting Information [Line Items]
Number of restaurants \| Restaurant				2,200
Parent Company Investment [Member]
Segment Reporting Information [Line Items]
Exchange ratio of shares	1

Summary of Significant Accounting Policies - Narrative (Details) $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Future lease payments due from franchisees on a nominal basis	$ 59
Prepaid gift cards expiration period	36 months
Product vouchers maximum expiration period	12 months
Points expiration period	18 months
Other Assets [Member]
Summary Of Significant Accounting Policies [Line Items]
Input VAT credit asset	$ 226
Accounts Payable And Other Current Liabilities [Member]
Summary Of Significant Accounting Policies [Line Items]
VAT payable	$ 5
KFC [Member]
Summary Of Significant Accounting Policies [Line Items]
Franchisee agreement term	10 years
Pizza Hut [Member]
Summary Of Significant Accounting Policies [Line Items]
Franchisee agreement term	10 years
Little Sheep [Member] \| Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Franchisee agreement term	5 years
Little Sheep [Member] \| Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Franchisee agreement term	10 years
Owner and Operator of KFC [Member] \| Shanghai [Member] \| KFC [Member]
Summary Of Significant Accounting Policies [Line Items]
Controlling ownership percentage maintained	58.00%
Owner and Operator of KFC [Member] \| Shanghai [Member] \| KFC [Member]
Summary Of Significant Accounting Policies [Line Items]
Controlling ownership percentage maintained	58.00%
Owner and Operator of KFC [Member] \| Beijing [Member] \| KFC [Member]
Summary Of Significant Accounting Policies [Line Items]
Controlling ownership percentage maintained	70.00%
Owner and Operator of KFC [Member] \| Beijing [Member] \| KFC [Member]
Summary Of Significant Accounting Policies [Line Items]
Controlling ownership percentage maintained	70.00%
Owner and Operator of KFC [Member] \| Wuxi [Member] \| KFC [Member]
Summary Of Significant Accounting Policies [Line Items]
Controlling ownership percentage maintained	83.00%
Owner and Operator of KFC [Member] \| Hangzhou [Member] \| KFC [Member]
Summary Of Significant Accounting Policies [Line Items]
Non-controlling equity ownership interest owned	47.00%
Owner and Operator of KFC [Member] \| Suzhou [Member] \| KFC [Member]
Summary Of Significant Accounting Policies [Line Items]
Non-controlling equity ownership interest owned	47.00%

Summary of Significant Accounting Policies - Narrative (Details 1) - USD ($)		3 Months Ended	10 Months Ended	12 Months Ended
	Nov. 01, 2016	Dec. 31, 2018	Oct. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Foreign Currency [Abstract]
Foreign currency translation adjustment		$ (17,000,000)		$ (17,000,000)
License fee percentage				3.00%
Total license fees paid			$ 216,000,000	$ 263,000,000	$ 245,000,000	$ 249,000,000
Direct Marketing Costs [Abstract]
Direct marketing expenses				341,000,000	333,000,000	332,000,000
Research and Development Expenses [Abstract]
Research and development expenses				$ 4,000,000	5,000,000	5,000,000
Impairment or Disposal of Property, Plant and Equipment [Abstract]
Number of consecutive years of operating losses used as primary indicator of potential impairment for our semi-annual impairment testing of restaurant assets				2 years
Income Taxes [Abstract]
Adjustment to provisional amounts as tax expense		36,000,000
Percentage threshold that the positions taken or expected to be taken is more likely than not sustained upon examination by tax authorities (in hundredths)				50.00%
Receivables [Abstract]
Number of days from the period in which the corresponding sales occur that trade receivables are generally due				30 days
Receivables due from unconsolidated affiliates including trade receivables and dividend receivables		65,000,000		$ 65,000,000	69,000,000
Goodwill and Intangible Assets [Abstract]
Goodwill Written Off Related To Sale Of Business Unit Years From Acquisition				2 years
Fair Value Goodwill Written Off Related To Sale Of Business Unit Minimum Years Refranchised				2 years
Impairment charge				$ 52,000,000	58,000,000	87,000,000
Daojia platform [Member]
Goodwill and Intangible Assets [Abstract]
Impairment charge				$ 12,000,000
Buildings [Member] \| Minimum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years)				20 years
Buildings [Member] \| Maximum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years)				50 years
Leasehold Improvements [Member] \| Minimum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years)				5 years
Leasehold Improvements [Member] \| Maximum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years)				10 years
Machinery and Equipment [Member] \| Minimum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years)				3 years
Machinery and Equipment [Member] \| Maximum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years)				10 years
Capitalized Software Costs [Member] \| Minimum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years)				3 years
Capitalized Software Costs [Member] \| Maximum [Member]
Property, Plant and Equipment [Abstract]
Estimated useful life used in the calculation of the depreciation and amortization on a straight-line basis (in years)				5 years
Payment Processors and Aggregators [Member]
Receivables [Abstract]
Allowance for doubtful accounts		$ 0		$ 0
Chinese Local Tax Authority [Member]
Income Taxes [Abstract]
PRC withholding tax on dividends				10.00%
Percentage of withholding tax on dividends by Hong Kong				5.00%
Minimum percentage of equity interest in a PRC-resident enterprise to be held by Hong Kong resident enterprise				25.00%
Tax withholding reduction percentage				5.00%
Incremental Impairment Spin-off [Member]
Impairment or Disposal of Property, Plant and Equipment [Abstract]
Additional impairment charges	$ 17,000,000
Transactions With Franchisees and Unconsolidated Affiliates [Member]
Direct Marketing Costs [Abstract]
Direct marketing expenses				$ 62,000,000	$ 69,000,000	$ 61,000,000

Schedule of Impact of Adoption of New Revenue Standard (Details) - USD ($) $ / shares in Units, $ in Millions	2 Months Ended	3 Months Ended						4 Months Ended	12 Months Ended
	Feb. 28, 2017	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Aug. 31, 2017	May 31, 2017	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disaggregation Of Revenue [Line Items]
Total revenues	$ 1,926	$ 1,914	$ 2,212	$ 2,068	$ 2,221	$ 2,130	$ 1,841	$ 1,872	$ 8,415	$ 7,769	$ 7,075
Total costs and expenses, net									7,474	6,991	6,441
Operating Profit	296	84	269	193	395	264	171	47	941	778	634
Net Income – Yum China Holdings, Inc.	$ 204	$ 74	$ 203	$ 143	$ 288	$ 176	$ 125	$ (107)	$ 708	$ 398	$ 498
Basic Earnings Per Common Share	$ 0.53	$ 0.19	$ 0.53	$ 0.37	$ 0.75	$ 0.46	$ 0.32	$ (0.28)	$ 1.84	$ 1.03	$ 1.35
Diluted Earnings Per Common Share	$ 0.52	$ 0.19	$ 0.51	$ 0.36	$ 0.72	$ 0.44	$ 0.31	$ (0.28)	$ 1.79	$ 1.00	$ 1.35
As Previously Reported [Member] \| 2014-09 [Member]
Disaggregation Of Revenue [Line Items]
Total revenues										$ 7,144	$ 6,752
Total costs and expenses, net										6,359	6,112
Operating Profit										785	640
Net Income – Yum China Holdings, Inc.										$ 403	$ 502
Basic Earnings Per Common Share										$ 1.04	$ 1.36
Diluted Earnings Per Common Share										$ 1.01	$ 1.36
As Adjusted [Member] \| 2014-09 [Member]
Disaggregation Of Revenue [Line Items]
Total revenues										$ 7,769	$ 7,075
Total costs and expenses, net										6,991	6,441
Operating Profit										778	634
Net Income – Yum China Holdings, Inc.										$ 398	$ 498
Basic Earnings Per Common Share										$ 1.03	$ 1.35
Diluted Earnings Per Common Share										$ 1.00	$ 1.35

