Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 19, 2018 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | QSP | |
Entity Registrant Name | Restaurant Brands International Limited Partnership | |
Entity Central Index Key | 1,618,755 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Partnership Exchangeable Units | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 217,543,591 | |
Class A common units | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 202,006,067 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||||
Cash and cash equivalents | $ 1,113 | $ 1,097.4 | $ 3,593.2 | $ 1,435.8 |
Accounts and notes receivable, net of allowance of $17.8 and $16.4, respectively | 481.4 | 488.8 | ||
Inventories, net | 91.8 | 78 | ||
Prepaids and other current assets | 48.7 | 85.4 | ||
Total current assets | 1,734.9 | 1,749.6 | ||
Property and equipment, net of accumulated depreciation and amortization of $716.5 and $623.3, respectively | 2,054.1 | 2,133.3 | ||
Intangible assets, net | 10,821 | 11,062.2 | ||
Goodwill | 5,680 | 5,782.3 | ||
Net investment in property leased to franchisees | 58 | 71.3 | ||
Other assets, net | 637.7 | 425.2 | ||
Total assets | 20,985.7 | 21,223.9 | ||
Current liabilities: | ||||
Accounts and drafts payable | 467 | 496.2 | ||
Other accrued liabilities | 678.4 | 865.7 | ||
Gift card liability | 95.3 | 214.9 | ||
Current portion of long term debt and capital leases | 79.6 | 78.2 | ||
Total current liabilities | 1,320.3 | 1,655 | ||
Term debt, net of current portion | 11,766.8 | 11,800.9 | ||
Capital leases, net of current portion | 240.6 | 243.8 | ||
Other liabilities, net | 1,738.5 | 1,455.1 | ||
Deferred income taxes, net | 1,524.7 | 1,508.1 | ||
Total liabilities | 16,590.9 | 16,662.9 | ||
Partners’ capital: | ||||
Partnership exchangeable units; 217,543,591 issued and outstanding at September 30, 2018; 217,708,924 issued and outstanding at December 31, 2017 | 1,248.2 | |||
Accumulated other comprehensive income (loss) | (1,110.9) | (884.3) | ||
Total Partners’ capital | 4,392.3 | 4,559.6 | ||
Noncontrolling interests | 2.5 | 1.4 | ||
Total equity | 4,394.8 | 4,561 | ||
Total liabilities and equity | 20,985.7 | 21,223.9 | ||
Class A common units | ||||
Partners’ capital: | ||||
Class A common units; 202,006,067 issued and outstanding at September 30, 2018 and December 31, 2017 | 4,255 | 4,167.5 | ||
Total equity | 4,255 | 4,167.5 | ||
Partnership Exchangeable Units | ||||
Partners’ capital: | ||||
Partnership exchangeable units; 217,543,591 issued and outstanding at September 30, 2018; 217,708,924 issued and outstanding at December 31, 2017 | 1,248.2 | 1,276.4 | ||
Total equity | $ 1,248.2 | $ 1,276.4 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Allowance for accounts and notes receivable | $ 17.8 | $ 16.4 |
Property and equipment, accumulated depreciation and amortization | $ 716.5 | $ 623.3 |
Class A common units | ||
Class A common units, issued (shares) | 202,006,067 | 202,006,067 |
Class A common units, outstanding (shares) | 202,006,067 | 202,006,067 |
Partnership Exchangeable Units | ||
Partnership exchangeable units, issued (shares) | 217,543,591 | 217,708,924 |
Partnership exchangeable units, outstanding (shares) | 217,543,591 | 217,708,924 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Revenues | $ 1,375.3 | $ 1,208.6 | $ 3,972.5 | $ 3,341.9 |
Operating costs and expenses: | ||||
Cost of sales | 469.9 | 493.3 | 1,347.9 | 1,376.9 |
Franchise and property expenses | 107.6 | 118.5 | 314.4 | 343.2 |
Selling, general and administrative expenses | 298.3 | 100.1 | 917.2 | 318.7 |
(Income) loss from equity method investments | (3.8) | (4.1) | (16.9) | (8.9) |
Other operating expenses (income), net | 26.1 | 21.5 | 9.4 | 82.1 |
Total operating costs and expenses | 898.1 | 729.3 | 2,572 | 2,112 |
Income from operations | 477.2 | 479.3 | 1,400.5 | 1,229.9 |
Interest expense, net | 134.9 | 136 | 404.8 | 375.4 |
Loss on early extinguishment of debt | 0 | 58.2 | 0 | 78.6 |
Income before income taxes | 342.3 | 285.1 | 995.7 | 775.9 |
Income tax expense | 92.5 | 38.3 | 152.9 | 119 |
Net income | 249.8 | 246.8 | 842.8 | 656.9 |
Net income attributable to noncontrolling interests | 0.1 | 0.3 | 0.5 | 1.1 |
Partnership preferred unit distributions | 0 | 67.5 | 0 | 202.5 |
Net income attributable to common unitholders | 249.7 | 179 | 842.3 | 453.3 |
Class A common units | ||||
Operating costs and expenses: | ||||
Net income | 449 | |||
Net income attributable to common unitholders | $ 133.6 | $ 91.3 | $ 449 | $ 231 |
Earnings per unit - basic and diluted | ||||
Earnings per unit - basic and diluted (in usd per share) | $ 0.66 | $ 0.45 | $ 2.22 | $ 1.14 |
Weighted average units outstanding - basic and diluted | ||||
Weighted average units outstanding - basic and diluted (shares) | 202 | 202 | 202 | 202 |
Distributions per unit | ||||
Distributions per unit (in dollars per share) | $ 0.56 | $ 0.23 | $ 1.67 | $ 0.67 |
Partnership Exchangeable Units | ||||
Operating costs and expenses: | ||||
Net income | $ 393.3 | |||
Net income attributable to common unitholders | $ 116.1 | $ 87.7 | $ 393.3 | $ 222.3 |
Earnings per unit - basic and diluted | ||||
Earnings per unit - basic and diluted (in usd per share) | $ 0.53 | $ 0.39 | $ 1.81 | $ 0.98 |
Weighted average units outstanding - basic and diluted | ||||
Weighted average units outstanding - basic and diluted (shares) | 217.6 | 226.8 | 217.6 | 226.9 |
Distributions per unit | ||||
Distributions per unit (in dollars per share) | $ 0.45 | $ 0.20 | $ 1.35 | $ 0.57 |
Sales | ||||
Revenues: | ||||
Sales | $ 609.1 | $ 631.6 | $ 1,743.1 | $ 1,784.1 |
Royalty, Property Revenue, and Franchisor | ||||
Revenues: | ||||
Revenues | $ 766.2 | $ 577 | $ 2,229.4 | $ 1,557.8 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 249.8 | $ 246.8 | $ 842.8 | $ 656.9 |
Foreign currency translation adjustment | 147 | 423 | (325.4) | 884.2 |
Net change in fair value of net investment hedges, net of tax of $0.4, $45.4, $(37.5) and $7.3 | (82.6) | (126.1) | 33.4 | (342.5) |
Net change in fair value of cash flow hedges, net of tax of $7.4, $1.4, $(2.7) and $8.2 | 23.9 | (3.9) | 51.5 | (23) |
Amounts reclassified to earnings of cash flow hedges, net of tax of $0.9, $(2.5), $(1.4) and $(6.3) | 7.4 | 6.9 | 13.6 | 17.9 |
Gain (loss) recognized on defined benefit pension plans, net of tax of $0.0, $0.2, $0.0 and $1.6 | 0.1 | (0.2) | 0.3 | 0.1 |
Other comprehensive income (loss) | 95.8 | 299.7 | (226.6) | 536.7 |
Comprehensive income (loss) | 345.6 | 546.5 | 616.2 | 1,193.6 |
Comprehensive income (loss) attributable to noncontrolling interests | 0.1 | 0.3 | 0.5 | 1.1 |
Comprehensive income attributable to preferred unitholder | 0 | 67.5 | 0 | 202.5 |
Comprehensive income (loss) attributable to common unitholders | $ 345.5 | $ 478.7 | $ 615.7 | $ 990 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax effect on change in fair value of investment hedges | $ 0.4 | $ 45.4 | $ (37.5) | $ 7.3 |
Tax effect of changes in fair value of cash flow hedges | 7.4 | 1.4 | (2.7) | 8.2 |
Tax effect on amounts reclassified to earnings of cash flow hedges | 0.9 | (2.5) | (1.4) | (6.3) |
Tax effect on pension and post-retirement benefit plans | $ 0 | $ 0.2 | $ 0 | $ 1.6 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Total | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Class A common units | Partnership Exchangeable Units |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect adjustment | Accounting Standards Update 2014-09 | $ (249.8) | $ (132) | $ (117.8) | ||
Beginning Balance Class A, shares at Dec. 31, 2017 | 202,006,067 | ||||
Beginning balances at Dec. 31, 2017 | 4,561 | $ (884.3) | $ 1.4 | $ 4,167.5 | $ 1,276.4 |
Beginning Balance Partnership exchangeable units, shares at Dec. 31, 2017 | 217,708,924 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Distributions declared on Class A common units | (338.2) | (338.2) | |||
Distributions declared on partnership exchangeable units | (293.8) | $ (293.8) | |||
Exchange of Partnership exchangeable units for RBI common shares | 9.9 | $ (9.9) | |||
Exchange of Partnership exchangeable units for RBI common shares, shares | (165,333) | ||||
Capital contribution from RBI Inc. | 98.8 | 98.8 | |||
Restaurant VIE contributions (distributions) | 0.6 | 0.6 | |||
Net income | 842.8 | 0.5 | $ 449 | $ 393.3 | |
Other comprehensive income (loss) | (226.6) | (226.6) | |||
Ending Balance Class A, shares at Sep. 30, 2018 | 202,006,067 | ||||
Ending balances at Sep. 30, 2018 | $ 4,394.8 | $ (1,110.9) | $ 2.5 | $ 4,255 | $ 1,248.2 |
Ending Balance Partnership exchangeable units, shares at Sep. 30, 2018 | 217,543,591 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 842.8 | $ 656.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 137.5 | 134.9 |
Premiums paid and non-cash loss on early extinguishment of debt | 0 | 75.9 |
Amortization of deferred financing costs and debt issuance discount | 21.9 | 25.2 |
(Income) loss from equity method investments | (16.9) | (8.9) |
Loss (gain) on remeasurement of foreign denominated transactions | (19.3) | 64.7 |
Net (gains) losses on derivatives | (24.4) | 23.1 |
Share-based compensation expense | 39.3 | 38 |
Deferred income taxes | 6.1 | (3.1) |
Other | 11.1 | 12.8 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||
Accounts and notes receivable | (0.3) | 0.3 |
Inventories and prepaids and other current assets | (16.3) | (1) |
Accounts and drafts payable | (24) | 6.8 |
Other accrued liabilities and gift card liability | (283.6) | (161.4) |
Other long-term assets and liabilities | (31.3) | (40) |
Net cash provided by operating activities | 642.6 | 824.2 |
Cash flows from investing activities: | ||
Payments for property and equipment | (53.3) | (16.9) |
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 1.8 | 19.6 |
Net payment for purchase of Popeyes, net of cash acquired | 0 | (1,635.9) |
Return of investment on direct financing leases | 12.3 | 11.8 |
Settlement/sale of derivatives, net | 11.2 | 771.8 |
Other investing activities, net | 0.3 | (2.3) |
Net cash provided by (used for) investing activities | (27.7) | (851.9) |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt | 0 | 4,350 |
Repayments of long-term debt and capital leases | (65.9) | (1,690) |
Payment of financing costs | 0 | (57) |
Distributions on Class A common, preferred and Partnership exchangeable units | (517.1) | (451.9) |
Payments in connection with repurchase of partnership preferred units | (60.1) | 0 |
Capital contribution from RBI Inc. | 52.9 | 17.5 |
Other financing activities, net | 1.3 | (6.2) |
Net cash (used for) provided by financing activities | (588.9) | 2,162.4 |
Effect of exchange rates on cash and cash equivalents | (10.4) | 22.7 |
Increase (decrease) in cash and cash equivalents | 15.6 | 2,157.4 |
Cash and cash equivalents at beginning of period | 1,097.4 | 1,435.8 |
Cash and cash equivalents at end of period | 1,113 | 3,593.2 |
Supplemental cash flow disclosures: | ||
Interest paid | 410.5 | 340.2 |
Income taxes paid | $ 373.8 | $ 189.3 |
Description of Business and Org
Description of Business and Organization | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Organization | Description of Business and Organization Restaurant Brands International Limited Partnership (“Partnership”, “we”, “us” or “our”) was formed on August 25, 2014 as a general partnership and was registered on October 27, 2014 as a limited partnership in accordance with the laws of the Province of Ontario. We franchise and operate quick service restaurants serving premium coffee and other beverage and food products under the Tim Hortons ® brand (“Tim Hortons” or “TH”), fast food hamburgers principally under the Burger King ® brand (“Burger King” or “BK”), and chicken under the Popeyes ® brand (“Popeyes” or “PLK”). We are one of the world’s largest quick service restaurant, or QSR, companies as measured by total number of restaurants. As of September 30, 2018 , we franchised or owned 4,805 Tim Hortons restaurants, 17,239 Burger King restaurants, and 3,022 Popeyes restaurants, for a total of 25,066 restaurants, and operate in more than 100 countries and U.S. territories. Approximately 100% of current system-wide restaurants are franchised. We are a subsidiary of Restaurant Brands International Inc. (“RBI”). RBI is our sole general partner, and as such, RBI has the exclusive right, power and authority to manage, control, administer and operate the business and affairs and to make decisions regarding the undertaking and business of Partnership in accordance with the partnership agreement of Partnership (“partnership agreement”) and applicable laws. All references to “$” or “dollars” are to the currency of the United States unless otherwise indicated. All references to Canadian dollars or C$ are to the currency of Canada unless otherwise indicated. |
Basis of Presentation and Conso
