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)
February 11, 2002
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 | (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 February 11, 2002 TRICON Global Restaurants, Inc. issued a press release with respect to earnings for the fourth quarter and full year ended December 29, 2001. 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 February 11, 2002 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: February 15, 2002
/s/ Brent A. Woodford
Vice President and Controller
(Principal Accounting Officer)
3
TRICON GLOBAL RESTAURANTS, INC. REPORTS ONGOING OPERATING EARNINGS PER SHARE OF $3.21 FOR FULL YEAR 2001; FOURTH-QUARTER ONGOING OPERATING EPS OF $1.08, AN INCREASE OF 33% VERSUS 2000
LOUISVILLE, Ky. (February 11, 2002) - Tricon Global Restaurants, Inc. (NYSE: YUM) reported results for the fourth quarter ended December 29, 2001.
Highlights of the fourth quarter:
Financial Highlights
($ Million Except Per Diluted Share Amounts)
% Change % Change
Vs. Vs.
Q4 Prior Year(a) Full Year Prior Year(a)
---------- ---------------- ------------ ----------------
System Sales 6,968 - 22,328 1
Revenues 2,202 1 6,953 (2)
Ongoing Operating Earnings 164 36 488 10
As % of Revenue 7.5% +2.0 ppts 7.0% +0.7 ppts
-------------------------------------------------------------------------------------------------
Ongoing Operating EPS 1.08 33 3.21 8
-------------------------------------------------------------------------------------------------
Net Facility Actions EPS - NM 0.02 NM
Unusual Items EPS - NM 0.01 NM
Reported EPS 1.08 25 3.24 17
4
David C. Novak, Chairman and CEO said, "I am pleased to report that we have achieved our 2001 full-year ongoing operating EPS commitment.
"I am even more pleased that we are moving into 2002 with wind behind our backs from a strong fourth-quarter performance. We are successfully executing our strategies of driving global expansion, improving restaurant operations, and leading the industry in multibrand innovation. Internationally, we continue to develop new restaurants at a record pace and have huge expansion opportunities for our brands, which we expect will drive more than half of Tricon's earnings growth for many years. Importantly, our operations measures for the U.S. improved in 2001, and we anticipate continued progress. Our U.S. sales trends at KFC and Taco Bell have improved. In fact, we believe our three U.S. brands enter 2002 better positioned, have sounder plans, and are fundamentally stronger businesses than a year ago.
"We continue to expand the best multibrand combinations for our brands while testing other QSR brand combinations. We believe that the multibranding concept is a key enabler for accelerating U.S. same-store sales growth, facilitating the remodeling of our U.S. restaurant system with solid returns, and expanding distribution into new trade areas.
"I am confident we have entered 2002 with solid prospects for revenue, earnings, and shareholder value growth. Our focus is consistency you can count on year after year."
Following is an update on Tricon's business segments and key drivers, which include global expansion, portfolio of leading U.S. brands, multibranding, franchise fees and cash generation and returns:
INTERNATIONAL BUSINESS PERFORMANCE
Q4 Full Year
----------------------------------- ------------------------------------------
Inc/(Dec)(a) Inc/(Dec)(a)
Excl. Excl.
($ millions) 2001 2000 Rept F/x(b) 2001 2000 Rept F/x(b)
Revenue $695 $621 +12% +15% $2,126 $2,031 +5% +10%
Restaurant Margin 14.1% 14.8% (0.7)ppts (0.6)ppts 13.9% 15.1% (1.2)ppts (1.2)ppts
Ongoing Operating $104 $90 +17% +20% $318 $309 +3% +10%
Profit
For the fourth quarter, international restaurant growth and system-wide, international same-store sales growth drove revenue and ongoing operating profit growth. On a comparable 16-week basis, ongoing operating profit increased 26% prior to foreign currency conversion to U.S. dollars. Higher operating costs adversely affected restaurant margin, and acquisitions of lower-margin restaurants were also a contributing factor.
