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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Canada
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98-1202754
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(State or Other Jurisdiction of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification No.)
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130 King Street West, Suite 300
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M5X 1E1
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Toronto,
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Ontario
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(Address of Principal Executive Offices)
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(Zip Code)
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbols
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Name of each exchange on which registered
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Common Shares, without par value
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QSR
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New York Stock Exchange
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Toronto Stock Exchange
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 6.
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As of
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||||||
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September 30,
2019 |
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December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,732
|
|
|
$
|
913
|
|
Accounts and notes receivable, net of allowance of $16 and $14, respectively
|
472
|
|
|
452
|
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||
Inventories, net
|
83
|
|
|
75
|
|
||
Prepaids and other current assets
|
86
|
|
|
60
|
|
||
Total current assets
|
2,373
|
|
|
1,500
|
|
||
Property and equipment, net of accumulated depreciation and amortization of $709 and $704, respectively
|
1,981
|
|
|
1,996
|
|
||
Operating lease assets, net
|
1,147
|
|
|
—
|
|
||
Intangible assets, net
|
10,439
|
|
|
10,463
|
|
||
Goodwill
|
5,579
|
|
|
5,486
|
|
||
Net investment in property leased to franchisees
|
47
|
|
|
54
|
|
||
Other assets, net
|
683
|
|
|
642
|
|
||
Total assets
|
$
|
22,249
|
|
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$
|
20,141
|
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LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts and drafts payable
|
$
|
510
|
|
|
$
|
513
|
|
Other accrued liabilities
|
797
|
|
|
637
|
|
||
Gift card liability
|
94
|
|
|
167
|
|
||
Current portion of long term debt and finance leases (Note 10)
|
776
|
|
|
91
|
|
||
Total current liabilities
|
2,177
|
|
|
1,408
|
|
||
Term debt, net of current portion
|
11,568
|
|
|
11,823
|
|
||
Finance leases, net of current portion
|
279
|
|
|
226
|
|
||
Operating lease liabilities, net of current portion
|
1,055
|
|
|
—
|
|
||
Other liabilities, net
|
1,598
|
|
|
1,547
|
|
||
Deferred income taxes, net
|
1,509
|
|
|
1,519
|
|
||
Total liabilities
|
18,186
|
|
|
16,523
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Common shares, no par value; unlimited shares authorized at September 30, 2019 and December 31, 2018; 298,095,767 shares issued and outstanding at September 30, 2019; 251,532,493 shares issued and outstanding at December 31, 2018
|
2,460
|
|
|
1,737
|
|
||
Retained earnings
|
762
|
|
|
674
|
|
||
Accumulated other comprehensive income (loss)
|
(864
|
)
|
|
(800
|
)
|
||
Total Restaurant Brands International Inc. shareholders’ equity
|
2,358
|
|
|
1,611
|
|
||
Noncontrolling interests
|
1,705
|
|
|
2,007
|
|
||
Total shareholders’ equity
|
4,063
|
|
|
3,618
|
|
||
Total liabilities and shareholders’ equity
|
$
|
22,249
|
|
|
$
|
20,141
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
624
|
|
|
$
|
609
|
|
|
$
|
1,735
|
|
|
$
|
1,743
|
|
Franchise and property revenues
|
834
|
|
|
766
|
|
|
2,389
|
|
|
2,229
|
|
||||
Total revenues
|
1,458
|
|
|
1,375
|
|
|
4,124
|
|
|
3,972
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
475
|
|
|
470
|
|
|
1,334
|
|
|
1,348
|
|
||||
Franchise and property expenses
|
133
|
|
|
107
|
|
|
401
|
|
|
314
|
|
||||
Selling, general and administrative expenses
|
320
|
|
|
298
|
|
|
948
|
|
|
917
|
|
||||
(Income) loss from equity method investments
|
(11
|
)
|
|
(4
|
)
|
|
(11
|
)
|
|
(17
|
)
|
||||
Other operating expenses (income), net
|
(30
|
)
|
|
26
|
|
|
(44
|
)
|
|
9
|
|
||||
Total operating costs and expenses
|
887
|
|
|
897
|
|
|
2,628
|
|
|
2,571
|
|
||||
Income from operations
|
571
|
|
|
478
|
|
|
1,496
|
|
|
1,401
|
|
||||
Interest expense, net
|
137
|
|
|
135
|
|
|
406
|
|
|
405
|
|
||||
Loss on early extinguishment of debt
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Income before income taxes
|
430
|
|
|
343
|
|
|
1,086
|
|
|
996
|
|
||||
Income tax expense
|
79
|
|
|
93
|
|
|
232
|
|
|
153
|
|
||||
Net income
|
351
|
|
|
250
|
|
|
854
|
|
|
843
|
|
||||
Net income attributable to noncontrolling interests (Note 12)
|
150
|
|
|
116
|
|
|
376
|
|
|
394
|
|
||||
Net income attributable to common shareholders
|
$
|
201
|
|
|
$
|
134
|
|
|
$
|
478
|
|
|
$
|
449
|
|
Earnings per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.76
|
|
|
$
|
0.53
|
|
|
$
|
1.85
|
|
|
$
|
1.81
|
|
Diluted
|
$
|
0.75
|
|
|
$
|
0.53
|
|
|
$
|
1.82
|
|
|
$
|
1.78
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
267
|
|
|
251
|
|
|
258
|
|
|
249
|
|
||||
Diluted
|
470
|
|
|
475
|
|
|
469
|
|
|
474
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
351
|
|
|
$
|
250
|
|
|
$
|
854
|
|
|
$
|
843
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
(173
|
)
|
|
147
|
|
|
185
|
|
|
(325
|
)
|
||||
Net change in fair value of net investment hedges, net of tax of $(37), $0, $2 and $(38)
|
143
|
|
|
(83
|
)
|
|
27
|
|
|
33
|
|
||||
Net change in fair value of cash flow hedges, net of tax of $9, $7, $43 and $(3)
|
(25
|
)
|
|
24
|
|
|
(116
|
)
|
|
52
|
|
||||
Amounts reclassified to earnings of cash flow hedges, net of tax of $(2), $1, $(3) and $(1)
|
5
|
|
|
8
|
|
|
7
|
|
|
14
|
|
||||
Other comprehensive income (loss)
|
(50
|
)
|
|
96
|
|
|
103
|
|
|
(226
|
)
|
||||
Comprehensive income (loss)
|
301
|
|
|
346
|
|
|
957
|
|
|
617
|
|
||||
Comprehensive income (loss) attributable to noncontrolling interests
|
129
|
|
|
161
|
|
|
424
|
|
|
288
|
|
||||
Comprehensive income (loss) attributable to common shareholders
|
$
|
172
|
|
|
$
|
185
|
|
|
$
|
533
|
|
|
$
|
329
|
|
|
Issued Common Shares
|
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Noncontrolling
Interest |
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2018
|
251,532,493
|
|
|
$
|
1,737
|
|
|
$
|
674
|
|
|
$
|
(800
|
)
|
|
$
|
2,007
|
|
|
$
|
3,618
|
|
Cumulative effect adjustment
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
9
|
|
|
21
|
|
|||||
Stock option exercises
|
2,019,620
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|||||
Share-based compensation
|
—
|
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Issuance of shares
|
134,809
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Dividends declared ($0.50 per share)
|
—
|
|
|
—
|
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
(127
|
)
|
|||||
Dividend equivalents declared on restricted stock units
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Distributions declared by Partnership on Partnership exchangeable units ($0.50 per unit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
(104
|
)
|
|||||
Exchange of Partnership exchangeable units for RBI common shares
|
141,190
|
|
|
2
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
135
|
|
|
—
|
|
|
111
|
|
|
246
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
26
|
|
|
22
|
|
|
48
|
|
|||||
Balances at March 31, 2019
|
253,828,112
|
|
|
$
|
1,812
|
|
|
$
|
692
|
|
|
$
|
(775
|
)
|
|
$
|
2,044
|
|
|
$
|
3,773
|
|
Stock option exercises
|
1,697,488
|
|
|
38
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38
|
|
|||||
Share-based compensation
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Issuance of shares
|
59,970
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends declared ($0.50 per share)
|
—
|
|
|
—
|
|
|
(128
|
)
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
|||||
Dividend equivalents declared on restricted stock units
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Distributions declared by Partnership on Partnership exchangeable units ($0.50 per unit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
(103
|
)
|
|||||
Exchange of Partnership exchangeable units for RBI common shares
|
45,325
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||||
Restaurant VIE contributions (distributions)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
142
|
|
|
—
|
|
|
115
|
|
|
257
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
58
|
|
|
47
|
|
|
105
|
|
|||||
Balances at June 30, 2019
|
255,630,895
|
|
|
$
|
1,870
|
|
|
$
|
704
|
|
|
$
|
(717
|
)
|
|
$
|
2,103
|
|
|
$
|
3,960
|
|
Stock option exercises
|
636,918
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|||||
Share-based compensation
|
—
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|||||
Issuance of shares
