Burger King 2009 Annual Report Download - page 31

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strategy described in this Form 10−K and implementing our business strategy may not sustain or improve our results of operations or
increase our market share. You should not place undue reliance on our financial guidance, nor should you rely on quarter−to−quarter
comparisons of our operating results as indicators of likely future performance.
Our indebtedness under our senior secured credit facility is substantial and could limit our ability to grow our business. In the event
we are unable to refinance or repay such indebtedness prior to their maturities, we may need to take certain actions which could
negatively impact our business or dilute our existing stockholders.
As of June 30, 2009, we had total indebtedness under our senior secured credit facility of $816.2 million, of which $150.0 million
is under Term Loan A and $666.2 million is under Term Loan B−1. The maturity dates of Term Loan A, Term Loan B−1 and any
future amounts borrowed under the revolving credit facility are June 30, 2011, June 30, 2012, and June 30, 2011, respectively. Our
indebtedness could have important consequences to you.
For example, it could:
• increase our vulnerability to general adverse economic and industry conditions;
• require us to dedicate a substantial portion of our cash flow from operations to payments on our
indebtedness if we do not maintain specified financial ratios, thereby reducing the availability of our cash
flow for other purposes;
• limit our ability to implement our growth strategy and strategic initiatives; or
• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we
operate, thereby placing us at a disadvantage compared to competitors that may have less indebtedness.
In addition, our senior secured credit facility permits us to incur substantial additional indebtedness in the future. As of June 30,
2009, we had $119.4 million, net of outstanding letters of credit of $30.6 million, available to us for additional borrowing under our
$150.0 million revolving credit facility portion of our senior secured credit facility. If we increase our indebtedness by borrowing under
the revolving credit facility or incur other new indebtedness, the risks described above would increase.
We anticipate refinancing the indebtedness under our senior secured credit facility within the next three years in light of the
maturity dates of Term Loan A, Term Loan B−1 and the revolving credit facility. The subprime mortgage crisis and current
recessionary conditions have adversely impacted the availability, cost and terms of debt financing. There can be no assurance that we
will be able to refinance our senior secured credit facility on terms as favorable as our current senior secured credit facility, on
commercially acceptable terms, or at all.
If we are unable to refinance our indebtedness under our senior secured credit facility, we cannot guarantee that we will generate
enough cash flow from operations or be able to obtain enough capital to repay our indebtedness and fund our planned capital
expenditures. In such event, we may need to close or sell restaurants, reduce the number and/or frequency of restaurant openings, slow
our reimaging of company restaurants, issue common stock or securities convertible into common stock or issue debt securities to repay
our indebtedness. If implemented, these actions could negatively impact our business or dilute our existing stockholders.
Our senior secured credit facility has restrictive terms and our failure to comply with any of these terms could put us in default,
which would have an adverse effect on our business and prospects.
Our senior secured credit facility contains a number of significant covenants. These covenants limit our ability and the ability of
our subsidiaries to, among other things:
• incur additional indebtedness;
• make capital expenditures and other investments above a certain level;
• merge, consolidate or dispose of our assets or the capital stock or assets of any subsidiary;
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