Basis of Presentation and Consolidation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation We have prepared the accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. Therefore, the Financial Statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC and Canadian securities regulatory authorities on February 23, 2018. The Financial Statements include our accounts and the accounts of entities in which we have a controlling financial interest, the usual condition of which is ownership of a majority voting interest. All material intercompany balances and transactions have been eliminated in consolidation. Investments in other affiliates that are owned 50% or less where we have significant influence are accounted for by the equity method. We also consider for consolidation entities in which we have certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. Tim Hortons has historically entered into certain arrangements in which an operator acquires the right to operate a restaurant, but Tim Hortons owns the restaurant’s assets. We perform an analysis to determine if the legal entity in which operations are conducted is a VIE and consolidate a VIE entity if we also determine Tim Hortons is the entity’s primary beneficiary (“Restaurant VIEs”). As of September 30, 2018 and December 31, 2017 , we determined that we are the primary beneficiary of 19 and 31 Restaurant VIEs, respectively. As Tim Hortons, Burger King, and Popeyes franchise and master franchise arrangements provide the franchise and master franchise entities the power to direct the activities that most significantly impact their economic performance, we do not consider ourselves the primary beneficiary of any such entity that might be a VIE. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included in the Financial Statements. The results for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The preparation of consolidated financial statements in conformity with U.S. GAAP and related rules and regulations of the SEC requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Certain prior year amounts in the accompanying Financial Statements and notes to the Financial Statements have been reclassified in order to be comparable with the current year classifications. These consist of the December 31, 2017 reclassification of Advertising fund restricted assets to Cash and cash equivalents, Accounts and notes receivable, net and Prepaids and other current assets and the reclassification of Advertising fund liabilities to Accounts and drafts payable and Other accrued liabilities as detailed below (in millions). These reclassifications had no effect on previously reported net income. December 31, 2017 December 31, 2017 As Reported Reclassification As Adjusted Current assets: Cash and cash equivalents $ 1,073.4 $ 24.0 $ 1,097.4 Accounts and notes receivable, net 455.9 32.9 488.8 Inventories, net 78.0 — 78.0 Advertising fund restricted assets 83.3 (83.3 ) — Prepaids and other current assets 59.0 26.4 85.4 Total current assets $ 1,749.6 $ — $ 1,749.6 Current liabilities: Accounts and drafts payable $ 412.9 $ 83.3 $ 496.2 Other accrued liabilities 838.2 27.5 865.7 Gift card liability 214.9 — 214.9 Advertising fund liabilities 110.8 (110.8 ) — Current portion of long term debt and capital leases 78.2 — 78.2 Total current liabilities $ 1,655.0 $ — $ 1,655.0 |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Revenue Recognition – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. We adopted this new guidance on January 1, 2018. See Note 4, Revenue Recognition , for further information about our transition to this new revenue recognition model using the modified retrospective transition method. Lease Accounting – In February 2016, the FASB issued new guidance on leases. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. The new guidance is effective commencing in 2019 and requires a modified retrospective transition approach with application in all comparative periods presented (the “comparative method”), or alternatively, as of the effective date as the date of initial application without restating comparative period financial statements (the “effective date method”). The new guidance also provides several practical expedients and policies that companies may elect under either transition method. We currently expect to apply the effective date method and elect the package of practical expedients under which we will not reassess the classification of our existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. Additionally, we expect to elect lessee and lessor practical expedients to not separate non-lease components, such as common area maintenance and property taxes, from lease components. We do not expect to elect the practical expedient that permits a reassessment of lease terms for existing leases. We have commenced an analysis of the impact of the new lease guidance and developed a comprehensive plan for our implementation of the new guidance. The project plan includes analyzing the impact of the new guidance on our current lease contracts, reviewing the completeness of our existing lease portfolio, comparing our accounting policies under current accounting guidance to the new accounting guidance and identifying potential differences from applying the requirements of the new guidance to our lease contracts. Under current accounting guidance for leases, we do not recognize an asset or liability created by operating leases where we are the lessee. We expect a material increase to our assets and liabilities on our consolidated balance sheet as a result of recognizing assets and liabilities for operating leases where we are the lessee on the date of initial application of the new guidance. We are continuing to evaluate the impact of the new guidance on capital leases and direct financing leases, as well as the impact of transition provisions of the new guidance on amounts recognized in connection with our previous application of acquisition accounting and previous accounting for build-to-suit leases. We are also continuing to evaluate the impact that adoption of this guidance will have on our consolidated statements of operations. We do not expect the adoption of this new guidance to have a material impact on the amount or timing of our cash flows and liquidity. Goodwill Impairment – In January 2017, the FASB issued guidance to simplify how an entity measures goodwill impairment by removing the second step of the two-step quantitative goodwill impairment test. An entity will no longer be required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured at the amount by which the carrying value exceeds the fair value of a reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment requires prospective adoption and is effective commencing in 2020 with early adoption permitted. Hedge Accounting – In August 2017, the FASB issued guidance to improve the transparency and understandability of information conveyed to financial statement users about an entity's risk management activities and to simplify the application of hedge accounting by preparers. We adopted this guidance on January 1, 2018 (the “Adoption Date”). The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness for cash flow and net investment hedges that are deemed effective. Most notably, for our cross-currency swaps designated as net investment hedges, the new guidance permits the exclusion of the interest component (the “Excluded Component”) from the accounting hedge without affecting net investment hedge designation. The initial value of the Excluded Component may be recognized in earnings on a systematic and rational basis over the life of the derivative instrument. Subsequent to the Adoption Date, we changed the method of assessing effectiveness for net investment hedges using derivatives from the forward method to the spot method. We de-designated the cross currency-swaps and re-designated them as of March 15, 2018 (the "Re-designation Date"). As a result of adopting the new guidance and the re-designation of our cross- currency-swaps, we will recognize a benefit from the amortization of the initial value of the Excluded Component as a component of Interest expense, net in our condensed consolidated statements of operations rather than as a component of other comprehensive income. All changes in fair value of the instruments related to currency fluctuations will continue to be recognized within other comprehensive income. The impact of adoption did not have a material effect on our Financial Statements as of the Adoption Date. We recorded a $15.9 million net benefit to Interest expense, net during the three months ended September 30, 2018 and a $39.4 million net benefit to Interest expense, net from the Re-designation Date through September 30, 2018 in our condensed consolidated statements of operations for the amortization of the initial value of the Excluded Component, as described above. We believe the new guidance better portrays the economic results of our risk management activities and net investment hedges in our Financial Statements. Reclassification of Certain Tax Effects – In February 2018, the FASB issued guidance which allows a reclassification from accumulated other comprehensive income to retained earnings for the tax effects of certain items within accumulated other comprehensive income. The amendment is effective commencing in 2019 with early adoption permitted. We are currently evaluating the impact that the adoption of this new guidance will have on our Financial Statements. Share-based payment arrangements with nonemployees – In June 2018, the FASB issued guidance which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendment is effective commencing in 2019 with early adoption permitted. We are currently evaluating the impact that the adoption of this new guidance will have on our Financial Statements. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue from Contracts with Customers We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts with Customers (“ASC 606”), from ASC Topic 605, Revenue Recognition and ASC Subtopic 952-605, Franchisors - Revenue Recognition (together, the “Previous Standards”) on January 1, 2018 using the modified retrospective transition method. Our Financial Statements reflect the application of ASC 606 guidance beginning in 2018, while our consolidated financial statements for prior periods were prepared under the guidance of the Previous Standards. The $249.8 million cumulative effect of our transition to ASC 606 is reflected as an adjustment to January 1, 2018 Partners' capital. Our transition to ASC 606 represents a change in accounting principle. ASC 606 eliminates industry-specific guidance and provides a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of ASC 606 is that a reporting entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the reporting entity expects to be entitled for the exchange of those goods or services. Revenue Recognition Significant Accounting Policies under ASC 606 Our revenues are comprised of sales and franchise and property revenues, which are detailed as follows: Sales Sales consist primarily of supply chain sales, which represent sales of products, supplies and restaurant equipment to franchisees, as well as sales to retailers. Orders placed by customers specify the goods to be delivered and transaction prices for supply chain sales. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the customer, which is when the customer obtains physical possession of the goods, legal title is transferred, the customer has all risks and rewards of ownership and an obligation to pay for the goods is created. Shipping and handling costs associated with outbound freight for supply chain sales are accounted for as fulfillment costs and classified as cost of sales. Commencing on January 1, 2018, we classify all sales of restaurant equipment to franchisees as Sales and related cost of equipment sold as Cost of sales. In periods prior to January 1, 2018, we classified sales of restaurant equipment at establishment of a restaurant and in connection with renewal or renovation as Franchise and property revenues and related costs as Franchise and property expense. To a much lesser extent, sales also include Company restaurant sales (including Restaurant VIEs), which consist of sales to restaurant guests. Revenue from Company restaurant sales is recognized at the point of sale. Taxes assessed by a governmental authority that we collect are excluded from revenue. Franchise and Property Revenues Franchise revenues Franchise revenues consist primarily of royalties, advertising fund contributions, initial and renewal franchise fees and upfront fees from development agreements and master franchise and development agreements (“MFDAs”). Under franchise agreements, we provide franchisees with (a) a franchise license, which includes a license to use our intellectual property and, in those markets where our subsidiaries manage an advertising fund, advertising and promotion management, (b) pre-opening services, such as training and inspections, and (c) ongoing services, such as development of training materials and menu items and restaurant monitoring and inspections. The services we provide are highly interrelated and dependent upon the franchise license and we concluded the services do not represent individually distinct performance obligations. Consequently, we bundle the franchise license performance obligation and promises to provide services into a single performance obligation under ASC 606, which we satisfy by providing a right to use our intellectual property over the term of each franchise agreement. Royalties, including franchisee contributions to advertising funds managed by our subsidiaries, are calculated as a percentage of franchise restaurant sales over the term of the franchise agreement. Under our franchise agreements, advertising contributions paid by franchisees must be spent on advertising, product development, marketing and related activities. Initial and renewal franchise fees are payable by the franchisee upon a new restaurant opening or renewal of an existing franchise agreement. Our franchise agreement royalties, inclusive of advertising fund contributions, represent sales-based royalties that are related entirely to our performance obligation under the franchise agreement and are recognized as franchise sales occur. Additionally, under ASC 606, initial and renewal franchise fees are recognized as revenue on a straight-line basis over the term of the respective agreement. Under the Previous Standards, initial franchise fees were recognized as revenue when the related restaurant commenced operations and our completion of all material services and conditions. Renewal franchise fees were recognized as revenue upon execution of a new franchise agreement. Our performance obligation under development agreements other than MFDAs generally consists of an obligation to