|
20,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends declared ($0.50 per share)
|
—
|
|
|
—
|
|
|
(141
|
)
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|||||
Dividend equivalents declared on restricted stock units
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Distributions declared by Partnership on Partnership exchangeable units ($0.50 per unit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92
|
)
|
|
(92
|
)
|
|||||
Exchange of Partnership exchangeable units for RBI common shares
|
41,807,254
|
|
|
552
|
|
|
—
|
|
|
(118
|
)
|
|
(434
|
)
|
|
—
|
|
|||||
Restaurant VIE contributions (distributions)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
201
|
|
|
—
|
|
|
150
|
|
|
351
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
(21
|
)
|
|
(50
|
)
|
|||||
Balances at September 30, 2019
|
298,095,767
|
|
|
$
|
2,460
|
|
|
$
|
762
|
|
|
$
|
(864
|
)
|
|
$
|
1,705
|
|
|
$
|
4,063
|
|
|
Issued Common Shares
|
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Noncontrolling
Interest |
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2017
|
243,899,476
|
|
|
$
|
2,052
|
|
|
$
|
651
|
|
|
$
|
(476
|
)
|
|
$
|
2,334
|
|
|
$
|
4,561
|
|
Cumulative effect adjustment
|
—
|
|
|
—
|
|
|
(132
|
)
|
|
—
|
|
|
(118
|
)
|
|
(250
|
)
|
|||||
Stock option exercises
|
5,058,992
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Share-based compensation
|
—
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|||||
Issuance of shares
|
113,733
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Dividends declared ($0.45 per share)
|
—
|
|
|
—
|
|
|
(112
|
)
|
|
—
|
|
|
—
|
|
|
(112
|
)
|
|||||
Distributions declared by Partnership on Partnership exchangeable units ($0.45 per unit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|
(98
|
)
|
|||||
Exchange of Partnership exchangeable units for RBI common shares
|
29,432
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restaurant VIE contributions (distributions)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
148
|
|
|
—
|
|
|
131
|
|
|
279
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(97
|
)
|
|
(86
|
)
|
|
(183
|
)
|
|||||
Balances at March 31, 2018
|
249,101,633
|
|
|
$
|
2,096
|
|
|
$
|
555
|
|
|
$
|
(573
|
)
|
|
$
|
2,164
|
|
|
$
|
4,242
|
|
Stock option exercises
|
410,383
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Share-based compensation
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Issuance of shares
|
12,332
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Dividends declared ($0.45 per share)
|
—
|
|
|
—
|
|
|
(112
|
)
|
|
—
|
|
|
—
|
|
|
(112
|
)
|
|||||
Dividend equivalents declared on restricted stock units
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Distributions declared by Partnership on Partnership exchangeable units ($0.45 per unit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|
(98
|
)
|
|||||
Exchange of Partnership exchangeable units for RBI common shares
|
42,923
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
167
|
|
|
—
|
|
|
147
|
|
|
314
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(74
|
)
|
|
(65
|
)
|
|
(139
|
)
|
|||||
Balances at June 30, 2018
|
249,567,271
|
|
|
$
|
2,116
|
|
|
$
|
608
|
|
|
$
|
(647
|
)
|
|
$
|
2,148
|
|
|
$
|
4,225
|
|
Stock option exercises
|
1,438,979
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|||||
Share-based compensation
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Issuance of shares
|
21,123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends declared ($0.45 per share)
|
—
|
|
|
—
|
|
|
(114
|
)
|
|
—
|
|
|
—
|
|
|
(114
|
)
|
|||||
Dividend equivalents declared on restricted stock units
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Distributions declared by Partnership on Partnership exchangeable units ($0.45 per unit)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|
(98
|
)
|
|||||
Exchange of Partnership exchangeable units for RBI common shares
|
92,978
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
134
|
|
|
—
|
|
|
116
|
|
|
250
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
45
|
|
|
96
|
|
|||||
Balances at September 30, 2018
|
251,120,351
|
|
|
$
|
2,157
|
|
|
$
|
626
|
|
|
$
|
(596
|
)
|
|
$
|
2,209
|
|
|
$
|
4,396
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
854
|
|
|
$
|
843
|
|
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
139
|
|
|
138
|
|
||
Non-cash loss on early extinguishment of debt
|
4
|
|
|
—
|
|
||
Amortization of deferred financing costs and debt issuance discount
|
22
|
|
|
22
|
|
||
(Income) loss from equity method investments
|
(11
|
)
|
|
(17
|
)
|
||
(Gain) loss on remeasurement of foreign denominated transactions
|
(38
|
)
|
|
(19
|
)
|
||
Net (gains) losses on derivatives
|
(43
|
)
|
|
(24
|
)
|
||
Share-based compensation expense
|
56
|
|
|
39
|
|
||
Deferred income taxes
|
(16
|
)
|
|
6
|
|
||
Other
|
1
|
|
|
11
|
|
||
Changes in current assets and liabilities, excluding acquisitions and dispositions:
|
|
|
|
||||
Accounts and notes receivable
|
(7
|
)
|
|
(1
|
)
|
||
Inventories and prepaids and other current assets
|
(34
|
)
|
|
(16
|
)
|
||
Accounts and drafts payable
|
(15
|
)
|
|
(24
|
)
|
||
Other accrued liabilities and gift card liability
|
(85
|
)
|
|
(284
|
)
|
||
Tenant inducements paid to franchisees
|
(13
|
)
|
|
(25
|
)
|
||
Other long-term assets and liabilities
|
97
|
|
|
24
|
|
||
Net cash provided by (used for) operating activities
|
911
|
|
|
673
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Payments for property and equipment
|
(32
|
)
|
|
(53
|
)
|
||
Net proceeds from disposal of assets, restaurant closures, and refranchisings
|
22
|
|
|
2
|
|
||
Settlement/sale of derivatives, net
|
17
|
|
|
11
|
|
||
Other investing activities, net
|
—
|
|
|
12
|
|
||
Net cash provided by (used for) investing activities
|
7
|
|
|
(28
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
750
|
|
|
—
|
|
||
Repayments of long-term debt and finance leases
|
(290
|
)
|
|
(66
|
)
|
||
Payment of financing costs
|
(13
|
)
|
|
—
|
|
||
Payment of dividends on common shares and distributions on Partnership exchangeable units
|
(669
|
)
|
|
(517
|
)
|
||
Payments in connection with redemption of preferred shares
|
—
|
|
|
(60
|
)
|
||
Proceeds from stock option exercises
|
99
|
|
|
53
|
|
||
Proceeds from derivatives
|
17
|
|
|
—
|
|
||
Other financing activities, net
|
—
|
|
|
1
|
|
||
Net cash (used for) provided by financing activities
|
(106
|
)
|
|
(589
|
)
|
||
Effect of exchange rates on cash and cash equivalents
|
7
|
|
|
(10
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
819
|
|
|
46
|
|
||
Cash and cash equivalents at beginning of period
|
913
|
|
|
1,097
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,732
|
|
|
$
|
1,143
|
|
Supplemental cash flow disclosures:
|
|
|
|
||||
Interest paid
|
$
|
433
|
|
|
$
|
411
|
|
Income taxes paid
|
$
|
171
|
|
|
$
|
374
|
|
|
As Reported
|
|
Total
|
|
Adjusted
|
||||||
|
December 31, 2018
|
|
Adjustments
|
|
January 1, 2019
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
913
|
|
|
$
|
—
|
|
|
$
|
913
|
|
Accounts and notes receivable, net
|
452
|
|
|
—
|
|
|
452
|
|
|||
Inventories, net
|
75
|
|
|
—
|
|
|
75
|
|
|||
Prepaids and other current assets
|
60
|
|
|
—
|
|
|
60
|
|
|||
Total current assets
|
1,500
|
|
|
—
|
|
|
1,500
|
|
|||
Property and equipment, net
|
1,996
|
|
|
26
|
|
(a)
|
2,022
|
|
|||
Operating lease assets, net
|
—
|
|
|
1,143
|
|
(b)
|
1,143
|
|
|||
Intangible assets, net
|
10,463
|
|
|
(133
|
)
|
(c)
|
10,330
|
|
|||
Goodwill
|
5,486
|
|
|
—
|
|
|
5,486
|
|
|||
Net investment in property leased to franchisees
|
54
|
|
|
—
|
|
|
54
|
|
|||
Other assets, net
|
642
|
|
|
—
|
|
|
642
|
|
|||
Total assets
|
$
|
20,141
|
|
|
$
|
1,036
|
|
|
$
|
21,177
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts and drafts payable
|
$
|
513
|
|
|
$
|
—
|
|
|
$
|
513
|
|
Other accrued liabilities
|
637
|
|
|
114
|
|
(d)
|
751
|
|
|||
Gift card liability
|
167
|
|
|
—
|
|
|
167
|
|
|||
Current portion of long term debt and finance leases
|
91
|
|
|
—
|
|
|
91
|
|
|||
Total current liabilities
|
1,408
|
|
|
114
|
|
|
1,522
|
|
|||
Term debt, net of current portion
|
11,823
|
|
|
(65
|
)
|
(e)
|
11,758
|
|
|||
Finance leases, net of current portion
|
226
|
|
|
62
|
|
(e)
|
288
|
|
|||
Operating lease liabilities, net of current portion
|
—
|
|
|
1,028
|
|
(f)
|
1,028
|
|
|||
Other liabilities, net
|
1,547
|
|
|
(132
|
)
|
(g)
|
1,415
|
|
|||
Deferred income taxes, net
|
1,519
|
|
|
8
|
|
(h)
|
1,527
|
|
|||
Total liabilities
|
16,523
|
|
|
1,015
|
|
|
17,538
|
|
|||
Shareholders’ equity:
|
|
|
|
|
|
||||||
Common shares
|
1,737
|
|
|
—
|
|
|
1,737
|
|
|||
Retained earnings
|
674
|
|
|
12
|
|
(i)
|
686
|
|
|||
Accumulated other comprehensive income (loss)
|
(800
|
)
|
|
—
|
|
|
(800
|
)
|
|||
Total RBI shareholders’ equity
|
1,611
|
|
|
12
|
|
|
1,623
|
|
|||
Noncontrolling interests
|
2,007
|
|
|
9
|
|
(i)
|
2,016
|
|
|||
Total shareholders’ equity
|
3,618
|
|
|
21
|
|
|
3,639
|
|
|||
Total liabilities and shareholders’ equity
|
$
|
20,141
|
|
|
$
|
1,036
|
|
|
$
|
21,177
|
|
(a)
|
Represents the net change in assets recorded in connection with build-to-suit leases.
