Burger King 2009 Annual Report Download - page 55

Table of Contents
the movement of currency exchange rates, partially offset by the net addition of eight Company restaurants during fiscal 2009. Payroll
and employee benefits costs as a percentage of Company restaurant revenues increased by 0.5% to 12.3%, primarily as a result of
negative Company comparable sales growth of (3.2%) (in constant currencies).
Occupancy and other operating costs
Occupancy and other operating costs increased by $18.8 million, or 4%, to $457.8 million in fiscal 2009, primarily as a result of
the net addition of 69 Company restaurants during fiscal 2009, increased rents and utility costs, start−up costs related to new and
acquired Company restaurants in the U.S. and the write−off of unfavorable leases in the prior year, primarily in Mexico, partially offset
by a reduction in the amount of accelerated depreciation related to the reimaging of Company restaurants in the United States and
Canada and a $22.4 million favorable impact from the movement of currency exchange rates. As a percentage of Company restaurant
revenues, occupancy and other operating costs remained relatively unchanged at 24.3%, primarily as a result of the benefits derived
from positive worldwide Company comparable sales growth of 0.3% (in constant currencies) and the prior year accelerated depreciation
expense noted above, offset by increased rents and the write−off of unfavorable leases in the prior year, as noted above.
In the United States and Canada, occupancy and other operating costs increased by $35.7 million, or 13%, to $306.8 million in
fiscal 2009, primarily as a result of the net addition of 59 Company restaurants during fiscal 2009, which represents a 6% increase in the
number of Company restaurants in this segment year over year, increased rents and utility costs, increased repairs and maintenance
costs, increased casualty insurance and start−up costs related to new and acquired Company restaurants, partially offset by a reduction
in the amount of accelerated depreciation as noted above and a $5.2 million favorable impact from the movement of currency exchange
rates in Canada. As a percentage of Company restaurant revenues, occupancy and other operating costs remained unchanged at 23.1%
with the benefits derived from positive Company comparable sales growth of 0.5% (in constant currencies) and the prior year
accelerated depreciation expense noted above, offset by increased rents and start−up costs related to new and acquired Company
restaurants.
In EMEA/APAC, occupancy and other operating costs decreased by $16.7 million, or 11%, to $133.2 million in fiscal 2009,
primarily due to a $14.4 million favorable impact from the movement in currency exchange rates, a reduction in payments made to third
parties for services currently performed by our employees, decreased repairs and maintenance costs and the refranchising of Company
restaurants in the prior year, primarily in Germany and the U.K., partially offset by increased rents. As a percentage of Company
restaurant revenues, occupancy and other operating costs remained relatively unchanged at 27.3%, with the benefits from reduced
payments for services performed by third parties in the prior year as noted above, decreased repairs and maintenance costs and the
closure of under−performing restaurants and the refranchising of Company restaurants in the U.K. (including benefits from the release
of unfavorable lease obligations), offset by increased rents.
In Latin America, occupancy and other operating costs decreased by $0.2 million, or 1%, to $17.8 million in fiscal 2009, primarily
as a result of a $2.8 million favorable impact from the movement in currency exchange rates, partially offset by the net addition of eight
Company restaurants during fiscal 2009, increased rents and utility costs and the write−off of unfavorable leases in the prior year. As a
percentage of Company restaurant revenues, occupancy and other operating costs increased by 3.6% to 29.7% as a result of increased
utility costs, the write−off of unfavorable leases as noted above, and negative Company comparable sales growth of 3.2% (in constant
currencies).
Selling, general and administrative expenses
Selling expenses increased by $1.8 million, or 2%, to $93.3 million for fiscal 2009, compared to the prior fiscal year. The increase,
which was primarily driven by an increase in sales and promotional expenses of $8.2 million as a result of increased sales at our
Company restaurants, was partially offset by a $4.0 million favorable impact from the movement of currency exchange rates and
$2.5 million due to lower local marketing expenditures primarily in EMEA.
General and administrative expenses decreased by $10.9 million, or 3%, to $397.1 million for fiscal 2009, compared to the prior
fiscal year. The decrease was primarily a result of a $14.9 million favorable impact from the
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