================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
October 12, 1999
Commission file number 1-13163
-----------
TRICON GLOBAL RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
North Carolina 13-3951308
- ----------------------------------- ----------------------
(State or other jurisdiction of (IRS Employer
of incorporation or organization) Identification No.)
1441 Gardiner Lane, Louisville, Kentucky 40213
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502) 874-8300
Former name or former address, if changed since last report: N/A
================================================================================
<PAGE>
Item 5. OTHER EVENTS
-------------
On October 12, 1999, TRICON Global Restaurants, Inc. issued a
press release with respect to earnings for the third quarter
ended September 4, 1999. A copy of such press release is
attached hereto as Exhibit 99 and incorporated herein by
reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(c) Exhibits
99 Press release dated October 12, 1999 from TRICON
Global Restaurants, Inc.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRICON GLOBAL RESTAURANTS, INC.
-------------------------------
(Registrant)
Date: October 13, 1999 /s/ Robert L. Carleton
---------------- ------------------------------------------
Robert L. Carleton
Senior Vice President and Controller
(Principal Accounting Officer)
3
<PAGE>
EXHIBIT 99
TRICON GLOBAL RESTAURANTS ANNOUNCES A 21 PERCENT INCREASE IN
ONGOING OPERATING EARNINGS TO $0.70 PER SHARE
LOUISVILLE, KY (October 12, 1999) - Tricon Global Restaurants, Inc. (NYSE:YUM)
reported third quarter ongoing operating earnings of $112 million, or $0.70 per
share, a 21 percent increase for the quarter ended September 4, 1999.
Year-to-date ongoing operating earnings increased 41 percent to $1.80 per share.
Ongoing operating EPS is from operations and does not include the impact of
accounting changes, facility action net gains, and unusual items.
Financial Highlights
Ongoing Operations
($MM except per diluted share amounts)
% Change % Change
Q3 vs. prior year Q3 YTD vs. prior year
-- -------------- ------ --------------
System sales 5,086 4 14,894 5
Revenues (a) 1,812 (10) 5,511 (7)
Operating Profit 232 6 638 16
Operating Earnings 112 24 290 46
================================================================================
Operating EPS 0.70 21 1.80 41
================================================================================
Reported EPS (b) 1.23 51 2.99 58
(a) As expected, our company revenues declined primarily due to our strategic
program to sell company stores to our franchise partners.
(b) Reported results, which are more fully described in the financial
attachments, include the impact of accounting changes, facility action net
gains, and unusual items.
<PAGE>
Tricon's strong operating results in the quarter, despite sales softness at both
KFC and Taco Bell in the U.S., demonstrate the advantages of a global portfolio
of category-leading brands. The international business delivered over a 40
percent increase in operating profits, on top of 20 percent growth in the same
period last year. In the U.S., Pizza Hut's same store sales rose six percent,
the ninth consecutive quarter of strong growth, while KFC and Taco Bell worked
to regain topline momentum lost in the second quarter. On a consolidated basis,
Tricon achieved over a 50 basis point increase in ongoing base store level
margins, driven by improved cost management in the U.S., sales leverage at Pizza
Hut and strong international results. Year-to-date, base store level margins
have improved by 175 basis points.
Consistent with its refranchising strategy, Tricon sold over 500 stores to its
franchise partners during the quarter, for a year-to-date total of over 1,100
stores sold. The expected loss in profits from these stores was offset by a
significant increase in higher return franchise fees, reduction in field level
G&A, and lower interest expense driven by significant debt repayment. The
refranchising strategy is successfully transitioning Tricon into a much higher
performing business, with stronger volume, higher profit stores. Free cash flow
in the quarter was used to pay down over $400 million of debt, with over $800
million repaid year-to-date.
Andrall Pearson, Chairman and CEO said: "This quarter's 21 percent ongoing
operating EPS growth, on top of our strongest growth in operating EPS last year,
is tangible evidence that our fundamental operational and financial strategies
are working. We're on track for an outstanding year and firmly positioned to
deliver our goal of mid-teen ongoing operating EPS growth each year."
"The $350 million share buyback plan announced last month reflects our
dramatically improved financial condition and liquidity, as well as our belief
that our stock is undervalued. Our cash from operations, coupled with the
proceeds we receive from selling stores to our franchise partners, will yield
over $1 billion in free cash flow this year. In concert, our operational and
financial strategies are building the long-term value of Tricon for our
shareholders," Mr. Pearson said.