grant exclusive development rights over a stated term. These development rights are not distinct from franchise agreements, so upfront fees paid by franchisees for exclusive development rights are deferred and apportioned to each franchise restaurant opened by the franchisee. The pro rata amount apportioned to each restaurant is accounted for as an initial franchise fee. We have a distinct performance obligation under our MFDAs to grant subfranchising rights over a stated term. Under the terms of MFDAs, we typically either receive an upfront fee paid in cash and/or receive noncash consideration in the form of an equity interest in the master franchisee or an affiliate of the master franchisee. We previously accounted for noncash consideration as a nonmonetary exchange and did not record revenue or a basis in the equity interest received in arrangements where we received noncash consideration. These transactions now fall within the scope of ASC 606, which requires us to record investments in the applicable equity method investee and recognize revenue in an amount equal to the fair value of the equity interest received. Upfront fees from master franchisees, including the fair value of noncash consideration, are deferred and amortized over the MFDA term on a straight-line basis. We may recognize unamortized upfront fees when a contract with a franchisee or master franchisee is modified and is accounted for as a termination of the existing contract. The portion of gift cards sold to customers which are never redeemed is commonly referred to as gift card breakage. Under ASC 606, we recognize gift card breakage income proportionately as each gift card is redeemed using an estimated breakage rate based on our historical experience. Under the Previous Standards, we recognized gift card breakage income for each gift card's remaining balance when redemption of that balance was deemed remote. Property Revenues Property revenues are accounted for in accordance with applicable accounting guidance for leases and are excluded from the scope of ASC 606. See Note 2, Significant Accounting Policies , to our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 for our property revenue accounting policies. Contract Liabilities Contract liabilities consist of deferred revenue resulting from initial and renewal franchise fees paid by franchisees, as well as upfront fees paid by master franchisees, which are generally recognized on a straight-line basis over the term of the underlying agreement. We classify these contract liabilities as Other liabilities, net in our condensed consolidated balance sheets. The following table reflects the change in contract liabilities between the date of adoption (January 1, 2018) and September 30, 2018 (in millions): Contract Liabilities Balance at January 1, 2018 $ 455.0 Revenue recognized that was included in the contract liability balance at the beginning of the year (39.6 ) Increase, excluding amounts recognized as revenue during the period 57.5 Impact of foreign currency translation (10.5 ) Balance at September 30, 2018 $ 462.4 The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2018 (in millions): Contract liabilities expected to be recognized in Amount Remainder of 2018 $ 9.3 2019 35.6 2020 34.9 2021 34.1 2022 33.3 Thereafter 315.2 Total $ 462.4 Disaggregation of Total Revenues Total revenues consist of the following (in millions): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Sales $ 609.1 $ 631.6 $ 1,743.1 $ 1,784.1 Royalties 556.7 332.8 1,611.0 883.5 Property revenues 192.0 204.1 560.3 568.4 Franchise fees and other revenue 17.5 40.1 58.1 105.9 Total revenues $ 1,375.3 $ 1,208.6 $ 3,972.5 $ 3,341.9 Financial Statement Impact of Transition to ASC 606 As noted above, we transitioned to ASC 606 using the modified retrospective method on January 1, 2018. The cumulative effect of this transition to applicable contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to Partners' capital as of this date. As a result of applying the modified retrospective method to transition to ASC 606, the following adjustments were made to the consolidated balance sheet as of January 1, 2018 (in millions): As Reported Total Adjusted December 31, 2017 Adjustments January 1, 2018 ASSETS Current assets: Cash and cash equivalents $ 1,097.4 $ — $ 1,097.4 Accounts and notes receivable, net 488.8 — 488.8 Inventories, net 78.0 — 78.0 Prepaids and other current assets 85.4 (23.0 ) 62.4 Total current assets 1,749.6 (23.0 ) 1,726.6 Property and equipment, net 2,133.3 — 2,133.3 Intangible assets, net 11,062.2 — 11,062.2 Goodwill 5,782.3 — 5,782.3 Net investment in property leased to franchisees 71.3 — 71.3 Other assets, net 425.2 106.6 531.8 Total assets $ 21,223.9 $ 83.6 $ 21,307.5 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 496.2 $ — $ 496.2 Other accrued liabilities 865.7 8.9 874.6 Gift card liability 214.9 (43.0 ) 171.9 Current portion of long term debt and capital leases 78.2 — 78.2 Total current liabilities 1,655.0 (34.1 ) 1,620.9 Term debt, net of current portion 11,800.9 — 11,800.9 Capital leases, net of current portion 243.8 — 243.8 Other liabilities, net 1,455.1 425.7 1,880.8 Deferred income taxes, net 1,508.1 (58.2 ) 1,449.9 Total liabilities 16,662.9 333.4 16,996.3 Partners' capital Class A common units 4,167.5 (132.0 ) 4,035.5 Partnership exchangeable units 1,276.4 (117.8 ) 1,158.6 Accumulated other comprehensive income (loss) (884.3 ) — (884.3 ) Total Partners' capital 4,559.6 (249.8 ) 4,309.8 Noncontrolling interests 1.4 — 1.4 Total equity 4,561.0 (249.8 ) 4,311.2 Total liabilities and equity $ 21,223.9 $ 83.6 $ 21,307.5 Franchise Fees The cumulative adjustment for franchise fees consists of the following: • A $320.7 million increase in Other liabilities, net for the cumulative reversal and deferral of previously recognized franchise fees related to franchise agreements in effect at January 1, 2018 that were entered into subsequent to the acquisitions of BK in 2010, TH in 2014 and PLK in 2017 (net of the cumulative revenue attributable for the period through January 1, 2018), with a corresponding decrease to Partners' capital. • A $106.6 million increase in Other assets, net for the previously unrecognized value of equity interests received in connection with MFDA arrangements. This increase resulted in a corresponding increase in Other liabilities, net of $105.0 million and an increase to Partners' capital of $1.6 million for the cumulative effect of revenue attributable for the period between the inception of each such arrangement and January 1, 2018. • A $67.1 million decrease to Deferred income taxes, net for the tax effects of the two adjustments noted above, with a corresponding increase to Partners' capital. Advertising Funds The cumulative adjustment for advertising funds reflects the recognition of cumulative advertising expenditures temporarily in excess of cumulative advertising fund contributions as of January 1, 2018, which is reflected as a $23.0 million decrease in Prepaids and other current assets and a $23.0 million decrease to Partners’ capital. Gift Card Breakage The adjustment for gift card breakage reflects the impact of the change to recognize gift card breakage proportionately as gift card balances are used rather than when it is deemed remote that the unused gift card balance would be redeemed, as done under the Previous Standards. The cumulative effect of applying ASC 606 accounting to gift card balances outstanding at January 1, 2018 is reflected as a $43.0 million decrease in Gift card liability, an $8.9 million increase in Other accrued liabilities, an $8.9 million increase in Deferred income taxes, net and a $25.2 million increase in January 1, 2018 Partners' capital. Comparison to Amounts if Previous Standards Had Been in Effect The following tables reflect the impact of adoption of ASC 606 on our condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and cash flows from operating activities for the nine months ended September 30, 2018 and our condensed consolidated balance sheet as of September 30, 2018 and the amounts as if the Previous Standards were in effect (“Amounts Under Previous Standards”) (in millions): Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2018 Three Months Ended Nine Months Ended As Reported Total Adjustments Amounts Under Previous Standards As Reported Total Adjustments Amounts Under Previous Standards Revenues: Sales $ 609.1 $ — $ 609.1 $ 1,743.1 $ — $ 1,743.1 Franchise and property revenues 766.2 (193.3 ) 572.9 2,229.4 (574.4 ) 1,655.0 Total revenues 1,375.3 (193.3 ) 1,182.0 3,972.5 (574.4 ) 3,398.1 Operating costs and expenses: Cost of sales 469.9 — 469.9 1,347.9 — 1,347.9 Franchise and property expenses 107.6 (0.2 ) 107.4 314.4 (0.4 ) 314.0 Selling, general and administrative expenses 298.3 (197.8 ) 100.5 917.2 (588.4 ) 328.8 (Income) loss from equity method investments (3.8 ) (1.1 ) (4.9 ) (16.9 ) (4.7 ) (21.6 ) Other operating expenses (income), net 26.1 0.1 26.2 9.4 0.1 9.5 Total operating costs and expenses 898.1 (199.0 ) 699.1 2,572.0 (593.4 ) 1,978.6 Income from operations 477.2 5.7 482.9 1,400.5 19.0 1,419.5 Interest expense, net 134.9 (0.7 ) 134.2 404.8 0.5 405.3 Income before income taxes 342.3 6.4 348.7 995.7 18.5 1,014.2 Income tax expense 92.5 0.9 93.4 152.9 4.1 157.0 Net income 249.8 5.5 255.3 842.8 14.4 857.2 Net income attributable to noncontrolling interests 0.1 — 0.1 0.5 — 0.5 Net income attributable to common unitholders $ 249.7 $ 5.5 $ 255.2 $ 842.3 $ 14.4 $ 856.7 Earnings per unit - basic and diluted: Class A common units $ 0.66 $ 0.68 $ 2.22 $ 2.25 Partnership exchangeable units $ 0.53 $ 0.55 $ 1.81 $ 1.83 The following summarizes the adjustments to our condensed consolidated statement of operations for the three and nine months ended September 30, 2018 to reflect our condensed consolidated statement of operations as if we had continued to recognize revenue under the Previous Standards: • As described above, our transition to ASC 606 resulted in the deferral of franchise fees, recognition of franchise fees in connection with MFDAs where we received an equity interest in the equity method investee, and a change in the timing of recognizing gift card breakage income. The adjustments for the three and nine months ended September 30, 2018 to reflect the recognition of this revenue as if the Previous Standards were in effect consists of a $9.0 million and $14.0 million increase in Franchise and property revenue, respectively, and a $1.7 million and $4.1 million increase in Income tax expense, respectively. • The adjustments to (income) loss from equity method investments for the three and nine months ended September 30, 2018 reflect the amount of losses from equity method investments we would not have recognized if the Previous Standards were in effect. There is no tax impact related to these adjustments. • As described above, under the Previous Standards our statement of operations did not reflect gross presentations of advertising fund contributions and expenses. Our transition to ASC 606 requires the presentation of advertising fund contributions and advertising fund expenses on a gross basis. The adjustments for the three and nine months ended September 30, 2018 to reflect advertising fund contributions and expenses as if the Previous Standards were in effect consist of a $202.3 million and $588.4 million decrease in Franchise and property revenues, respectively, a $0.2 million and $0.4 million decrease in Franchise and property expenses, respectively, a $197.8 million and $588.4 million decrease in Selling, general and administrative expenses, respectively, a $0.7 million decrease in Interest expense, net for the three months ended September 30, 2018 and a $0.5 million increase in Interest expense, net for the nine months ended September 30, 2018 , and a $0.8 million decrease in Income tax expense for the three months ended September 30, 2018 and no adjustment to Income tax expense for the nine months ended September 30, 2018 . Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2018 The transition to ASC 606 had no net impact on our cash provided by operating activities and no impact on our cash used for investing activities or cash used for financing activities during the nine months ended September 30, 2018 . Total Amounts Under As Reported Adjustments Previous Standards Cash flows from operating activities: Net income $ 842.8 $ 14.4 $ 857.2 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 137.5 — 137.5 Amortization of deferred financing costs and debt issuance discount 21.9 — 21.9 (Income) loss from equity method investments (16.9 ) (4.7 ) (21.6 ) Loss (gain) on remeasurement of foreign denominated transactions (19.3 ) — (19.3 ) Net losses on derivatives (24.4 ) — (24.4 ) Share-based compensation expense 39.3 — 39.3 Deferred income taxes 6.1 4.1 10.2 Other 11.1 — 11.1 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (0.3 ) — (0.3 ) Inventories and prepaids and other current assets (16.3 ) (1.1 ) (17.4 ) Accounts and drafts payable (24.0 ) 5.6 (18.4 ) Other accrued liabilities and gift card liability (283.6 ) (3.5 ) (287.1 ) Other long-term assets and liabilities (31.3 ) (14.8 ) (46.1 ) Net cash provided by operating activities $ 642.6 $ — $ 642.6 Condensed Consolidated Balance Sheet As Reported Total Amounts Under September 30, 2018 Adjustments Previous Standards ASSETS Current assets: Cash and cash equivalents $ 1,113.0 $ — $ 1,113.0 Accounts and notes receivable, net 481.4 — 481.4 Inventories, net 91.8 — 91.8 Prepaids and other current assets 48.7 24.1 72.8 Total current assets 1,734.9 24.1 1,759.0 Property and equipment, net 2,054.1 — 2,054.1 Intangible assets, net 10,821.0 — 10,821.0 Goodwill 5,680.0 — 5,680.0 Net investment in property leased to franchisees 58.0 — 58.0 Other assets, net 637.7 (101.9 ) 535.8 Total assets $ 20,985.7 $ (77.8 ) $ 20,907.9 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 467.0 $ 5.6 $ 472.6 Other accrued liabilities 678.4 (13.2 ) 665.2 Gift card liability 95.3 43.8 139.1 Current portion of long term debt and capital leases 79.6 — 79.6 Total current liabilities 1,320.3 36.2 1,356.5 Term debt, net of current portion 11,766.8 — 11,766.8 Capital leases, net of current portion 240.6 — 240.6 Other liabilities, net 1,738.5 (440.5 ) 1,298.0 Deferred income taxes, net 1,524.7 62.3 1,587.0 Total liabilities 16,590.9 (342.0 ) 16,248.9 Partners' capital Class A common units 4,255.0 141.6 4,396.6 Partnership exchangeable units 1,248.2 122.6 1,370.8 Accumulated other comprehensive income (loss) (1,110.9 ) — (1,110.9 ) Total Partners' capital 4,392.3 264.2 4,656.5 Noncontrolling interests 2.5 — 2.5 Total equity 4,394.8 264.2 4,659.0 Total liabilities and equity $ 20,985.7 $ (77.8 ) $ 20,907.9 |
