Burger King Holdings Inc. LBO Analysis

Circularity OffValuation date 6/30/2010Acquisition share price $24.00 Exit EV / EBITDA multiple 9.4x Exit year 5.0

Model based on 3G Capital's September 2, 2010 tender offer for all outstanding shares of Burger King Holdings, Inc ("BKC").Model assumes BKC pays a special dividend before the deal closes and 3G contributes 161 million in cash for operations.Specific financing terms were unknown as of the date of this analysis.

© One-Eyed Capitalist (www.oneeyedcapitalist.blogspot.com) 9/26/2010

Model based on 3G Capital's September 2, 2010 tender offer for all outstanding shares of Burger King Holdings, Inc ("BKC").Model assumes BKC pays a special dividend before the deal closes and 3G contributes 161 million in cash for operations.

All numbers in $mm except per share data

Sources

Equity financing 1,500.0 Term loan facility 1,750.0 Revolving credit facility 150.0 Senior unsecured notes 900.0 Existing capital leases 65.3 Total sources 4,365.3 Additional cash for operations 161.4

Deal terms

Advisory fee 1%Pay-out cash prior to closing Yes

LIBOR floor 1.75%Term loan interest spread 4.75%Revolver interest spread 4.75%Revolver commitment fee 1%Senior notes interest 8%

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Uses Balance sheet reconciliationPre LBO

BK offer price $24.00 Basic shares 135.9 Assets excl. cash 2,528.6 Diluted shares 139.3 Cash – Acquired equity value 3,344.1 Goodwill 31.0 Net debt 826.3 Total assets 2559.6Enterprise value 4,170.4 Advisory fees 33.4 Debt 761.0 Total uses 4,203.9 Leases 65.3

Other liabilties 792.5 Dilution Equity 940.8 Options outstanding 6.4 Weighted avg. exercise price 17.2 Total liabilties + SE 2,559.6 RSUs, deferred shares, PBRS awards 1.6 Weighted avg. exercise price – Dilution 3.456

Deal metrics

Transaction value 4,170.4 % debt 66% % equity 34%

EV / LTM EBITDA 9.4x Price / earnings 8.0x Debt / EBITDA 6.4x

Post LBO

Assets excl. cash 2,559.6 Cash 161.4 Goodwill (31.0)Total assets 2,690

Debt 2,800.0 Leases 65.3 Other liabilities 792.5 Equity 1,500.0

Total liabilties + SE 5,157.8 New goodwill 2,467.8

All numbers in $mm except per share data

Return analysisFor fiscal year ending June 30,

2008 2009 2010 2011 2012 2013

Sponsor investment (1,500.0) – – – Dividends – – – Exit enterprise value – – – (-) Net debt at exit – – – Total Sponsor cash flow (1,500.0) – – –

IRR 19.8%

Return sensitivity to exit multiple and Revolver / Term loan cost of debt

19.8% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50%7.0x 8.0x 9.0x

10.0x 11.0x

Return sensitivty to capex requirements and cost cutting

19.8% 5% 5.00% 5.50% 6.00% 6.50% 7.00%(3.0%)(2.0%)(1.0%)0.0% 1.0% 2.0% 3.0%

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For fiscal year ending June 30,2014 2015

– – – – – 5,329.3 – (1,625.5)– 3,703.8

5.00% 5.50%Exit multiple 9.4x Term loan spread 4.75%

7.50% 8.00%SG&A cost cutting in 2011 0.00%Capex % of sales 7.00%

Operating and debt paydown model

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Operating and debt paydown model

All numbers in $mm except per share data

InputsFor fiscal year ending June 30,

2008 2009 2010 2011

Revenue assumptionsCompany restaurant growth 5% (2%) 3% Franchise growth 1% 1% 1% Property ($ amount) 113.5 113.7 113.7

COGS assumptionsFood, paper, and product costs % sales 31% 32% 32% 31% Payroll and employee benefits % sales 30% 31% 31% 30% Occupancy and other costs % sales 24% 24% 25% 24%