David Novak, Vice Chairman and President added: "We're committed to achieving
consistent, sustainable topline growth through product introductions, quality
service and differentiated marketing."
In the fourth quarter, KFC is adding an entire new concept layer by introducing
a line of five freshly made chicken sandwiches. Tricon believes that over time,
the new line can contribute $100,000 - $200,000 per unit of annual sales. Also,
Taco Bell introduced The Chalupa, a fried version of its popular Gordita, aimed
at increasing transactions with the core heavy fast food user. "We're encouraged
by the early results of these new products at KFC and Taco Bell, on top of
strong year ago results," said Mr. Novak.
2
<PAGE>
Pizza Hut continues to capture competitive share in the traditional-style, value
segment, reflecting strong incremental demand, especially with new users, for
its Big New Yorker pizza introduced in the first quarter, and is delivering on
its competitive positioning as having the "Best Pizzas Under One Roof".
Tricon's international business continues to benefit from its tight focus on key
equity growth markets. For example, on a local currency basis, same store sales
were up at least five percent or better at KFC and Pizza Hut in Mexico and
Puerto Rico, KFC Thailand and Australia, and Pizza Hut in Korea. Additionally,
operating profits are up over 50 percent in China, Korea and KFC in the U.K. due
to new units, improved cost controls and product promotions.
Results*
- -- System sales grew four percent to $5 billion, driven by net new units.
Year-to-date system sales grew five percent to nearly $15 billion.
- U.S. system sales increased two percent for the quarter and four
percent year-to-date.
- International system sales increased seven percent for both the
quarter and year-to-date. Excluding the favorable impact of currency
translation, international system sales grew four percent for the
quarter and six percent year-to-date.
- -- As expected, our refranchising efforts and closures of poor performing
units drove our worldwide company revenues down despite new unit
development.
- U.S. revenues declined 14 percent in the quarter and ten percent
year-to-date.
- International revenues increased one percent for both the quarter and
year-to-date. Excluding the favorable impact of currency translation,
international revenues were flat for the quarter and up one percent
year-to-date.
- Franchise and license fees increased 15 percent in both the quarter
and year-to-date driven by units acquired from us and net new unit
development.
- -- Company same store sales in the U.S. were up six percent at Pizza Hut
driven by a five percent increase in transactions. Taco Bell posted a three
percent decline in same store sales as transactions fell seven percent,
lapping a two percent increase in same store sales last year. KFC's same
store sales dropped two percent with a four percent decline in
transactions. In the quarter, KFC overlapped a five percent increase in
same store sales last year which was their strongest quarterly growth in
three years. Year-to-date same store sales were up 10 percent at Pizza Hut,
up one percent at KFC and slightly favorable at Taco Bell.
3
<PAGE>
- -- Company store level margins as a percent of sales increased over 100 basis
points for the quarter on top of a 290 basis point increase last year.
- -- Ongoing base store level margins increased over 50 basis points, on top of
a 150 basis point increase last year, driven primarily by favorable price
and product mix shifts and improved cost management.
- -- Year-to-date, store level margins increased 230 basis points; ongoing base
margins contributed 175 basis points to this growth.
- -- General and administrative expense (G&A), including foreign exchange
gains/losses and income/losses from joint ventures, declined six percent in
the quarter. The favorable impacts of our portfolio effect and our fourth
quarter 1998 decision to streamline our international business were
partially offset by higher strategic corporate expenses. G&A increased one
percent year-to-date. Excluding the impact of favorable accounting changes,
G&A declined four percent in the quarter and increased three percent
year-to-date.
- -- In the third quarter the favorable aggregate impact of previously disclosed
accounting changes totaled $0.02 per share. Year-to-date the favorable
impact of accounting changes totaled $0.08 per share.
- -- Net interest declined 31 percent in the quarter and 27 percent year to date
primarily due to lower debt levels.
- -- The effective tax rate on ongoing operating income for the third quarter
was 40.5 percent versus 42.1 percent in 1998 primarily due to a reduction
in the rate on foreign operations.
*These results should be read in conjunction with the attached financial
summary.