For the full year, the same factors previously noted for the fourth quarter impacted revenue growth, restaurant margin and ongoing operating profit in a similar manner. On a comparable 52-week basis, ongoing operating profit increased 12% prior to foreign currency conversion.
5
In 2002, the company expects international revenues to grow at a low-double-digit rate and international ongoing operating profit to grow 14% to 15% prior to foreign currency conversion and the favorable impact of the cessation of amortization of goodwill and certain intangible assets (SFAS 142). Based on current foreign currency rates, the company expects an approximate $10-million adverse impact of foreign-currency conversion on ongoing operating profit for the full year 2002.
UNITED STATES PORTFOLIO PERFORMANCE
Q4 Full Year
-------------------------------- -------------------------------
($ millions) 2001 2000 Inc/(Dec)(a) 2001 2000 Inc/(Dec)(a)
U.S. Blended Same-Store +3% (3)% NM +1% (2)% NM
Sales(b)
Revenue $1,507 $1,561 (4)% $4,827 $5,062 (5)%
Restaurant Margin 16.1% 15.0% +1.1ppts 15.2% 15.2% -
Ongoing Operating Profit $239 $205 +16% $722 $742 (3)%
For the fourth quarter 2001, blended portfolio same-store sales at company restaurants increased 3% and consisted of an 8% increase at Taco Bell, a 7% increase at KFC, and a 5% decrease at Pizza Hut. Revenue declined 4% primarily due to the impact of refranchising and one less operating week in 2001. Excluding the impact of refranchising, acquisitions and lapping an extra week in 2000, revenues would have increased 4%. Restaurant margin improved by 1.1 ppts, driven by the positive same-store sales increases achieved during the quarter. Higher same-store sales drove a 16% increase in ongoing operating profit. Versus 2000, the negative ongoing operating profit impact of one less operating week in 2001 was offset by substantially lower costs related to Taco Bell's franchise financial health.
For the full year 2001, blended portfolio same-store sales at company restaurants increased 1% and consisted of a 3% increase at KFC combined with same-store sales that were even with last year at Taco Bell and Pizza Hut. Revenue declined 5% primarily due to the impact of refranchising. Excluding the impact of refranchising, acquisitions and lapping an extra week in 2000, revenues would have increased 2%. Restaurant margin was even with last year as the benefit from higher same-store sales was offset by higher operating costs. Refranchising was the main factor that resulted in a 3% decline in ongoing operating profit. Excluding refranchising, acquisitions and lapping an extra week in 2000, ongoing operating profit would have increased 4%.
For the full year 2002, we expect U.S. blended same-store sales growth of at least 2%, U.S. revenues to increase 3% and U.S. ongoing operating profit to increase 5% prior to the benefit of SFAS 142.
6
WORLDWIDE NEW RESTAURANT DEVELOPMENT
Q4 Full Year
Restaurant Openings(a)
Worldwide 626 1,489
International 437 1,041
United States 189 448
Restaurant Net Growth Vs. Last Year(a)
Worldwide NA 2%
International NA 6%
United States NA (1)%
The company set a record with 1,041 international openings in 2001. These included over 600 KFCs and 400 Pizza Huts. Our franchise and joint-venture partners opened nearly 70% of our new international restaurants in 2001.
KFC and Pizza Hut drove openings in the United States for the full year. Restaurant closures more than offset openings in the U.S. for the full year as we continued to restructure and upgrade our asset base with higher-volume, new-image restaurants. One point not reflected in these statistics is the impact of multibranding on our U.S. restaurant system. Multibrand conversions, while increasing the points of distribution of the added brand, result in no additional unit counts. Similarly, a newly opened multibrand unit, while increasing the points of distribution of two brands, results in just one additional unit count.
For 2002, we expect 5% to 6% net growth in international restaurants and no change in the U.S. This forecast excludes licensed locations.
