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Burger King Worldwide, Inc. Reports Fourth Quarter And Full Year 2012 Results

On February 14, 2013 the company’s Board of Directors declared a cash dividend of $0.05 per share, a 25% increase from the previous dividend of $0.04 per share. The dividend will be paid on March 15, 2013 to shareholders of record at the close of business on February 28, 2013. Future dividends will be determined at the discretion of the Board of Directors.

Investor Conference Call

The company will host an investor conference call and webcast at 8:30 a.m. ET, Friday, February 15, 2013, to review financial results for the quarter and fiscal year ended December 31, 2012. The earnings call will be broadcast live via the company's investor relations website at http://investor.bk.com and will be available for replay. The dial-in number is 877.317.6776 for U.S. callers and 412.317.6776 for international callers.

About Burger King Worldwide

Founded in 1954, BURGER KING ® (NYSE:BKW) is the second largest fast food hamburger chain in the world. The original HOME OF THE WHOPPER ®, the BURGER KING ® system operates in over 12,900 locations serving over 11 million guests daily in 86 countries and territories worldwide. Approximately 97 percent of BURGER KING ® restaurants are owned and operated by independent franchisees, many of them family-owned operations that have been in business for decades. To learn more about Burger King Worldwide, please visit the company's website at www.bk.com or follow us on Facebook and Twitter.

Forward-Looking Statements

This press release contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties. These forward-looking statements include statements about the company’s expectations and belief regarding its ability to continue to capitalize on the Burger King® brand by growing globally; its expectations and belief regarding its ability to execute on its four pillar strategy in the U.S. and Canada and accelerate restaurant growth internationally; its expectations and belief regarding its ability to complete its refranchising initiative in LAC by closing on its previously-announced refranchising transaction in Mexico; and its expectations and belief regarding its ability to deliver sustainable long-term growth. The factors that could cause actual results to differ materially from the company’s expectations are detailed in the company's filings with the Securities and Exchange Commission, such as its annual and quarterly reports and current reports on Form 8-K, including the following: risks related to the company’s ability to successfully implement its domestic and international growth strategy; risks related to global economic or other business conditions that may affect the desire or ability of customers to purchase the company’s products; risks related to the financial strength of the company’s franchisees; risks related to the company’s substantial indebtedness; risks related to the company’s ability to compete domestically and internationally in an intensely competitive industry; and risks related to the effectiveness of the company’s marketing and advertising programs.

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
 
  Three Months Ended  
December 31,   Increase / (Decrease)
  2012   2011   $   %
(In millions, except per share data)
Revenues:
Company restaurant revenues $ 182.3 $ 404.4 $ (222.1 ) (54.9 )%
Franchise and property revenues   222.2   176.2   46.0   26.1 %
Total revenues 404.5 580.6 (176.1 ) (30.3 )%
Company restaurant expenses:
Food, paper and product costs 57.5 127.4 (69.9 ) (54.9 )%
Payroll and employee benefits 53.5 116.7 (63.2 ) (54.2 )%
Occupancy and other operating costs   50.2   107.2   (57.0 ) (53.2 )%
Total Company restaurant expenses 161.2 351.3 (190.1 ) (54.1 )%
Franchise and property expenses 25.1 25.5 (0.4 ) (1.6 )%
Selling, general and administrative expenses 79.2 114.4 (35.2 ) (30.8 )%
Other operating (income) expense, net   27.1   1.5   25.6   NM  
Total operating costs and expenses   292.6   492.7   (200.1 ) (40.6 )%
Income from operations 111.9 87.9 24.0 27.3 %
Total interest expense, net 50.2 61.0 (10.8 ) (17.7 )%
Loss on early extinguishment of debt   -   1.5   (1.5 ) NM  
Income before income taxes 61.7 25.4 36.3 142.9 %
Income tax expense   13.1   0.4   12.7   3175.0 %
Net income $ 48.6 $ 25.0 $ 23.6   94.4 %
 
Earnings per share:
Basic $ 0.14 $ 0.07 $ 0.07   93.3 %
Diluted $ 0.14 $ 0.07 $ 0.06   90.0 %
Weighted average shares outstanding
Basic   350.2   348.2   1.9   0.6 %
Diluted   356.4   348.2   8.1   2.3 %
 
NM - not meaningful
 
BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
 
  Twelve Months Ended    
December 31,   Increase / (Decrease)
2012   2011   $   %
(In millions, except per share data)
Revenues:
Company restaurant revenues $ 1,169.0 $ 1,638.7 $ (469.7 ) (28.7 )%
Franchise and property revenues   797.3   697.0   100.3   14.4 %
Total revenues 1,966.3 2,335.7 (369.4 ) (15.8 )%
Company restaurant expenses:
Food, paper and product costs 382.2 524.7 (142.5 ) (27.2 )%
Payroll and employee benefits 345.1 481.2 (136.1 ) (28.3 )%
Occupancy and other operating costs   309.9   441.5   (131.6 ) (29.8 )%
Total Company restaurant expenses 1,037.2 1,447.4 (410.2 ) (28.3 )%
Franchise and property expenses 112.1 97.1 15.0 15.4 %
Selling, general and administrative expenses 346.0 417.4 (71.4 ) (17.1 )%
Other operating (income) expense, net   53.3   11.3   42.0   NM  
Total operating costs and expenses   1,548.6   1,973.2   (424.6 ) (21.5 )%
Income from operations 417.7 362.5 55.2 15.2 %
Total interest expense, net 223.8 226.7 (2.9 ) (1.3 )%
Loss on early extinguishment of debt   34.2   21.1   13.1   62.1 %
Income before income taxes 159.7 114.7 45.0 39.2 %
Income tax expense   42.0   26.6   15.4   57.9 %
Net income $ 117.7 $ 88.1 $ 29.6   33.6 %
 
