Burger King Worldwide, Inc. (Form: 10-Q, Received: 10/28/2013 16:40:54)

Large accelerated filer

Accelerated filer

Non-accelerated filer

x (Do not check if a smaller reporting company)

Smaller reporting company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-35511

BURGER KING WORLDWIDE, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware		45-5011014
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		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)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one);

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of September 30, 2013, there were 351,245,099 shares of the Registrant’s Common Stock outstanding.

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

TABLE OF CONTENTS


		Page

PART I – Financial Information
Item 1.	Financial Statements		3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		41
Item 4.	Controls and Procedures		41

PART II – Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		43
Item 5.	Other Information		43
Item 6.	Exhibits		44
	Signatures		45
	Index to Exhibits		46

PART I – Financial Information

Item 1. Financial Statements

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In millions, except share data)

(Unaudited)


	As of
	September 30,			December 31,
	2013			2012
ASSETS
Current assets:
Cash and cash equivalents	$	764.3		$	546.7
Trade and notes receivable, net		164.6			179.0
Prepaids and other current assets, net		99.6			91.3
Deferred income taxes, net		38.0			73.5

Total current assets		1,066.5			890.5

Property and equipment, net of accumulated depreciation of $173.6 million and $200.8 million, respectively		804.6			885.2
Intangible assets, net		2,799.3			2,811.2
Goodwill		626.5			619.2
Net investment in property leased to franchisees		167.4			180.4
Other assets, net		306.9			177.5

Total assets	$	5,771.2		$	5,564.0

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts and drafts payable	$	25.8		$	68.7
Accrued advertising		101.2			66.5
Other accrued liabilities		182.0			206.8
Current portion of long term debt and capital leases		75.0			55.8

Total current liabilities		384.0			397.8

Term debt, net of current portion		2,890.8			2,905.1
Capital leases, net of current portion		78.5			88.4
Other liabilities, net		354.8			382.4
Deferred income taxes, net		664.5			615.3

Total liabilities		4,372.6			4,389.0


Commitments and Contingencies (Note 15)

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; 351,245,099 shares issued and outstanding at September 30, 2013; 350,238,771 shares issued and outstanding at December 31, 2012;		3.5			3.5
Additional paid-in capital		1,223.0			1,205.7
Retained earnings		183.3			76.1
Accumulated other comprehensive loss		(11.2	)		(110.3	)

Total stockholders’ equity		1,398.6			1,175.0

Total liabilities and stockholders’ equity	$	5,771.2		$	5,564.0

See accompanying notes to condensed consolidated financial statements.

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In millions, except per share data)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012

Revenues:
Company restaurant revenues	$	27.0	$	244.6	$	200.8	$	986.7
Franchise and property revenues		248.1		211.1		680.3		579.7

Total revenues		275.1		455.7		881.1		1,566.4

Company restaurant expenses:
Food, paper and product costs		8.5		79.7		63.8		324.7
Payroll and employee benefits		7.4		71.9		61.6		291.6
Occupancy and other operating costs		7.0		64.7		52.2		259.7

Total Company restaurant expenses		22.9		216.3		177.6		876.0
Franchise and property expenses		40.5		37.7		113.5		90.0
Selling, general and administrative expenses		59.6		77.6		187.8		268.4
Other operating expenses (income), net		6.6		30.3		21.1		26.2

Total operating costs and expenses		129.6		361.9		500.0		1,260.6

Income from operations		145.5		93.8		381.1		305.8
Interest expense, net		50.2		57.3		149.3		173.6
Loss on early extinguishment of debt		—		23.0		—		34.2

Income before income taxes		95.3		13.5		231.8		98.0
Income tax expense		27.1		6.9		64.9		28.9

Net income	$	68.2	$	6.6	$	166.9	$	69.1


Earnings per share:
Basic	$	0.19	$	0.02	$	0.48	$	0.20
Diluted	$	0.19	$	0.02	$	0.47	$	0.20
Weighted average shares outstanding
Basic		351.2		350.0		350.9		349.4
Diluted		358.1		355.0		357.7		353.3
Dividends per common share	$	0.06	$	—	$	0.17	$	—

See accompanying notes to condensed consolidated financial statements.

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In millions)

(Unaudited)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012

Net income	$	68.2		$	6.6		$	166.9		$	69.1

Foreign currency translation adjustment		44.6			21.6			31.6			(5.4	)
Reclassification of foreign currency translation adjustment into net income		—			—			(3.0	)		—
Net change in fair value of net investment hedges (net of tax of $6.5, $2.7, $3.6 and $0.0)		(10.1	)		(0.1	)		(5.6	)		(0.1	)
Net change in fair value of interest rate caps/swaps (net of tax of $1.4, $7.3, $47.9 and $11.5)		(2.2	)		(9.0	)		74.2			(18.0	)
Amounts reclassified to earnings of cash flow hedges (net of tax of $0.7, $3.7, $1.7 and $4.1)		1.0			5.5			2.6			6.4
Pension and post-retirement benefit plans (net of tax of $0.4, $0.3, $0.7 and $3.9)		(0.4	)		(0.3	)		(0.1	)		6.2
Amortization of prior service costs (net of tax of $0.3, $0.5, $0.9 and $0.7)		(0.4	)		(0.3	)		(1.1	)		(1.2	)
Amortization of actuarial losses (net of tax of $0.1, $0.0, $0.4 and $0.0)		0.2			—			0.5			—

Other comprehensive income (loss), net of tax		32.7			17.4			99.1			(12.1	)

Total comprehensive income	$	100.9		$	24.0		$	266.0		$	57.0

See accompanying notes to condensed consolidated financial statements.

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In millions)

(Unaudited)


	Nine Months Ended
	September 30,
	2013			2012
Cash flows from operating activities:
Net income	$	166.9		$	69.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		48.4			96.0
Loss on early extinguishment of debt		—			34.2
Amortization of deferred financing costs and debt issuance discount		41.7			43.6
Equity in net loss from unconsolidated affiliates		9.7			1.4
Loss (gain) on remeasurement of foreign denominated transactions		1.0			(5.4	)
Amortization of defined benefit pension and postretirement items		(1.6	)		(1.8	)
Realized loss on terminated caps/swaps		4.3			10.7
Net (gains) losses on refranchisings and dispositions of assets		(2.5	)		10.4
Bad debt expense, net of recoveries		2.2			2.9
Share-based compensation		7.1			9.3
Deferred income taxes		33.3			8.0
Changes in current assets and liabilities, excluding acquisitions and dispositions:
Trade and notes receivables		6.3			(4.1	)
Prepaids and other current assets		(0.2	)		(8.9	)
Accounts and drafts payable		(35.7	)		(34.7	)
Accrued advertising		9.7			(31.0	)
Other accrued liabilities		(4.9	)		(47.7	)
Other long-term assets and liabilities		(18.0	)		(7.4	)

Net cash provided by operating activities		267.7			144.6

Cash flows from investing activities:
Payments for property and equipment		(10.8	)		(37.7	)
Proceeds from refranchisings, disposition of assets and restaurant closures		48.7			70.0
Payments for acquired franchisee operations, net of cash acquired		(11.9	)		(15.3	)
Return of investment on direct financing leases		11.9			10.4
Other investing activities		0.2			—

Net cash provided by investing activities		38.1			27.4

Cash flows from financing activities:
Proceeds from term debt		—			1,733.5
Repayments of term debt and capital leases		(38.1	)		(1,754.7	)
Extinguishment of debt		—			(112.8	)
Payment of financing costs		—			(16.0	)
Proceeds from stock option exercises		2.7			1.3
Excess tax benefits from share-based compensation		4.2			—
Dividends paid on common stock		(59.7	)		—

Net cash used for financing activities		(90.9	)		(148.7	)

Effect of exchange rates on cash and cash equivalents		2.7			0.5
Increase in cash and cash equivalents		217.6			23.8
Cash and cash equivalents at beginning of period		546.7			459.0

Cash and cash equivalents at end of period	$	764.3		$	482.8


Supplemental cash flow disclosures:
Interest paid	$	85.2		$	114.3
Income taxes paid	$	24.7		$	31.8
Non-cash investing and financing activities:
Investment in unconsolidated affiliates	$	17.8		$	98.6
Acquisition of property with capital lease obligations	$	1.0		$	36.1

See accompanying notes to condensed consolidated financial statements.

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(Tabular amounts in millions of dollars unless noted otherwise)

Note 1. Basis of Presentation and Consolidation

We have prepared the accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, the Financial Statements should be read in conjunction with the audited Consolidated Financial Statements contained in our Annual Report on Form 10-K filed with the SEC on February 22, 2013.

The Financial Statements include our accounts and the accounts of our wholly-owned subsidiaries. Investments in affiliates owned 50% or less and variable interest entities (“VIEs”) in which we are not deemed to be the primary beneficiary are accounted for by the equity method. All material intercompany balances and transactions have been eliminated in consolidation.

We have investments in certain franchisee entities that are VIEs. We are required to consolidate VIEs where we have determined that we are the primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. The principal entities in which we possess a variable interest are accounted for under the equity method, as we have determined we are not the primary beneficiary.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included in the Financial Statements. The results for interim periods do not necessarily indicate the results that may be expected for any other interim period or for the full year.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our Financial Statements and Notes to the Financial Statements. Management adjusts such estimates and assumptions when facts and circumstances dictate. Such estimates and assumptions may be affected by volatile credit, equity, foreign currency, energy markets and declines in consumer spending. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.

Certain prior year amounts in the accompanying Financial Statements and Notes to the Financial Statements have been reclassified in order to be comparable with the current year classifications. These reclassifications had no effect on previously reported net income.

Note 2. New Accounting Pronouncements

During the nine months ended September 30, 2013, we adopted a Financial Accounting Standards Board (“FASB”) accounting standards update that amends accounting guidance to require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amounts reclassified are required by GAAP to be reclassified to net income in their entirety in the same reporting period. The disclosures required by this accounting standards update are included in this report.

During the nine months ended September 30, 2013, we adopted an accounting standards update that amends accounting guidance for the release of the cumulative translation adjustment into net income when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. Accordingly, the cumulative translation adjustment should be released into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The adoption of this accounting standard update did not have a significant impact on our consolidated financial position, results of operations or cash flows.

Note 3. Prepaids and Other Current Assets, net

Prepaids and other current assets, net consist of the following:


	As of
	September 30,		December 31,
	2013		2012
Prepaid expenses	$	51.6	$	23.3
Refundable and prepaid income taxes		28.0		28.5
Inventories		1.7		6.7
Deferred financing costs - current portion		9.0		8.9
Assets held for sale (1)		9.3		23.9

Total Prepaids and other current assets	$	99.6	$	91.3

(1)	Assets held for sale primarily consists of machinery and equipment and goodwill.

Note 4. Intangible Assets, net and Goodwill

Intangible assets, net and goodwill consist of the following:


	As of
	September 30, 2013							December 31, 2012
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Identifiable assets subject to amortization:
Franchise agreements	$	488.5	$	(60.6	)	$	427.9	$	485.6	$	(46.2	)	$	439.4
Favorable leases		170.9		(47.3	)		123.6		183.1		(40.2	)		142.9

Subtotal		659.4		(107.9	)		551.5		668.7		(86.4	)		582.3


Indefinite lived intangible assets - Brand	$	2,247.8	$	—		$	2,247.8	$	2,228.9	$	—		$	2,228.9

Intangible assets, net						$	2,799.3						$	2,811.2


Goodwill	$	626.5						$	619.2

We recorded amortization expense on intangible assets of $9.0 million for the three months ended September 30, 2013 and $9.5 million for the same period in the prior year. We recorded amortization expense on intangible assets of $27.4 million for the nine months ended September 30, 2013 and $28.6 million for the same period in the prior year.

Note 5. Other Accrued Liabilities and Other Liabilities, net

Other accrued liabilities and other liabilities consist of the following:


	As of
	September 30,		December 31,
	2013		2012
Current:
Accrued payroll and employee-related costs	$	26.8	$	44.9
Restructuring and other provisions		10.5		14.6
Withholding taxes		3.2		4.1
Interest payable		36.5		16.9
Casualty insurance		5.9		7.3
Gift card liabilities		11.0		18.2
Income tax payable		0.2		2.8
Deferred income		23.1		18.1
Lease liability		7.1		8.0
Other		57.7		71.9

Other accrued liabilities	$	182.0	$	206.8


Non-current:
Accrued pension	$	71.3	$	77.7
Unfavorable leases		130.4		169.1
Casualty insurance reserves		15.1		18.6
Retiree health benefits		8.0		8.0
Deferred compensation		5.4		7.8
Income tax payable		30.4		26.3
Derivatives liability		19.7		11.0
Lease liability		44.0		32.2
Other		30.5		31.7

Other liabilities, net	$	354.8	$	382.4

Note 6. Long-Term Debt

Long-term debt consists of the following:


								Interest rates (a)
		As of						Three Months Ended						Nine Months Ended
	Maturity	September 30,			December 31,			September 30,						September 30,
	dates	2013			2012			2013			2012			2013			2012
Tranche A Term Loans	2017	$	1,004.3		$	1,023.6			3.3	%		N/A			3.3	%		N/A
Tranche B Term Loans (b)	2019		690.8			695.1			4.7	%		N/A			4.7	%		N/A
9 ⁷ / ₈ % Senior Notes	2018		794.5			794.5			10.1	%		10.1	%		10.1	%		10.1	%
11.0% Discount Notes (c)	2019		441.1			407.1			11.5	%		11.5	%		11.5	%		11.5	%
Deferred Premiums on interest rate caps	2016		23.7			29.0			2.5	%		2.5	%		2.5	%		2.5	%
Other	N/A		0.8			0.9

Total debt			2,955.2			2,950.2
Less: current maturities of debt			(64.4	)		(45.1	)

Total long-term debt		$	2,890.8		$	2,905.1

(a)	Represents the effective interest rate for the instrument computed on a quarterly basis, including the amortization of deferred debt issuance costs and original issue discount, as applicable, and in the case of our term loans, the effect of interest rate caps.

(b)	Principal face amount herein is presented net of a discount of $7.1 million at September 30, 2013 and $8.1 million at December 31, 2012.

(c)	Principal face amount herein is presented net of a discount of $138.0 million at September 30, 2013 and $172.0 million at December 31, 2012.

2012 Revolving Credit Facility

As of September 30, 2013, we had no amounts outstanding under the 2012 Revolving Credit Facility. Funds available under the 2012 Revolving Credit Facility for future borrowings may be used to repay other debt, finance debt or share repurchases, acquisitions, capital expenditures and other general corporate purposes. We have a $75.0 million letter of credit sublimit as part of the 2012 Revolving Credit Facility, which reduces our borrowing capacity under this facility by the cumulative amount of outstanding letters of credit. As of September 30, 2013, we had no letters of credit issued against the 2012 Revolving Credit Facility and our borrowing capacity was $130.0 million.

Loss on Early Extinguishment of Debt

We recorded a $23.0 million loss on early extinguishment of debt during the three months ended September 30, 2012 in connection with the refinancing of term loans outstanding under the 2011 Amended Credit Agreement with the 2012 Credit Agreement. We recorded a $34.2 million loss on early extinguishment of debt during the nine months ended September 30, 2012 in connection with the refinancing, as well as prepayments of term loans prior to the refinancing and repurchases of our Discount Notes and Senior Notes.

Interest Expense, net

Interest expense, net consists of the following:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Tranche A Term Loans	$	6.6		$	—		$	19.8		$	—
Tranche B Term Loans		6.7			—			19.9			—
Secured Term Loan - USD tranche		—			16.8			—			51.2
Secured Term Loan - Euro tranche		—			2.9			—			8.8
Interest Rate Caps		1.8			1.0			4.8			2.9
9 ⁷ / ₈ % Senior Notes		19.7			19.6			58.9			59.0
11.0% Discount Notes		11.6			10.4			34.0			33.0
Amortization of deferred financing costs and debt issuance discount		2.6			3.7			7.7			10.6
Capital lease obligations		1.6			1.9			4.9			6.2
Other		0.3			1.2			1.1			2.6
Interest income		(0.7	)		(0.2	)		(1.8	)		(0.7	)

Total	$	50.2		$	57.3		$	149.3		$	173.6

Note 7. Income Taxes

The U.S. Federal tax statutory rate reconciles to the effective tax rate as follows:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
U.S. Federal income tax rate		35.0	%		35.0	%		35.0	%		35.0	%
State income taxes, net of federal income tax benefit		2.0			1.5			1.9			1.7
Costs and taxes related to foreign operations		4.7			32.6			4.5			4.6
Foreign tax rate differential		(14.1	)		(10.0	)		(14.0	)		(14.6	)
Foreign exchange differential on tax benefits		—			(1.0	)		—			(0.1	)
Change in valuation allowance		(0.4	)		—			(0.9	)		—
Change in accrual for tax uncertainties		0.7			(2.0	)		1.5			0.5
Other		0.5			(5.0	)		—			2.4

Effective income tax rate		28.4	%		51.1	%		28.0	%		29.5	%

Note 8. Accumulated Other Comprehensive Income (Loss)

The following table displays the change in the components of accumulated other comprehensive income (loss):


							Foreign			Accumulated
	Gains (Losses)						Currency			Other
	on Cash Flow			Defined Benefit			Translation			Comprehensive
	Hedges			Pension			Adjustments			Income (Loss)
Balances at December 31, 2012	$	(29.2	)	$	(3.8	)	$	(77.3	)	$	(110.3	)
Foreign currency translation adjustment		—			—			31.6			31.6
Reclassification of foreign currency translation adjustment into net income		—			—			(3.0	)		(3.0	)
Net change in fair value of net investment hedges, net of tax		(5.6	)		—			—			(5.6	)
Net change in fair value of interest rate caps/swaps, net of tax		74.2			—			—			74.2
Amounts reclassified to earnings of cash flow hedges, net of tax		2.6			—			—			2.6
Pension and post-retirement benefit plans, net of tax		—			(0.1	)		—			(0.1	)
Amortization of prior service costs, net of tax		—			(1.1	)		—			(1.1	)
Amortization of actuarial losses, net of tax		—			0.5			—			0.5

Balances at September 30, 2013	$	42.0		$	(4.5	)	$	(48.7	)	$	(11.2	)

The following table displays the reclassifications out of accumulated other comprehensive income (loss):


		Amounts Reclassified from AOCI
		Three Months Ended						Nine Months Ended
	Affected Line Item in the Statements	September 30,						September 30,
Details about AOCI Components	of Operations	2013			2012			2013			2012

Gains (Losses) on cash flow hedges:
Interest rate derivative contracts	Interest expense, net	$	(1.7	)	$	(0.8	)	$	(4.3	)	$	(2.1	)
	Other operating expenses (income), net		—			(8.4	)		—			(8.4	)

	Total before tax		(1.7	)		(9.2	)		(4.3	)		(10.5	)
	Income tax (expense) benefit		0.7			3.7			1.7			4.1

	Net of tax		(1.0	)		(5.5	)		(2.6	)		(6.4	)


Defined benefit pension plan items:
Amortization of prior service costs	SG&A (1)		0.8			0.8			2.0			1.9
Amortization of actuarial gains (losses)	SG&A (1)		(0.3	)		—			(0.9	)		—

	Total before tax		0.5			0.8			1.1			1.9
	Income tax (expense) benefit		(0.3	)		(0.5	)		(0.5	)		(0.7	)

	Net of tax		0.2			0.3			0.6			1.2


Foreign currency translation adjustment:
Sale of foreign entity	Other operating expenses (income), net		—			—			3.0			—


Total reclassifications	Net of tax	$	(0.8	)	$	(5.2	)	$	1.0		$	(5.2	)

(1)	Refers to selling, general and administrative expenses in the unaudited condensed consolidated statements of operations.

Note 9. Fair Value Measurements

The following table presents our assets and liabilities measured at fair value on a recurring basis and the levels of inputs used to measure fair value, which include derivatives designated as cash flow hedging instruments, derivatives designated as net investment hedges, investments held in a rabbi trust which consist of money market accounts and mutual funds established to fund a portion of our current and future obligations under our Executive Retirement Plan (“ERP”), and ERP liabilities as well as their location on our condensed consolidated balance sheets as of September 30, 2013 and December 31, 2012:


		Fair Value Measurements						Fair Value Measurements
		at September 30, 2013						at December 31, 2012
	Balance Sheet Location	(Level 1)		(Level 2)		Total		(Level 1)		(Level 2)		Total
Assets:
Derivatives designated as cash flow hedges:
Interest rate caps	Other assets, net	$	—	$	5.2	$	5.2	$	—	$	4.3	$	4.3
Forward-starting interest rate swaps	Other assets, net		—		122.0		122.0		—		0.8		0.8
Other:
Investments held in a rabbi trust	Other assets, net		2.0		—		2.0		6.3		—		6.3

Total assets at fair value		$	2.0	$	127.2	$	129.2	$	6.3	$	5.1	$	11.4


Liabilities:

Derivatives designated as net investment hedges:
Cross-currency rate swaps	Other liabilities, net	$	—	$	19.7	$	19.7	$	—	$	11.0	$	11.0
Other:
ERP liabilities	Other accrued liabilities		—		2.7		2.7		—		4.4		4.4
ERP liabilities	Other liabilities, net		—		5.4		5.4		—		7.8		7.8

Total liabilities at fair value		$	—	$	27.8	$	27.8	$	—	$	23.2	$	23.2

Our derivatives are valued using a discounted cash flow analysis that incorporates observable market parameters, such as interest rate yield curves and currency rates, classified as Level 2 within the valuation hierarchy. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by us or the counterparty.

