☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Canada | 98-1202754 | |||||||||||
(State or Other Jurisdiction of | (I.R.S. Employer | |||||||||||
Incorporation or Organization) | Identification No.) | |||||||||||
130 King Street West, Suite 300 | M5X 1E1 | |||||||||||
Toronto, | Ontario | |||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
Title of each class | Trading Symbols | Name of each exchange on which registered | ||||||||||||
Common Shares, without par value | QSR | New York Stock Exchange | ||||||||||||
Toronto Stock Exchange |
Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||||||||
Emerging growth company | ☐ |
Page | ||||||||
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Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item | ||||||||
Item | ||||||||
Item 6. | ||||||||
As of | |||||||
March 31, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 2,498 | $ | 1,533 | |||
Accounts and notes receivable, net of allowance of $16 and $13, respectively | 414 | 527 | |||||
Inventories, net | 85 | 84 | |||||
Prepaids and other current assets | 62 | 52 | |||||
Total current assets | 3,059 | 2,196 | |||||
Property and equipment, net of accumulated depreciation and amortization of $751 and $746, respectively | 1,939 | 2,007 | |||||
Operating lease assets, net | 1,115 | 1,176 | |||||
Intangible assets, net | 10,085 | 10,563 | |||||
Goodwill | 5,376 | 5,651 | |||||
Net investment in property leased to franchisees | 49 | 48 | |||||
Other assets, net | 1,006 | 719 | |||||
Total assets | $ | 22,629 | $ | 22,360 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts and drafts payable | $ | 484 | $ | 644 | |||
Other accrued liabilities | 779 | 790 | |||||
Gift card liability | 106 | 168 | |||||
Current portion of long term-debt and finance leases | 103 | 101 | |||||
Total current liabilities | 1,472 | 1,703 | |||||
Long-term debt, net of current portion | 12,822 | 11,759 | |||||
Finance leases, net of current portion | 283 | 288 | |||||
Operating lease liabilities, net of current portion | 1,039 | 1,089 | |||||
Other liabilities, net | 1,774 | 1,698 | |||||
Deferred income taxes, net | 1,487 | 1,564 | |||||
Total liabilities | 18,877 | 18,101 | |||||
Shareholders’ equity: | |||||||
Common shares, no par value; unlimited shares authorized at March 31, 2020 and December 31, 2019; 299,767,716 shares issued and outstanding at March 31, 2020; 298,281,081 shares issued and outstanding at December 31, 2019 | 2,537 | 2,478 | |||||
Retained earnings | 761 | 775 | |||||
Accumulated other comprehensive income (loss) | (1,113 | ) | (763 | ) | |||
Total Restaurant Brands International Inc. shareholders’ equity | 2,185 | 2,490 | |||||
Noncontrolling interests | 1,567 | 1,769 | |||||
Total shareholders’ equity | 3,752 | 4,259 | |||||
Total liabilities and shareholders’ equity | $ | 22,629 | $ | 22,360 |
As of | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 1,919 | $ | 1,533 | |||||||
Accounts and notes receivable, net of allowance of $37 and $13, respectively | 589 | 527 | |||||||||
Inventories, net | 87 | 84 | |||||||||
Prepaids and other current assets | 85 | 52 | |||||||||
Total current assets | 2,680 | 2,196 | |||||||||
Property and equipment, net of accumulated depreciation and amortization of $831 and $746, respectively | 1,975 | 2,007 | |||||||||
Operating lease assets, net | 1,122 | 1,176 | |||||||||
Intangible assets, net | 10,415 | 10,563 | |||||||||
Goodwill | 5,571 | 5,651 | |||||||||
Net investment in property leased to franchisees | 63 | 48 | |||||||||
Other assets, net | 707 | 719 | |||||||||
Total assets | $ | 22,533 | $ | 22,360 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts and drafts payable | $ | 523 | $ | 644 | |||||||
Other accrued liabilities | 883 | 790 | |||||||||
Gift card liability | 108 | 168 | |||||||||
Current portion of long-term debt and finance leases | 107 | 101 | |||||||||
Total current liabilities | 1,621 | 1,703 | |||||||||
Long-term debt, net of current portion | 12,300 | 11,759 | |||||||||
Finance leases, net of current portion | 304 | 288 | |||||||||
Operating lease liabilities, net of current portion | 1,054 | 1,089 | |||||||||
Other liabilities, net | 1,917 | 1,698 | |||||||||
Deferred income taxes, net | 1,422 | 1,564 | |||||||||
Total liabilities | 18,618 | 18,101 | |||||||||
Shareholders’ equity: | |||||||||||
Common shares, 0 par value; Unlimited shares authorized at September 30, 2020 and December 31, 2019; 303,877,203 shares issued and outstanding at September 30, 2020; 298,281,081 shares issued and outstanding at December 31, 2019 | 2,648 | 2,478 | |||||||||
Retained earnings | 692 | 775 | |||||||||
Accumulated other comprehensive income (loss) | (997) | (763) | |||||||||
Total Restaurant Brands International Inc. shareholders’ equity | 2,343 | 2,490 | |||||||||
Noncontrolling interests | 1,572 | 1,769 | |||||||||
Total shareholders’ equity | 3,915 | 4,259 | |||||||||
Total liabilities and shareholders’ equity | $ | 22,533 | $ | 22,360 |
Three Months Ended March 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Revenues: | Revenues: | |||||||||||||||||||||||||||||
Sales | $ | 503 | $ | 522 | Sales | $ | 541 | $ | 624 | $ | 1,450 | $ | 1,735 | |||||||||||||||||
Franchise and property revenues | 722 | 744 | Franchise and property revenues | 796 | 834 | 2,160 | 2,389 | |||||||||||||||||||||||
Total revenues | 1,225 | 1,266 | Total revenues | 1,337 | 1,458 | 3,610 | 4,124 | |||||||||||||||||||||||
Operating costs and expenses: | Operating costs and expenses: | |||||||||||||||||||||||||||||
Cost of sales | 399 | 406 | Cost of sales | 418 | 475 | 1,156 | 1,334 | |||||||||||||||||||||||
Franchise and property expenses | 126 | 133 | Franchise and property expenses | 128 | 133 | 388 | 401 | |||||||||||||||||||||||
Selling, general and administrative expenses | 325 | 312 | Selling, general and administrative expenses | 302 | 320 | 922 | 948 | |||||||||||||||||||||||
(Income) loss from equity method investments | 2 | (2 | ) | (Income) loss from equity method investments | 18 | (11) | 36 | (11) | ||||||||||||||||||||||
Other operating expenses (income), net | (16 | ) | (17 | ) | Other operating expenses (income), net | 54 | (30) | 59 | (44) | |||||||||||||||||||||
Total operating costs and expenses | 836 | 832 | Total operating costs and expenses | 920 | 887 | 2,561 | 2,628 | |||||||||||||||||||||||
Income from operations | 389 | 434 | Income from operations | 417 | 571 | 1,049 | 1,496 | |||||||||||||||||||||||
Interest expense, net | 119 | 132 | Interest expense, net | 129 | 137 | 376 | 406 | |||||||||||||||||||||||
Loss on early extinguishment of debt | Loss on early extinguishment of debt | 0 | 4 | 0 | 4 | |||||||||||||||||||||||||
Income before income taxes | 270 | 302 | Income before income taxes | 288 | 430 | 673 | 1,086 | |||||||||||||||||||||||
Income tax expense | 46 | 56 | Income tax expense | 65 | 79 | 62 | 232 | |||||||||||||||||||||||
Net income | 224 | 246 | Net income | 223 | 351 | 611 | 854 | |||||||||||||||||||||||
Net income attributable to noncontrolling interests (Note 12) | 80 | 111 | Net income attributable to noncontrolling interests (Note 12) | 78 | 150 | 216 | 376 | |||||||||||||||||||||||
Net income attributable to common shareholders | $ | 144 | $ | 135 | Net income attributable to common shareholders | $ | 145 | $ | 201 | $ | 395 | $ | 478 | |||||||||||||||||
Earnings per common share | Earnings per common share | |||||||||||||||||||||||||||||
Basic | $ | 0.48 | $ | 0.53 | Basic | $ | 0.48 | $ | 0.76 | $ | 1.31 | $ | 1.85 | |||||||||||||||||
Diluted | $ | 0.48 | $ | 0.53 | Diluted | $ | 0.47 | $ | 0.75 | $ | 1.30 | $ | 1.82 | |||||||||||||||||
Weighted average shares outstanding | Weighted average shares outstanding | |||||||||||||||||||||||||||||
Basic | 299 | 252 | Basic | 303 | 267 | 301 | 258 | |||||||||||||||||||||||
Diluted | 469 | 467 | Diluted | 470 | 470 | 469 | 469 |
Three Months Ended March 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Net income | $ | 224 | $ | 246 | Net income | $ | 223 | $ | 351 | $ | 611 | $ | 854 | |||||||||||||||||
Foreign currency translation adjustment | (751 | ) | 159 | Foreign currency translation adjustment | 239 | (173) | (170) | 185 | ||||||||||||||||||||||