|
(b)
|
Represents the capitalization of operating lease right-of-use (“ROU”) assets equal to the amount of recognized operating lease liability, adjusted by the net carrying amounts of related favorable lease assets and unfavorable lease liabilities in which we are the lessee and straight-line rent accruals, which were reclassified to operating lease ROU assets.
|
(c)
|
Represents the net carrying amount of favorable lease assets associated with leases in which we are the lessee, which have been reclassified to operating lease ROU assets.
|
(d)
|
Represents the current portion of operating lease liabilities.
|
(e)
|
Represents the net change in liabilities recorded in connection with build-to-suit leases.
|
(f)
|
Represents the recognition of operating lease liabilities, net of current portion.
|
(g)
|
Represents the net carrying amount of unfavorable lease liabilities associated with leases in which we are the lessee and $64 million of straight-line rent accruals which have been reclassified to operating lease ROU assets.
|
(h)
|
Represents the net tax effects of the adjustments noted above, with a corresponding adjustment to shareholders’ equity.
|
(i)
|
Represents net change in assets and liabilities recorded in connection with built-to-suit leases and the tax effects of adjustments noted above.
|
|
As of
|
||
|
September 30, 2019
|
||
Land
|
$
|
903
|
|
Buildings and improvements
|
1,131
|
|
|
Restaurant equipment
|
21
|
|
|
|
2,055
|
|
|
Accumulated depreciation and amortization
|
(451
|
)
|
|
Property and equipment leased, net
|
$
|
1,604
|
|
|
As of
|
||
|
September 30, 2019
|
||
Future rents to be received:
|
|
||
Future minimum lease receipts
|
$
|
50
|
|
Contingent rents (a)
|
21
|
|
|
Estimated unguaranteed residual value
|
15
|
|
|
Unearned income
|
(28
|
)
|
|
|
58
|
|
|
Current portion included within accounts receivables
|
(11
|
)
|
|
Net investment in property leased to franchisees
|
$
|
47
|
|
(a)
|
Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting.
|
|
|
Three months ended September 30, 2019
|
|
Nine months ended September 30, 2019
|
||||
Lease income - operating leases
|
|
|
|
|
||||
Minimum lease payments
|
|
$
|
112
|
|
|
$
|
335
|
|
Variable lease payments
|
|
100
|
|
|
281
|
|
||
Amortization of favorable and unfavorable income lease contracts, net
|
|
1
|
|
|
5
|
|
||
Subtotal - lease income from operating leases
|
|
213
|
|
|
621
|
|
||
Earned income on direct financing leases
|
|
2
|
|
|
7
|
|
||
Total property revenues
|
|
$
|
215
|
|
|
$
|
628
|
|
|
|
Three months ended September 30, 2019
|
|
Nine months ended September 30, 2019
|
||||
Operating lease cost
|
|
$
|
52
|
|
|
$
|
158
|
|
Operating lease variable lease cost
|
|
51
|
|
|
151
|
|
||
Finance lease cost:
|
|
|
|
|
||||
Amortization of right-of-use assets
|
|
7
|
|
|
20
|
|
||
Interest on lease liabilities
|
|
5
|
|
|
16
|
|
||
Sublease income
|
|
(164
|
)
|
|
(483
|
)
|
||
Total lease cost (income)
|
|
$
|
(49
|
)
|
|
$
|
(138
|
)
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
145
|
|
Operating cash flows from finance leases
|
|
$
|
16
|
|
Financing cash flows from finance leases
|
|
$
|
20
|
|
Right-of-use assets obtained in exchange for new finance lease obligations
|
|
$
|
5
|
|
Right-of-use assets obtained in exchange for new operating lease obligations
|
|
$
|
106
|
|
|
Lease Receipts
|
|
Lease Commitments (a)
|
||||||||||||
|
Direct
Financing Leases |
|
Operating
Leases |
|
Finance
Leases |
|
Operating
Leases |
||||||||
Remainder of 2019
|
$
|
3
|
|
|
$
|
106
|
|
|
$
|
12
|
|
|
$
|
49
|
|
2020
|
10
|
|
|
406
|
|
|
46
|
|
|
190
|
|
||||
2021
|
7
|
|
|
383
|
|
|
44
|
|
|
178
|
|
||||
2022
|
5
|
|
|
360
|
|
|
42
|
|
|
166
|
|
||||
2023
|
5
|
|
|
337
|
|
|
39
|
|
|
151
|
|
||||
Thereafter
|
20
|
|
|
1,899
|
|
|
270
|
|
|
961
|
|
||||
Total minimum receipts / payments
|
$
|
50
|
|
|
$
|
3,491
|
|
|
453
|
|
|
1,695
|
|
||
Less amount representing interest (b)
|
|
|
|
|
(147
|
)
|
|
(518
|
)
|
||||||
Present value of minimum lease payments
|
|
|
|
|
306
|
|
|
1,177
|
|
||||||
Current portion of lease obligations
|
|
|
|
|
(27
|
)
|
|
(122
|
)
|
||||||
Long-term portion of lease obligations
|
|
|
|
|
$
|
279
|
|
|
$
|
1,055
|
|
(a)
|
Minimum lease commitments have not been reduced by minimum sublease rentals of $2,298 million due in the future under non-cancelable subleases.
|
(b)
|
Calculated using the interest rate for each lease.
|
|
Lease Receipts
|
|
Lease Commitments (a)
|
||||||||||||
|
Direct
Financing Leases |
|
Operating
Leases |
|
Finance
Leases |
|
Operating
Leases |
||||||||
2019
|
$
|
14
|
|
|
$
|
416
|
|
|
$
|
38
|
|
|
$
|
183
|
|
2020
|
10
|
|
|
388
|
|
|
36
|
|
|
172
|
|
||||
2021
|
7
|
|
|
360
|
|
|
34
|
|
|
158
|
|
||||
2022
|
5
|
|
|
331
|
|
|
33
|
|
|
145
|
|
||||
2023
|
5
|
|
|
306
|
|
|
30
|
|
|
130
|
|
||||
Thereafter
|
19
|
|
|
1,704
|
|
|
201
|
|
|
831
|
|
||||
Total minimum receipts / payments
|
$
|
60
|
|
|
$
|
3,505
|
|
|
372
|
|
|
$
|
1,619
|
|
|
Less amount representing interest
|
|
|
|
|
(125
|
)
|
|
|
|||||||
Present value of minimum finance lease payments
|
|
|
|
|
247
|
|
|
|
|||||||
Current portion of finance lease obligation
|
|
|
|
|
(21
|
)
|
|
|
|||||||
Long-term portion of finance lease obligation
|
|
|
|
|
$
|
226
|
|
|
|
(a)
|
Minimum lease commitments have not been reduced by minimum sublease rentals of $2,290 million due in the future under non-cancelable subleases.
|
Contract Liabilities
|
|
TH
|
|
BK
|
|
PLK
|
|
Consolidated
|
||||||||
Balance at December 31, 2018
|
|
$
|
62
|
|
|
$
|
405
|
|
|
$
|
19
|
|
|
$
|
486
|
|
Revenue recognized that was included in the contract liability balance at the beginning of the year
|
|
(7
|
)
|
|
(30
|
)
|
|
(1
|
)
|
|
(38
|
)
|
||||
Increase, excluding amounts recognized as revenue during the period
|
|
6
|
|
|
55
|
|
|
6
|
|
|
67
|
|
||||
Impact of foreign currency translation
|
|
1
|
|
|
(9
|
)
|
|
—
|
|
|
(8
|
)
|
||||
Balance at September 30, 2019
|
|
$
|
62
|
|
|
$
|
421
|
|
|
$
|
24
|
|
|
$
|
507
|
|
Contract liabilities expected to be recognized in
|
|
TH
|
|
BK
|
|
PLK
|
|
Consolidated
|
||||||||
Remainder of 2019
|
|
$
|
2
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
11
|
|
2020
|
|
8
|
|
|
32
|
|
|
2
|
|
|
42
|
|
||||
2021
|
|
7
|
|
|
31
|
|
|
2
|
|
|
40
|
|
||||
2022
|
|
7
|
|
|
31
|
|
|
2
|
|
|
40
|
|
||||
2023
|
|
6
|
|
|
30
|
|
|
1
|
|
|
37
|
|
||||
Thereafter
|
|
32
|
|
|
288
|
|
|
17
|
|
|
337
|
|
||||
Total
|
|
$
|
62
|
|
|
$
|
421
|
|
|
$
|
24
|
|
|
$
|
507
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales
|
$
|
624
|
|
|
$
|
609
|
|
|
$
|
1,735
|
|
|
$
|
1,743
|
|
Royalties
|
602
|
|
|
557
|
|
|
1,706
|
|
|
1,611
|
|
||||
Property revenues
|
215
|
|
|
192
|
|
|
628
|
|
|
560
|
|
||||
Franchise fees and other revenue
|
17
|
|
|
17
|
|
|
55
|
|
|
58
|
|
||||
Total revenues
|
$
|
1,458
|
|
|
$
|
1,375
|
|
|
$
|
4,124
|
|
|
$
|
3,972
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders - basic
|
$
|
201
|
|
|
$
|
134
|
|
|
$
|
478
|
|
|
$
|
449
|
|
Add: Net income attributable to noncontrolling interests
|
150
|
|
|
116
|
|
|
376
|
|
|
393
|
|
||||
Net income available to common shareholders and noncontrolling interests - diluted
|
$
|
351
|
|
|
$
|
250
|
|
|
$
|
854
|
|
|
$
|
842
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares - basic
|
267
|
|
|
251
|
|
|
258
|
|
|
249
|
|
||||
Exchange of noncontrolling interests for common shares (Note 12)
|
197
|
|
|
218
|
|
|
204
|
|
|
218
|
|
||||
Effect of other dilutive securities
