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TheStreet Open House

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

Stock quotes in this article: BKW

We evaluate our restaurants and assess our business based on the following operating metrics.

System sales growth refers to the change in sales at all company-owned and franchise restaurants in one period from the same period in the prior year. Comparable sales growth refers to the change in restaurant sales in one period from the same prior year period for restaurants that have been open for thirteen months or longer. Company-owned restaurants refranchised during a quarterly period are included with franchise restaurants for the purpose of calculating comparable sales growth for the quarter. Comparable sales and sales growth are measured on a constant currency basis, which means that results exclude the effect of foreign currency translation and are calculated by translating current year results at prior year exchange rates. We analyze key operating metrics on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements (“FX Impact”).

Franchise sales represent sales at all franchise restaurants and are revenues to our franchisees. We do not record franchise sales as revenues; however, our franchise revenues include royalties based on a percentage of franchise sales. Average restaurant sales refer to the total sales divided by total store months for all company-owned and franchise restaurants open during the period. Net refranchisings refer to sales of company-owned restaurants to franchisees, net of acquisitions of franchise restaurants by us.

Tabular amounts in millions of dollars unless noted otherwise.

Consolidated BKW      
 
 
 

Key Business Metrics

 

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2012 2011 2012 2011
 

System sales growth

6.7 % 2.2 % 5.9 % 1.7 %

Franchise sales

$ 3,857.6 $ 3,415.3 $ 14,672.5 $ 13,653.4

Comparable sales growth

Company 0.0 % 2.3 % 3.6 % 0.1 %
Franchise 2.8 % 1.1 % 3.2 % (0.6 )%
System 2.7 % 1.2 % 3.2 % (0.5 )%

Average restaurant sales

$ 319.9 $ 309.6 $ 1,267.9 $ 1,248.0
Net Restaurant Growth (NRG)
Company 4 1 (6 ) (4 )
Franchise 326 116 491 265
System 330 117 485 261

Net refranchisings

181 1 871 45
Restaurant counts at period end
Company 418 1,295 418 1,295
Franchise 12,579 11,217 12,579 11,217
System 12,997 12,512 12,997 12,512
CRM % 11.6 % 13.1 % 11.3 % 11.7 %
 
 
 
 
 

FX Impact

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2012 2011 2012 2011
 
Favorable / (Unfavorable) Favorable / (Unfavorable)
 
Consolidated revenues $ (2.2 ) $ (2.5 ) $ (41.3 ) $ 35.6
Consolidated CRM (0.1 ) (0.4 ) (3.1 ) 2.6
Consolidated SG&A 0.4 0.3 6.5 (8.2 )
Consolidated income from operations (0.8 ) (0.5 ) (10.9 ) 5.3
Consolidated net income (loss) (2.3 ) (0.4 ) (10.6 ) 5.7
Consolidated adjusted EBITDA (0.9 ) (0.7 ) (12.8 ) 4.5
 
U.S. & Canada
     
 

Key Business Metrics

 
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
Favorable / (Unfavorable) Favorable / (Unfavorable)
Systemwide sales growth 3.1 % (2.0 )% 3.0 % (3.3 )%
Franchise sales $ 2,105.1 $ 1,854.4 $ 8,143.9 $ 7,510.5
Comparable sales growth
Company (0.2 )% 0.5 % 3.7 % (1.9 )%
Franchise 3.9 % (2.4 )% 3.4 % (3.6 )%
System 3.7 % (2.0 )% 3.5 % (3.4 )%
NRG
Company 2 (2 ) (4 ) (7 )
Franchise 21 (21 ) (20 ) (43 )
System 23 (23 ) (24 ) (50 )
Net Refranchisings 180 1 752 38
Restaurant counts at period end
Company 183 939 183 939
Franchise 7,293 6,561 7,293 6,561
System 7,476 7,500 7,476 7,500
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
Company:
Company restaurant revenues $ 104.3 $ 285.1 $ 792.9 $ 1,172.0
CRM 8.7 38.6 90.1 142.2
CRM % 8.3 % 13.5 % 11.4 % 12.1 %
Company restaurant expenses as

a % of Company restaurant revenue:

Food and paper 31.7 % 31.5 % 33.0 % 32.3 %
Payroll and benefits 30.3 % 30.2 % 30.5 % 30.4 %
Depreciation and amortization 4.9 % 5.6 % 5.5 % 5.7 %
Other occupancy and operating 24.8 % 19.2 % 19.6 % 19.5 %
 