Earnings per share:
Basic $ 0.34 $ 0.25 $ 0.08   33.0 %
Diluted $ 0.33 $ 0.25 $ 0.08   31.3 %
Weighted average shares outstanding
Basic   349.7   348.2   1.5   0.4 %
Diluted   354.1   348.2   6.0   1.7 %
 
NM - not meaningful
 
BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
     
As of
December 31, December 31,
2012 2011

ASSETS

(In millions, except share data)
Current assets:
Cash and cash equivalents $ 546.7 $ 459.0
Trade and notes receivable, net 179.0 152.8
Prepaids and other current assets, net 91.3 69.2
Deferred income taxes, net   73.5     43.1  
Total current assets 890.5 724.1
 
Property and equipment, net of accumulated depreciation of $200.8 million

and $150.1 million, respectively

885.2 1,026.5
Intangible assets, net 2,811.2 2,823.3
Goodwill 619.2 657.7
Net investment in property leased to franchisees 180.4 242.2
Other assets, net   177.5     134.6  
Total assets $ 5,564.0   $ 5,608.4  

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts and drafts payable $ 68.7 $ 98.4
Accrued advertising 66.5 97.4
Other accrued liabilities 206.8 242.7
Current portion of long term debt and capital leases   55.8     33.5  
Total current liabilities 397.8 472.0
 
Term debt, net of current portion 2,905.1 3,010.3
Capital leases, net of current portion 88.4 95.4
Other liabilities, net 382.4 366.2
Deferred income taxes, net   615.3     615.3  
Total liabilities   4,389.0     4,559.2  
 
Commitments and Contingencies
 
Stockholders' equity:
Preferred stock, $0.01 par value; 200,000,000 shares authorized;

no shares issued or outstanding

- -
Common stock, $0.01 par value; 2,000,000,000 shares authorized;
350,238,771 shares issued and outstanding at December 31, 2012;
348,245,293 shares issued and outstanding at December 31, 2011 3.5 3.5
Additional paid-in capital 1,205.7 1,186.6
Retained earnings (accumulated deficit) 76.1 (27.6 )
Accumulated other comprehensive loss   (110.3 )   (113.3 )
Total stockholders' equity   1,175.0     1,049.2  
Total liabilities and stockholders' equity $ 5,564.0   $ 5,608.4  
 
BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

  2012   2011

(In millions)

 
 
Cash flows from operating activities:
Net income $ 117.7 $ 88.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 114.2 136.4
Loss on early extinguishment of debt 34.2 21.1
Amortization of deferred financing costs and debt issuance discount 57.0 46.3
Equity in net loss from unconsolidated affiliates 4.1 -
(Gain) loss on remeasurement of foreign denominated transactions (8.2 ) 0.4
Amortization of prior service costs (2.5 ) -
Realized loss on terminated caps/swaps 11.8 0.5
Loss (gain) on refranchisings and dispositions of assets 27.0 (1.0 )
Impairment on non-restaurant properties - 2.3
Bad debt expense (recoveries), net (0.8 ) 6.1
Share-based compensation and non-cash incentive compensation expense 12.2 6.4
Deferred income taxes

8.9

(27.3 )
Changes in current assets and liabilities, excluding acquisitions and dispositions:
Trade and notes receivable (22.2 ) (6.0 )
Prepaids and other current assets (7.0 ) 105.5
Accounts and drafts payable (23.9 ) 8.7
Accrued advertising (32.3 ) 18.3
Other accrued liabilities

(40.3

) 16.0
Other long-term assets and liabilities   (25.5 )   (15.6 )
Net cash provided by operating activities   224.4     406.2  
Cash flows from investing activities:
Payments for property and equipment (70.2 ) (82.1 )
Proceeds from refranchisings, disposition of asset and restaurant closures 104.9 29.9
Investments in / advances to unconsolidated affiliates - (4.5 )
Payments for acquired franchisee operations, net of cash acquired (15.3 ) -
Return of investment on direct financing leases 14.2 14.6
Other investing activities   -     0.7  
Net cash provided by (used for) investing activities   33.6     (41.4 )
Cash flows from financing activities:
Proceeds from term debt 1,733.5 1,860.0
Proceeds from Discount Notes - 401.5
Repayments of term debt and capital leases (1,766.8 ) (1,874.5 )
Extinguishment of debt (112.8 ) (70.6 )
Payment of financing costs (16.0 ) (32.6 )
Dividends paid on common stock (14.0 ) (393.4 )
Proceeds from stock option exercises 1.5 -
Proceeds from issuance of shares   -     1.6  
Net cash used for financing activities   (174.6 )   (108.0 )
Effect of exchange rates on cash and cash equivalents 4.3 (4.8 )
Increase in cash and cash equivalents 87.7 252.0
Cash and cash equivalents at beginning of period   459.0     207.0  
Cash and cash equivalents at end of period $ 546.7   $ 459.0  
 

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Key Business Metrics

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