|
6
|
|
|
6
|
|
|
7
|
|
|
7
|
|
||||
Weighted average common shares - diluted
|
470
|
|
|
475
|
|
|
469
|
|
|
474
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share (a)
|
$
|
0.76
|
|
|
$
|
0.53
|
|
|
$
|
1.85
|
|
|
$
|
1.81
|
|
Diluted earnings per share (a)
|
$
|
0.75
|
|
|
$
|
0.53
|
|
|
$
|
1.82
|
|
|
$
|
1.78
|
|
Anti-dilutive securities outstanding
|
3
|
|
|
6
|
|
|
3
|
|
|
6
|
|
|
As of
|
||||||||||||||||||||||
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Identifiable assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Franchise agreements
|
$
|
709
|
|
|
$
|
(214
|
)
|
|
$
|
495
|
|
|
$
|
705
|
|
|
$
|
(194
|
)
|
|
$
|
511
|
|
Favorable leases (a)
|
129
|
|
|
(64
|
)
|
|
65
|
|
|
407
|
|
|
(200
|
)
|
|
207
|
|
||||||
Subtotal
|
838
|
|
|
(278
|
)
|
|
560
|
|
|
1,112
|
|
|
(394
|
)
|
|
718
|
|
||||||
Indefinite lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tim Hortons brand
|
$
|
6,425
|
|
|
$
|
—
|
|
|
$
|
6,425
|
|
|
$
|
6,259
|
|
|
$
|
—
|
|
|
$
|
6,259
|
|
Burger King brand
|
2,099
|
|
|
—
|
|
|
2,099
|
|
|
2,131
|
|
|
—
|
|
|
2,131
|
|
||||||
Popeyes brand
|
1,355
|
|
|
—
|
|
|
1,355
|
|
|
1,355
|
|
|
—
|
|
|
1,355
|
|
||||||
Subtotal
|
9,879
|
|
|
—
|
|
|
9,879
|
|
|
9,745
|
|
|
—
|
|
|
9,745
|
|
||||||
Intangible assets, net
|
|
|
|
|
$
|
10,439
|
|
|
|
|
|
|
$
|
10,463
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tim Hortons segment
|
$
|
4,140
|
|
|
|
|
|
|
$
|
4,038
|
|
|
|
|
|
||||||||
Burger King segment
|
593
|
|
|
|
|
|
|
602
|
|
|
|
|
|
||||||||||
Popeyes segment
|
846
|
|
|
|
|
|
|
846
|
|
|
|
|
|
||||||||||
Total
|
$
|
5,579
|
|
|
|
|
|
|
$
|
5,486
|
|
|
|
|
|
(a)
|
The decrease in favorable leases reflects the reclassification of favorable leases where we are the lessee to operating lease right-of-use assets in connection with our transition to ASC 842. See Note 4, Leases.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues from affiliates:
|
|
|
|
|
|
|
|
||||||||
Royalties
|
$
|
89
|
|
|
$
|
76
|
|
|
$
|
254
|
|
|
$
|
218
|
|
Property revenues
|
8
|
|
|
8
|
|
|
25
|
|
|
26
|
|
||||
Franchise fees and other revenue
|
1
|
|
|
3
|
|
|
7
|
|
|
7
|
|
||||
Total
|
$
|
98
|
|
|
$
|
87
|
|
|
$
|
286
|
|
|
$
|
251
|
|
|
As of
|
||||||
|
September 30,
2019 |
|
December 31,
2018 |
||||
Current:
|
|
|
|
||||
Dividend payable
|
$
|
232
|
|
|
$
|
207
|
|
Interest payable
|
91
|
|
|
87
|
|
||
Accrued compensation and benefits
|
52
|
|
|
69
|
|
||
Taxes payable
|
153
|
|
|
113
|
|
||
Deferred income
|
35
|
|
|
27
|
|
||
Accrued advertising expenses
|
27
|
|
|
30
|
|
||
Restructuring and other provisions
|
6
|
|
|
11
|
|
||
Current portion of operating lease liabilities (a)
|
122
|
|
|
—
|
|
||
Other
|
79
|
|
|
93
|
|
||
Other accrued liabilities
|
$
|
797
|
|
|
$
|
637
|
|
Noncurrent:
|
|
|
|
||||
Taxes payable
|
$
|
585
|
|
|
$
|
493
|
|
Contract liabilities
|
507
|
|
|
486
|
|
||
Unfavorable leases (b)
|
107
|
|
|
192
|
|
||
Derivatives liabilities
|
267
|
|
|
179
|
|
||
Accrued pension
|
62
|
|
|
64
|
|
||
Accrued lease straight-lining liability (b)
|
—
|
|
|
69
|
|
||
Deferred income
|
26
|
|
|
22
|
|
||
Other
|
44
|
|
|
42
|
|
||
Other liabilities, net
|
$
|
1,598
|
|
|
$
|
1,547
|
|
(a)
|
Represents the current portion of operating lease liabilities recognized in connection with our transition to ASC 842. See Note 4, Leases.
|
(b)
|
The decreases in unfavorable leases and accrued lease straight-lining liability reflect the reclassification of unfavorable leases and lease straight-lining liability where we are the lessee in the underlying operating lease to the right-of-use assets recorded for the underlying lease in connection with our transition to ASC 842. See Note 4, Leases.
|
|
As of
|
||||||
|
September 30,
2019 |
|
December 31,
2018 |
||||
Term Loan B (due February 17, 2024)
|
$
|
6,070
|
|
|
$
|
6,338
|
|
2015 4.625% Senior Notes (due January 15, 2022)
|
1,250
|
|
|
1,250
|
|
||
2017 4.25% Senior Notes (due May 15, 2024)
|
1,500
|
|
|
1,500
|
|
||
2019 3.875% Senior Notes (due January 15, 2028)
|
750
|
|
|
—
|
|
||
2017 5.00% Senior Notes (due October 15, 2025)
|
2,800
|
|
|
2,800
|
|
||
Other (a)
|
79
|
|
|
150
|
|
||
Less: unamortized deferred financing costs and deferred issue discount
|
(132
|
)
|
|
(145
|
)
|
||
Total debt, net
|
12,317
|
|
|
11,893
|
|
||
Less: current maturities of debt (b)
|
(749
|
)
|
|
(70
|
)
|
||
Total long-term debt
|
$
|
11,568
|
|
|
$
|
11,823
|
|
(a)
|
The decrease in Other reflects the de-recognition of obligations associated with build-to-suit leases recorded under the Previous Standard. Liabilities associated with build-to-suit leases were remeasured and recorded as finance lease liabilities in conjunction with our transition to ASC 842.
|
(b)
|
As of September 30, 2019, current maturities of debt includes $750 million of the total outstanding principal balance of the 2015 4.625% Senior Notes (defined below), net of related unamortized deferred financing costs, which is equal to the proceeds received from the issuance of the 2019 3.875% Senior Notes (defined below) that were used to redeem the 2015 4.625% Senior Notes on October 7, 2019.
|
|
As of
|
||||||
|
September 30,
2019 |
|
December 31,
2018 |
||||
Fair value of our variable term debt and senior notes
|
$
|
12,557
|
|
|
$
|
11,237
|
|
Principal carrying amount of our variable term debt and senior notes
|
12,370
|
|
|
11,888
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Debt (a)
|
$
|
130
|
|
|
$
|
125
|
|
|
$
|
382
|
|
|
$
|
375
|
|
Finance lease obligations
|
5
|
|
|
6
|
|
|
16
|
|
|
18
|
|
||||
Amortization of deferred financing costs and debt issuance discount
|
7
|
|
|
8
|
|
|
22
|
|
|
22
|
|
||||
Interest income
|
(5
|
)
|
|
(4
|
)
|
|
(14
|
)
|
|
(10
|
)
|
||||
Interest expense, net
|
$
|
137
|
|
|
$
|
135
|
|
|
$
|
406
|
|
|
$
|
405
|
|
(a)
|
Amount includes $16 million and $15 million benefit during the three months ended September 30, 2019 and 2018, respectively, and $53 million and $39 million benefit during the nine months ended September 30, 2019 and 2018, respectively, related to the amortization of the Excluded Component as defined in Note 13, Derivatives.
|
|
Derivatives
|
|
Pensions
|
|
Foreign Currency Translation
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||
Balance at December 31, 2018
|
$
|
253
|
|
|
$
|
(15
|
)
|
|
$
|
(1,038
|
)
|
|
$
|
(800
|
)
|
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
185
|
|
|
185
|
|
||||
Net change in fair value of derivatives, net of tax
|
(89
|
)
|
|
—
|
|
|
—
|
|
|
(89
|
)
|
||||
Amounts reclassified to earnings of cash flow hedges, net of tax
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Amounts attributable to noncontrolling interests
|
70
|
|
|
(3
|
)
|
|
(234
|
)
|
|
(167
|
)
|
||||
Balance at September 30, 2019
|
$
|
241
|
|
|
$
|
(18
|
)
|
|
$
|
(1,087
|
)
|
|
$
|
(864
|
)
|
|
Gain or (Loss) Recognized in Other Comprehensive Income (Loss)
|
||||||||||||||
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Derivatives designated as cash flow hedges(1)
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
(35
|
)
|
|
$
|
22
|
|
|
$
|
(156
|
)
|
|
$
|
46
|
|
Forward-currency contracts
|
$
|
1
|
|
|
$
|
(5
|
)
|
|
$
|
(3
|
)
|
|
$
|
8
|
|
Derivatives designated as net investment hedges
|
|
|
|
|
|
|
|
||||||||
Cross-currency rate swaps
|
$
|
180
|
|
|
$
|
(83
|
)
|
|
$
|
25
|
|
|
$
|
71
|
|
(1)
|
We did not exclude any components from the cash flow hedge relationships presented in this table.