Other income statement assumptionsSG&A cost cutting as a % of sales 0%SG&A as a % of sales 20% 19% 20% 20% Property expenses % of property revenue 51% 51% 52% 52% Other operating expenses (income) -0.6 1.9 -0.7 0

Fixed asset assumptionsCapex % of sales 7% 8% 6% 7%Intangible asset amortization 5 8.8 8.7 8.9Depreciation % of beg. PP&E 10.17% 10%

Balance sheet assumptionsReceivables % of sales 5.1% 5.7% 5.5%Prepaids and other current assets % of COGS 5.3% 5.5% 5.5%Deferred income taxes % of sales 1.3% 0.6% 1.0%Investment in franchisee property % of franchisee reven 24.9% 25.2% 25.0%Other assets 98.9 104.2 104.2 Accounts payable % of COGS 7.7% 6.6% 7.0%Accrued advertising % of sales 2.7% 2.9% 2.8%Other accrued liabilities % of sales 8.7% 8.0% 8.0%Other liabilties % of sales 14.0% 13.8% 13.8%Deferred income taxes % of sales 2.9% 2.7% 2.7%Share issues / (repurchases) 0.0Dividends 0.0

Tax assumptionsEffective tax rate 35.3% 29.7% 34.3% 35.5% Marginal tax rate 37.6% 37.8% 38.4% 38.4%

Debt assumptionsCash floor 50

Cash sweep 100%LIBORCredit facility interest rate 6.50%Credit facility commitment fee 1.00%Term loan interst rate 6.50%Senior notes interest rate 8%Capital lease interest rate 15% 15% 15% Principal repayments 0Interest on cash 1%

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For fiscal year ending June 30,2012 2013 2014 2015

3% 3% 3% 3% Growth assumption 1 Conservative1% 1% 1% 1%

113.7 113.7 113.7 113.7

31% 31% 31% 31% Operating leverage bene 2 Moderate30% 30% 30% 30% Restaurant costs as a % of restaurant sales changes by 3%24% 24% 24% 24%

1% 0% 0% 0%19% 19% 19% 19% 52% 52% 52% 52%

0 0 0 0

7% 7% 7% 7%8.8 8.8 8.6 8.2

10% 10% 10% 10%

5.5% 5.5% 5.5% 5.5%5.5% 5.5% 5.5% 5.5%1.0% 1.0% 1.0% 1.0%

25.0% 25.0% 25.0% 25.0%104.2 104.2 104.2 104.2 7.0% 7.0% 7.0% 7.0%2.8% 2.8% 2.8% 2.8%8.0% 8.0% 8.0% 8.0%

13.8% 13.8% 13.8% 13.8%2.7% 2.7% 2.7% 2.7%

0.0 0.0 0.0 0.00.0 0.0 0.0 0.0

35.5% 35.5% 35.5% 35.5% 38.4% 38.4% 38.4% 38.4%

50 50 50 50

100% 100% 100% 100%

6.50% 6.50% 6.50% 6.50%1.00% 1.00% 1.00% 1.00%6.50% 6.50% 6.50% 6.50%

8% 8% 8% 8%15% 15% 15% 15%

0 0 0 01% 1% 1% 1%

Conservative

Restaurant costs as a % of restaurant sales changes by 3%

All numbers in $mm except per share data

Income statementFor fiscal year ending June 30,

2008 2009 2010 2011

Revenue 2,454.7 2,537.4 2,502.2 2,554.6 Restaurant expenses 1,538.0 1,643.7 1,614.8 1,598.9 Gross margin (1) 916.7 893.7 887.4 955.7 SGA 501.0 494.3 495.8 506.2 Property expenses 62.1 58.1 59.4 58.6 Other operating expenses (income) (0.6) 1.9 (0.7) –

