Pizza Hut 2000 Annual Report Download - page 54

52 TRICON GLOBAL RESTAURANTS, INC. AND SUBSIDIARIES
Note 6 Franchise and License Fees
2000 1999 1998
Initial fees, including renewal fees $÷÷48 $÷÷«÷71 $÷÷÷67
Initial franchise fees included in
refranchising gains (20) (45) (44)
28 26 23
Continuing fees 760 697 604
$÷788 $÷÷«723 $÷÷627
Note 7 Other (Income) Expense
2000 1999 1998
Equity income from investments in
unconsolidated affiliates $÷«(25) $÷÷÷(19) $÷÷«(18)
Foreign exchange net loss (gain) –3(6)
$÷«(25) $÷÷÷(16) $÷÷«(24)
Note 8 Property, Plant and Equipment, net
2000 1999
Land $÷÷543 $÷÷572
Buildings and improvements 2,469 2,553
Capital leases, primarily buildings 82 102
Machinery and equipment 1,522 1,598
4,616 4,825
Accumulated depreciation and amortization (2,056) (2,279)
Impairment allowances (20) (15)
$÷2,540 $«2,531
Note 9 Intangible Assets, net
2000 1999
Reacquired franchise rights $÷÷«264 $÷÷326
Trademarks and other identifiable intangibles 102 124
Goodwill 53 77
$÷÷«419 $÷÷527
In determining the above amounts, we have subtracted
accumulated amortization of $415 million for 2000 and
$456 million for 1999.
Note 10 Accounts Payable and Other Current Liabilities
2000 1999
Accounts payable $÷÷«326 $«÷«375
Accrued compensation and benefits 209 281
Other current liabilities 443 429
$÷÷«978 $«1,085
Note 11 Short-term Borrowings and Long-term Debt
2000 1999
Short-term Borrowings
Current maturities of long-term debt $÷÷«10 $÷÷«47
International lines of credit 68 45
Other 12 25
$«««««90 $«««117
Long-term Debt
Senior, unsecured Term Loan Facility,
due October 2002 $÷«689 $÷«774
Senior, unsecured Revolving Credit
Facility, expires October 2002 1,037 955
Senior, Unsecured Notes, due May 2005 (7.45%) 351 352
Senior, Unsecured Notes, due May 2008 (7.65%) 251 251
Capital lease obligations (see Note 12) 74 97
Other, due through 2010 (6% – 11%) 59
2,407 2,438
Less current maturities of long-term debt (10) (47)
$2,397 $2,391
Our primary bank credit agreement, as amended in 2000
and 1999, is comprised of a senior, unsecured Term Loan
Facility and a $3 billion senior unsecured Revolving Credit
Facility (collectively referred to as the “Credit Facilities”) both
of which mature on October 2, 2002. Amounts outstanding
under our Revolving Credit Facility are expected to fluctuate,
but Term Loan Facility reductions may not be reborrowed.
The Credit Facilities are subject to various covenants includ-
ing financial covenants relating to maintenance of specific
leverage and fixed charge coverage ratios. In addition, the
Credit Facilities contain affirmative and negative covenants
including, among other things, limitations on certain additional
indebtedness, guarantees of indebtedness, cash dividends,
aggregate non-U.S. investment and certain other transactions,
as defined in the agreement. The Credit Facilities require
prepayment of a portion of the proceeds from certain capital
market transactions and refranchising of restaurants.
Interest on amounts borrowed is payable at least quarterly
at variable rates, based principally on the London Interbank
Offered Rate (“LIBOR”) plus a variable margin factor. At
December 30, 2000 and December 25, 1999, the weighted
average interest rate on our variable rate debt was 7.2% and
6.6%, respectively, which includes the effects of associated
interest rate swaps. See Note 13 for a discussion of our use
of derivative instruments, our management of credit risk
inherent in derivative instruments and fair value information
related to debt and interest rate swaps.