MULTIBRANDING
Q4 Full Year
Multibrand Additions 137 309
Total Multibrand Restaurants NA 1,520
Tricon continues to expand multibranding with its three brands and test the viability of other QSR concepts as multibrand partners. We now have 71 KFC/A&W multibrands in the system. We have also begun testing multibranding with Long John Silver's (LJS) and have two Taco Bell/LJS and five KFC/LJS restaurants in operation as of the end of 2001. We expect to continue to expand these multibrand combinations based on results to date. Furthermore, we recently announced that the company would begin a multibrand test with Back Yard Burgers. Our first restaurant multibranded with Back Yard Burgers is expected to open by the end of the first quarter.
In 2002, Tricon continues to expect to add at least 325 multibranded restaurants through new-restaurant openings and conversions of existing restaurants.
7
FRANCHISE FEES
Q4(a) Full Year(a)
Franchise Restaurant Net Change(b) 153 132
Franchise Fees ($ millions)(b) $255 $815
Growth vs 2000 +1% +3%
Growth vs 2000, prior to foreign exchange conversion +2% +5%
For 2002, the company expects franchise fees to grow to at least $850 million.
CASH GENERATED AND RETURN ON INVESTED CAPITAL
($ millions) Q4 Full Year Cash Generated $344 $1,121 Capital Spending and Acquisitions $282 $744 Debt Reduction $134 $300 Share Repurchase $2 $100 Return on Invested Capital NM 18%
Cash generated for the full year 2001 included $90 million of after-tax refranchising proceeds and over $120 million of receivable collections and other proceeds related to AmeriServe.
For 2002, the company expects to generate over $1.1 billion of cash, including $200 million of proceeds from stock-option exercises and $65 million from after-tax refranchising proceeds prior to capital spending of an estimated $785 million.
The company expects return on invested capital to remain in the top tier of large-scale restaurant companies.
FIRST-QUARTER 2002 OUTLOOK
Our guidance for first quarter ongoing operating EPS is between $0.74 and $0.78, an increase of 25% to 32%.
Projected factors contributing to these expectations are . . .
8
YEAR 2002 OUTLOOK
Tricon expects to earn between $3.56 and $3.63 of ongoing operating EPS for the full year.
SFAS 142 UPDATE
Effective December 30, 2001, the beginning of fiscal year 2002, we adopted Statement of Financial Accounting Standards (SFAS) No. 142 "Goodwill and Other Intangible Assets" and ceased amortization of certain of our indefinite-lived intangibles, including goodwill. If SFAS 142 had been effective for fiscal 2001, reported net income and ongoing operating EPS would have increased by approximately $26 million and $0.17 respectively.
U.S. restaurant profit would have been approximately $21 million higher and restaurant margin would have been approximately 0.5 percentage points higher, while general and administrative costs would have been approximately $1 million lower.
International restaurant profit would have been approximately $11 million higher and restaurant margin would have been approximately 0.6 percentage points higher, while general and administrative costs would have been approximately $1 million lower and other income would have been approximately $4 million higher.
For 2002, the company anticipates that the adoption of SFAS 142 will favorably impact ongoing operating EPS by $0.13 to $0.16 subject to portfolio actions occurring in 2002, changes in foreign-currency exchange rates, tax rates, and average diluted shares outstanding. This assumption is included in the above noted 2002 EPS outlook. Tricon will provide additional updates throughout the year as results become final.
9
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 statements include those identified by such words as may, will, expect, anticipate, believe, plan and other similar terminology. These "forward-looking" statements reflect management's current expectations regarding future events and operating and financial performance and are based on currently available data. However, actual results are subject to future events and uncertainties, which could cause actual results to differ from those projected in this announcement. Factors that can cause actual results to differ materially include: changes in global and local business, economic and political conditions in the countries and territories where Tricon operates; changes in currency exchange and interest rates; changes in commodity, labor and other operating costs; changes in competition in the food industry, consumer preferences, spending patterns and demographic trends; the effectiveness of our operating initiatives and advertising and promotional efforts; new-product and concept development by Tricon and other food-industry competitors; the success of our refranchising strategy; the ongoing business viability of our franchise and license operators; our ability to secure alternative distribution to our restaurants at competitive rates and to ensure adequate supplies of restaurant products and equipment in our stores; our actuarially determined casualty loss estimates; changes in legislation and governmental regulation; and changes in accounting policies and practices. Further information about 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.