Investment held in a rabbi trust consist of money market funds and mutual funds and the fair value measurements are derived using quoted prices in active markets for the specific funds which are based on Level 1 inputs of the fair value hierarchy. The fair value measurements of the ERP liabilities are derived principally from observable market data which are based on Level 2 inputs of the fair value hierarchy.

At September 30, 2013, the fair value of our variable rate term debt and bonds was estimated at $3.1 billion, compared to a carrying amount of $2.9 billion, net of original issue discount. At December 31, 2012, the fair value of our variable rate term debt and bonds was estimated at $3.1 billion, compared to a carrying amount of $2.9 billion, net of original issue discount. Fair value of variable rate term debt was estimated using inputs based on bid and offer prices and are Level 2 inputs within the fair value hierarchy. Fair value of the Senior Notes and Discount Notes was estimated using quoted market prices and are Level 1 inputs within the fair value hierarchy.

Certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis but are subject to periodic impairment tests. These items primarily include long-lived assets, the Brand and other intangible assets.

With respect to our assets held for sale recorded at fair value, the fair value measurements are typically based on binding purchase prices from acquirers of Company restaurants that we plan to refranchise. In certain cases, our corporate development team may develop fair value estimates for assets held for sale for which there is no binding purchase price. These fair value measurements, which are based on Level 3 inputs, and changes in fair value measurements are reviewed and assessed each quarter for assets classified as held for sale by our corporate development team. Our corporate development team utilizes its knowledge of the FFHR industry and historical experience in refranchising transactions in establishing the valuation process, which is generally based on a market approach. Under the market approach, our corporate development team uses transaction prices for refranchisings that were recently completed, adjusting where necessary for factors specific to the assets held for sale.

Assets held for sale totaled $9.3 million at September 30, 2013 and $23.9 million at December 31, 2012 and consisted primarily of goodwill and machinery and equipment to be sold in connection with refranchisings.

We assess the fair value less costs to sell of assets held for sale each reporting period they remain classified as held for sale. We report subsequent changes in the fair value less costs to sell of assets held for sale as an adjustment to the carrying amount of the assets held for sale. However, the adjusted carrying amount cannot exceed the carrying amount of the long-lived asset at the time it was initially classified as held for sale. We did not record any impairment charges associated with assets held for sale during the three and nine months ended September 30, 2013 as well as during the three months ended September 30, 2012. During the nine months ended September 30, 2012, we recorded impairment losses of $13.2 million associated with long-lived assets for restaurants we classified as held for sale.

Note 10. Derivative Instruments

We enter into derivative instruments for risk management purposes, including derivatives designated as cash flow hedges, derivatives designated as net investment hedges and those utilized as economic hedges. We use derivatives to manage exposure to fluctuations in interest rates and currency exchange rates. See Note 9 for fair value measurements of our derivative instruments.

Interest Rate Caps

We have entered into interest rate cap agreements to manage interest rate risk. Such agreements cap the borrowing rate on variable debt to provide a hedge against the risk of rising rates. At September 30, 2013 and December 31, 2012, we had interest rate cap agreements (notional amount of $1.3 billion and $1.4 billion, respectively) (the “Cap Agreements”) to mitigate the impact of fluctuations in the three-month LIBOR and effectively cap the LIBOR applicable to our variable rate debt at a weighted-average rate of 1.75%. The six year Cap Agreements are a series of individual caplets that reset and settle quarterly through October 19, 2016 consistent with the payment dates of our LIBOR-based term debt.

Under the terms of the Cap Agreements, if LIBOR resets above a strike price, we will receive the net difference between LIBOR and the strike price. We have elected our applicable rate per annum as Eurocurrency rate determined by reference to LIBOR. In addition, on the quarterly settlement dates, we will remit the deferred premium payment (plus interest) to the counterparty, whether LIBOR resets above or below the strike price.

The Cap Agreements are designated as cash flow hedges and to the extent they are effective in offsetting the variability of the variable rate interest payments, changes in the derivatives’ fair values are not included in current earnings but are included in accumulated other comprehensive income (AOCI) in the accompanying condensed consolidated balance sheets. At each cap maturity date, the portion of the fair value attributable to the matured cap will be reclassified from AOCI into earnings as a component of interest expense.

From time to time as we prepay portions of the 2012 Term Loan Facility, we may modify our Cap Agreements to reduce the notional amount. The terms of the Cap Agreements will not otherwise be revised by these modifications. On the modification date, the portion of the fair value attributable to the modified cap will be reclassified from AOCI into earnings as a component of interest expense.

Cross-currency Rate Swaps

To protect the value of our investments in our foreign operations against adverse changes in foreign currency exchange rates, we may, from time to time, hedge a portion of our net investment in one or more of our foreign subsidiaries. At September 30, 2013, we had outstanding cross-currency rate swaps with an aggregate notional value of $430.0 million to hedge a portion of the net investment in our Switzerland subsidiary, Burger King Europe GmbH. A total notional value of $230.0 million of these swaps are contracts to exchange quarterly fixed-rate interest payments we make in Euros for quarterly fixed-rate interest payments we receive in U.S. dollars and mature on October 19, 2016. A total notional value of $200.0 million of these swaps are contracts to exchange quarterly floating-rate interest payments we make in Euros based on EURIBOR for quarterly floating-rate interest payments we receive in U.S. dollars based on LIBOR and mature on September 28, 2017. These cross-currency rate swaps also require the exchange of Euros and U.S. dollar principal payments upon maturity. Changes in the fair value of these instruments are recognized in AOCI to offset the change in the carrying amount of the net investment being hedged. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated.

Forward-Starting Interest Rate Swaps

At September 30, 2013, we had outstanding three forward-starting interest rate swaps with a total notional value of $2.3 billion to hedge the variability of forecasted interest payments attributable to changes in LIBOR. The forward-starting interest rate swaps effectively fix LIBOR on $1.0 billion of floating-rate debt beginning 2015 and an additional $1.3 billion of floating-rate debt starting 2016. The hedges have a seven year maturity. We account for these hedges as cash flow hedges, and as such, the effective portion of unrealized changes in market value has been recorded in AOCI and is reclassified to income during the period in which the hedge transaction affects earnings. Gains and losses from hedge ineffectiveness are recognized in current earnings.

Foreign Currency Forward Contracts

From time to time, we enter into foreign currency forward contracts to economically hedge the remeasurement of certain foreign currency-denominated intercompany loans receivable and other foreign-currency denominated assets recorded in our consolidated balance sheets. The forward currency forward contracts are not designated as hedging instruments. Gains and losses on foreign currency forward contracts are recognized in other (income) expense, net and are offset by the gains or losses resulting from the settlement of the underlying foreign currency denominated assets and liabilities. At September 30, 2013, we had foreign currency forward contracts with a total notional amount of $51.5 million maturing within the next 3 months.

Credit Risk

By entering into derivative instrument contracts, we are exposed to counterparty credit risk. Counterparty credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is in an asset position, the counterparty has a liability to us, which creates credit risk for us. We attempt to minimize this risk by selecting counterparties with investment grade credit ratings and regularly monitoring our market position with each counterparty.

Credit-Risk Related Contingent Features

Our derivative instruments do not contain any credit-risk related contingent features.

The following tables present the required quantitative disclosures for our derivative instruments:


	Gain (Loss) Recognized in
	Other Comprehensive Income (Loss)
	(effective portion)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Derivatives designated as cash flow hedges:
Interest rate caps	$	(2.4	)	$	(4.0	)	$	0.9		$	(17.2	)
Forward-starting interest rate swaps	$	(1.3	)	$	(12.3	)	$	121.2		$	(12.3	)

Derivatives designated as net investment hedges:
Cross-currency rate swaps	$	(16.7	)	$	(2.8	)	$	(9.2	)	$	(0.1	)

	Gain (Loss) Reclassified from
	AOCI into Earnings
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Derivatives designated as cash flow hedges:
Interest rate caps - gain (loss) reclassified into interest expense, net	$	(1.7	)	$	(0.8	)	$	(4.3	)	$	(2.1	)
Interest rate caps - gain (loss) reclassified into other operating expenses (income), net	$	—		$	(8.4	)	$	—		$	(8.4	)

	Gain (Loss) Recognized in
	Other Operating Expenses (Income), Net
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	$	—		$	—		$	(0.9	)	$	—

The net amount of pre-tax gains and losses included in AOCI as of September 30, 2013 that we expect to be reclassified into earnings within the next 12 months is $8.5 million of losses.

Note 11. Share-Based Compensation

Share-based incentive awards are provided to employees, directors and other persons who provide services to the Company and its subsidiaries under the terms of various share-based compensation plans.

We are currently issuing stock awards under the Burger King Worldwide, Inc. Amended and Restated 2012 Omnibus Incentive Plan (the “Plan”), which increased the shares available for issuance under the Plan from 8,500,000 to 14,500,000. The Plan was approved by our stockholders at our annual meeting on May 15, 2013.

During the nine months ended September 30, 2013, approximately 3,015,000 stock options were granted. These awards generally cliff vest five years from the original grant date and expire ten years following the grant date.

We recorded $2.4 million of share-based compensation expense in selling, general and administrative expenses for the three months ended September 30, 2013 compared to $1.7 million for the three months ended September 30, 2012. We recorded $7.1 million of share-based compensation expense in selling, general and administrative expenses for the nine months ended September 30, 2013 compared to $9.3 million for the nine months ended September 30, 2012.

Note 12. Earnings Per Share

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period adjusted for the dilutive effect of stock options. We exclude stock options from the calculation of diluted earnings per share if the effect of including such stock options is anti-dilutive.

Basic and diluted earnings per share are as follows (in millions, except per share information):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Numerator:
Net income	$	68.2	$	6.6	$	166.9	$	69.1
Denominator:
Weighted average shares - basic		351.2		350.0		350.9		349.4
Effect of dilutive securities		6.9		5.0		6.8		3.9

Weighted average shares - diluted		358.1		355.0		357.7		353.3

Basic earnings per share	$	0.19	$	0.02	$	0.48	$	0.20
Diluted earnings per share	$	0.19	$	0.02	$	0.47	$	0.20
Anti-dilutive stock options outstanding		2.9		0.3		2.9		3.6

Note 13. Franchise and Property Revenues

Franchise and property revenues consist of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Franchise royalties	$	171.8	$	158.6	$	486.0	$	448.1
Property revenues		54.8		42.9		159.7		106.9
Franchise fees and other revenue		21.5		9.6		34.6		24.7

Total	$	248.1	$	211.1	$	680.3	$	579.7

The following table presents information relating to the analysis of our restaurant count for the geographic areas and periods indicated.


	U.S. & Canada			EMEA			LAC			APAC			Total
*Number of Company restaurants:*
Restaurant count at December 31, 2012		183			132			100			3			418
Openings		—			—			—			—			—
Closures		(4	)		—			(2	)		—			(6	)
Refranchisings		(127	)		(113	)		(98	)		—			(338	)

Restaurant count at September 30, 2013		52			19			—			3			74


*Number of franchise restaurants:*
Restaurant count at December 31, 2012		7,293			2,989			1,290			1,007			12,579
Openings		26			214			66			130			436
Closures		(94	)		(45	)		(3	)		(26	)		(168	)
Refranchisings		127			113			98			—			338

Restaurant count at September 30, 2013		7,352			3,271			1,451			1,111			13,185


*Number of system-wide restaurants:*
Restaurant count at December 31, 2012		7,476			3,121			1,390			1,010			12,997
Openings		26			214			66			130			436
Closures		(98	)		(45	)		(5	)		(26	)		(174	)
Refranchisings		—			—			—			—			—

Restaurant count at September 30, 2013		7,404			3,290			1,451			1,114			13,259

Note 14. Other Operating Expenses (Income), Net

Other operating expenses (income), net consists of the following:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013		2012
Net (gains) losses on disposal of assets, restaurant closures and refranchisings	$	0.3	$	14.1		$	0.6	$	15.2
Litigation settlements and reserves, net		0.1		0.8			0.6		1.3
Foreign exchange net losses (gains)		0.5		1.5			6.1		(5.3	)
Loss on termination of interest rate cap		—		8.7			—		8.7
Equity in net loss (income) from unconsolidated affiliates		2.9		(0.4	)		9.7		1.4
Other, net		2.8		5.6			4.1		4.9

Other operating expenses (income), net	$	6.6	$	30.3		$	21.1	$	26.2

Closures and Dispositions

Gains and losses on closures and dispositions represent sales of Company properties and other costs related to restaurant closures and refranchisings, and are recorded in other operating (income) expenses, net in the accompanying condensed consolidated statements of operations. Gains and losses recognized in the current period may reflect closures and refranchisings that occurred in previous periods.

During the three months ended September 30, 2013, net (gains) losses on disposal of assets, restaurant closures and refranchisings consisted of net losses associated with refranchisings of $0.4 million and net gains associated with asset disposals and restaurant closures of $0.1 million.

During the three months ended September 30, 2012, net (gains) losses on disposal of assets, restaurant closures and refranchisings consisted of net losses associated with refranchisings of $12.4 million and net losses associated with asset disposals and restaurant closures of $1.7 million.

During the nine months ended September 30, 2013, net (gains) losses on disposal of assets, restaurant closures and refranchisings consisted of net gains associated with refranchisings of $2.3 million, net losses from sale of subsidiaries of $1.0 million and net losses associated with asset disposals and restaurant closures of $1.9 million.

During the nine months ended September 30, 2012, net (gains) losses on disposal of assets, restaurant closures and refranchisings consisted of net gains associated with refranchisings of $4.8 million, impairment losses associated with long-lived assets for Company restaurants of $13.2 million and net losses associated with asset disposals and restaurant closures of $6.8 million.

Note 15. Guarantees, Commitments and Contingencies

In some of the matters described below, loss contingencies are not both probable and estimable in the view of management and, accordingly, reserves have not been established for those matters. However, information is provided below or included in Note 19, “Commitments and Contingencies” to the Consolidated Financial Statements of our Annual Report on Form 10-K filed with the SEC on February 22, 2013 regarding the nature of the contingency and, where specified, the amount of the claim associated with the loss contingency.

Litigation

On March 1, 2013, a putative class action lawsuit was filed against Burger King Corporation in the U.S. District Court of Maryland. The complaint alleges that BKC and/or its agents sent unsolicited advertisements by fax to thousands of consumers in Maryland and elsewhere in the United States to promote its home delivery program in violation of the Telephone Consumers Protection Act. It is not possible at this time to determine the likelihood of class certification in this case or reasonably estimate the probability or amount of liability for monetary damages on a class wide basis.

From time to time, we are involved in other legal proceedings arising in the ordinary course of business relating to matters including, but not limited to, disputes with franchisees, suppliers, employees and customers, as well as disputes over our intellectual property.

Guarantees

From time to time, we enter into agreements under which we guarantee loans made by third parties to qualified franchisees. As of September 30, 2013, there were $107.0 million of loans outstanding to franchisees that we had guaranteed under five such programs, with additional franchisee borrowing capacity of approximately $219.8 million remaining. Our maximum guarantee liability under these five programs is limited to an aggregate of $31.9 million, assuming full utilization of all borrowing capacity. As of September 30, 2013, the liability reflecting the fair value of these guarantee obligations was $4.3 million. No events of default have occurred and no significant payments have been made by us in connection with these guarantees through September 30, 2013.

Note 16. Segment Reporting

We operate in the fast food hamburger restaurant category of the quick service restaurant segment of the restaurant industry. Revenues include retail sales at Company restaurants and franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchise restaurants and franchise fees paid by franchisees as well as property income we derive from properties we lease or sublease to our franchisees. Our business is managed in four distinct geographic segments: (1) United States (“U.S.”) and Canada; (2) Europe, the Middle East and Africa (“EMEA”); (3) Latin America and the Caribbean (“LAC”); and (4) Asia Pacific (“APAC”).

Revenues by geographic segment consist of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Revenues:
U.S. and Canada	$	172.1	$	288.0	$	509.6	$	1,032.3
EMEA		71.3		111.7		265.7		354.2
LAC		18.1		33.5		65.2		96.3
APAC		13.6		22.5		40.6		83.6

Total revenues	$	275.1	$	455.7	$	881.1	$	1,566.4

Only the U.S. represented more than 10% of our total revenues during the three months ended September 30, 2013 and only the U.S. and Germany represented more than 10% of our total revenues during the three months ended September 30, 2012, the nine months ended September 30, 2013 and the nine months ended September 30, 2012. Revenues in the U.S. totaled $164.5 million for the three months ended September 30, 2013, compared to $246.0 million for the three months ended September 30, 2012. Revenues in the U.S. totaled $455.6 million for the nine months ended September 30, 2013, compared to $916.6 million for the nine months ended September 30, 2012. Revenues in Germany totaled $98.1 million for the nine months ended September 30, 2013, $53.7 million for the three months ended September 30, 2012 and $161.2 million for the nine months ended September 30, 2012.

The unallocated amounts reflected in the table below include 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.

Our measure of segment income is adjusted EBITDA. 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 and assists management in comparing segment performance by removing the impact of certain items that management believes do not reflect our core operations. A reconciliation of segment income to net income consists of the following:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Segment Income:
U.S. and Canada	$	120.9		$	112.1		$	326.6		$	341.1
EMEA		49.2			42.8			136.5			118.4
LAC		16.0			17.2			46.6			50.2
APAC		11.4			9.9			33.2			28.7
Unallocated Management G&A		(21.5	)		(19.1	)		(59.4	)		(58.5	)

Adjusted EBITDA		176.0			162.9			483.5			479.9
Share-based compensation and non-cash incentive compensation expense		3.5			2.6			9.4			6.1
Global portfolio realignment project costs		4.7			7.0			23.6			20.1
Business combination agreement expenses		—			0.6			—			25.7
Other operating expenses (income), net		6.6			30.3			21.1			26.2

EBITDA		161.2			122.4			429.4			401.8
Depreciation and amortization		15.7			28.6			48.3			96.0

Income from operations		145.5			93.8			381.1			305.8
Interest expense, net		50.2			57.3			149.3			173.6
Loss on early extinguishment of debt		—			23.0			—			34.2
Income tax expense		27.1			6.9			64.9			28.9

Net income	$	68.2		$	6.6		$	166.9		$	69.1

Note 17. Supplemental Financial Information

On October 19, 2010, Burger King Corporation (“BKC”) issued the Senior Notes. The Senior Notes are irrevocably and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by Burger King Holdings, Inc. (“Holdings”) and the U.S. subsidiaries of BKC (the “Guarantors”). On April 19, 2011, Burger King Capital Holdings, LLC (“BKCH”) and Burger King Capital Finance, Inc. (“BKCF” and together with BKCH, the “Issuers”) issued the Discount Notes. In August 2012, the Company entered into a Supplemental Indenture with respect to the Senior Notes and a Supplemental Indenture with respect to the Discount Notes (the “Supplemental Indentures”) to guarantee BKC’s obligations under the Senior Notes and the Issuers’ obligations under the Discount Notes. The Supplemental Indentures allow the financial reporting obligation under the Indentures to be satisfied through the reporting of the Company’s consolidated financial information. The 2012 Credit Agreement allows the financial reporting obligation of BKC to be satisfied through the reporting of the Company’s consolidated financial information, provided that the financial information of BKC and its subsidiaries is presented on a standalone basis. The non-U.S. subsidiaries are identified below as Non-Guarantors.

The following represents the condensed consolidating financial information for BKC (Issuer), the Guarantors and the non-U.S. subsidiaries of BKC (the “Non-Guarantors”), together with eliminations, as of and for the periods indicated. The condensed consolidating financial information of BKW is combined with the financial information of BKCF and presented in a single column under the heading “BKW.” Selling, general and administrative expenses in the condensed consolidating statements of operations only pertain to professional fees and other transaction costs incurred by BKW associated with the Business Combination Agreement. The consolidating financial information may not necessarily be indicative of the financial position, results of operations or cash flows had BKC, Guarantors and Non-Guarantors operated as independent entities.

