8-K 1 d357236d8k.htm FORM 8-K Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 22, 2012

 

 

Commission file number: 001-32875

 

 

BURGER KING HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware   75-3095469

(State or Other Jurisdiction

of Incorporation)

 

(IRS Employer

Identification No.)

5505 Blue Lagoon Drive, Miami, Florida   33126
(Address of Principal Executive Offices)   (Zip Code)

 

 

(305) 378-3000

(Registrant’s Telephone Number, Including Area Code)

 

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 7.01. Regulation FD Disclosure

On May 22, 2012, Burger King Worldwide Holdings, Inc. (the “Company”), the indirect parent of Burger King Holdings, Inc., will present material non-public information regarding the Company’s last five quarters on a consolidated basis and by operating segment at an analyst meeting at the Company’s Miami headquarters. A copy of the information presented at the meeting is included in this Form 8-K.

We evaluate our restaurants and assess our business based on the following operating metrics and key financial measures:

 

   

Sales growth refers to the change in sales at all Company and franchise restaurants in one period from the same period in the prior year. We review sales growth as an operating metric to help identify and assess trends in restaurant sales for the Burger King system as a whole, without distortion from the effects of refranchised or acquired restaurants.

 

   

Comparable sales growth refers to the change in restaurant sales in one period from the same prior year period for restaurants that have been opened for thirteen months or longer.

 

   

Net restaurant growth (“NRG”) represents the opening of new restaurants during a stated period, net of closures.

 

   

Net refranchisings refer to sales of Company restaurants to franchisees, net of acquisitions of franchise restaurants by us.

 

   

Company restaurant margin, or CRM, is derived by subtracting Company restaurant expenses from Company restaurant revenues for a stated period, and is typically analyzed as a percentage of Company restaurant revenues, a metric we refer to as Company restaurant margin %, or CRM %. Company restaurant expenses are comprised of food, paper and product costs, payroll and employee benefits (“labor” costs) and occupancy and other operating costs, which include rent and depreciation and amortization related to restaurant properties (“occupancy and other operating” costs). Food, paper and product costs vary with sales volume, while labor and occupancy costs are primarily fixed costs with variable components. We review the relationship between our Company restaurant expenses and Company restaurant revenues in the context of how those relationships affect CRM and CRM %.

 

   

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization adjusted to exclude specifically identified items that management believes do not directly reflect our core operations. These items include share-based compensation and non-cash compensation expense, other operating (income) expenses, net, and all other specifically identified costs associated with non-recurring projects; Transaction costs, global restructuring and related professional fees, field optimization project costs and global portfolio realignment project costs. We use adjusted EBITDA as our measure of segment income.

 

   

Adjusted net income is used by management to evaluate and forecast earnings from ongoing operations excluding the impact of unusual items. This measure is used by management to evaluate and forecast earnings from ongoing operations.

Comparable sales and sales growth are measured on a constant currency basis, which means the results exclude the effect of foreign currency translation and are calculated by translating current year results at prior year exchange rates. We analyze certain key financial measures on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements (“FX impact”).

 

2


The following tables present our financial results, including operating metrics and key financial measures for the last five quarters on a consolidated basis and by operating segment: (1) the U.S. and Canada; (2) Europe, the Middle East and Africa, or EMEA; (3) Latin America and the Caribbean, or LAC; and (4) Asia Pacific, or APAC. Tabular amounts in millions of dollars unless otherwise noted.

Consolidated

BURGER KING WORLDWIDE HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

 

     Three Months Ended  
     March  31,
2012
     December  31,
2011
     September  30,
2011
    June  30,
2011
     March  31,
2011
 
               

Revenues:

             

Company restaurant revenues

   $ 396.2       $ 404.4       $ 422.8      $ 419.0       $ 392.5   

Franchise and property revenues

     173.7         176.2         184.9        176.4         159.5   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total revenues

     569.9         580.6         607.7        595.4         552.0   

Company restaurant expenses:

             

Food, paper and product costs

     130.0         127.4         134.9        135.4         127.0   

Payroll and employee benefits

     119.5         116.7         122.3        122.2         120.0   

Occupancy and other operating costs

     104.5         107.2         113.0        111.6         109.7   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total Company restaurant expenses

     354.0         351.3         370.2        369.2         356.7   

Franchise and property expenses

     23.8         25.5         25.3        23.2         23.1   

Selling, general and administrative expenses

     95.0         114.4         103.3        99.3         100.4   

Other operating (income) expenses, net

     13.0         1.5         (2.7     4.7         7.8   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total operating costs and expenses

     485.8         492.7         496.1        496.4         488.0   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Income from operations