Franchise:
Franchise and property revenues $ 129.1 $ 98.1 $ 468.2 $ 397.1
Franchise and property expenses 15.2 19.1 79.8 69.9
Segment SG&A 14.2 25.0 76.3 95.7
Segment depreciation and amortization 7.7 21.1 68.8 86.2
Segment income 116.1 113.7 471.0 459.9
Segment margin 49.7 % 29.7 % 37.3 % 29.3 %
 

FX Impact

 

Three Months Ended December 31,

Twelve Months Ended December 31,

2012 2011 2012 2011
 
Favorable / (Unfavorable) Favorable / (Unfavorable)
 
Segment revenues $ 1.1 $ (0.3 ) $ (1.6 ) $ 6.4
Segment CRM - - (0.2 ) 0.6
Segment income 0.6 (0.1 ) 0.3 (1.3 )
 
EMEA      
 
 

Key Business Metrics

 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2012     2011     2012     2011  
Favorable / (Unfavorable) Favorable / (Unfavorable)
Systemwide sales growth 10.5 % 9.3 % 11.2 % 6.5 %
Franchise sales $ 1,011.1 $ 920.4 $ 3,822.9 $ 3,649.0
Comparable sales growth
Company 0.6 % 7.7 % 4.3 % 5.8 %
Franchise 1.7 % 7.2 % 3.1 % 4.1 %
System 1.6 % 7.3 % 3.2 % 4.3 %
NRG
Company - - (1 ) (4 )
Franchise 127 47 240 158
System 127 47 239 154
Net Refranchisings 1 - 59 7
Restaurant counts at period end
Company 132 192 132 192
Franchise 2,989 2,690 2,989 2,690
System 3,121 2,882 3,121 2,882
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2012     2011     2012     2011  
Company:
Company restaurant revenues $ 61.5 $ 86.2 $ 264.6 $ 330.7
CRM 9.7 11.9 30.7 35.5
CRM % 15.8 % 13.8 % 11.6 % 10.7 %
Company restaurant expenses as

a % of Company restaurant revenue:

Food and paper 29.5 % 29.8 % 30.1 % 29.4 %
Payroll and benefits 31.7 % 29.4 % 32.5 % 31.4 %
Depreciation and amortization 2.4 % 3.2 % 3.1 % 3.5 %
Other occupancy and operating 20.6 % 23.7 % 22.7 % 25.0 %
 
Franchise:
Franchise and property revenues $ 57.2 $ 48.6 $ 208.3 $ 194.9
Franchise and property expenses 9.2 6.3 29.7 25.9
Segment SG&A 13.7 19.6 61.1 81.1
Segment depreciation and amortization 3.7 5.7 17.9 22.6
Segment income 47.7 40.3 166.1 146.0
Segment margin 40.2 % 29.9 % 35.1 % 27.8 %
 

FX Impact

Three Months Ended December 31,

Twelve Months Ended December 31,

  2012     2011     2012     2011  
 
Favorable / (Unfavorable) Favorable / (Unfavorable)
 
Segment revenues $ (4.1 ) $ (1.0 ) $ (35.9 ) $ 23.4
Segment CRM (0.3 ) (0.1 ) (2.2 ) 1.7
Segment income (1.5 ) (0.3 ) (12.7 ) 6.4
 
LAC        
 
 

Key Business Metrics

Three Months Ended Twelve Months Ended
December 31, December 31,
  2012     2011     2012     2011  
Favorable / (Unfavorable) Favorable / (Unfavorable)
Systemwide sales growth 11.2 % 8.2 % 9.9 % 13.5 %
Franchise sales $ 356.1 $ 318.5 $ 1,334.1 $ 1,208.7
Comparable sales growth
Company (0.7 )% 4.5 % 0.6 % 4.3 %
Franchise 0.8 % 10.0 % 5.9 % 8.1 %
System 0.7 % 9.7 % 5.7 % 7.9 %
NRG
Company 2 - 3 1
Franchise 108 46 165 81
System 110 46 168 82
Net Refranchisings - - - -
Restaurant counts at period end
Company 100 97 100 97
Franchise 1,290 1,125 1,290 1,125
System 1,390 1,222 1,390 1,222
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2012     2011     2012     2011  
Company:
Company restaurant revenues $ 15.9 $ 15.3 $ 62.5 $ 66.2
CRM 2.8 2.9 9.9 12.5
CRM % 17.6 % 19.0 % 15.8 % 18.9 %
Company restaurant expenses as

a % of Company restaurant revenue:

Food and paper 38.5 % 39.2 % 38.8 % 38.2 %
Payroll and benefits 13.6 % 12.4 % 12.9 % 12.0 %
Depreciation and amortization 7.5 % 9.8 % 9.3 % 9.7 %
Other occupancy and operating 22.8 % 19.6 % 23.2 % 21.2 %
 