Net change in fair value of net investment hedges, net of tax of $(106) and $26 | 411 | (76 | ) | |||||||||||||||||||||||||||
Net change in fair value of cash flow hedges, net of tax of $79 and $12 | (214 | ) | (34 | ) | ||||||||||||||||||||||||||
Amounts reclassified to earnings of cash flow hedges, net of tax of $(4) and $0 | 11 | (1 | ) | |||||||||||||||||||||||||||
Net change in fair value of net investment hedges, net of tax of $40, $(37), $(12) and $2 | Net change in fair value of net investment hedges, net of tax of $40, $(37), $(12) and $2 | (198) | 143 | 39 | 27 | |||||||||||||||||||||||||
Net change in fair value of cash flow hedges, net of tax of $7, $9, $99 and $43 | Net change in fair value of cash flow hedges, net of tax of $7, $9, $99 and $43 | (17) | (25) | (268) | (116) | |||||||||||||||||||||||||
Amounts reclassified to earnings of cash flow hedges, net of tax of $(8), $(2), $(18) and $(3) | Amounts reclassified to earnings of cash flow hedges, net of tax of $(8), $(2), $(18) and $(3) | 22 | 5 | 51 | 7 | |||||||||||||||||||||||||
Other comprehensive income (loss) | (543 | ) | 48 | Other comprehensive income (loss) | 46 | (50) | (348) | 103 | ||||||||||||||||||||||
Comprehensive income (loss) | (319 | ) | 294 | Comprehensive income (loss) | 269 | 301 | 263 | 957 | ||||||||||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interests | (113 | ) | 133 | Comprehensive income (loss) attributable to noncontrolling interests | 94 | 129 | 91 | 424 | ||||||||||||||||||||||
Comprehensive income (loss) attributable to common shareholders | $ | (206 | ) | $ | 161 | Comprehensive income (loss) attributable to common shareholders | $ | 175 | $ | 172 | $ | 172 | $ | 533 |
Issued Common Shares | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||
Balances at December 31, 2019 | 298,281,081 | $ | 2,478 | $ | 775 | (763 | ) | $ | 1,769 | $ | 4,259 | |||||||||||
Stock option exercises | 1,053,264 | 30 | — | — | — | 30 | ||||||||||||||||
Share-based compensation | — | 19 | — | — | — | 19 | ||||||||||||||||
Issuance of shares | 255,325 | 6 | — | — | — | 6 | ||||||||||||||||
Dividends declared ($0.52 per share) | — | — | (156 | ) | — | — | (156 | ) | ||||||||||||||
Dividend equivalents declared on restricted stock units | — | 2 | (2 | ) | — | — | — | |||||||||||||||
Distributions declared by Partnership on Partnership exchangeable units ($0.52 per unit) | — | — | — | — | (86 | ) | (86 | ) | ||||||||||||||
Exchange of Partnership exchangeable units for RBI common shares | 178,046 | 2 | — | — | (2 | ) | — | |||||||||||||||
Restaurant VIE contributions (distributions) | — | — | — | — | (1 | ) | (1 | ) | ||||||||||||||
Net income | — | — | 144 | — | 80 | 224 | ||||||||||||||||
Other comprehensive income (loss) | — | — | — | (350 | ) | (193 | ) | (543 | ) | |||||||||||||
Balances at March 31, 2020 | 299,767,716 | $ | 2,537 | $ | 761 | $ | (1,113 | ) | $ | 1,567 | $ | 3,752 |
Issued Common Shares | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Issued Common Shares | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Total | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2018 | 251,532,493 | $ | 1,737 | $ | 674 | $ | (800 | ) | $ | 2,007 | $ | 3,618 | |||||||||||||||||||||||||||||||||||||||||||||
Cumulative effect adjustment | — | — | 12 | — | 9 | 21 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019 | Balances at December 31, 2019 | 298,281,081 | $ | 2,478 | $ | 775 | (763) | $ | 1,769 | $ | 4,259 | ||||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | 2,019,620 | 42 | — | — | — | 42 | Stock option exercises | 1,053,264 | 30 | — | — | — | 30 | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | 22 | — | — | — | 22 | Share-based compensation | — | 19 | — | — | — | 19 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares | 134,809 | 7 | — | — | — | 7 | Issuance of shares | 255,325 | 6 | — | — | — | 6 | ||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.50 per share) | — | — | (127 | ) | — | — | (127 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.52 per share) | Dividends declared ($0.52 per share) | — | — | (156) | — | — | (156) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend equivalents declared on restricted stock units | — | 2 | (2 | ) | — | — | — | Dividend equivalents declared on restricted stock units | — | 2 | (2) | — | — | 0 | |||||||||||||||||||||||||||||||||||||||||||
Distributions declared by Partnership on Partnership exchangeable units ($0.50 per unit) | — | — | — | — | (104 | ) | (104 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared by Partnership on Partnership exchangeable units ($0.52 per unit) | Distributions declared by Partnership on Partnership exchangeable units ($0.52 per unit) | — | — | — | — | (86) | (86) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange of Partnership exchangeable units for RBI common shares | 141,190 | 2 | — | (1 | ) | (1 | ) | — | Exchange of Partnership exchangeable units for RBI common shares | 178,046 | 2 | — | — | (2) | 0 | ||||||||||||||||||||||||||||||||||||||||||
Restaurant VIE contributions (distributions) | Restaurant VIE contributions (distributions) | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | 135 | — | 111 | 246 | Net income | — | — | 144 | — | 80 | 224 | ||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | 26 | 22 | 48 | Other comprehensive income (loss) | — | — | — | (350) | (193) | (543) | ||||||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2019 | 253,828,112 | $ | 1,812 | $ | 692 | $ | (775 | ) | $ | 2,044 | $ | 3,773 | |||||||||||||||||||||||||||||||||||||||||||||
Balances at March 31, 2020 | Balances at March 31, 2020 | 299,767,716 | $ | 2,537 | $ | 761 | $ | (1,113) | $ | 1,567 | $ | 3,752 | |||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | Stock option exercises | 316,172 | 11 | — | — | — | 11 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | Share-based compensation | — | 20 | — | — | — | 20 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares | Issuance of shares | 45,071 | 0 | — | — | — | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.52 per share) | Dividends declared ($0.52 per share) | — | — | (158) | — | — | (158) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend equivalents declared on restricted stock units | Dividend equivalents declared on restricted stock units | — | 1 | (1) | — | — | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared by Partnership on Partnership exchangeable units ($0.52 per unit) | Distributions declared by Partnership on Partnership exchangeable units ($0.52 per unit) | — | — | — | — | (85) | (85) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange of Partnership exchangeable units for RBI common shares | Exchange of Partnership exchangeable units for RBI common shares | 2,494,854 | 33 | — | (9) | (24) | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Restaurant VIE contributions (distributions) | Restaurant VIE contributions (distributions) | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | Net income | — | — | 106 | — | 58 | 164 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | Other comprehensive income (loss) | — | — | — | 97 | 52 | 149 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at June 30, 2020 | Balances at June 30, 2020 | 302,623,813 | $ | 2,602 | $ | 708 | $ | (1,025) | $ | 1,567 | $ | 3,852 | |||||||||||||||||||||||||||||||||||||||||||||
