Burger King 2009 Annual Report Download - page 96

Table of Contents
BURGER KING HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
BKC is the borrower under the facility and the Company and certain subsidiaries have jointly and severally unconditionally
guaranteed the payment of the amounts under the facility. The Company, BKC and certain subsidiaries have pledged, as collateral, a
100% equity interest in the domestic subsidiaries of the Company and BKC with certain exceptions. Furthermore, BKC has pledged as
collateral a 65% equity interest in certain foreign subsidiaries.
During the year ended June 30, 2009, the Company paid $146.8 million of term debt, of which $2.5 million related to the Term
Loan A and $144.3 million related to the revolving credit facility and borrowed $94.3 million under the revolving credit facility. As of
June 30, 2009, the next scheduled principal payment on term debt is the September 30, 2009 principal payment of $15.6 million on
Term Loan A. The level of required principal repayments increases over time thereafter. The maturity dates of Term Loan A, Term
Loan B−1, and any amounts drawn under the revolving credit facility are June 2011, June 2012 and June 2011, respectively.
The aggregate maturities of long−term debt, including the Term Loan A, Term Loan B−1 and other debt as of June 30, 2009, are
as follows (in millions):
Principal
Year
Ended
June 30, Amount
2010 $ 62.7
2011 87.7
2012 666.4
2013 0.2
2014 0.2
Thereafter 1.1
Total $ 818.3
The Company also has lines of credit with foreign banks, which can also be used to provide guarantees, in the amounts of
$3.5 million and $4.4 million as of June 30, 2009 and 2008, respectively. There are no guarantees issued against these lines of credit as
of June 30, 2009 and 2008, respectively.
Note 13. Fair Value Measurements and Derivative Instruments
Fair Value Measurements
In September 2006, the FASB issued SFAS No. 157. This statement provides a single definition of fair value, a framework for
measuring fair value, and expanded disclosures concerning fair value. SFAS No. 157 applies to instruments accounted for under
previously issued pronouncements that prescribe fair value as the relevant measure of value. (See Note 2)
Disclosures about Derivative Instruments and Hedging Activities
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”
(“SFAS No. 161”), which provides companies with requirements for enhanced disclosures about derivative instruments and hedging
activities to enable investors to better understand their effects on a company’s financial position, financial performance and cash flows.
The Company adopted the disclosure provisions of SFAS No. 161 during the quarter ended March 31, 2009.
The Company enters into derivative instruments for risk management purposes, including derivatives designated as hedging
instruments under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”) and those utilized
as economic hedges. The Company uses derivatives to manage exposure to fluctuations in interest rates and currency exchange rates.
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