-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WLuE4IzAUgH25cT20Tz0cGwwe/helJeLAg1eLUzdIJ+9xIuDcU6FwgYQWm6cDXSA ojw9d1mIcatUm6yyDvjywA== 0001041061-99-000013.txt : 19991018 0001041061-99-000013.hdr.sgml : 19991018 ACCESSION NUMBER: 0001041061-99-000013 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19991012 ITEM INFORMATION: FILED AS OF DATE: 19991013 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRICON GLOBAL RESTAURANTS INC CENTRAL INDEX KEY: 0001041061 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 933951308 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13163 FILM NUMBER: 99727505 BUSINESS ADDRESS: STREET 1: 1441 GARDINER LANE CITY: LOUISVILLE STATE: KY ZIP: 40213 BUSINESS PHONE: 5028748300 MAIL ADDRESS: STREET 1: 1441 GARDINER LANE CITY: LOUISVILLE STATE: KY ZIP: 40213 FORMER COMPANY: FORMER CONFORMED NAME: GREAT AMERICAN RESTAURANT CO DATE OF NAME CHANGE: 19970618 8-K 1 CURRENT REPORT ================================================================================ 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 ================================================================================ 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 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 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. 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 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 - -- 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 Financial Summary - -----------------
Third Quarter 1999 ------------------ (MMs except per share amounts) Quarter % Year-to-Date % ---------------------- Change ------------------------ Change 1999 1998 B/(W) 1999 1998 B/(W) ---------- ---------- --------- ---------- ------------ ---------- 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 ========== ========== ========== ==========
(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
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) ---------- ---------- ---------- ---------- ---------- ---------- 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) ========== ========== ========== ==========
NM - Not Meaningful See accompanying notes. 6
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) ---------- ---------- ---------- ---------- ---------- ----------- 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 ========== ========== ========== ==========
NM - Not Meaningful See accompanying notes. 7 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 (c) Facility actions net gain includes the following:
12 Weeks Ended 36 Weeks Ended -------------------- -------------------- 9/04/99 9/05/98 9/04/99 9/05/98 --------- --------- --------- --------- 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 ========= ========= ========= =========
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
TRICON Global Restaurants, Inc. Restaurant Units Activity Summary For the 12 Weeks Ended September 4, 1999 (unaudited) Company- Joint Operated Ventured Franchised Licensed Total ---------- ---------- ------------ ---------- --------- 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%
(a) Includes 58 Company and 4 Joint Ventured units approved for closure but not yet closed at September 4, 1999. 10
TRICON Global Restaurants, Inc. Restaurant Units Activity Summary For the 36 Weeks Ended September 4, 1999 (unaudited) Company- Joint Operated Ventured Franchised Licensed Total ---------- ---------- ------------ ---------- --------- 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%
(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. -----END PRIVACY-ENHANCED MESSAGE-----