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Yum! Brands Annual Report, Year Ended Dec 30, 2000

Filing Date
Filed March 28, 2001
Period End
December 30, 2000
Security
YUM
In the record · 2016–202610-K1110-Q328-K146

YUM filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 146 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Material agreement8-K · Sep ’19Sep ’19
  3. Leadership change8-K · Sep ’21Sep ’21
  4. Material agreement8-K · Sep ’25Sep ’25

01—Abstract

Summary

Summary of the 10-K filed March 28, 2001. Cited figures are marked; the original filing is the authoritative source.

Tricon Global Restaurants, Inc. (now Yum!

Brands, Inc.) reported fiscal 2000 (53 weeks ended December 30, 2000) with system sales of $22.16 billiona, up 2% from $21.76 billion in 1999, and total revenues of $7.09 billion, down 9% from $7.82 billion. Net income fell to $413 million, or $2.77 per diluted share, from $627 million, or $3.92 per diluted share in 1999. Operating profit was $860 million versus $1.24 billion.

Ongoing operating profit rose 1% to $888 millionb, while unusual items of $204 million, largely tied to the AmeriServe bankruptcy, weighed on reported results. The company is refranchising restaurants, which it expects to substantially complete in 2001, and the Portfolio Effect reduced Company sales by $1.08 billion in 2000. The Taco Bell franchise system faces financial stress tied to declining same-store sales and the Kraft taco shell recall.

The company charged about $26 millionc to ongoing operating profit for franchisee-related expenses and has a $15 million loan program for franchisees. U.S. Company same-store sales declined 2% blended, with KFC down 3%, Pizza Hut up 1%, and Taco Bell down 5%. Total debt stood at $2.49 billion at year-end, with a $1.8 billion unused revolving credit facility, and the company announced a new $300 million share repurchase program in February 2001.

The company does not intend to pay dividends. The filing also details ongoing wage and hour class actions at Pizza Hut and Taco Bell, with a Taco Bell verdict issued in March 2001 that was mixed for the company. Management states it believes the company has adequate financial resources to meet its requirements in 2001 and beyond.

02—Key points

Key Highlights

  1. System sales were $22.16 billion in 2000, up 2% from $21.76 billion in 1999, with ongoing operating profit up 1% to $888 million.
  2. Total revenues declined 9% to $7.09 billion, reflecting the refranchising program and the Portfolio Effect, which reduced Company sales by $1.08 billion.
  3. Diluted EPS fell to $2.77 from $3.92, with net income of $413 million versus $627 million, driven by $204 million in unusual items, mainly the AmeriServe bankruptcy charges of $170 million.
  4. U.S. Company same-store sales declined 2% blended, with Taco Bell down 5% and KFC down 3%, while Pizza Hut rose 1%.
  5. Taco Bell franchisees face financial difficulties tied to sales declines and the Kraft taco shell recall, with the company charging about $26 million to ongoing operating profit for franchisee-related expenses.
  6. Total debt was $2.49 billion at year-end, with $1.8 billion of unused revolving credit facility borrowings, and a new $300 million share repurchase authorization was approved in February 2001.
  7. The company does not presently intend to pay dividends on its common stock.

03—Questions

Frequently Asked Questions

  1. Why did reported earnings decline so sharply in 2000?

    Net income fell to $413 million from $627 million. The decline reflects lower operating profit of $860 million versus $1.24 billion, which was affected by $204 million of unusual items, including $170 million tied to the AmeriServe bankruptcy reorganization, and by lower facility actions net gains of $176 million versus $381 million in 1999.

  2. What is the status of the refranchising program?

    The company refranchised 757 units in 2000, compared with 1,435 in 1999, and expects to substantially complete the refranchising program in 2001. Its overall ownership of system units declined to 20 percent at year-end 2000 from 47 percent at year-end 1994.

  3. What risks does the Taco Bell franchise system pose?

    Certain Taco Bell franchise operators face financial problems primarily from sales declines, which the company believes were worsened by the Kraft corn taco shell recall. A $15 million loan program has aided about 75 franchisees, and the company believes a group representing about 1,000 Taco Bell restaurants will require restructuring. The filing states that additional costs could be material.

  4. How is the company's balance sheet and liquidity positioned?

    Total debt was $2.49 billion at year-end 2000, with long-term debt of $2.40 billion. The company had unused Revolving Credit Facility borrowings of $1.8 billion net of $190 million of letters of credit. Shareholders' deficit was $322 million. The company believes it has adequate financial resources to meet its requirements in 2001 and beyond.

  5. What is the outlook for the international business?

    Tricon Restaurants International accounted for 35% of system sales and 29% of total revenues in 2000. International system sales rose 6% and ongoing operating profit rose 16% to $309 million. The company plans to continue investing in key international markets with substantial growth potential, and a new Canadian unconsolidated affiliate and a planned Polish venture are expected to change reported revenues in 2001.

04—Continue

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