Burger King 2013 Annual Report Download - page 52

Table of Contents
At any time prior to April 15, 2015, the Issuers may redeem all or a part of the Discount Notes at a redemption price equal to 100% of the accreted value
thereof on the redemption date plus the Applicable Premium as of, and accrued and unpaid interest, to but excluding the redemption date. “Applicable
Premium” means the greater of: (1) 1.0% of the accreted value of the Discount Notes redeemed; and (2) the excess of (a) the present value at such redemption
date of (i) the redemption price of such Discount Notes at April 15, 2015, plus (ii) all required interest payments through April 15, 2015, computed using a
discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (b) the accreted value of the Discount Notes redeemed. In
addition, prior to April 15, 2014, the Issuers may redeem up to 35% of the original principal amount of the Discount Notes with the proceeds of certain equity
offerings at a redemption price equal to 111% of the accreted value of the Discount Notes, plus (without duplication) any accrued but unpaid interest, if any,
to the date of redemption.
On or after April 15, 2015, the Issuers may redeem all or a part of the Discount Notes at the redemption prices (expressed as percentages of accreted
value of the Discount Notes to be redeemed) set forth below, plus accrued and unpaid interest to (but excluding) the redemption date: April 15, 2015 –
April 14, 2016 (105.5%); April 15, 2016 – April 14, 2017 (102.75%); and April 15, 2017 and thereafter (100%).
During 2012, we repurchased and retired Discount Notes with an aggregate face value of $92.9 million and an aggregate carrying value of $61.1
million, net of unamortized original issue discount, for a purchase price of $69.6 million. During 2011, we repurchased and retired Discount Notes with a
carrying value of $7.9 million for a purchase price of $7.6 million. No Discount Notes were repurchased during 2013.
On December 16, 2011, the board of directors of Worldwide paid a dividend to its stockholders, including 3G, in the amount of $393.4 million,
representing the net proceeds from the sale of the Discount Notes.
Restrictions and Covenants
The 2012 Credit Agreement and Indentures contain certain restrictions and covenants that we must meet during the term of the 2012 Credit Agreement,
Senior Notes and Discount Notes, including, but not limited to, limitations on restricted payments (as defined in the 2012 Credit Agreement and Indentures),
incurrence of indebtedness, issuance of disqualified stock and preferred stock, asset sales, mergers and consolidations, transactions with affiliates and
guarantees of indebtedness by subsidiaries.
The 2012 Credit Agreement contains a number of customary affirmative and negative covenants that, among other things, will limit or restrict the ability
of BKC and its restricted subsidiaries to: incur additional indebtedness (including guarantee obligations); incur liens; engage in mergers, consolidations,
liquidations and dissolutions; sell assets (with exceptions for, among other things, sales of company-owned restaurants to existing or prospective franchisees
and sales of real estate, subject to achievement of specified total leverage ratios in the case of real estate sales); pay dividends and make other payments in
respect of capital stock; make investments, loans and advances; pay and modify the terms of certain indebtedness; engage in certain transactions with
affiliates; enter into certain speculative hedging arrangements; enter into negative pledge clauses and clauses restricting subsidiary distributions; and change its
line of business. In addition, under the 2012 Credit Agreement, BKC is required to maintain a specified minimum interest coverage ratio and not exceed a
specified maximum total leverage ratio.
Pursuant to the Senior Notes Indenture, BKC is restricted from paying any dividend or making any payment or distribution on account of its equity
interests unless, among other things, (i) the dividend, payment or distribution (together with all other such dividends, payments or distributions made since
the issue date of the Senior Notes) is less than an amount calculated based in part on the Consolidated Net Income (as defined in the Senior Notes Indenture) of
BKC and its restricted subsidiaries since the issue date of the Senior Notes, or (ii) the dividend, payment or distribution fits within one or more exceptions,
including if:
• it is made with funds received from the issuance of equity interests of BKC or its direct or indirect parent companies and is used for the
redemption, repurchase or other acquisition of equity interests of BKC or its direct or indirect parent companies;
• it is less than 6% per annum of the net cash proceeds received by or contributed to BKC from a public offering of BKC’s common stock or the
common stock of any of its direct or indirect parent companies;
• it is used to fund certain operational expenditures of any of BKC’s direct or indirect parent companies; or
• it, when combined with all other Restricted Payments (as defined in the Senior Notes Indenture) that rely upon this exception, does not exceed $75
million (the transactions described in these four bullet points, collectively, the “Permitted Distributions”).
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Source: Burger King Worldwide, Inc., 10-K, February 21, 2014 Powered by Morningstar® Document Research℠
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