Tricon Global Restaurants, Inc. will hold a conference call to review the company's operating and financial performance at 11:00 a.m. EST Tuesday, February 12, 2002.
For U.S. callers, the number is 877/815-2029. For international callers, the number is 706/645-9271.
The call will be available for playback beginning Tuesday, February 12, at 1:00 p.m. EST through Thursday, February 21, at 12:00 midnight EST. To access the playback, dial 800/642-1687 in the U.S.A. and 706/645-9291 internationally. The playback pass code is 2962426.
The call and the playback can be accessed via the Internet by visiting Tricon's Web site: www.triconglobal.com and selecting "4th Quarter Earnings Web cast." (Real Player is required, which can be downloaded at no charge. The process could take at least 10 minutes.)
Analysts are invited to contact
Tim Jerzyk, Vice President Investor Relations at 502/874-2543
Scott Colosi, Director Investor Relations at 502/874-8918
Members of the media are invited to contact
Amy Sherwood, Vice President Public Relations at 502/874-8200
Individual shareholders are invited to contact
Scott Colosi, Director Investor Relations at 502/874-8918
10
Tricon Global Restaurants, Inc.
Condensed Consolidated Statements of Income
(amounts in millions, except per share amounts)
(unaudited)
Quarter Ended(a) Year Ended(a)
------------------------ % Change ------------------------ % Change
12/29/01 12/30/00 B/(W)(b) 12/29/01 12/30/00 B/(W)(b)
----------- ----------- ----------- ----------- ----------- -----------
Revenues
Company sales $ 1,947 $ 1,930 1 $ 6,138 $ 6,305 (3)
Franchise and license fees 255 252 1 815 788 3
----------- ----------- ----------- -----------
2,202 2,182 1 6,953 7,093 (2)
----------- ----------- ----------- -----------
Costs and expenses, net
Company restaurant expenses 1,646 1,641 - 5,232 5,351 2
General and administrative expenses 257 272 5 796 830 4
Franchise and license expenses(c) 13 31 55 59 49 (20)
Other (income) expense(d) (8) (4) NM (23) (25) (8)
Facility actions net loss (gain)(e) 26 (60) NM 1 (176) NM
Unusual items (income) expense(f) (1) 36 NM (3) 204 NM
----------- ----------- ----------- -----------
Total costs and expenses, net 1,933 1,916 (1) 6,062 6,233 3
----------- ----------- ----------- -----------
Operating profit 269 266 1 891 860 4
Interest expense, net 46 55 17 158 176 10
----------- ---------- ----------- -----------
Income before income taxes 223 211 5 733 684 7
Income tax provision 59 83 30 241 271 11
----------- ----------- ----------- -----------
Net income $ 164 $ 128 28 $ 492 $ 413 19
=========== =========== =========== ===========
Basic EPS Data
EPS $ 1.13 $ 0.88 28 $ 3.36 $ 2.81 19
========== =========== =========== ===========
Average shares outstanding 146 146 - 147 147 -
=========== =========== =========== ===========
Diluted EPS Data
EPS $ 1.08 $ 0.86 25 $ 3.24 $ 2.77 17
=========== =========== =========== ===========
Average shares outstanding 152 149 (3) 152 149 (2)
=========== =========== =========== ===========
See accompanying notes.
11
Tricon Global Restaurants, Inc.