     84.1         87.9         111.6        99.0         64.0   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Interest expense, net

     59.1         61.0         59.4        56.1         50.2   

Loss on early extinguishment of debt

     3.5         1.5         —          —           19.6   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Income (loss) before income taxes

     21.5         25.4         52.2        42.9         (5.8

Income tax expense

     7.2         0.4         13.4        12.7         0.1   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss)

   $ 14.3       $ 25.0       $ 38.8      $ 30.2       $ (5.9
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted net income

   $ 39.8       $ 50.3       $ 54.2      $ 46.5       $ 27.6   

 

3


     Three Months Ended  
     March 31,     December 31,     September 30,     June 30,     March 31,  
     2012     2011     2011     2011     2011  

Company:

          

Company restaurant revenues

   $ 396.2      $ 404.4      $ 422.8      $ 419.0      $ 392.5   

CRM

     42.2        53.1        52.6        49.8        35.8   

CRM %

     10.7     13.1     12.4     11.9     9.1

Company restaurant expenses as a % of Company restaurant revenue:

          

Food and paper

     32.8     31.5     31.9     32.3     32.4

Payroll and benefits

     30.2     28.9     28.9     29.2     30.6

Depreciation and amortization

     5.5     5.3     5.3     5.4     5.9

Other occupancy and operating

     20.8     21.2     21.5     21.2     22.0

Franchise:

          

Franchise and property revenues

   $ 173.7      $ 176.2      $ 184.9      $ 176.4      $ 159.5   

Franchise and franchise property expenses

     23.8        25.5        25.3        23.2        23.1   

Franchise sales (in constant currencies) (1)

     3,385.5        3,415.2        3,634.0        3,449.0        3,155.1   

Consolidated Adjusted EBITDA

     143.2        154.1        161.0        149.9        120.0   

Consolidated Adjusted EBITDA margin

     25.1     26.5     26.5     25.2     21.7

Unallocated Management G&A (2)

     26.2        22.8        25.4        21.9        31.0   

FX Impact

 

     Three Months Ended  
     March 31,     December 31,     September 30,      June 30,      March 31,  
     2012     2011     2011      2011      2011  

Consolidated revenues

   $ (6.1   $ (2.5   $ 15.2       $ 19.7       $ 3.2   

Consolidated CRM

     (0.5     (0.4     1.4         1.4         0.2   

Consolidated adjusted EBITDA

     (1.6     (0.7     2.8         2.7         (0.3

 

4


Key Business Metrics

 

     Three Months Ended  
     March 31,     December 31,     September 30,     June 30,     March 31,  
     2012     2011     2011     2011     2011  

Systemwide sales growth

     6.5     2.2     3.6     0.4     1.5

Comparable sales growth

          

Company

     6.1     2.3     3.2     (1.6 )%      (3.6 )% 

Franchise

     4.4     1.1     1.4     (2.2 )%      (2.8 )% 

System

     4.6     1.2     1.6     (2.2 )%      (2.8 )% 

NRG

          

Company

     (5     1        —          (3     (2

Franchise

     27        116        59        38        52   

System

     22        117        59        35        50   

Net Refranchisings

     5        1        35        6        3   

Restaurant counts at period end

          

Company

     1,285        1,295        1,295        1,330        1,339   

Franchise

     11,249        11,217        11,100        11,006        10,962   

System

     12,534        12,512        12,395        12,336        12,301   

CRM %

     10.7     13.1     12.4     11.9     9.1

 

(1) 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.
(2) Unallocated Management G&A includes corporate support costs in areas such as facilities, finance, human resources, information technology, legal, marketing and supply chain management, which benefit all of our geographic segments and system-wide restaurants and are not allocated specifically to any of the geographic segments.

 

5


U.S. & Canada

 

     Three Months Ended  
     March 31,     December 31,     September 30,     June 30,     March 31,  
     2012     2011     2011     2011     2011  

Company:

          

Company restaurant revenues

   $ 286.3      $ 285.1      $ 302.2      $ 302.1      $ 282.6   

CRM

     33.8        38.6        37.6        38.0        28.1   

CRM %

     11.8     13.5     12.4     12.6     9.9

Company restaurant expenses as a % of Company restaurant revenue:

          

Food and paper

     33.1     31.5     32.2     32.8     32.8

Payroll and benefits

     31.1     30.2     30.1     30.0     31.5

Depreciation and amortization

     5.6     5.6     5.6     5.6     5.9

Other occupancy and operating

     18.4     19.2     19.7     19.0     19.9

Franchise:

          