4
<PAGE>
Financial Summary
- -----------------
<TABLE>
<CAPTION>
Third Quarter 1999
------------------
(MMs except per share amounts)
Quarter % Year-to-Date %
---------------------- Change ------------------------ Change
1999 1998 B/(W) 1999 1998 B/(W)
---------- ---------- --------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
System Sales(a) $ 5,086 $ 4,905 4 $ 14,894 $ 14,198 5
Company revenues(b) 1,812 2,021 (10) 5,511 5,950 (7)
Ongoing operating profit(c) $ 232 $ 220 6 $ 638 $ 548 16
Interest expense 42 62 31 145 198 27
Income tax provision 78 67 (16) 203 151 (34)
---------- ---------- ---------- ----------
Ongoing operating earnings(c) $ 112 $ 91 24 $ 290 $ 199 46
========== ========== ========== ==========
Earnings per diluted share components:
Ongoing Operating Earnings $ 0.70 $ 0.58 21 $ 1.80 $ 1.28 41
Accounting changes(d) 0.02 - NM 0.08 - NM
Facility actions net gain 0.52 0.22 NM 1.14 0.59 91
Unusual (charges)/credits(e) (0.01) .02 NM (0.03) .02 NM
---------- ---------- ---------- ----------
Total $ 1.23 $ 0.82 51 $ 2.99 $ 1.89 58
========== ========== ========== ==========
</TABLE>
(a) Includes combined sales from company, franchised, licensed, and joint
venture units.
(b) Includes company sales and franchise and license fees.
(c) Before accounting changes, facility actions net gain and unusual
charges/(credits).
(d) Includes both required and discretionary changes, which are more fully
described in our 1999 second quarter Form 10-Q.
(e) Primarily includes additional costs related to wage and hour litigation,
write off of goodwill in an international business and, as to year-to-date,
additional costs to streamline our international business as more fully
described in our 1999 second quarter Form 10-Q.
This announcement contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These "forward-looking" statements
reflect management's expectations and are based upon currently available data;
however, actual results are subject to future events and uncertainties, which
could cause actual results to differ from those projected in these statements.
Factors that can cause actual results to differ materially include economic and
political conditions in the countries and territories where Tricon operates, the
impact of such conditions on consumer spending and currency exchange rates,
pricing pressures resulting from competitive discounting, new product and
concept development by Tricon and other food industry competitors, the success
of our refranchising strategy, fluctuations in commodity prices, supplier
contracts, and actuarially determined casualty loss estimates. Further
information on factors that could affect Tricon's financial and other results
are included in the company's Forms 10-Q and 10-K, filed with the Securities and
Exchange Commission.
Contact: Lynn A. Tyson
Vice President, Investor Relations
502-874-8617
5
<PAGE>
<TABLE>
<CAPTION>
TRICON Global Restaurants, Inc.
Condensed Consolidated Statement Of Operations
(tabular amounts in millions, except per share amounts)
(unaudited)
12 Weeks Ended % 36 Weeks Ended %
----------------------- Change(a) ----------------------- Change(a)
9/04/99 9/05/98 B/(W) 9/04/99 9/05/98 B/(W)
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
Company sales $ 1,639 $ 1,869 (12) $ 5,024 $ 5,526 (9)
Franchise and license fees 173 152 15 487 424 15
---------- ---------- ---------- ----------
1,812 2,021 (10) 5,511 5,950 (7)
---------- ---------- ---------- ----------
Costs and expenses, net
Company restaurants
Food and paper 513 592 13 1,575 1,762 11
Payroll and employee benefits 447 524 15 1,391 1,607 13
Occupancy and other operating expenses
419 477 12 1,268 1,418 11
---------- ---------- ---------- ----------
1,379 1,593 13 4,234 4,787 12
General, administrative and other
expenses(b) 197 208 6 619 615 (1)
Facility actions net gain(c) (144) (54) NM (311) (156) NM
Unusual charges (credits)(d) 3 (5) NM 7 (5) NM
---------- ---------- ---------- ----------
Total costs and expenses, net(b)(e) 1,435 1,742 18 4,549 5,241 13
---------- ---------- ---------- ----------
Operating Profit 377 279 35 962 709 36
Interest expense, net 42 62 31 145 198 27
---------- ---------- ---------- ----------
Income Before Income Taxes 335 217 54 817 511 60
Income Tax Provision(f) 138 89 (56) 335 217 (55)
---------- ---------- ---------- ----------
Net Income $ 197 $ 128 54 $ 482 $ 294 64
========== ========== ========== ==========
Basic EPS Data
- --------------
EPS $ 1.28 $ 0.84 52 $ 3.14 $ 1.93 62
========== ========== ========== ==========
Average Shares Outstanding 154 153 (1) 154 152 (1)
========== ========== ========== ==========
Diluted EPS Data
- ----------------
EPS $ 1.23 $ 0.82 51 $ 2.99 $ 1.89 58
========== ========== ========== ==========
Average Shares Outstanding 160 157 (2) 161 155 (4)
========== ========== ========== ==========
</TABLE>
NM - Not Meaningful
See accompanying notes.