WORLDWIDE Ongoing Operating Results
(amounts in millions)
(unaudited)
Quarter Ended(a) Year Ended(a)
------------------------ % Change ------------------------ % Change
12/29/01 12/30/00 B/(W)(b) 12/29/01 12/30/00 B/(W)(b)
----------- ----------- -------------- ----------- ----------- --------------
System sales $ 6,968 $ 6,994 - $ 22,328 $ 22,159 1
=========== =========== =========== ===========
Company sales $ 1,947 $ 1,930 1 $ 6,138 $ 6,305 (3)
Franchise and license fees 255 252 1 815 788 3
----------- ----------- ----------- -----------
Revenues 2,202 2,182 1 6,953 7,093 (2)
----------- ----------- ----------- -----------
Company restaurant costs 1,646 1,641 - 5,232 5,351 2
General and administrative
expenses 257 272 5 796 830 4
Franchise and license expenses(c) 13 31 55 59 49 (20)
Other (income) expense(d) (8) (4) NM (23) (25) (8)
----------- ----------- ----------- -----------
Ongoing operating profit 294 242 21 889 888 -
Interest expense, net 46 55 17 158 176 10
Income tax provisions 84 67 (24) 243 268 10
----------- ----------- ----------- -----------
ONGOING OPERATING
EARNINGS $ 164 $ 120 36 $ 488 $ 444 10
=========== =========== =========== ===========
ONGOING OPERATING EPS $ 1.08 $ 0.81 33 $ 3.21 $ 2.98 8
=========== =========== =========== ===========
Avg. shares outstanding - diluted 152 149 (3) 152 149 (2)
=========== =========== =========== ===========
Ongoing operating tax rate 33.8% 36.0% 2.2 ppts. 33.1% 37.7% 4.6 ppts.
=========== =========== =========== ===========
Company sales 100.0% 100.0% 100.0% 100.0%
Food and paper 30.7 30.9 0.2 ppts. 31.1 30.8 (0.3) ppts.
Payroll and employee benefits 26.4 27.6 1.2 ppts. 27.1 27.7 0.6 ppts.
Occupancy and other operating
expenses 27.4 26.5 (0.9) ppts. 27.0 26.4 (0.6) ppts.
----------- ----------- ----------- -----------
Restaurant margin 15.5% 15.0% 0.5 ppts. 14.8% 15.1% (0.3) ppts.
=========== =========== =========== ===========
Reconciliation of Ongoing Operating Profit to Reported Operating Profit
U.S. ongoing operating profit $ 239 $ 205 16 $ 722 $ 742 (3)
International ongoing operating
profit 104 90 17 318 309 3
Unallocated and corporate
expenses (48) (53) 8 (148) (163) 9
Foreign exchange (loss) (1) - NM (3) - NM
----------- ----------- ----------- -----------
Ongoing operating profit $ 294 $ 242 21 $ 889 $ 888 -
Facility actions net (loss) gain(e) (26) 60 NM (1) 176 NM
Unusual items income (expense)(f) 1 (36) NM 3 (204) NM
----------- ----------- ----------- -----------
Reported operating profit $ 269 $ 266 1 $ 891 $ 860 4
=========== =========== =========== ===========
12
Tricon Global Restaurants, Inc.
UNITED STATES Ongoing Operating Results
(amounts in millions)
(unaudited)
Quarter Ended(a) Year Ended(a)
----------------------- % Change ------------------------ % Change
12/29/01 12/30/00 B/(W)(b) 12/29/01 12/30/00 B/(W)(b)
----------- ----------- -------------- ------------ ----------- --------------
System sales $ 4,522 $ 4,597 (2) $ 14,596 $ 14,514 1
=========== =========== ============ ===========
Company sales $ 1,339 $ 1,393 (4) $ 4,287 $ 4,533 (5)
Franchise and license fees 168 168 - 540 529 2
----------- ----------- ------------ -----------
Revenues 1,507 1,561 (4) 4,827 5,062 (5)
----------- ----------- ------------ -----------
Company restaurant costs 1,124 1,184 5 3,638 3,846 5
General and administrative
expenses 133 141 6 418 428 2
Franchise and license expenses(c) 11 31 61 49 46 (10)
----------- ----------- ------------ -----------
Ongoing operating profit $ 239 $ 205 16 $ 722 $ 742 (3)
=========== =========== ============ ===========
Company sales 100.0% 100.0% 100.0% 100.0%
Food and paper 28.1 28.6 0.5 ppts. 28.6 28.6 -
Payroll and employee benefits 30.0 31.1 1.1 ppts. 30.6 30.8 0.2 ppts.