Franchise and property revenues

   $ 100.3      $ 98.1      $ 103.8      $ 102.3      $ 92.9   

Franchise and franchise property expenses

     16.5        19.1        17.5        16.3        17.0   

Franchise sales (in constant currencies)

     1,848.3        1,854.4        1,968.8        1,910.6        1,776.7   

Segment income

     112.9        112.5        118.9        115.3        102.8   

Segment margin

     29.2     29.4     29.3     28.5     27.4

FX Impact

 

     Three Months Ended  
     March 31,     December 31,     September 30,     June 30,     March 31,  
     2012     2011     2011     2011     2011  
     Favorable / (Unfavorable)  

Segment revenues

   $ (0.5   $ (0.3   $ 2.2      $ 2.5      $ 2.0   

Segment CRM

     —          —          0.2        0.2        0.2   

Segment income

     (0.1     (0.1     (0.6     (0.8     0.2   

Key Business Metrics

 

     Three Months Ended  
     March 31,     December 31,     September 30,     June 30,     March 31,  
     2012     2011     2011     2011     2011  
     Favorable / (Unfavorable)  

Systemwide sales growth

     3.7     (2.0 )%      (0.3 )%      (5.5 )%      (5.1 )% 

Comparable sales growth

          

Company

     6.0     0.5     1.8     (3.7 )%      (6.0 )% 

Franchise

     4.0     (2.4 )%      (0.6 )%      (5.5 )%      (6.0 )% 

System

     4.2     (2.0 )%      (0.3 )%      (5.3 )%      (6.0 )% 

NRG

          

Company

     (1     (2     (1     (1     (3

Franchise

     (11     (21     (4     (17     (1

System

     (12     (23     (5     (18     (4

Net Refranchisings

     4        1        35        2        —     

Restaurant counts at period end

          

Company

     934        939        942        978        981   

Franchise

     6,554        6,561        6,581        6,550        6,565   

System

     7,488        7,500        7,523        7,528        7,546   

 

6


EMEA

 

     Three Months Ended  
     March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Company:

          

Company restaurant revenues

   $ 77.6      $ 86.2      $ 84.9      $ 81.6      $ 78.0   

CRM

     6.4        11.9        10.7        7.7        5.2   

CRM %

     8.2     13.8     12.6     9.4     6.7

Company restaurant expenses as a % of Company restaurant revenue:

          

Food and paper

     30.7     29.8     29.0     29.2     29.7

Payroll and benefits

     32.2     29.4     30.5     32.1     33.7

Depreciation and amortization

     3.6     3.2     3.4     3.6     3.7

Other occupancy and operating

     25.3     23.7     24.6     26.0     26.2

Franchise:

          

Franchise and property revenues

   $ 45.7      $ 48.6      $ 53.9      $ 49.3      $ 43.1   

Franchise and franchise property expenses

     6.1        6.3        6.5        6.3        6.8   

Franchise sales (in constant currencies)

     896.0        920.4        1,008.3        922.7        797.6   

Segment income

     32.8        40.3        43.7        35.3        26.7   

Segment margin

     26.6     29.9     31.5     26.9     22.0

FX Impact

 

     Three Months Ended  
     March 31,
2012
    December 31,
2011
    September 30,
2011
     June 30,
2011
     March 31,
2011
 
     Favorable / (Unfavorable)  

Segment revenues

   $ (4.8   $ (1.0   $ 10.8       $ 14.4       $ (0.8

Segment CRM

     (0.3     (0.1     1.0         0.9         (0.1

Segment income

     (1.4     (0.3     3.5         3.7         (0.5

Key Business Metrics

 

     Three Months Ended  
     March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Systemwide sales growth

     10.6     9.3     5.8     3.6     7.0

Comparable sales growth

          

Company

     7.6     7.7     6.1     4.9     4.2

Franchise

     6.5     7.2     4.6     3.1     1.3

System

     6.6     7.3     4.7     3.2     1.5

NRG

          

Company

     (1     —          (1     (1     (2

Franchise

     35        47        40        32        39   

System

     34        47        39        31        37   

Net Refranchisings

     1        —          —          4        3   

Restaurant counts at period end

          

Company

     190        192        192        193        198   

Franchise

     2,726        2,690        2,643        2,603        2,567   

System

     2,916        2,882        2,835        2,796        2,765   

 

7


LAC

 

     Three Months Ended  
     March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Company:

          

Company restaurant revenues

   $ 14.7      $ 15.3      $ 17.9      $ 17.6      $ 15.4   

CRM

     2.2        2.9        3.7        3.4        2.6   

CRM %

     15.0     18.7     20.7     19.0     16.9

Company restaurant expenses as a % of Company restaurant revenue:

