Burger King 2013 Annual Report Download - page 50

Table of Contents
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Our primary sources of liquidity are cash on hand, cash generated by operations and borrowings available under our 2012 Revolving Credit Facility (as
defined below). We have used, and may in the future use, our liquidity to make required interest and principal payments, to repurchase shares of our common
stock, to voluntarily repay and/or repurchase our or one of 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, 2013, we had cash and cash equivalents of $786.9 million and working capital of $728.4 million. In addition, at December 31, 2013,
we had borrowing capacity of $130.0 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 currently plan to utilize cash flows from our foreign
subsidiaries to meet our future debt service requirements in the U.S. 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 on the Closing Date 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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Our long-term debt is comprised primarily of borrowings under our 2012 Credit Agreement, amounts outstanding under our Senior Notes and
Discount Notes (each defined below), and obligations under capital leases. The following information summarizes the principal terms and near term
debt service requirements under our 2012 Credit Agreement and the indentures governing our Senior Notes and Discount Notes (the “Senior Notes
Indenture” and “Discount Notes Indenture”, collectively, “Indentures”). For further information about our long-term debt, see Note 9 to the
accompanying audited Consolidated Financial Statements included in Part II, Item 8 “Financial Statements and Supplementary Data.”
2012 Credit Agreement
As of December 31, 2013, we had $991.4 million in Tranche A Term Loans and $689.4 million of Tranche B Term Loans outstanding. The Tranche
A Term Loans mature on September 28, 2017 and the Tranche B Term Loans mature on September 28, 2019. The principal amount of the Tranche A Term
Loans amortizes in quarterly installments of (i) $12.9 million from December 31, 2013 through September 30, 2014, (ii) $19.3 million from December 31,
2014 through September 30, 2015, (iii) $25.8 million from December 31, 2015 through September 30, 2016, and (iv) $32.2 million from December 31,
2016 through June 30, 2017, with the balance payable at maturity. The principal amount of the Tranche B Term Loans amortizes in quarterly installments
equal to 0.25% of the original principal amount of the Tranche B Term Loans, with the balance payable at maturity.
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Source: Burger King Worldwide, Inc., 10-K, February 21, 2014 Powered by Morningstar® Document Research℠
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