6
<PAGE>
<TABLE>
<CAPTION>
TRICON Global Restaurants, Inc.
Supplemental Schedule of Reportable Operating Segments'
Revenues and Operating Profit
(in millions)
(unaudited)
12 Weeks Ended % 36 Weeks Ended %
----------------------- Change(a) ----------------------- Change(a)
9/04/99 9/05/98 B/(W) 9/04/99 9/05/98 B/(W)
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
SYSTEM SALES
United States $ 3,419 $ 3,351 2 $ 10,028 $ 9,647 4
International 1,667 1,554 7 4,866 4,551 7
---------- ---------- ---------- ----------
Worldwide $ 5,086 $ 4,905 4 $ 14,894 $ 14,198 5
========== ========== ========== ==========
REVENUES
United States
Company sales $ 1,199 $ 1,429 (16) $ 3,745 $ 4,245 (12)
Franchise and license fees 119 104 14 334 286 17
---------- ---------- ---------- ----------
Total United States 1,318 1,533 (14) 4,079 4,531 (10)
---------- ---------- ---------- ----------
International
Company sales 440 441 - 1,279 1,282 -
Franchise and license fees 54 47 16 153 137 12
---------- ---------- ---------- ----------
Total International 494 488 1 1,432 1,419 1
---------- ---------- ---------- ----------
Worldwide $ 1,812 $ 2,021 (10) $ 5,511 $ 5,950 (7)
========== ========== ========== ==========
RESTAURANT MARGIN(b)(e)
United States $ 193 $ 214 (11) $ 605 $ 575 5
International 67 62 9 185 164 13
---------- ---------- ---------- ----------
Worldwide $ 260 $ 276 (6) $ 790 $ 739 7
========== ========== ========== ==========
RESTAURANT MARGIN AS A PERCENT OF COMPANY
SALES
United States 16.1% 15.1% 1.0 ppts. 16.2% 13.6% 2.6 ppts.
International 15.3% 14.0% 1.3 ppts. 14.5% 12.8% 1.7 ppts.
Worldwide 15.9% 14.8% 1.1 ppts. 15.7% 13.4% 2.3 ppts.
OPERATING PROFIT
United States(b) $ 207 $ 207 - $ 598 $ 523 14
International(b) 74 53 41 186 130 43
---------- ---------- ---------- ----------
Total(b) 281 260 8 784 653 20
Unallocated expenses(b) (46) (42) (8) (124) (107) (15)
Foreign exchange gain (loss) 1 2 NM (2) 2 NM
Facility actions net gain(c) 144 54 NM 311 156 NM
Unusual (charges) credits(d) (3) 5 NM (7) 5 NM
---------- ---------- ---------- ----------
Total Operating Profit(b)(e) $ 377 $ 279 35 $ 962 $ 709 36
========== ========== ========== ==========
</TABLE>
NM - Not Meaningful
See accompanying notes.
7
<PAGE>
NOTES TO THE CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND SUPPLEMENTAL
SCHEDULE OF REPORTABLE OPERATING SEGMENTS' REVENUES AND OPERATING PROFIT:
(tabular dollar amounts in millions, except per share amounts)
Certain items have been reclassified in the condensed consolidated financial
statements for prior periods to conform with the fiscal 1999 presentation. These
reclassifications had no effect on previously reported net income.
(a) Percentages may not recompute due to rounding.
(b) Included in our 1999 operating results are several accounting and human
resource policy changes. These changes fall into three categories:
- Required Changes in Generally Accepted Accounting Principles ("GAAP")
resulting in a benefit of approximately $3 million and $4 million for
the quarter and year-to-date, respectively,
- Discretionary methodology changes implemented to more accurately
measure certain liabilities resulting in a benefit of approximately $2
million and $13 million, for the quarter and year-to-date,
respectively and
- Policy changes driven by our accounting and human resource
standardization programs resulting in a benefit of approximately $4
million year-to-date.
