1、2000 Annual ReportTMT R I C O N G L O B A LR E S T A U R A N T S ,I N C .2 0 0 0 A n n u a l R e p o r tT R I C O N G L O B A LR E S T A U R A N T S ,I N C .EINZELN SIND WIR KSTLICH, ZUSAMMEN SIND WIR YUM!Hungry for more information?Contact: TMSEULS NOUS SOMMES DLICIEUX, ENSEMBLE NOUS SOMMES YUM!SOL
2、AS SOMOS DELICIOSAS, JUNTAS SOMOS YUM!ALONE WERE DELICIOUS, TOGETHER WERE YUM!4613 Tricon Covers 3/20/R1 3/21/01 6:25 PM Page 1David C. Novak 48Chairman and Chief ExecutiveOfficer, TriconAndrall E. Pearson75Founding Chairman, TriconD. Ronald Daniel 71Treasurer, Harvard University,Former Managing Par
3、tner,McKinsey and Company James Dimon45Chairman and Chief ExecutiveOfficer, Bank One CorporationMassimo Ferragamo 43President and Vice Chairman,Ferragamo USA, Inc., a subsidiaryof Salvatore Ferragamo ItaliaRobert Holland, Jr.59Owner and Chief ExecutiveOfficer, WorkPlace Integrators, Michigans larges
4、t Steelcase office furniture dealerSidney Kohl 70Former Chairman, KohlsSupermarkets, Founder, KohlsDepartment StoresKenneth Langone 65Founder, Chairman of the Boardand Chief Executive Officer,Invemed Associates, Inc., aninvestment banking firm,Founder, Home Depot, Inc.Jackie Trujillo 65Chairman of t
5、he Board, HarmanManagement CorporationRobert J. Ulrich 57Chairman and Chief ExecutiveOfficer, Target Corporation and Target StoresJeanette S.Wagner 71Vice Chairman, Estee LauderCompanies, Inc.John L.Weinberg 76Director, Goldman Sachs Group, Inc.Board of DirectorsExecutive OfficersDavid C. Novak48Cha
6、irman and Chief ExecutiveOfficer, Tricon Andrall E. Pearson75Founding Chairman, Tricon Cheryl Bachelder44President and Chief ConceptOfficer, KFC, U.S.A.Peter A. Bassi51President, Tricon RestaurantsInternationalJonathan D. Blum42Senior Vice President, PublicAffairs, TriconEmil J. Brolick53President a
7、nd Chief ConceptOfficer, Taco Bell U.S.A.Christian Campbell50Senior Vice President, GeneralCounsel and Secretary, TriconMark S. Cosby42Chief Operating Officer, KFC,U.S.A.Gregg Dedrick41Executive Vice President, Peopleand Shared Services, TriconDavid J. Deno43Chief Financial Officer, TriconPeter R. H
8、earl49Executive Vice President, TriconRestaurants InternationalAylwin B. Lewis46Chief Operating Officer, Tricon Michael A. Miles39Chief Operating Officer, Pizza Hut, U.S.A.Robert T. Nilsen41Chief Operating Officer, Taco Bell, U.S.A.Denise L. Ramos44Senior Vice President, Treasurer,Tricon Charles E.
9、Rawley50 Chief Development Officer,TriconMichael S. Rawlings46President and Chief ConceptOfficer, Pizza Hut, U.S.A.Brent A.Woodford38Vice President and Controller,TriconABCDEFGHIJKLI F AB C LH K JG D EFinancial Highlights(in millions, except per share and unit amounts)5-year20001999199819971996growt
10、hKFC$823$837$817$786$7752%Pizza Hut7126966456306202%Taco Bell896918931902886(1)%(a)Compounded annual growth rateAverage U.S. Sales Per System Unit(in thousands)5-year20001999199819971996growthKFC$4.4$4.3$4.2$4.0$3.94%Pizza Hut5.05.04.84.74.9Taco Bell5.15.25.04.84.63%Total U.S.14.514.514.013.513.42%T
11、otal International7.77.36.67.06.93%Total$22.2$21.8$20.6$20.5$20.32%(a)Compounded annual growth rateWorldwide System Sales(in billions) Contents1 Dear Partners6 Customer Mania!8 International12 Pizza Hut16 KFC20 Taco Bell24 Tricon Facts26 FinancialsNumber of stores: 20001999% B(W)Company6,1236,981(12
12、)Affiliates1,8441,17857Franchisees19,28718,4145Licensees3,1633,409(7)Total stores30,41729,9821System sales$22,159$21,7622Company revenues$7,093$7,822(9)Ongoing operating profit$888$8811Accounting changes$29NMFacility actions net gain$176$381(54)Unusual items$(204)$(51)NMOperating profit$860$1,240(31
13、)Net income$413$627(34)Diluted earnings per common share$2.77$3.92(29)Diluted ongoing earnings per common share$2.98$2.5816Cash flows provided by:Operating activities$491$565(13)Refranchising proceeds$381$916(58)(a)(a)4613 Tricon Covers 3/20/R1 3/22/01 4:06 PM Page 2As youll see on the front cover,
14、were a company on a global mission.From Mexico to Malaysia, and Boston to Bangkok, weve become obsessed even maniacal about satisfying customers better than any other restaurantcompany in the world.Our PASSION is to put a YUM on peoples faces around the worldwe offer thatspecial eating experience th
15、at makes you smile and creates lifelong customers.Well do that with: food you cravecomeback valueand customer-focused teams.Our jobs are the best in the world for people who are committed toquality food and satisfying customers better than anyone.Dear PartnersIts been said the true test of any great
16、 company is how itresponds to a difficult and challenging year. Theres no ques-tion that 2000 was just that kind of year for Tricon, andwere confident the way we responded will make us strongerin 2001 and beyond.For the full year 2000, we achieved 16% growth in ongoing operating earnings per share,
17、driven by strong performance at our International business, continued samestore sales growth at Pizza Hut and by significant reductions in overhead, interest expense and the ongoing operating taxrate. While 16% growth is nothing to sneeze at, it fell wellbelow our expectations for the year because o