Stock option exercises | Stock option exercises | 567,636 | 19 | — | — | — | 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | Share-based compensation | — | 16 | — | — | — | 16 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of shares | Issuance of shares | 63,686 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared ($0.52 per share) | Dividends declared ($0.52 per share) | — | — | (158) | — | — | (158) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Dividend equivalents declared on restricted stock units | Dividend equivalents declared on restricted stock units | — | 3 | (3) | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared by Partnership on Partnership exchangeable units ($0.52 per unit) | Distributions declared by Partnership on Partnership exchangeable units ($0.52 per unit) | — | — | — | — | (84) | (84) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Exchange of Partnership exchangeable units for RBI common shares | Exchange of Partnership exchangeable units for RBI common shares | 622,068 | 8 | — | (2) | (6) | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Restaurant VIE contributions (distributions) | Restaurant VIE contributions (distributions) | — | — | — | — | 1 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | Net income | — | — | 145 | — | 78 | 223 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | Other comprehensive income (loss) | — | — | — | 30 | 16 | 46 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at September 30, 2020 | Balances at September 30, 2020 | 303,877,203 | $ | 2,648 | $ | 692 | $ | (997) | $ | 1,572 | $ | 3,915 |
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) | — | — | 0 | |||||||||||||||||||||||||||||
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) | 0 | |||||||||||||||||||||||||||||
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 | 0 | — | — | — | 0 | |||||||||||||||||||||||||||||
Dividends declared ($0.50 per share) | — | — | (128) | — | — | (128) | |||||||||||||||||||||||||||||
Dividend equivalents declared on restricted stock units | — | 2 | (2) | — | — | 0 | |||||||||||||||||||||||||||||
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) | 0 | |||||||||||||||||||||||||||||
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 | — | — | — | — | 0 | |||||||||||||||||||||||||||||
Dividends declared ($0.50 per share) | — | — | (141) | — | — | (141) | |||||||||||||||||||||||||||||
Dividend equivalents declared on restricted stock units | — | 2 | (2) | — | — | 0 | |||||||||||||||||||||||||||||
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) | 0 | |||||||||||||||||||||||||||||
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 |
Three Months Ended March 31, | Nine Months Ended September 30, | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
Cash flows from operating activities: | Cash flows from operating activities: | |||||||||||||||||
Net income | $ | 224 | $ | 246 | Net income | $ | 611 | $ | 854 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization | 45 | 47 | Depreciation and amortization | 139 | 139 | |||||||||||||
Premiums paid and non-cash loss on early extinguishment of debt | Premiums paid and non-cash loss on early extinguishment of debt | 0 | 4 | |||||||||||||||
Amortization of deferred financing costs and debt issuance discount | 6 | 7 | Amortization of deferred financing costs and debt issuance discount | 19 | 22 | |||||||||||||
(Income) loss from equity method investments | 2 | (2 | ) | (Income) loss from equity method investments | 36 | (11) | ||||||||||||
(Gain) loss on remeasurement of foreign denominated transactions | (8 | ) | (15 | ) | (Gain) loss on remeasurement of foreign denominated transactions | 54 | (38) | |||||||||||
Net (gains) losses on derivatives | (6 | ) | (20 | ) | Net (gains) losses on derivatives | 14 | (43) | |||||||||||
Share-based compensation expense | 19 | 22 | Share-based compensation expense | 55 | 56 | |||||||||||||
Deferred income taxes | (31 | ) | 38 | Deferred income taxes | (120) | (16) | ||||||||||||
Other | (4 | ) | 3 | Other | 23 | 1 | ||||||||||||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | Changes in current assets and liabilities, excluding acquisitions and dispositions: | |||||||||||||||||
Accounts and notes receivable | 94 | 14 | Accounts and notes receivable | (83) | (7) | |||||||||||||
Inventories and prepaids and other current assets | (13 | ) | (13 | ) | Inventories and prepaids and other current assets | (21) | (34) | |||||||||||
Accounts and drafts payable | (136 | ) | (69 | ) | Accounts and drafts payable | (110) | (15) | |||||||||||
Other accrued liabilities and gift card liability | (67 | ) | (126 | ) | Other accrued liabilities and gift card liability | (12) | (85) | |||||||||||
Tenant inducements paid to franchisees | (3 | ) | — | Tenant inducements paid to franchisees | (7) | (13) | ||||||||||||
Other long-term assets and liabilities | 14 | 22 | Other long-term assets and liabilities | 10 | 97 | |||||||||||||
Net cash provided by operating activities | 136 | 154 | Net cash provided by operating activities | 608 | 911 | |||||||||||||
Cash flows from investing activities: | Cash flows from investing activities: | |||||||||||||||||
Payments for property and equipment | (19 | ) | (5 | ) | Payments for property and equipment | (71) | (32) | |||||||||||
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 4 | 4 | Net proceeds from disposal of assets, restaurant closures, and refranchisings | 9 | 22 | |||||||||||||
Settlement/sale of derivatives, net | 12 | 11 | Settlement/sale of derivatives, net | 29 | 17 | |||||||||||||
Other investing activities, net | — | 1 | ||||||||||||||||
Net cash (used for) provided by investing activities | (3 | ) | 11 | Net cash (used for) provided by investing activities | (33) | 7 | ||||||||||||
Cash flows from financing activities: | Cash flows from financing activities: | |||||||||||||||||
Proceeds from revolving line of credit and long-term debt | 1,085 | — | Proceeds from revolving line of credit and long-term debt | 1,585 | 750 | |||||||||||||
Repayments of long-term debt and finance leases | (25 | ) | (23 | ) | ||||||||||||||
Repayments of revolving line of credit, long-term debt and finance leases | Repayments of revolving line of credit, long-term debt and finance leases | (1,071) | (290) | |||||||||||||||
Payment of financing costs | Payment of financing costs | (10) | (13) | |||||||||||||||
Payment of dividends on common shares and distributions on Partnership exchangeable units | (232 | ) | (207 | ) | Payment of dividends on common shares and distributions on Partnership exchangeable units | (716) | (669) | |||||||||||
Proceeds from stock option exercises | 30 | 42 | Proceeds from stock option exercises | 60 | 99 | |||||||||||||
(Payments) proceeds from derivatives | (2 | ) | 5 | (Payments) proceeds from derivatives | (29) | 17 | ||||||||||||
Other financing activities, net | (1 | ) | 1 | Other financing activities, net | (1) | 0 | ||||||||||||
Net cash provided by (used for) financing activities | 855 | (182 | ) | |||||||||||||||
Net cash used for financing activities | Net cash used for financing activities | (182) | (106) | |||||||||||||||
Effect of exchange rates on cash and cash equivalents | (23 | ) | 6 | Effect of exchange rates on cash and cash equivalents | (7) | 7 | ||||||||||||
Increase (decrease) in cash and cash equivalents | 965 | (11 | ) | Increase (decrease) in cash and cash equivalents | 386 | 819 | ||||||||||||
Cash and cash equivalents at beginning of period | 1,533 | 913 | Cash and cash equivalents at beginning of period | 1,533 | 913 | |||||||||||||
Cash and cash equivalents at end of period | $ | 2,498 | $ | 902 | Cash and cash equivalents at end of period | $ | 1,919 | $ | 1,732 | |||||||||
Supplemental cash flow disclosures: | Supplemental cash flow disclosures: | |||||||||||||||||
Interest paid | $ | 104 | $ | 140 | Interest paid | $ | 315 | $ | 433 | |||||||||
Income taxes paid | $ | 48 | $ | 45 | Income taxes paid | $ | 163 | $ | 171 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Lease income - operating leases | |||||||||||||||||||||||
Minimum lease payments | $ | 112 | $ | 112 | $ | 333 | $ | 335 | |||||||||||||||
Variable lease payments | 82 | 100 | 191 | 281 | |||||||||||||||||||
Amortization of favorable and unfavorable income lease contracts, net | 1 | 1 | 4 | 5 | |||||||||||||||||||
Subtotal - lease income from operating leases | 195 | 213 | 528 | 621 | |||||||||||||||||||
Earned income on direct financing leases | 1 | 2 | 4 | 7 | |||||||||||||||||||
Total property revenues | $ | 196 | $ | 215 | $ | 532 | $ | 628 |
Three months ended March 31, 2020 | Three months ended March 31, 2019 | |||||||
Lease income - operating leases | ||||||||
Minimum lease payments | $ | 112 | $ | 111 | ||||
Variable lease payments | 63 | 84 | ||||||