These changes impacted our results as follows:
12 Weeks 36 Weeks
Ended Ended
9/04/99 9/04/99
---------- -----------
Restaurant margin $ - $ 8
General, administrative and other
expenses 5 13
---------- -----------
Operating profit $ 5 $ 21
========== ===========
U.S. $ - $ 12
International 1 (1)
Unallocated 4 10
---------- -----------
Total $ 5 $ 21
========== ===========
After-tax impact $ 3 $ 13
========== ===========
Per basic share $ 0.02 $ 0.08
========== ===========
Per diluted share $ 0.02 $ 0.08
========== ===========
8
<PAGE>
(c) Facility actions net gain includes the following:
<TABLE>
<CAPTION>
12 Weeks Ended 36 Weeks Ended
-------------------- --------------------
9/04/99 9/05/98 9/04/99 9/05/98
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Refranchising gains $ 154 $ 64 $ 332 $ 172
Store closure costs (2) (10) (2) (8)
Impairment charges for stores that will continue to
be used in the business (3) - (10) (8)
Impairment charges for stores to be closed in the
future (5) - (9) -
--------- --------- --------- ---------
$ 144 $ 54 $ 311 $ 156
========= ========= ========= =========
U.S. $ 144 $ 54 $ 306 $ 144
International - - 5 12
--------- --------- --------- ---------
Total $ 144 $ 54 $ 311 $ 156
========= ========= ========= =========
After-tax net gain $ 84 $ 34 $ 183 $ 92
========= ========= ========= =========
Per basic share $ 0.54 $ 0.22 $ 1.19 $ 0.61
========= ========= ========= =========
Per diluted share $ 0.52 $ 0.22 $ 1.14 $ 0.59
========= ========= ========= =========
</TABLE>
Facility actions net gain in 1999 includes favorable adjustments to our
1997 fourth quarter charge of $5 million ($3 million after-tax or $0.02
per diluted share) in the quarter and $9 million ($6 million after-tax or
$0.04 per diluted share) year-to-date. These adjustments relate to
decisions to retain certain stores originally expected to be disposed of
and better-than-expected proceeds from stores disposed of.
(d) Unusual charges of $3 million ($3 million after-tax or $0.01 per diluted
share) in the quarter and $7 million ($5 million after-tax or $0.03 per
diluted share) year-to-date 1999 primarily include:
- Additional costs of defending the wage and hour litigation as more
fully described in our 1998 Form 10-K and 1999 second quarter Form
10-Q,
- Additional severance and other exit costs related to strategic
decisions to streamline the infrastructure of our international
business as more fully described in our 1998 Form 10-K and 1999 second
quarter Form 10-Q and
- Write-off of enterprise-level goodwill in one of our international
businesses.
Unusual credits of $5 million ($3 million after-tax or $0.02 per diluted
share) in the quarter and year-to-date 1998 includes reversal of certain
reserves relating to better-than-expected proceeds from the sale of
property and settlement of lease liabilities associated with properties
retained upon the sale of non-core businesses in 1997.
(e) Year-to-date restaurant margin and operating profit includes a favorable
impact of approximately $21 million ($13 million after-tax or $0.08 per
diluted share) resulting from favorable self-insurance adjustments as
determined by our independent actuary primarily related to 1998. These
adjustments reflect improved casualty loss trends across all three of our
U.S. operating companies and were recorded in the first quarter of 1999.
(f) The effective tax rates were 41.1% and 40.7% for the 12 weeks ended
September 4, 1999 and September 5, 1998, respectively. The effective tax
rates were 41.0% and 42.3% for the 36 weeks ended September 4, 1999 and
September 5, 1998, respectively.
9
<PAGE>
<TABLE>
<CAPTION>
TRICON Global Restaurants, Inc.
Restaurant Units Activity Summary
For the 12 Weeks Ended September 4, 1999
(unaudited)
Company- Joint
Operated Ventured Franchised Licensed Total
---------- ---------- ------------ ---------- ---------
<S> <C> <C> <C> <C>
KFC U.S.
Balance at June 12, 1999 1,595 - 3,500 52 5,147
New openings and acquisitions 13 - 21 - 34
Refranchising and licensing (123) - 123 - -
Closures and divestitures (12) - (6) (2) (20)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 1,473 - 3,638 50 5,161
========== ========== ============ ========== =========
Pizza Hut U.S.
Balance at June 12, 1999 2,710 - 4,177 1,461 8,348
New openings and acquisitions 3 - 11 108 122
Refranchising and licensing (191) - 191 - -
Closures and divestitures (11) - (39) (186) (236)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 2,511 - 4,340 1,383 8,234
========== ========== ============ ========== =========
Taco Bell U.S.