Revenue - Schedule of Disaggregation of Revenue by Types of Arrangements and Segments (Details) - USD ($)
$ in Millions

2 Months Ended

3 Months Ended

4 Months Ended

12 Months Ended

Feb. 28, 2017

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Aug. 31, 2017

May 31, 2017

Dec. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

$ 1,926

$ 1,914

$ 2,212

$ 2,068

$ 2,221

$ 2,130

$ 1,841

$ 1,872

$ 8,415

$ 7,769

$ 7,075

KFC [Member]

5,690

5,066

4,757

Pizza Hut [Member]

All Other Segments [Member]

2,111

2,093

1,996

Corporate and Unallocated [Member]

106

100

^[1]

522

^[2]

504

222

Combined [Member]

8,423

7,769

7,075

Elimination [Member]

Elimination [Member] | All Other Segments [Member]

(8)

Operating Segments [Member]

Operating Segments [Member] | KFC [Member]

8,415

7,769

7,075

Operating Segments [Member] | Pizza Hut [Member]

5,690

5,066

4,757

Operating Segments [Member] | All Other Segments [Member]

2,111

2,093

1,996

100

106

100

Company Sales [Member]

Company Sales [Member] | KFC [Member]

1,738

1,721

2,008

1,888

2,016

1,924

1,664

1,667

7,633

6,993

6,622

Company Sales [Member] | Pizza Hut [Member]

5,495

4,863

4,572

Company Sales [Member] | All Other Segments [Member]

2,106

2,090

1,993

Company Sales [Member] | Corporate and Unallocated [Member]

Company Sales [Member] | Combined [Member]

^[2]

7,633

6,993

6,622

Franchise [Member]

Franchise [Member] | KFC [Member]

141

129

Franchise [Member] | Pizza Hut [Member]

132

134

124

Franchise [Member] | All Other Segments [Member]

Franchise [Member] | Combined [Member]

Transactions With Franchisees and Unconsolidated Affiliates [Member]

141

129

Transactions With Franchisees and Unconsolidated Affiliates [Member] | KFC [Member]

147

142

159

141

161

160

141

151

603

599

299

Transactions With Franchisees and Unconsolidated Affiliates [Member] | Pizza Hut [Member]

Transactions With Franchisees and Unconsolidated Affiliates [Member] | All Other Segments [Member]

Transactions With Franchisees and Unconsolidated Affiliates [Member] | Corporate and Unallocated [Member]

Transactions With Franchisees and Unconsolidated Affiliates [Member] | Combined [Member]

514

^[2]

504

222

603

599

299

Other Revenues [Member]

Other Revenues [Member] | All Other Segments [Member]

$ 5

$ 20

$ 9

$ 5

$ 4

$ 8

$ 3

$ 20

Other Revenues [Member] | Corporate and Unallocated [Member]

Other Revenues [Member] | Combined [Member]

^[2]

Other Revenues [Member] | Elimination [Member]

$ 36

$ 25

Net Income – Yum China Holdings, Inc.

$ (8)

[1]	Amounts have not been allocated to any segment for performance reporting purposes.
[2]	Company sales from Corporate and Unallocated represent sales from COFFii & JOY, a coffee concept recently developed by the Company in 2018.

Revenue - Schedule of Franchise Fees and Income (Details) - Franchise [Member] - USD ($) $ in Millions	2 Months Ended	3 Months Ended						4 Months Ended	12 Months Ended
	Feb. 28, 2017	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Aug. 31, 2017	May 31, 2017	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenue From Contract With Customer [Line Items]
Franchise fees and income	$ 36	$ 31	$ 36	$ 34	$ 40	$ 38	$ 33	$ 34	$ 141	$ 141	$ 129
Transferred at Point in Time [Member]
Revenue From Contract With Customer [Line Items]
Franchise fees and income									7	6	5
Transferred over Time [Member]
Revenue From Contract With Customer [Line Items]
Franchise fees and income									$ 134	$ 135	$ 124

Revenue - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
Revenue - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Revenue From Contract With Customer [Abstract]
Impairment losses related to costs to obtain contracts	$ 0	$ 0
Costs to obtain contracts	8	12
Revenue recognized	$ 46	$ 30

Revenue (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Contract liabilities
- Deferred revenue related to prepaid stored-value products	$ 73	$ 50
- Deferred revenue related to customer loyalty programs	17	16
- Deferred revenue related to upfront fees	37	39
Total	$ 127	$ 105

Transactions With Parent (Details) $ in Millions	10 Months Ended
Transactions With Parent (Details) $ in Millions	Oct. 31, 2016 USD ($)
Transactions with Parent [Line Items]
Percentage of initial fees and continuing fees to company and franchise sales	3.00%
General and administrative expenses [Member]
Transactions with Parent [Line Items]
Corporate expense allocations	$ 11

Transactions With Parent (Details 2) - USD ($) $ in Millions	10 Months Ended	12 Months Ended
	Oct. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Transactions With Parent [Abstract]
Initial fees – Company	$ 9
Initial fees – Franchisees	2
Continuing fees – Company	163
Continuing fees – Franchisees	42
Total	$ 216	$ 263	$ 245	$ 249

Earnings Per Common Share ("EPS") - Narrative (Details)	Oct. 31, 2016
Parent Company Investment [Member]
Earnings Per Share [Line Items]
Exchange ratio of shares	1

Earnings Per Common Share ("EPS") (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions

2 Months Ended

3 Months Ended

4 Months Ended

12 Months Ended

Feb. 28, 2017

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Aug. 31, 2017

May 31, 2017

Dec. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Earnings Per Share [Abstract]

$ 204

$ 74

$ 203

$ 143

$ 288

$ 176

$ 125

$ (107)

$ 708

$ 398

$ 498

Weighted-average common shares outstanding (for basic calculation)

^[1]

384

387

368

Effect of dilutive share-based awards

^[1]

Effect of dilutive warrants

^[2]

Weighted-average common and dilutive potential common shares outstanding (for diluted calculation)

395

398

369

Basic Earnings Per Share

$ 0.53

$ 0.19

$ 0.53

$ 0.37

$ 0.75

$ 0.46

$ 0.32

$ (0.28)

$ 1.84

$ 1.03

$ 1.35

Diluted Earnings Per Share

$ 0.52

$ 0.19

$ 0.51

$ 0.36

$ 0.72

$ 0.44

$ 0.31

$ (0.28)

$ 1.79

$ 1.00

$ 1.35

Share-based awards and warrants excluded from the diluted EPS computation

^[3]

[1]	As a result of the separation, shares of Yum China common stock were distributed to YUM’s shareholders of record as of October 19, 2016 and included in the calculated weighted-average common shares outstanding. Holders of outstanding YUM equity awards generally received both adjusted YUM awards and Yum China awards, or adjusted awards of either YUM or Yum China in their entirety, to maintain the pre-separation intrinsic value of the awards. Any subsequent exercise of these awards, whether held by the Company’s employees or YUM’s employees, would increase the number of common shares outstanding. The outstanding equity awards are included in the computation of diluted EPS, if there is dilutive effect. See Note 15 for a further discussion of share-based compensation.
[2]	Pursuant to the investment agreements dated September 1, 2016, Yum China issued to strategic investors two tranches of warrants on January 9, 2017, with each tranche providing the right to purchase 8,200,405 shares of Yum China common stock, at an exercise price of $31.40 and $39.25 per share, respectively, subject to customary anti-dilution adjustments. The warrants may be exercised at any time through October 31, 2021. The outstanding warrants are included in the computation of diluted EPS, if there is dilutive effect when the average market price of Yum China common stock for the year exceeds the applicable exercise price of the warrants
[3]	These outstanding employee stock options, stock appreciation rights, RSUs, PSUs and warrants were not included in the computation of diluted EPS because to do so would have been antidilutive for the years presented.