EBIT 354.2 339.4 332.9 391.0

Depreciation & amortization 95.6 98.1 111.7 110.3 EBITDA 449.8 437.5 444.6 501.3

Interest expense, net 61.2 54.6 48.6 – Profit before taxes 293.0 284.8 284.3 391.0

Tax expense 103.4 84.7 97.5 138.8 Net Income 189.6 200.1 186.8 252.2

Dividends 34.2 34.1 34.2 0

WASO - basic 135.1 134.8 135.4 135.4WASO - diluted 137.2 136.8 137.6 137.6EPS - basic $1.40 $1.48 $1.38 $1.86 EPS - diluted 0.25 0.25 0.25 1.83 Dividends per share 0.25 0.25 0.25 –

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For fiscal year ending June 30,2012 2013 2014 2015

2,608.3 2,663.3 2,719.5 2,777.1 1,639.2 1,680.5 1,722.9 1,766.3

969.1 982.8 996.7 1,010.8 490.7 501.1 511.7 522.5

58.6 58.6 58.6 58.6 – – – –

419.8 423.1 426.4 429.8

118.0 125.3 132.1 138.4 537.8 548.4 558.5 568.1

– – – – 419.8 423.1 426.4 429.8

149.0 150.2 151.4 152.6 270.8 272.9 275.1 277.2

0 0 0 0

135.4 135.4 135.4 135.4137.6 137.6 137.6 137.6

$2.00 $2.02 $2.03 $2.05 1.97 1.98 2.00 2.01

– – – –

All numbers in $mm except per share data

Balance sheetFor fiscal year ending June 30,

2008 2009 2010 2011

Cash and cash equivalents 121.7 0.0 50.0Receivables 130.0 142.9 137.6Prepaids and other current assets 86.4 88.4 88.8Deferred income taxes 32.5 15.1 25.0

Total current assets 370.6 246.4 301.5

PP&E, net 1013.2 1014.1 1091.5Intangible assets, net 1062.7 1025.4 1016.5Goodwill 26.4 31.0 2467.8Investment in property leased to franchisees 135.3 138.5 138.8Other assets 98.9 104.2 104.2

Total assets 2707.1 2559.6 5120.3

Accounts payable 127.0 106.9 113.0Accrued advertising 67.8 71.9 70.1Other accrued liabilities 220.0 200.9 200.2Current portion of LT debt and leases 67.5 93.3 0.0

Total current liabilities 482.3 473.0 383.3

LT debt 755.6 667.7 2506.6Capital leases 65.8 65.3 65.3Other liabilties 354.5 344.6 345.3Deferred income taxes 74.1 68.2 67.6

Total liabilities 1732.3 1618.8 3368.1

Common stock 1.4 1.4 -APIC, net 577.5 580.3 -Retained earnings 455.4 420.4 1752.2AOCI -59.5 -61.3 0.0

Total SE 974.8 940.8 1752.2

Total SE + liabiltiies 2707.1 2559.6 5120.3

Balance check 0.00 0.00 0.00

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For fiscal year ending June 30,2012 2013 2014 2015