Amortization of favorable and unfavorable income lease contracts, net | 2 | 2 | ||||||
Subtotal - lease income from operating leases | 177 | 197 | ||||||
Earned income on direct financing leases | 1 | 2 | ||||||
Total property revenues | $ | 178 | $ | 199 |
Contract Liabilities | TH | BK | PLK | Consolidated | ||||||||||||
Balance at December 31, 2019 | $ | 64 | $ | 449 | $ | 28 | $ | 541 | ||||||||
Recognized during period and included in the contract liability balance at the beginning of the year | (2 | ) | (30 | ) | (1 | ) | (33 | ) | ||||||||
Increase, excluding amounts recognized as revenue during the period | 2 | 6 | 3 | 11 | ||||||||||||
Impact of foreign currency translation | (3 | ) | (4 | ) | — | (7 | ) | |||||||||
Balance at March 31, 2020 | $ | 61 | $ | 421 | $ | 30 | $ | 512 |
Contract Liabilities | TH | BK | PLK | Consolidated | ||||||||||||||||||||||
Balance at December 31, 2019 | $ | 64 | $ | 449 | $ | 28 | $ | 541 | ||||||||||||||||||
Recognized during period and included in the contract liability balance at the beginning of the year | (7) | (50) | (2) | (59) | ||||||||||||||||||||||
Increase, excluding amounts recognized as revenue during the period | 5 | 15 | 9 | 29 | ||||||||||||||||||||||
Impact of foreign currency translation | (1) | 7 | 0 | 6 | ||||||||||||||||||||||
Balance at September 30, 2020 | $ | 61 | $ | 421 | $ | 35 | $ | 517 |
Contract liabilities expected to be recognized in | TH | BK | PLK | Consolidated | ||||||||||||
Remainder of 2020 | $ | 6 | $ | 26 | $ | 2 | $ | 34 | ||||||||
2021 | 8 | 33 | 2 | 43 | ||||||||||||
2022 | 7 | 32 | 2 | 41 | ||||||||||||
2023 | 7 | 31 | 2 | 40 | ||||||||||||
2024 | 6 | 30 | 2 | 38 | ||||||||||||
Thereafter | 27 | 269 | 20 | 316 | ||||||||||||
Total | $ | 61 | $ | 421 | $ | 30 | $ | 512 |
Contract liabilities expected to be recognized in | TH | BK | PLK | Consolidated | ||||||||||||||||||||||
Remainder of 2020 | $ | 2 | $ | 9 | $ | 1 | $ | 12 | ||||||||||||||||||
2021 | 8 | 34 | 2 | 44 | ||||||||||||||||||||||
2022 | 8 | 33 | 2 | 43 | ||||||||||||||||||||||
2023 | 7 | 32 | 2 | 41 | ||||||||||||||||||||||
2024 | 7 | 31 | 2 | 40 | ||||||||||||||||||||||
Thereafter | 29 | 282 | 26 | 337 | ||||||||||||||||||||||
Total | $ | 61 | $ | 421 | $ | 35 | $ | 517 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Sales | $ | 541 | $ | 624 | $ | 1,450 | $ | 1,735 | |||||||||||||||
Royalties | 581 | 602 | 1,576 | 1,706 | |||||||||||||||||||
Property revenues | 196 | 215 | 532 | 628 | |||||||||||||||||||
Franchise fees and other revenue | 19 | 17 | 52 | 55 | |||||||||||||||||||
Total revenues | $ | 1,337 | $ | 1,458 | $ | 3,610 | $ | 4,124 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Sales | $ | 503 | $ | 522 | |||
Royalties | 526 | 528 | |||||
Property revenues | 178 | 199 | |||||
Franchise fees and other revenue | 18 | 17 | |||||
Total revenues | $ | 1,225 | $ | 1,266 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Numerator: | |||||||
Net income attributable to common shareholders - basic | $ | 144 | $ | 135 | |||
Add: Net income attributable to noncontrolling interests | 80 | 111 | |||||
Net income available to common shareholders and noncontrolling interests - diluted | $ | 224 | $ | 246 | |||
Denominator: | |||||||
Weighted average common shares - basic | 299 | 252 | |||||
Exchange of noncontrolling interests for common shares (Note 12) | 165 | 208 | |||||
Effect of other dilutive securities | 5 | 7 | |||||
Weighted average common shares - diluted | 469 | 467 | |||||
Basic earnings per share (a) | $ | 0.48 | $ | 0.53 | |||
Diluted earnings per share (a) | $ | 0.48 | $ | 0.53 | |||
Anti-dilutive securities outstanding | 8 | 5 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income attributable to common shareholders - basic | $ | 145 | $ | 201 | $ | 395 | $ | 478 | |||||||||||||||
Add: Net income attributable to noncontrolling interests | 78 | 150 | 215 | 376 | |||||||||||||||||||
Net income available to common shareholders and noncontrolling interests - diluted | $ | 223 | $ | 351 | $ | 610 | $ | 854 | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average common shares - basic | 303 | 267 | 301 | 258 | |||||||||||||||||||
Exchange of noncontrolling interests for common shares (Note 12) | 162 | 197 | 164 | 204 | |||||||||||||||||||
Effect of other dilutive securities | 5 | 6 | 4 | 7 | |||||||||||||||||||
Weighted average common shares - diluted | 470 | 470 | 469 | 469 | |||||||||||||||||||
Basic earnings per share (a) | $ | 0.48 | $ | 0.76 | $ | 1.31 | $ | 1.85 | |||||||||||||||
Diluted earnings per share (a) | $ | 0.47 | $ | 0.75 | $ | 1.30 | $ | 1.82 | |||||||||||||||
Anti-dilutive securities outstanding | 8 | 3 | 8 | 3 |
As of | |||||||||||||||||||||||
March 31, 2020 | December 31, 2019 | ||||||||||||||||||||||
Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||
Identifiable assets subject to amortization: | |||||||||||||||||||||||
Franchise agreements | $ | 706 | $ | (230 | ) | $ | 476 | $ | 720 | $ | (225 | ) | $ | 495 | |||||||||
Favorable leases | 119 | (62 | ) | 57 | 127 | (65 | ) | 62 | |||||||||||||||
Subtotal | 825 | (292 | ) | 533 | 847 | (290 | ) | 557 | |||||||||||||||
Indefinite lived intangible assets: | |||||||||||||||||||||||
Tim Hortons brand | $ | 6,090 | $ | — | $ | 6,090 | $ | 6,534 | $ | — | $ | 6,534 | |||||||||||
Burger King brand | 2,107 | — | 2,107 | 2,117 | — | 2,117 | |||||||||||||||||
Popeyes brand | 1,355 | — | 1,355 | 1,355 | — | 1,355 | |||||||||||||||||
Subtotal | 9,552 | — | 9,552 | 10,006 | — | 10,006 | |||||||||||||||||
Intangible assets, net | $ | 10,085 | $ | 10,563 | |||||||||||||||||||
Goodwill | |||||||||||||||||||||||
Tim Hortons segment | $ | 3,935 | $ | 4,207 | |||||||||||||||||||
Burger King segment | 595 | 598 | |||||||||||||||||||||
Popeyes segment | 846 | 846 | |||||||||||||||||||||
Total | $ | 5,376 | $ | 5,651 |
As of | |||||||||||||||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | ||||||||||||||||||||||||||||||
Identifiable assets subject to amortization: | |||||||||||||||||||||||||||||||||||
Franchise agreements | $ | 724 | $ | (252) | $ | 472 | $ | 720 | $ | (225) | $ | 495 | |||||||||||||||||||||||
Favorable leases | 116 | (63) | 53 | 127 | (65) | 62 | |||||||||||||||||||||||||||||
Subtotal | 840 | (315) | 525 | 847 | (290) | 557 | |||||||||||||||||||||||||||||
Indefinite-lived intangible assets: | |||||||||||||||||||||||||||||||||||
Tim Hortons brand | $ | 6,390 | $ | — | $ | 6,390 | $ | 6,534 | $ | — | $ | 6,534 | |||||||||||||||||||||||
Burger King brand | 2,145 | — | 2,145 | 2,117 | — | 2,117 | |||||||||||||||||||||||||||||
Popeyes brand | 1,355 | — | 1,355 | 1,355 | — | 1,355 | |||||||||||||||||||||||||||||
Subtotal | 9,890 | — | 9,890 | 10,006 | — | 10,006 | |||||||||||||||||||||||||||||
Intangible assets, net | $ | 10,415 | $ | 10,563 | |||||||||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||||||||||||
Tim Hortons segment | $ | 4,119 | $ | 4,207 | |||||||||||||||||||||||||||||||
Burger King segment | 606 | 598 | |||||||||||||||||||||||||||||||||
Popeyes segment | 846 | 846 | |||||||||||||||||||||||||||||||||
Total | $ | 5,571 | $ | 5,651 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Revenues from affiliates: | |||||||
Royalties | $ | 73 | $ | 78 | |||
Property revenues | 8 | 8 | |||||
Franchise fees and other revenue | 3 | 3 | |||||
Total | $ | 84 | $ | 89 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues from affiliates: | |||||||||||||||||||||||
Royalties | $ | 82 | $ | 89 | $ | 209 | $ | 254 | |||||||||||||||
Property revenues | 8 | 8 | 24 | 25 | |||||||||||||||||||
Franchise fees and other revenue | 4 | 1 | 10 | 7 | |||||||||||||||||||
Total | $ | 94 | $ | 98 | $ | 243 | $ | 286 |
As of | |||||||
March 31, 2020 | December 31, 2019 | ||||||
Current: | |||||||
Dividend payable | $ | 242 | $ | 232 | |||
Interest payable | 93 | 71 | |||||
Accrued compensation and benefits | 36 | 57 | |||||
Taxes payable | 147 | 126 | |||||
Deferred income | 28 | 35 | |||||
Accrued advertising expenses | 47 | 40 | |||||
Restructuring and other provisions | 8 | 8 | |||||
Current portion of operating lease liabilities | 120 | 126 | |||||
Other | 58 | 95 | |||||
Other accrued liabilities | $ | 779 | $ | 790 | |||
