|We are engaged principally
in developing, operating, franchising and licensing the worldwide KFC, Pizza Hut and Taco
Bell concepts. We also previously operated the Non-core Businesses, all of which were sold
in 1997 prior to the Spin-off.
KFC, Pizza Hut and Taco Bell operate throughout the U.S.
and in 80, 88 and 12 countries and territories outside the U.S., respectively. Principal
international markets include Australia, Canada, China, Japan, Mexico, Puerto Rico and the
U.K. At year-end 1998, we had 12 investments in unconsolidated affiliates outside the U.S.
which operate KFC and/or Pizza Hut restaurants, the most significant of which are
corporate joint ventures located in Japan, the U.K. and China.
We identify our operating segments based on management responsibility within the U.S.
and International. For purposes of applying SFAS 131, we consider our U.S. Core Businesses
to be similar and have aggregated them into a single reportable operating segment. Other
than the U.S., no individual country represented 10% or more of our total revenues,
profits or assets.
See Note 4 for additional operating segment disclosures
related to impairment, suspension of depreciation and amortization and the carrying amount
of assets held for disposal.
The 1997 and 1996 financial data we reported above are materially consistent with
restaurant segment information previously reported by PepsiCo. We made adjustments to
these amounts primarily to remove the impact of the restaurant distribution business
previously included by PepsiCo in its restaurant segment, and to include the investment in
and our equity income (loss) of unconsolidated affiliates within the international
segment. We made this change to align our reporting with the way we internally review and
make decisions regarding our international business.