50.0 50.0 50.0 50.0140.5 143.5 146.5 149.6

87.9 90.2 92.4 94.825.5 26.1 26.6 27.2

304.0 309.7 315.5 321.5

1164.9 1234.9 1301.8 1366.01007.7 998.9 990.3 982.12467.8 2467.8 2467.8 2467.8

140.4 141.9 143.5 145.1104.2 104.2 104.2 104.2

5189.0 5257.4 5323.1 5386.7

111.9 114.7 117.6 120.671.5 73.0 74.6 76.1

204.4 208.7 213.1 217.60.0 0.0 0.0 0.0

387.8 396.4 405.3 414.3

2291.4 2069.4 1842.1 1610.265.3 65.3 65.3 65.3

352.5 359.9 367.5 375.369.0 70.4 71.9 73.4

3166.0 2961.5 2752.1 2538.5

- - - -- - - -

2023.0 2295.9 2570.9 2848.10.0 0.0 0.0 0.0

2023.0 2295.9 2570.9 2848.1

5189.0 5257.4 5323.1 5386.7

0.00 0.00 0.00 0.00

All numbers in $mm except per share data

Cash flow statementFor fiscal year ending June 30,

2008 2009 2010 2011Cash flow from operating activitiesNet income 252.2 Depreciation and amortization 110.3 Change in receivables 5.3 Change in prepaids and other current assets (0.4)Change in deferred income taxes (9.9)Change in other assets – Change in accounts payable 6.1 Change in accrued advertising (1.8)Change in other accrued liabilities (0.7)Change in other liabilties 0.7 Change in deferred income taxes (0.6)

Operating cash flow 361.1

Cash flow from investing activitiesCapex (178.8)Change in investment in property leased to franchisees (0.3)

Investing cash flow (179.2)

Cash flow from financing activitiesDividends – Share issues / (repurchases) –

Cash flow available for debt repayment 181.9

Change in LT debt (293.4)Change in capital leases –

Financing cash flow (293.4)

Net change in cash (111.4)

Cash balance 161.4 50.0

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For fiscal year ending June 30,2012 2013 2014 2015

270.8 272.9 275.1 277.2 118.0 125.3 132.1 138.4

(2.9) (3.0) (3.0) (3.1)0.9 (2.2) (2.3) (2.3)

(0.5) (0.5) (0.5) (0.6)– – – –

(1.1) 2.8 2.9 3.0 1.5 1.5 1.5 1.6 4.2 4.3 4.4 4.5 7.2 7.4 7.6 7.8 1.4 1.4 1.5 1.5

399.4 410.0 419.2 427.9

(182.6) (186.4) (190.4) (194.4)(1.5) (1.6) (1.6) (1.6)

(184.1) (188.0) (191.9) (196.0)

– – – – – – – –

215.3 222.0 227.2 231.9

(215.3) (222.0) (227.2) (231.9)– – – –

(215.3) (222.0) (227.2) (231.9)

– – – –

50.0 50.0 50.0 50.0

All numbers in $mm except per share data

DebtFor fiscal year ending June 30,

2008 2009 2010 2011

Beginning cash 161.4 Cash floor 50.0 Cash flow available for debt service 181.9

Cash available for debt repayment 293.4

Revolving credit facilityBeginning balance 150.0 Issuance / (repayment) (150.0)Ending balance 150.0 – Interest expense 4.9 Commitment fee 0.8

Cash available for debt repayment 143.4

Term loan facilityBeginning balance 1,750.0 Issuance / (repayment) (143.4)Ending balance 1,750.0 1,606.6 Interest expense 109.1

Cash available for debt repayment –

Senior unsecured notesBeginning balance 900.0 Issuance / (repayment) – Ending balance 900.0 900.0 Interest expense 72.0

Cash available for debt repayment –

Capital leasesBeginning balance 65.3 Issuance / (repayment) – Ending balance 65.3 65.3 Interest expense 10.1

Debt summaryRevolving credit facility 150.0 – Term loan facility 1,750.0 1,606.6 Senior unsecured notes 900.0 900.0

Capital leases 65.3 65.3 Total 2,865.3 2,571.9

Interest expenseRevolving credit facility 5.6 Term loan facility 109.1 Senior unsecured notes 72.0 Capital leases 10.1

Total 196.8

Cash balance 161.4 50.0 Cash interest income 1.1

Interest expense, net 195.8

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For fiscal year ending June 30,2012 2013 2014 2015

50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0

215.3 222.0 227.2 231.9

215.3 222.0 227.2 231.9

– – – – – – – – – – – – – – – –

1.5 1.5 1.5 1.5

215.3 222.0 227.2 231.9

1,606.6 1,391.4 1,169.4 942.1 (215.3) (222.0) (227.2) (231.9)

