Burger King 2012 Annual Report Download - page 55

Table of Contents
our affiliate’s outstanding debt, to fund our investing activities and/or to pay dividends. As a result of our borrowings, we are highly leveraged. Our liquidity
requirements are significant, primarily due to debt service requirements.
At December 31, 2012, we had cash and cash equivalents of $546.7 million and working capital of $492.7 million. In addition, at December 31,
2012, we had borrowing capacity of $118.4 million under our 2012 Revolving Credit Facility. Based on our current level of operations and available cash, we
believe our cash flow from operations, combined with availability under our 2012 Revolving Credit Facility, will provide sufficient liquidity to fund our
current obligations, debt service requirements and capital spending requirements over the next twelve months.
Our consolidated cash and cash equivalents include balances held in foreign tax jurisdictions that represent undistributed earnings of our foreign
subsidiaries, which are considered indefinitely reinvested for U.S. income tax purposes. We do not plan to utilize cash flows from our foreign subsidiaries to
meet our future debt service requirements in the U.S. and to the degree cash is transferred to the U.S. from our foreign subsidiaries, we expect we will be able
to do so in a tax efficient manner. However, adverse income tax consequences could result if we are compelled to make unplanned transfers of cash to meet
future liquidity requirements in the U.S.
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On September 28, 2012 (the “Closing Date”), BKC and Holdings entered into a Credit Agreement (the “2012 Credit Agreement”) to refinance amounts
borrowed under our previous credit agreement, the 2011 Amended Credit Agreement. The 2012 Credit Agreement provides for (i) tranche A term loans in the
aggregate principal amount of $1,030.0 million (the “Tranche A Term Loans”), (ii) tranche B term loans in the aggregate amount of $705.0 million (the
“Tranche B Term Loans” and, together with the Tranche A Term Loans, the “2012 Term Loans”), in each case under the new senior secured term loan
facility (the “2012 Term Loan Facility”), and (iii) a new senior secured revolving credit facility for up to $130.0 million of revolving extensions of credit
outstanding at any time (including revolving loans, swingline loans and letters of credit (the “2012 Revolving Credit Facility” and, together with the 2012 Term
Loan Facility, the “2012 Credit Facilities”).
On the Closing Date, the full amount of the Tranche A Term Loans and Tranche B Term Loans was drawn and no revolving loans were drawn. The
proceeds of the Tranche A Term Loans and the Tranche B Term Loans were used to repay the term loans outstanding under the 2011 Amended Credit
Agreement. In addition, approximately $11.5 million of letters of credit were issued in order to backstop, replace or roll-over existing letters of credit under the
2011 Amended Credit Agreement. The Tranche A Term Loans have a five-year maturity, and the Tranche B Term Loans have a seven-year maturity. The
2012 Revolving Credit Facility matures on October 19, 2015, which was the maturity date of the revolving credit facility under the 2011 Amended Credit
Agreement.
The 2012 debt refinancing provided for, among other things, lower interest rates and maturity extensions on our term loans.
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Source: Burger King Worldwide, Inc., 10-K, February 22, 2013 Powered by Morningstar® Document Research℠
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