Earnings per Unit
Earnings per Unit | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per Unit | Earnings per Unit Partnership uses the two-class method in the computation of earnings per unit. Pursuant to the terms of the partnership agreement, RBI, as the holder of the Class A common units, is entitled to receive distributions from Partnership in an amount equal to the aggregate dividends payable by RBI to holders of RBI common shares, and the holders of Class B exchangeable limited partnership units (the “Partnership exchangeable units”) are entitled to receive distributions from Partnership in an amount per unit equal to the dividends payable by RBI on each RBI common share. Partnership’s net income available to common unitholders is allocated between the Class A common units and Partnership exchangeable units on a fully-distributed basis and reflects residual net income after noncontrolling interests and Partnership preferred unit distributions. Basic and diluted earnings per Class A common unit is determined by dividing net income allocated to Class A common unit holders by the weighted average number of Class A common units outstanding for the period. Basic and diluted earnings per Partnership exchangeable unit is determined by dividing net income allocated to the Partnership exchangeable units by the weighted average number of Partnership exchangeable units outstanding during the period. There are no dilutive securities for Partnership as RBI equity awards will not affect the number of Class A common units or Partnership exchangeable units outstanding. However, the issuance of shares by RBI in future periods will affect the allocation of net income attributable to common unitholders between Partnership’s Class A common units and Partnership exchangeable units. The following table summarizes the basic and diluted earnings per unit calculations (in millions, except per unit amounts): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Allocation of net income among partner interests: Net income allocated to Class A common unitholders $ 133.6 $ 91.3 $ 449.0 $ 231.0 Net income allocated to Partnership exchangeable unitholders 116.1 87.7 393.3 222.3 Net income attributable to common unitholders $ 249.7 $ 179.0 $ 842.3 $ 453.3 Denominator - basic and diluted partnership units: Weighted average Class A common units 202.0 202.0 202.0 202.0 Weighted average Partnership exchangeable units 217.6 226.8 217.6 226.9 Earnings per unit - basic and diluted: Class A common units $ 0.66 $ 0.45 $ 2.22 $ 1.14 Partnership exchangeable units $ 0.53 $ 0.39 $ 1.81 $ 0.98 |
Intangible Assets, net and Good
Intangible Assets, net and Goodwill | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net and Goodwill | Intangible Assets, net and Goodwill Intangible assets, net and goodwill consist of the following (in millions): As of September 30, 2018 December 31, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Identifiable assets subject to amortization: Franchise agreements $ 717.1 $ (187.7 ) $ 529.4 $ 724.7 $ (168.0 ) $ 556.7 Favorable leases 428.5 (201.4 ) 227.1 455.7 (193.7 ) 262.0 Subtotal 1,145.6 (389.1 ) 756.5 1,180.4 (361.7 ) 818.7 Indefinite lived intangible assets: Tim Hortons brand $ 6,570.7 $ — $ 6,570.7 $ 6,727.1 $ — $ 6,727.1 Burger King brand 2,138.9 — 2,138.9 2,161.5 — 2,161.5 Popeyes brand 1,354.9 — 1,354.9 1,354.9 — 1,354.9 Subtotal 10,064.5 — 10,064.5 10,243.5 — 10,243.5 Intangible assets, net $ 10,821.0 $ 11,062.2 Goodwill Tim Hortons segment $ 4,229.9 $ 4,325.8 Burger King segment 604.3 610.7 Popeyes segment 845.8 845.8 Total $ 5,680.0 $ 5,782.3 Amortization expense on intangible assets totaled $17.3 million for the three months ended September 30, 2018 and $18.7 million for the same period in the prior year. Amortization expense on intangible assets totaled $53.0 million for the nine months ended September 30, 2018 and $54.2 million for the same period in the prior year. The change in the brands and goodwill balances during the nine months ended September 30, 2018 was due to the impact of foreign currency translation. |
Equity Method Investments
Equity Method Investments | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The aggregate carrying amount of our equity method investments was $264.2 million and $155.1 million as of September 30, 2018 and December 31, 2017 , respectively, and is included as a component of Other assets, net in our accompanying condensed consolidated balance sheets. The increase in the carrying amount of our equity method investments as of September 30, 2018 compared to December 31, 2017 is primarily attributable to the recognition of investments received in connection with master franchise and development arrangements as a result of our transition to ASC 606. See Note 4, Revenue Recognition . TH and BK both have equity method investments. PLK does not have any equity method investments. With respect to our TH business, the most significant equity method investment is our 50% joint venture interest with The Wendy’s Company (the “TIMWEN Partnership”), which jointly holds real estate underlying Canadian combination restaurants. Distributions received from this joint venture were $3.2 million and $2.7 million during the three months ended September 30, 2018 and 2017 , respectively. Distributions received from this joint venture were $9.0 million and $8.1 million during the nine months ended September 30, 2018 and 2017 , respectively. The aggregate market value of our 20.5% equity interest in Carrols Restaurant Group, Inc. (“Carrols”) based on the quoted market price on September 30, 2018 was approximately $137.5 million . The aggregate market value of our 10.1% equity interest in BK Brasil Operação e Assessoria a Restaurantes S.A. based on the quoted market price on September 30, 2018 was approximately $73.9 million . No quoted market prices are available for our other equity method investments. We have equity interests in entities that own or franchise Tim Hortons or Burger King restaurants. Franchise and property revenues recognized from franchisees that are owned or franchised by entities in which we have an equity interest consist of the following (in millions): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenues from affiliates: Royalties $ 75.9 $ 39.2 $ 217.7 $ 121.1 Property revenues 8.6 7.2 26.4 20.1 Franchise fees and other revenue 2.1 3.7 6.8 14.7 Total $ 86.6 $ 50.1 $ 250.9 $ 155.9 We recognized $5.1 million and $5.3 million of rent expense associated with the TIMWEN Partnership during the three months ended September 30, 2018 and 2017 , respectively. We recognized $14.6 million and $14.7 million of rent expense associated with the TIMWEN Partnership during the nine months ended September 30, 2018 and 2017 , respectively. At September 30, 2018 and December 31, 2017 , we had $33.2 million and $31.9 million , respectively, of accounts receivable, net from our equity method investments which were recorded in accounts and notes receivable, net in our condensed consolidated balance sheets. (Income) loss from equity method investments reflects our share of investee net income or loss, non-cash dilution gains or losses from changes in our ownership interests in equity method investees and basis difference amortization. During the nine months ended September 30, 2018 we recorded an increase to the carrying value of our equity method investment balance and a non-cash dilution gain of $20.4 million on the initial public offering by one of our equity method investees. |
Other Accrued Liabilities and O
Other Accrued Liabilities and Other Liabilities, net | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities and Other Liabilities, net | Other Accrued Liabilities and Other Liabilities, net Other accrued liabilities (current) and other liabilities, net (noncurrent) consist of the following (in millions): As of September 30, December 31, Current: Dividend payable $ 210.9 $ 96.9 Interest payable 93.8 88.6 Accrued compensation and benefits 64.6 66.6 Taxes payable 121.2 401.0 Deferred income 49.7 42.9 Accrued advertising expenses 24.6 27.5 Closed property reserve 8.9 10.8 Restructuring and other provisions 8.8 12.0 Other 95.9 119.4 Other accrued liabilities $ 678.4 $ 865.7 Noncurrent: Derivatives liabilities $ 368.1 $ 498.5 Taxes payable 500.9 495.6 Contract liabilities, net 462.4 10.0 Unfavorable leases 216.4 251.8 Accrued pension 64.7 72.0 Accrued lease straight-lining liability 57.5 46.4 Deferred income 27.2 27.4 Other 41.3 53.4 Other liabilities, net $ 1,738.5 $ 1,455.1 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following (in millions): As of September 30, December 31, Term Loan Facility (due February 17, 2024) $ 6,340.3 $ 6,388.7 2017 4.25% Senior Notes (due May 15, 2024) 1,500.0 1,500.0 2015 4.625% Senior Notes (due January 15, 2022) 1,250.0 1,250.0 2017 5.00% Senior Notes (due October 15, 2025) 2,800.0 2,800.0 Other 82.4 89.1 Less: unamortized deferred financing costs and deferred issue discount (148.9 ) (170.1 ) Total debt, net 11,823.8 11,857.7 Less: current maturities of debt (57.0 ) (56.8 ) Total long-term debt $ 11,766.8 $ 11,800.9 Revolving Credit Facility As of September 30, 2018 , we had no amounts outstanding under our senior secured revolving credit facility (the "Revolving Credit Facility"). Funds available under the Revolving Credit Facility may be used to repay other debt, finance debt or share repurchases, fund acquisitions or capital expenditures and for other general corporate purposes. We have a $125.0 million letter of credit sublimit as part of the Revolving Credit Facility, which reduces our borrowing availability thereunder by the cumulative amount of outstanding letters of credit. As of September 30, 2018 , we had $4.6 million of letters of credit issued against the Revolving Credit Facility, and our borrowing availability was $495.4 million . Fair Value Measurement The following table presents the fair value of our variable rate term debt and senior notes, estimated using inputs based on bid and offer prices that are Level 2 inputs, and principal carrying amount (in billions): As of September 30, December 31, Fair value of our variable term debt and senior notes $ 11.7 $ 12.0 Principal carrying amount of our variable term debt and senior notes 11.9 11.9 Interest Expense, net Interest expense, net consists of the following (in millions): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Debt (a) $ 125.3 $ 131.2 $ 375.5 $ 350.1 Capital lease obligations 6.2 5.4 17.7 15.4 Amortization of deferred financing costs and debt issuance discount 7.4 8.5 21.9 25.2 Interest income (4.0 ) (9.1 ) (10.3 ) (15.3 ) Interest expense, net $ 134.9 $ 136.0 $ 404.8 $ 375.4 (a) Amount includes $15.9 million and $39.4 million benefit during the three and nine months ended September 30, 2018 from our adoption of a new hedge accounting standard. See Note 3, New Accounting Pronouncements , for further details of the effects of this change in accounting principle on Interest expense, net. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate was 27.0% for the three months ended September 30, 2018 . The effective tax rate for this period was primarily a result of the mix of income from multiple tax jurisdictions, the year to date impact from the realignment of various internal financing arrangements and the increase in valuation allowance on deferred tax assets. Our effective tax rate was 15.4% for the nine months ended September 30, 2018 . This rate was primarily a result of the mix of income from multiple tax jurisdictions, the benefit from reserve releases due to audit settlements during the first half of 2018, and the realignment of various internal financing arrangements. In addition, benefits from stock option exercises reduced the effective tax rate by 0.9% and 6.9% for the three and nine months ended September 30, 2018 , respectively. Our effective tax rate was 13.4% and 15.3% for the three and nine months ended September 30, 2017 , respectively. The effective tax rate during these periods was primarily a result of the mix of income from multiple tax jurisdictions, the favorable impact of our internal financing structure and benefits from stock option exercises that reduced the effective tax rate by 6.8% and 4.5% for the three and nine months ended September 30, 2017 , respectively, partially offset by non-deductible transaction related costs. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Equity | Equity During the nine months ended September 30, 2018 , Partnership exchanged 165,333 Partnership exchangeable units pursuant to exchange notices received. In accordance with the terms of the partnership agreement, Partnership satisfied the exchange notices by exchanging these Partnership exchangeable units for the same number of newly issued RBI common shares. The issuances of shares was accounted for as a capital contribution by RBI to Partnership. The exchanges of Partnership exchangeable units were recorded as increases to the Class A common units balance within partner’s capital in our consolidated balance sheet in an amount equal to the market value of the newly issued RBI common shares and a reduction to the Partnership exchangeable units balance within partner’s capital of our consolidated balance sheet in an amount equal to the cash paid by Partnership and the market value of the newly issued RBI common shares. Pursuant to the terms of the partnership agreement, upon the exchange of Partnership exchangeable units, each such Partnership exchangeable unit was cancelled concurrently with the exchange. Accumulated Other Comprehensive Income (Loss) The following table displays the changes in the components of accumulated other comprehensive income (loss) (“AOCI”) (in millions): Derivatives Pensions Foreign Currency Translation Accumulated Other Comprehensive Income (Loss) Balances at December 31, 2017 $ 176.8 $ (28.8 ) $ (1,032.3 ) $ (884.3 ) Foreign currency translation adjustment — — (325.4 ) (325.4 ) Net change in fair value of derivatives, net of tax 84.9 — — 84.9 Amounts reclassified to earnings of cash flow hedges, net of tax 13.6 — — 13.6 Pension and post-retirement benefit plans, net of tax — 0.3 — 0.3 Balances at September 30, 2018 $ 275.3 $ (28.5 ) $ (1,357.7 ) $ (1,110.9 ) |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Disclosures about Derivative Instruments and Hedging Activities We enter into derivative instruments for risk management purposes, including derivatives designated as cash flow hedges, derivatives designated as net investment hedges and those utilized as economic hedges. We use derivatives to manage our exposure to fluctuations in interest rates and currency exchange rates. Interest Rate Swaps During 2018, we entered into a series of receive-variable, pay-fixed interest rate swaps with a notional value of $3,500.0 million to hedge the variability in the interest payments on a portion of our senior secured term loan facility (the "Term Loan Facility") beginning March 29, 2018 through the expiration of the final swap on February 17, 2024 , resetting each March. At inception, these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value are recorded in AOCI and reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. During 2015, we entered into a series of receive-variable, pay- fixed interest rate swaps with a notional value of $2,500.0 million to hedge the variability in the interest payments on a portion of our Term Loan Facility beginning May 28, 2015. All of these interest rate swaps were settled on April 26, 2018 for an insignificant cash receipt. At inception, these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value were recorded in AOCI and reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. During 2015, we settled certain interest rate swaps and recognized a net unrealized loss of $84.6 million in AOCI at the date of settlement. This amount will be reclassified into Interest expense, net as the original hedged forecasted transaction affects earnings. The amount of pre-tax losses in AOCI as of September 30, 2018 that we expect to be reclassified into interest expense within the next 12 months is $12.3 million . Cross-Currency Rate Swaps To protect the value of our investments in our foreign operations against adverse changes in foreign currency exchange rates, we hedge a portion of our net investment in one or more of our foreign subsidiaries by using cross-currency rate swaps. At September 30, 2018 , we had outstanding cross-currency rate swap contracts between the Canadian dollar and U.S. dollar and the Euro and U.S. dollar that have been designated as net investment hedges of a portion of our equity in foreign operations in those currencies. The component of the gains and losses on our net investment in these designated foreign operations driven by changes in foreign exchange rates are economically offset by movements in the fair value of our cross-currency swap contracts. The fair value of the swaps is calculated each period with changes in fair value reported in AOCI, net of tax. We terminated and settled our previous cross-currency rate swaps in June 2017, with an aggregate notional value of $5,000.0 million , between the Canadian dollar and U.S. dollar. In connection with this termination, we received $763.5 million which was reflected as a source of cash provided by investing activities in the condensed consolidated statement of cash flows. The unrealized gains totaled $533.4 million , net of tax, as of the termination date and will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying foreign operations. Additionally, we entered into new fixed-to-fixed cross-currency rate swaps to partially hedge the net investment in our Canadian subsidiaries. At inception, these cross-currency rate swaps were designated as a hedge and are accounted for as net investment hedges. These swaps are contracts to exchange quarterly fixed-rate interest payments we make on the Canadian dollar notional amount of C$6,753.5 million for quarterly fixed-rate interest payments we receive on the U.S. dollar notional amount of $5,000.0 million through the maturity date of June 30, 2023 . In making such changes, we effectively realigned our Canadian dollar hedges to reflect our current cash flow mix and capital structure maturity profile. At September 30, 2018 , we also had outstanding cross-currency rate swaps in which we pay quarterly fixed-rate interest payments on the Euro notional value of €1,107.8 million and receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $1,200.0 million . At inception, these cross-currency rate swaps were designated as a hedge and are accounted for as a net investment hedge. In August 2018, we extended the term of the swaps from March 31, 2021 to the maturity date of February 17, 2024. The extension of the term resulted in a re-designation of the hedge and the swaps continue to be accounted for as a net investment hedge. Additionally, in August 2018 we entered into cross-currency rate swaps in which we receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $400.0 million through the maturity date of February 17, 2024. At inception, these cross-currency rate swaps were designated as a hedge and are accounted for as a net investment hedge. The fixed to fixed cross-currency rate swaps hedging Canadian dollar and Euro net investments utilized the forward method of effectiveness assessment prior to March 15, 2018. On March 15, 2018, we dedesignated and subsequently redesignated the outstanding fixed to fixed cross-currency rate swaps to prospectively use the spot method of hedge effectiveness assessment. We also elected to amortize the Excluded Component over the life of the derivative instrument. The amortization of the Excluded Component is recognized in Interest expense, net in the condensed consolidated statement of operations. The change in fair value that is not related to the Excluded Component is recorded in AOCI and will be reclassified to earnings when the foreign subsidiaries are sold or substantially liquidated. See Note 3, New Accounting Pronouncements , for further information on the adoption of this new guidance. Foreign Currency Exchange Contracts We use foreign exchange derivative instruments to manage the impact of foreign exchange fluctuations on U.S. dollar purchases and payments, such as coffee purchases made by our Canadian Tim Hortons operations. At September 30, 2018 , we had outstanding forward currency contracts to manage this risk in which we sell Canadian dollars and buy U.S. dollars with a notional value of $143.0 million with maturities to November 2019 . We have designated these instruments as cash flow hedges, and as such, the unrealized changes in market value of effective hedges are recorded in AOCI and are reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. Credit Risk By entering into derivative contracts, we are exposed to counterparty credit risk. Counterparty credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is in an asset position, the counterparty has a liability to us, which creates credit risk for us. We attempt to minimize this risk by selecting counterparties with investment grade credit ratings and regularly monitoring our market position with each counterparty. Credit-Risk Related Contingent Features Our derivative instruments do not contain any credit-risk related contingent features. Quantitative Disclosures about Derivative Instruments and Fair Value Measurements The following tables present the required quantitative disclosures for our derivative instruments, including their estimated fair values (all estimated using Level 2 inputs) and their location on our condensed consolidated balance sheets (in millions): Gain or (Loss) Recognized in Other Comprehensive Income (Loss) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Derivatives designated as cash flow hedges(1) Interest rate swaps $ 22.0 $ (0.1 ) $ 46.4 $ (20.5 ) Forward-currency contracts $ (5.5 ) $ (5.2 ) $ 7.8 $ (10.7 ) Derivatives designated as net investment hedges Cross-currency rate swaps $ (83.0 ) $ (171.5 ) $ 70.9 $ (349.8 ) (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, 2018 2017 2018 2017 Derivatives designated as cash flow hedges Interest rate swaps Interest expense, net $ (4.8 ) $ (8.2 ) $ (15.9 ) $ (23.1 ) Forward-currency contracts Cost of sales $ (1.7 ) $ (1.2 ) $ 0.9 $ (1.1 ) 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, 2018 2017 2018 2017 Derivatives designated as net investment hedges Cross-currency rate swaps Interest expense, net $ 15.9 $ — $ 39.4 $ — Fair Value as of September 30, 2018 December 31, 2017 Balance Sheet Location Assets: Derivatives designated as cash flow hedges Interest Rate $ 11.0 $ — Other assets, net Foreign currency 2.8 0.5 Prepaids and other current assets Total assets at fair value $ 13.8 $ 0.5 Liabilities: Derivatives designated as cash flow hedges Interest rate $ — $ 42.1 Other liabilities, net Foreign currency 0.6 5.1 Other accrued liabilities Derivatives designated as net investment hedges Foreign currency 368.1 456.4 Other liabilities, net Total liabilities at fair value $ 368.7 $ 503.6 |
Other Operating Expenses (Incom
Other Operating Expenses (Income), net | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Operating Expenses (Income), net | Other Operating Expenses (Income), net Other operating expenses (income), net consist of the following (in millions): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net losses (gains) on disposal of assets, restaurant closures, and refranchisings $ 7.5 $ 3.4 $ 17.2 $ 14.9 Litigation settlements (gains) and reserves, net 5.1 0.6 (0.6 ) 1.7 Net losses (gains) on foreign exchange (3.1 ) 17.7 (19.3 ) 64.9 Other, net 16.6 (0.2 ) 12.1 0.6 Other operating expenses (income), net $ 26.1 $ 21.5 $ 9.4 $ 82.1 Net losses (gains) on disposal of assets, restaurant closures, and refranchisings represent sales of properties and other costs related to restaurant closures and refranchisings. Gains and losses recognized in the current period may reflect certain costs related to closures and refranchisings that occurred in previous periods. Litigation settlements (gains) and reserves, net primarily reflects payments made and proceeds received in connection with litigation matters. Net losses (gains) on foreign exchange is primarily related to revaluation of foreign denominated assets and liabilities. Other, net during the three and nine months ended September 30, 2018 is comprised primarily of an accrual for a payment expected to be made in 2018 in connection with the settlement of certain provisions associated with the 2017 redemption of RBI's preferred shares as a result of recently proposed Treasury regulations. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, we are involved in legal proceedings arising in the ordinary course of business relating to matters including, but not limited to, disputes with franchisees, suppliers, employees and customers, as well as disputes over our intellectual property. On June 19, 2017, a claim was filed in the Ontario Superior Court of Justice. The plaintiff, a franchisee of two Tim Hortons restaurants, seeks to certify a class of all persons who have carried on business as a Tim Hortons franchisee in Canada at any time after December 15, 2014. The claim alleges various causes of action against the defendants in relation to the purported misuse of amounts paid by members of the proposed class to the Tim Hortons Canada advertising fund (the “Ad Fund”). The plaintiff seeks to have the Ad Fund franchisee contributions held in trust for the benefit of members of the proposed class, an accounting of the Ad Fund, as well as damages for breach of contract, breach of trust, breach of the statutory duty of fair dealing, and breach of fiduciary duties. On October 6, 2017, a claim was filed in the Ontario Superior Court of Justice. The plaintiffs, two franchisees of Tim Hortons restaurants, seek to certify a class of all persons who have carried on business as a Tim Hortons franchisee at any time after March 8, 2017. The claim alleges various causes of action against the defendants in relation to the purported adverse treatment of member and potential member franchisees of the Great White North Franchisee Association. The plaintiffs seek damages for, among other things, breach of contract, breach of the statutory duty of fair dealing, and breach of the franchisees’ statutory right of association. On July 24, 2018, a complaint for declaratory relief was filed against Tim Hortons USA, Inc. ("THUSA") and Restaurant Brands International Limited Partnership in the Circuit Court of the 11th Judicial Circuit in Miami-Dade County, Florida by Great White North Franchisee Association - USA, Inc., on behalf of its members. The complaint alleges certain breaches of the franchise agreements between THUSA and its franchisees and the implied covenant of good faith and fair dealing, as well as violations of the U.S. franchise rules and the Florida Deceptive and Unfair Trade Practices Act. While we believe the claims are without merit and intend to vigorously defend against these lawsuits, we are unable to predict the ultimate outcome of these cases or estimate the range of possible loss, if any. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting As stated in Note 1, Description of Business and Organization , we manage three brands. Under the Tim Hortons brand, we operate in the donut/coffee/tea category of the quick service segment of the restaurant industry. Under the Burger King brand, we operate in the fast food hamburger restaurant category of the quick service segment of the restaurant industry. Under the Popeyes brand, we operate in the chicken category of the quick service segment of the restaurant industry. Our business generates revenue from the following sources: (i) franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchise restaurants and franchise fees paid by franchisees; (ii) property revenues from properties we lease or sublease to franchisees; and (iii) sales at Company restaurants. In addition, our TH business generates revenue from sales to franchisees related to our supply chain operations, including manufacturing, procurement, warehousing and distribution, as well as sales to retailers. Each brand is managed by a brand president that reports directly to our Chief Executive Officer, who is our Chief Operating Decision Maker. Therefore, we have three operating segments: (1) TH, which includes all operations of our Tim Hortons brand, (2) BK, which includes all operations of our Burger King brand, and (3) PLK, which includes all operations of our Popeyes brand. Our three operating segments represent our reportable segments. As stated in Note 4, Revenue Recognition , we transitioned to ASC 606 on January 1, 2018 using the modified retrospective transition method. Our Financial Statements reflect the application of ASC 606 guidance beginning in 2018, while our Financial Statements for prior periods were prepared under the guidance of the Previous Standards. For comparability purposes, we have disclosed 2018 total revenues by operating segment under the Previous Standards as well as segment income with a reconciliation to net income under the Previous Standards. See Note 4, Revenue Recognition , for further details of the effects of this change in accounting principle on total revenues and net income. PLK revenues and segment income from the acquisition date of March 27, 2017 through September 30, 2017 are included in our condensed consolidated statement of operations for the nine months ended September 30, 2017. The following table presents revenues, by segment and by country (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2018 As Reported 2018 Amounts Under Previous Standards 2017 2018 As Reported 2018 Amounts Under Previous Standards 2017 Revenues by operating segment: TH $ 853.9 $ 796.5 $ 827.0 $ 2,440.4 $ 2,278.6 $ 2,332.9 BK 416.4 315.5 313.6 1,224.4 914.5 874.3 PLK 105.0 70.0 68.0 307.7 205.0 134.7 Total revenues $ 1,375.3 $ 1,182.0 $ 1,208.6 $ 3,972.5 $ 3,398.1 $ 3,341.9 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues by country (a): Canada $ 776.6 $ 748.7 $ 2,214.3 $ 2,093.6 United States 447.4 310.5 1,318.9 856.1 Other 151.3 149.4 439.3 392.2 Total revenues $ 1,375.3 $ 1,208.6 $ 3,972.5 $ 3,341.9 (a) Only Canada and the United States represented 10% or more of our total revenues in each period presented. Our measure of segment income is Adjusted EBITDA. Adjusted EBITDA represents earnings (net income or loss) before interest expense, net, (gain) loss on early extinguishment of debt, income tax expense, and depreciation and amortization, adjusted to exclude the non-cash impact of share-based compensation and non-cash incentive compensation expense and (income) loss from equity method investments, net of cash distributions received from equity method investments, as well as other operating expenses (income), net. Other specifically identified costs associated with non-recurring projects are also excluded from Adjusted EBITDA, including fees and expenses associated with the Popeyes Acquisition (“PLK Transaction costs”), Corporate restructuring and tax advisory fees related to the interpretation and implementation of comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act enacted by the U.S. government on December 22, 2017 and non-operational Office centralization and relocation costs in connection with the centralization and relocation of our Canadian and U.S. restaurant support centers to new offices in Toronto, Ontario, and Miami, Florida, respectively. Adjusted EBITDA is used by management to measure operating performance of the business, excluding these non-cash and other specifically identified items that management believes are not relevant to management’s assessment of operating performance or the performance of an acquired business. A reconciliation of segment income to net income (loss) consists of the following (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2018 As Reported 2018 Amounts Under Previous Standards 2017 2018 As Reported 2018 Amounts Under Previous Standards 2017 Segment income: TH $ 298.9 $ 294.1 $ 294.4 $ 829.6 $ 833.2 $ 831.7 BK 231.0 237.6 233.9 681.5 684.6 637.8 PLK 41.5 44.0 36.8 120.2 127.3 70.0 Adjusted EBITDA 571.4 575.7 565.1 1,631.3 1,645.1 1,539.5 Share-based compensation and non-cash incentive compensation expense 13.8 13.6 12.5 44.6 44.4 42.9 PLK Transaction costs — — 6.9 9.7 9.7 49.8 Corporate restructuring and tax advisory fees 5.5 5.5 — 19.0 19.0 — Office centralization and relocation costs 4.1 4.1 — 16.5 16.5 — Impact of equity method investments (a) (0.3 ) (1.4 ) (1.3 ) (5.9 ) (10.6 ) (0.1 ) Other operating expenses (income), net 26.1 26.2 21.5 9.4 9.5 82.1 EBITDA 522.2 527.7 525.5 1,538.0 1,556.6 1,364.8 Depreciation and amortization 45.0 44.8 46.2 137.5 137.1 134.9 Income from operations 477.2 482.9 479.3 1,400.5 1,419.5 1,229.9 Interest expense, net 134.9 134.2 136.0 404.8 405.3 375.4 Loss on early extinguishment of debt — — 58.2 — — 78.6 Income tax expense 92.5 93.4 38.3 152.9 157.0 119.0 Net income $ 249.8 $ 255.3 $ 246.8 $ 842.8 $ 857.2 $ 656.9 (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. |
Supplemental Financial Informat
Supplemental Financial Information | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information On February 17, 2017, 1011778 B.C. Unlimited Liability Company (the “Parent Issuer”) and New Red Finance Inc. (the “Co-Issuer” and together with the Parent Issuer, the “Issuers”) entered into an amended credit agreement that provides for obligations under the Credit Facilities. On August 28, 2017, the Issuers entered into the 2017 5.00% Senior Notes Indenture with respect to the 2017 5.00% Senior Notes. On May 17, 2017, the Issuers entered into the 2017 4.25% Senior Notes Indenture with respect to the 2017 4.25% Senior Notes. On May 22, 2015, the Issuers entered into the 2015 4.625% Senior Notes Indenture with respect to the 2015 4.625% Senior Notes. The agreement governing our Credit Facilities, the 2017 5.00% Senior Notes Indenture, the 2017 4.25% Senior Notes Indenture and the 2015 4.625% Senior Notes Indenture allow the financial reporting obligation of the Parent Issuer to be satisfied through the reporting of Partnership’s consolidated financial information, provided that the consolidated financial information of the Parent Issuer and its restricted subsidiaries is presented on a standalone basis. The following represents the condensed consolidating financial information for the Parent Issuer and its restricted subsidiaries (“Consolidated Borrowers”) on a consolidated basis, together with eliminations, as of and for the periods indicated. The condensed consolidating financial information of Partnership is combined with the financial information of its wholly-owned subsidiaries that are also parent entities of the Parent Issuer and presented in a single column under the heading “RBILP”. The consolidating financial information may not necessarily be indicative of the financial position, results of operations or cash flows had the Issuers and Partnership operated as independent entities. RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions of U.S. dollars) As of September 30, 2018 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,113.0 $ — $ — $ 1,113.0 Accounts and notes receivable, net 481.4 — — 481.4 Inventories, net 91.8 — — 91.8 Prepaids and other current assets 48.7 — — 48.7 Total current assets 1,734.9 — — 1,734.9 Property and equipment, net 2,054.1 — — 2,054.1 Intangible assets, net 10,821.0 — — 10,821.0 Goodwill 5,680.0 — — 5,680.0 Net investment in property leased to franchisees 58.0 — — 58.0 Intercompany receivable — 210.9 (210.9 ) — Investment in subsidiaries — 4,394.8 (4,394.8 ) — Other assets, net 637.7 — — 637.7 Total assets $ 20,985.7 $ 4,605.7 $ (4,605.7 ) $ 20,985.7 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 467.0 $ — $ — $ 467.0 Other accrued liabilities 467.5 210.9 — 678.4 Gift card liability 95.3 — — 95.3 Current portion of long term debt and capital leases 79.6 — — 79.6 Total current liabilities 1,109.4 210.9 — 1,320.3 Term debt, net of current portion 11,766.8 — — 11,766.8 Capital leases, net of current portion 240.6 — — 240.6 Other liabilities, net 1,738.5 — — 1,738.5 Payables to affiliates 210.9 — (210.9 ) — Deferred income taxes, net 1,524.7 — — 1,524.7 Total liabilities 16,590.9 210.9 (210.9 ) 16,590.9 Partners’ capital: Class A common units — 4,255.0 — 4,255.0 Partnership exchangeable units — 1,248.2 — 1,248.2 Common shares 3,614.5 — (3,614.5 ) — Retained Earnings 1,888.7 — (1,888.7 ) — Accumulated other comprehensive income (loss) (1,110.9 ) (1,110.9 ) 1,110.9 (1,110.9 ) Total Partners' capital/shareholders' equity 4,392.3 4,392.3 (4,392.3 ) 4,392.3 Noncontrolling interests 2.5 2.5 (2.5 ) 2.5 Total equity 4,394.8 4,394.8 (4,394.8 ) 4,394.8 Total liabilities and equity $ 20,985.7 $ 4,605.7 $ (4,605.7 ) $ 20,985.7 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions of U.S. dollars) As of December 31, 2017 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,097.4 $ — $ — $ 1,097.4 Accounts and notes receivable, net 488.8 — — 488.8 Inventories, net 78.0 — — 78.0 Prepaids and other current assets 85.4 — — 85.4 Total current assets 1,749.6 — — 1,749.6 Property and equipment, net 2,133.3 — — 2,133.3 Intangible assets, net 11,062.2 — — 11,062.2 Goodwill 5,782.3 — — 5,782.3 Net investment in property leased to franchisees 71.3 — — 71.3 Intercompany receivable — 96.9 (96.9 ) — Investment in subsidiaries — 4,561.0 (4,561.0 ) — Other assets, net 425.2 — — 425.2 Total assets $ 21,223.9 $ 4,657.9 $ (4,657.9 ) $ 21,223.9 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 496.2 $ — $ — $ 496.2 Other accrued liabilities 768.8 96.9 — 865.7 Gift card liability 214.9 — — 214.9 Current portion of long term debt and capital leases 78.2 — — 78.2 Total current liabilities 1,558.1 96.9 — 1,655.0 Term debt, net of current portion 11,800.9 — — 11,800.9 Capital leases, net of current portion 243.8 — — 243.8 Other liabilities, net 1,455.1 — — 1,455.1 Payables to affiliates 96.9 — (96.9 ) — Deferred income taxes, net 1,508.1 — — 1,508.1 Total liabilities 16,662.9 96.9 (96.9 ) 16,662.9 Partners’ capital: Class A common units — 4,167.5 — 4,167.5 Partnership exchangeable units — 1,276.4 — 1,276.4 Common shares 3,515.7 — (3,515.7 ) — Retained Earnings 1,928.2 — (1,928.2 ) — Accumulated other comprehensive income (loss) (884.3 ) (884.3 ) 884.3 (884.3 ) Total Partners' capital/shareholders' equity 4,559.6 4,559.6 (4,559.6 ) 4,559.6 Noncontrolling interests 1.4 1.4 (1.4 ) 1.4 Total equity 4,561.0 4,561.0 (4,561.0 ) 4,561.0 Total liabilities and equity $ 21,223.9 $ 4,657.9 $ (4,657.9 ) $ 21,223.9 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended September 30, 2018 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 609.1 $ — $ — $ 609.1 Franchise and property revenues 766.2 — — 766.2 Total revenues 1,375.3 — — 1,375.3 Operating costs and expenses: Cost of sales 469.9 — — 469.9 Franchise and property expenses 107.6 — — 107.6 Selling, general and administrative expenses 298.3 — — 298.3 (Income) loss from equity method investments (3.8 ) — — (3.8 ) Other operating expenses (income), net 26.1 — — 26.1 Total operating costs and expenses 898.1 — — 898.1 Income from operations 477.2 — — 477.2 Interest expense, net 134.9 — — 134.9 Income before income taxes 342.3 — — 342.3 Income tax expense 92.5 — — 92.5 Net income 249.8 — — 249.8 Equity in earnings of consolidated subsidiaries — 249.8 (249.8 ) — Net income (loss) 249.8 249.8 (249.8 ) 249.8 Net income (loss) attributable to noncontrolling interests 0.1 0.1 (0.1 ) 0.1 Net income (loss) attributable to common unitholders $ 249.7 $ 249.7 $ (249.7 ) $ 249.7 Comprehensive income (loss) $ 345.6 $ 345.6 $ (345.6 ) $ 345.6 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Nine Months Ended September 30, 2018 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 1,743.1 $ — $ — $ 1,743.1 Franchise and property revenues 2,229.4 — — 2,229.4 Total revenues 3,972.5 — — 3,972.5 Operating costs and expenses: Cost of sales 1,347.9 — — 1,347.9 Franchise and property expenses 314.4 — — 314.4 Selling, general and administrative expenses 917.2 — — 917.2 (Income) loss from equity method investments (16.9 ) — — (16.9 ) Other operating expenses (income), net 9.4 — — 9.4 Total operating costs and expenses 2,572.0 — — 2,572.0 Income from operations 1,400.5 — — 1,400.5 Interest expense, net 404.8 — — 404.8 Income before income taxes 995.7 — — 995.7 Income tax expense 152.9 — — 152.9 Net income 842.8 — — 842.8 Equity in earnings of consolidated subsidiaries — 842.8 (842.8 ) — Net income (loss) 842.8 842.8 (842.8 ) 842.8 Net income (loss) attributable to noncontrolling interests 0.5 0.5 (0.5 ) 0.5 Net income (loss) attributable to common unitholders $ 842.3 $ 842.3 $ (842.3 ) $ 842.3 Comprehensive income (loss) $ 