|
|
|
Location of Gain or (Loss) Reclassified from AOCI into Earnings
|
|
Gain or (Loss) Reclassified from AOCI into Earnings
|
||||||||||||||
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
Interest expense, net
|
|
$
|
(7
|
)
|
|
$
|
(5
|
)
|
|
$
|
(14
|
)
|
|
$
|
(16
|
)
|
Forward-currency contracts
|
|
Cost of sales
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
4
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Location of Gain or (Loss) Recognized in Earnings
|
|
Gain or (Loss) Recognized in Earnings
(Amount Excluded from Effectiveness Testing)
|
||||||||||||||
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Derivatives designated as net investment hedges
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cross-currency rate swaps
|
|
Interest expense, net
|
|
$
|
16
|
|
|
$
|
15
|
|
|
$
|
53
|
|
|
$
|
39
|
|
|
Fair Value as of
|
|
|
|
|
||||||
|
September 30, 2019
|
|
December 31, 2018
|
|
Balance Sheet Location
|
||||||
Assets:
|
|
|
|
|
|
||||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
||||||
Foreign currency
|
$
|
1
|
|
|
$
|
7
|
|
|
Prepaids and other current assets
|
||
Derivatives designated as net investment hedges
|
|
|
|
|
|
||||||
Foreign currency
|
39
|
|
|
58
|
|
|
Other assets, net
|
||||
Total assets at fair value
|
$
|
40
|
|
|
$
|
65
|
|
|
|
||
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
||||||
Interest rate
|
$
|
223
|
|
|
$
|
72
|
|
|
Other liabilities, net
|
||
Derivatives designated as net investment hedges
|
|
|
|
|
|
||||||
Foreign currency
|
44
|
|
|
107
|
|
|
Other liabilities, net
|
||||
Total liabilities at fair value
|
$
|
267
|
|
|
$
|
179
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
(1
|
)
|
|
$
|
17
|
|
Litigation settlements (gains) and reserves, net
|
1
|
|
|
5
|
|
|
1
|
|
|
(1
|
)
|
||||
Net losses (gains) on foreign exchange
|
(35
|
)
|
|
(3
|
)
|
|
(38
|
)
|
|
(19
|
)
|
||||
Other, net
|
(2
|
)
|
|
17
|
|
|
(6
|
)
|
|
12
|
|
||||
Other operating expenses (income), net
|
$
|
(30
|
)
|
|
$
|
26
|
|
|
$
|
(44
|
)
|
|
$
|
9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues by operating segment:
|
|
|
|
|
|
|
|
||||||||
TH
|
$
|
881
|
|
|
$
|
854
|
|
|
$
|
2,472
|
|
|
$
|
2,440
|
|
BK
|
457
|
|
|
416
|
|
|
1,315
|
|
|
1,224
|
|
||||
PLK
|
120
|
|
|
105
|
|
|
337
|
|
|
308
|
|
||||
Total revenues
|
$
|
1,458
|
|
|
$
|
1,375
|
|
|
$
|
4,124
|
|
|
$
|
3,972
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues by country (a):
|
|
|
|
|
|
|
|
||||||||
Canada
|
$
|
805
|
|
|
$
|
776
|
|
|
$
|
2,245
|
|
|
$
|
2,214
|
|
United States
|
489
|
|
|
448
|
|
|
1,412
|
|
|
1,319
|
|
||||
Other
|
164
|
|
|
151
|
|
|
467
|
|
|
439
|
|
||||
Total revenues
|
$
|
1,458
|
|
|
$
|
1,375
|
|
|
$
|
4,124
|
|
|
$
|
3,972
|
|
(a)
|
Only Canada and the United States represented 10% or more of our total revenues in each period presented.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Segment income:
|
|
|
|
|
|
|
|
||||||||
TH
|
$
|
301
|
|
|
$
|
299
|
|
|
$
|
825
|
|
|
$
|
830
|
|
BK
|
254
|
|
|
231
|
|
|
728
|
|
|
681
|
|
||||
PLK
|
47
|
|
|
41
|
|
|
129
|
|
|
120
|
|
||||
Adjusted EBITDA
|
602
|
|
|
571
|
|
|
1,682
|
|
|
1,631
|
|
||||
Share-based compensation and non-cash incentive compensation expense
|
18
|
|
|
13
|
|
|
62
|
|
|
44
|
|
||||
PLK Transaction costs
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Corporate restructuring and tax advisory fees
|
5
|
|
|
5
|
|
|
22
|
|
|
19
|
|
||||
Office centralization and relocation costs
|
—
|
|
|
4
|
|
|
6
|
|
|
16
|
|
||||
Impact of equity method investments (a)
|
(9
|
)
|
|
—
|
|
|
1
|
|
|
(6
|
)
|
||||
Other operating expenses (income), net
|
(30
|
)
|
|
26
|
|
|
(44
|
)
|
|
9
|
|
||||
EBITDA
|
618
|
|
|
523
|
|
|
1,635
|
|
|
1,539
|
|
||||
Depreciation and amortization
|
47
|
|
|
45
|
|
|
139
|
|
|
138
|
|
||||
Income from operations
|
571
|
|
|
478
|
|
|
1,496
|
|
|
1,401
|
|
||||
Interest expense, net
|
137
|
|
|
135
|
|
|
406
|
|
|
405
|
|
||||
Loss on early extinguishment of debt
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Income tax expense
|
79
|
|
|
93
|
|
|
232
|
|
|
153
|
|
||||
Net income
|
$
|
351
|
|
|
$
|
250
|
|
|
$
|
854
|
|
|
$
|
843
|
|
(a)
|
Represents (i) (income) loss from equity method investments and (ii) cash distributions received from our equity method investments. Cash distributions received from our equity method investments are included in segment income.
|
•
|
System-wide sales growth refers to the percentage change in sales at all franchise restaurants and Company restaurants (referred to as system-wide sales) in one period from the same period in the prior year.
|
•
|
Comparable sales refers to the percentage change in restaurant sales in one period from the same prior year period for restaurants that have been open for 13 months or longer for TH and BK and 17 months or longer for PLK.
|
•
|
System-wide sales growth and comparable sales are measured on a constant currency basis, which means the results exclude the effect of foreign currency translation (“FX Impact”). For system-wide sales growth and comparable sales, we calculate the FX Impact by translating prior year results at current year monthly average exchange rates.
|
•
|
Unless otherwise stated, system-wide sales growth, system-wide sales, and comparable sales are presented on a system-wide basis, which means they include franchise restaurants and Company restaurants. System-wide results are driven by our franchise restaurants, as approximately 100% of current system-wide restaurants are franchised. Franchise sales represent sales at all franchise restaurants and are revenues to our franchisees. We do not record franchise sales as revenues; however, our royalty revenues are calculated based on a percentage of franchise sales.
|
•
|
Net restaurant growth reflects the percentage change in restaurant count (openings, net of closures) over a trailing twelve-month period, divided by the restaurant count at the beginning of the trailing twelve month period.
|
•
|
Beginning on January 1, 2019, we record lease income and lease cost on a gross basis for lessee reimbursements of costs such as property taxes and maintenance when we are the lessor in the lease. Although there was no net impact to our consolidated statement of operations from this change, the presentation resulted in total increases to both franchise and property revenues and franchise and property expenses of $32 million ($22 million related to our TH segment and $10 million related to our BK segment ) during the three months ended September 30, 2019 and $99 million ($65 million related to our TH segment, $33 million related to our BK segment and $1 million related to our PLK segment) during the nine months ended September 30, 2019, compared to the three and nine months ended September 30, 2018, respectively, when such amounts were recorded on a net basis.
|
•
|
As described in Note 4, Leases, to the accompanying unaudited condensed consolidated financial statements, the transition provisions of ASC 842 required the reclassification of favorable lease assets and unfavorable lease liabilities where we are the lessee in the underlying lease to the right-of-use (“ROU”) asset recorded for the underlying lease. As a result of this reclassification, the amortization period for certain favorable lease assets and unfavorable lease liabilities was reduced, resulting in $1 million and $5 million net increases in non-cash amortization expense during the three and nine months ended September 30, 2019, respectively, compared to the three and nine months ended September 30, 2018, respectively. Favorable lease assets and unfavorable lease liabilities associated with leases where we are the lessor were not impacted by our transition to ASC 842.