Noncurrent: | |||||||
Taxes payable | $ | 575 | $ | 579 | |||
Contract liabilities | 512 | 541 | |||||
Derivatives liabilities | 461 | 341 | |||||
Unfavorable leases | 91 | 103 | |||||
Accrued pension | 64 | 65 | |||||
Deferred income | 30 | 25 | |||||
Other | 41 | 44 | |||||
Other liabilities, net | $ | 1,774 | $ | 1,698 |
As of | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Current: | |||||||||||
Dividend payable | $ | 243 | $ | 232 | |||||||
Interest payable | 106 | 71 | |||||||||
Accrued compensation and benefits | 62 | 57 | |||||||||
Taxes payable | 157 | 126 | |||||||||
Deferred income | 41 | 35 | |||||||||
Accrued advertising expenses | 65 | 40 | |||||||||
Restructuring and other provisions | 12 | 8 | |||||||||
Current portion of operating lease liabilities | 128 | 126 | |||||||||
Other | 69 | 95 | |||||||||
Other accrued liabilities | $ | 883 | $ | 790 | |||||||
Noncurrent: | |||||||||||
Taxes payable | $ | 604 | $ | 579 | |||||||
Contract liabilities | 517 | 541 | |||||||||
Derivatives liabilities | 592 | 341 | |||||||||
Unfavorable leases | 83 | 103 | |||||||||
Accrued pension | 55 | 65 | |||||||||
Deferred income | 26 | 25 | |||||||||
Other | 40 | 44 | |||||||||
Other liabilities, net | $ | 1,917 | $ | 1,698 |
As of | |||||||
March 31, 2020 | December 31, 2019 | ||||||
Term Loan B (due November 19, 2026) | $ | 5,337 | $ | 5,350 | |||
Term Loan A (due October 7, 2024) | 745 | 750 | |||||
Revolving Credit Facility (due October 7, 2024) | 995 | — | |||||
2017 4.25% Senior Notes (due May 15, 2024) | 1,500 | 1,500 | |||||
2019 3.875% Senior Notes (due January 15, 2028) | 750 | 750 | |||||
2017 5.00% Senior Notes (due October 15, 2025) | 2,800 | 2,800 | |||||
2019 4.375% Senior Notes (due January 15, 2028) | 750 | 750 | |||||
TH Facility and other | 163 | 81 | |||||
Less: unamortized deferred financing costs and deferred issue discount | (142 | ) | (148 | ) | |||
Total debt, net | 12,898 | 11,833 | |||||
Less: current maturities of debt | (76 | ) | (74 | ) | |||
Total long-term debt | $ | 12,822 | $ | 11,759 |
As of | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Term Loan B (due November 19, 2026) | $ | 5,310 | $ | 5,350 | |||||||
Term Loan A (due October 7, 2024) | 736 | 750 | |||||||||
2017 4.25% Senior Notes (due May 15, 2024) | 1,500 | 1,500 | |||||||||
2019 3.875% Senior Notes (due January 15, 2028) | 750 | 750 | |||||||||
2020 5.75% Senior Notes (due April 15, 2025) | 500 | 0 | |||||||||
2017 5.00% Senior Notes (due October 15, 2025) | 2,800 | 2,800 | |||||||||
2019 4.375% Senior Notes (due January 15, 2028) | 750 | 750 | |||||||||
TH Facility and other | 171 | 81 | |||||||||
Less: unamortized deferred financing costs and deferred issue discount | (139) | (148) | |||||||||
Total debt, net | 12,378 | 11,833 | |||||||||
Less: current maturities of debt | (78) | (74) | |||||||||
Total long-term debt | $ | 12,300 | $ | 11,759 |
As of | |||||||
March 31, 2020 | December 31, 2019 | ||||||
Fair value of our variable term debt and senior notes | $ | 12,148 | $ | 12,075 | |||
Principal carrying amount of our variable term debt and senior notes | 12,877 | 11,900 |
As of | |||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Fair value of our variable term debt and senior notes | $ | 12,283 | $ | 12,075 | |||||||
Principal carrying amount of our variable term debt and senior notes | 12,346 | 11,900 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Debt (a) | $ | 119 | $ | 130 | $ | 351 | $ | 382 | |||||||||||||||
Finance lease obligations | 4 | 5 | 14 | 16 | |||||||||||||||||||
Amortization of deferred financing costs and debt issuance discount | 7 | 7 | 19 | 22 | |||||||||||||||||||
Interest income | (1) | (5) | (8) | (14) | |||||||||||||||||||
Interest expense, net | $ | 129 | $ | 137 | $ | 376 | $ | 406 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Debt (a) | $ | 113 | $ | 124 | |||
Finance lease obligations | 5 | 5 | |||||
Amortization of deferred financing costs and debt issuance discount | 6 | 7 | |||||
Interest income | (5 | ) | (4 | ) | |||
Interest expense, net | $ | 119 | $ | 132 |
Derivatives | Pensions | Foreign Currency Translation | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
Balance at December 31, 2019 | $ | 199 | $ | (19) | $ | (943) | $ | (763) | |||||||||||||||
Foreign currency translation adjustment | — | — | (170) | (170) | |||||||||||||||||||
Net change in fair value of derivatives, net of tax | (229) | — | — | (229) | |||||||||||||||||||
Amounts reclassified to earnings of cash flow hedges, net of tax | 51 | — | — | 51 | |||||||||||||||||||
Amounts attributable to noncontrolling interests | 64 | — | 50 | 114 | |||||||||||||||||||
Balance at September 30, 2020 | $ | 85 | $ | (19) | $ | (1,063) | $ | (997) |
Derivatives | Pensions | Foreign Currency Translation | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
Balance at December 31, 2019 | $ | 199 | $ | (19 | ) | $ | (943 | ) | $ | (763 | ) | ||||
Foreign currency translation adjustment | — | — | (751 | ) | (751 | ) | |||||||||
Net change in fair value of derivatives, net of tax | 197 | — | — | 197 | |||||||||||
Amounts reclassified to earnings of cash flow hedges, net of tax | 11 | — | — | 11 | |||||||||||
Amounts attributable to noncontrolling interests | (74 | ) | — | 267 | 193 | ||||||||||
Balance at March 31, 2020 | $ | 333 | $ | (19 | ) | $ | (1,427 | ) | $ | (1,113 | ) |
Gain or (Loss) Recognized in Other Comprehensive Income (Loss) | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Derivatives designated as cash flow hedges(1) | |||||||||||||||||||||||
Interest rate swaps | $ | (22) | $ | (35) | $ | (370) | $ | (156) | |||||||||||||||
Forward-currency contracts | $ | (2) | $ | 1 | $ | 3 | $ | (3) | |||||||||||||||
Derivatives designated as net investment hedges | |||||||||||||||||||||||
Cross-currency rate swaps | $ | (238) | $ | 180 | $ | 51 | $ | 25 |
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, | |||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||
Derivatives designated as cash flow hedges | ||||||||||||||||||||||||||||||||
Interest rate swaps | Interest expense, net | $ | (30) | $ | (7) | $ | (71) | $ | (14) | |||||||||||||||||||||||
Forward-currency contracts | Cost of sales | $ | 0 | $ | 0 | $ | 2 | $ | 4 | |||||||||||||||||||||||
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, | |||||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||||
Derivatives designated as net investment hedges | ||||||||||||||||||||||||||||||||
Cross-currency rate swaps | Interest expense, net | $ | 15 | $ | 16 | $ | 56 | $ | 53 |
Gain or (Loss) Recognized in Other Comprehensive Income (Loss) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Derivatives designated as cash flow hedges(1) | |||||||
Interest rate swaps | $ | (300 | ) | $ | (44 | ) | |
Forward-currency contracts | $ | 7 | $ | (2 | ) | ||
Derivatives designated as net investment hedges | |||||||
Cross-currency rate swaps | $ | 517 | $ | (102 | ) |
Fair Value as of | |||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | Balance Sheet Location | |||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Derivatives designated as cash flow hedges | |||||||||||||||||||||||
Interest rate | $ | 0 | $ | 7 | Other assets, net | ||||||||||||||||||
Derivatives designated as net investment hedges | |||||||||||||||||||||||
Foreign currency | 18 | 22 | Other assets, net | ||||||||||||||||||||
Total assets at fair value | $ | 18 | $ | 29 | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivatives designated as cash flow hedges | |||||||||||||||||||||||
Interest rate | $ | 490 | $ | 175 | Other liabilities, net | ||||||||||||||||||
Foreign currency | 1 | 2 | Other accrued liabilities | ||||||||||||||||||||
Derivatives designated as net investment hedges | |||||||||||||||||||||||
Foreign currency | 102 | 166 | Other liabilities, net | ||||||||||||||||||||
Total liabilities at fair value | $ | 593 | $ | 343 |
Location of Gain or (Loss) Reclassified from AOCI into Earnings | Gain or (Loss) Reclassified from AOCI into Earnings | |||||||||
Three Months Ended March 31, | ||||||||||
2020 | 2019 | |||||||||
Derivatives designated as cash flow hedges | ||||||||||