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
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Reference 3: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
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-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=109256448&loc=d3e4984-109258

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Section S99
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-Subparagraph (SX 210.5-03(21))
-URI http://asc.fasb.org/extlink&oid=115205541&loc=SL114868664-224227

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
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-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1252-109256

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
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-Subparagraph (SX 210.9-04(23))
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
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-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=109260490&loc=SL5780133-109256

+ Details

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=109256448&loc=d3e4984-109258

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1252-109256

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(23))
-URI http://asc.fasb.org/extlink&oid=114873765&loc=SL114874048-224260

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1337-109256

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(21))
-URI http://asc.fasb.org/extlink&oid=115205541&loc=SL114868664-224227

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=109260490&loc=SL5780133-109256

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(19))
-URI http://asc.fasb.org/extlink&oid=114873790&loc=SL114874131-224263

+ Details

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

Gain from re-measurement of previously held ownership interest at fair value

Earnings Per Common Share ("EPS") (Parenthetical) (Details)		12 Months Ended
	Jan. 09, 2017 Tranche $ / shares shares	Dec. 31, 2018 Tranche
Class Of Warrant Or Right [Line Items]
Number of tranches of warrants \| Tranche	2	2
Tranche One Warrants [Member]
Class Of Warrant Or Right [Line Items]
Warrants to purchase shares of common stock \| shares	8,200,405
Exercise price of warrants \| $ / shares	$ 31.40
Tranche Two Warrants [Member]
Class Of Warrant Or Right [Line Items]
Warrants to purchase shares of common stock \| shares	8,200,405
Exercise price of warrants \| $ / shares	$ 39.25

Items Affecting Comparability of Net Income and Cash Flows - Narrative (Details) - USD ($)

3 Months Ended

4 Months Ended

12 Months Ended

Nov. 01, 2016

Dec. 31, 2018

Mar. 31, 2018

Dec. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2015

Sep. 30, 2018

^[1]

$ 98,000,000

Unrealized investment loss

^[2]

(27,000,000)

Percentage of license fees on net sales

52,000,000

$ 58,000,000

$ 87,000,000

Tax benefit

$ 214,000,000

$ 379,000,000

$ 156,000,000

3.00%

Reversal of the previous loss recognized

$ 2,000,000

Proceeds from disposal of aircraft

19,000,000

Net book value of aircraft

17,000,000

Loss on sale of aircraft

$ (15,000,000)

Additional income tax expense

^[2]

$ 21,000,000

$ 163,900,000

One-time transition tax on deemed repatriation of accumulated undistributed foreign earnings

129,800,000

Re-measurement of deferred tax assets

4,500,000

Deferred tax assets valuation allowance

$ 29,600,000

Reversal to provisional amounts as adjustment to tax expense

$ 36,000,000

Common Stock [Member]

Issuance of common stock to Investors (in shares)

19,145,169.42

19,000,000

Daojia Platform and Customer-related Assets [Member]

Impairment charge allocated to noncontrolling interests

$ 12,000,000

Tax benefit

(3,000,000)

1,000,000

Impairment charge allocated to parent

8,000,000

Meituan Dianping [Member]

Number of ordinary shares subscribed

8,400,000

Maximum percentage of ordinary shares subscribed

1.00%

Fair value of Investment in Meituan's ordinary shares

$ 74,000,000

Unrealized investment loss

(27,000,000)

Little Sheep Group Limited [Member]

Tax benefit

$ (26,000,000)

Little Sheep Group Limited [Member] | Redeemable Noncontrolling Interest [Member]

Percentage of additional equity interest acquired

7.00%

Noncontrolling interest loss upon redemption

$ 8,000,000

Little Sheep Group Limited [Member] | Redeemable Noncontrolling Interest [Member] | Maximum [Member]

Redeemable Noncontrolling Interest, Purchase Price

$ 1,000,000

Wuxi KFC [Member]

Gain from re-measurement of previously held ownership interest at fair value

$ 98,000,000

Ownership interest previously held

47.00%

Percentage of additional equity interest acquired

36.00%

[1]	As a result of the acquisition of Wuxi KFC in the first quarter of 2018, as disclosed in Note 6, the Company recognized a gain of $98 million from the re-measurement of our previously held 47% equity interest at fair value, which was not allocated to any segment for performance reporting purposes.
[2]	Amounts have not been allocated to any segment for performance reporting purposes.

Other Income, Net (Details) - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Other Income And Expenses [Abstract]

Equity income from investments in unconsolidated affiliates

$ 65

$ 54

Gain from re-measurement of equity interest upon acquisition

^[1]

Foreign exchanges and other

(11)

(1)

Other income, net

$ 152

$ 64

$ 60

[1]	As a result of the acquisition of Wuxi KFC in the first quarter of 2018, as disclosed in Note 6, the Company recognized a gain of $98 million from the re-measurement of our previously held 47% equity interest at fair value, which was not allocated to any segment for performance reporting purposes.

This item represents the entity's proportionate share for the period of the net income (loss) of its investee (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. This item includes income or expense related to stock-based compensation based on the investor's grant of stock to employees of an equity method investee.

Other Operating Income (Expense), Net

Other Income, Net (Parenthetical) (Details) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Mar. 31, 2018

Dec. 31, 2018

Gain from re-measurement of previously held ownership interest at fair value

^[1]

$ 98

Wuxi KFC [Member]

Other Operating Income (Expense), Net

Gain from re-measurement of previously held ownership interest at fair value

$ 98

Ownership interest previously held

47.00%

[1]	As a result of the acquisition of Wuxi KFC in the first quarter of 2018, as disclosed in Note 6, the Company recognized a gain of $98 million from the re-measurement of our previously held 47% equity interest at fair value, which was not allocated to any segment for performance reporting purposes.

Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Accounts Receivables, net
Accounts receivables, gross	$ 81	$ 81
Allowance for doubtful accounts	(1)	(2)
Accounts receivables, net	80	79
Prepaid Expenses and Other Current Assets
Prepaid rent	42	41
Receivables from payment processors and aggregators	49	40
Dividends receivable from unconsolidated affiliates	20	21
Other prepaid expenses and current assets	66	60
Prepaid expenses and other current assets	177	162
Other Assets
VAT assets	226	176
Land use right	138	131
Long-term deposits	64	56
Investment in equity securities	47
Costs to obtain contracts	8	12
Others	8	10
Other Assets	491	385
Accounts Payable and Other Current Liabilities
Accounts payable	619	420
Accrued compensation and benefits	200	219
Accrued capital expenditures	137	142
Contract liabilities	96	72
Accrued marketing expenses	32	28
Other current liabilities	115	104
Accounts payable and other current liabilities	1,199	985
Other Liabilities
Deferred escalating minimum rent	144	162
Contract liabilities	31	33
Accrued income tax payable	71	112
Deferred income tax liabilities	65	32
Other noncurrent liabilities	44	49
Other liabilities	$ 355	$ 388

