UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): December 6, 2010
BURGER KING HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware | 1-32875 | 75-3095469 | ||
(State or Other Jurisdiction | (Commission | (IRS Employer | ||
of Incorporation) | File Number) | Identification No.) |
5505 Blue Lagoon Drive
Miami, Florida
(Address of Principal Executive Offices)
Miami, Florida
(Address of Principal Executive Offices)
33126
(Zip Code)
(Zip Code)
(305) 378-3000
(Registrants Telephone Number, Including Area Code)
(Registrants Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.05 Costs Associated with Exit or Disposal Activities.
On December 6, 2010, Burger King Holdings, Inc. (the Company) implemented the beginning of a
restructuring plan that has resulted in the reduction of 413 corporate and field positions in the
Companys North America and Latin America business segments. In the United States, 371 corporate
and field positions were eliminated, the majority of which were based at the Companys headquarters
in Miami, Florida. Most of the affected employees are located in North America and Latin America
and were notified of this restructuring on December 6, 2010. The Company is undertaking the
restructuring as part of its on-going cost reduction efforts with the goal of driving efficiencies
and creating fiscal resources that will be reinvested into the Companys business.
As a result of the above-described work force reductions in North America and Latin America, the
Company currently estimates it will incur total charges of approximately $30 million related to
severance benefits and other severance-related expenses. These restructuring charges will result
in future cash expenditures. The Company expects to record these charges in the fourth quarter of
fiscal 2010, which ends on December 31, 2010. As previously reported in the Companys Quarterly
Report on Form 10-Q filed on November 9, 2010, the Company changed its fiscal year from June 30 to
December 31, effective as of November 5, 2010. The Company estimates that overall salary and
fringe expense as part of its general and administrative expenses (G&A) in North America and
Latin America will decrease on an annual run rate basis by
approximately $40 million to $50 million. The
Company expects to see the benefit of these cost reductions beginning in the first quarter of
fiscal 2011. If the Company is not able to maintain its operations with a reduced workforce, the
Company may incur additional G&A and therefore may not achieve these estimated cost reductions.
At this time, the Company is evaluating the organizational structures in its EMEA and APAC regions
to identify cost-saving opportunities that will increase efficiency and strengthen its business.
The Companys preliminary estimate of the total charges related to severance benefits and other
severance-related expenses for a work force reduction is $15 million. This estimate is
preliminary and is subject to change based on a variety of factors. These restructuring charges
will result in future cash expenditures. The Company expects to record these charges in the fourth
quarter of fiscal 2010. The Company estimates that overall salary and fringe expense in these
regions will decrease on an annual run rate basis by approximately $15 million to $20 million as a result
of these work force reductions. However, the Company is unable to determine the expected timing of
the benefits from these cost reductions.
The severance-related charges that the Company expects to incur in connection with these work force
reductions are subject to a number of assumptions, and actual results may differ. The Company may
also incur other charges not currently contemplated due to events that may occur as a result of, or
related to, these cost reductions. The above-described work force reductions will not impact the
number of employees at the BURGER KING® restaurants operated by the Company in any of its business
segments.
In addition, the Company is focused on reducing other corporate G&A expenses, including travel,
technology, rental, maintenance, recruiting, utilities, training and communication costs, as well
as professional fees and services. The Company is in the process of completing its initial
implementation of the Zero Based Budgeting program, which is a method of annual planning designed
to build a strong ownership culture by requiring departments to estimate and justify costs and
expenditures from a zero base rather than focusing on the prior years budget as the base. As a
result of the initial implementation of this program, the Company estimates that these other
corporate G&A expenses will decrease on an annual run rate basis by approximately $30 million to $40
million. These estimated savings are subject to a number of assumptions, and actual results may
differ. The Company is unable to determine the expected timing of the benefits from these cost
reductions.
This current report on Form 8-K contains forward-looking statements, including, but not limited to,
statements related to expectations of one-time severance costs, severance-related expenses and
other charges to be incurred in connection with the Companys global work force reductions;
expectations of a reduction in overall salary and fringe expense; expectations regarding the
Companys ability to maintain its operations with a reduced work force and achieve estimated cost
reductions; expectations of the benefits of the Companys Zero Based Budgeting program; and
expectations of the decrease in other corporate G&A expenses as a result of the initial
implementation of the Zero Based Budgeting program. These forward-looking statements are based on
the Companys current estimates and expectations and inherently involve significant risks and
uncertainties. The Companys actual financial results could differ materially from those
anticipated
in such forward-looking statements as a result of those risks and uncertainties, which include,
without limitation, the risk that the restructuring will not drive efficiencies or create fiscal
resources to reinvest into the Companys business; the risk that the restructuring will negatively
impact the Companys ability to successfully operate its business; the risk that the costs of the
restructuring may be greater than anticipated; the risk that the work force reductions in North
America, Latin America and the EMEA and APAC regions will not achieve estimated cost reductions;
the risk that the Companys Zero Based Budgeting program will not achieve estimated savings, and
other risks and uncertainties more fully described in the Companys periodic filings with the
Securities and Exchange Commission (the SEC). You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this current report. The
Company does not intend to update any forward-looking statement in this current report to reflect
any change in the events, conditions or circumstances arising after the date on which it is filed
with the SEC.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BURGER KING HOLDINGS, INC. |
||||
By: | /s/ Anne Chwat | |||
Anne Chwat | ||||
General Counsel and Secretary | ||||
Date: December 9, 2010
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