Occupancy and other operating
expenses 25.8 25.3 (0.5) ppts. 25.6 25.4 (0.2) ppts.
----------- ----------- ------------ -----------
Restaurant margin 16.1% 15.0% 1.1 ppts. 15.2% 15.2% -
=========== =========== ============ ===========
13
Tricon Global Restaurants, Inc.
INTERNATIONAL Ongoing Operating Results
(amounts in millions)
(unaudited)
Quarter Ended(a) Year Ended(a)
------------------------ % Change ---------------------- % Change
12/29/01 12/30/00 B/(W)(b) 12/29/01 12/30/00 B/(W)(b)
----------- ----------- -------------- ---------- ----------- --------------
System sales $ 2,446 $ 2,397 2 $ 7,732 $ 7,645 1
=========== =========== =========== ===========
Company sales $ 608 $ 537 13 $ 1,851 $ 1,772 5
Franchise and license fees 87 84 4 275 259 6
----------- ----------- ----------- -----------
Revenues 695 621 12 2,126 2,031 5
----------- ----------- ----------- -----------
Company restaurant costs 522 457 (14) 1,594 1,505 (6)
General and administrative
expenses 76 78 2 230 239 3
Franchise and license expenses(c) 2 - NM 10 3 NM
Equity income from investments
in unconsolidated affiliates (9) (4) NM (26) (25) 3
----------- ----------- ----------- -----------
Ongoing operating profit $ 104 $ 90 17 $ 318 $ 309 3
=========== =========== =========== ===========
Company sales 100.0% 100.0% 100.0% 100.0%
Food and paper 36.6 37.0 0.4 ppts. 36.9 36.5 (0.4) ppts.
Payroll and employee benefits 18.4 18.5 0.1 ppts. 19.1 19.5 0.4 ppts.
Occupancy and other operating
expenses 30.9 29.7 (1.2) ppts. 30.1 28.9 (1.2) ppts.
----------- ----------- ----------- -----------
Restaurant margin 14.1% 14.8% (0.7) ppts. 13.9% 15.1% (1.2) ppts.
=========== =========== =========== ===========
14
Notes to the Condensed Consolidated Statements of Income and
Ongoing Operating Results
(tabular dollar amounts in millions)
Year 2000 Benefit of 53rd Week
----------------------------------------------------------------
US International Unallocated Worldwide
----------- -------------- ------------- ------------
Revenues $ 67 $ 20 $ - $ 87
Ongoing operating profit $ 17 $ 4 $ (2) $ 19
Quarter Ended Year Ended
-------------------------- --------------------------
12/29/01 12/30/00 12/29/01 12/30/00
----------- ----------- ------------ -----------
Equity income from investments in unconsolidated
affiliates $ (9) $ (4) $ (26) $ (25)
Foreign exchange net loss 1 - 3 -
----------- ----------- ------------ -----------
Total other (income) expense $ (8) $ (4) $ (23) $ (25)
=========== =========== ============ ===========
Quarter Ended Year Ended
-------------------------- --------------------------
12/29/01 12/30/00 12/29/01 12/30/00
----------- ----------- ------------ -----------
Refranchising net loss (gain) $ 10 $ (74) $ (39) $ (200)
Store closure costs 7 6 17 10
Impairment charges for stores that will continue
to be used in the business 9 4 18 8
Impairment charges for stores to be closed - 4 5 6
----------- ----------- ------------ -----------
Facility actions net loss (gain) $ 26 $ (60) $ 1 $ (176)
=========== =========== ============ ===========
Fourth quarter and year-to-date 2001 refranchising net loss (gain) included a charge of $11 million to mark to market the net assets of an international market that is held for sale.