Franchise:
Franchise and property revenues $ 22.2 $ 17.5 $ 71.9 $ 61.9
Franchise and property expenses - (0.4 ) - (1.1 )
Segment SG&A 3.2 4.1 14.6 18.3
Segment depreciation and amortization 1.2 1.6 6.0 6.7
Segment income 23.0 18.3 73.2 63.9
Segment margin 60.4 % 55.8 % 54.5 % 49.9 %
 

FX Impact

Three Months Ended December 31,

 

Twelve Months Ended December 31,

  2012     2011     2012     2011  
 
Favorable / (Unfavorable) Favorable / (Unfavorable)
 
Segment revenues $ 0.8 $ (1.5 ) $ (3.7 ) $ 1.1
Segment CRM 0.2 (0.3 ) (0.6 ) 0.2
Segment income - (0.2 ) (0.4 ) -
 
APAC      
 

Key Business Metrics

Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012   2011
Favorable / (Unfavorable)   Favorable / (Unfavorable)
Systemwide sales growth 13.6 % 4.0 % 4.8 % 13.2 %
Franchise sales $ 385.3 $ 321.9 $ 1,371.6 $ 1,285.1
Comparable sales growth
Company (9.4 )% 7.0 % 2.4 % 7.1 %
Franchise 0.8 % (1.6 )% (0.6 )% (0.7 )%
System 0.8 % (1.2 )% (0.5 )% (0.4 )%
NRG
Company - 3 (4 ) 6
Franchise 70 44 106 69
System 70 47 102 75
Net Refranchisings - - 60 -
Restaurant counts at period end
Company 3 67 3 67
Franchise 1,007 841 1,007 841
System 1,010 908 1,010 908
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
 
Company:
Company restaurant revenues $ 0.6 $ 17.8 $ 49.0 $ 69.8
CRM (0.1 ) (0.2 ) 1.1 1.1
CRM % (1) (7.3 )% (1.4 )% 2.3 % 1.6 %
 
Franchise:
Franchise and property revenues $ 13.8 $ 12.0 $ 48.9 $ 43.1
Franchise and property expenses 0.7 0.5 2.6 2.4
Segment SG&A 1.2 7.1 12.0 22.7
Segment depreciation and amortization 0.6 1.6 5.7 7.6
Segment income 12.4 5.8 41.1 26.7
Segment margin 86.1 % 19.5 % 42.0 % 23.6 %
 
(1) Percentage figures calculated based on whole numbers.
 
 

FX Impact

Three Months Ended December 31,

 

Twelve Months Ended December 31,

2012 2011 2012 2011
 
Favorable / (Unfavorable)   Favorable / (Unfavorable)
 
Segment revenues $ - $ 0.3 $ (0.1 ) $ 4.7
Segment CRM - - (0.1 ) 0.1
Segment income - (0.1 ) - (0.6 )
Other Operating (Income) Expense, net
 
  Three Months Ended   Twelve Months Ended
December 31, December 31,
2012   2011   2012   2011
Net (gains) losses on disposal of assets, restaurant closures and refranchisings $ 15.6 $ 6.2 $ 30.8 $ 6.2
Litigation settlements and reserves, net 0.4 0.6 1.7 1.3
Foreign exchange net (gains) losses 1.1 (11.3 ) (4.2 ) (4.6 )
Loss on termination of interest rate cap - - 8.7 -
Equity in net (income) loss from unconsolidated affiliates

2.7

0.3

4.1

1.2
Other, net   7.3   5.7    

12.2

    7.2  
Other operating (income) expense, net $ 27.1 $ 1.5   $ 53.3   $ 11.3  
 
Selling, general and administrative expenses
 
 
Three Months Ended   Twelve Months Ended
December 31, December 31,
  2012     2011   2012     2011
 
Selling expenses $ 7.8 $ 20.1 $ 48.3 $ 78.2
Management general and administrative expenses 48.4 58.9 212.7 248.5
Share-based compensation 6.8 5.5 10.2 6.4
Depreciation and amortization 4.8 4.0 17.6 15.9
2010 Transaction costs - 1.6 - 3.7
Global restructuring and related professional fees - 13.8 - 46.5
Field optimization project costs - 3.4 - 10.6
Global portfolio realignment project costs 10.1 7.1 30.2 7.6
Business combination agreement expenses   1.3   -   27.0   -
Total general and administrative expenses   71.4   94.3   297.7   339.2
Selling, general and administrative expenses $ 79.2 $ 114.4 $ 346.0 $ 417.4
 

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Non-GAAP Financial Measures

5 of 7

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