Supplemental Balance Sheet Information (Details 1) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 3,348	$ 3,416
Accumulated depreciation and amortization	(1,733)	(1,725)
Property, plant and equipment, net	1,615	1,691
Buildings and Improvements [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	2,121	2,184
Capital Leases, Primarily Buildings [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	26	28
Machinery and Equipment and Construction in Progress [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 1,201	$ 1,204

Supplemental Balance Sheet Information - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Supplemental Balance Sheet Information Disclosure [Abstract]
Depreciation and amortization expense related to property, plant and equipment	$ 414	$ 391	$ 385
Amortization expense related to land use right	$ 5	$ 4	$ 5

Goodwill and Intangible Assets (Details) - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Accumulated impairment losses

$ 648

$ 490

$ 461

^[1]

(382)

266

108

Effect of currency translation adjustment and other

175

^[2]

(17)

KFC [Member]

238

238

Effect of currency translation adjustment and other

175

^[2]

(17)

Pizza Hut [Member]

Effect of currency translation adjustment and other

All Other Segments [Member]

Accumulated impairment losses

391

382

^[1]

(382)

$ (382)

$ 9

$ 9

[1]	Accumulated impairment losses represent Little Sheep goodwill related impairment.
[2]	Goodwill acquired resulted from the acquisition of Wuxi KFC. (Note 1).

Goodwill and Intangible Assets (Details 1) - USD ($)
$ in Millions

Dec. 31, 2018

Dec. 31, 2017

$ 195

^[1]

$ 149

Accumulated Impairment Losses

(120)

(104)

^[2]

(12)

Total intangible assets

Little Sheep [Member] | Trademark [Member]

248

^[1]

205

Intangible assets, net

116

101

Indefinite-lived intangible assets

Reacquired franchise rights [Member]

^[3]

150

^[1]

100

^[3]

(100)

(87)

^[3]

Daojia platform [Member]

^[1]

Accumulated Impairment Losses

(3)

(1)

^[2]

(10)

Customer-related assets [Member]

^[1]

Accumulated Impairment Losses

(8)

(6)

^[2]

(2)

Other [Member]

^[1]

(9)

(10)

$ 8

$ 9

[1]	Changes in gross carrying amount include effect of currency translation adjustment.
[2]	In 2018, we recorded an impairment charge of $12 million on intangible assets acquired from Daojia primarily attributable to the Daojia platform. See Note 6 for details.
[3]	Increase in gross carrying amount of reacquired franchise rights in 2018 primarily resulted from the acquisition of Wuxi KFC.

Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Definite-lived intangible assets
Definite-lived intangible assets, amortization expense	$ 26	$ 14	$ 12
Approximate amortization expense for definite-lived intangible assets - 2019	17
Approximate amortization expense for definite-lived intangible assets - 2020	13
Approximate amortization expense for definite-lived intangible assets - 2021	13
Approximate amortization expense for definite-lived intangible assets - 2022	13
Approximate amortization expense for definite-lived intangible assets - 2023	$ 3

Goodwill and Intangible Assets - Parenthetical (Details 1) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Schedule Of Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Impairment charge	$ 52	$ 58	$ 87
Daojia platform [Member]
Schedule Of Finite And Indefinite Lived Intangible Assets By Major Class [Line Items]
Impairment charge	$ 12

Credit Facilities - Narrative (Details) - 12 months ended Dec. 31, 2018	USD ($)	CNY (¥)
Line Of Credit Facility [Line Items]
Credit facility maximum borrowing amount	$ 418,000,000	¥ 2,876,000,000
Onshore Credit Facility [Member]
Line Of Credit Facility [Line Items]
Credit facility maximum borrowing amount	218,000,000	¥ 1,500,000,000
Offshore Credit Facility [Member]
Line Of Credit Facility [Line Items]
Credit facility maximum borrowing amount	$ 200,000,000
Revolving Credit Facility [Member] \| Maximum [Member]
Line Of Credit Facility [Line Items]
Credit facility expiration period	1 year
Credit facility terms	The credit facilities had remaining terms of one year or less as of December 31, 2018. Each credit facility bears interest based on the prevailing rate stipulated by the People’s Bank of China or London Interbank Offered Rate (LIBOR) administered by the ICE Benchmark Administration. Each credit facility contains a cross-default provision whereby our failure to make any payment on a principal amount from any credit facility will constitute a default on other credit facilities. Some of the credit facilities contain financial covenants including, among other things, limitations on certain additional indebtedness and liens, and certain other transactions specified in the respective agreement. Interest on any outstanding borrowings is due at least monthly.

Investment Agreements with Strategic Investors - Narrative (Details) $ / shares in Units, $ in Millions				12 Months Ended
	Jan. 09, 2017 Tranche $ / shares shares	Dec. 30, 2016 USD ($) $ / shares	Nov. 01, 2016 USD ($) Tranche $ / shares shares	Dec. 31, 2018 USD ($) Tranche $ / shares shares	Dec. 31, 2017 $ / shares shares	Oct. 31, 2016 $ / shares shares
Subsidiary Sale Of Stock [Line Items]
Investment agreements, consideration received \| $			$ 460.0
Number of tranches of warrants \| Tranche	2			2
Common stock, shares issued \| shares				392,000,000	389,000,000	363,758,219
Common stock, shares outstanding \| shares				379,000,000	385,000,000	363,758,219
Common stock, par value \| $ / shares				$ 0.01	$ 0.01	$ 0.01
Discount percentage on volume weighted average trading price per share		8.00%
Shares repurchased from investors \| shares				9,000,000	3,400,000
Warrants exercisable period				Oct. 31, 2021
Residual amounts allocated to common stock \| $			364.0
Warrants [Member]
Subsidiary Sale Of Stock [Line Items]
Fair value of liabilities \| $			97.1
Decrease in fair value of liability included in earnings \| $		$ (2.1)
Liability post-closing adjustment reclassified to equity \| $		95.0
Call and Written Put Option [Member]
Subsidiary Sale Of Stock [Line Items]
Fair value of asset \| $			1.3
Increase in fair value included in earnings \| $		$ 19.2
Warrants First Tranche [Member]
Subsidiary Sale Of Stock [Line Items]
Amount on which exercise price of warrants based \| $				$ 12,000.0
Warrants Second Tranche [Member]
Subsidiary Sale Of Stock [Line Items]
Amount on which exercise price of warrants based \| $				$ 15,000.0
Minimum [Member]
Subsidiary Sale Of Stock [Line Items]
VWAP measurement period				Dec. 01, 2016
Maximum [Member]
Subsidiary Sale Of Stock [Line Items]
VWAP measurement period				Dec. 30, 2016
Primavera [Member]
Subsidiary Sale Of Stock [Line Items]
Investment agreements, consideration received \| $			$ 410.0
Shares issued subject to post-closing adjustment \| shares			17,064,172.74
Shares repurchased from investors \| shares	699,394.74
Primavera [Member] \| Warrants First Tranche [Member]
Subsidiary Sale Of Stock [Line Items]
Warrants to purchase common stock \| shares	7,309,057
Primavera [Member] \| Warrants Second Tranche [Member]
Subsidiary Sale Of Stock [Line Items]
Warrants to purchase common stock \| shares	7,309,057
Ant Financial [Member]
Subsidiary Sale Of Stock [Line Items]
Investment agreements, consideration received \| $			$ 50.0
Shares issued subject to post-closing adjustment \| shares			2,080,996.68
Shares repurchased from investors \| shares	85,291.68
Ant Financial [Member] \| Warrants First Tranche [Member]
Subsidiary Sale Of Stock [Line Items]
Warrants to purchase common stock \| shares	891,348
Ant Financial [Member] \| Warrants Second Tranche [Member]
Subsidiary Sale Of Stock [Line Items]
Warrants to purchase common stock \| shares	891,348
Primavera & Ant Financial [Member]
Subsidiary Sale Of Stock [Line Items]
Ownership percentage of new common stock issued, subject to potential adjustment			5.00%
Number of tranches of warrants \| Tranche			2
Warrants issuable minimum period after separation			70 days
Warrants additional ownership percentage exercisable by investors			4.00%
Common stock, par value \| $ / shares	$ 0.01
Common stock, price per share \| $ / shares			$ 24.03
Shares repurchased price per share \| $ / shares		$ 25.05
Outstanding shares of common stock owned	4.80%
Outstanding shares of common stock owned, subject to post-closing adjustment	8.70%
Primavera & Ant Financial [Member] \| Warrants First Tranche [Member]
Subsidiary Sale Of Stock [Line Items]
Warrant exercise price \| $ / shares	$ 31.40
Primavera & Ant Financial [Member] \| Warrants Second Tranche [Member]
Subsidiary Sale Of Stock [Line Items]
Warrant exercise price \| $ / shares	$ 39.25
Primavera & Ant Financial [Member] \| Minimum [Member]
Subsidiary Sale Of Stock [Line Items]
Expected ownership percentage of new common stock issued, final			4.30%
Primavera & Ant Financial [Member] \| Maximum [Member]
Subsidiary Sale Of Stock [Line Items]
Expected ownership percentage of new common stock issued, final			5.90%