616.2 $ 616.2 $ (616.2 ) $ 616.2 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended September 30, 2017 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 631.6 $ — $ — $ 631.6 Franchise and property revenues 577.0 — — 577.0 Total revenues 1,208.6 — — 1,208.6 Operating costs and expenses: Cost of sales 493.3 — — 493.3 Franchise and property expenses 118.5 — — 118.5 Selling, general and administrative expenses 100.1 — — 100.1 (Income) loss from equity method investments (4.1 ) — — (4.1 ) Other operating expenses (income), net 21.5 — — 21.5 Total operating costs and expenses 729.3 — — 729.3 Income from operations 479.3 — — 479.3 Interest expense, net 136.0 — — 136.0 Loss on early extinguishment of debt 58.2 — — 58.2 Income before income taxes 285.1 — — 285.1 Income tax expense 38.3 — — 38.3 Net income 246.8 — — 246.8 Equity in earnings of consolidated subsidiaries — 246.8 (246.8 ) — Net income (loss) 246.8 246.8 (246.8 ) 246.8 Net income (loss) attributable to noncontrolling interests 0.3 0.3 (0.3 ) 0.3 Partnership preferred unit distributions — 67.5 — 67.5 Net income (loss) attributable to common unitholders $ 246.5 $ 179.0 $ (246.5 ) $ 179.0 Comprehensive income (loss) $ 546.5 $ 546.5 $ (546.5 ) $ 546.5 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Nine Months Ended September 30, 2017 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 1,784.1 $ — $ — $ 1,784.1 Franchise and property revenues 1,557.8 — — 1,557.8 Total revenues 3,341.9 — — 3,341.9 Operating costs and expenses: Cost of sales 1,376.9 — — 1,376.9 Franchise and property expenses 343.2 — — 343.2 Selling, general and administrative expenses 318.7 — — 318.7 (Income) loss from equity method investments (8.9 ) — — (8.9 ) Other operating expenses (income), net 82.1 — — 82.1 Total operating costs and expenses 2,112.0 — — 2,112.0 Income from operations 1,229.9 — — 1,229.9 Interest expense, net 375.4 — — 375.4 Loss on early extinguishment of debt 78.6 — — 78.6 Income before income taxes 775.9 — — 775.9 Income tax expense 119.0 — — 119.0 Net income 656.9 — — 656.9 Equity in earnings of consolidated subsidiaries — 656.9 (656.9 ) — Net income (loss) 656.9 656.9 (656.9 ) 656.9 Net income (loss) attributable to noncontrolling interests 1.1 1.1 (1.1 ) 1.1 Partnership preferred unit distributions — 202.5 — 202.5 Net income (loss) attributable to common unitholders $ 655.8 $ 453.3 $ (655.8 ) $ 453.3 Comprehensive income (loss) $ 1,193.6 $ 1,193.6 $ (1,193.6 ) $ 1,193.6 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Nine months ended September 30, 2018 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 842.8 $ 842.8 $ (842.8 ) $ 842.8 Adjustments to reconcile net income to net cash (used for) provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (842.8 ) 842.8 — Depreciation and amortization 137.5 — — 137.5 Amortization of deferred financing costs and debt issuance discount 21.9 — — 21.9 (Income) loss from equity method investments (16.9 ) — — (16.9 ) Loss (gain) on remeasurement of foreign denominated transactions (19.3 ) — — (19.3 ) Net (gains) losses on derivatives (24.4 ) — — (24.4 ) Share-based compensation expense 39.3 — — 39.3 Deferred income taxes 6.1 — — 6.1 Other 11.1 — — 11.1 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (0.3 ) — — (0.3 ) Inventories and prepaids and other current assets (16.3 ) — — (16.3 ) Accounts and drafts payable (24.0 ) — — (24.0 ) Other accrued liabilities and gift card liability (283.6 ) — — (283.6 ) Other long-term assets and liabilities (31.3 ) — — (31.3 ) Net cash (used for) provided by operating activities 642.6 — — 642.6 Cash flows from investing activities: Payments for property and equipment (53.3 ) — — (53.3 ) Proceeds from disposal of assets, restaurant closures, and refranchisings 1.8 — — 1.8 Return of investment on direct financing leases 12.3 — — 12.3 Settlement/sale of derivatives, net 11.2 — — 11.2 Other investing activities, net 0.3 — — 0.3 Net cash provided by (used for) investing activities (27.7 ) — — (27.7 ) Cash flows from financing activities: Repayments of long-term debt and capital leases (65.9 ) — — (65.9 ) Distributions on Class A common, preferred and Partnership exchangeable units — (517.1 ) — (517.1 ) Payments in connection with repurchase of partnership preferred units — (60.1 ) — (60.1 ) Capital contribution from RBI Inc. 52.9 — — 52.9 Distributions from subsidiaries (577.2 ) 577.2 — — Other financing activities, net 1.3 — — 1.3 Net cash provided by (used for) financing activities (588.9 ) — — (588.9 ) Effect of exchange rates on cash and cash equivalents (10.4 ) — — (10.4 ) Increase (decrease) in cash and cash equivalents 15.6 — — 15.6 Cash and cash equivalents at beginning of period 1,097.4 — — 1,097.4 Cash and cash equivalents at end of period $ 1,113.0 $ — $ — $ 1,113.0 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Nine Months Ended September 30, 2017 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 656.9 $ 656.9 $ (656.9 ) $ 656.9 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (656.9 ) 656.9 — Depreciation and amortization 134.9 — — 134.9 Premiums paid and non-cash loss on extinguishment of debt 75.9 — — 75.9 Amortization of deferred financing costs and debt issuance discount 25.2 — — 25.2 (Income) loss from equity method investments (8.9 ) — — (8.9 ) Loss (gain) on remeasurement of foreign denominated transactions 64.7 — — 64.7 Net losses on derivatives 23.1 — — 23.1 Share-based compensation expense 38.0 — — 38.0 Deferred income taxes (3.1 ) — — (3.1 ) Other 12.8 — — 12.8 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable 0.3 — — 0.3 Inventories and prepaids and other current assets (1.0 ) — — (1.0 ) Accounts and drafts payable 6.8 — — 6.8 Other accrued liabilities and gift card liability (161.4 ) — — (161.4 ) Other long-term assets and liabilities (40.0 ) — — (40.0 ) Net cash provided by operating activities 824.2 — — 824.2 Cash flows from investing activities: Payments for property and equipment (16.9 ) — — (16.9 ) Proceeds from disposal of assets, restaurant closures, and refranchisings 19.6 — — 19.6 Net payment for purchase of Popeyes, net of cash acquired (1,635.9 ) — — (1,635.9 ) Return of investment on direct financing leases 11.8 — — 11.8 Settlement/sale of derivatives, net 771.8 — — 771.8 Other investing activities, net (2.3 ) — — (2.3 ) Net cash provided by (used for) investing activities (851.9 ) — — (851.9 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 4,350.0 — — 4,350.0 Repayments of long-term debt and capital leases (1,690.0 ) — — (1,690.0 ) Payment of financing costs (57.0 ) — — (57.0 ) Distributions on Class A common, preferred and Partnership exchangeable units — (451.9 ) — (451.9 ) Capital contribution from RBI Inc. 17.5 — — 17.5 Distributions from subsidiaries (451.9 ) 451.9 — — Other financing activities, net (6.2 ) — — (6.2 ) Net cash provided by (used for) financing activities 2,162.4 — — 2,162.4 Effect of exchange rates on cash and cash equivalents 22.7 — — 22.7 Increase (decrease) in cash and cash equivalents 2,157.4 — — 2,157.4 Cash and cash equivalents at beginning of period 1,435.8 — — 1,435.8 Cash and cash equivalents at end of period $ 3,593.2 $ — $ — $ 3,593.2 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Exchange of Partnership exchangeable units On October 16, 2018 Partnership received an exchange notice representing 11,106,925 Partnership exchangeable units. In accordance with the terms of the partnership agreement, Partnership intends to satisfy the exchange notice by repurchasing 10,000,000 Partnership exchangeable units with cash and exchanging 1,106,925 Partnership exchangeable units for the same number of newly issued RBI common shares. Pursuant to the partnership agreement, the exchanging holder may withdraw the exchange notice in whole or in part on or before October 30, 2018, at which point the exchange notice will become irrevocable. The issuance of shares will be accounted for as a capital contribution by RBI to Partnership. The exchange of Partnership exchangeable units will be recorded as an increase to the Class A common units balance within partner's capital in our condensed consolidated balance sheet in an amount equal to the market value of the newly issued RBI common shares and a reduction to the Partnership exchangeable units balance within partner's capital of our condensed consolidated balance sheet in an amount equal to the cash paid by Partnership and the market value of the new issued RBI common shares. Pursuant to the partnership agreement, upon the exchange of Partnership exchangeable units, each such Partnership exchangeable unit is automatically deemed cancelled concurrently with such exchange. The exchange date will occur on November 6, 2018 . The repurchase of the Partnership exchangeable units is anticipated to be financed with available cash on hand. Cash Distributions/Dividends On October 1, 2018 , RBI paid a cash dividend of $0.45 per RBI common share to common shareholders of record on September 7, 2018 . Partnership made a distribution to RBI as holder of Class A common units in the amount of the aggregate dividends declared and paid by RBI on RBI common shares and also made a distribution in respect of each Partnership exchangeable unit in the amount of $0.45 per exchangeable unit to holders of record on September 7, 2018 . The RBI board of directors has declared a cash dividend of $0.45 per RBI common share, which will be paid on January 4, 2019 to RBI common shareholders of record on December 17, 2018 . Partnership will make a distribution to RBI as holder of Class A common units in the amount of the aggregate dividends declared and paid by RBI on RBI common shares. Partnership will also make a distribution in respect of each Partnership exchangeable unit in the amount of $0.45 per Partnership exchangeable unit, and the record date and payment date for such distribution will be the same as the record date and payment date for the cash dividend per RBI common share set forth above. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | Revenue Recognition – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. We adopted this new guidance on January 1, 2018. See Note 4, Revenue Recognition , for further information about our transition to this new revenue recognition model using the modified retrospective transition method. Lease Accounting – In February 2016, the FASB issued new guidance on leases. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. The new guidance is effective commencing in 2019 and requires a modified retrospective transition approach with application in all comparative periods presented (the “comparative method”), or alternatively, as of the effective date as the date of initial application without restating comparative period financial statements (the “effective date method”). The new guidance also provides several practical expedients and policies that companies may elect under either transition method. We currently expect to apply the effective date method and elect the package of practical expedients under which we will not reassess the classification of our existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. Additionally, we expect to elect lessee and lessor practical expedients to not separate non-lease components, such as common area maintenance and property taxes, from lease components. We do not expect to elect the practical expedient that permits a reassessment of lease terms for existing leases. We have commenced an analysis of the impact of the new lease guidance and developed a comprehensive plan for our implementation of the new guidance. The project plan includes analyzing the impact of the new guidance on our current lease contracts, reviewing the completeness of our existing lease portfolio, comparing our accounting policies under current accounting guidance to the new accounting guidance and identifying potential differences from applying the requirements of the new guidance to our lease contracts. Under current accounting guidance for leases, we do not recognize an asset or liability created by operating leases where we are the lessee. We expect a material increase to our assets and liabilities on our consolidated balance sheet as a result of recognizing assets and liabilities for operating leases where we are the lessee on the date of initial application of the new guidance. We are continuing to evaluate the impact of the new guidance on capital leases and direct financing leases, as well as the impact of transition provisions of the new guidance on amounts recognized in connection with our previous application of acquisition accounting and previous accounting for build-to-suit leases. We are also continuing to evaluate the impact that adoption of this guidance will have on our consolidated statements of operations. We do not expect the adoption of this new guidance to have a material impact on the amount or timing of our cash flows and liquidity. Goodwill Impairment – In January 2017, the FASB issued guidance to simplify how an entity measures goodwill impairment by removing the second step of the two-step quantitative goodwill impairment test. An entity will no longer be required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured at the amount by which the carrying value exceeds the fair value of a reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment requires prospective adoption and is effective commencing in 2020 with early adoption permitted. Hedge Accounting – In August 2017, the FASB issued guidance to improve the transparency and understandability of information conveyed to financial statement users about an entity's risk management activities and to simplify the application of hedge accounting by preparers. We adopted this guidance on January 1, 2018 (the “Adoption Date”). The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness for cash flow and net investment hedges that are deemed