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

As of September 30, 2013

(Unaudited)


	BKW			BKCH			Issuer			Guarantors			Non- Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	3.3		$	—		$	600.6		$	—		$	160.4		$	—		$	764.3
Trade and notes receivable, net		—			—			118.2			—			46.4			—			164.6
Prepaids and other current assets, net		—			0.7			76.5			—			22.4			—			99.6
Deferred income taxes, net		0.1			1.7			32.3			—			3.9			—			38.0

Total current assets		3.4			2.4			827.6			—			233.1			—			1,066.5

Property and equipment, net		—			—			732.2			—			72.4			—			804.6
Intangible assets, net		—			—			1,536.5			—			1,262.8			—			2,799.3
Goodwill		—			—			359.6			—			266.9			—			626.5
Net investment in property leased to franchisees		—			—			155.4			—			12.0			—			167.4
Intercompany receivable		10.2			—			58.0			—			—			(68.2	)		—
Investment in subsidiaries		1,380.8			1,792.5			1,576.2			1,792.5			—			(6,542.0	)		—
Other assets, net		—			5.9			239.1			—			61.9			—			306.9

Total assets	$	1,394.4		$	1,800.8		$	5,484.6		$	1,792.5		$	1,909.1		$	(6,610.2	)	$	5,771.2

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts and drafts payable	$	—		$	—		$	20.6		$	—		$	5.2		$	—		$	25.8
Accrued advertising		—			—			69.5			—			31.7			—			101.2
Other accrued liabilities		(0.4	)		(11.8	)		157.0			—			37.2			—			182.0
Current portion of long term debt and capital leases		—			—			71.8			—			3.2			—			75.0

Total current liabilities		(0.4	)		(11.8	)		318.9			—			77.3			—			384.0

Term debt, net of current portion		—			441.1			2,449.7			—			—			—			2,890.8
Capital leases, net of current portion		—			—			59.5			—			19.0			—			78.5
Other liabilities, net		0.4			—			308.8			—			45.6			—			354.8
Payables to affiliates		—			0.5			—			—			67.7			(68.2	)		—
Deferred income taxes, net		(4.2	)		(0.3	)		575.9			—			93.1			—			664.5

Total liabilities		(4.2	)		429.5			3,712.8			—			302.7			(68.2	)		4,372.6

Stockholders’ equity:
Common stock		3.5			—			—			—			—			—			3.5
Additional paid-in capital		1,223.0			1,110.2			1,442.2			1,443.2			1,313.3			(5,308.9	)		1,223.0
Retained earnings		183.3			281.8			361.5			360.5			307.7			(1,311.5	)		183.3
Accumulated other comprehensive loss		(11.2	)		(11.2	)		(11.2	)		(11.2	)		(44.8	)		78.4			(11.2	)

Total stockholders’ equity		1,398.6			1,380.8			1,792.5			1,792.5			1,576.2			(6,542.0	)		1,398.6

Total liabilities and stockholders’ equity	$	1,394.4		$	1,810.3		$	5,505.3		$	1,792.5		$	1,878.9		$	(6,610.2	)	$	5,771.2

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

As of December 31, 2012


	BKW			BKCH			Issuer			Guarantors			Non- Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	0.1		$	—		$	355.3		$	—		$	191.3		$	—		$	546.7
Trade and notes receivable, net		—			—			128.8			—			50.2			—			179.0
Prepaids and other current assets, net		—			0.6			70.9			—			19.8			—			91.3
Deferred income taxes, net		0.7			20.3			36.3			—			16.2			—			73.5

Total current assets		0.8			20.9			591.3			—			277.5			—			890.5

Property and equipment, net		—			—			754.7			—			130.5			—			885.2
Intangible assets, net		—			—			1,554.7			—			1,256.5			—			2,811.2
Goodwill		—			—			355.0			—			264.2			—			619.2
Net investment in property leased to franchisees		—			—			167.0			—			13.4			—			180.4
Intercompany receivable		3.8			—			190.9			—			—			(194.7	)		—
Investment in subsidiaries		1,169.5			1,537.6			1,517.2			1,537.6			—			(5,761.9	)		—
Other assets, net		—			6.5			106.6			—			64.4			—			177.5

Total assets	$	1,174.1		$	1,565.0		$	5,237.4		$	1,537.6		$	2,006.5		$	(5,956.6	)	$	5,564.0

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts and drafts payable	$	—		$	—		$	45.0		$	—		$	23.7		$	—		$	68.7
Accrued advertising		—			—			30.7			—			35.8			—			66.5
Other accrued liabilities		(0.3	)		(11.8	)		157.1			—			61.8			—			206.8
Current portion of long term debt and capital leases		—			—			52.6			—			3.2			—			55.8

Total current liabilities		(0.3	)		(11.8	)		285.4			—			124.5			—			397.8

Term debt, net of current portion		—			407.1			2,498.0			—			—			—			2,905.1
Capital leases, net of current portion		—			—			66.2			—			22.2			—			88.4
Other liabilities, net		0.2			—			322.6			—			59.6			—			382.4
Payables to affiliates		3.6			0.5			—			—			190.6			(194.7	)		—
Deferred income taxes, net		(4.4	)		(0.3	)		527.6			—			92.4			—			615.3

Total liabilities		(0.9	)		395.5			3,699.8			—			489.3			(194.7	)		4,389.0

Stockholders’ equity:
Common stock		3.5			—			—			—			—			—			3.5
Additional paid-in capital		1,205.7			1,164.9			1,478.3			1,479.3			1,386.9			(5,509.4	)		1,205.7
Retained earnings		76.1			114.9			169.6			168.6			206.7			(659.8	)		76.1
Accumulated other comprehensive loss		(110.3	)		(110.3	)		(110.3	)		(110.3	)		(76.4	)		407.3			(110.3	)

Total stockholders’ equity		1,175.0			1,169.5			1,537.6			1,537.6			1,517.2			(5,761.9	)		1,175.0

Total liabilities and stockholders’ equity	$	1,174.1		$	1,565.0		$	5,237.4		$	1,537.6		$	2,006.5		$	(5,956.6	)	$	5,564.0

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidating Statements of Operations

Three Months Ended September 30, 2013

(Unaudited)


	BKW		BKCH			Issuer			Guarantors		Non- Guarantors		Eliminations			Consolidated
Revenues:
Company restaurant revenues	$	—	$	—		$	18.7		$	—	$	8.3	$	—		$	27.0
Franchise and property revenues		—		—			167.1			—		81.0		—			248.1
Intercompany revenues		—		—			—			—		—		—			—

Total revenues		—		—			185.8			—		89.3		—			275.1
Company restaurant expenses:
Food, paper and product costs		—		—			5.9			—		2.6		—			8.5
Payroll and employee benefits		—		—			5.1			—		2.3		—			7.4
Occupancy and other operating costs		—		—			4.6			—		2.4		—			7.0

Total Company restaurant expenses		—		—			15.6			—		7.3		—			22.9
Franchise and property expenses		—		—			29.0			—		11.5		—			40.5
Selling, general and administrative expenses		—		—			43.8			—		15.8		—			59.6
Intercompany expenses		—		—			(0.6	)		—		0.6		—			—
Other operating expenses (income), net		—		—			0.6			—		6.0		—			6.6

Total operating costs and expenses		—		—			88.4			—		41.2		—			129.6

Income from operations		—		—			97.4			—		48.1		—			145.5
Interest expense, net		—		11.8			37.6			—		0.8		—			50.2
Loss on early extinguishment of debt		—		—			—			—		—		—			—

Income (loss) before income taxes		—		(11.8	)		59.8			—		47.3		—			95.3
Income tax expense (benefit)		—		(3.2	)		17.2			—		13.1		—			27.1

Income (loss) from continuing operations		—		(8.6	)		42.6			—		34.2		—			68.2
Equity in earnings of subsidiaries		68.2		76.8			34.2			76.8		—		(256.0	)		—

Net income (loss)	$	68.2	$	68.2		$	76.8		$	76.8	$	34.2	$	(256.0	)	$	68.2


Total comprehensive income (loss)	$	100.9	$	100.9		$	109.5		$	109.5	$	78.8	$	(398.7	)	$	100.9

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidating Statements of Operations

Nine Months Ended September 30, 2013

(Unaudited)


	BKW		BKCH			Issuer			Guarantors		Non- Guarantors			Eliminations			Consolidated
Revenues:
Company restaurant revenues	$	—	$	—		$	57.2		$	—	$	143.6		$	—		$	200.8
Franchise and property revenues		—		—			455.6			—		224.7			—			680.3
Intercompany revenues		—		—			1.6			—		(1.6	)		—			—

Total revenues		—		—			514.4			—		366.7			—			881.1
Company restaurant expenses:
Food, paper and product costs		—		—			18.2			—		45.6			—			63.8
Payroll and employee benefits		—		—			16.0			—		45.6			—			61.6
Occupancy and other operating costs		—		—			15.7			—		36.5			—			52.2

Total Company restaurant expenses		—		—			49.9			—		127.7			—			177.6
Franchise and property expenses		—		—			81.2			—		32.3			—			113.5
Selling, general and administrative expenses		—		—			131.0			—		56.8			—			187.8
Intercompany expenses		—		—			(0.9	)		—		0.9			—			—
Other operating expenses, net		—		—			14.8			—		6.3			—			21.1

Total operating costs and expenses		—		—			276.0			—		224.0			—			500.0

Income from operations		—		—			238.4			—		142.7			—			381.1
Interest expense, net		—		34.5			111.8			—		3.0			—			149.3
Loss on early extinguishment of debt		—		—			—			—		—			—			—

Income (loss) before income taxes		—		(34.5	)		126.6			—		139.7			—			231.8
Income tax expense (benefit)		—		(9.5	)		35.7			—		38.7			—			64.9

Income (loss) from continuing operations		—		(25.0	)		90.9			—		101.0			—			166.9
Equity in earnings of subsidiaries		166.9		191.9			101.0			191.9		—			(651.7	)		—

Net income (loss)	$	166.9	$	166.9		$	191.9		$	191.9	$	101.0		$	(651.7	)	$	166.9


Total comprehensive income (loss)	$	266.0	$	266.0		$	291.0		$	291.0	$	132.6		$	(980.6	)	$	266.0

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidating Statements of Operations

Three Months Ended September 30, 2012

(Unaudited)


	BKW			BKCH			Issuer			Guarantors		Non- Guarantors			Eliminations			Consolidated
Revenues:
Company restaurant revenues	$	—		$	—		$	126.8		$	—	$	117.8		$	—		$	244.6
Franchise and property revenues		—			—			141.9			—		69.2			—			211.1
Intercompany revenues		—			—			1.7			—		(5.0	)		3.3			—

Total revenues		—			—			270.4			—		182.0			3.3			455.7
Company restaurant expenses:
Food, paper and product costs		—			—			41.6			—		38.1			—			79.7
Payroll and employee benefits		—			—			37.4			—		34.5			—			71.9
Occupancy and other operating costs		—			—			32.6			—		32.1			—			64.7

Total Company restaurant expenses		—			—			111.6			—		104.7			—			216.3
Franchise and property expenses		—			—			27.7			—		10.0			—			37.7
Selling, general and administrative expenses		(1.7	)		—			52.1			—		27.2			—			77.6
Intercompany expenses		—			—			(1.3	)		—		(2.0	)		3.3			—
Other operating expenses, net		—			—			12.7			—		17.6			—			30.3

Total operating costs and expenses		(1.7	)		—			202.8			—		157.5			3.3			361.9

Income (loss) from operations		1.7			—			67.6			—		24.5			—			93.8
Interest expense, net		—			10.7			44.1			—		2.5			—			57.3
Loss on early extinguishment of debt		—			—			23.0			—		—			—			23.0

Income (loss) before income taxes		1.7			(10.7	)		0.5			—		22.0			—			13.5
Income tax expense (benefit)		3.6			(3.6	)		5.1			—		1.8			—			6.9

Income (loss) from continuing operations		(1.9	)		(7.1	)		(4.6	)		—		20.2			—			6.6
Equity in earnings of subsidiaries		8.5			15.6			20.2			15.6		—			(59.9	)		—

Net income (loss)	$	6.6		$	8.5		$	15.6		$	15.6	$	20.2		$	(59.9	)	$	6.6


Total comprehensive income (loss)	$	24.0		$	25.9		$	33.0		$	33.0	$	41.8		$	(133.7	)	$	24.0

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidating Statements of Operations

Nine Months Ended September 30, 2012

(Unaudited)


	BKW			BKCH			Issuer			Guarantors		Non- Guarantors			Eliminations			Consolidated
Revenues:
Company restaurant revenues	$	—		$	—		$	590.9		$	—	$	395.8		$	—		$	986.7
Franchise and property revenues		—			—			381.6			—		198.1			—			579.7
Intercompany revenues		—			—			5.0			—		(5.0	)		—			—

Total revenues		—			—			977.5			—		588.9			—			1,566.4
Company restaurant expenses:
Food, paper and product costs		—			—			196.0			—		128.7			—			324.7
Payroll and employee benefits		—			—			177.5			—		114.1			—			291.6
Occupancy and other operating costs		—			—			145.2			—		114.5			—			259.7

Total Company restaurant expenses		—			—			518.7			—		357.3			—			876.0
Franchise and property expenses		—			—			62.7			—		27.3			—			90.0
Selling, general and administrative expenses		14.0			—			168.1			—		86.3			—			268.4
Intercompany expenses		—			—			(1.3	)		—		1.3			—			—
Other operating expenses, net		—			—			35.1			—		(8.9	)		—			26.2

Total operating costs and expenses		14.0			—			783.3			—		463.3			—			1,260.6

Income (loss) from operations		(14.0	)		—			194.2			—		125.6			—			305.8
Interest expense, net		—			33.1			133.3			—		7.2			—			173.6
Loss on early extinguishment of debt		—			9.7			24.5			—		—			—			34.2

Income (loss) before income taxes		(14.0	)		(42.8	)		36.4			—		118.4			—			98.0
Income tax expense (benefit)		(0.4	)		(11.9	)		24.2			—		17.0			—			28.9

Income (loss) from continuing operations		(13.6	)		(30.9	)		12.2			—		101.4			—			69.1
Equity in earnings of subsidiaries		82.7			113.6			101.4			113.6		—			(411.3	)		—

Net income (loss)	$	69.1		$	82.7		$	113.6		$	113.6	$	101.4		$	(411.3	)	$	69.1


Total comprehensive income (loss)	$	57.0		$	70.6		$	101.5		$	101.5	$	96.0		$	(369.6	)	$	57.0

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidating Statements of Cash Flows

Nine Months Ended September 30, 2013

(Unaudited)


	BKW			BKCH			Issuer			Guarantor			Non- Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	166.9		$	166.9		$	191.9		$	191.9		$	101.0		$	(651.7	)	$	166.9
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in earnings of subsidiary		(166.9	)		(191.9	)		(101.0	)		(191.9	)		—			651.7			—
Depreciation and amortization		—			—			32.6			—			15.8			—			48.4
Amortization of deferred financing cost and debt issuance discount		—			34.5			7.2			—			—			—			41.7
Equity in net loss from unconsolidated affiliates		—			—			4.5			—			5.2			—			9.7
Loss (gain) on remeasurement of foreign denominated transactions		—			—			(0.5	)		—			1.5			—			1.0
Amortization of defined benefit pension and postretirement items		—			—			(1.1	)		—			(0.5	)		—			(1.6	)
Realized loss on terminated caps/swaps		—			—			4.3			—			—			—			4.3
Net loss (gain) on refranchisings and dispositions of assets		—			—			5.4			—			(7.9	)		—			(2.5	)
Bad debt expense, net of recoveries		—			—			2.2			—			—			—			2.2
Share-based compensation		—			—			5.4			—			1.7			—			7.1
Deferred income taxes		—			16.5			7.6			—			9.2			—			33.3
Changes in current assets and liabilities, excluding dispositions:
Trade and notes receivables		—			—			7.7			—			(1.4	)		—			6.3
Prepaids and other current assets		—			—			(1.0	)		—			0.8			—			(0.2	)
Accounts and drafts payable		—			—			(24.6	)		—			(11.1	)		—			(35.7	)
Accrued advertising		—			—			14.0			—			(4.3	)		—			9.7
Other accrued liabilities					—			9.5			—			(14.4	)		—			(4.9	)
Other long-term assets and liabilities		—						(19.2	)		—			1.2			—			(18.0	)

Net cash provided by operating activities		—			26.0			144.9			—			96.8			—			267.7

Cash flows from investing activities:
Payments for property and equipment		—			—			(8.5	)		—			(2.3	)		—			(10.8	)

Proceeds from refranchisings, disposition of assets and restaurant closures		—			—			45.1			—			3.6			—			48.7
Payments for acquired franchisee operations, net of cash acquired		—			—			(11.9	)		—			—			—			(11.9	)
Return of investment on direct financing leases		—			—			10.9			—			1.0			—			11.9
Other investing activities		—			—			0.2			—			—			—			0.2

Net cash provided by (used for) investing activities		—			—			35.8			—			2.3			—			38.1

Cash flows from financing activities:
Repayments of term debt and capital leases		—			—			(35.5	)		—			(2.6	)		—			(38.1	)
Proceeds from stock option exercises		2.7			—			—			—			—			—			2.7
Excess tax benefits from share-based compensation		—			—			4.2			—			—			—			4.2
Dividends paid on common stock		(59.7	)		—			—			—			—			—			(59.7	)
Intercompany financing		60.2			(26.0	)		95.9			—			(130.1	)					—

Net cash provided by (used for) financing activities		3.2			(26.0	)		64.6			—			(132.7	)		—			(90.9	)

Effect of exchange rates on cash and cash equivalents		—			—			—			—			2.7			—			2.7
Increase (decrease) in cash and cash equivalents		3.2			—			245.3			—			(30.9	)		—			217.6
Cash and cash equivalents at beginning of period		0.1			—			355.3			—			191.3			—			546.7

Cash and cash equivalents at end of period	$	3.3		$	—		$	600.6		$	—		$	160.4		$	—		$	764.3

BURGER KING WORLDWIDE, INC. AND SUBSIDIARIES

Condensed Consolidating Statements of Cash Flows

Nine Months Ended September 30, 2012

(Unaudited)


	BKW			BKCH			Issuer			Guarantor			Non- Guarantor			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	69.1		$	82.7		$	113.6		$	113.6		$	101.4		$	(411.3	)		69.1
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Equity in earnings of subsidiary		(82.7	)		(113.6	)		(101.4	)		(113.6	)		—			411.3			—
Depreciation and amortization		—			—			65.6			—			30.4			—			96.0
Loss on early extinguishment of debt		—			9.7			24.5			—			—			—			34.2
Amortization of deferred financing cost and debt issuance discount		—			33.2			10.4			—			—			—			43.6
Equity in net loss from unconsolidated affiliates		—			—			0.1			—			1.3			—			1.4
Loss (gain) on remeasurement of foreign denominated transactions		—			—			(3.7	)		—			(1.7	)		—			(5.4	)
Amortization of defined benefit pension and postretirement items		—			—			(1.8	)		—			—			—			(1.8	)
Realized loss on terminated caps/swaps		—			—			10.7			—			—			—			10.7
Net loss (gain) on refranchisings and dispositions of assets		—			—			20.3			—			(9.9	)		—			10.4
Bad debt expense, net of recoveries		—			—			3.0			—			(0.1	)		—			2.9
Share-based compensation		—			—			8.4			—			0.9			—			9.3
Deferred income taxes		—			0.1			7.9			—			—			—			8.0
Changes in current assets and liabilities, excluding dispositions:
Trade and notes receivables		—			—			(6.7	)		—			2.6			—			(4.1	)
Prepaids and other current assets		—			—			(4.5	)		—			(4.4	)		—			(8.9	)
Accounts and drafts payable		—			—			(18.5	)		—			(16.2	)		—			(34.7	)
Accrued advertising		—			—			(41.0	)		—			10.0			—			(31.0	)
Other accrued liabilities		4.8			(18.4	)		(7.1	)		—			(27.0	)		—			(47.7	)
Other long-term assets and liabilities		—			—			(11.3	)		—			3.9			—			(7.4	)

Net cash provided by (used for) operating activities		(8.8	)		(6.3	)		68.5			—			91.2			—			144.6

Cash flows from investing activities:
Payments for property and equipment		—			—			(29.5	)		—			(8.2	)		—			(37.7	)
Proceeds from refranchisings, disposition of assets and restaurant closures		—			—			54.3			—			15.7			—			70.0
Payments for acquired franchisee operations, net of cash acquired		—			—			—			—			(15.3	)		—			(15.3	)
Return of investment on direct financing leases		—			—			9.4			—			1.0			—			10.4

Net cash provided by (used for) investing activities		—			—			34.2			—			(6.8	)		—			27.4

Cash flows from financing activities:
Proceeds from term debt		—			—			1,733.5			—			—			—			1,733.5
Repayments of term debt and capital leases		—			—			(1,752.6	)		—			(2.1	)		—			(1,754.7	)
Extinguishment of debt		—			(62.6	)		(50.2	)		—			—			—			(112.8	)
Payment of financing costs		—			—			(16.0	)		—			—			—			(16.0	)
Proceeds from stock option exercises		1.3			—			—			—			—			—			1.3
Intercompany financing		7.9			68.9			(77.0	)		—			0.2			—			—

Net cash provided by (used for) financing activities		9.2			6.3			(162.3	)		—			(1.9	)		—			(148.7	)

Effect of exchange rates on cash and cash equivalents		—			—			—			—			0.5			—			0.5
Increase (decrease) in cash and cash equivalents		0.4			0.0			(59.6	)		—			83.0			—			23.8
Cash and cash equivalents at beginning of period		0.2			—			287.1			—			171.7			—			459.0

Cash and cash equivalents at end of period	$	0.6		$	0.0		$	227.5		$	—		$	254.7		$	—		$	482.8

Note 18. Subsequent Events

Dividend

On October 27, 2013, our Board of Directors approved a cash dividend to shareholders of $0.07 per share that will be paid on November 26, 2013 to shareholders of record at the close of business on November 12, 2013. Future dividends will be determined at the discretion of the Board of Directors.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion together with our unaudited condensed consolidated financial statements and the related notes thereto included in Part I, Item 1 “Financial Statements.” Unless the context otherwise requires, all references to “we,” “us” and “our” refer to Burger King Worldwide, Inc. and its subsidiaries, including Burger King Holdings, Inc. (“Holdings”) and Burger King Corporation (“BKC”).

Operating results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for the fiscal year and our key business measures, as discussed below, may decrease for any future period. Unless otherwise stated, comparable sales growth and sales growth are presented on a system-wide basis, which means they include sales at both Company restaurants and franchise restaurants. 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. System-wide results are driven primarily by our franchise restaurants, as approximately 99% of our system-wide restaurants are franchised.