Leases - Narrative (Details) $ in Millions	12 Months Ended
Leases - Narrative (Details) $ in Millions	Dec. 31, 2018 USD ($) Restaurant Property	Dec. 31, 2017 USD ($)
Capital Leased Assets [Line Items]
Number of restaurants operated \| Restaurant	6,800
Maximum duration of lease commitments from inception for the vast majority of our lease commitments (in years)	20 years
Number of properties sublease subject to franchisees \| Property	170
Present value of minimum payments under capital leases	$ 27	$ 29
Accounts Payable And Other Current Liabilities [Member]
Capital Leased Assets [Line Items]
Current portion of capital lease obligations	$ 2	$ 1

Leases (Details) $ in Millions	Dec. 31, 2018 USD ($)
Capital leases, future minimum commitments [Abstract]
2019	$ 3
2020	3
2021	3
2022	3
2023	3
Thereafter	22
Capital leases, total future minimum commitments	37
Operating leases, future minimum commitments [Abstract]
2019	466
2020	440
2021	394
2022	336
2023	275
Thereafter	864
Operating leases, total future minimum commitments	2,775
Operating leases, lease receivables [Abstract]
2019	15
2020	13
2021	10
2022	8
2023	6
Thereafter	7
Operating leases, total lease receivables	$ 59

Leases (Details 1) - USD ($) $ in Millions	12 Months Ended
Leases (Details 1) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Rental expense
Minimum	$ 467	$ 496	$ 470
Contingent	304	292	250
Total rental expense	771	788	720
Rental income	$ 27	$ 28	$ 26

The increases or decreases in lease payments that result from changes occurring after the inception of the lease in the factors (other than the passage of time) on which lease payments are based, except that any escalation of minimum lease payments relating to increases in construction or acquisition cost of the leased property or for increases in some measure of cost or value during the construction or preconstruction period, are excluded from contingent rentals. Contingent rentals also may include amounts for which the triggering events have not yet occurred or the specified targets for which have not yet been achieved (such as sales based percentage rent), but which events are considered probable of occurring or which specified targets are considered probable of being achieved.

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Fair Value Measurements and Disclosures - Narrative (Details)	Dec. 31, 2018 USD ($)
Fair Value Disclosures [Abstract]
Transfer from Level 1 to Level 2	$ 0
Transfer from Level 2 to Level 1	$ 0

Fair Value Measurements and Disclosures - Assets Measured or Disclosed at Fair Value on Recurring Basis (Details) - Recurring Fair Value Measurements [Member] - USD ($)
$ in Millions

Dec. 31, 2018

Dec. 31, 2017

Cash equivalents, Fair Value Measurement or Disclosure

$ 949

$ 728

Short-term investments, Fair Value Measurement or Disclosure

122

205

Total assets, Fair Value Measurement or Disclosure

1,118

933

Level 1 [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Cash equivalents, Fair Value Measurement or Disclosure

379

Short-term investments, Fair Value Measurement or Disclosure

Total assets, Fair Value Measurement or Disclosure

426

155

Level 2 [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Cash equivalents, Fair Value Measurement or Disclosure

570

635

Short-term investments, Fair Value Measurement or Disclosure

122

143

Total assets, Fair Value Measurement or Disclosure

692

778

Time Deposits [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Cash equivalents, Fair Value Measurement or Disclosure

570

635

Short-term investments, Fair Value Measurement or Disclosure

122

143

Time Deposits [Member] | Level 2 [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Cash equivalents, Fair Value Measurement or Disclosure

570

635

Short-term investments, Fair Value Measurement or Disclosure

122

143

Money Market Funds [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Cash equivalents, Fair Value Measurement or Disclosure

226

Money Market Funds [Member] | Level 1 [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Cash equivalents, Fair Value Measurement or Disclosure

226

Fixed Rate Debt Securities [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Cash equivalents, Fair Value Measurement or Disclosure

^[1]

153

Short-term investments, Fair Value Measurement or Disclosure

^[1]

Fixed Rate Debt Securities [Member] | Level 1 [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Cash equivalents, Fair Value Measurement or Disclosure

^[1]

153

Short-term investments, Fair Value Measurement or Disclosure

^[1]

$ 62

Investment in Equity Securities [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Other assets, Fair Value Measurement or Disclosure

Investment in Equity Securities [Member] | Level 1 [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Other assets, Fair Value Measurement or Disclosure

$ 47

[1]	Classified as held-to-maturity investments and measured at amortized cost.

Fair Value Measurements and Disclosures (Details) - Fair Value, Measurements, Nonrecurring [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total expense recognized from non-recurring fair value measurements

$ 39

$ 38

$ 54

Daojia Impairment [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total expense recognized from non-recurring fair value measurements

^[1]

Restaurant-level impairment [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total expense recognized from non-recurring fair value measurements

^[2]

$ 27

Incremental Restaurant-level Impairment Upon Separation [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total expense recognized from non-recurring fair value measurements

^[3]

Changes in Fair Value of Financial Instruments [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total expense recognized from non-recurring fair value measurements

^[4]

$ (21)

Income from Reversal of Contingent Consideration [Member]

Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]

Total expense recognized from non-recurring fair value measurements

^[5]

$ (3)