1,391.4 1,169.4 942.1 710.2 97.4 83.2 68.6 53.7

– – – –

900.0 900.0 900.0 900.0 – – – –

900.0 900.0 900.0 900.0 72.0 72.0 72.0 72.0

– – – –

65.3 65.3 65.3 65.3 – – – –

65.3 65.3 65.3 65.3 10.1 10.1 10.1 10.1

– – – – 1,391.4 1,169.4 942.1 710.2

900.0 900.0 900.0 900.0

65.3 65.3 65.3 65.3 2,356.7 2,134.7 1,907.4 1,675.5

1.5 1.5 1.5 1.5 97.4 83.2 68.6 53.7 72.0 72.0 72.0 72.0 10.1 10.1 10.1 10.1

181.0 166.8 152.2 137.3

50.0 50.0 50.0 50.0 0.5 0.5 0.5 0.5

180.5 166.3 151.7 136.8

All numbers in $mm except per share data

CalculationsFor fiscal year ending June 30,

2008 2009 2010 2011

Beginning PP&E 1,013.2 1,014.1 Capex 178.2 204.0 150.3 178.8 Depreciation 101.4 Ending PP&E 1,013.2 1,014.1 1,091.5

Beginning retained earnings 1,500.0 Net income 252.2 Dividends – Ending retained earnings 1,500.0 1,752.2

Revenue projectionFor fiscal year ending June 30,

2008 2009 2010 2011Revenues

Company restaurant 1,795.9 1,880.5 1,839.3 1,885.6 Franchise 537.2 543.4 549.2 555.3 Property 121.6 113.5 113.7 113.7

Total 2,454.7 2,537.4 2,502.2 2,554.6

Restaurant COGS projectionFor fiscal year ending June 30,

2008 2009 2010 2011Restaurant expenses

Food, paper, and product costs 564.3 603.7 585.0 580.9 Payroll and employee benefits 534.7 582.2 568.7 564.2 Occupancy and other operating costs 439.0 457.8 461.1 453.9

Total 1,538.0 1,643.7 1,614.8 1,598.9

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For fiscal year ending June 30,2012 2013 2014 2015

1,091.5 1,164.9 1,234.9 1,301.8 182.6 186.4 190.4 194.4 109.2 116.5 123.5 130.2

1,164.9 1,234.9 1,301.8 1,366.0

1,752.2 2,023.0 2,295.9 2,570.9 270.8 272.9 275.1 277.2

– – – – 2,023.0 2,295.9 2,570.9 2,848.1

For fiscal year ending June 30,2012 2013 2014 2015

1,933.2 1,981.9 2,031.8 2,083.0 561.5 567.7 574.0 580.4 113.7 113.7 113.7 113.7

2,608.3 2,663.3 2,719.5 2,777.1

For fiscal year ending June 30,2012 2013 2014 2015

595.5 610.5 625.9 641.7 578.4 593.0 607.9 623.2 465.3 477.0 489.0 501.4

1,639.2 1,680.5 1,722.9 1,766.3

All numbers in $mm except per share data

MetricsFor fiscal year ending June 30,

2008 2009 2010 2011

Operating metricsRevenue growth 3% (1%) 2% EBIT margin 14% 13% 13% 15% EBITDA margin 18% 17% 18% 20% Profit margin 8% 8% 7% 10%

Credit metricsTotal debt 2,571.9 Net debt 2,521.9 Total debt / EBITDA 5.1x Net debt / EBITDA 5.0x Total debt / (EBITDA - Capex) 8.4x EBITDA / Interest expense 2.5x

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For fiscal year ending June 30,2012 2013 2014 2015

2% 2% 2% 2% 16% 16% 16% 15% 21% 21% 21% 20% 10% 10% 10% 10%

2,356.7 2,134.7 1,907.4 1,675.5 2,306.7 2,084.7 1,857.4 1,625.5

4.4x 3.9x 3.4x 2.9x 4.3x 3.8x 3.3x 2.9x 6.6x 5.6x 4.7x 3.9x 3.0x 3.3x 3.7x 4.1x