Overview

Burger King Worldwide, Inc. (“BKW”, the “Company” or “we”) is a Delaware corporation formed on April 2, 2012 and the indirect parent of Burger King Corporation (“BKC”), a Florida corporation that franchises and operates fast food hamburger restaurants, principally under the Burger King® brand. We are the world’s second largest fast food hamburger restaurant, or FFHR, chain as measured by the total number of restaurants. As of September 30, 2013, we owned or franchised a total of 13,259 restaurants in 91 countries and U.S. territories. Of these restaurants, 74 were Company restaurants and 13,185, or approximately 99% of all Burger King restaurants, were owned by our franchisees. Our restaurants are limited service restaurants that feature flame-grilled hamburgers, chicken and other specialty sandwiches, french fries, soft drinks and other affordably-priced food items. We believe our restaurants appeal to a broad spectrum of consumers, with multiple day parts appealing to different customer groups. During our more than 50 years of operating history, we have developed a scalable and cost-efficient quick service hamburger restaurant model that offers customers fast, delicious food at affordable prices.

We generate revenues from three sources: (1) franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchise restaurants and fees paid by franchisees, (2) property income from properties that we lease or sublease to franchisees, and (3) retail sales at Company restaurants. Revenues derived from our franchise system comprised 90% of our revenues during the three months ended September 30, 2013 compared to 46% of our revenues during the three months ended September 30, 2012, reflecting the refranchisings completed during the 12-month period in connection with our global portfolio realignment project (as defined below).

Recent Events and Factors Affecting Comparability

Global Portfolio Realignment Project

During 2011, we initiated a project to realign our global restaurant portfolio by refranchising our Company restaurants and establishing strategic partnerships to accelerate development through joint ventures and master franchise and development agreements (the “global portfolio realignment project”). As a result of the global portfolio realignment project, we incurred $4.7 million of general and administrative expenses consisting of professional fees and severance, including $1.5 million of severance related to the departure of our Chairman, North America, during the three months ended September 30, 2013, $7.0 million during the three months ended September 30, 2012, $23.6 million during the nine months ended September 30, 2013 and $20.1 million during the nine months ended September 30, 2012.

During the nine months ended September 30, 2013, we refranchised 33 restaurants in the United States and 94 restaurants in Canada and entered into a master franchise and development agreement for Canada with the franchisee. During the same period, we refranchised 98 Company restaurants in Mexico to a joint venture with an existing franchisee in exchange for cash and a minority interest in the joint venture and entered into a master franchise and development agreement for Mexico with the joint venture. We also refranchised 91 restaurants in Germany and 22 restaurants in Spain. Upon completion of our refranchising initiative, we will continue to own and operate 52 restaurants in Miami, Florida, which we expect to use as a base for the testing of new products and systems. We expect to complete our refranchising initiative by the end of 2013, at which time our global portfolio realignment project will also be completed. We expect to continue to enter into joint ventures and master franchise and development agreements as part of our business strategy to accelerate development, but we do not intend to make any adjustments based on expenses that we incur in connection with these arrangements.

Merger with Justice

Business Combination Agreement Expenses

On April 3, 2012, Burger King Worldwide Holdings, Inc., a Delaware corporation and the indirect parent company of Holdings (“Worldwide”), entered into a Business Combination Agreement and Plan of Merger with Justice Holdings Limited and its affiliates (the “Business Combination Agreement”). We did not incur any expenses during the three and nine months ended September 30, 2013 related to the Business Combination Agreement. We recorded $0.6 million of general and administrative expenses associated with the Business Combination Agreement during the three months ended September 30, 2012, consisting of professional fees and other transaction costs. We recorded $25.7 million of general and administrative expenses associated with the Business Combination Agreement during the nine months ended September 30, 2012, consisting of $5.9 million of one-time share-based compensation expense as a result of the increase in our equity value implied by the Business Combination Agreement and $19.8 million of professional fees and other transaction costs.

Operating Metrics and Key Financial Measures

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

•

System-wide 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.

•

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.

•

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. Company restaurants refranchised during a period will be included in the calculation of comparable sales growth for franchise restaurants during the period regardless of when the refranchising occurred.

•

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.

Comparable sales growth and system-wide 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”).

In addition, we evaluate our Company restaurants and assess our total business based on the following key financial measures:

•

Company restaurant margin, or CRM, is derived by subtracting Company restaurant expenses from Company restaurant revenues for a stated period, which we analyze as a percentage of Company restaurant revenues, a metric we refer to as Company restaurant margin %, or CRM%. We review the relationship between our Company restaurant expenses and Company restaurant revenues in the context of how those relationships affect CRM and CRM%. As a result of our refranchising initiative, the impact of CRM and CRM% on our operating results has substantially diminished.

•

Adjusted EBITDA represents earnings (net income or loss) before interest, taxes, depreciation and amortization adjusted to exclude specifically identified items that management believes do not directly reflect our core operations. See Non-GAAP Reconciliations .

Results of Operations for the Three and Nine Months Ended September 30, 2013 and 2012

Tabular amounts in millions of dollars unless noted otherwise.

The following tables present our results of operations and key business metrics for the three and nine months ended September 30, 2013 and 2012:


	Three Months Ended						Variance						Nine Months Ended						Variance
	September 30,						$			%			September 30,						$			%
	2013			2012			Favorable / (Unfavorable)						2013			2012			Favorable / (Unfavorable)

Revenues:
Company restaurant revenues	$	27.0		$	244.6		$	(217.6	)		(89.0	)%	$	200.8		$	986.7		$	(785.9	)		(79.6	)%
Franchise and property revenues		248.1			211.1			37.0			17.5	%		680.3			579.7			100.6			17.4	%

Total revenues		275.1			455.7			(180.6	)		(39.6	)%		881.1			1,566.4			(685.3	)		(43.8	)%
Company restaurant expenses:
Food, paper and product costs		8.5			79.7			71.2			89.3	%		63.8			324.7			260.9			80.4	%
Payroll and employee benefits		7.4			71.9			64.5			89.7	%		61.6			291.6			230.0			78.9	%
Occupancy and other operating costs		7.0			64.7			57.7			89.2	%		52.2			259.7			207.5			79.9	%

Total Company restaurant expenses		22.9			216.3			193.4			89.4	%		177.6			876.0			698.4			79.7	%
Franchise and property expenses		40.5			37.7			(2.8	)		(7.4	)%		113.5			90.0			(23.5	)		(26.1	)%
Selling, general and administrative expenses		59.6			77.6			18.0			23.2	%		187.8			268.4			80.6			30.0	%
Other operating expenses (income), net		6.6			30.3			23.7			78.2	%		21.1			26.2			5.1			19.5	%

Total operating costs and expenses		129.6			361.9			232.3			64.2	%		500.0			1,260.6			760.6			60.3	%

Income from operations		145.5			93.8			51.7			55.1	%		381.1			305.8			75.3			24.6	%
Interest expense, net		50.2			57.3			7.1			12.4	%		149.3			173.6			24.3			14.0	%
Loss on early extinguishment of debt		—			23.0			23.0			100.0	%		—			34.2			34.2			100.0	%

Income before income taxes		95.3			13.5			81.8			605.9	%		231.8			98.0			133.8			136.5	%
Income tax expense		27.1			6.9			(20.2	)		(292.8	)%		64.9			28.9			(36.0	)		(124.6	)%

Net income	$	68.2		$	6.6		$	61.6			933.3	%	$	166.9		$	69.1		$	97.8			141.5	%


FX Impact Favorable/(Unfavorable)

Consolidated revenues	$	(2.4	)	$	(14.9	)							$	(5.2	)	$	(40.4	)
Consolidated CRM		0.1			(1.1	)								0.1			(3.0	)
Consolidated SG&A		(0.6	)		2.4									(0.9	)		5.7
Consolidated income from operations		(3.4	)		(3.7	)								(6.2	)		(11.7	)
Consolidated net income		(3.4	)		(3.2	)								(6.2	)		(9.9	)
Consolidated Adjusted EBITDA		(3.0	)		(6.4	)								(6.0	)		(18.0	)

Key Business Metrics

System-wide sales growth		4.9	%		3.6	%								3.7	%		5.8	%
Franchise sales	$	4,184.8		$	3,830.0								$	11,916.1		$	10,814.9
Comparable sales growth
Company		(0.9	)%		0.4	%								(1.1	)%		4.3	%
Franchise		0.9	%		1.5	%								0.1	%		3.3	%
System		0.9	%		1.4	%								0.0	%		3.4	%
Net Restaurant Growth (NRG)
Company		—			(2	)								(6	)		(10	)
Franchise		133			65									268			165
System		133			63									262			155
Net refranchisings		—			221									338			690
Restaurant counts at period end
Company		74			595									74			595
Franchise		13,185			12,072									13,185			12,072
System		13,259			12,667									13,259			12,667
CRM %		15.2	%		11.6	%								11.6	%		11.2	%

System Comparable Sales Growth

During the three months ended September 30, 2013, worldwide system comparable sales growth was driven by comparable sales growth in the EMEA, LAC and APAC segments, partially offset by negative comparable sales growth in the U.S. and Canada segment.

During the nine months ended September 30, 2013, worldwide system comparable sales growth was flat, with comparable sales growth in the EMEA and APAC segments offset by negative comparable sales growth in the U.S. and Canada and LAC segments.

Company restaurants

During the three and nine months ended September 30, 2013, Company restaurant revenues decreased primarily due to the net refranchising of 519 Company restaurants during the trailing twelve-month period.

During the three and nine months ended September 30, 2013, CRM% increased primarily as a result of the net refranchising of 519 Company restaurants with lower than average CRM% during the trailing twelve-month period.

Franchise and Property

During the three months ended September 30, 2013, franchise and property revenues increased due to higher royalties and rental income driven by franchise comparable sales growth in EMEA, APAC and LAC, franchise NRG of 594 restaurants during the trailing twelve-month period and the net refranchising of 519 Company restaurants during the same period. Additionally, franchise fees and other revenue increased as a result of higher franchise fees in EMEA and APAC and other revenue in the U.S. and Canada. These factors were partially offset by negative franchise comparable sales growth in the U.S. and Canada and unfavorable FX impact.

During the nine months ended September 30, 2013, franchise and property revenues increased due to higher royalties and rental income driven by franchise comparable sales growth in EMEA and APAC, franchise NRG of 594 restaurants during the trailing twelve-month period and the net refranchising of 519 Company restaurants during the same period. Additionally, franchise fees and other revenue increased as a result of higher franchise fees in EMEA and APAC and other revenue in the U.S. and Canada. These factors were partially offset by negative franchise comparable sales growth in the U.S. and Canada and LAC and unfavorable FX impact.

During the three and nine months ended September 30, 2013, franchise and property expenses increased primarily due to new leases and subleases associated with additional restaurants leased or subleased to franchisees as a result of the refranchisings partially offset by a decrease in bad debt expense and favorable FX impact.

Selling, general and administrative expenses

Our selling, general and administrative expenses were comprised of the following:


	Three Months Ended September 30,				Variance						Nine Months Ended September 30,				Variance
	Three Months Ended September 30,				$			%			Nine Months Ended September 30,				$			%
	2013		2012		Favorable / (Unfavorable)						2013		2012		Favorable / (Unfavorable)

Selling expenses	$	1.3	$	10.4	$	9.1			87.5	%	$	6.0	$	40.5	$	34.5			85.2	%

Management general and administrative expenses		47.3		52.9		5.6			10.6	%		140.6		163.2		22.6			13.8	%
Share-based compensation and non-cash incentive compensation expense		3.5		2.6		(0.9	)		(34.6	)%		9.4		6.1		(3.3	)		(54.1	)%
Depreciation and amortization		2.8		4.1		1.3			31.7	%		8.2		12.8		4.6			35.9	%
Global portfolio realignment project costs		4.7		7.0		2.3			32.9	%		23.6		20.1		(3.5	)		(17.4	)%
Business combination agreement expenses		—		0.6		0.6			100.0	%		—		25.7		25.7			100.0	%

Total general and administrative expenses		58.3		67.2		8.9			13.2	%		181.8		227.9		46.1			20.2	%

Selling, general and administrative expenses	$	59.6	$	77.6	$	18.0			23.2	%	$	187.8	$	268.4	$	80.6			30.0	%

Selling expenses consist primarily of Company restaurant advertising fund contributions. For the three and nine months ended September 30, 2013, selling expenses decreased primarily as a result of the refranchisings.

Management general and administrative expenses (“Management G&A”) are comprised primarily of salary and employee related costs for our non-restaurant employees, professional fees and general overhead for our corporate offices. The decrease in Management G&A in the three and nine months ended September 30, 2013 was driven primarily by a decrease in salary and fringe benefits.

The decrease in our total general and administrative expenses for the three months ended September 30, 2013 was driven primarily by a decrease in Management G&A, a decrease in global portfolio realignment project costs, lower depreciation and amortization expenses and the non-recurrence of Business Combination Agreement expenses, partially offset by an increase in share-based compensation and non-cash incentive compensation expense.

The decrease in our total general and administrative expenses for the nine months ended September 30, 2013 was driven primarily by a decrease in Management G&A, the non-recurrence of Business Combination Agreement expenses and lower depreciation and amortization expenses, partially offset by an increase in global portfolio realignment project costs and share-based compensation and non-cash incentive compensation expense.

Other operating expenses (income), net

Our other operating expenses (income), net were comprised of the following:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013		2012

Net (gains) losses on disposal of assets, restaurant closures and refranchisings	$	0.3	$	14.1		$	0.6	$	15.2
Litigation settlements and reserves, net		0.1		0.8			0.6		1.3
Foreign exchange net losses (gains)		0.5		1.5			6.1		(5.3	)
Loss on termination of interest rate cap		—		8.7			—		8.7
Equity in net loss (income) from unconsolidated affiliates		2.9		(0.4	)		9.7		1.4
Other, net		2.8		5.6			4.1		4.9

Other operating expenses (income), net	$	6.6	$	30.3		$	21.1	$	26.2

During the three months ended September 30, 2012, net (gains) losses on disposals of assets, restaurant closures and refranchisings consisted of $12.4 million in net losses associated with refranchisings and $1.7 million of net losses associated with asset disposals and restaurant closures. During the nine months ended September 30, 2012, net (gain) losses on disposal of assets, restaurant closures and refranchisings consisted of $4.8 million in net gains associated with refranchisings, $13.2 million of impairment losses associated with long-lived assets for Company restaurants and $6.8 million of net losses associated with asset disposals and restaurant closures.

The increase in equity in net loss from unconsolidated affiliates for the nine months ended September 30, 2013 mainly pertains to losses recognized on our equity investments acquired during the second quarter of 2012. These equity losses from unconsolidated affiliates were driven primarily by integration costs, litigation settlement costs and start up costs incurred by our unconsolidated affiliates.

Interest expense, net


	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Interest expense, net	$	50.2		$	57.3		$	149.3		$	173.6
Weighted average interest rate on long-term debt		6.7	%		7.5	%		6.6	%		7.6	%

During the three and nine months ended September 30, 2013 interest expense, net decreased compared to the three and nine months ended September 30, 2012 due to a lower weighted average interest rate as a result of the 2012 refinancing and reduced borrowings resulting from principal payments and prepayments of our term loans prior to the 2012 refinancing and repurchases of our Senior Notes and Discount Notes during 2012.

Loss on early extinguishment of debt

Income tax expense

Our effective tax rate was 28.4% for the three months ended September 30, 2013, primarily as a result of the current mix of income from multiple tax jurisdictions. Our effective tax rate was 51.1% for the three months ended September 30, 2012, as a result of the mix of income during the period from multiple tax jurisdictions and the impact of non-deductible losses and costs on refranchisings primarily in foreign jurisdictions.

Our effective tax rate was 28.0% for the nine months ended September 30, 2013, primarily as a result of the current mix of income from multiple tax jurisdictions and the impact of non-deductible expenses related to our global portfolio realignment project, partially offset by a favorable impact from the sale of foreign subsidiaries. Our effective tax rate was 29.5% for the nine months ended September 30, 2012, as a result of the mix of income during the period from multiple tax jurisdictions and the impact of non-deductible losses and costs of refranchisings primarily in foreign jurisdictions.

Net Income

Our net income increased in the three and nine months ended September 30, 2013 primarily as a result of an increase in income from operations as a result of the factors discusses above, a decrease in interest expense, net and the non-recurrence of loss on early extinguishment of debt, partially offset by an increase in income tax expense.

Non-GAAP Reconciliations

The tables below contain information regarding EBITDA and adjusted EBITDA, which are non-GAAP measures. EBITDA is defined as net income before depreciation and amortization, interest expense, net, loss on early extinguishment of debt and income tax expense. Adjusted EBITDA is defined as EBITDA excluding the impact of share-based compensation and non-cash incentive compensation expense, other operating expenses (income), net, and all other specifically identified costs associated with non-recurring projects, including global portfolio realignment project costs and Business Combination Agreement expenses. Share-based compensation and non-cash incentive compensation expense for the 2012 periods have been adjusted to be comparable to the 2013 presentation to reflect the portion of annual non-cash incentive compensation that eligible employees elected to receive as common equity in lieu of their 2012 cash bonus. Adjusted EBITDA is used by management to measure operating performance of the business, excluding specifically identified items that management believes do not directly reflect our core operations, and represents our measure of segment income.


	Results						Variance						Results						Variance
	Three Months Ended September 30,						$			%			Nine Months Ended September 30,						$			%
	2013			2012			Favorable / (Unfavorable)						2013			2012			Favorable / (Unfavorable)

Segment income:
U.S. and Canada	$	120.9		$	112.1		$	8.8			7.9	%	$	326.6		$	341.1		$	(14.5	)		(4.3	)%
EMEA		49.2			42.8			6.4			15.0	%		136.5			118.4			18.1			15.3	%
LAC		16.0			17.2			(1.2	)		(7.0	)%		46.6			50.2			(3.6	)		(7.2	)%
APAC		11.4			9.9			1.5			15.2	%		33.2			28.7			4.5			15.7	%
Unallocated Management G&A		(21.5	)		(19.1	)		(2.4	)		(12.6	)%		(59.4	)		(58.5	)		(0.9	)		(1.5	)%

Adjusted EBITDA		176.0			162.9			13.1			8.0	%		483.5			479.9			3.6			0.8	%
Share-based compensation and non-cash incentive compensation expense		3.5			2.6			(0.9	)		(34.6	)%		9.4			6.1			(3.3	)		(54.1	)%
Global portfolio realignment project costs		4.7			7.0			2.3			32.9	%		23.6			20.1			(3.5	)		(17.4	)%
Business combination agreement expenses		—			0.6			0.6			100.0	%		—			25.7			25.7			100.0	%
Other operating expenses (income), net		6.6			30.3			23.7			78.2	%		21.1			26.2			5.1			19.5	%

EBITDA		161.2			122.4			38.8			31.7	%		429.4			401.8			27.6			6.9	%
Depreciation and amortization		15.7			28.6			12.9			45.1	%		48.3			96.0			47.7			49.7	%

Income from operations		145.5			93.8			51.7			55.1	%		381.1			305.8			75.3			24.6	%
Interest expense, net		50.2			57.3			7.1			12.4	%		149.3			173.6			24.3			14.0	%
Loss on early extinguishment of debt		—			23.0			23.0			100.0	%		—			34.2			34.2			100.0	%
Income tax expense		27.1			6.9			(20.2	)		(292.8	)%		64.9			28.9			(36.0	)		(124.6	)%

Net income	$	68.2		$	6.6		$	61.6			933.3	%	$	166.9		$	69.1		$	97.8			141.5	%

Consolidated adjusted EBITDA in the three months ended September 30, 2013 reflects increases in segment income in our U.S. and Canada, EMEA and APAC segments, partially offset by a decrease in segment income in our LAC segment and an increase in Unallocated Management G&A. Consolidated adjusted EBITDA in the nine months ended September 30, 2013 reflects increases in segment income in our EMEA and APAC segments, partially offset by decreases in segment income in our U.S and Canada and LAC segments and increases in Unallocated Management G&A. Unallocated Management G&A represents 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. EBITDA for the three and nine months ended September 30, 2013 increased primarily for the same reasons that consolidated adjusted EBITDA increased as well as decreases in Business Combination Agreement expenses and decreases in other operating expenses (income), net.

