In October of 1997, PepsiCo spun off its restaurant holdings into a triumvirate which today is known as Tricon Global Restaurants Inc. Currently, the Tricon organization is made up of four operating divisions organized around its three core concepts: Kentucky Fried Chicken (KFC), Pizza Hut and Taco Bell. KFC is based in Louisville, Pizza Hut and Tricon Restaurants International ("Tricon International") are headquartered in Dallas and Taco Bell is located in Irvine, California.

1998 was an outstanding year for Tricon, perhaps best reflected in its stock price, which soared 73 percent by the end of 1998. For the first time in nearly a decade, KFC, Pizza Hut and Taco Bell delivered positive same store sales growth for the full year.

Tricon also moved forward in their goals of debt-reduction and refranchising. Strong demand in the food service market led to the refranchising of nearly 1,400 units -- almost equaling the record number of units the company sold in 1997. As a result, the company made significant progress against its strategy to reduce their ownership to 20-25 percent of the system. The units franchised, together with the closure of 661 units, drove the company ownership to 32 percent by the end of 1998, six points below Tricon’s 1997 ownership level. The $600 million received from the sales of these units, in addition to cash from ongoing operations, enabled the company to pay down over $1 billion of debt last year, almost two years ahead of schedule.

On the marketing and innovation front, KFC had great success in 1998 in the U.S. with Popcorn Chicken and the Colonel’s Crispy Strips. KFC also re-introduced "the Colonel" in an animated advertising campaign. Taco Bell hit a home run with the launch of Gorditas, as well as with its introduction of the "Yo quiero Taco Bell" Chihuahua. Pizza Hut had a turnaround year after introducing the well-received Sicilian Pizza.

Tricon anticipates system sales to grow four to five percent, with the addition of 1,500 units, mostly by the company’s franchisees and licensees, in 1999. The company also expects to pay down $400-$500 million of debt reducing its balance to just over $3 billion by year’s end.