Burger King 2013 Annual Report Download - page 54

Table of Contents
While we expect to have capital expenditures during 2014, we did not have any material capital expenditure commitments as of December 31, 2013. We
expect to fund capital expenditures from cash on hand and cash flow from operations.
Financing Activities
Cash used for financing activities was $132.7 million in 2013, compared to $174.6 million in 2012. The decrease in cash used for financing activities
was driven primarily as a result of cash used for the prepayment of term loans and repurchase of Senior Notes and Discount Notes and the payment of
financing costs during 2012, partially offset by higher scheduled debt principal payments, higher dividend payments and share repurchases during 2013.
Cash used for financing activities was $174.6 million in 2012, compared to $108.0 million in 2011, primarily as a result of an increase in cash used
for the prepayment of our Term Loans, repurchase of our Senior Notes and Discount Notes, and dividend payments in 2012. 2011 proceeds were primarily
provided by the sale of our Discount Notes, generating $393.4 million in net proceeds which were paid as a dividend to the stockholders of Worldwide,
principally 3G.
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Term debt, including current portion, interest and interest rate cap premiums (1) $1,929.4 $ 123.6 $ 318.0 $ 814.4 $ 673.4
Senior Notes, including interest 1,167.2 78.5 156.9 931.8 —
Discount Notes, including PIK interest 691.1 — — 277.0 414.1
Operating lease obligations 826.7 97.1 175.7 148.1 405.8
Purchase commitments (2) 142.2 124.7 15.5 2.0 —
Capital lease obligations 125.0 17.2 30.4 24.6 52.8
Unrecognized tax benefits (3) 31.9 — — — —
Severance and severance-related costs 5.6 5.6 — — —
Total $4,919.1 $446.7 $696.5 $2,197.9 $1,546.1
(1) We have estimated our interest payments through the maturity of our 2012 Credit Facilities based on current LIBOR rates and the terms of our interest
rate caps.
(2) Includes open purchase orders, as well as commitments to purchase advertising and other marketing services from third parties in advance on behalf of
the Burger King system and obligations related to information technology and service agreements.
(3) We have provided only a total in the table above since the timing of the unrecognized tax benefit payments is unknown.
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During the fiscal year ended June 30, 2000, we entered into long-term, exclusive contracts with soft drink vendors to supply Company and franchise
restaurants with their products and obligating Burger King restaurants in the United States to purchase a specified number of gallons of soft drink syrup.
These volume commitments are not subject to any time limit and as of December 31, 2013, we estimate it will take approximately 16 years for these purchase
commitments to be completed. In the event of early termination of this arrangement, we may be required to make termination payments that could be material to
our financial position, results of operations and cash flows.
From time to time, we enter into agreements under which we guarantee loans made by third parties to qualified franchisees. As of December 31, 2013,
there were $123.6 million of loans outstanding to franchisees that we had guaranteed under five such programs, with additional franchisee borrowing capacity
of approximately $204.2 million remaining. Our maximum guarantee liability under these five programs is limited to an aggregate of $28.9 million, assuming
full utilization of all borrowing capacity.We record a liability in the period the loans are funded. As of December 31, 2013, the liability reflecting the fair value
of these guarantee obligations was $5.2 million. No significant payments have been made by us in connection with these guarantees through December 31,
2013.
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Source: Burger King Worldwide, Inc., 10-K, February 21, 2014 Powered by Morningstar® Document Research℠
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