U.S. and Canada


	Three Months Ended September 30,						Variance			Nine Months Ended September 30,						Variance
	Three Months Ended September 30,						Favorable/ (Unfavorable)			Nine Months Ended September 30,						Favorable/ (Unfavorable)
	2013			2012			Favorable/ (Unfavorable)			2013			2012			Favorable/ (Unfavorable)

Company:
Company restaurant revenues	$	18.7		$	159.9		$	(141.2	)	$	92.4		$	688.6		$	(596.2	)
CRM		3.1			18.3			(15.2	)		9.6			81.4			(71.8	)
CRM %		16.6	%		11.4	%		5.2	%		10.4	%		11.8	%		(1.4	)%
Company restaurant expenses as a % of Company restaurant revenue:
Food and paper		31.5	%		32.9	%		1.4	%		32.8	%		33.2	%		0.4	%
Payroll and benefits		27.3	%		30.2	%		2.9	%		30.0	%		30.5	%		0.5	%
Depreciation and amortization		5.3	%		5.5	%		0.2	%		5.2	%		5.6	%		0.4	%
Other occupancy and operating		19.3	%		20.0	%		0.7	%		21.6	%		18.9	%		(2.7	)%

Franchise:
Franchise and property revenues	$	153.4		$	128.1		$	25.3		$	417.2		$	343.7		$	73.5
Franchise and property expenses		32.5			29.4			(3.1	)		89.3			67.6			(21.7	)
Segment SG&A		12.9			22.9			10.0			41.0			77.1			36.1
Segment depreciation and amortization		9.8			18.0			8.2			30.1			60.7			30.6
Segment income		120.9			112.1			8.8			326.6			341.1			(14.5	)
Segment margin		70.2	%		38.9	%		31.3	%		64.1	%		33.0	%		31.1	%

FX Impact Favorable/(Unfavorable)

Segment revenues	$	(0.3	)	$	(0.6	)				$	(0.9	)	$	(2.8	)
Segment CRM		—			(0.1	)					(0.1	)		(0.2	)
Segment income		(0.2	)		(0.1	)					(0.4	)		(0.5	)

Key Business Metrics

System-wide sales growth		(0.8	)%		1.3	%					(1.2	)%		2.9	%
Franchise sales	$	2,257.7		$	2,139.0					$	6,548.5		$	6,038.8
Comparable sales growth
Company		(0.6	)%		0.7	%					(2.1	)%		4.2	%
Franchise		(0.3	)%		1.7	%					(1.2	)%		3.3	%
System		(0.3	)%		1.6	%					(1.2	)%		3.4	%
NRG
Company		—			(3	)					(4	)		(6	)
Franchise		(13	)		(13	)					(68	)		(41	)
System		(13	)		(16	)					(72	)		(47	)
Net Refranchisings		—			182						127			572
Restaurant counts at period end
Company		52			361						52			361
Franchise		7,352			7,092						7,352			7,092
System		7,404			7,453						7,404			7,453

Results of Operations for U.S. and Canada

System Comparable Sales Growth

During the three and nine months ended September 30, 2013, negative system comparable sales growth in the U.S. and Canada was primarily due to continued softness in consumer spending and ongoing competitive headwinds.

Company restaurants

During the three and nine months ended September 30, 2013, Company restaurant revenues decreased primarily due to the refranchising of 307 Company restaurants during the trailing twelve-month period.

During the three months ended September 30, 2013, CRM% increased primarily as a result of the net refranchising of 307 Company restaurants with lower than average CRM% during the trailing twelve-month period.

During the nine months ended September 30, 2013, CRM% decreased primarily as a result of the deleveraging effect of negative Company comparable sales growth on our fixed occupancy and other operating costs, partially offset by the net refranchising of 307 Company restaurants with lower than average CRM% during the trailing twelve-month period.

Franchise and Property

During the three and nine months ended September 30, 2013, franchise and property revenues increased primarily due to higher royalties and rental income derived from the net refranchising of 307 Company restaurants during the trailing twelve-month period, as well as an increase of approximately $9.0 million in other revenue. These factors were partially offset by the effects of negative franchise comparable sales growth and negative franchise NRG. FX impact was not significant.

During the three and nine months ended September 30, 2013, franchise and property expenses increased primarily due to new leases and subleases associated with additional restaurants leased or subleased to franchisees as a result of the refranchisings, partially offset by a decrease in bad debt expense. FX impact was not significant.

Segment income and segment margin

During the three months ended September 30, 2013, segment income increased due to an increase in net franchise and property income and a decrease in segment selling, general and administrative expenses (“SG&A”), partially offset by a decrease in CRM.

During the nine months ended September 30, 2013, segment income decreased due to a decrease in CRM, partially offset by an increase in net franchise and property income and a decrease in SG&A.

Segment margin increased during the three and nine months ended September 30, 2013, primarily as a result of the higher contribution of franchise and property revenues in the segment, which typically yields higher margins than Company restaurant revenues, after the completion of the refranchisings.

EMEA


	Three Months Ended September 30,						Variance			Nine Months Ended September 30,						Variance
	Three Months Ended September 30,						Favorable/ (Unfavorable)			Nine Months Ended September 30,						Favorable/ (Unfavorable)
	2013			2012			Favorable/ (Unfavorable)			2013			2012			Favorable/ (Unfavorable)

Company:
Company restaurant revenues	$	7.7		$	57.9		$	(50.2	)	$	92.6		$	203.1		$	(110.5	)
CRM		1.1			7.3			(6.2	)		11.8			21.0			(9.2	)
CRM %		14.3	%		12.6	%		1.7	%		12.7	%		10.3	%		2.4	%
Company restaurant expenses as a % of Company restaurant revenue:
Food and paper		32.0	%		29.9	%		(2.1	)%		30.1	%		30.3	%		0.2	%
Payroll and benefits		26.9	%		33.6	%		6.7	%		33.7	%		32.7	%		(1.0	)%
Depreciation and amortization		5.5	%		2.4	%		(3.1	)%		1.9	%		3.3	%		1.4	%
Other occupancy and operating		21.3	%		21.5	%		0.2	%		21.6	%		23.4	%		1.8	%

Franchise:
Franchise and property revenues	$	63.6		$	53.8		$	9.8		$	173.1		$	151.1		$	22.0
Franchise and property expenses		7.2			7.8			0.6			21.9			20.5			(1.4	)
Segment SG&A		11.2			14.5			3.3			35.2			47.4			12.2
Segment depreciation and amortization		2.9			4.0			1.1			8.7			14.2			5.5
Segment income		49.2			42.8			6.4			136.5			118.4			18.1
Segment margin		69.0	%		38.3	%		30.7	%		51.4	%		33.4	%		18.0	%

FX Impact Favorable/(Unfavorable)

Segment revenues	$	1.0		$	(11.5	)				$	1.1		$	(28.8	)
Segment CRM		0.1			(0.8	)					0.1			(1.9	)
Segment income		0.3			(4.6	)					0.1			(12.3	)

Key Business Metrics

System-wide sales growth		10.0	%		7.0	%					8.8	%		9.4	%
Franchise sales	$	1,194.6		$	1,017.2					$	3,214.5		$	2,811.8
Comparable sales growth
Company		(1.7	)%		2.1	%					1.2	%		5.4	%
Franchise		2.4	%		1.8	%					2.1	%		3.6	%
System		2.4	%		1.8	%					2.1	%		3.7	%
NRG
Company		—			—						—			(1	)
Franchise		80			33						169			113
System		80			33						169			112
Net Refranchisings		—			1						113			58
Restaurant counts at period end
Company		19			133						19			133
Franchise		3,271			2,861						3,271			2,861
System		3,290			2,994						3,290			2,994

Results of Operations for EMEA

System Comparable Sales Growth

During the three and nine months ended September 30, 2013, system comparable sales growth in EMEA was driven by comparable sales growth in Germany, Spain and Turkey.

Company restaurants

During the three and nine months ended September 30, 2013, Company restaurant revenues decreased primarily due to the net refranchising of 114 Company restaurants during the trailing twelve-month period.

During the three months ended September 30, 2013, CRM% increased primarily as a result of the net refranchising of 114 Company restaurants with lower than average CRM% during the trailing twelve-month period. These factors were partially offset by the deleveraging effect of negative Company comparable sales growth on our fixed occupancy and other operating costs and increased food, paper and product costs.

During the nine months ended September 30, 2013, CRM% increased primarily as a result of the leveraging effect of Company comparable sales growth on our fixed occupancy and other operating costs, the net refranchising of 114 Company restaurants with lower than average CRM% during the trailing twelve-month period and lower depreciation expense. These factors were partially offset by wage rate increases in Germany.

Franchise and Property

During the three and nine months ended September 30, 2013, franchise and property revenues increased due to an increase in royalties driven by franchise comparable sales growth, franchise NRG of 296 restaurants during the trailing twelve-month period and the net refranchising of 114 Company restaurants during the same period. Additionally, franchise revenue increased as a result of higher initial franchise fees due to an increase in the number of restaurant openings and favorable FX impact. These factors were partially offset by a decrease in rental income in Germany as a result of the transfer of certain properties subleased to franchisees in connection with our Germany refranchising.

During the three months ended September 30, 2013, franchise and property expenses decreased primarily as a result of the transfer of certain properties subleased to franchisees in connection with our Germany refranchising, partially offset by an increase in bad debt expense as a result of higher recoveries in the prior year. FX impact was not significant.

During the nine months ended September 30, 2013, franchise and property expenses increased due to rent expense associated with additional properties leased or subleased to franchisees as a result of refranchisings during the trailing twelve-month period, partially offset by a decrease in rent expense in Germany as a result of the transfer of certain properties subleased to franchisees in connection with our Germany refranchising. FX impact was not significant.

Segment income and segment margin

During the three and nine months ended September 30, 2013, segment income increased primarily due to an increase in net franchise and property income and a decrease in segment SG&A, partially offset by a decrease in CRM.

LAC


	Three Months Ended September 30,						Variance			Nine Months Ended September 30,						Variance
	Three Months Ended September 30,						Favorable/ (Unfavorable)			Nine Months Ended September 30,						Favorable/ (Unfavorable)
	2013			2012			Favorable/ (Unfavorable)			2013			2012			Favorable/ (Unfavorable)

Company:
Company restaurant revenues	$	—		$	15.8			NM		$	13.9		$	46.6		$	(32.7	)
CRM		—			2.1			NM			2.0			7.1			(5.1	)
CRM %		—			13.3	%		NM			14.4	%		15.2	%		(0.8	)%

Franchise:
Franchise and property revenues	$	18.1		$	17.7		$	0.4		$	51.3		$	49.7		$	1.6
Franchise and property expenses		0.2			—			(0.2	)		0.6			—			(0.6	)
Segment SG&A		1.9			4.2			2.3			6.7			11.4			4.7
Segment depreciation and amortization		—			1.6			1.6			0.6			4.8			4.2
Segment income		16.0			17.2			(1.2	)		46.6			50.2			(3.6	)
Segment margin		88.4	%		51.3	%		37.1	%		71.5	%		52.1	%		19.4	%

NM - not meaningful

FX Impact Favorable/(Unfavorable)

Segment revenues	$	(2.4	)		(2.4	)				$	(4.4	)	$	(8.4	)
Segment CRM		—			(0.2	)					0.1			(0.8	)
Segment income		(2.4	)		(1.5	)					(4.7	)		(4.8	)

Key Business Metrics

System-wide sales growth		17.3	%		13.0	%					13.6	%		17.6	%
Franchise sales	$	366.1		$	338.5					$	1,045.2		$	978.0
Comparable sales growth
Company		—			(5.5	)%					(8.7	)%		1.0	%
Franchise		2.1	%		3.1	%					(0.3	)%		7.9	%
System		2.1	%		2.7	%					(0.5	)%		7.5	%
NRG
Company		—			1						(2	)		1
Franchise		27			24						63			57
System		27			25						61			58
Net Refranchisings		—			—						98			—
Restaurant counts at period end
Company		—			98						—			98
Franchise		1,451			1,182						1,451			1,182
System		1,451			1,280						1,451			1,280

Results of Operations for LAC

System Comparable Sales Growth

During the three months ended September 30, 2013, system comparable sales growth in LAC was driven by comparable sales growth in Brazil, partially offset by negative comparable sales growth in Mexico and Puerto Rico.

During the nine months ended September 30, 2013, negative system comparable sales growth in LAC was driven by negative comparable sales growth in Mexico and Puerto Rico, partially offset by system comparable sales growth in Brazil.

Company restaurants

During the nine months ended September 30, 2013, Company restaurant revenues decreased primarily due to the refranchising of 98 Company restaurants on April 1, 2013.

During the nine months ended September 30, 2013, CRM% decreased primarily as a result of the deleveraging effect of negative Company comparable sales on our fixed occupancy and other operating costs. FX impact was not significant.

Franchise and Property

During the three months ended September 30, 2013, franchise and property revenues increased due to higher royalties driven by franchise comparable sales growth, franchise NRG of 171 restaurants during the trailing twelve-month period and the net refranchising of 98 Company restaurants during the same period. These factors were partially offset by unfavorable FX impact.

During the nine months ended September 30, 2013, franchise and property revenues increased due to higher royalties driven by franchise NRG of 171 restaurants during the trailing twelve-month period and the net refranchising of 98 Company restaurants during the same period. These factors were partially offset by unfavorable FX impact and lower royalties driven by negative franchise comparable sales growth.

During the three and nine months ended September 30, 2013, franchise and property expenses increased primarily due to increases in bad debt expenses. FX impact was not significant.

Segment income and segment margin

During the three and nine months ended September 30, 2013, segment income decreased due to a decrease in CRM, partially offset by an increase in net franchise and property income and a decrease in segment SG&A.

APAC


	Three Months Ended September 30,						Variance			Nine Months Ended September 30,						Variance
	Three Months Ended September 30,						Favorable/ (Unfavorable)			Nine Months Ended September 30,						Favorable/ (Unfavorable)
	2013			2012			Favorable/ (Unfavorable)			2013			2012			Favorable/ (Unfavorable)
Franchise:
Franchise and property revenues	$	13.0		$	11.5		$	1.5		$	38.7		$	35.2		$	3.5
Franchise and property expenses		0.6			0.5			(0.1	)		1.7			1.9			0.2
Segment SG&A		1.5			2.8			1.3			5.4			10.9			5.5
Segment depreciation and amortization		0.6			1.1			0.5			1.8			5.1			3.3
Segment income		11.4			9.9			1.5			33.2			28.7			4.5
Segment margin		83.8	%		44.0	%		39.8	%		81.8	%		34.3	%		47.5	%

FX Impact Favorable/(Unfavorable)

Segment revenues	$	(0.7	)	$	(0.4	)				$	(1.0	)	$	(0.4	)
Segment income		(0.7	)		(0.2	)					(1.0	)		(0.4	)

Key Business Metrics

System-wide sales growth		14.1	%		(1.3	)%					10.8	%		2.4	%
Franchise sales	$	366.4		$	335.3					$	1,108.0		$	986.3
System comparable sales growth		3.7	%		(2.2	)%					3.4	%		(1.0	)%
System NRG		39			21						104			32
Net Refranchisings		—			38						—			60
Restaurant counts at period end
Company		3			3						3			3
Franchise		1,111			937						1,111			937
System		1,114			940						1,114			940

Results of Operations for APAC

System Comparable Sales Growth

During the three months ended September 30, 2013, system comparable sales growth in APAC was driven by comparable sales growth in Australia, Korea and China, partially offset by negative comparable sales growth in New Zealand and Japan.

During the nine months ended September 30, 2013, system comparable sales growth in APAC was driven by comparable sales growth in Australia and Korea, partially offset by negative comparable sales growth in China, New Zealand and Japan.

Franchise and Property

During the three and nine months ended September 30, 2013, franchise and property revenues increased due to higher royalties driven by franchise comparable sales growth, franchise NRG of 174 restaurants during the trailing twelve-month period and the net refranchising of 38 Company restaurants during September 2012. Additionally, franchise revenue increased as a result of higher initial franchise fees due to an increase in the number of restaurant openings. These factors were partially offset by unfavorable FX impact.

During the three and nine months ended September 30, 2013, franchise and property expenses were relatively unchanged from the prior year.

Segment income and segment margin

During the three and nine months ended September 30, 2013, segment income increased primarily due to an increase in net franchise and property income and a decrease in segment SG&A.

During the three and nine months ended September 30, 2013, segment margin increased primarily as a result of the higher contribution of franchise and property revenues in the segment, which typically yields higher margins than Company restaurant revenues, after the completion of the refranchisings.

Liquidity and Capital Resources

Our primary sources of liquidity are cash on hand, cash generated by operations and borrowings available under our 2012 Revolving Credit Facility (defined below). We have used, and may in the future use, our liquidity to make required interest and principal payments, to voluntarily repay and/or repurchase our or one of our affiliate’s outstanding debt, to fund our investing activities, to repurchase our shares and/or to pay dividends. As a result of our borrowings, we are highly leveraged. Our liquidity requirements are significant, primarily due to debt service requirements.

At September 30, 2013, we had cash and cash equivalents of $764.3 million and working capital of $682.5 million. In addition, at September 30, 2013, we had borrowing capacity of $130.0 million under our 2012 Revolving Credit Facility. Based on our current level of operations and available cash, we believe our cash flow from operations, combined with availability under our 2012 Revolving Credit Facility, will provide sufficient liquidity to fund our current obligations, debt service requirements and capital spending requirements over the next twelve months.

Our consolidated cash and cash equivalents include balances held in foreign tax jurisdictions that represent undistributed earnings of our foreign subsidiaries, which are considered indefinitely reinvested for U.S. income tax purposes. We do not plan to utilize cash flows from our foreign subsidiaries to meet our future debt service requirements in the U.S. However, adverse income tax consequences could result if we are compelled to make unplanned transfers of cash to meet future liquidity requirements in the U.S.

Debt Instruments

Our long-term debt is comprised primarily of borrowings under our 2012 Credit Agreement (defined below), amounts outstanding under our Senior Notes and Discount Notes (each also defined below), and obligations under capital leases. For further information about our long-term debt, see Note 6 to the accompanying unaudited Condensed Consolidated Financial Statements included in this report.

As of September 30, 2013, we had $1,004.3 million in Tranche A Term Loans outstanding and $690.8 million of Tranche B Term Loans outstanding (the “2012 Term Loan Facility”) under our credit agreement dated September 28, 2012 (the “2012 Credit Agreement”). The 2012 Term Loan Facility, together with the revolving credit facility available under the 2012 Credit Agreement (the “2012 Revolving Credit Facility”) are collectively referred to as the “2012 Credit Facilities”. As of September 30, 2013, the interest rate was 2.50% on our outstanding Tranche A Term Loan and 3.75% on our outstanding Tranche B Term Loan. As of September 30, 2013, we had no amounts outstanding under the 2012 Revolving Credit Facility. Based on the amounts outstanding under the 2012 Term Loan Facility and the three-month LIBOR rate as of September 30, 2013, required debt service for the next twelve months is estimated to be approximately $51.0 million in interest payments and $58.6 million in principal payments.

As of September 30, 2013 we had outstanding $794.5 million of 9.875% senior notes due 2018 (the “Senior Notes”). In addition, as of September 30, 2013, we had outstanding $441.1 million of 11.0% senior discount notes due 2019 (the “Discount Notes”), which were issued by Burger King Capital Holdings, LLC and Burger King Capital Finance, Inc., our wholly-owned indirect subsidiaries.

As of September 30, 2013, we were in compliance with all covenants of the 2012 Credit Agreement and the indentures governing our Senior Notes and Discount Notes, and there were no limitations on our ability to draw on the availability under our 2012 Revolving Credit Facility.

Comparative Cash Flows

Operating Activities

Cash provided by operating activities was $267.7 million for the nine months ended September 30, 2013, compared to $144.6 million during the same period in the prior year. The increase in cash provided by operating activities was driven primarily by changes in working capital resulting from the timing of advertising expenditures and lower interest and income tax payments and an increase in net income, excluding non-cash adjustments.

Investing Activities

Cash provided by investing activities was $38.1 million for the nine months ended September 30, 2013, compared to $27.4 million during the same period in the prior year. The increase in cash provided by investing activities was driven primarily as a result of a decrease in capital expenditures and a decrease in payments for acquired franchisee operations, partially offset by a decrease in proceeds from refranchisings, net.

Capital expenditures have historically been comprised primarily of (i) costs to build new Company restaurants and new restaurants that we lease to franchisees, (ii) costs to maintain the appearance of existing restaurants in accordance with our standards, including investments in new equipment and remodeling costs and (iii) investments in information technology systems and corporate furniture and fixtures. The following table presents capital expenditures, by type of expenditure:


	Nine Months Ended September 30,
	2013		2012
New restaurants	$	—	$	1.1
Existing restaurants		3.9		23.3
Other, including corporate		6.9		13.3

Total	$	10.8	$	37.7

We expect cash capital expenditures of approximately $30.0 million to $40.0 million in 2013. Our actual capital expenditures may be affected by economic and other factors. We expect to fund capital expenditures from cash on hand and cash flow from operations.

Financing Activities

Cash used for financing activities was $90.9 million for the nine months ended September 30, 2013, compared to $148.7 million during the same period in the prior year. 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 the nine months ended September 30, 2012, partially offset by dividend payments during the nine months ended September 30, 2013.

Dividends

On February 14, 2013, our board declared a cash dividend of $0.05 per share, which was paid on March 15, 2013 to shareholders of record on February 28, 2013. On April 10, 2013, our board declared a cash dividend of $0.06 per share, which was paid on May 15, 2013 to shareholders of record on May 1, 2013. On July 30, 2013, our board declared a cash dividend of $0.06 per share, which was paid on August 30, 2013 to shareholders of record on August 15, 2013. On October 27, 2013, our board declared a cash dividend of $0.07 per share, to be paid on November 26, 2013 to shareholders of record on November 12, 2013. Future dividends will be determined at the discretion of the Board of Directors.

Commitments and Off-Balance Sheet Arrangements

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 September 30, 2013, we estimate it will take approximately 14 years for these purchase commitments to be completed.

During 2011, we entered into a five-year contract with a vendor to supply Company and franchise restaurants in certain countries in LAC with soft drink products on an exclusive basis and to supply Company and franchise restaurants in the United States with food products. We received upfront fees and contributions to our marketing funds in connection with this agreement and may receive additional fees in the future in connection with the achievement of certain milestones. We recognize the fees earned in connection with milestone achievement as franchise and property revenue when it is reasonably estimable and probable. Upfront fees are amortized as franchise and property revenue over the term of the contract. As of September 30, 2013, the deferred income associated with this contract totaled $2.2 million.