|
Consolidated
|
Three Months Ended September 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Sales
|
$
|
624
|
|
|
$
|
609
|
|
|
$
|
15
|
|
|
$
|
(5
|
)
|
|
$
|
20
|
|
|
$
|
1,735
|
|
|
$
|
1,743
|
|
|
$
|
(8
|
)
|
|
$
|
(44
|
)
|
|
$
|
36
|
|
Franchise and property revenues
|
834
|
|
|
766
|
|
|
68
|
|
|
(8
|
)
|
|
76
|
|
|
2,389
|
|
|
2,229
|
|
|
160
|
|
|
(49
|
)
|
|
209
|
|
||||||||||
Total revenues
|
1,458
|
|
|
1,375
|
|
|
83
|
|
|
(13
|
)
|
|
96
|
|
|
4,124
|
|
|
3,972
|
|
|
152
|
|
|
(93
|
)
|
|
245
|
|
||||||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cost of sales
|
475
|
|
|
470
|
|
|
(5
|
)
|
|
4
|
|
|
(9
|
)
|
|
1,334
|
|
|
1,348
|
|
|
14
|
|
|
34
|
|
|
(20
|
)
|
||||||||||
Franchise and property expenses
|
133
|
|
|
107
|
|
|
(26
|
)
|
|
1
|
|
|
(27
|
)
|
|
401
|
|
|
314
|
|
|
(87
|
)
|
|
7
|
|
|
(94
|
)
|
||||||||||
Selling, general and administrative expenses
|
320
|
|
|
298
|
|
|
(22
|
)
|
|
2
|
|
|
(24
|
)
|
|
948
|
|
|
917
|
|
|
(31
|
)
|
|
11
|
|
|
(42
|
)
|
||||||||||
(Income) loss from equity method investments
|
(11
|
)
|
|
(4
|
)
|
|
7
|
|
|
—
|
|
|
7
|
|
|
(11
|
)
|
|
(17
|
)
|
|
(6
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||||||||
Other operating expenses (income), net
|
(30
|
)
|
|
26
|
|
|
56
|
|
|
—
|
|
|
56
|
|
|
(44
|
)
|
|
9
|
|
|
53
|
|
|
(2
|
)
|
|
55
|
|
||||||||||
Total operating costs and expenses
|
887
|
|
|
897
|
|
|
10
|
|
|
7
|
|
|
3
|
|
|
2,628
|
|
|
2,571
|
|
|
(57
|
)
|
|
47
|
|
|
(104
|
)
|
||||||||||
Income from operations
|
571
|
|
|
478
|
|
|
93
|
|
|
(6
|
)
|
|
99
|
|
|
1,496
|
|
|
1,401
|
|
|
95
|
|
|
(46
|
)
|
|
141
|
|
||||||||||
Interest expense, net
|
137
|
|
|
135
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
406
|
|
|
405
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||||
Loss on early extinguishment of debt
|
4
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
4
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
||||||||||
Income before income taxes
|
430
|
|
|
343
|
|
|
87
|
|
|
(6
|
)
|
|
93
|
|
|
1,086
|
|
|
996
|
|
|
90
|
|
|
(46
|
)
|
|
136
|
|
||||||||||
Income tax expense
|
79
|
|
|
93
|
|
|
14
|
|
|
9
|
|
|
5
|
|
|
232
|
|
|
153
|
|
|
(79
|
)
|
|
11
|
|
|
(90
|
)
|
||||||||||
Net income
|
$
|
351
|
|
|
$
|
250
|
|
|
$
|
101
|
|
|
$
|
3
|
|
|
$
|
98
|
|
|
$
|
854
|
|
|
$
|
843
|
|
|
$
|
11
|
|
|
$
|
(35
|
)
|
|
$
|
46
|
|
(a)
|
We calculate the FX Impact by translating prior year results at current year monthly average exchange rates. We analyze these results on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements.
|
TH Segment
|
Three Months Ended September 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Sales
|
$
|
584
|
|
|
$
|
571
|
|
|
$
|
13
|
|
|
$
|
(5
|
)
|
|
$
|
18
|
|
|
$
|
1,618
|
|
|
$
|
1,627
|
|
|
$
|
(9
|
)
|
|
$
|
(44
|
)
|
|
$
|
35
|
|
Franchise and property revenues
|
297
|
|
|
283
|
|
|
14
|
|
|
(3
|
)
|
|
17
|
|
|
854
|
|
|
813
|
|
|
41
|
|
|
(22
|
)
|
|
63
|
|
||||||||||
Total revenues
|
881
|
|
|
854
|
|
|
27
|
|
|
(8
|
)
|
|
35
|
|
|
2,472
|
|
|
2,440
|
|
|
32
|
|
|
(66
|
)
|
|
98
|
|
||||||||||
Cost of sales
|
441
|
|
|
437
|
|
|
(4
|
)
|
|
4
|
|
|
(8
|
)
|
|
1,233
|
|
|
1,250
|
|
|
17
|
|
|
34
|
|
|
(17
|
)
|
||||||||||
Franchise and property expenses
|
91
|
|
|
72
|
|
|
(19
|
)
|
|
1
|
|
|
(20
|
)
|
|
268
|
|
|
210
|
|
|
(58
|
)
|
|
6
|
|
|
(64
|
)
|
||||||||||
Segment SG&A
|
77
|
|
|
76
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
236
|
|
|
238
|
|
|
2
|
|
|
6
|
|
|
(4
|
)
|
||||||||||
Segment depreciation and amortization (b)
|
28
|
|
|
26
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
80
|
|
|
78
|
|
|
(2
|
)
|
|
2
|
|
|
(4
|
)
|
||||||||||
Segment income (c)
|
301
|
|
|
299
|
|
|
2
|
|
|
(2
|
)
|
|
4
|
|
|
825
|
|
|
830
|
|
|
(5
|
)
|
|
(22
|
)
|
|
17
|
|
(b)
|
Segment depreciation and amortization consists of depreciation and amortization included in cost of sales and franchise and property expenses.
|
(c)
|
TH segment income includes $3 million and $4 million of cash distributions received from equity method investments for the three months ended September 30, 2019 and 2018, respectively. TH segment income includes $11 million and $10 million of cash distributions received from equity method investments for the nine months ended September 30, 2019 and 2018, respectively.
|
BK Segment
|
Three Months Ended September 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Sales
|
$
|
19
|
|
|
$
|
18
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
57
|
|
|
$
|
56
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Franchise and property revenues
|
438
|
|
|
398
|
|
|
40
|
|
|
(5
|
)
|
|
45
|
|
|
1,258
|
|
|
1,168
|
|
|
90
|
|
|
(26
|
)
|
|
116
|
|
||||||||||
Total revenues
|
457
|
|
|
416
|
|
|
41
|
|
|
(5
|
)
|
|
46
|
|
|
1,315
|
|
|
1,224
|
|
|
91
|
|
|
(26
|
)
|
|
117
|
|
||||||||||
Cost of sales
|
18
|
|
|
17
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
53
|
|
|
50
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
||||||||||
Franchise and property expenses
|
39
|
|
|
33
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|
124
|
|
|
97
|
|
|
(27
|
)
|
|
1
|
|
|
(28
|
)
|
||||||||||
Segment SG&A
|
159
|
|
|
147
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
|
449
|
|
|
433
|
|
|
(16
|
)
|
|
2
|
|
|
(18
|
)
|
||||||||||
Segment depreciation and amortization (b)
|
12
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
36
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||||
Segment income (d)
|
254
|
|
|
231
|
|
|
23
|
|
|
(4
|
)
|
|
27
|
|
|
728
|
|
|
681
|
|
|
47
|
|
|
(23
|
)
|
|
70
|
|
(d)
|
No cash distributions were received from equity method investments for the three months ended September 30, 2019 and 2018. BK segment income includes $2 million and $1 million of cash distributions received from equity method investments for the nine months ended September 30, 2019 and 2018, respectively.
|
PLK Segment
|
Three Months Ended September 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
|
Nine Months Ended September 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Sales
|
$
|
21
|
|
|
$
|
20
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
60
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Franchise and property revenues
|
99
|
|
|
85
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|
277
|
|
|
248
|
|
|
29
|
|
|
(1
|
)
|
|
30
|
|
||||||||||
Total revenues
|
120
|
|
|
105
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
337
|
|
|
308
|
|
|
29
|
|
|
(1
|
)
|
|
30
|
|
||||||||||
Cost of sales
|
16
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
48
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Franchise and property expenses
|
3
|
|
|
2
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
9
|
|
|
7
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||||||
Segment SG&A
|
56
|
|
|
48
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|
159
|
|
|
141
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
||||||||||
Segment depreciation and amortization (b)
|
2
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Segment income
|
47
|
|
|
41
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|
129
|
|
|
120
|
|
|
9
|
