On August 14, 1997, the Board of Directors of PepsiCo, Inc. (PepsiCo) approved a formal plan to spin off its restaurant businesses
to its shareholders as an independent publicly-traded company (Distribution), and announced it also received a ruling from the
Internal Revenue Service that the spin-off would be tax free to PepsiCo and its shareholders. TRICON Global Restaurants, Inc.
(TRICON), the new company, is composed of the worldwide operations of Pizza Hut, Taco Bell and KFC and the non-core U.S.
businesses either disposed of or held for disposal (see Note 2). The spin- off was effective October 6, 1997 (Distribution Date).
Owners of PepsiCo capital stock as of September 19, 1997 (Record Date) received one share of common stock of TRICON for every
ten shares of PepsiCo capital stock or 152 million shares. On October 6, 1997, TRICON made a $4.5 billion cash distribution to
PepsiCo representing repayment of certain amounts due and a dividend. See Note 3 for a description of the bank credit agreement
entered into subsequent to the end of the third quarter. |