Interest rate swaps | Interest expense, net | $ | (15 | ) | $ | (1 | ) | |||
Forward-currency contracts | Cost of sales | $ | — | $ | 2 | |||||
Location of Gain or (Loss) Recognized in Earnings | Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) | |||||||||
Three Months Ended March 31, | ||||||||||
2020 | 2019 | |||||||||
Derivatives designated as net investment hedges | ||||||||||
Cross-currency rate swaps | Interest expense, net | $ | 21 | $ | 18 |
Fair Value as of | |||||||||||
March 31, 2020 | December 31, 2019 | Balance Sheet Location | |||||||||
Assets: | |||||||||||
Derivatives designated as cash flow hedges | |||||||||||
Interest rate | $ | — | $ | 7 | Other assets, net | ||||||
Foreign currency | $ | 5 | $ | — | Prepaids and other current assets | ||||||
Derivatives designated as net investment hedges | |||||||||||
Foreign currency | 377 | 22 | Other assets, net | ||||||||
Total assets at fair value | $ | 382 | $ | 29 | |||||||
Liabilities: | |||||||||||
Derivatives designated as cash flow hedges | |||||||||||
Interest rate | $ | 461 | $ | 175 | Other liabilities, net | ||||||
Foreign currency | — | 2 | Other accrued liabilities | ||||||||
Derivatives designated as net investment hedges | |||||||||||
Foreign currency | — | 166 | Other liabilities, net | ||||||||
Total liabilities at fair value | $ | 461 | $ | 343 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings | $ | (2 | ) | $ | 3 | ||
Net losses (gains) on foreign exchange | (8 | ) | (15 | ) | |||
Other, net | (6 | ) | (5 | ) | |||
Other operating expenses (income), net | $ | (16 | ) | $ | (17 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings | $ | 4 | $ | 6 | $ | 2 | $ | (1) | |||||||||||||||
Litigation settlements (gains) and reserves, net | 4 | 1 | 5 | 1 | |||||||||||||||||||
Net losses (gains) on foreign exchange | 44 | (35) | 54 | (38) | |||||||||||||||||||
Other, net | 2 | (2) | (2) | (6) | |||||||||||||||||||
Other operating expenses (income), net | $ | 54 | $ | (30) | $ | 59 | $ | (44) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues by operating segment: | |||||||||||||||||||||||
TH | $ | 762 | $ | 881 | $ | 2,028 | $ | 2,472 | |||||||||||||||
BK | 433 | 457 | 1,168 | 1,315 | |||||||||||||||||||
PLK | 142 | 120 | 414 | 337 | |||||||||||||||||||
Total revenues | $ | 1,337 | $ | 1,458 | $ | 3,610 | $ | 4,124 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Revenues by operating segment: | |||||||
TH | $ | 699 | $ | 749 | |||
BK | 388 | 411 | |||||
PLK | 138 | 106 | |||||
Total revenues | $ | 1,225 | $ | 1,266 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues by country (a): | |||||||||||||||||||||||
Canada | $ | 691 | $ | 805 | $ | 1,837 | $ | 2,245 | |||||||||||||||
United States | 499 | 489 | 1,392 | 1,412 | |||||||||||||||||||
Other | 147 | 164 | 381 | 467 | |||||||||||||||||||
Total revenues | $ | 1,337 | $ | 1,458 | $ | 3,610 | $ | 4,124 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Revenues by country (a): | |||||||
Canada | $ | 632 | $ | 676 | |||
United States | 450 | 444 | |||||
Other | 143 | 146 | |||||
Total revenues | $ | 1,225 | $ | 1,266 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Segment income: | |||||||||||||||||||||||
TH | $ | 258 | $ | 301 | $ | 594 | $ | 825 | |||||||||||||||
BK | 245 | 254 | 605 | 728 | |||||||||||||||||||
PLK | 58 | 47 | 164 | 129 | |||||||||||||||||||
Adjusted EBITDA | 561 | 602 | 1,363 | 1,682 | |||||||||||||||||||
Share-based compensation and non-cash incentive compensation expense | 19 | 18 | 63 | 62 | |||||||||||||||||||
Corporate restructuring and tax advisory fees | 3 | 5 | 11 | 22 | |||||||||||||||||||
Office centralization and relocation costs | 0 | 0 | 0 | 6 | |||||||||||||||||||
Impact of equity method investments (a) | 20 | (9) | 42 | 1 | |||||||||||||||||||
Other operating expenses (income), net | 54 | (30) | 59 | (44) | |||||||||||||||||||
EBITDA | 465 | 618 | 1,188 | 1,635 | |||||||||||||||||||
Depreciation and amortization | 48 | 47 | 139 | 139 | |||||||||||||||||||
Income from operations | 417 | 571 | 1,049 | 1,496 | |||||||||||||||||||
Interest expense, net | 129 | 137 | 376 | 406 | |||||||||||||||||||
Loss on early extinguishment of debt | 0 | 4 | 0 | 4 | |||||||||||||||||||
Income tax expense | 65 | 79 | 62 | 232 | |||||||||||||||||||
Net income | $ | 223 | $ | 351 | $ | 611 | $ | 854 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Segment income: | |||||||
TH | $ | 189 | $ | 237 | |||
BK | 200 | 222 | |||||
PLK | 55 | 41 | |||||
Adjusted EBITDA | 444 | 500 | |||||
Share-based compensation and non-cash incentive compensation expense | 21 | 25 | |||||
Corporate restructuring and tax advisory fees | 1 | 6 | |||||
Office centralization and relocation costs | — | 4 | |||||
Impact of equity method investments (a) | 4 | 1 | |||||
Other operating expenses (income), net | (16 | ) | (17 | ) | |||
EBITDA | 434 | 481 | |||||
Depreciation and amortization | 45 | 47 | |||||
Income from operations | 389 | 434 | |||||
Interest expense, net | 119 | 132 | |||||
Income tax expense | 46 | 56 | |||||
Net income | $ | 224 | $ | 246 |
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | 2020 | 2019 | Favorable / (Unfavorable) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | $ | 541 | $ | 624 | $ | (83) | $ | (4) | $ | (79) | $ | 1,450 | $ | 1,735 | $ | (285) | $ | (26) | $ | (259) | |||||||||||||||||||||||||||||||||||||||
Franchise and property revenues | 796 | 834 | (38) | (6) | (32) | 2,160 | 2,389 | (229) | (33) | (196) | |||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues | 1,337 | 1,458 | (121) | (10) | (111) | 3,610 | 4,124 | (514) | (59) | (455) | |||||||||||||||||||||||||||||||||||||||||||||||||
Operating costs and expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales | 418 | 475 | 57 | 3 | 54 | 1,156 | 1,334 | 178 | 20 | 158 | |||||||||||||||||||||||||||||||||||||||||||||||||
Franchise and property expenses | 128 | 133 | 5 | — | 5 | 388 | 401 | 13 | 4 | 9 | |||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 302 | 320 | 18 | — | 18 | 922 | 948 | 26 | 5 | 21 | |||||||||||||||||||||||||||||||||||||||||||||||||
(Income) loss from equity method investments | 18 | (11) | (29) | 1 | (30) | 36 | (11) | (47) | — | (47) | |||||||||||||||||||||||||||||||||||||||||||||||||
Other operating expenses (income), net | 54 | (30) | (84) | 1 | (85) | 59 | (44) | (103) | — | (103) | |||||||||||||||||||||||||||||||||||||||||||||||||
Total operating costs and expenses | 920 | 887 | (33) | 5 | (38) | 2,561 | 2,628 | 67 | 29 | 38 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income from operations | 417 | 571 | (154) | (5) | (149) | 1,049 | 1,496 | (447) | (30) | (417) | |||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 129 | 137 | 8 | — | 8 | 376 | 406 | 30 | — | 30 | |||||||||||||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | — | 4 | 4 | — | 4 | — | 4 | 4 | — | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 288 | 430 | (142) | (5) | (137) | 673 | 1,086 | (413) | (30) | (383) | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense | 65 | 79 | 14 | — | 14 | 62 | 232 | 170 | 1 | 169 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 223 | $ | 351 | $ | (128) | $ | (5) | $ | (123) | $ | 611 | $ | 854 | $ | (243) | $ | (29) | $ | (214) |
Consolidated | Three Months Ended March 31, | Variance | FX Impact (a) | Variance Excluding FX Impact | |||||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | |||||||||||||||||
Revenues: | |||||||||||||||||||
Sales | $ | 503 | $ | 522 | $ | (19 | ) | $ | (5 | ) | $ | (14 | ) | ||||||
Franchise and property revenues | 722 | 744 | (22 | ) | (9 | ) | (13 | ) | |||||||||||
Total revenues | 1,225 | 1,266 | (41 | ) | (14 | ) | (27 | ) | |||||||||||
Operating costs and expenses: | |||||||||||||||||||
Cost of sales | 399 | 406 | 7 | 4 | 3 | ||||||||||||||
Franchise and property expenses | 126 | 133 | 7 | 1 | 6 | ||||||||||||||
Selling, general and administrative expenses | 325 | 312 | (13 | ) | 2 | (15 | ) | ||||||||||||
(Income) loss from equity method investments | 2 | (2 | ) | (4 | ) | (1 | ) | (3 | ) | ||||||||||
Other operating expenses (income), net | (16 | ) | (17 | ) | (1 | ) | (1 | ) | — | ||||||||||