|
|
(1
|
)
|
|
10
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended
September 30, |
||||||||||||
Key Business Metrics
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
System-wide sales growth
|
|
|
|
|
|
|
|
||||||||
TH
|
(0.1
|
)%
|
|
2.8
|
%
|
|
0.6
|
%
|
|
2.4
|
%
|
||||
BK
|
10.7
|
%
|
|
7.8
|
%
|
|
9.6
|
%
|
|
9.1
|
%
|
||||
PLK
|
15.6
|
%
|
|
7.9
|
%
|
|
10.5
|
%
|
|
9.8
|
%
|
||||
Consolidated
|
8.9
|
%
|
|
6.7
|
%
|
|
7.8
|
%
|
|
7.7
|
%
|
||||
System-wide sales
|
|
|
|
|
|
|
|
||||||||
TH
|
$
|
1,774
|
|
|
$
|
1,793
|
|
|
$
|
5,037
|
|
|
$
|
5,143
|
|
BK
|
$
|
6,010
|
|
|
$
|
5,544
|
|
|
$
|
17,016
|
|
|
$
|
16,096
|
|
PLK
|
$
|
1,103
|
|
|
$
|
956
|
|
|
$
|
3,070
|
|
|
$
|
2,797
|
|
Consolidated
|
$
|
8,887
|
|
|
$
|
8,293
|
|
|
$
|
25,123
|
|
|
$
|
24,036
|
|
Comparable sales
|
|
|
|
|
|
|
|
||||||||
TH
|
(1.4
|
)%
|
|
0.6
|
%
|
|
(0.5
|
)%
|
|
0.1
|
%
|
||||
BK
|
4.8
|
%
|
|
1.0
|
%
|
|
3.6
|
%
|
|
2.1
|
%
|
||||
PLK
|
9.7
|
%
|
|
0.5
|
%
|
|
4.5
|
%
|
|
2.1
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
As of September 30,
|
||||||||||
|
|
|
|
|
2019
|
|
2018
|
||||||||
Net restaurant growth
|
|
|
|
|
|
|
|
||||||||
TH
|
|
|
|
|
1.7
|
%
|
|
2.7
|
%
|
||||||
BK
|
|
|
|
|
5.8
|
%
|
|
6.1
|
%
|
||||||
PLK
|
|
|
|
|
5.6
|
%
|
|
7.6
|
%
|
||||||
Consolidated
|
|
|
|
|
5.0
|
%
|
|
5.6
|
%
|
||||||
Restaurant count
|
|
|
|
|
|
|
|
||||||||
TH
|
|
|
|
|
4,887
|
|
|
4,805
|
|
||||||
BK
|
|
|
|
|
18,232
|
|
|
17,239
|
|
||||||
PLK
|
|
|
|
|
3,192
|
|
|
3,022
|
|
||||||
Consolidated
|
|
|
|
|
26,311
|
|
|
25,066
|
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
|
|
$
|
|
%
|
|
|
$
|
|
%
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||
Segment SG&A:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
TH
|
$
|
77
|
|
|
$
|
76
|
|
|
$
|
(1
|
)
|
|
(1.3
|
)%
|
|
$
|
236
|
|
|
$
|
238
|
|
|
$
|
2
|
|
|
0.8
|
%
|
BK
|
159
|
|
|
147
|
|
|
(12
|
)
|
|
(8.2
|
)%
|
|
449
|
|
|
433
|
|
|
(16
|
)
|
|
(3.7
|
)%
|
||||||
PLK
|
56
|
|
|
48
|
|
|
(8
|
)
|
|
(16.7
|
)%
|
|
159
|
|
|
141
|
|
|
(18
|
)
|
|
(12.8
|
)%
|
||||||
Share-based compensation and non-cash incentive compensation expense
|
18
|
|
|
13
|
|
|
(5
|
)
|
|
(38.5
|
)%
|
|
62
|
|
|
44
|
|
|
(18
|
)
|
|
(40.9
|
)%
|
||||||
Depreciation and amortization
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
%
|
|
14
|
|
|
16
|
|
|
2
|
|
|
12.5
|
%
|
||||||
PLK Transaction costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|
10
|
|
|
10
|
|
|
NM
|
|
||||||
Corporate restructuring and tax advisory fees
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
%
|
|
22
|
|
|
19
|
|
|
(3
|
)
|
|
(15.8
|
)%
|
||||||
Office centralization and relocation costs
|
—
|
|
|
4
|
|
|
4
|
|
|
NM
|
|
|
6
|
|
|
16
|
|
|
10
|
|
|
62.5
|
%
|
||||||
Selling, general and administrative expenses
|
$
|
320
|
|
|
$
|
298
|
|
|
$
|
(22
|
)
|
|
(7.4
|
)%
|
|
$
|
948
|
|
|
$
|
917
|
|
|
$
|
(31
|
)
|
|
(3.4
|
)%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings
|
$
|
6
|
|
|
$
|
7
|
|
|
$
|
(1
|
)
|
|
$
|
17
|
|
Litigation settlements (gains) and reserves, net
|
1
|
|
|
5
|
|
|
1
|
|
|
(1
|
)
|
||||
Net losses (gains) on foreign exchange
|
(35
|
)
|
|
(3
|
)
|
|
(38
|
)
|
|
(19
|
)
|
||||
Other, net
|
(2
|
)
|
|
17
|
|
|
(6
|
)
|
|
12
|
|
||||
Other operating expenses (income), net
|
$
|
(30
|
)
|
|
$
|
26
|
|
|
$
|
(44
|
)
|
|
$
|
9
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest expense, net
|
$
|
137
|
|
|
$
|
135
|
|
|
$
|
406
|
|
|
$
|
405
|
|
Weighted average interest rate on long-term debt
|
5.1
|
%
|
|
5.1
|
%
|
|
5.1
|
%
|
|
4.9
|
%
|
|
Three Months Ended September 30,
|
|
Variance
|
|
Nine Months Ended September 30,
|
|
Variance
|
||||||||||||||||||||||
|
|
$
|
|
%
|
|
|
$
|
|
%
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||
Segment income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
TH
|
$
|
301
|
|
|
$
|
299
|
|
|
$
|
2
|
|
|
0.7
|
%
|
|
$
|
825
|
|
|
$
|
830
|
|
|
$
|
(5
|
)
|
|
(0.6
|
)%
|
BK
|
254
|
|
|
231
|
|
|
23
|
|
|
10.0
|
%
|
|
728
|
|
|
681
|
|
|
47
|
|
|
6.9
|
%
|
||||||
PLK
|
47
|
|
|
41
|
|
|
6
|
|
|
12.3
|
%
|
|
129
|
|
|
120
|
|
|
9
|
|
|
7.3
|
%
|
||||||
Adjusted EBITDA
|
602
|
|
|
571
|
|
|
31
|
|
|
5.3
|
%
|
|
1,682
|
|
|
1,631
|
|
|
51
|
|
|
3.1
|
%
|
||||||
Share-based compensation and non-cash incentive compensation expense
|
18
|
|
|
13
|
|
|
(5
|
)
|
|
(38.5
|
)%
|
|
62
|
|
|
44
|
|
|
(18
|
)
|
|
(40.9
|
)%
|
||||||
PLK Transaction costs
|
—
|
|
|
—
|
|
|
—
|
|
|
NM
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|
NM
|
|
||||||
Corporate restructuring and tax advisory fees
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
%
|
|
22
|
|
|
19
|
|
|
(3
|
)
|
|
(15.8
|
)%
|
||||||
Office centralization and relocation costs
|
—
|
|
|
4
|
|
|
4
|
|
|
NM
|
|
|
6
|
|
|
16
|
|
|
10
|
|
|
62.5
|
%
|
||||||
Impact of equity method investments (a)
|
(9
|
)
|
|
—
|
|
|
9
|
|
|
NM
|
|
|
1
|
|
|
(6
|
)
|
|
(7
|
)
|
|
NM
|
|
||||||
Other operating expenses (income), net
|
(30
|
)
|
|
26
|
|
|
56
|
|
|
NM
|
|
|
(44
|
)
|
|
9
|
|
|
53
|
|
|
NM
|
|
||||||
EBITDA
|
618
|
|
|
523
|
|
|
95
|
|
|
18.2
|
%
|
|
1,635
|
|
|
1,539
|
|
|
96
|
|
|
6.2
|
%
|
||||||
Depreciation and amortization
|
47
|
|
|
45
|
|
|
(2
|
)
|
|
(4.4
|
)%
|
|
139
|
|
|
138
|
|
|
(1
|
)
|
|
(0.7
|
)%
|
||||||
Income from operations
|
571
|
|
|
478
|
|
|
93
|
|
|
19.5
|
%
|
|
1,496
|
|
|
1,401
|
|
|
95
|
|
|
6.8
|
%
|
||||||
Interest expense, net
|
137
|
|
|
135
|
|
|
(2
|
)
|
|
(1.5
|
)%
|
|
406
|
|
|
405
|
|
|
(1
|
)
|
|
(0.2
|
)%
|
||||||
Loss on early extinguishment of debt
|
4
|
|
|
—
|
|
|
(4
|
)
|
|
NM
|
|
|
4
|
|
|
—
|
|
|
(4
|
)
|
|
NM
|
|
||||||
Income tax expense
|
79
|
|
|
93
|
|
|
14
|
|
|
15.1
|
%
|
|
232
|
|
|
153
|
|
|
(79
|
)
|
|
(51.6
|
)%
|
||||||
Net income
|
$
|
351
|
|
|
$
|
250
|
|
|
$
|
101
|
|
|
40.4
|
%
|
|
$
|
854
|
|
|
$
|
843
|
|
|
$
|
11
|
|
|
1.3
|
%
|
(a)
|
Represents (i) (income) loss from equity method investments and (ii) cash distributions received from our equity method investments. Cash distributions received from our equity method investments are included in segment income.
|
|
|
|
Payment Due by Period as of October 7, 2019
|
||||||||||||||||||||
Contractual Obligations
|
Total as of September 30, 2019
|
|
Total
|
|
Less Than
1 Year |
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years |
||||||||||||
|
|
|
(In millions)
|
||||||||||||||||||||
Credit Facilities, including interest (a)
|
$
|
7,235
|
|
|
$
|
8,104
|
|
|
$
|
305
|
|
|
$
|
617
|
|
|
$
|
6,558
|
|
|
$
|
624
|
|
Senior Notes, including interest (b)
|
7,683
|
|
|
6,432
|
|
|
233
|
|
|
466
|
|
|
1,942
|
|
|
3,791
|
|
||||||
Other long term debt
|
92
|
|
|
92
|
|
|
3
|
|
|
10
|
|
|
19
|
|
|
60
|
|
(a)
|
We have estimated our interest payments through the maturity of our Credit Facilities based on LIBOR as of September 30, 2019.
|
(b)
|
Amounts included herein for the Senior Notes exclude amounts for the Tim Hortons Notes.
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
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 Extension Presentation Linkbase Document
|
|
|
|
104
|
|
Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESTAURANT BRANDS INTERNATIONAL INC.