[1]	See Note 6 for further discussion.
[2]	Restaurant-level impairment charges are recorded in Closures and impairment expenses, net and resulted primarily from our semi-annual impairment evaluation of long-lived assets of individual restaurants that were being operated at the time of impairment and had not been offered for refranchising. The fair value measurements used in these impairment evaluations were based on discounted cash flow estimates using unobservable inputs (Level 3). The remaining net book value of assets measured at fair value during the years ended December 31, 2018, 2017 and 2016 was insignificant.
[3]	Incremental restaurant-level impairment represents additional impairment as a result of including the impact from the license fee paid to YUM on the individual restaurants’ future cash flow, which is equal to 3% of net system sales. Such license fee did not impact the impairment assessment prior to the separation as it was considered an intercompany charge at the time, whereas it became a charge from a third party after the separation and therefore should be considered in the impairment assessment. The remaining net book value of assets measured at fair value during the year ended December 31, 2018 was insignificant.
[4]	(d)The Post-Closing Adjustment and the Warrants from the investment with strategic investors were accounted for as derivative instruments and liability-classified equity contracts, respectively (see Note 11). These financial instruments were initially measured at fair value as of November 1, 2016, the date when shares of common stock were issued, and subject to subsequent fair value measurement until December 30, 2016. They are classified within Level 3 because their fair values are based on inputs that are unobservable in the market. The Company adopted the Monte-Carlo Simulation model (the “MCS” model) and Black-Scholes option-pricing model (the “BS” model) in deriving the initial fair values of the Post-Closing Adjustment and the Warrants, respectively. On December 30, 2016, when the Adjusted VWAP Price Per Share was determined, the Post-Closing Adjustment was re-measured at fair value of $20.5 million based on 784,686.42 shares of common stock to be repurchased from the Investors at the closing price of $26.12 per share. The Warrants were re-measured at fair value of $95 million using the BS option-pricing model with assumptions as of December 30, 2016. The key assumptions for the MCS model and the BS model as of November 1, 2016 and December 30, 2016, respectively, are as follows: November 1, 2016 December 30, 2016 Post-Closing Adjustment Warrants Warrants Fair market value of common stock $26.19 $26.19 $26.12 Expected term 60 days 5 years 5 years Average risk-free rate-of-return 0.27% 1.31% 1.93% Expected volatility 33% 34% 33% Expected dividend yield —% —% —% The Adjusted VWAP Price Per Share for the Post-Closing Adjustment and the exercise price of the Warrants are estimated based on simulated paths. Since we became a publicly traded company after the separation and did not have sufficient historical trading data to estimate the expected volatility, we estimated the expected volatility of our common stock based on the historical price volatility of the publicly traded shares of comparable companies in the same business as the Company over the periods equal to the expected term of these financial instruments. The risk-free interest rate was based on the U.S. Treasury zero-coupon yield in effect with maturity terms equal to the expected term of the financial instruments. The dividend yield was estimated to be zero.
[5]	During 2017, we recognized income of $3 million from the reversal of contingent consideration previously recorded for a business combination (Level 3), as the fair value of such contingent consideration is considered to be nil given the remote likelihood of the payment obligation.

Fair Value Measurements and Disclosures (Parenthetical) (Details) $ / shares in Units, $ in Millions	1 Months Ended	12 Months Ended
	Dec. 30, 2016 USD ($) $ / shares shares	Dec. 31, 2018 shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016	Nov. 01, 2016
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Percentage of license fees on net sales		3.00%	3.00%	3.00%
Shares repurchased \| shares		9,000,000	3,400,000
Expected Dividend Yield [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Dividend yield	0				0
Common Stock [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Shares repurchased \| shares	784,686.42
Shares repurchased price per share \| $ / shares	$ 26.12
Fair Value, Inputs, Level 3 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Income recognized from reversal of contingent consideration			$ 3.0
Fair Value, Inputs, Level 3 [Member] \| Common Stock [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value of stock to be repurchased calculated based on weighted average trading price	$ 20.5
Fair Value, Inputs, Level 3 [Member] \| Warrants [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair value of stock to be repurchased calculated based on weighted average trading price	$ 95.0

Fair Value Measurements and Disclosures (Details 1) - Fair Value, Inputs, Level 3 [Member] $ in Thousands	Dec. 30, 2016 USD ($) Year	Nov. 01, 2016 USD ($) day Year
Post-closing Adjustment [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair market value measurement input		$ 26,190
Post-closing Adjustment [Member] \| Expected Term [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair market value measurement input \| day		60
Post-closing Adjustment [Member] \| Average Risk-free Rate-of-return [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair market value measurement input		0.0027
Post-closing Adjustment [Member] \| Expected Volatility [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair market value measurement input		0.33
Warrants [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair market value measurement input	$ 26,120	$ 26,190
Warrants [Member] \| Expected Term [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair market value measurement input \| Year	5	5
Warrants [Member] \| Average Risk-free Rate-of-return [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair market value measurement input	0.0193	0.0131
Warrants [Member] \| Expected Volatility [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Fair market value measurement input	0.33	0.34

Retirement Plans - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Defined contribution plan, vesting interest percentage	30.00%
Deferred compensation arrangement with individual, minimum service period	3 years
Defined contribution plan, additional annual vesting interest percentage	10.00%
Government-Sponsored Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, contributed by company	$ 174.0	$ 157.0	$ 148.0
Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, contributed by company, in percentage	5.00%
Minimum [Member] \| Local Social Security Bureau [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, contributed by company, in percentage	10.00%
Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, contributed by company, in percentage	10.00%
Defined contribution plan, additional annual vesting interest percentage	100.00%
Maximum [Member] \| Local Social Security Bureau [Member]
Defined Benefit Plan Disclosure [Line Items]
Defined benefit plan, contributed by company, in percentage	22.00%
Account Payable [Member] \| Yum China Holdings, Inc. Leadership Retirement Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Liabilities attributable to employees	$ 4.4	$ 4.2

Share-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions		12 Months Ended
	Oct. 04, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Oct. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation, vesting terms		Certain awards are subject to specific retirement conditions, which allow the awards to fully vest as long as the employee is actively employed for at least one year following the grant date, provides at least six months notification of intention to retire, and signs non-solicitation and non-compete agreements. Under such circumstances, the grant-date fair value of the award is recognized as expense on a straight-line basis over the one-year service period from the grant date.
Expected term (years)		6 years 6 months	6 years 9 months
Dividends approved date	Oct. 04, 2017
Dividends payable, amount per share	$ 0.10
Share-based compensation expense		$ 24.0	$ 26.0	$ 16.0
Deferred tax benefit recognized		$ 1.0	$ 3.0	3.0
Non-Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock granted		45,425	56,763
Grant date fair value		$ 1.8	$ 2.3
Stock Options and Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)		4 years
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period		10 years
Vesting schedule of grants under stock award plans		25.00%
Expected term (years)		6 years 6 months
Total intrinsic value of stock options and SARs exercised		$ 31.0	44.0	25.0
Unrecognized compensation cost		$ 24.0
Remaining weighted-average vesting period		1 year 8 months 8 days
Total fair value at grant date or modification date of awards vested		$ 14.0	$ 11.0	$ 11.0
RSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)		3 years
RSUs [Member] \| Third Grant Anniversary [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting schedule of grants under stock award plans		100.00%
PSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)		3 years
Expected term (years)		3 years
Model to fair value share-based payment awards		MCS model
Weighted-average grant-date fair value of awards granted (in dollars per share)		$ 41.75
Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant-date fair value of awards granted (in dollars per share)		13.52	$ 10.19	$ 12.78
RSUs and PSUs [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant-date fair value of awards granted (in dollars per share)		$ 39.50
Unrecognized compensation cost		$ 17.0
Unvested RSUs		987,998	949,000
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)		1 year
Expected term (years)				6 years 6 months
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (years)				6 years 9 months
Long Term Incentive Plan (the "2016" Plan) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for future issuance					45,000,000
Long Term Incentive Plan (the "2016" Plan) [Member] \| Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)		3 years
Long Term Incentive Plan (the "2016" Plan) [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (in years)		5 years

