Pizza Hut 2000 Annual Report Download - page 53

TRICON GLOBAL RESTAURANTS, INC. AND SUBSIDIARIES 51
The following table summarizes the 2000 and 1999 activity
related to all stores disposed of or held for disposal including
the stores that were covered by the fourth quarter 1997 charge.
We believe that the remaining carrying amounts are adequate
to complete our disposal actions.
Asset
Impairment
Allowances Liabilities
Carrying amount at December 26, 1998 $«127 $«77
Amounts used (100) (36)
(Income) expense impact:
New decisions 915
Estimate/decision changes (20) 15
Other 4–
Carrying amount at December 25, 1999 $«÷20 $«÷71
Amounts used (10) (22)
(Income) expense impact:
New decisions 14 5
Estimate/decision changes (4) (7)
Other –3
Carrying amount at December 30, 2000 $«÷20 $«÷50
The carrying values of assets held for disposal, which
were all located in the U.S., were $2 million and $40 million
at December 30, 2000 and December 25, 1999, respectively.
These assets included restaurants and in 1999, our idle pro-
cessing facility in Wichita, Kansas, which was sold in 2000
for its approximate net book value.
The following table summarizes Company sales and restau-
rant margin related to stores held for disposal at December 30,
2000 or disposed of through refranchising or closure during
2000, 1999 and 1998. Restaurant margin represents Company
sales less the cost of food and paper, payroll and employee
benefits and occupancy and other operating expenses. These
amounts do not include the impact of Company stores that
have been or are expected to be contributed to new uncon-
solidated affiliates.
2000 1999 1998
Stores held for disposal or disposed of in 2000:
Sales $408 $750 $690
Restaurant margin 55 97 92
Stores disposed of in 1999 and 1998:
Sales $659 $1,825
Restaurant margin 66 192
The margin reported above reflects a benefit from the sus-
pension of depreciation and amortization of approximately
$2 million, $9 million and $32 million in 2000, 1999 and
1998, respectively. The loss of restaurant margin from the
disposal of these stores was largely mitigated by (a) increased
franchise fees from stores refranchised; (b) lower field general
and administrative expenses; and (c) the estimated interest
savings from the reduction of average debt with net after-tax
refranchising proceeds.
Unusual Items
2000 1999 1998
U.S. $÷29 $13 $12
International 834
Unallocated 167 35 (1)
Worldwide $204 $51 $15
After-tax $129 $29 $÷3
Unusual items in 2000 included: (a) $170 million of
charges and direct incremental costs related to the AmeriServe
Food Distribution, Inc. (“AmeriServe”) bankruptcy reorgani-
zation process; (b) an increase in the estimated costs of
settlement of certain wage and hour litigation and associated
defense costs incurred in 2000; (c) costs associated with the
formation of an unconsolidated affiliate in Canada; and
(d) the reversal of excess provisions arising from the resolu-
tion of a dispute associated with the disposition of our
Non-core Businesses. See Note 21 for further discussion of
the AmeriServe bankruptcy reorganization process and wage
and hour litigation.
Unusual items in 1999 included: (a) the write-off of
approximately $41 million owed to us by AmeriServe at the
AmeriServe bankruptcy petition date; (b) an increase in the
estimated costs of settlement of certain wage and hour litiga-
tion and associated defense and other costs incurred in 1999;
(c) favorable adjustments to our 1997 fourth quarter charge;
(d) the write-down to estimated fair market value less cost to
sell of our idle Wichita processing facility; (e) costs associated
with the formation of unconsolidated affiliates in Canada
and Poland; (f) the impairment of enterprise-level goodwill
in one of our international businesses; and (g) severance and
other exit costs related to strategic decisions to streamline
the infrastructure of our international business.
Unusual items in 1998 included: (a) an increase in the
estimated costs of settlement of certain wage and hour litiga-
tion and associated defense and other costs incurred in 1998;
(b) severance and other exit costs related to strategic decisions
to streamline the infrastructure of our international businesses;
(c) favorable adjustments to our 1997 fourth quarter charge
related to anticipated actions that were not taken, primarily
severance; (d) the writedown to estimated fair market value
less costs to sell our minority interest in a privately held Non-
core Business, previously carried at cost; and (e) reversals of
certain impairment allowances and lease liabilities relating to
better-than-expected proceeds from the sale of properties and
settlement of lease liabilities associated with properties retained
upon the sale of a Non-core Business.