18、f a decline of2% in U.S. blended same store sales, driven by a 5% declineat Taco Bell and 3% decline at KFC.The year was further complicated by the bankruptcy ofAmeriServe, our primary food distributor. Our team workedaround the clock to arrange for interim financing and to setDavid C. NovakChairman
19、 and Chief Executive Officer4613 Redesign Pg 01-Pg 05/R5 3/21/01 9:56 PM Page 12TRICON GLOBAL RESTAURANTSup a new system to pay our vendors on time. This allowed usto continue to satisfy our customers by keeping our restau-rants open and having product available. Thats behind usnow as we achieved th
20、e best possible outcome when McLaneCompany, Inc. finalized its purchase of AmeriServe. McLane,a division of Wal-Mart, is a financially solid, world-class distributor with a proven track record of excellent service.While this situation cost us significant financial and humancapital, it also showed th
21、at we can weather even the most difficult times because of our financial strength and the capa-bility of our people.Our focus now is to put 100% of our efforts toward achiev-ing our superordinate business objective: sustainable salesgrowth.This means we have to become maniacal about doing a better j
22、ob of satisfying customers, which will enable us to drive same store sales growth and add new units aroundTricons Internationalbusiness representsabout one-third of our profits. Weopened 929 new tra-ditional restaurantsinternationally, drivenby the significantgrowth of our Asia-Pacific businesses.th
23、e globe. In fact, we are striving to build a global restaurantsystem of over 725,000 Customer Maniacs,team memberswho are obsessed to go the extra mile to make sure we put a YUM on our customers faces every time they eat our food.This is the key to sales and profitability.In this report, the preside
24、nts of KFC, Pizza Hut, Taco Belland Tricon Restaurants International will share with you whatthey are doing to drive sustainable sales growth and bring cus-tomer mania to life. Customer mania is taking hold!Going forward, we will continue to report on five keyareas of our business that we believe ar
25、e important to measur-ing our growth and progress in becoming a unique restaurantcompany and a great investment. During 2000, we made sub-stantial progress in all these areas except U.S. blended samestore sales growth.4613 Redesign Pg 01-Pg 05/R7 3/22/01 4:58 PM Page 2TRICON GLOBAL RESTAURANTS31. In
26、ternational ExpansionOur International business now represents about a third of our profits and we have only scratched the surface of our development opportunity. In 2000, we opened a record929 new traditional units. We are confident we will be ableto at least repeat this pace of development in 2001
27、, and inyears to come. To put the profit opportunity into perspective,McDonalds makes over a billion dollars a year in Europealone. Thats more than what all of Tricon makes today. Andthe only serious international restaurant brands are KFC,Pizza Hut and McDonalds. Our two global brands, KFCand Pizza
28、 Hut, are universally accepted by our customersaround the world. Led by Pete Bassi, we have the people,infrastructure and processes in place to drive consistent mid-teens profit growth from here on out.2. Blended U.S. Sales GrowthWe have three category-leading brands, and we believe thatover time, h
29、aving a portfolio of brands reduces our exposureto temporary ups and downs of a single brand and will enableus to deliver consistent same store sales growth. Thats whyblended same store sales growth is a good way to measureour progress. This represents our number one challenge asblended same store s
30、ales declined 2% in 2000 after two yearsof 4% growth. To upgrade ourconcept leadership, we success-fully recruited Emil Brolickfrom Wendys and CherylBachelder from Dominos to be Presidents of Taco Bell andKFC, respectively. Both ofthese executives have proventrack records for driving sus-tainable sa
31、me store sales growthand building customer-focusedorganizations. They will joinTricon leads theindustry with multi-branded restaurants,resulting in a busi-ness that represents$1 billion in annualsystem sales. Mike Rawlings of Pizza Hut to lead our efforts to increaseour focus on running great restau
32、rants and differentiatingour brands in everything we do. Our average unit volumesare about half of McDonalds and we are not capacity con-strained. There is no doubt that we have significant salesopportunity at each brand.3. MultibrandingMultibranding is putting two or even three of our brands inone
33、restaurant asset. We now are the worlds multibrandingleader with a business that accounts for $1 billion in annualsystem sales. We want you to know why we are so enthusiasticabout multibranding. First and most important, its a hugecustomer win. Customers tell us time and again that theyprefer having