Share-Based Compensation (Details)	12 Months Ended
Share-Based Compensation (Details)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Award Valuation
Risk-free interest rate	2.50%	1.90%
Expected term (years)	6 years 6 months	6 years 9 months
Expected volatility	33.00%	34.00%
Expected dividend yield	1.00%	0.00%
Minimum [Member]
Award Valuation
Risk-free interest rate			1.30%
Expected term (years)			6 years 6 months
Expected volatility			27.00%
Expected dividend yield			0.00%
Maximum [Member]
Award Valuation
Risk-free interest rate			1.40%
Expected term (years)			6 years 9 months
Expected volatility			35.00%
Expected dividend yield			2.60%

Share-Based Compensation (Details 1) - Stock Options and Stock Appreciation Rights [Member]
$ / shares in Units, shares in Thousands, $ in Millions

12 Months Ended

Dec. 31, 2018

USD ($)

$ / shares

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Outstanding at the beginning of 2018 (in shares) | shares

21,595

Granted (in shares) | shares

1,179

Exercised (in shares) | shares

(4,493)

Forfeited or expired (in shares) | shares

(611)

Outstanding at the end of 2018 (in shares) | shares

17,670

^[1]

Exercisable at the end of 2018 (in shares) | shares

12,407

Outstanding at the beginning 2018, Weighted-average exercise price (in dollars per share) | $ / shares

$ 18.96

Granted, Weighted-average exercise price (in dollars per share) | $ / shares

40.29

Exercised, Weighted-average exercise price (in dollars per share) | $ / shares

15.12

Forfeited or expired, Weighted-average exercise price (in dollars per share) | $ / shares

24.14

Outstanding at the end of 2018, Weighted-average exercise price (in dollars per share) | $ / shares

21.18

Exercisable at the end of 2018, Weighted-average exercise price (in dollars per share) | $ / shares

$ 18.64

Outstanding at the end of 2018, Weighted-average remaining contractual term (in years)

5 years 2 months 23 days

Exercisable at the end of 2018, Weighted-average remaining contractual term (in years)

4 years 2 months 12 days

Outstanding at the end of 2018, Aggregate intrinsic value (in dollars) | $

$ 226

Exercisable at the end of 2018, Aggregate intrinsic value (in dollars) | $

$ 185

[1]	Outstanding awards include 669,433 stock options and 17,000,656 SARs with weighted-average exercise prices of $16.35 and $21.37, respectively. Outstanding awards represent Yum China awards held by employees of both the Company and YUM.

Share-Based Compensation (Parenthetical) (Details 1)	Dec. 31, 2018 $ / shares shares
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock options outstanding at the end of 2017 (in shares) \| shares	669,433
SARs outstanding at the end of 2017 (in shares) \| shares	17,000,656
Stock options outstanding at the end of 2017, Weighted-average exercise price (in dollars per share) \| $ / shares	$ 16.35
SARs outstanding at the end of 2017, Weighted-average exercise price (in dollars per share) \| $ / shares	$ 21.37

Share-Based Compensation (Details 2) - RSUs and PSUs [Member]	12 Months Ended
	Dec. 31, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested at the beginning of 2018 (in shares) \| shares	949,000
Granted (in shares) \| shares	302,000
Vested (in shares) \| shares	(183,000)
Forfeited or expired (in shares) \| shares	(80,000)
Unvested at the end of 2018 (in shares) \| shares	987,998
Unvested at the beginning of 2018 \| $ / shares	$ 26.56
Granted \| $ / shares	39.50
Vested \| $ / shares	25.03
Forfeited or expired \| $ / shares	28.93
Unvested at the end of 2018 \| $ / shares	$ 30.60

Equity - Narrative (Details) - USD ($)		3 Months Ended				12 Months Ended
Equity - Narrative (Details) - USD ($)	Oct. 04, 2017	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Oct. 31, 2016	Oct. 27, 2016
Class Of Stock [Line Items]
Percentage of shares distribution for each share held by parent stockholders									100.00%
Common stock, shares authorized		1,000,000,000				1,000,000,000	1,000,000,000		1,000,000,000
Common stock, par value		$ 0.01				$ 0.01	$ 0.01		$ 0.01
Common stock, shares issued		392,000,000				392,000,000	389,000,000		363,758,219
Common stock, shares outstanding		379,000,000				379,000,000	385,000,000		363,758,219
Shares repurchased						9,000,000	3,400,000
Shares repurchased at cost						$ 312,000,000	$ 128,000,000
Remaining amount available for repurchase		$ 960,000,000				960,000,000
Dividends declared date	Oct. 04, 2017
Dividends payable, amount per share	$ 0.10
Total cash dividend paid						161,000,000	38,000,000
Cash dividend paid date	2017-12
Cash dividends paid, amount per share		$ 0.12	$ 0.10	$ 0.1	$ 0.1
Other comprehensive Income (loss)						(160,000,000)	142,000,000	$ (133,000,000)
Accumulated other comprehensive (loss) income		$ (17,000,000)				(17,000,000)	137,000,000
Tax effect related to components of other comprehensive income						$ 0	$ 0	$ 0
Percentage of annual after tax profit required to be allocated to general reserve		10.00%				10.00%
Maximum percentage of annual after tax profit to be allocated to general reserve based on registered capital		50.00%				50.00%
Restricted net assets		$ 624,000,000				$ 624,000,000
Rights Plan [Member]
Class Of Stock [Line Items]
Percentage of preferred stock purchase of share										100.00%
Dividend record date						Oct. 27, 2016
Rights plan expiration date						Oct. 27, 2017

Income Taxes - Narrative (Details) - USD ($) $ in Millions	4 Months Ended	12 Months Ended
Income Taxes - Narrative (Details) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Taxes Disclosure [Line Items]
U.S. federal statutory rate, percent			21.00%	35.00%	35.00%
Estimated additional income tax expense	$ 163.9
Estimated transition tax on deemed repatriation of accumulated undistributed foreign earnings	129.8
Estimated remeasurement of deferred tax assets based on revising rate	4.5
Estimated valuation allowance for deferred assets as a result of Tax Act	29.6		$ 29.6
One time transition tax payable	83.0			$ 83.0
Transition tax included in income tax payable	6.6			6.6
Transition tax included in other liabilities	$ 76.4			$ 76.4
Adjustment to tax expense			$ 36.0
Effective income tax rate			22.60%	47.20%	23.50%
Recognized tax benefit			$ 214.0	$ 379.0	$ 156.0
Foreign withholding taxes not recognized, cumulative amount of temporary differences			2,400.0
Cash payments for tax liabilities on income tax returns			$ 208.0	232.0	182.0
Percentage threshold that the positions taken or expected to be taken is more likely than not sustained upon examination by tax authorities (in hundredths)			50.00%
Increase (decrease) in unrecognized tax benefits			$ 3.0	8.0
Amount of unrecognized tax benefits balance			22.0
Total interest and penalties recorded during the period			$ (1.0)	2.0	3.0
Scenario Forecast [Member]
Income Taxes Disclosure [Line Items]
Increase (decrease) in unrecognized tax benefits		$ (7.0)
Minimum [Member]
Income Taxes Disclosure [Line Items]
Effective Income Tax Rate Foreign Tax Withholding			5.00%
Maximum [Member]
Income Taxes Disclosure [Line Items]
Effective Income Tax Rate Foreign Tax Withholding			10.00%
Little Sheep Group Limited [Member]
Income Taxes Disclosure [Line Items]
Recognized tax benefit					$ (26.0)
Valuation allowance recorded				$ 19.5
Little Sheep Group Limited and Daojia [Member]
Income Taxes Disclosure [Line Items]
Operating loss carryforwards			$ 111.0
Operating loss carryforwards expiration year			2023
China [Member]
Income Taxes Disclosure [Line Items]
Effective income tax rate				25.00%