          

Food and paper

     38.1     39.2     38.5     37.5     37.0

Payroll and benefits

     12.9     12.4     11.7     11.9     12.3

Depreciation and amortization

     10.2     9.8     8.9     9.7     10.4

Other occupancy and operating

     23.8     19.9     20.2     21.9     23.4

Franchise:

          

Franchise and property revenues

   $ 15.8      $ 17.5      $ 16.0      $ 14.6      $ 13.8   

Franchise and franchise property expenses

     0.2        (0.4     0.6        —          (1.3

Franchise sales (in constant currencies)

     315.8        318.5        322.7        295.3        272.2   

Segment income

     15.9        18.3        15.9        14.5        15.2   

Segment margin

     52.1     55.8     46.9     45.0     52.1

FX Impact

 

     Three Months Ended  
     March 31,
2012
    December 31,
2011
    September 30,
2011
     June 30,
2011
     March 31,
2011
 
     Favorable / (Unfavorable)  

Segment revenues

   $ (1.1   $ (1.5   $ 0.7       $ 1.1       $ 0.8   

Segment CRM

     (0.2     (0.3     0.2         0.2         0.1   

Segment income

     (0.1     (0.2     —           0.1         0.1   

Key Business Metrics

 

     Three Months Ended  
     March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Systemwide sales growth

     15.3     8.2     15.6     16.6     18.9

Comparable sales growth

          

Company

     3.1     4.5     12.1     4.6     (4.3 )% 

Franchise

     10.3     10.0     10.5     6.9     4.5

System

     9.9     9.7     10.5     6.8     4.0

NRG

          

Company

     —          —          —          —          1   

Franchise

     6        46        11        15        9   

System

     6        46        11        15        10   

Net Refranchisings

     —          —          —          —          —     

Restaurant counts at period end

          

Company

     97        97        97        97        97   

Franchise

     1,131        1,125        1,079        1,068        1,053   

System

     1,228        1,222        1,176        1,165        1,150   

 

8


APAC

 

     Three Months Ended  
     March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Company:

          

Company restaurant revenues

   $ 17.6      $ 17.8      $ 17.8      $ 17.7      $ 16.5   

CRM

     (0.2     (0.2     0.6        0.8        (0.1

CRM %

     (1.1 )%      (1.4 )%      3.5     4.8     (0.6 )% 

Company restaurant expenses as a % of Company restaurant revenue:

          

Food and paper

     33.4     33.7     34.3     33.3     33.3

Payroll and benefits

     20.5     18.5     19.7     18.1     17.6

Depreciation and amortization

     7.4     6.8     5.3     6.5     10.3

Other occupancy and operating

     39.8     42.4     37.2     37.3     39.4

Franchise:

          

Franchise and property revenues

   $ 11.9      $ 12.0      $ 11.2      $ 10.2      $ 9.7   

Franchise and franchise property expenses

     1.0        0.5        0.7        0.6        0.6   

Franchise sales (in constant currencies)

     325.4        321.9        334.2        320.4        308.6   

Segment income

     7.8        5.8        7.9        6.7        6.3   

Segment margin

     26.4     19.4     27.3     24.0     24.0

FX Impact

 

     Three Months Ended  
     March 31,
2012
     December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 
     Favorable / (Unfavorable)  

Segment revenues

   $ 0.3       $ 0.3      $ 1.5      $ 1.7      $ 1.2   

Segment CRM

     —           —          —          0.1        —     

Segment income

     —           (0.1     (0.1     (0.3     (0.1

Key Business Metrics

 

     Three Months Ended  
     March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Systemwide sales growth

     5.4     4.0     14.5     19.4     16.4

Comparable sales growth

          

Company

     3.7     7.0     7.0     7.0     7.5

Franchise

     (3.1 )%      (1.6 )%      (1.8 )%      (0.9 )%      1.8

System

     (2.8 )%      (1.2 )%      (1.5 )%      (0.6 )%      2.0

NRG

          

Company

     (3     3        2        (1     2   

Franchise

     (3     44        12        8        5   

System

     (6     47        14        7        7   

Net Refranchisings

     —          —          —          —          —     

Restaurant counts at period end

          

Company

     64        67        64        62        63   

Franchise

     838        841        797        785        777   

System

     902        908        861        847        840   

 

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The reconciliation of segment income to net income is as follows:

 

     Three Months Ended  
     March 31,
2012
    December 31,
2011
    September 30,
2011
    June 30,
2011
    March 31,
2011
 

Segment Income:

          

