(Including Core and Non-core Businesses)

Assets decreased $1.4 billion or 22% to $5.1 billion at year-end 1997.  The decline was principally due to the fourth quarter charge, refranchising and store closures and the disposal of the Non-core Businesses, partially offset by an increase in cash.

Liabilities increased $4.4 billion to $6.7 billion at year-end 1997 primarily reflecting the $4.55 billion borrowing under our bank credit agreement, partially offset by a lower net deferred tax liability.  The lower net deferred tax liability results primarily from the higher deferred tax assets principally related to the fourth quarter charge.

Our operating working capital deficit, which excludes short-term investments, short-term borrowings and non-core assets held for disposal, is typical of restaurant operations where the majority of sales are for cash.  The modest $27 million increase in our operating working capital deficit to $805 million at year-end 1997 primarily reflected an increase in current liabilities to the fourth quarter charge.

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