Income Taxes (Details) - USD ($) $ in Millions	12 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
U.S. and foreign income (loss) before income taxes [Abstract]
U.S.	$ (3)	$ (13)	$ 5
China	979	806	655
Other Foreign	(26)	10	6
Income Before Income Taxes	$ 950	$ 803	$ 666

Income Taxes (Details 1) - USD ($) $ in Millions	12 Months Ended
Income Taxes (Details 1) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Details of income tax provision (benefit) [Abstract]
Current: Federal	$ (33)	$ 85	$ (2)
Current: Foreign	214	232	200
Total current income tax provision (benefit)	181	317	198
Deferred: Federal		77	(36)
Deferred: Foreign	33	(15)	(6)
Total deferred income tax provision (benefit)	33	62	(42)
Effective income tax rate	$ 214	$ 379	$ 156

Income Taxes (Details 2) - USD ($) $ in Millions	12 Months Ended
Income Taxes (Details 2) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract]
U.S. federal statutory rate	$ 199	$ 281	$ 233
Impact from the Tax Act	(36)	164
Statutory rate differential attributable to foreign operations	56	(60)	(55)
Adjustments to reserves and prior years	(4)	(1)	16
Change in valuation allowances	(4)	2
Other, net	3	(7)	(12)
Effective income tax rate	$ 214	$ 379	$ 156
Effective income tax rate reconciliation [Abstract]
U.S. federal statutory rate, percent	21.00%	35.00%	35.00%
Impact from the Tax Act, percent	(3.80%)	20.40%
Statutory rate differential attributable to foreign operations, percent	5.80%	(7.50%)	(8.30%)
Adjustments to reserves and prior years, percent	(0.40%)	(0.20%)	2.40%
Change in valuation allowances, percent	(0.40%)	0.20%
Other, net, percent	0.40%	(0.70%)	(1.80%)
Effective income tax rate, percent	22.60%	47.20%	23.50%
Little Sheep Group Limited [Member]
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract]
Tax benefit from Little Sheep restructuring			$ (26)
Effective income tax rate reconciliation [Abstract]
Tax benefit from Little Sheep restructuring, percent			(3.80%)

Income Taxes (Details 3) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Net deferred tax assets (liabilities) [Abstract]
Operating losses and tax credit carryforwards	$ 28	$ 43
Employee benefits	6	5
Share-based compensation	5	6
Deferred escalating minimum rent	41	45
Other liabilities	12	10
Deferred income and other	50	49
Gross deferred tax assets	160	178
Deferred tax asset valuation allowances	(50)	(68)
Net deferred tax assets	110	110
Intangible assets	(28)	(25)
Property, plant and equipment	(31)	(2)
Gain from re-measurement of equity interest upon acquisition	(23)
Other	(4)	(10)
Gross deferred tax liabilities	(86)	(37)
Net deferred tax assets	24	73
Reported in Consolidated Balance Sheets as:
Deferred income taxes	89	105
Other liabilities	(65)	(32)
Net deferred tax assets	24	73
Little Sheep Group Limited [Member]
Net deferred tax assets (liabilities) [Abstract]
Tax benefit from Little Sheep restructuring	$ 18	$ 20

Income Taxes (Details 4) - USD ($) $ in Millions	12 Months Ended
Income Taxes (Details 4) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Beginning of Year	$ 28	$ 26
Additions for tax positions of prior years	3	8
Reductions due to statute expiration	(9)	(6)
End of Year	$ 22	$ 28

Income Taxes (Details 5) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Accrued interest and penalties	$ 6	$ 7

Segment Reporting - Narrative (Details) - Segment	3 Months Ended	12 Months Ended
Segment Reporting - Narrative (Details) - Segment	May 31, 2017	Dec. 31, 2018
Segment Reporting [Abstract]
Number of reportable segments	2	2
Number of non-reportable operating segments		4

Segment Reporting (Details) - USD ($)
$ in Millions

2 Months Ended

3 Months Ended

4 Months Ended

12 Months Ended

Feb. 28, 2017

Dec. 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Mar. 31, 2018

Aug. 31, 2017

May 31, 2017

Dec. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

$ 1,926

$ 1,914

$ 2,212

$ 2,068

$ 2,221

$ 2,130

$ 1,841

$ 1,872

$ 8,415

$ 7,769

$ 7,075

Unallocated Other revenues

$ 296

$ 269

$ 193

$ 395

$ 264

$ 171

941

778

634

Unallocated Other operating costs and expenses

(6)

Unallocated and corporate G&A expenses

(129)

(185)

(153)

Unallocated Closures and impairment expense

^[1]

(12)

(17)

Unallocated Other income

^[2]

Interest income, net

^[3]

Investment loss

^[3]

(27)

Income Before Income Taxes

^[3]

950

803

666

445

409

402

470

415

436

4,610

4,287

4,610

4,287

KFC [Member]

5,690

5,066

4,757

Pizza Hut [Member]

All Other Segments [Member]

2,111

2,093

1,996

Corporate and Unallocated [Member]

106

100

Unallocated revenues from transactions with franchisees and unconsolidated affiliates

^[3]

522

^[4]

504

222

^[5]

514

504

222

Unallocated expenses for transactions with franchisees and unconsolidated affiliates

^[5]

(512)

(500)

(219)

^[1]

Operating Segments [Member]

^[6]

2,177

1,931

2,177

1,931

Operating Segments [Member] | KFC [Member]

8,415

7,769

7,075

5,690

5,066

4,757

^[7]

895

802

641

296

265

266

^[8]

292

227

221

Operating Segments [Member] | Pizza Hut [Member]

^[9]

1,745

1,544

1,745

1,544

2,111

2,093

1,996

157

149

129

126

120

^[8]

129

Operating Segments [Member] | All Other Segments [Member]

558

668

558

668

100

106

100

(12)

(9)

(5)

$ 130

$ 144

130

144

Elimination [Member]

Elimination [Member] | All Other Segments [Member]

(8)

Combined [Member]

$ 8,423

$ 7,769

$ 7,075

[1]	Primarily includes 2018 impairment charges on intangible assets acquired from Daojia and 2016 incremental restaurant-level impairment charges. See Note 6.
[2]	Primarily includes gain from re-measurement of previously held equity interest in connection with the acquisition of Wuxi KFC. See Note 6.
[3]	Amounts have not been allocated to any segment for performance reporting purposes.
[4]	Company sales from Corporate and Unallocated represent sales from COFFii & JOY, a coffee concept recently developed by the Company in 2018.
[5]	Primarily includes revenues and associated expenses of transactions with franchisee and unconsolidated affiliates derived from the Company’s central procurement model whereby the Company centrally purchases all food and paper products from suppliers then sells and delivers to all restaurants, including franchisees and unconsolidated affiliates. Amounts have not been allocated to any segment for purposes of making operating decisions or assessing financial performance as the transactions are deemed corporate revenues and expenses in nature.
[6]	Primarily includes cash and cash equivalents, short-term investments, inventories and investment in equity securities that are centrally managed.
[7]	Includes equity income from investments in unconsolidated affiliates of $65 million, $65 million and $54 million in 2018, 2017 and 2016, respectively.
[8]	Includes store closure impairment charges as well as restaurant-level impairment charges resulting from our semi-annual impairment evaluation (See Note 13).
[9]	Includes investments in unconsolidated affiliates.

Segment Reporting (Parenthetical) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting [Abstract]
Equity income from investments in unconsolidated affiliates	$ 65	$ 65	$ 54