Balance at June 12, 1999 1,394 - 3,640 1,680 6,714
New openings and acquisitions 7 - 52 38 97
Refranchising and licensing (129) - 127 2 -
Closures and divestitures (3) - (9) (51) (63)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 1,269 - 3,810 1,669 6,748
========== ========== ============ ========== =========
Total U.S.
Balance at June 12, 1999 5,699 - 11,317 3,193 20,209
New openings and acquisitions 23 - 84 146 253
Refranchising and licensing (443) - 441 2 -
Closures and divestitures (26) - (54) (239) (319)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 5,253 - 11,788 3,102 20,143
========== ========== ============ ========== =========
International
Balance at June 12, 1999 2,031 1,134 6,078 306 9,549
New openings and acquisitions 26 18 89 19 152
Refranchising and licensing (64) 4 60 - -
Closures and divestitures (14) (4) (14) (12) (44)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 1,979 1,152 6,213 313 9,657
========== ========== ============ ========== =========
Worldwide
Balance at June 12, 1999 7,730 1,134 17,395 3,499 29,758
New openings and acquisitions 49 18 173 165 405
Refranchising and licensing (507) 4 501 2 -
Closures and divestitures (40) (4) (68) (251) (363)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 7,232(a) 1,152(a) 18,001 3,415 29,800
========== ========== ============ ========== =========
% of Total 24.3% 3.9% 60.4% 11.4% 100.0%
</TABLE>
(a) Includes 58 Company and 4 Joint Ventured units approved for closure but not
yet closed at September 4, 1999.
10
<PAGE>
<TABLE>
<CAPTION>
TRICON Global Restaurants, Inc.
Restaurant Units Activity Summary
For the 36 Weeks Ended September 4, 1999
(unaudited)
Company- Joint
Operated Ventured Franchised Licensed Total
---------- ---------- ------------ ---------- ---------
<S> <C> <C> <C> <C>
KFC U.S.
Balance at December 26, 1998(a) 1,633 - 3,414 58 5,105
New openings and acquisitions 39 - 76 - 115
Refranchising and licensing (170) - 170 - -
Closures and divestitures (29) - (22) (8) (59)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 1,473 - 3,638 50 5,161
========== ========== ============ ========== =========
Pizza Hut U.S.
Balance at December 26, 1998(a) 2,985 - 3,982 1,445 8,412
New openings and acquisitions 12 - 53 249 314
Refranchising and licensing (396) - 396 - -
Closures and divestitures (90) - (91) (311) (492)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 2,511 - 4,340 1,383 8,234
========== ========== ============ ========== =========
Taco Bell U.S.
Balance at December 26, 1998(a) 1,614 - 3,466 1,772 6,852
New openings and acquisitions 15 - 129 94 238
Refranchising and licensing (333) - 328 5 -
Closures and divestitures (27) - (113) (202) (342)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 1,269 - 3,810 1,669 6,748
========== ========== ============ ========== =========
Total U.S.
Balance at December 26, 1998(a) 6,232 - 10,862 3,275 20,369
New openings and acquisitions 66 - 258 343 667
Refranchising and licensing (899) - 894 5 -
Closures and divestitures (146) - (226) (521) (893)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 5,253 - 11,788 3,102 20,143
========== ========== ============ ========== =========
International
Balance at December 26, 1998(a) 2,165 1,120 5,788 321 9,394
New openings and acquisitions(b) 93 47 287 37 464
Refranchising and licensing (239) (1) 246 (6) -
Closures and divestitures(b) (40) (14) (108) (39) (201)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 1,979 1,152 6,213 313 9,657
========== ========== ============ ========== =========
Worldwide
Balance at December 26, 1998(a) 8,397 1,120 16,650 3,596 29,763
New openings and acquisitions(b) 159 47 545 380 1,131
Refranchising and licensing (1,138) (1) 1,140 (1) -
Closures and divestitures(b) (186) (14) (334) (560) (1,094)
---------- ---------- ------------ ---------- ---------
Balance at September 4, 1999 7,232(c) 1,152(c) 18,001 3,415 29,800
========== ========== ============ ========== =========
% of Total 24.3% 3.9% 60.4% 11.4% 100.0%
</TABLE>
(a) A total of 114 units have been reclassified from U.S. to International to
reflect the transfer of management responsibility.
(b) Company new openings and acquisitions and franchise closures and
divestitures include stores acquired by the Company from franchisees of 9
units for International.
(c) Includes 58 Company and 4 Joint Ventured units approved for closure but not
yet closed at September 4, 1999.