Total operating costs and expenses | 836 | 832 | (4 | ) | 5 | (9 | ) | ||||||||||||
Income from operations | 389 | 434 | (45 | ) | (9 | ) | (36 | ) | |||||||||||
Interest expense, net | 119 | 132 | 13 | — | 13 | ||||||||||||||
Income before income taxes | 270 | 302 | (32 | ) | (9 | ) | (23 | ) | |||||||||||
Income tax expense | 46 | 56 | 10 | — | 10 | ||||||||||||||
Net income | $ | 224 | $ | 246 | $ | (22 | ) | $ | (9 | ) | $ | (13 | ) |
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | 2020 | 2019 | Favorable / (Unfavorable) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | $ | 506 | $ | 584 | $ | (78) | $ | (4) | $ | (74) | $ | 1,345 | $ | 1,618 | $ | (273) | $ | (26) | $ | (247) | |||||||||||||||||||||||||||||||||||||||
Franchise and property revenues | 256 | 297 | (41) | (3) | (38) | 683 | 854 | (171) | (14) | (157) | |||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues | 762 | 881 | (119) | (7) | (112) | 2,028 | 2,472 | (444) | (40) | (404) | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales | 388 | 441 | 53 | 3 | 50 | 1,061 | 1,233 | 172 | 20 | 152 | |||||||||||||||||||||||||||||||||||||||||||||||||
Franchise and property expenses | 83 | 91 | 8 | — | 8 | 250 | 268 | 18 | 4 | 14 | |||||||||||||||||||||||||||||||||||||||||||||||||
Segment SG&A | 63 | 77 | 14 | — | 14 | 211 | 236 | 25 | 3 | 22 | |||||||||||||||||||||||||||||||||||||||||||||||||
Segment depreciation and amortization (b) | 28 | 28 | — | — | — | 82 | 80 | (2) | 1 | (3) | |||||||||||||||||||||||||||||||||||||||||||||||||
Segment income (c) | 258 | 301 | (43) | (2) | (41) | 594 | 825 | (231) | (13) | (218) |
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | 2020 | 2019 | Favorable / (Unfavorable) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | $ | 17 | $ | 19 | $ | (2) | $ | — | $ | (2) | $ | 49 | $ | 57 | $ | (8) | $ | — | $ | (8) | |||||||||||||||||||||||||||||||||||||||
Franchise and property revenues | 416 | 438 | (22) | (2) | (20) | 1,119 | 1,258 | (139) | (18) | (121) | |||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues | 433 | 457 | (24) | (2) | (22) | 1,168 | 1,315 | (147) | (18) | (129) | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales | 16 | 18 | 2 | — | 2 | 49 | 53 | 4 | — | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Franchise and property expenses | 42 | 39 | (3) | — | (3) | 129 | 124 | (5) | — | (5) | |||||||||||||||||||||||||||||||||||||||||||||||||
Segment SG&A | 142 | 159 | 17 | — | 17 | 422 | 449 | 27 | 1 | 26 | |||||||||||||||||||||||||||||||||||||||||||||||||
Segment depreciation and amortization (b) | 13 | 12 | (1) | — | (1) | 37 | 37 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Segment income (d) | 245 | 254 | (9) | (2) | (7) | 605 | 728 | (123) | (17) | (106) |
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | 2020 | 2019 | Favorable / (Unfavorable) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | $ | 18 | $ | 21 | $ | (3) | $ | — | $ | (3) | $ | 56 | $ | 60 | $ | (4) | $ | — | $ | (4) | |||||||||||||||||||||||||||||||||||||||
Franchise and property revenues | 124 | 99 | 25 | (1) | 26 | 358 | 277 | 81 | (1) | 82 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues | 142 | 120 | 22 | (1) | 23 | 414 | 337 | 77 | (1) | 78 | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales | 14 | 16 | 2 | — | 2 | 46 | 48 | 2 | — | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||
Franchise and property expenses | 3 | 3 | — | — | — | 9 | 9 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Segment SG&A | 70 | 56 | (14) | — | (14) | 201 | 159 | (42) | — | (42) | |||||||||||||||||||||||||||||||||||||||||||||||||
Segment depreciation and amortization (b) | 2 | 2 | — | — | — | 6 | 8 | 2 | — | 2 | |||||||||||||||||||||||||||||||||||||||||||||||||
Segment income | 58 | 47 | 11 | (1) | 12 | 164 | 129 | 35 | (1) | 36 |
TH Segment | Three Months Ended March 31, | Variance | FX Impact (a) | Variance Excluding FX Impact | |||||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | |||||||||||||||||
Revenues: | |||||||||||||||||||
Sales | $ | 465 | $ | 483 | $ | (18 | ) | $ | (5 | ) | $ | (13 | ) | ||||||
Franchise and property revenues | 234 | 266 | (32 | ) | (2 | ) | (30 | ) | |||||||||||
Total revenues | 699 | 749 | (50 | ) | (7 | ) | (43 | ) | |||||||||||
Cost of sales | 366 | 372 | 6 | 4 | 2 | ||||||||||||||
Franchise and property expenses | 84 | 87 | 3 | 1 | 2 | ||||||||||||||
Segment SG&A | 87 | 82 | (5 | ) | 1 | (6 | ) | ||||||||||||
Segment depreciation and amortization (b) | 26 | 26 | — | — | — | ||||||||||||||
Segment income (c) | 189 | 237 | (48 | ) | (2 | ) | (46 | ) |
BK Segment | Three Months Ended March 31, | Variance | FX Impact (a) | Variance Excluding FX Impact | |||||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | |||||||||||||||||
Revenues: | |||||||||||||||||||
Sales | $ | 17 | $ | 19 | $ | (2 | ) | $ | — | $ | (2 | ) | |||||||
Franchise and property revenues | 371 | 392 | (21 | ) | (7 | ) | (14 | ) | |||||||||||
Total revenues | 388 | 411 | (23 | ) | (7 | ) | (16 | ) | |||||||||||
Cost of sales | 17 | 18 | 1 | — | 1 | ||||||||||||||
Franchise and property expenses | 39 | 43 | 4 | — | 4 | ||||||||||||||
Segment SG&A | 145 | 141 | (4 | ) | 1 | (5 | ) | ||||||||||||
Segment depreciation and amortization (b) | 12 | 13 | 1 | — | 1 | ||||||||||||||
Segment income (d) | 200 | 222 | (22 | ) | (6 | ) | (16 | ) |
PLK Segment | Three Months Ended March 31, | Variance | FX Impact (a) | Variance Excluding FX Impact | |||||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | |||||||||||||||||
Revenues: | |||||||||||||||||||
Sales | $ | 21 | $ | 20 | $ | 1 | $ | — | $ | 1 | |||||||||
Franchise and property revenues | 117 | 86 | 31 | — | 31 | ||||||||||||||
Total revenues | 138 | 106 | 32 | — | 32 | ||||||||||||||
Cost of sales | 16 | 16 | — | — | — | ||||||||||||||
Franchise and property expenses | 3 | 3 | — | — | — | ||||||||||||||
Segment SG&A | 66 | 49 | (17 | ) | — | (17 | ) | ||||||||||||
Segment depreciation and amortization (b) | 2 | 3 | 1 | — | 1 | ||||||||||||||
Segment income | 55 | 41 | 14 | — | 14 |
Three Months Ended March 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
Key Business Metrics | 2020 | 2019 | Key Business Metrics | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
System-wide sales growth | System-wide sales growth | |||||||||||||||||||||||||||||
TH | (9.9 | )% | 0.5 | % | TH | (13.7) | % | (0.1) | % | (19.1) | % | 0.6 | % | |||||||||||||||||
BK | (3.0 | )% | 8.2 | % | BK | (7.9) | % | 10.7 | % | (12.1) | % | 9.6 | % | |||||||||||||||||
PLK | 32.3 | % | 6.8 | % | PLK | 21.5 | % | 15.6 | % | 25.7 | % | 10.5 | % | |||||||||||||||||
Consolidated | 0.0 | % | 6.4 | % | Consolidated | (5.4) | % | 8.9 | % | (8.9) | % | 7.8 | % | |||||||||||||||||
System-wide sales | System-wide sales | |||||||||||||||||||||||||||||
TH | $ | 1,382 | $ | 1,547 | TH | $ | 1,520 | $ | 1,774 | $ | 4,010 | $ | 5,037 | |||||||||||||||||
BK | $ | 4,999 | $ | 5,289 | BK | $ | 5,484 | $ | 6,010 | $ | 14,610 | $ | 17,016 | |||||||||||||||||
PLK | $ | 1,258 | $ | 955 | PLK | $ | 1,331 | $ | 1,103 | $ | 3,836 | $ | 3,070 | |||||||||||||||||
Consolidated | $ | 7,639 | $ | 7,791 | Consolidated | $ | 8,335 | $ | 8,887 | $ | 22,456 | $ | 25,123 | |||||||||||||||||
Comparable sales | Comparable sales | |||||||||||||||||||||||||||||
TH | (10.3 | )% | (0.6 | )% | TH | (12.5) | % | (1.4) | % | (17.2) | % | (0.5) | % | |||||||||||||||||
BK | (3.7 | )% | 2.2 | % | BK | (7.0) | % | 4.8 | % | (7.9) | % | 3.6 | % | |||||||||||||||||
PLK | 26.2 | % | 0.6 | % | PLK | 17.4 | % | 9.7 | % | 22.5 | % | 4.5 | % | |||||||||||||||||
As of March 31, | As of September 30, | |||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||||
Net restaurant growth | Net restaurant growth | |||||||||||||||||||||||||||||
TH | 1.2 | % | 1.9 | % | TH | 1.0 | % | 1.7 | % | |||||||||||||||||||||
BK | 5.8 | % | 5.7 | % | BK | 2.4 | % | 5.8 | % | |||||||||||||||||||||
PLK | 6.9 | % | 6.6 | % | PLK | 7.1 | % | 5.6 | % | |||||||||||||||||||||
Consolidated | 5.0 | % | 5.1 | % | Consolidated | 2.7 | % | 5.0 | % | |||||||||||||||||||||
Restaurant count | Restaurant count | |||||||||||||||||||||||||||||