In the event of early termination of any of these arrangements, 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 September 30, 2013, there were $107.0 million of loans outstanding to franchisees that we had guaranteed under five such programs, with additional franchisee borrowing capacity of approximately $219.8 million remaining. Our maximum guarantee liability under these five programs is limited to an aggregate of $31.9 million, assuming full utilization of all borrowing capacity. As of September 30, 2013, the liability reflecting the fair value of these guarantee obligations was $4.3 million. No significant payments have been made by us in connection with these guarantees through September 30, 2013.

Critical Accounting Policies and Estimates

This discussion and analysis of financial condition and results of operations is based on our audited Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as related disclosures of contingent assets and liabilities. We evaluate our estimates on an ongoing basis and we base our estimates on historical experience and various other assumptions we deem reasonable to the situation. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Volatile credit, equity, foreign currency and energy markets, and declines in consumer spending have increased and may continue to create uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in our estimates could materially impact our results of operations and financial condition in any particular period. For a complete discussion of our critical and significant accounting policies and estimates, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K filed with the SEC on February 22, 2013.

New Accounting Pronouncements

See Note 2 – New Accounting Pronouncements, in the notes to the unaudited condensed consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There were no material changes during the nine months ended September 30, 2013 to the disclosures made in Part II, Item 7A of our Annual Report on Form 10-K filed with the SEC on February 22, 2013 for the year ended December 31, 2012.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was conducted under the supervision and with the participation of management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and Exchange Act Rules 15d-15(e)) as of September 30, 2013. Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of such date.

Internal Control Over Financial Reporting

The Company’s management, including the CEO and CFO, confirm that there were no changes in the Company’s internal control over financial reporting during the three months ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Cautionary Note Regarding Forward-Looking Statements

Certain statements made in this report reflect management’s expectations regarding future events and economic performance are forward-looking in nature and, accordingly, are subject to risks and uncertainties. These forward-looking statements include statements regarding our expectations about the benefits of our fully franchised business model; our expectations and belief regarding the costs and benefits of implementing our global portfolio realignment project; our expectations and belief regarding our ability to accelerate international development through joint venture structures and master franchise and development agreements; our expectations and belief regarding our ability to complete our global portfolio realignment project; our expectations and belief regarding our ability to repurchase shares and return cash to shareholders; our expectations and belief regarding our ability to fund our current obligations, projected working capital requirements, debt service requirements and capital spending requirements over the next twelve months and the foreseeable future; our expectations regarding our exposure to changes in interest rates and foreign currency exchange rates and the impact of changes in interest rates and foreign currency exchange rates on the amount of our interest payments, future earnings and cash flows; our belief and estimates regarding accounting and tax matters; our expectations regarding our ability to hedge interest rate risk of our variable rate debt through the purchase of interest rate caps and forward-starting interest rate swaps and to hedge our net investment in a Swiss subsidiary through the purchase of cross-currency swaps; our expectations with respect to amounts we expect to be reclassified into earnings within the next twelve months; and other expectations regarding our future financial and operational results. These forward-looking statements are only predictions based on our current expectations and projections about future events. Important factors could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements.

These factors include those risk factors set forth in filings with the Securities and Exchange Commission, including our annual and quarterly reports, and the following:

•

Risks related to our substantial indebtedness, which could adversely affect our financial condition and prevent us from fulfilling our obligations under our 2012 Credit Facilities, Senior Notes and Discount Notes;

•

Global economic or other business conditions that may affect the desire or ability of our customers to purchase our products such as inflationary pressures, high unemployment levels, increases in gas prices, declines in median income growth, consumer confidence and consumer discretionary spending and changes in consumer perceptions of dietary health and food safety, and the impact of negative sales and traffic on our business, including the risk that we will be required to incur non-cash impairment or other charges that reduce our earnings;

•

Our relationship with, and the success of, our franchisees and risks related to our restaurant ownership mix;

•

The effectiveness of our marketing and advertising programs and franchisee support of these programs;

•

Our ability to successfully execute our global portfolio realignment project;

•

Risks arising from significant and rapid fluctuations in interest rates and in the currency exchange markets and the decisions and positions that we take to hedge such volatility;

•

Our ability to successfully implement our domestic and international growth strategy and risks related to our international operations;

•

Risk related to relying on master franchisees and subfranchisees to accelerate restaurant growth; and

•

Risks related to the ability of counterparties to our 2012 Credit Facilities, interest rate caps, cross-currency swaps, forward-starting interest rate swaps, foreign currency forward contracts, and any similar instrument to fulfill their commitments and/or obligations;

We operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We do not undertake any responsibility to update any of these forward-looking statements to conform our prior statements to actual results or revised expectations.

Part II – Other Information

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

On April 10, 2013, our Board of Directors authorized the repurchase of up to $200 million of our common stock. The repurchase authorization will remain in effect until May 31, 2016 or when the share limit is reached. The amount and timing of the repurchases will be determined by management. The share repurchases may be suspended or discontinued at any time. No shares were repurchased during the third quarter of 2013.

Item 5.

Other Information

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On July 30, 2013, the Compensation Committee of the Company approved and adopted a new severance pay plan for eligible employees of BKC and its subsidiaries, including certain of the named executive officers (the “Severance Plan”). Pursuant to the Severance Plan, eligible employees whose employment is involuntarily terminated due to reductions in staff, position elimination, facility closing, closure of a business unit or organizational changes or restructuring are entitled to two weeks of severance for every year worked, with a two-week minimum and capped at five months for employees at the level of vice president and above. In addition, employees are entitled to receive continued group medical, dental and vision coverage at the active employee rate for the longer of three months or the employee’s severance pay period, subject to certain conditions. The employee’s right to receive these benefits is subject to his or her execution of a general release of claims in favor of BKC and entry into other separation documents. A copy of the Severance Plan is attached as Exhibit 10.31 to this report.

On October 14, 2013, we reimbursed Steve Wiborg, our former Chairman, North America, for closing costs of $113,001, plus tax gross-up of $42,541, in connection with the sale of his home in Miami, Florida and agreed to pay approximately $37,000 in relocation expenses in connection with Mr. Wiborg’s move back to Chicago.

Item 6. Exhibits

The exhibits listed in the accompanying index are filed as part of this report.


Exhibit Number		Description

10.31		Burger King Corporation U.S. Severance Pay Plan

10.32		Form of Option Award Agreement issued under the Amended and Restated 2012 Omnibus Incentive Plan

10.33		Form of Board Member Option Award Agreement issued under the Amended and Restated 2012 Omnibus Incentive Plan

31.1		Certification of Chief Executive Officer of Burger King Worldwide, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer of Burger King Worldwide, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer of Burger King Worldwide, Inc. pursuant to Section 903 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer of Burger King Worldwide, Inc. pursuant to Section 903 of the Sarbanes-Oxley Act of 2002

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 thereunto duly authorized.


	BURGER KING WORLDWIDE, INC. (Registrant)

Date: October 28, 2013	By:	/s/ Joshua Kobza
		Name:	Joshua Kobza, principal financial officer
		Title:	Chief Financial Officer (principal financial officer) (duly authorized officer)

INDEX TO EXHIBITS


Exhibit Number		Description

10.31		Burger King Corporation U.S. Severance Pay Plan

10.32		Form of Option Award Agreement issued under the Amended and Restated 2012 Omnibus Incentive Plan

10.33		Form of Board Member Option Award Agreement issued under the Amended and Restated 2012 Omnibus Incentive Plan

31.1		Certification of Chief Executive Officer of Burger King Worldwide, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer of Burger King Worldwide, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer of Burger King Worldwide, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer of Burger King Worldwide, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Presentation Linkbase Document

Exhibit 10.31

BURGER KING CORPORATION

SEVERANCE PAY PLAN

AND

SUMMARY PLAN DESCRIPTION

Effective: July 30, 2013

PURPOSE OF THE PLAN

The purpose of the Burger King Corporation U.S. Severance Pay Plan (“Plan”) is to provide severance pay benefits to eligible employees whose employment with Burger King Corporation. or any of its participating subsidiaries is terminated involuntarily under the conditions described below.

Except as otherwise provided by the Company in writing, this Plan (i) is the sole arrangement of the Company regarding severance-type benefits to eligible employees and (ii) replaces and supersedes all prior plans, programs, understandings and arrangements providing severance-type benefits to eligible employees.

Only the Plan Administrator has the authority to approve changes to the conditions for receiving benefits under this Plan or changes to the benefits to be provided under the Plan. Any such approval must be in writing.

This document contains the official text of the Plan effective for employment terminations occurring on and after July 30, 2013. This document also serves as the summary plan description for the Plan.

DEFINITIONS

Company means Burger King Corporation .

Employer means the Company and any subsidiary or affiliate of the Company which participates in this Plan.

Plan Administrator means the Company’s Benefits Committee and such other person or committee appointed from time to time by the Company to administer the Plan.

ELIGIBLE EMPLOYEES

The benefits under this Plan are limited to employees who are classified by an Employer as exempt employees or non-exempt salaried employees.

Unless the Plan Administrator provides otherwise in writing, the following employees are NOT eligible to participate in this Plan:

•

Any employee who is classified by an Employer as an hourly employee

•

Any employee who is classified by an Employer as a part-time, temporary or seasonal employee, third-party staffing agency employee or an independent contractor.

•

Any employee who was in a restaurant management position immediately preceding his or her involuntary termination.

•

Any employee who is covered by a collective bargaining agreement.

•

Any employee who is eligible to participate in another plan or arrangement maintained by the Company or any of its affiliates which provides severance-type benefits unless such other plan or arrangement provides that the employee will be eligible to receive benefits under this Plan.

•

Any employee who is covered by an employment or other agreement unless the agreement provides that the employee will be eligible to receive benefits under this Plan.

INVOLUNTARY TERMINATION OF EMPLOYMENT

•

Involuntary Termination

An employee will be eligible for severance benefits under this Plan only if the Plan Administrator, in its sole discretion, determines that the employee’s employment is being terminated involuntarily for any of the following reasons:

•

Reduction in staff.

•

Position elimination.

•

Facility closing.

•

Closure of a business unit.

•

Organizational change or restructuring.

•

Termination of Employment Not Eligible for Severance Benefits

An employee will not be eligible for severance benefits if the Plan Administrator, in its sole discretion, determines that the employee’s employment is terminated for any of the following reasons:

•

Resignation or other voluntary termination of employment.

•

Failure to return to work upon the expiration of an authorized leave of absence.

•

Death or disability.

•

Termination for cause or for behavior prejudicial to the Company or any of its subsidiaries or affiliates, as determined by the Plan Administrator in its sole discretion.

•

Termination for gross misconduct or violation of company policy.

•

Termination for poor performance.

•

Other Employment Offer

An employee will not be eligible to receive benefits under this Plan if any of the following events has occurred:

•

The employee has been offered, but refused to accept, another position with the Company or any of its subsidiaries or affiliates at a location that is 50 or fewer miles from his or her then current primary place of residence.

•

The employee’s employment has been terminated in connection with a sale or transfer, merger, establishment of a joint venture, or other corporate transaction, and such employee has been offered employment by the successor employer.

•

The employee’s employment is terminated in connection with the “outsourcing” of operational functions and he/she has been offered employment by the outsourcing vendor.

CONDITIONS FOR PAYMENT OF SEVERANCE BENEFITS

An eligible employee who is involuntarily terminated will not receive severance benefits under this Plan unless the Plan Administrator determines that the employee has satisfied all of the following conditions:

•

Work Until Last Day Designated

The employee must continue to be actively at work through the last day of work designated by the Employer, unless the employee is absent due to vacation, temporary layoff, or an approved absence from work (including leave under the Family and Medical Leave Act).

•

Execution of Release and Other Separation Documents

The employee must execute and deliver to the Company, within the period of time specified by the Plan Administrator, an agreement in a form satisfactory to the Company containing a general release of claims in favor of the Company and such other terms and provisions as may be determined by the Company, in its sole discretion, which include but are not limited to those related to non-disclosure, non-disparagement, non-competition, non-solicitation, continued cooperation in litigation, and the return of company assets.

SEVERANCE BENEFITS

•

Severance Pay

•

Amount of Severance Pay

The amount of severance pay payable to an eligible employee will be determined in accordance with the Severance Pay Guidelines below and subject to the reductions set forth below; provided , that the Plan Administrator, in its sole discretion, and on a case-by case basis, may increase or decrease the amount of severance pay payable to an eligible employee.


Position	Severance Pay Amount	Minimum / Maximum Amount of Severance Pay
Senior Manager and below	2 weeks of Base Pay for each Year of Service	Min. Severance = 2 weeks Max. Severance = 1 month
Director and Senior Director	2 weeks of Base Pay for each Year of Service	Min. Severance = 2 weeks Max. Severance = 3 months
Vice President and above	2 weeks of Base Pay for each Year of Service	Min. Severance = 2 weeks Max. Severance = 5 months

For purposes of determining the amount of severance pay –

•

Base Pay means the employee’s regular rate of salary (determined on a weekly basis or monthly basis, as applicable, and based on a 12-month calendar year) payable immediately preceding his or her date of termination. Base Pay does not include discretionary bonuses, other variable compensation, or extra pay.

•

Years of Service means an employee’s completed years of employment from his or her most recent date of hire by an Employer until his or her date of termination.

•

Payment of Severance Pay

The Company will pay the severance pay in installments at the same time and in the same manner as the Company’s regular payroll practice until such benefit is paid in full. Payments will begin as soon as practicable following the date in which the employee’s separation agreement and general release becomes effective.

Notwithstanding the foregoing, if an employee is deemed on the date of termination to be a “specified employee” within the meaning of Section 409A(a)(2)(B) of the Internal Revenue Code and if the severance payment is not exempt from Section 409A, then payment shall not be made or provided prior to the earlier of (A) the expiration of six (6)-month period measured from the date of employee’s termination of employment and (B) the date of employee’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments delayed pursuant to this paragraph shall be paid to employee in a lump sum, and any remaining payments and benefits due under this Plan shall be paid or provided in accordance with the normal payment dates specified above.

•

Continued Group Health Benefit Coverage – Payment of Cost for COBRA Coverage

The employee may elect to participate in continued group medical, dental and vision coverage at the active employee rate for the longer of three (3) months or the employee’s Severance Pay period, provided that the Company’s obligation to provide this continued coverage: (i) is subject to the employee continuing to make his/her portion of the monthly premium payments to AETNA; and (ii) shall immediately cease in the event the employee becomes eligible for different coverage, and the employee must notify the Company within one (1) week of becoming eligible for different coverage.

After the end of this period, the employee, if eligible, may elect to continue COBRA coverage at his or her expense for the remainder of the COBRA coverage period.

•

Continued Life Insurance Coverage

The Company will continue to provide basic life insurance coverage at no cost to the employee until the last day of the calendar month during which the eligible employee receives the final payment of severance pay under this Plan, or, if earlier, until the commencement of his/her employment with another employer.

RIGHT TO TERMINATE BENEFITS

Notwithstanding anything in this Plan to the contrary, in the event that the Plan Administrator in its discretion determines that

•

an employee is reemployed by the Company or any of its subsidiaries, affiliates, or successors before the completion of the scheduled payment of severance pay, OR

•

the Plan Administrator determines that an employee has breached any of the terms and conditions set forth in any agreement executed by the employee as a condition to receiving benefits under this Plan, including, but not limited to, the separation agreement and general release, or

•

the Plan Administrator subsequently determines that the employee engaged in an act that would have constituted grounds for termination for cause.

then the Plan Administrator shall have the right to terminate the benefits payable under this Plan at any time.

ADMINISTRATION OF THE PLAN

The Plan Administrator shall have sole authority and discretion to administer and construe the terms of this Plan, subject to applicable requirements of law. Without limiting the generality of the foregoing, the Plan Administrator shall have complete discretionary authority to carry out the following powers and duties:

•

To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan;

•

To interpret the Plan, its interpretation thereof to be final and conclusive on all persons claiming benefits under the Plan;

•

To provide an employee with severance benefits other than those set out in this Plan;

•

To decide all questions, including without limitation, issues of fact, concerning the Plan, including the eligibility of any person to participate in, and receive benefits under, the Plan; and

•

To appoint such agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan.

CLAIMS PROCEDURE

The Plan Administrator reviews and authorizes payment of severance benefits for those employees who qualify under the provisions of the Plan. No claim forms need be submitted. Questions regarding payment of the severance benefits should be directed to the Plan Administrator.

If an employee feels he or she is not receiving severance benefits which are due, the employee should file a written claim for the benefits with the Plan Administrator. A decision on whether to grant or deny the claim will be made within 90 days following receipt of the claim. If more than 90 days is required to render a decision, the employee will be notified in writing of the reasons for delay. In any event, however, a decision to grant or deny a claim will be made by not later than 180 days following the initial receipt of the claim.

If the claim is denied in whole or in part, the employee will receive a written explanation of the specific reasons for the denial, including a reference to the Plan provisions on which the denial is based.

If the employee wishes to appeal this denial, the employee may write within 60 days after receipt of the notification of denial. The claim will then be reviewed by the Plan Administrator, and the employee will receive written notice of the final decision within 60 days after the request for review. If more than 60 days is required to render a decision, the employee will be notified in writing of the reasons for delay before the end of the initial 60 day period. In any event, however, the employee will receive a written notice of the final decision within 120 days after the request for review.

GENERAL RULES

•

Right to Withhold Taxes

The Company shall withhold such amounts from payments under this Plan as it determines necessary to fulfill any federal, state, or local wage or compensation withholding requirements.

•

No Right to Continued Employment

Neither the Plan nor any action taken with respect to it shall confer upon any person the right to continue in the employ of the Company or any of its subsidiaries or affiliates.

•

Benefits Non-Assignable

Benefits under the Plan may not be anticipated, assigned or alienated.

•

Unfunded Plan

The Company will make all payments under the Plan, and pay all expenses of the Plan, from its general assets. Nothing contained in this Plan shall give any eligible employee any right, title or interest in any property of the Company or any of its affiliates nor shall it create any trust relationship.

•

Severability

The provisions of the Plan are severable. If any provision of the Plan is deemed legally or factually invalid or unenforceable to any extent or in any application, then the remainder of the provisions of the Plan, except to such extent or in such application, shall not be affected, and each and every provision of the Plan shall be valid and enforceable to the fullest extent and in the broadest application permitted by law.

•

Section Headings

Section headings are used herein for convenience of reference only and shall not affect the meaning of any provision of this Plan.

PLAN AMENDMENT AND TERMINATION

The Company has the power to amend, modify or terminate this Plan at any time with respect to any employee at any time prior to such employee’s termination of employment through a written document executed by an officer at the rank of Senior Vice-President or above.

Eligible employees do not have any vested right to severance pay or other benefits under this Plan.

GOVERNING LAWS AND TIME LIMIT FOR BEGINNING LEGAL ACTIONS

The provisions of the Plan shall be construed, administered and enforced according to applicable federal law and, where appropriate, the laws of the State of Florida without reference to its conflict of laws rules and without regard to any rule of any jurisdiction that would result in the application of the law of another jurisdiction.

The parties expressly consent that any action or proceeding relating to this Plan or any release or other agreement entered into with respect to this Plan will only be brought in the federal or state courts, as appropriate, located in the State of Florida and that any such action or proceeding be heard without jury, and the parties expressly waive the right to bring any such action in any other jurisdiction and have such action heard before a jury.

No action relating to this Plan or any release or other agreement entered into with respect to this Plan may be brought later than the second anniversary of earlier of termination of employment or other event giving rise to the claim.

STATEMENT OF ERISA RIGHTS

As a participant in this Plan you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all plan participants shall be entitled to:

•

Receive Information About Your Plan and Benefits

Examine, without charge, at the plan administrator’s office and at other specified locations all documents governing the plan and a copy of the latest annual report (Form 5500 Series) required to be filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

Obtain, upon written request to the plan administrator, copies of documents governing the operation of the plan and copies of the latest annual report (Form 5500 Series), if any required, and updated summary plan description. The administrator may make a reasonable charge for the copies.

•

Prudent Actions by Plan Fiduciaries

In addition to creating rights for plan participants ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your plan, called “fiduciaries” of the plan, have a duty to do so prudently and in the interest of you and other plan participants and beneficiaries. No one, including your employer, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a welfare benefit or exercising your rights under ERISA.

•

Enforce Your Rights

If your claim for a severance benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the plan administrator

to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. If it should happen that plan fiduciaries misuse the plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

•

Assistance with Your Questions

If you have any questions about your plan, you should contact the plan administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the plan administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

ADDITIONAL INFORMATION


Plan Sponsor:		Burger King Corporation 5505 Blue Lagoon Drive Miami, FL 33126

Employer Identification Number (EIN):		59-0787929

Plan Name:		Burger King Corporation U.S. Severance Pay Plan

Type of Plan:		Welfare benefit plan - severance pay

Plan Year:		Calendar year

Plan Number:		558

Plan Administrator:		[Chief Information and Performance Officer] Burger King Corporation 5505 Blue Lagoon Drive Miami, FL 33126

Agent for Service of Legal Process:		Plan Administrator

Exhibit 10.32

BURGER KING WORLDWIDE, INC.

