Burger King and Diageo Take Steps Toward Separation

Burger King Corporation has confirmed that in the event of a public offering of Burger King common stock, its parent company Diageo (NYSE: DEO) intends Burger King to have a balance sheet which will support investment grade unsecured debt rated 'BBB' or higher by Standard and Poor's.

Burger King said that in the context of such a separation, Diageo has also agreed to transfer to Burger King Corporation several foreign subsidiaries through which restaurants are operated outside North America. These are Burger King Limited (UK), Burger King BV (Netherlands) and Burger King Australia Pty. Burger King Corporation is a wholly-owned subsidiary of Diageo plc.

Following a recent return of capital to Diageo, Burger King Corporation currently has approximately $1 billion of long-term debt owed to Diageo on its balance sheet.

Burger King Corporation created the American icon, the HOME OF THE WHOPPER®, in 1957. The company and its franchisees operate more than 11,370 restaurants in all 50 states and 58 countries and international territories around the world, with more than 92% o BURGER KING® restaurants owned and operated by independent franchisees. Since the company's founding in Miami in 1954, the BURGER KING® brand has become recognized for great flame-broiled taste and HAVE IT YOUR WAY® food customization. In fiscal year 2000, the BURGER KING® system had system-wide sales of $11.4 billion. Burger King Corporation is a part of Diageo (NYSE: DEO), the international food and drinks company.