15
Tricon Global Restaurants, Inc.
Cash Generation/Use
(amounts in millions)
(unaudited)
Quarter Ended Year Ended
---------------------------- ---------------------------
12/29/01 12/30/00 12/29/01 12/30/00
----------- ------------ ----------- -----------
Ongoing Operating Earnings $ 164 $ 120 $ 488 $ 444
Depreciation & Amortization 127 109 370 354
Refranchising proceeds, after-tax 34 105 90 261
AmeriServe 21 20 128 (243)
Other (2) (69) 45 68
----------- ------------ ----------- -----------
Total Cash Generated $ 344 $ 285 $ 1,121 $ 884
=========== ============ =========== ===========
Capital Spending $ 276 $ 259 $ 636 $ 572
Acquisitions 6 (3) 108 24
Debt Reduction, net 134 11 300 28
Share Repurchase 2 - 100 216
----------- ------------ ----------- -----------
Total Cash Uses $ 418 $ 267 $ 1,144 $ 840
=========== ============ =========== ===========
Net increase (decrease) in cash $ (74) $ 18 $ (23) $ 44
=========== ============ =========== ===========
16
Tricon Global Restaurants, Inc.
Restaurant Units Activity Summary
For the Year Ended December 29, 2001
(unaudited)
United States
----------------------------------------------------------------------------------------------------------------
Total
Excluding Total
Company Franchisees Licensees Licensees Units
-------------- ------------- -------------- ----------- -----------
Pizza Hut U.S.
Beginning of Year 1,801 4,888 6,689 1,238 7,927
New Builds 88 123 211 118 329
Acquisitions 13 (13) - - -
Refranchising & Licensing (48) 48 - - -
Closures & Divestitures (109) (222) (331) (206) (537)
Other - - - - -
-------------- ------------- -------------- ----------- -----------
End of Year 1,745 4,824 6,569 1,150 7,719
============== ============= ============== =========== ===========
% of Total 22.6% 62.5% 85.1% 14.9% 100.0%
Taco Bell U.S.
Beginning of Year 1,162 3,996 5,158 1,588 6,746
New Builds 25 54 79 59 138
Acquisitions 117 (114) 3 (3) -
Refranchising & Licensing - - - - -
Closures & Divestitures (39) (108) (147) (293) (440)
Other - - - - -
-------------- ------------- -------------- ----------- -----------
End of Year 1,265 3,828 5,093 1,351 6,444
============== ============= ============== =========== ===========
% of Total 19.6% 59.4% 79.0% 21.0% 100.0%
KFC U.S.
Beginning of Year 1,339 3,978 5,317 47 5,364
New Builds 70 88 158 5 163
Acquisitions 6 (6) - - -
Refranchising & Licensing (107) 107 - - -
Closures & Divestitures (34) (86) (120) (8) (128)
Other - - - - -
-------------- ------------- -------------- ----------- -----------
End of Year 1,274 4,081 5,355 44 5,399
============== ============= ============== =========== ===========
% of Total 23.6% 75.6% 99.2% 0.8% 100.0%
Total U.S.
Beginning of Year 4,302 12,862 17,164 2,873 20,037
New Builds 183 265 448 182 630
Acquisitions 136 (133) 3 (3) -
Refranchising & Licensing (155) 155 - - -
Closures & Divestitures (182) (416) (598) (507) (1,105)
Other - - - - -
-------------- ------------- -------------- ----------- -----------
End of Year 4,284 12,733 17,017 2,545 19,562
============== ============= ============== =========== ===========
% of Total 21.9% 65.1% 87.0% 13.0% 100.0%
17
Tricon Global Restaurants, Inc.