AMENDED AND RESTATED 2012 OMNIBUS INCENTIVE PLAN

OPTION AWARD AGREEMENT

Unless defined in this Option Award Agreement (this “ Award Agreement ”), capitalized terms will have the same meanings ascribed to them in the Burger King Worldwide, Inc. Amended and Restated 2012 Omnibus Incentive Plan (as may be amended from time to time, the “ Plan ”).

Pursuant to Section 6 of the Plan, you have been granted a Non-Qualified Stock Option (the “ Option ” ) on the following terms and subject to the provisions of the Plan, which is incorporated herein by reference. In the event of a conflict between the provisions of the Plan and this Award Agreement, the provisions of the Plan will govern.


Total Number of Shares Underlying Options:		[ ] Shares

Exercise Price per Share:		$[ ] per Share

Grant Date:

Expiration Date:

Vesting Date:		[ ], subject to your continued Service through the Vesting Date and further subject to the Section entitled “Termination” in Exhibit A .

By execution of this Award Agreement, you and the Company agree that this Option is granted under and governed by the terms and conditions of the Plan and the terms and conditions set forth in the attached as Exhibit A .

A-1

EXHIBIT A

TERMS AND CONDITIONS OF THE

OPTION AWARD AGREEMENT

Vesting .

This Option will vest and become exercisable on the “Vesting Date” set forth in this Award Agreement. Any portion of this Option that becomes exercisable in accordance with the foregoing will remain exercisable until the Expiration Date, unless earlier terminated pursuant to the Plan or this Award Agreement (including, without limitation, the section below entitled “Termination”). Subject to the section below entitled “Termination,” this Option may be exercised only while you are employed by the Company or any of its Affiliates. Prior to the exercise of this Option, you will not have any rights of a shareholder with respect to this Option or the Shares subject thereto.

Method of Exercise .

This Option will be exercisable pursuant to procedures approved by the Committee and communicated to you. No Shares will be delivered pursuant to the exercise of this Option unless (i) you have complied with your obligations under this Award Agreement, (ii) the exercise of this Option and the delivery of such Shares complies with applicable law, and (iii) full payment (or satisfactory provision therefor) of the aggregate exercise price of the Option and any withholding or other taxes have been received by the Company. Until such time as the Shares are delivered to you (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), you will have no right to vote or receive dividends or any other rights as a shareholder with respect to such Shares, notwithstanding the exercise of this Option.

Adjustment for Certain Events .

If and to the extent that it would not cause a violation of Section 409A of the Code or other applicable law, if any Corporate Event described in Section 5(d)(ii) of the Plan shall occur, the Committee shall make an adjustment as described in such Section 5(d)(ii) in such manner as the Committee may, in its sole discretion, deem appropriate and equitable to prevent substantial dilution or enlargement of the rights provided under this Option.

Termination .

Upon termination of your Service (other than as set forth below) prior to the Vesting Date, you will forfeit this Option without any consideration due to you.

If your Service terminates prior to the Vesting Date Without Cause (as defined below) or by reason of your death, Retirement or Disability (as defined below), you (or, if applicable, such other person who is entitled to exercise this Option) shall be vested in the number of Shares as if the Shares subject to the Option vested 20% on each of

A-2

, , , and , respectively, and you (or, if applicable, such other person who is entitled to exercise this Option) may exercise the Option to the extent vested on the date of termination of your Service as provided for below.

Subject to any terms and conditions that the Committee may impose in accordance with Section 13 of the Plan, in the event that a Change in Control occurs and, within twelve (12) months following the date of such Change in Control, your Service is terminated by the Company Without Cause (as defined herein), this Option shall vest in full upon such termination. In the event that there is a conflict between the terms of this Award Agreement regarding the effect of a Change in Control on this Option and the terms of any Employment Agreement, the terms of this Option Award Agreement will govern.

To the extent this Option is or becomes exercisable on the date of termination of your Service, then, if you (or, if applicable, such other person who is entitled to exercise this Option) do not exercise this Option on or prior to the expiration of the Option Exercise Period (as set forth below), this Option will terminate. In no event may you exercise this Option after the Expiration Date.


Type of Termination		Option Exercise Period

Without Cause		90 day period beginning on the date of termination

Resignation		90 day period beginning on the date of termination

Retirement		One year period beginning on the date of termination

Disability		One year period beginning on the date of termination

Death		One year period beginning on the date of termination

For Cause		None, the Option expires immediately

The date of termination of your Service will not be extended by any notice period mandated under local law ( e.g ., active employment would not include a period of “garden leave” or similar period pursuant to local law). The Committee shall have the exclusive discretion to determine the date of termination of your Service for purposes of this Option.

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In the event that there is a conflict between the terms of this Award Agreement regarding the effect of a termination of your Service on this Option and the terms of any Employment Agreement, the terms of your Employment Agreement will govern.

For purposes of this Award Agreement, the following terms shall have the following meanings:

“ Cause ” means (i) a material breach by you of any of your obligations under any written employment agreement with the Company or any of its Affiliates, (ii) a material violation by you of any of the policies, procedures, rules and regulations of the Company or any of its Affiliates applicable to employees or other service providers generally or to employees or other service providers at your grade level; (iii) the failure by you to reasonably and substantially perform your duties to the Company or its Affiliates (other than as a result of physical or mental illness or injury); (iv) your willful misconduct or gross negligence that has caused or is reasonably expected to result in material injury to the business, reputation or prospects of the Company or any of its Affiliates; (v) your fraud or misappropriation of funds; or (vi) the commission by you of a felony or other serious crime involving moral turpitude; provided that if you are a party to an Employment Agreement at the time of termination of your Service and such Employment Agreement contains a different definition of “cause” (or any derivation thereof), the definition in such Employment Agreement will control for purposes of this Award Agreement.

If you are terminated Without Cause and, within the twelve (12) month period subsequent to such termination of your Service, the Company determines that your Service could have been terminated for Cause, subject to anything to the contrary that may be contained in your Employment Agreement at the time of termination of your Service, your Service will, at the election of the Company, be deemed to have been terminated for Cause, effective as of the date the events giving rise to Cause occurred.

“ Disability ” means (i) a physical or mental condition entitling you to benefits under the long-term disability policy of the Company covering you or (ii) in the absence of any such policy, a physical or mental condition rendering you unable to perform your duties for the Company or any of its Affiliates for a period of six (6) consecutive months or longer; provided that if you are a party to an Employment Agreement at the time of termination of your Service and such Employment Agreement contains a different definition of “disability” (or any derivation thereof), the definition in such Employment Agreement will control for purposes of this Award Agreement.

“ Retirement ” means a termination of Service by you on or after the later of (i) your 55 ^th birthday and (ii) your completion of five years of Service with the Company or its Affiliates.

“ Without Cause ” means a termination of your Service by you for “Good Reason”, if you have an Employment Agreement that defines the term “Good Reason”, or by your employer (the “Employer”) other than any such termination by your Employer for Cause or due to your death or Disability; provided that if you are a party to an

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Employment Agreement at the time of termination of your Service and such Employment Agreement contains a different definition of “without cause” (or any derivation thereof), the definition in such Employment Agreement will control for purposes of this Award Agreement. Notwithstanding the foregoing, if you are a party to an Employment Agreement at the time of termination of your Service and such Employment Agreement provides that a termination of your Service by you for “Good Reason” constitutes termination of your Service “Without Cause”, such termination for Good Reason shall not constitute termination Without Cause for purposes of the acceleration of your Options following a Change in Control.

Taxes .

Regardless of any action the Company or your Employer takes with respect to any or all income tax, social security or insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option grant, including the grant, vesting or exercise of this Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (2) do not commit to structure the terms of the grant or any aspect of this Option to reduce or eliminate your liability for Tax-Related Items.

Prior to exercise of this Option, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or the Employer. In this regard, you authorize the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or the Employer or from proceeds of the sale of Shares. Alternatively, or in addition, if permissible under local law, the Company may in its sole and absolute discretion (1) sell or arrange for the sale of Shares that you acquire to meet the withholding obligation for Tax-Related Items, and/or (2) withhold the amount of Shares necessary to satisfy the minimum withholding amount. Finally, you will pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of your participation in the Plan or your purchase of Shares that cannot be satisfied by the means previously described. The Company may refuse to honor the exercise and refuse to deliver the Shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.

No Guarantee of Continued Service .

You acknowledge and agree that the vesting of this Option on the Vesting Date is earned only by performing continuing Service (not through the act of being hired or being granted this Award). You further acknowledge and agree that this Award Agreement, the transactions contemplated hereunder and the Vesting Date shall not be construed as giving you the right to be retained in the employ of, or to continue to provide Service to,

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the Company or any Affiliate. Further, the Company or the applicable Affiliate may at any time dismiss you, free from any liability, or any claim under the Plan, unless otherwise expressly provided in any other agreement binding you, the Company or the applicable Affiliate. The receipt of this Award is not intended to confer any rights on you except as set forth in this Award Agreement.

Termination for Cause; Restrictive Covenants .

In consideration for the grant of this Option and for other good and valuable consideration, the sufficiency of which is acknowledged by you, you agree as follows:

Upon (i) a termination of your Service for Cause, (ii) a retroactive termination of your Service for Cause as permitted herein or under your Employment Agreement, or (iii) a violation of any post-termination restrictive covenant (including, without limitation, non-disclosure, non-competition and/or non-solicitation) contained in your Employment Agreement, any separation or termination or similar agreement you may enter into with the Company or one of its Affiliates in connection with termination of your Service, any Options you hold that are then outstanding shall be immediately forfeited and the Company may require that you repay (with interest or appreciation (if any), as applicable, determined up to the date payment is made), and you shall promptly repay, to the Company, the Fair Market Value (in cash or in Shares) of any Shares received upon the exercise of Options during the period beginning on the date that is one year before the date of your termination and ending on the first anniversary of the date of your termination, minus the applicable exercise price. The Fair Market Value of any such Shares shall be determined as of the date of exercise of such Option.

Company’s Right of Offset .

If you become entitled to a distribution of benefits under this Award, and if at such time you have any outstanding debt, obligation, or other liability representing an amount owing to the Company or any of its Affiliates, then the Company or its Affiliates, upon a determination by the Committee, and to the extent permitted by applicable law and it would not cause a violation of Section 409A of the Code, may offset such amount so owing against the amount of benefits otherwise distributable. Such determination shall be made by the Committee.

Acknowledgment of Nature of Award .

In accepting this Option, you acknowledge that:

(a) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan;

(b) the Option award is voluntary, occasional and discretionary and does not create any contractual or other right to receive future Option awards, or benefits in lieu of Options even if Options have been awarded repeatedly in the past;

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(d) your participation in the Plan is voluntary;

(e) this Option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or to the Employer;

(f) this Option is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

(g) the future value of the underlying Shares is unknown and cannot be predicted with certainty;

(h) if the underlying Shares do not increase in value, this Option will have no value;

(i) if you receive Shares, the value of such Shares acquired upon exercise may increase or decrease in value; and

(j) no claim or entitlement to compensation or damages arises from termination of this Option, and no claim or entitlement to compensation or damages shall arise from any diminution in value of this Option or Shares received upon exercise of this Option resulting from termination of your Service by the Employer and you irrevocably release the Company and the Employer from any such claim that may arise.

Securities Laws .

By accepting this Option, you acknowledge that federal securities laws and/or the Company’s policies regarding trading in its securities may limit or restrict your right to buy or sell Shares, including, without limitation, sales of Shares acquired in connection with this Option. You agree to comply with such federal securities law requirements and Company policies, as such laws and policies are amended from time to time.

Data Privacy Notice and Consent.

You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Award Agreement by and among, as applicable, the Employer, the Company, its Subsidiaries and its Affiliates or such other third party administrator as designated by the Committee in its sole and absolute discretion for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that the Company, the Employer and/or such other third party administrator as designated by the Committee in its sole and absolute discretion may hold certain personal information about you, including, but not limited to, your name, home

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address and telephone number, date of birth, social insurance or social security number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of this Option or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker, escrow agent or other third party with whom the Shares received upon exercise of this Option may be deposited. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

Limits on Transferability; Beneficiaries .

This Option shall not be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability to any party, or Transferred, otherwise than by your will or the laws of descent and distribution or to a Beneficiary upon your death, and this Option shall be exercised during your lifetime only by you or your guardian or legal representative, except that this Option may be Transferred to one or more Beneficiaries or other Transferees during your lifetime with the consent of the Committee, and may be exercised by such Transferees in accordance with the terms of this Award Agreement. A Beneficiary, Transferee, or other person claiming any rights under this Award Agreement shall be subject to all terms and conditions of the Plan and this Award Agreement, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

No Transfer to any executor or administrator of your estate or to any Beneficiary by will or the laws of descent and distribution of any rights in respect of this Option shall be effective to bind the Company unless the Committee shall have been furnished with (i) written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the Transfer and (ii) the written agreement of the Transferee to comply with all the terms and conditions applicable to this Option and any Shares purchased upon exercise of this Option that are or would have been applicable to you.

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No Compensation Deferrals .

It is intended that the Option awarded pursuant to this Award Agreement be exempt from Section 409A of the Code (“Section 409A”) because it is believed that (i) the Exercise Price per Share may never be less than the Fair Market Value of a Share on the Grant Date and the number of Shares subject to the Option is fixed on the original Grant Date, (ii) the Transfer or exercise of the Option is subject to taxation under Section 83 of the Code and Treasury Regulation 1.83-7, and (iii) the Option does not include any feature for the deferral of compensation other than the deferral of recognition of income until the exercise of the Option. The provisions of this Award Agreement shall be interpreted in a manner consistent with this intention. In the event that the Company believes, at any time, that any benefit or right under this Award Agreement is subject to Section 409A, then the Committee may (acting alone and without any required consent by you) amend this Award Agreement in such manner as the Committee deems necessary or appropriate to be exempt from or otherwise comply with the requirements of Section 409A (including without limitation, amending the Award Agreement to increase the Exercise Price per Share to such amount as may be required in order for the Option to be exempt from Section 409A).

Notwithstanding the foregoing, the Company does not make any representation to you that the Option awarded pursuant to this Agreement is exempt from, or satisfies, the requirements of Section 409A, and the Company shall have no liability or other obligation to indemnify or hold harmless you or any Beneficiary for any tax, additional tax, interest or penalties that you or any Beneficiary may incur in the event that any provision of this Agreement, or any amendment or modification thereof or any other action taken with respect thereto, is deemed to violate any of the requirements of Section 409A.

Entire Agreement; Governing Law; Jurisdiction; Waiver of Jury Trial .

The Plan, this Award Agreement and, to the extent applicable, your Employment Agreement or any separation agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings, representations and agreements (whether oral or written) of the Company and you with respect to the subject matter hereof. This Award Agreement may not be modified in a manner that adversely affects your rights heretofore granted under the Plan, except with your consent or to comply with applicable law or to the extent permitted under other provisions of the Plan. This Award Agreement is governed by the laws of the State of Delaware, without regard to its principles of conflict of laws.

ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AGREEMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE OF FLORIDA OR (TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFORE) THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF FLORIDA, AND YOU IRREVOCABLY SUBMIT TO THE JURISDICTION OF BOTH SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. ANY ACTIONS OR PROCEEDINGS TO ENFORCE A JUDGMENT ISSUED BY ONE OF THE FOREGOING COURTS MAY BE ENFORCED IN ANY JURISDICTION.

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TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, YOU HEREBY WAIVE, AND COVENANT THAT YOU WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE.

By signing this Award Agreement, you acknowledge receipt of a copy of the Plan and represent that you are familiar with the terms and conditions of the Plan, and hereby accept this Award subject to all provisions in this Award Agreement and in the Plan. You hereby agree to accept as final, conclusive and binding all decisions or interpretations of the Committee upon any questions arising under the Plan or this Award Agreement.

Electronic Delivery .

The Company may, in its sole discretion, decide to deliver any documents related to this Option or future options that may be awarded under the Plan by electronic means or request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

Agreement Severable .

In the event that any provision in this Award Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Award Agreement.

Language .

If you have received this Award Agreement or any other document related to the Plan translated into a language other than English and if the translated version is different that the English version, the English version will control.

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APPENDIX A

ADDITIONAL TERMS AND CONDITIONS OF THE

BURGER KING WORLDWIDE, INC.

AMENDED AND RESTATED 2012 OMNIBUS INCENTIVE PLAN

OPTION AWARD AGREEMENT FOR NON-U.S. PARTICIPANTS

TERMS AND CONDITIONS

This Appendix A includes additional terms and conditions that govern this Option granted to you under the Plan if you are located outside the U.S. and/or in one of the countries listed below at the time of grant. Certain capitalized terms used but not defined in this Appendix A have the meanings set forth in the Amended and Restated 2012 Omnibus Incentive Plan and/or the Option Award Agreement.

NOTIFICATIONS

This Appendix A also includes information regarding exchange controls and certain other issues of which you should be aware with respect to participation in the Plan. The information is based on the securities, exchange control, and other laws in effect in the respective countries as of January 2012. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information in this Appendix A as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at the time you vest in or exercise this Option or sell Shares acquired under the Plan.

In addition, the information contained herein is general in nature and may not apply to your particular situation, and the Company is not in a position to assure you of a particular result. Accordingly, you are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation.

Finally, if you are a citizen or resident of a country other than the one in which you are currently working, transfer employment after this Option is granted or are considered a resident of another country for local law purposes, the notifications contained herein may not be applicable to you, and the Company shall, in its discretion, determine to what extent the terms and conditions contained herein shall apply to you.

GENERAL NON-U.S. TERMS AND CONDITIONS

TERMS AND CONDITIONS

The following terms and conditions apply to you if you are located outside of the U.S. at the time of grant.

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Entire Agreement .

The following provisions supplement the entire Award Agreement, generally:

If you are located outside the U.S., in no event will any aspect of this Option be determined in accordance with your Employment Agreement (or other Service contract). The terms and conditions of this Option will be solely determined in accordance with the provisions of the Plan and the Award Agreement, including this Appendix A, which supersede and replace any prior agreement, either written or verbal (including your Employment Agreement, if applicable) in relation to this Option.

Termination for Cause .

The Termination for Cause section of the Award Agreement shall only be enforced, to the extent deemed permissible under applicable local law, as determined in the sole discretion of the Committee.

Taxes .

The following provisions supplement the Taxes section of the Award Agreement:

You acknowledge that your liability for Tax-Related Items may exceed the amount withheld by the Company and/or the Employer.

If you have become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, you acknowledge that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

To avoid any negative accounting treatment, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the exercised Option, notwithstanding that a number of Shares are held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan.

Limits on Transferability; Beneficiaries .

The following provision supplements the Limits on Transferability; Beneficiaries section of the Award Agreement:

If you are located outside the U.S., this Option may not be Transferred to a designated Beneficiary and may only be Transferred upon your death to your legal heirs in accordance with applicable laws of descent and distribution. In no case may this Option be Transferred to another individual during your lifetime.

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Acknowledgement of Nature of Award .

The following provisions supplement the Acknowledgment of Nature of Award section of the Award Agreement:

You acknowledge the following with respect to this Option:

(a) The Option and any Shares acquired under the Plan are not intended to replace any pension rights or compensation.

(b) In no event should this Option or any Shares acquired under the Plan be considered as compensation for, or relating in any way to, past services for the Company, the Employer or any Affiliate.

No Advice Regarding Award .

The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying Shares. You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.

Governing Law .

The following provisions supplement the Governing Law section of the Award Agreement:

For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or the Award Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of Florida and agree that such litigation shall be conducted only in the court of Miami-Dade County, Florida, or the federal courts for the United States for the Southern District of Florida, and no other courts, where this grant is made and/or to be performed.

Appendix A .

Notwithstanding any provision in this Award Agreement, this Option grant shall be subject to the special terms and conditions set forth in any appendix to the Award Agreement for your country, including the provisions set forth in this Appendix A. Moreover, if you relocate to one of the countries included in this Appendix A, the special terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or facilitate the administration of the Plan. The Appendix constitutes part of the Award Agreement.

Imposition of Other Requirements .

The Company reserves the right to impose other requirements on your participation in the Plan, on this Option and on any Shares purchased upon exercise of this Option, to the extent the Company determines it is necessary or advisable in order to comply with local law or facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

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BRAZIL

TERMS AND CONDITIONS

Compliance with Law .

By accepting this Option you acknowledge that you agree to comply with applicable Brazilian laws and pay any and all applicable taxes legally due by you associated with the exercise of this Option, the receipt of any dividends, and the sale of Shares acquired under the Plan.

NOTIFICATIONS

Exchange Control Information .

If you are resident or domiciled in Brazil, you will be required to submit annually a declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights is equal to or greater than US$100,000. Assets and rights that must be reported include Shares.

CANADA

TERMS AND CONDITIONS

Form of Payment .

Notwithstanding anything in the Plan or the Award Agreement to the contrary, you are prohibited from surrendering Shares that you already own or attesting to the ownership of Shares to pay the Exercise Price or any Tax-Related Items in connection with this Option.

Data Privacy Notice and Consent .

This provision supplements the Data Privacy section of the Award Agreement:

You hereby authorize the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. You further authorize the Company and any Subsidiary or Affiliate and the administrator of the Plan to disclose and discuss the Plan with their advisors. You further authorize the Company and any Subsidiary or Affiliate to record such information and to keep such information in your employee file.

Termination of Service .