U.S. and Canada

   $ 112.9      $ 112.5      $ 118.9      $ 115.3      $ 102.8   

EMEA

     32.8        40.3        43.7        35.3        26.7   

LAC

     15.9        18.3        15.9        14.5        15.2   

APAC

     7.8        5.8        7.9        6.7        6.3   

Unallocated Management G&A

     (26.2     (22.8     (25.4     (21.9     (31.0
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     143.2        154.1        161.0        149.9        120.0   

Share-based compensation

     1.4        5.5        0.3        0.4        0.2   

Transaction costs (1)

     1.1        1.6        1.0        0.3        0.8   

Global restructuring and related professional fees (2)

     —          13.8        10.5        10.0        12.2   

Global portfolio realignment project (3)

     3.7        7.1        0.5        —          —     

Field optimization project costs (4)

     —          3.4        5.5        1.7        —     

Business Combination Agreement expenses (5)

     5.9        —          —          —          —     

Other operating (income) expenses, net

     13.0        1.5        (2.7     4.7        7.8   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     118.1        121.2        145.9        132.8        99.0   

Depreciation and amortization

     34.0        33.3        34.3        33.8        35.0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     84.1        87.9        111.6        99.0        64.0   

Interest expense, net

     59.1        61.0        59.4        56.1        50.2   

Loss on early extinguishment of debt

     3.5        1.5        —          —          19.6   

Income tax expense

     7.2        0.4        13.4        12.7        0.1   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 14.3      $ 25.0      $ 38.8      $ 30.2      $ (5.9
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The reconciliation of net income to adjusted net income is as follows:

 

     Three Months Ended  
     March 31,
2012
     December 31,
2011
     September 30,
2011
    June 30,
2011
     March 31,
2011
 

Adjusted net income

             

Net income

   $ 14.3       $ 25.0       $ 38.8      $ 30.2       $ (5.9

Income tax expense (benefit)

     7.2         0.4         13.4        12.7         0.1   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Income before income taxes

     21.5         25.4         52.2        42.9         (5.8

Adjustments:

             

Franchise agreement amortization

     5.2         5.4         5.3        5.6         5.5   

Amortization of deferred financing costs and original issue discount

     3.5         4.0         3.6        3.5         3.4   

Loss on early extinguishment of debt

     3.5         1.5         —          —           19.6   

Other operating (income) expense, net

     13.0         1.5         (2.7     4.7         7.8   

Transaction costs (1)

     1.1         1.6         1.0        0.3         0.8   

Global restructuring and related professional fees (2)

     —           13.8         10.5        10.0         12.2   

Global portfolio realignment project (3)

     3.7         7.1         0.5        —           —     

Field optimization project costs (4)

     —           3.4         5.5        1.7         —     

Business Combination Agreement expenses (5)

     5.9         —           —          —           —     
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total adjustments

     35.9         38.3         23.7        25.8         49.3   

Adjusted income before income taxes

     57.4         63.7         75.9        68.7         43.5   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted income tax expense (6)

     17.6         13.4         21.7        22.2         15.9   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted net income

   $ 39.8       $ 50.3       $ 54.2      $ 46.5       $ 27.6   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

10


(1) Represents expenses incurred related to the acquisition of the Company.
(2) Represents severance benefits, other severance-related costs and related professional fees incurred in connection with the company’s global restructuring efforts, the voluntary resignation severance program offered for a limited time to eligible employees based at its Miami headquarters and additional reductions in corporate and field positions in the U.S.
(3) Represents costs associated with an ongoing project to realign our global restaurant portfolio by refranchising our Company restaurants and establishing strategic partners and joint ventures to accelerate development. These costs primarily include severance related costs and fees for professional services.
(4) Represents severance-related costs, compensation costs for overlap staffing, travel expenses, consulting and training costs incurred in connection with the Company’s efforts to expand and enhance its U.S. field organization.
(5) Represents a one-time share-based compensation expense related to awards granted during the three months ended March 31, 2012 resulting from the increase in equity value of BKWWH implied by the recently announced Business Combination Agreement with Justice Holdings Ltd. and its subsidiaries. We also expect to incur professional fees and other transaction costs associated with the planned transaction.
(6) Adjusted income tax expense for the last five quarters is calculated using the company’s actual tax rate for all items with the exception of the adjustments listed above to which a blended statutory tax rate of 29.0%, 34.0%, 35.0%, 37.0% and 32.0%, respectively, has been applied.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

BURGER KING HOLDINGS, INC.

/s/ Daniel S. Schwartz

Daniel S. Schwartz
Chief Financial Officer

Date: May 22, 2012

 

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