Restaurant Units Activity Summary
For the Year Ended December 29, 2001
(unaudited)
International
---------------------------------------------------------------------------------------------------------------------------
Total
Unconsolidated Excluding Total
Company Affiliates Franchisees Licensees Licensees Units
------------ ----------------- ------------- ------------ ---------- -----------
Pizza Hut International
Beginning of Year 668 819 2,466 3,953 204 4,157
New Builds 116 63 237 416 6 422
Acquisitions 130 (55) (75) - - -
Refranchising & Licensing (67) (2) 69 - - -
Closures & Divestitures (43) (6) (217) (266) (41) (307)
Other (41) 41 - - - -
------------ ----------------- ------------- ------------ ---------- -----------
End of Year 763 860 2,480 4,103 169 4,272
============ ================= ============= ============ ========== ===========
% of Total 17.9% 20.1% 58.0% 96.0% 4.0% 100.0%
Taco Bell International
Beginning of Year 44 3 169 216 33 249
New Builds 3 1 5 9 - 9
Acquisitions - 27 (25) 2 (2) -
Refranchising & Licensing (2) - 2 - - -
Closures & Divestitures (6) - (11) (17) (2) (19)
Other - - - - - -
------------ ----------------- ------------- ------------ ---------- -----------
End of Year 39 31 140 210 29 239
============ ================= ============= ============ ========== ===========
% of Total 16.3% 13.0% 58.6% 87.9% 12.1% 100.0%
KFC International
Beginning of Year 1,109 1,022 3,790 5,921 53 5,974
New Builds 219 86 311 616 2 618
Acquisitions 95 - (95) - - -
Refranchising & Licensing (9) (18) 27 - - -
Closures & Divestitures (39) (33) (97) (169) (7) (176)
Other (26) 52 (26) - - -
------------ ----------------- ------------- ------------ ---------- ----------
End of Year 1,349 1,109 3,910 6,368 48 6,416
============ ================= ============= ============ ========== ===========
% of Total 21.0% 17.3% 61.0% 99.3% 0.7% 100.0%
Total International
Beginning of Year 1,821 1,844 6,425 10,090 290 10,380
New Builds 338 150 553 1,041 8 1,049
Acquisitions 225 (28) (195) 2 (2) -
Refranchising & Licensing (78) (20) 98 - - -
Closures & Divestitures (88) (39) (325) (452) (50) (502)
Other(a) (67) 93 (26) - - -
------------ ----------------- ------------- ------------ ---------- -----------
End of Year 2,151 2,000 6,530 10,681 246 10,927
============ ================= ============= ============ ========== ===========
% of Total 19.7% 18.3% 59.7% 97.7% 2.3% 100.0%
Worldwide
---------------------------------------------------------------------------------------------------------------------------
Total Tricon
Beginning of Year 6,123 1,844 19,287 27,254 3,163 30,417
New Builds 521 150 818 1,489 190 1,679
Acquisitions 361 (28) (328) 5 (5) -
Refranchising & Licensing (233) (20) 253 - - -
Closures & Divestitures (270) (39) (741) (1,050) (557) (1,607)
Other(a) (67) 93 (26) - - -
------------ ----------------- ---------- ------------ ---------- -----------
End of Year 6,435 2,000 19,263 27,698 2,791 30,489
============ ================= =========== ============ ========== ===========
% of Total 21.1% 6.5% 63.2% 90.8% 9.2% 100.0%
18
Tricon Global Restaurants, Inc.
Multibrand Restaurants
For the Year Ended December 29, 2001
(unaudited)
Net Additions
----------------------------------------
Total Multibrand
16 Weeks Ended 52 Weeks Ended Restaurants
12/29/01 12/29/01 12/29/01
---------------- ---------------- -------------------
KFC/Taco Bell 15 29 677
Taco Bell/Pizza Hut 29 153 553
KFC/Pizza Hut 48 52 164
KFC/A&W 30 55 71
KFC/TB/PH 3 n 1 5 10 45
KFC/Long John Silver's 5 5 5
Taco Bell/Long John Silver's 2 2 2
Other 3 3 3
---------------- ---------------- -------------------
Total 137 309 1,520
================ ================ ===================
19