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Notes to Consolidated Financial Statements
Note 4 - Discontinued Operations
The restaurants segment was composed of the core restaurant businesses of Pizza Hut, Taco Bell and Kentucky Fried Chicken, PepsiCo Food Systems, a restaurant distribution operation, and several non-core U.S. restaurant businesses. In 1997, we spun off the restaurant businesses to our shareholders as an independent publicly traded company (Distribution). The spin-off was effective as a tax-free Distribution on October 6, 1997 (Distribution Date). Owners of PepsiCo capital stock as of September 19, 1997 received one share of common stock of TRICON Global Restaurants, Inc., the new company, for every ten shares of PepsiCo capital stock. Immediately before the Distribution Date, we received $4.5 billion in cash from TRICON as repayment of certain amounts due and a dividend. PFS and the non-core U.S. restaurant businesses were sold before the Distribution Date resulting in after-tax cash proceeds of approximately $1.0 billion.
Income from discontinued operations:
The above amounts include costs directly associated with the spin-off but do not include an allocation of our interest or general and administrative expenses.
1997
1996
Net sales
$
8,375
$
11,441
Costs and expenses
(7,704
)
(10,935
)
PFS gain
500
-
Interest expense, net
(20
)
(25
)
Provision for iincome taxes
(500
)
(274
)
Income from discontinued operations
$
651
$
207