Burger King 2012 Annual Report Download - page 43

Table of Contents
During 2011, franchise and property expenses increased primarily due to new leases and subleases associated with additional restaurants leased or
subleased to franchisees as a result of the refranchising of Company restaurants, the impact of acquisition accounting, including a $15.7 million increase in
franchise agreement amortization to $21.8 million, and unfavorable FX impact. These factors were partially offset by a decrease in bad debt expense.
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Our selling, general and administrative expenses were comprised of the following:
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Selling expenses $48.3 $ 78.2 $16.7 $ 25.3 $44.2 38.2% 9.3%
Management general and administrative expenses 212.7 248.5 65.6 116.6 173.5 14.4% 30.1%
Share-based compensation and non-cash incentive
compensation expense 10.2 6.4 — 5.8 8.3 (59.4)% 54.6%
Depreciation and amortization 17.6 15.9 2.8 5.4 9.8 (10.7)% 11.7%
2010 Transaction costs — 3.7 94.9 — — 100.0% 96.1%
Global restructuring and related professional fees — 46.5 67.2 — — 100.0% 30.8%
Field optimization project costs — 10.6 — — — 100.0% NA
Global portfolio realignment project costs 30.2 7.6 — — — (297.4)% NA
Business combination agreement expenses 27.0 — — — — NA NA
Total general and administrative expenses 297.7 339.2 230.5 127.8 191.6 12.2% 38.3%
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NA — Not Applicable
Selling expenses consist primarily of Company restaurant advertising fund contributions. During 2012, selling expenses decreased primarily as a result
of the refranchisings, favorable FX impact and a temporary reduction in advertising fund contributions associated with incentives to accelerate implementation
of restaurant equipment initiatives. During 2011, selling expenses as a percentage of Company restaurant revenues were flat in comparison to the prior year.
Management general and administrative expenses (“Management G&A”) are comprised primarily of salary and employee related costs for our non-
restaurant employees, professional fees and general overhead for our corporate offices, including rent, maintenance and utilities, travel and meeting expenses,
IT and technology costs and other general operating expenses. General and administrative expenses also include certain non-cash expenses, including share-
based compensation, depreciation and amortization as well as separately managed expenses associated with unusual or non-recurring events, such as costs
associated with the 2010 Transactions, global restructuring, field optimization project, global portfolio realignment project and business combination
agreement expenses. The decrease in Management G&A in 2012 was driven primarily by a decrease in salary
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Source: Burger King Worldwide, Inc., 10-K, February 22, 2013 Powered by Morningstar® Document Research℠
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