Burger King 2006 Annual Report Download - page 115

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BURGER KING HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements Ì (Continued)
Quarterly results were impacted by timing of expenses and charges which affect comparability of results.
The impact of these items during each quarter for fiscal 2006 and 2005 was as follows:
For the Quarters Ended
Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Sep 30,
2006 2006 2005 2005 2005 2005 2004 2004
(In millions)
Revenues:
Franchise system distress impact(a) ÏÏÏÏ $Ì $Ì $Ì $Ì $(3) $(1) $Ì $ 1
Selling, general and administrative:
Franchise system distress impact(b) ÏÏÏÏ (1) Ì Ì 1 2 9 9 8
Global reorganization and realignmentÏÏÏ 7 2 1 Ì 7 4 3 3
Compensatory make-whole payment ÏÏÏÏ Ì 34 Ì Ì Ì Ì Ì Ì
Executive severance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5 Ì Ì Ì Ì Ì Ì Ì
Total effect on SG&A ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11 36 1 1 9 13 12 11
Fees paid to affiliates:
Management fee ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 2 3 3 2 2 2 3
Management agreement termination fee 30 Ì Ì Ì Ì Ì Ì Ì
Total fees paid to affiliatesÏÏÏÏÏÏÏÏÏÏ 31 2 3 3 2 2 2 3
Other operating (income) expenses
(""OIE''), net:
Franchise system distress impact(c) ÏÏÏÏ 1 (2) 1 Ì Ì 7 Ì 1
Loss on asset disposals and asset
impairment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì 9 13 (4) Ì
Total effect on OIE, net ÏÏÏÏÏÏÏÏÏÏÏÏ 1 (2) 1 Ì 9 20 (4) 1
Total effect on income from operations 43 36 5 4 17 34 10 16
Interest on $350 million loan paid-off at
IPOÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3 3 Ì Ì Ì Ì Ì Ì
Loss on early extinguishment of debt ÏÏÏÏÏ 4 1 Ì 13 Ì Ì Ì Ì
Total effect on income before income
taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $50 $40 $ 5 $17 $17 $34 $10 $16
(a) Represents revenues not recognized and (recoveries) of revenues previously not recognized.
(b) Represents bad debt expense (recoveries), incremental advertising contributions and the internal and
external costs of FFRP program administration.
(c) Represents (recoveries) reserves on acquired debt, net and other items included within operating
(income) expenses, net.
Note 22. New Accounting Pronouncements
In December 2004, the FASB issued Statement No. 123 (revised 2004), SFAS No. 123(R), which is a
revision of SFAS No. 123, Accounting for Stock-Based Compensation (""SFAS 123''). SFAS 123(R)
supersedes Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (""APB
No. 25''). SFAS No. 123(R) requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no
longer an alternative. Under SFAS No. 123(R) the effective date for a nonpublic entity that becomes a public
entity after June 15, 2005 is the first interim or annual reporting period beginning after becoming a public
company. Further, SFAS No. 123(R) states that an entity that makes a filing with a regulatory agency in
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