The following provision supplements the Termination section of the Award Agreement:

Your right to vest in this Option (if any) and your right to exercise the vested Option (if any) will terminate effective as of the earlier of (1) the date the you receive notice of termination from the Employer, or (2) the date you are no longer actively providing Service, regardless of any notice period or period of pay in lieu of such notice required under applicable laws (including, but not limited to statutory law, regulatory law and/or common law); the Committee shall have the exclusive discretion to determine when you are no longer actively providing Service for purposes of this Option.

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French Language Provision .

The following provisions will apply if you are a resident of Quebec:

The parties acknowledge that it is their express wish that the Award Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

Les parties reconnaissent avoir exigé la rédaction en anglais de la Convention, ainsi que de tous documents, avis et procédures judiciaires, exécutés, donnés ou intentés en vertu de, ou liés directement ou indirectement à, la présente convention.

GERMANY

NOTIFICATIONS

Exchange Control Information .

Cross-border payments in excess of €12,500 must be reported monthly to the German Federal Bank. If you use a German bank to transfer a cross-border payment in excess of €12,500 in connection with the sale of Shares acquired under the Plan, the bank will make the report for you. In addition, you must report any receivables or payables or debts in foreign currency exceeding an amount of €5,000,000 on a monthly basis.

MEXICO

TERMS AND CONDITIONS

Labor Law Policy and Acknowledgment .

In accepting the grant of this Option, you expressly recognize that Burger King Worldwide, Inc., with registered offices at 5500 Blue Lagoon Drive, Miami, Florida 33126, U.S.A., is solely responsible for the administration of the Plan and that your participation in the Plan and acquisition of Shares do not constitute a Service relationship between you and Burger King Worldwide, Inc. since you are participating in the Plan on a wholly commercial basis and your sole Employer is Administración de Comidas Rapidas SA de CV, located at Monte Elbruz No. 132, Piso 10, Colonia Chapultepec Morales, D.F., Mexico 11570. Based on the foregoing, you expressly recognize that the Plan and the benefits that you may derive from participating in the Plan do not establish any rights between you and the Employer, Administración de Comidas Rapidas SA de CV, and do not form part of the Service conditions and/or benefits provided by Administración de Comidas Rapidas SA de CV, and any modification of the Plan or its termination shall not constitute a change or impairment of the terms and conditions of your Service relationship.

You further understand that your participation in the Plan is as a result of a unilateral and discretionary decision of Burger King Worldwide, Inc.; therefore, Burger King Worldwide, Inc. reserves the absolute right to amend and/or discontinue your participation at any time without any liability to you.

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Finally, you hereby declare that you do not reserve to any action or right to bring any claim against Burger King Worldwide, Inc. for any compensation or damages regarding any provision of the Plan or the benefits derived under the Plan, and you therefore grant a full and broad release to Burger King Worldwide, Inc., its Subsidiaries, Affiliates, branches, representation offices, its shareholders, officers, agents, or legal representatives with respect to any claim that may arise.

TÉRMINOS Y CONDICIONES

Política Laboral y Reconocimiento/Aceptación.

Al aceptar el otorgamiento de esta Opción, usted expresamente reconoce que Burger King Worldwide, Inc., con oficinas registradas en 5500 Blue Lagoon Drive, Miami, Florida 33126, EE.UU., es únicamente responsable por la administración del Plan y que la participación de usted en el Plan y la adquisición de Acciones no constituyen una relación de Servicio entre usted y Burger King Worldwide, Inc., ya que usted está participando en el Plan sobre un base totalmente comercial y su único Patrón es Administración de Comidas Rapidas SA de CV con direccion ubicada en Monte Elbruz No. 132, Piso 10, Colonia Chapultepec Morales, D.F., Mexico 11570. Con base en lo anterior, usted expresamente reconoce que el Plan y los beneficios que pudieran derivarle de la participación en el Plan no establecen derecho alguno entre usted y el Patrón, Administración de Comidas Rapidas SA de CV y no forman parte de las condiciones de Servicios y/o las prestaciones otorgadas por Administración de Comidas Rapidas SA de CV y que cualquier modificación al Plan o su terminación no constituirá un cambio o daño o perjuicio a los términos y condiciones de su relación de Servicios.

Asimismo, usted además entiende que su participación en el Plan es resultado de una decisión unilateral y discrecional de Burger King Worldwide, Inc.; por lo tanto, Burger King Worldwide, Inc. se reserva el absoluto derecho de modificar y/o discontinuar su participación en cualquier momento y sin responsabilidad alguna frente el Participante.

Finalmente, usted por este medio declara que no se reserva derecho o acción alguna para presentar cualquier reclamación o demanda en contra de Burger King Worldwide, Inc. por cualquier compensación o daño en relación con cualquier disposición del Plan o de los beneficios derivados de conformidad con el Plan y, por lo tanto, usted otorga el más amplio y total finiquito que en derecho proceda a Burger King Worldwide, Inc., sus Subsidiarias, Afiliadas, sucursales, oficinas de representación, sus accionistas, funcionarios y/o directores, agentes o representantes legales en relación con cualquier reclamación demanda que pudiera surgir.

SINGAPORE

NOTIFICATIONS

Securities Law Information .

The grant of this Option is being made pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.)

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( “SFA” ). The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that this Option is subject to section 257 of the SFA and you will not be able to make (i) any subsequent sale of Shares in Singapore or (ii) any offer of such subsequent sale of Shares subject to the awards in Singapore, unless such sale or offer in is made pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA (Chapter 289, 2006 Ed.).

Director Notification Requirement .

Directors of a Singapore Affiliate are subject to certain notification requirements under the Singapore Companies Act. Directors must notify the Singapore Affiliate in writing of an interest ( e.g. , Options, Shares, etc.) in the Company or any related companies within two days of (i) its acquisition or disposal, (ii) any change in a previously disclosed interest ( e.g., when the Shares are sold), or (iii) becoming a director.

Insider Trading Notification .

You should be aware of the Singapore insider trading rules, which may impact the acquisition or disposal of shares or rights to Shares under the Plan. Under the Singapore insider trading rules, you are prohibited from selling Shares when you are in possession of information which is not generally available and which you know or should know will have a material effect on the price of Shares once such information is generally available.

SPAIN

TERMS AND CONDITIONS

Nature of Grant .

This provision supplements the Acknowledgement of the Nature of this Award section of the Award Agreement including this Appendix A:

In accepting this Option, you consent to participation in the Plan and acknowledge that you have received a copy of the Plan.

You understand and agree that, as a condition of the grant of this Option, except as provided for in the Award Agreement, the termination of your Service for any reason (including for the reasons listed below) will automatically result in the loss of this Option that has not vested on the date of termination.

In particular, you understand and agree that any unvested Option as of your termination date and any vested Option not exercised within the period set forth in the Award Agreement following your termination date will be forfeited without entitlement to the underlying Shares or to any amount as indemnification in the event of a termination by reason of, including, but not limited to: resignation, Retirement, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without cause, individual or collective layoff on objective grounds, whether adjudged to be with cause or adjudged or recognized to be without cause, material modification of the terms of employment under Article 41 of the Workers’ Statute, relocation under Article 40 of the Workers’ Statute, Article 50 of the Workers’ Statute, unilateral withdrawal by the Employer, and under Article 10.3 of Royal Decree 1382/1985.

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Furthermore, you understand that the Company has unilaterally, gratuitously and discretionally decided to grant this Option under the Plan to individuals who may be employees of the Company or any Subsidiary or Affiliate. The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company or its Subsidiaries or Affiliates on an ongoing basis other than to the extent set forth in the Award Agreement. Consequently, you understand that this Option is granted on the assumption and condition that this Option and the Shares issued upon exercise shall not become a part of any employment or Service contract (either with the Company, the Employer or any Subsidiary or Affiliate) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. In addition, you understand that the grant of this Option would not be made to you but for the assumptions and conditions referred to above; thus, you acknowledge and freely accept that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant to you of this Option shall be null and void.

NOTIFICATIONS

Securities Law Information .

The Option and the Shares described in the Award Agreement and this Appendix do not qualify under Spanish regulations as securities. No “offer of securities to the public”, as defined under Spanish law, has taken place or will take place in the Spanish territory. The Award Agreement (including this Appendix) has not been nor will it be registered with the Comisión Nacional del Mercado de Valores , and does not constitute a public offering prospectus.

Exchange Control Information .

The acquisition of Shares and the sale of Shares must be declared for statistical purposes to the Dirección General de Comercio e Inversiones (the “DGCI”) of the Ministry of Industry, Tourism and Commerce. Because you will not purchase or sell the Shares through the use of a Spanish financial institution, you must make the declaration by filing a D-6 form with the DGCI. Generally, the D-6 form must be filed each January while the Shares are owned or to report the sale of Shares.

When receiving foreign currency payments derived from the ownership of Shares ( i.e., dividends or sale proceeds) exceeding €50,000, you must inform the financial institution receiving the payment of the basis upon which such payment is made. You will need to provide the institution with the following information: (i) your name, address, and fiscal identification number; (ii) the name and corporate domicile of the Company; (iii) the amount of the payment; (iv) the currency used; (v) the country of origin; (vi) the reasons for the payment; and (vii) any further information that may be required.

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SWITZERLAND

NOTIFICATIONS

Securities Law Information .

The offer of this Option is considered a private offering in Switzerland and is therefore not subject to registration in Switzerland.

UNITED KINGDOM

TERMS & CONDITIONS

Tax Acknowledgment .

The following provisions supplement the Taxes section of the Award Agreement:

You shall pay to the Company or any Affiliate any amount of income tax that the Company or the Affiliate may be required to account to HM Revenue & Customs (“HMRC”) with respect to the event giving rise to the income tax (the “Taxable Event”) that cannot be satisfied by the means described in the Award Agreement. If payment or withholding of the income tax is not made within ninety (90) days of the Taxable Event or such other period as required under U.K. law (the “Due Date”), and if you are a director or executive officer of the Company (within the meaning of Section 13(k) of the U.S. Securities and Exchange Act of 1934, as amended), you will not be eligible for any loan to cover the income tax due. In the event that you are a director or executive officer and the income tax due is not collected from or paid by you by the Due Date, the amount of any uncollected income tax will constitute a benefit to you on which additional income tax and National Insurance contributions will be payable. You will be responsible for reporting and paying any income tax and National Insurance contributions due on this additional benefit directly to HMRC under the self-assessment regime.

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Exhibit 10.33

BURGER KING WORLDWIDE, INC.

AMENDED AND RESTATED 2012 OMNIBUS INCENTIVE PLAN

BOARD MEMBER OPTION AWARD AGREEMENT

This Award is issued pursuant to the Company’s compensation program for the Board and represents the initial Option authorized under such program. Unless defined in this Option Award Agreement (this “ Award Agreement ”), capitalized terms will have the same meanings ascribed to them in the Burger King Worldwide, Inc. Amended and Restated 2012 Omnibus Incentive Plan (as may be further amended from time to time, the “ Plan ”).

Pursuant to Section 6 of the Plan, you have been granted a Non-Qualified Stock Option (the “ Option ”) on the following terms and subject to the provisions of the Plan, which is incorporated herein by reference. In the event of a conflict between the provisions of the Plan and this Award Agreement, the provisions of the Plan will govern.


Total Number of Shares Underlying Options:		[ ] Shares

Exercise Price per Share:		$[ ] per Share

Grant Date:

Expiration Date:

Vesting Date:		[ ], subject to your continued Service through the Vesting Date and further subject to the Section entitled “Termination” in Exhibit A .

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EXHIBIT A

TERMS AND CONDITIONS OF THE

OPTION AWARD AGREEMENT

Vesting .

This Option will vest and become exercisable on the “Vesting Date” set forth in this Award Agreement. Any portion of this Option that becomes exercisable in accordance with the foregoing will remain exercisable until the Expiration Date, unless earlier terminated pursuant to the Plan or this Award Agreement (including, without limitation, the section below entitled “Termination”). Subject to the section below entitled “Termination,” this Option may be exercised only while you are in continuous Service with the Company. Prior to the exercise of this Option, you will not have any rights of a shareholder with respect to this Option or the Shares subject thereto.

Method of Exercise .

Adjustment for Certain Events .

Termination .

Upon termination of your Service (other than as set forth below) prior to the Vesting Date, you will forfeit this Option without any consideration due to you.

If your Service terminates prior to the Vesting Date Without Cause (as defined below) or by reason of your death or Disability (as defined below), you (or, if applicable, such other person who is entitled to exercise this Option) shall be vested in the number of Shares as if the Shares subject to the Option vested 20% on each of

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[ ], [ ], [ ], [ ] and [ ], respectively, and you (or, if applicable, such other person who is entitled to exercise this Option) may exercise the Option to the extent vested on the date of termination of your Service as provided for below.


Type of Termination		Option Exercise Period

Without Cause		90 day period beginning on the date of termination

Disability		One year period beginning on the date of termination

Death		One year period beginning on the date of termination

For Cause		None, the Option expires immediately

For purposes of this Award Agreement, the following terms shall have the following meanings:

“ Cause ” means your (i) gross negligence or willful misconduct in connection with your duties as a member of the Board or refusal, after demand, to substantially perform such duties, (ii) material violation of any of the Company’s policies, procedures, rules and regulations, including, without limitation, the Board of Director Code of Conduct and the Burger King Companies’ Code of Business Ethics and Conduct, in each case, as they may be amended from time to time in the Company’s sole discretion, (iii) dishonesty, fraud, embezzlement or misappropriation of funds or theft; or (iv) commission of a felony or other serious crime involving moral turpitude.

If you are terminated Without Cause and, within the twelve (12) month period subsequent to such termination of your Service, the Company determines that your Service could have been terminated for Cause, your Service will, at the election of the Company, be deemed to have been terminated for Cause, effective as of the date the events giving rise to Cause occurred.

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“ Disability ” means your physical or mental condition rendering you unable to perform your duties as a member of the Board for a period of six (6) consecutive months or longer.

“ Without Cause ” means a termination of your Service by the Board other than any such termination by the Board for Cause or due to your death or Disability.

Taxes .

You acknowledge that you are required to pay any withholding or other applicable taxes that may be due as a result of the grant, vesting or exercise of this Option and the receipt of Shares hereunder.

No Guarantee of Continued Service .

You acknowledge and agree that the vesting of this Option on the Vesting Date is earned only by performing continuing Service (not through the act of being granted this Award). You further acknowledge and agree that this Award Agreement, the transactions contemplated hereunder and the Vesting Date shall not be construed as giving you the right to continue to provide Service to, the Company or any Affiliate. Further, the Company or the applicable Affiliate may, at any time, dismiss you, free from any liability, or any claim under the Plan, unless otherwise expressly provided in any other agreement binding you, the Company or the applicable Affiliate. The receipt of this Award is not intended to confer any rights on you except as set forth in this Award Agreement.

Termination for Cause; Restrictive Covenants .

In consideration for the grant of this Option and for other good and valuable consideration, the sufficiency of which is acknowledged by you, you agree as follows:

Upon (i) a termination of your Service for Cause, (ii) a retroactive termination of your Service for Cause as permitted herein, or (iii) a violation of any post-termination restrictive covenant (including, without limitation, non-disclosure, non-competition and/or non-solicitation) contained in any separation or termination or similar agreement you may enter into with the Company or one of its Affiliates in connection with termination of your Service, any Options you hold that are then outstanding shall be immediately forfeited and the Company may require that you repay (with interest or appreciation (if any), as applicable, determined up to the date payment is made), and you shall promptly repay, to the Company, the Fair Market Value (in cash or in Shares) of any Shares received upon the exercise of Options during the period beginning on the date that is one year before the date of your termination and ending on the first anniversary of the date of your termination, minus the applicable exercise price. The Fair Market Value of any such Shares shall be determined as of the date of exercise of such Option.

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Company’s Right of Offset .

Acknowledgment of Nature of Award .

In accepting this Option, you acknowledge that:

(a) the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan;

(d) your participation in the Plan is voluntary;

(e) this Option is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company;

(g) the future value of the underlying Shares is unknown and cannot be predicted with certainty;

(h) if the underlying Shares do not increase in value, this Option will have no value;

(i) if you receive Shares, the value of such Shares acquired upon exercise may increase or decrease in value; and

(j) no claim or entitlement to compensation or damages arises from termination of this Option, and no claim or entitlement to compensation or damages shall arise from any diminution in value of this Option or Shares received upon exercise of this Option resulting from termination of your Service by the Board and you irrevocably release the Company and the Board from any such claim that may arise.

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Securities Laws .

Data Privacy Notice and Consent.

You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Award Agreement by and among, as applicable, the Company, its Subsidiaries and its Affiliates or such other third party administrator as designated by the Committee in its sole and absolute discretion for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that the Company and/or such other third party administrator as designated by the Committee in its sole and absolute discretion may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance or social security number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of this Option or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in your favor, for the purpose of implementing, administering and managing the Plan (“Data”). You understand that Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country, or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that you may request a list with the names and addresses of any potential recipients of the Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required to a broker, escrow agent or other third party with whom the Shares received upon exercise of this Option may be deposited. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

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Limits on Transferability; Beneficiaries .

No Compensation Deferrals .

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tax, interest or penalties that you or any Beneficiary may incur in the event that any provision of this Agreement, or any amendment or modification thereof or any other action taken with respect thereto, is deemed to violate any of the requirements of Section 409A.

Entire Agreement; Governing Law; Jurisdiction; Waiver of Jury Trial .

The Plan, this Award Agreement and, to the extent applicable, any separation agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings, representations and agreements (whether oral or written) of the Company and you with respect to the subject matter hereof. This Award Agreement may not be modified in a manner that adversely affects your rights heretofore granted under the Plan, except with your consent or to comply with applicable law or to the extent permitted under other provisions of the Plan. This Award Agreement is governed by the laws of the State of Delaware, without regard to its principles of conflict of laws.

Electronic Delivery .

The Company may, in its sole discretion, decide to deliver any documents related to this Option or future options that may be awarded under the Plan by electronic means

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or request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

Agreement Severable .

Language .

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APPENDIX A

ADDITIONAL TERMS AND CONDITIONS OF THE

BURGER KING WORLDWIDE, INC.

AMENDED AND RESTATED 2012 OMNIBUS INCENTIVE PLAN

OPTION AWARD AGREEMENT FOR NON-U.S. PARTICIPANTS

TERMS AND CONDITIONS

NOTIFICATIONS

This Appendix A also includes information regarding exchange controls and certain other issues of which you should be aware with respect to participation in the Plan. The information is based on the securities, exchange control, and other laws in effect in the respective countries as of January 2011. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information in this Appendix A as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at the time you vest in or exercise this Option or sell Shares acquired under the Plan.

GENERAL NON-U.S. TERMS AND CONDITIONS

TERMS AND CONDITIONS

The following terms and conditions apply to you if you are located outside of the U.S. at the time of grant.

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Entire Agreement .

The following provisions supplement the entire Award Agreement, generally:

If you are located outside the U.S., in no event will any aspect of this Option be determined in accordance with your Service contract, if applicable. The terms and conditions of this Option will be solely determined in accordance with the provisions of the Plan and the Award Agreement, including this Appendix A, which supersede and replace any prior agreement, either written or verbal in relation to this Option.

Termination for Cause .

The Termination for Cause section of the Award Agreement shall only be enforced, to the extent deemed permissible under applicable local law, as determined in the sole discretion of the Committee.

Taxes .

The following provisions supplement the Taxes section of the Award Agreement:

You acknowledge that your liability for Tax-Related Items may exceed the amount withheld by the Company.

If you have become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable or tax withholding event, as applicable, you acknowledge that the Company may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

Limits on Transferability; Beneficiaries .

The following provision supplements the Limits on Transferability; Beneficiaries section of the Award Agreement:

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Acknowledgement of Nature of Award .

The following provisions supplement the Acknowledgment of Nature of Award section of the Award Agreement:

You acknowledge the following with respect to this Option:

(a) The Option and any Shares acquired under the Plan are not intended to replace any pension rights or compensation.

(b) In no event should this Option or any Shares acquired under the Plan be considered as compensation for, or relating in any way to, past services for the Company or any Affiliate.

No Advice Regarding Award .

Governing Law .

The following provisions supplement the Governing Law section of the Award Agreement:

Appendix A .

Imposition of Other Requirements .

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BELGIUM

NOTIFICATIONS

Tax Acknowledgment .

You are required to report any bank accounts opened and maintained outside Belgium on your annual tax return.

BRAZIL

TERMS AND CONDITIONS

Compliance with Law .

NOTIFICATIONS

Exchange Control Information .

SWITZERLAND

NOTIFICATIONS

Securities Law Information .

The offer of this Option is considered a private offering in Switzerland and is therefore not subject to registration in Switzerland.

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EXHIBIT 31.1

CERTIFICATION

I, Daniel Schwartz, certify that:

I have reviewed this quarterly report on Form 10-Q of Burger King Worldwide, Inc:

Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Daniel Schwartz

Daniel Schwartz

Chief Executive Officer

Dated: October 28, 2013

EXHIBIT 31.2

CERTIFICATION

I, Joshua Kobza, certify that:

I have reviewed this quarterly report on Form 10-Q of Burger King Worldwide, Inc:

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Joshua Kobza

Joshua Kobza

Chief Financial Officer

Dated: October 28, 2013

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Burger King Worldwide, Inc. (the “Company”) for the quarter ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel Schwartz, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Daniel Schwartz

Daniel Schwartz

Chief Executive Officer

Dated: October 28, 2013

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Burger King Worldwide, Inc. (the “Company”) for the quarter ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joshua Kobza, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Joshua Kobza

Joshua Kobza

Chief Financial Officer

Dated: October 28, 2013