34、 more than one of our brands in the same assetbecause it gives them more choices for the entire family.Next, we generate higher cash flow per unit in multibrandedunits. And finally, we are able to add new restaurants in tradeareas that we could not penetrate with a single brand. Theseare trade areas
35、 where the real estate is expensive, as in theNortheast, or in rural areas where there are not enough peopleto support just one brand. This gives us the ability to furtherexpand our leading brands effectively with good returns. Forexample, of the 509 U.S. traditional units we opened in 2000,4613 Red
36、esign Pg 01-Pg 05/R7 3/22/01 4:59 PM Page 3120 were multibranded.Without multibranding, inmany cases we would not havebeen able to open these unitsand generate good returns.The biggest news for us in2000 was the development ofPersonal Pan Pizza Express, which allows us to provide ourcustomers indivi
37、dual size pizzas through Taco Bell and KFCdrive-thrus. Drive-thru pizza on demand is a breakthroughin the category. We plan to add 280 Personal Pan PizzaExpresses to new or existing restaurants this year and willcontinue to add units as our operating capability allows.Whats more, we have had good su
38、ccess testing Taco Bells in rural Pizza Huts and have a test agreement with KFC and A&W that is generating strong results. We are now theworlds leader in multibranding, and we know leading theway in multibranding will pay huge dividends for our share-holders down the road.“We plan to add 280Personal
39、 Pan PizzaExpresses to new andexisting units this yearthat allow us to pro-vide our customersindividual size pizzasthrough Taco Bell andKFC drive-thrus.”4. Franchise FeesWe now generate about $800 million per year in franchisefees, up almost 40% in three years. Whats more, our fran-chise partners ar
40、e expanding around the world. Franchiseesand affiliates opened over 1,000 restaurants and acquiredover 700 restaurants from Tricon in 2000. All in all, we haverefranchised over 3,000 U.S. restaurants in the last threeyears, including more than 500 KFCs, 1,500 Pizza Huts and nearly 1,000 Taco Bells g
41、enerating about $1.4 billionin net proceeds after tax. The refranchising program has beena major success and has dramatically improved our returns.We will wind down our refranchising program by the end of2001. There continues to be significant demand to buy andbuild new restaurants because of the po
42、wer of our leadingbrand names. It should be noted, however, that certain of our Taco Bell franchisees are experiencing financial difficultybecause of soft sales. We are proactively working with thesefranchisees to restructure debt and ensure operational viabil-ity. We believe these issues will be re
43、solved in 2001.5. Cash FlowTricon generated $850 million of cash prior to investmentthis year. Our objective is to turn this strong cash flow intohigh returns. Here we have made huge progress with ourAndrall E. PearsonFounding Chairman4TRICON GLOBAL RESTAURANTS“Over the last three years, it has been
44、 my privilege to serve as Tricons first Chairman and CEO.Last year,the Board of Directors named David Novak CEO.On January 1, 2001, David assumed the additionalresponsibility of Chairman. I can think of no finer person to lead Tricon into the future than my partner,David Novak.I will remain active i
45、n the operation of the business as well as serving on Tricons Board of Directors.Im enthusiastic about Triconsopportunities ahead as we build on the progress begun these last few years.”4613 Redesign Pg 01-Pg 05/R7 3/22/01 5:01 PM Page 4TRICON GLOBAL RESTAURANTS5return on invested capital improving
46、to 18%, which we believe leads the industry andis up 10 percentage points from 1997. In 2000,we invested in 370 new company restaurants,upgraded and remodeled 289 company restau-rants, handled the AmeriServe problem andpurchased over $200 million of our shares. We are confident we will continue to d
47、rive highreturns going forward.Stepping back, we are a significantly strongercompany now than we were when we were spunoff by PepsiCo three years ago. Weve more thandoubled ongoing operating earnings per share,reduced debt by $2.2 billion, improved restau-rant margins over 3 full points, reduced our
48、general and administrative expenses over $50 million,improved ongoing operatingprofit 32% and grown systemsales 8%, while closing almost3,000 stores systemwide thatdid not generate adequatereturns and reflect the properimage for our brands.As a result of Tricons strongcash flow and financial condi-t
49、ion, our Board of Directors hasauthorized a share repurchaseprogram of up to an additional$300 million to be executedover the next two years. This is obviously a reflection of theconfidence the Board has in our outlook for 2001 and beyond.Just as important, were confident we have put the buildingblo
50、cks in place to drive consistent performance. There is no doubt in our minds that Tricon has all the characteristicsto become one of the worlds great companies over time:leading brands, a proven international business, tremendousReturn on Invested Capital9700989918%17%12%8%David C. NovakChairman and
