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Yum! Brands Annual Report (Amendment), Year Ended Dec 30, 2000

Filing Date
Filed April 5, 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/A filed April 5, 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. Operating profit fell to $860 million from $1.24 billion, while ongoing operating profit rose 1% to $888 million. Net income declined to $413 million, or $2.77 per diluted share, from $627 million, or $3.92 per diluted share, in 1999.

The decline was driven largely by $204 millionb of unusual items, including $170 million tied to the AmeriServe bankruptcy reorganization, and by the refranchising program, which reduced Company sales by 11%. U.S. same-store sales were down 2% on a blended basis, with KFC down 3%, Pizza Hut up 1%, and Taco Bell down 5%. Management flagged financial stress among Taco Bell franchisees, many of whom face restructuring, and noted that Kraft's recall of corn taco shells likely hurt Taco Bell sales.

The company reported shareholders' deficit of $322 millionc, a total debt balance of $2.49 billion, and a working capital deficit of $634 million. It also authorized a new $300 million share repurchase program over two years and stated it does not presently intend to pay dividends.

The filing is an amendment (10-K/A) that adds Part II Item 9 and Part III Items 10 through 13, which incorporate information by reference from the 2001 proxy statement. The company expects to substantially complete its refranchising program in 2001 and plans to refinance a portion of its credit facilities with public bonds, which it expects will raise interest rates.

02—Key points

Key Highlights

  1. Fiscal 2000 system sales were $22.16 billion, up 2% from $21.76 billion in 1999, with total revenues down 9% to $7.09 billion.
  2. Net income fell to $413 million ($2.77 diluted EPS) from $627 million ($3.92 diluted EPS) in 1999, driven by $204 million of unusual items.
  3. Ongoing operating profit rose 1% to $888 million, while reported operating profit fell 31% to $860 million.
  4. AmeriServe Food Distribution's bankruptcy resulted in a $170 million unusual-items charge in 2000, with a $86 million residual asset receivable recorded.
  5. U.S. blended same-store sales declined 2%, with Taco Bell down 5% and KFC down 3%, while Pizza Hut rose 1%.
  6. Taco Bell franchisees face financial difficulties, and the company recorded about $26 million in related charges to ongoing operating profit.
  7. The company has a shareholders' deficit of $322 million, $2.49 billion in total debt, and authorized a new $300 million share repurchase program.

03—Questions

Frequently Asked Questions

  1. Why did reported operating profit decline so sharply in 2000?

    Operating profit fell to $860 million from $1.24 billion, mainly because unusual items rose to $204 million from $51 million, facility actions net gains dropped to $176 million from $381 million, and company restaurant sales declined as units were refranchised.

  2. What is the company's exposure to the AmeriServe bankruptcy?

    Tricon provided approximately $246 million to AmeriServe under the plan of reorganization, recorded a net settlement expense of $170 million in 2000, and expects to receive about $86 million from the residual assets of AmeriServe's estate, with up to $220 million in priority proceeds from bankruptcy causes of action.

  3. How are the Taco Bell franchisees affecting the company?

    Certain Taco Bell franchisees face financial problems due to store sales declines, which the company believes were worsened by the Kraft corn taco shell recall. Taco Bell established a $15 million loan program, and the company charged about $26 million to ongoing operating profit for related expenses.

  4. Does the company pay dividends or return capital to shareholders?

    The company does not presently intend to pay dividends. It repurchased about $216 million of stock in 2000 under a prior program, and in February 2001 authorized a new program to repurchase up to $300 million over two years, with no repurchases made as of March 9, 2001.

04—Continue

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