TH | 4,925 | 4,866 | TH | 4,934 | 4,887 | |||||||||||||||||||||||||
BK | 18,848 | 17,823 | BK | 18,675 | 18,232 | |||||||||||||||||||||||||
PLK | 3,336 | 3,120 | PLK | 3,418 | 3,192 | |||||||||||||||||||||||||
Consolidated | 27,109 | 25,809 | Consolidated | 27,027 | 26,311 |
Three Months Ended March 31, | Variance | |||||||||||||
$ | % | |||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | ||||||||||||
Segment SG&A: | ||||||||||||||
TH | $ | 87 | $ | 82 | $ | (5 | ) | (6.1 | )% | |||||
BK | 145 | 141 | (4 | ) | (2.8 | )% | ||||||||
PLK | 66 | 49 | (17 | ) | (34.7 | )% | ||||||||
Share-based compensation and non-cash incentive compensation expense | 21 | 25 | 4 | 16.0 | % | |||||||||
Depreciation and amortization | 5 | 5 | — | — | % | |||||||||
Corporate restructuring and tax advisory fees | 1 | 6 | 5 | 83.3 | % | |||||||||
Office centralization and relocation costs | — | 4 | 4 | 100.0 | % | |||||||||
Selling, general and administrative expenses | $ | 325 | $ | 312 | $ | (13 | ) | (4.2 | )% |
Three Months Ended September 30, | Variance | Nine Months Ended September 30, | Variance | ||||||||||||||||||||||||||||||||||||||||||||
$ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | 2020 | 2019 | Favorable / (Unfavorable) | ||||||||||||||||||||||||||||||||||||||||||
Segment SG&A: | |||||||||||||||||||||||||||||||||||||||||||||||
TH | $ | 63 | $ | 77 | $ | 14 | 18.2 | % | $ | 211 | $ | 236 | $ | 25 | 10.6 | % | |||||||||||||||||||||||||||||||
BK | 142 | 159 | 17 | 10.7 | % | 422 | 449 | 27 | 6.0 | % | |||||||||||||||||||||||||||||||||||||
PLK | 70 | 56 | (14) | (25.0) | % | 201 | 159 | (42) | (26.4) | % | |||||||||||||||||||||||||||||||||||||
Share-based compensation and non-cash incentive compensation expense | 19 | 18 | (1) | (5.6) | % | 63 | 62 | (1) | (1.6) | % | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 5 | 5 | — | — | % | 14 | 14 | — | — | % | |||||||||||||||||||||||||||||||||||||
Corporate restructuring and tax advisory fees | 3 | 5 | 2 | 40.0 | % | 11 | 22 | 11 | 50.0 | % | |||||||||||||||||||||||||||||||||||||
Office centralization and relocation costs | — | — | — | — | % | — | 6 | 6 | 100.0 | % | |||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | $ | 302 | $ | 320 | $ | 18 | 5.6 | % | $ | 922 | $ | 948 | $ | 26 | 2.7 | % |
Three Months Ended March 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings | $ | (2 | ) | $ | 3 | Net losses (gains) on disposal of assets, restaurant closures, and refranchisings | $ | 4 | $ | 6 | $ | 2 | $ | (1) | ||||||||||||||||
Litigation settlements (gains) and reserves, net | Litigation settlements (gains) and reserves, net | 4 | 1 | 5 | 1 | |||||||||||||||||||||||||
Net losses (gains) on foreign exchange | (8 | ) | (15 | ) | Net losses (gains) on foreign exchange | 44 | (35) | 54 | (38) | |||||||||||||||||||||
Other, net | (6 | ) | (5 | ) | Other, net | 2 | (2) | (2) | (6) | |||||||||||||||||||||
Other operating expenses (income), net | $ | (16 | ) | $ | (17 | ) | Other operating expenses (income), net | $ | 54 | $ | (30) | $ | 59 | $ | (44) |
Three Months Ended March 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
Interest expense, net | $ | 119 | $ | 132 | Interest expense, net | $ | 129 | $ | 137 | $ | 376 | $ | 406 | |||||||||||||||||
Weighted average interest rate on long-term debt | 4.6 | % | 5.0 | % | Weighted average interest rate on long-term debt | 4.5 | % | 5.1 | % | 4.6 | % | 5.1 | % |
Three Months Ended March 31, | Variance | Three Months Ended September 30, | Variance | Nine Months Ended September 30, | Variance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | % | $ | % | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | Favorable / (Unfavorable) | 2020 | 2019 | Favorable / (Unfavorable) | 2020 | 2019 | Favorable / (Unfavorable) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment income: | Segment income: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TH | $ | 189 | $ | 237 | $ | (48 | ) | (20.1 | )% | TH | $ | 258 | $ | 301 | $ | (43) | (14.1) | % | $ | 594 | $ | 825 | $ | (231) | (27.9) | % | |||||||||||||||||||||||||||||||||||
BK | 200 | 222 | (22 | ) | (10.0 | )% | BK | 245 | 254 | (9) | (3.3) | % | 605 | 728 | (123) | (16.9) | % | ||||||||||||||||||||||||||||||||||||||||||||
PLK | 55 | 41 | 14 | 34.2 | % | PLK | 58 | 47 | 11 | 23.4 | % | 164 | 129 | 35 | 26.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | 444 | 500 | (56 | ) | (11.2 | )% | Adjusted EBITDA | 561 | 602 | (41) | (6.6) | % | 1,363 | 1,682 | (319) | (18.9) | % | ||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation and non-cash incentive compensation expense | 21 | 25 | 4 | 16.0 | % | Share-based compensation and non-cash incentive compensation expense | 19 | 18 | (1) | (5.6) | % | 63 | 62 | (1) | (1.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
Corporate restructuring and tax advisory fees | 1 | 6 | 5 | 83.3 | % | Corporate restructuring and tax advisory fees | 3 | 5 | 2 | 40.0 | % | 11 | 22 | 11 | 50.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
Office centralization and relocation costs | — | 4 | 4 | 100.0 | % | Office centralization and relocation costs | — | — | — | NM | — | 6 | 6 | 100.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Impact of equity method investments (a) | 4 | 1 | (3 | ) | NM | Impact of equity method investments (a) | 20 | (9) | (29) | NM | 42 | 1 | (41) | NM | |||||||||||||||||||||||||||||||||||||||||||||||
Other operating expenses (income), net | (16 | ) | (17 | ) | (1 | ) | (5.9 | )% | Other operating expenses (income), net | 54 | (30) | (84) | NM | 59 | (44) | (103) | NM | ||||||||||||||||||||||||||||||||||||||||||||
EBITDA | 434 | 481 | (47 | ) | (9.8 | )% | EBITDA | 465 | 618 | (153) | (24.8) | % | 1,188 | 1,635 | (447) | (27.3) | % | ||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 45 | 47 | 2 | 4.3 | % | Depreciation and amortization | 48 | 47 | (1) | (2.1) | % | 139 | 139 | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||
Income from operations | 389 | 434 | (45 | ) | (10.4 | )% | Income from operations | 417 | 571 | (154) | (27.0) | % | 1,049 | 1,496 | (447) | (29.9) | % | ||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | 119 | 132 | 13 | 9.8 | % | Interest expense, net | 129 | 137 | 8 | 5.8 | % | 376 | 406 | 30 | 7.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
Loss on early extinguishment of debt | Loss on early extinguishment of debt | — | 4 | 4 | NM | — | 4 | 4 | NM | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense | 46 | 56 | 10 | 17.9 | % | Income tax expense | 65 | 79 | 14 | 17.7 | % | 62 | 232 | 170 | 73.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 224 | $ | 246 | $ | (22 | ) | (8.9 | )% | Net income | $ | 223 | $ | 351 | $ | (128) | (36.5) | % | $ | 611 | $ | 854 | $ | (243) | (28.5) | % |
Payment Due by Period as of October 16, 2020 | |||||||||||||||||||||||||||||||||||
Contractual Obligations | Total as of September 30, 2020 | Total | Less Than 1 Year | 1-3 Years | 3-5 Years | More Than 5 Years | |||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||
Credit Facilities, including interest (a) | $ | 6,700 | $ | 6,700 | $ | 186 | $ | 386 | $ | 976 | $ | 5,152 | |||||||||||||||||||||||
Senior Notes, including interest (b) | 7,818 | 8,092 | 285 | 566 | 2,465 | 4,776 | |||||||||||||||||||||||||||||
Other long term debt | 184 | 184 | 9 | 24 | 37 | 114 |
Payment Due by Period as of April 7, 2020 | |||||||||||||||||||||||
Contractual Obligations | Total as of March 31, 2020 | Total | Less Than 1 Year | 1-3 Years | 3-5 Years | More Than 5 Years | |||||||||||||||||
(In millions) | |||||||||||||||||||||||
Credit Facilities, including interest (a) | $ | 8,203 | $ | 8,203 | $ | 259 | $ | 522 | $ | 2,124 | $ | 5,298 | |||||||||||
Senior Notes, including interest (b) | 7,320 | 7,965 | 294 | 589 | 2,033 | 5,049 | |||||||||||||||||
Other long term debt | 186 | 186 | 9 | 24 | 36 | 117 |
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: | By: | /s/ Matthew Dunnigan | ||||||||||||||||||||||||
Name: | Matthew Dunnigan | |||||||||||||||||||||||||
Title: | Chief Financial Officer (principal financial officer) (duly authorized officer) |