(Registrant)
|
||||
|
|
|
|
|||||
Date: October 28, 2019
|
|
|
|
By:
|
|
/s/ Matthew Dunnigan
|
||
|
|
|
|
|
|
Name:
|
|
Matthew Dunnigan
|
|
|
|
|
|
|
Title:
|
|
Chief Financial Officer
(principal financial officer)
(duly authorized officer)
|
Initial Purchaser
|
Principal Amount
|
|
Morgan Stanley & Co. LLC
|
$
|
93,750,000
|
J.P. Morgan Securities LLC
|
|
65,625,000
|
Wells Fargo Securities, LLC
|
|
65,625,000
|
RBC Capital Markets, LLC
|
|
56,250,000
|
Barclays Capital Inc.
|
|
56,250,000
|
BofA Securities, Inc.
|
|
39,843,750
|
Rabo Securities USA, Inc.
|
|
39,843,750
|
HSBC Securities (USA) Inc.
|
|
39,843,750
|
MUFG Securities Americas Inc.
|
|
39,843,750
|
BMO Capital Markets Corp.
|
|
39,843,750
|
Goldman Sachs & Co. LLC
|
|
30,468,750
|
Fifth Third Securities, Inc.
|
|
30,468,750
|
BNP Paribas Securities Corp.
|
|
30,468,750
|
Citigroup Global Markets Inc.
|
|
30,468,750
|
Scotia Capital (USA) Inc.
|
|
30,468,750
|
SunTrust Robinson Humphrey, Inc.
|
|
30,468,750
|
Capital One Securities, Inc.
|
|
30,468,750
|
Total
|
$
|
750,000,000
|
1.
|
BK Whopper Bar, LLC, a Florida limited liability company
|
2.
|
BK Acquisition, Inc., a Delaware corporation
|
3.
|
Orange Intermediate, LLC, a Delaware limited liability company
|
4.
|
Orange Group, Inc., a Delaware corporation
|
5.
|
LLCxox, LLC, a Delaware limited liability company
|
6.
|
Blue Holdco 1, LLC, a Delaware limited liability company
|
7.
|
Blue Holdco 2, LLC, a Delaware limited liability company
|
8.
|
Blue Holdco 3, LLC, a Delaware limited liability company
|
9.
|
SBFD Holding Co., a Delaware corporation
|
10.
|
Tim Hortons USA Inc., a Florida corporation
|
11.
|
Tim Hortons (New England), Inc., a Delaware corporation
|
12.
|
Burger King Worldwide, Inc., a Delaware corporation
|
13.
|
Burger King Capital Finance, Inc., a Delaware corporation
|
14.
|
Burger King Holdings, Inc., a Delaware corporation
|
15.
|
Blue Holdco 440, LLC, a Delaware limited liability company
|
16.
|
Tim Donut U.S. Limited, Inc., a Florida corporation
|
17.
|
Burger King Corporation, a Florida corporation
|
18.
|
Burger King Interamerica, LLC, a Florida limited liability company
|
19.
|
1014369 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
20.
|
1019334 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
21.
|
Grange Castle Holdings Limited, a Canada corporation
|
22.
|
GPAir Limited, an Ontario corporation
|
23.
|
The TDL Group Corp./Groupe TDL Corporation, a British Columbia limited company
|
24.
|
Burger King Canada Holdings Inc./Placements Burger King Canada Inc., an Ontario corporation
|
25.
|
1024670 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
26.
|
1028539 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
27.
|
1029261 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
28.
|
1057837 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
29.
|
1057772 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
30.
|
1057639 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
31.
|
TDLdd Holdings ULC, a British Columbia unlimited liability company
|
32.
|
TDLrr Holdings ULC, a British Columbia unlimited liability company
|
33.
|
BK Canada Service ULC, a British Columbia unlimited liability company
|
34.
|
Restaurant Brands Holdings Corporation, an Ontario corporation
|
35.
|
Tim Hortons Canadian IP Holdings Corporation, an Ontario corporation
|
36.
|
Restaurant Brands International US Services LLC, a Florida limited liability company
|
37.
|
PLK Enterprises of Canada, Inc., a British Columbia corporation
|
38.
|
Popeyes Louisiana Kitchen, Inc., a Minnesota corporation
|
39.
|
1112097 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
40.
|
1112104 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
41.
|
1112106 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
42.
|
1112090 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
43.
|
1112100 B.C. Unlimited Liability Company, a British Columbia unlimited liability company
|
44.
|
BC12sub- Orange Holdings ULC, a British Columbia unlimited liability company
|
45.
|
SBFD Subco ULC, a British Columbia unlimited liability company
|
46.
|
LAX Holdings ULC, a British Columbia unlimited liability company
|
47.
|
Orange Group International, Inc., an Ontario corporation
|
48.
|
Blue Holdco aka8, llc, a Delaware limited liability company
|
49.
|
Blue Holdco aka7, llc, a Delaware limited liability company
|
50.
|
BCP-Sub, LLC, a Delaware limited liability company
|
51.
|
SBFD, LLC, a Delaware limited liability company
|
52.
|
SBFD Beta, LLC, a Delaware limited liability company
|
53.
|
RB Timbit Holdings ULC, a British Columbia unlimited liability company
|
54.
|
RB OCS Holdings ULC, a British Columbia unlimited liability company
|
55.
|
RB Crispy Chicken Holdings ULC, a British Columbia unlimited liability company
|
56.
|
PBB Holdings ULC, a British Columbia unlimited liability company
|
57.
|
ZN1 Holdings ULC, a British Columbia unlimited liability company
|
58.
|
ZN2 Holdings ULC, a British Columbia unlimited liability company
|
59.
|
ZN3 Holdings ULC, a British Columbia unlimited liability company
|
60.
|
ZN4 Holdings ULC, a British Columbia unlimited liability company
|
61.
|
ZN5 Holdings ULC, a British Columbia unlimited liability company
|
62.
|
ZN6 Holdings ULC, a British Columbia unlimited liability company
|
63.
|
ZN7 Holdings ULC, a British Columbia unlimited liability company
|
64.
|
ZN8 Holdings ULC, a British Columbia unlimited liability company
|
65.
|
ZN9 Holdings ULC, a British Columbia unlimited liability company
|
66.
|
ZN19TDL Holdings ULC, a British Columbia unlimited liability company
|
67.
|
LLC-QZ, LLC, a Delaware limited liability company
|
68.
|
Société en commandite Tarte 3/ Pie 3 Limited Partnership, a Quebec limited partnership
|
69.
|
Société en commandite Tarte 4/ Pie 4 Limited Partnership, a Quebec limited partnership
|
70.
|
Société en commandite P2019/P2019 Limited Partnership, a Quebec limited partnership
|
71.
|
LLC-K4, LLC, a Delaware limited liability company
|
72.
|
LLC-QQ, LLC, a Delaware limited liability company
|
73.
|
12-2019 Holdings ULC, a British Columbia unlimited liability company
|
74.
|
12zz Holdings ULC, a British Columbia unlimited liability company
|
75.
|
RBHzz Holdings ULC, a British Columbia unlimited liability company
|
76.
|
Société en commandite BC12/ BC12 Limited Partnership, a Quebec limited partnership
|
77.
|
12Kr Holdings ULC, a British Columbia unlimited liability company
|
78.
|
12Krr Holdings ULC, a British Columbia unlimited liability company
|
79.
|
KR1 Holdings ULC, a British Columbia unlimited liability company
|
80.
|
KR2 Holdings ULC, a British Columbia unlimited liability company
|
81.
|
KR3 Holdings ULC, a British Columbia unlimited liability company
|
82.
|
KR4 Holdings ULC, a British Columbia unlimited liability company
|
83.
|
KR5 Holdings ULC, a British Columbia unlimited liability company
|
84.
|
KR6 Holdings ULC, a British Columbia unlimited liability company
|
85.
|
KR7 Holdings ULC, a British Columbia unlimited liability company
|
86.
|
KR8 Holdings ULC, a British Columbia unlimited liability company
|
87.
|
KR9 Holdings ULC, a British Columbia unlimited liability company
|
88.
|
KR19TDL Holdings ULC, a British Columbia unlimited liability company
|
89.
|
Société en commandite BC12p/ BC12p Limited Partnership, a Quebec limited partnership
|
1.
|
Pricing term sheet containing the terms of the Securities, substantially in the form of Annex B.
|
Issuers:
|
1011778 B.C. Unlimited Liability Company and New Red Finance, Inc.
|
|
|
Securities Description:
|
3.875% First Lien Senior Secured Notes due 2028
|
|
|
Distribution:
|
144A/Regulation S without registration rights
|
|
|
Aggregate Principal Amount:
|
$750,000,000, which represents an increase of $250,000,000 from the offering size in the Preliminary Offering Memorandum
|
|
|
Gross Proceeds:
|
$750,000,000
|
|
|
Maturity:
|
January 15, 2028
|
|
|
Coupon:
|
3.875%
|
|
|
Issue Price:
|
100.000% plus accrued interest, if any, from September 24, 2019
|
|
|
Yield to Maturity:
|
3.875%
|
|
|
Spread to Treasury:
|
+235 bps
|
|
|
Benchmark:
|
UST 2.75% due February 15, 2028
|
|
|
Interest Payment Dates:
|
March 15 and September 15, commencing March 15, 2020
|
|
|
Equity Clawback:
|
Up to 40% at 103.875% prior to September 15, 2022
|
|
|
Optional Redemption:
|
Make-whole call @ T+50 basis points prior to September 15, 2022 then on or after September 15 of the years set forth below:
Year Percentage
2022 ......................................................... 101.938.%
2023 ......................................................... 100.969.%
2024 and thereafter .................................. 100.000%
|
|
|
Change of Control:
|
Putable at 101% of principal plus accrued and unpaid interest
|
|
|
Trade Date:
|
September 6, 2019
|
|
|
Settlement:
|
We expect that the notes will be delivered to investors in bookentry form through The Depository Trust Company on or about September 24, 2019, which will be twelve (12) business days following the date of pricing of the notes (this settlement cycle is being referred to as “T + 12”). Under Rule 15c6-1 of the Securities Exchange Act of 1934, as amended, trades in the secondary market are required to settle in two business days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the notes on the date hereof or on the next nine succeeding business days will be required to specify an alternative settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of the notes who wish to make such trades should consult their own advisors.
|
|
|
CUSIP:
|
144A: 68245X AH2
Reg S: C6900P AF6
|
|
|
ISIN:
|
144A: US68245XAH26
Reg S: USC6900PAF65
|
|
|
Denominations/Multiple:
|
2,000 x 1,000
|
|
|
Ratings*:
|
Ba2 / BB
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Restaurant Brands International Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a.
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
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):
|
a.
|
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
|
b.
|
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/ José E. Cil
|
José E. Cil
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Restaurant Brands International Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
a.
|
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;
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b.
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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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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/s/ Matthew Dunnigan
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Matthew Dunnigan
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Chief Financial Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ José E. Cil
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José E. Cil
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Chief Executive Officer
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Matthew Dunnigan
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Matthew Dunnigan
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Chief Financial Officer
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