effective. Most notably, for our cross-currency swaps designated as net investment hedges, the new guidance permits the exclusion of the interest component (the “Excluded Component”) from the accounting hedge without affecting net investment hedge designation. The initial value of the Excluded Component may be recognized in earnings on a systematic and rational basis over the life of the derivative instrument. Subsequent to the Adoption Date, we changed the method of assessing effectiveness for net investment hedges using derivatives from the forward method to the spot method. We de-designated the cross currency-swaps and re-designated them as of March 15, 2018 (the "Re-designation Date"). As a result of adopting the new guidance and the re-designation of our cross- currency-swaps, we will recognize a benefit from the amortization of the initial value of the Excluded Component as a component of Interest expense, net in our condensed consolidated statements of operations rather than as a component of other comprehensive income. All changes in fair value of the instruments related to currency fluctuations will continue to be recognized within other comprehensive income. The impact of adoption did not have a material effect on our Financial Statements as of the Adoption Date. We recorded a $15.9 million net benefit to Interest expense, net during the three months ended September 30, 2018 and a $39.4 million net benefit to Interest expense, net from the Re-designation Date through September 30, 2018 in our condensed consolidated statements of operations for the amortization of the initial value of the Excluded Component, as described above. We believe the new guidance better portrays the economic results of our risk management activities and net investment hedges in our Financial Statements. Reclassification of Certain Tax Effects – In February 2018, the FASB issued guidance which allows a reclassification from accumulated other comprehensive income to retained earnings for the tax effects of certain items within accumulated other comprehensive income. The amendment is effective commencing in 2019 with early adoption permitted. We are currently evaluating the impact that the adoption of this new guidance will have on our Financial Statements. Share-based payment arrangements with nonemployees – In June 2018, the FASB issued guidance which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendment is effective commencing in 2019 with early adoption permitted. We are currently evaluating the impact that the adoption of this new guidance will have on our Financial Statements. |
Basis of Presentation and Con_2
Basis of Presentation and Consolidation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Reclassification of certain assets | These consist of the December 31, 2017 reclassification of Advertising fund restricted assets to Cash and cash equivalents, Accounts and notes receivable, net and Prepaids and other current assets and the reclassification of Advertising fund liabilities to Accounts and drafts payable and Other accrued liabilities as detailed below (in millions). These reclassifications had no effect on previously reported net income. December 31, 2017 December 31, 2017 As Reported Reclassification As Adjusted Current assets: Cash and cash equivalents $ 1,073.4 $ 24.0 $ 1,097.4 Accounts and notes receivable, net 455.9 32.9 488.8 Inventories, net 78.0 — 78.0 Advertising fund restricted assets 83.3 (83.3 ) — Prepaids and other current assets 59.0 26.4 85.4 Total current assets $ 1,749.6 $ — $ 1,749.6 Current liabilities: Accounts and drafts payable $ 412.9 $ 83.3 $ 496.2 Other accrued liabilities 838.2 27.5 865.7 Gift card liability 214.9 — 214.9 Advertising fund liabilities 110.8 (110.8 ) — Current portion of long term debt and capital leases 78.2 — 78.2 Total current liabilities $ 1,655.0 $ — $ 1,655.0 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Change in contract liabilities | The following table reflects the change in contract liabilities between the date of adoption (January 1, 2018) and September 30, 2018 (in millions): Contract Liabilities Balance at January 1, 2018 $ 455.0 Revenue recognized that was included in the contract liability balance at the beginning of the year (39.6 ) Increase, excluding amounts recognized as revenue during the period 57.5 Impact of foreign currency translation (10.5 ) Balance at September 30, 2018 $ 462.4 |
Schedule of estimated revenues expected to be recognized | The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 30, 2018 (in millions): Contract liabilities expected to be recognized in Amount Remainder of 2018 $ 9.3 2019 35.6 2020 34.9 2021 34.1 2022 33.3 Thereafter 315.2 Total $ 462.4 |
Disaggregation of total revenues | Total revenues consist of the following (in millions): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Sales $ 609.1 $ 631.6 $ 1,743.1 $ 1,784.1 Royalties 556.7 332.8 1,611.0 883.5 Property revenues 192.0 204.1 560.3 568.4 Franchise fees and other revenue 17.5 40.1 58.1 105.9 Total revenues $ 1,375.3 $ 1,208.6 $ 3,972.5 $ 3,341.9 |
Schedule of new accounting pronouncements and adjustments | The following tables reflect the impact of adoption of ASC 606 on our condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and cash flows from operating activities for the nine months ended September 30, 2018 and our condensed consolidated balance sheet as of September 30, 2018 and the amounts as if the Previous Standards were in effect (“Amounts Under Previous Standards”) (in millions): Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2018 Three Months Ended Nine Months Ended As Reported Total Adjustments Amounts Under Previous Standards As Reported Total Adjustments Amounts Under Previous Standards Revenues: Sales $ 609.1 $ — $ 609.1 $ 1,743.1 $ — $ 1,743.1 Franchise and property revenues 766.2 (193.3 ) 572.9 2,229.4 (574.4 ) 1,655.0 Total revenues 1,375.3 (193.3 ) 1,182.0 3,972.5 (574.4 ) 3,398.1 Operating costs and expenses: Cost of sales 469.9 — 469.9 1,347.9 — 1,347.9 Franchise and property expenses 107.6 (0.2 ) 107.4 314.4 (0.4 ) 314.0 Selling, general and administrative expenses 298.3 (197.8 ) 100.5 917.2 (588.4 ) 328.8 (Income) loss from equity method investments (3.8 ) (1.1 ) (4.9 ) (16.9 ) (4.7 ) (21.6 ) Other operating expenses (income), net 26.1 0.1 26.2 9.4 0.1 9.5 Total operating costs and expenses 898.1 (199.0 ) 699.1 2,572.0 (593.4 ) 1,978.6 Income from operations 477.2 5.7 482.9 1,400.5 19.0 1,419.5 Interest expense, net 134.9 (0.7 ) 134.2 404.8 0.5 405.3 Income before income taxes 342.3 6.4 348.7 995.7 18.5 1,014.2 Income tax expense 92.5 0.9 93.4 152.9 4.1 157.0 Net income 249.8 5.5 255.3 842.8 14.4 857.2 Net income attributable to noncontrolling interests 0.1 — 0.1 0.5 — 0.5 Net income attributable to common unitholders $ 249.7 $ 5.5 $ 255.2 $ 842.3 $ 14.4 $ 856.7 Earnings per unit - basic and diluted: Class A common units $ 0.66 $ 0.68 $ 2.22 $ 2.25 Partnership exchangeable units $ 0.53 $ 0.55 $ 1.81 $ 1.83 Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2018 The transition to ASC 606 had no net impact on our cash provided by operating activities and no impact on our cash used for investing activities or cash used for financing activities during the nine months ended September 30, 2018 . Total Amounts Under As Reported Adjustments Previous Standards Cash flows from operating activities: Net income $ 842.8 $ 14.4 $ 857.2 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 137.5 — 137.5 Amortization of deferred financing costs and debt issuance discount 21.9 — 21.9 (Income) loss from equity method investments (16.9 ) (4.7 ) (21.6 ) Loss (gain) on remeasurement of foreign denominated transactions (19.3 ) — (19.3 ) Net losses on derivatives (24.4 ) — (24.4 ) Share-based compensation expense 39.3 — 39.3 Deferred income taxes 6.1 4.1 10.2 Other 11.1 — 11.1 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (0.3 ) — (0.3 ) Inventories and prepaids and other current assets (16.3 ) (1.1 ) (17.4 ) Accounts and drafts payable (24.0 ) 5.6 (18.4 ) Other accrued liabilities and gift card liability (283.6 ) (3.5 ) (287.1 ) Other long-term assets and liabilities (31.3 ) (14.8 ) (46.1 ) Net cash provided by operating activities $ 642.6 $ — $ 642.6 Condensed Consolidated Balance Sheet As Reported Total Amounts Under September 30, 2018 Adjustments Previous Standards ASSETS Current assets: Cash and cash equivalents $ 1,113.0 $ — $ 1,113.0 Accounts and notes receivable, net 481.4 — 481.4 Inventories, net 91.8 — 91.8 Prepaids and other current assets 48.7 24.1 72.8 Total current assets 1,734.9 24.1 1,759.0 Property and equipment, net 2,054.1 — 2,054.1 Intangible assets, net 10,821.0 — 10,821.0 Goodwill 5,680.0 — 5,680.0 Net investment in property leased to franchisees 58.0 — 58.0 Other assets, net 637.7 (101.9 ) 535.8 Total assets $ 20,985.7 $ (77.8 ) $ 20,907.9 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 467.0 $ 5.6 $ 472.6 Other accrued liabilities 678.4 (13.2 ) 665.2 Gift card liability 95.3 43.8 139.1 Current portion of long term debt and capital leases 79.6 — 79.6 Total current liabilities 1,320.3 36.2 1,356.5 Term debt, net of current portion 11,766.8 — 11,766.8 Capital leases, net of current portion 240.6 — 240.6 Other liabilities, net 1,738.5 (440.5 ) 1,298.0 Deferred income taxes, net 1,524.7 62.3 1,587.0 Total liabilities 16,590.9 (342.0 ) 16,248.9 Partners' capital Class A common units 4,255.0 141.6 4,396.6 Partnership exchangeable units 1,248.2 122.6 1,370.8 Accumulated other comprehensive income (loss) (1,110.9 ) — (1,110.9 ) Total Partners' capital 4,392.3 264.2 4,656.5 Noncontrolling interests 2.5 — 2.5 Total equity 4,394.8 264.2 4,659.0 Total liabilities and equity $ 20,985.7 $ (77.8 ) $ 20,907.9 As a result of applying the modified retrospective method to transition to ASC 606, the following adjustments were made to the consolidated balance sheet as of January 1, 2018 (in millions): As Reported Total Adjusted December 31, 2017 Adjustments January 1, 2018 ASSETS Current assets: Cash and cash equivalents $ 1,097.4 $ — $ 1,097.4 Accounts and notes receivable, net 488.8 — 488.8 Inventories, net 78.0 — 78.0 Prepaids and other current assets 85.4 (23.0 ) 62.4 Total current assets 1,749.6 (23.0 ) 1,726.6 Property and equipment, net 2,133.3 — 2,133.3 Intangible assets, net 11,062.2 — 11,062.2 Goodwill 5,782.3 — 5,782.3 Net investment in property leased to franchisees 71.3 — 71.3 Other assets, net 425.2 106.6 531.8 Total assets $ 21,223.9 $ 83.6 $ 21,307.5 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 496.2 $ — $ 496.2 Other accrued liabilities 865.7 8.9 874.6 Gift card liability 214.9 (43.0 ) 171.9 Current portion of long term debt and capital leases 78.2 — 78.2 Total current liabilities 1,655.0 (34.1 ) 1,620.9 Term debt, net of current portion 11,800.9 — 11,800.9 Capital leases, net of current portion 243.8 — 243.8 Other liabilities, net 1,455.1 425.7 1,880.8 Deferred income taxes, net 1,508.1 (58.2 ) 1,449.9 Total liabilities 16,662.9 333.4 16,996.3 Partners' capital Class A common units 4,167.5 (132.0 ) 4,035.5 Partnership exchangeable units 1,276.4 (117.8 ) 1,158.6 Accumulated other comprehensive income (loss) (884.3 ) — (884.3 ) Total Partners' capital 4,559.6 (249.8 ) 4,309.8 Noncontrolling interests 1.4 — 1.4 Total equity 4,561.0 (249.8 ) 4,311.2 Total liabilities and equity $ 21,223.9 $ 83.6 $ 21,307.5 |
Earnings per Unit (Tables)
Earnings per Unit (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Unit | The following table summarizes the basic and diluted earnings per unit calculations (in millions, except per unit amounts): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Allocation of net income among partner interests: Net income allocated to Class A common unitholders $ 133.6 $ 91.3 $ 449.0 $ 231.0 Net income allocated to Partnership exchangeable unitholders 116.1 87.7 393.3 222.3 Net income attributable to common unitholders $ 249.7 $ 179.0 $ 842.3 $ 453.3 Denominator - basic and diluted partnership units: Weighted average Class A common units 202.0 202.0 202.0 202.0 Weighted average Partnership exchangeable units 217.6 226.8 217.6 226.9 Earnings per unit - basic and diluted: Class A common units $ 0.66 $ 0.45 $ 2.22 $ 1.14 Partnership exchangeable units $ 0.53 $ 0.39 $ 1.81 $ 0.98 |
Intangible Assets, net and Go_2
Intangible Assets, net and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net and Goodwill | Intangible assets, net and goodwill consist of the following (in millions): As of September 30, 2018 December 31, 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Identifiable assets subject to amortization: Franchise agreements $ 717.1 $ (187.7 ) $ 529.4 $ 724.7 $ (168.0 ) $ 556.7 Favorable leases 428.5 (201.4 ) 227.1 455.7 (193.7 ) 262.0 Subtotal 1,145.6 (389.1 ) 756.5 1,180.4 (361.7 ) 818.7 Indefinite lived intangible assets: Tim Hortons brand $ 6,570.7 $ — $ 6,570.7 $ 6,727.1 $ — $ 6,727.1 Burger King brand 2,138.9 — 2,138.9 2,161.5 — 2,161.5 Popeyes brand 1,354.9 — 1,354.9 1,354.9 — 1,354.9 Subtotal 10,064.5 — 10,064.5 10,243.5 — 10,243.5 Intangible assets, net $ 10,821.0 $ 11,062.2 Goodwill Tim Hortons segment $ 4,229.9 $ 4,325.8 Burger King segment 604.3 610.7 Popeyes segment 845.8 845.8 Total $ 5,680.0 $ 5,782.3 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Franchise and Property Revenues | Franchise and property revenues recognized from franchisees that are owned or franchised by entities in which we have an equity interest consist of the following (in millions): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenues from affiliates: Royalties $ 75.9 $ 39.2 $ 217.7 $ 121.1 Property revenues 8.6 7.2 26.4 20.1 Franchise fees and other revenue 2.1 3.7 6.8 14.7 Total $ 86.6 $ 50.1 $ 250.9 $ 155.9 |
Other Accrued Liabilities and_2
Other Accrued Liabilities and Other Liabilities, net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Accrued Liabilities (Current) and Other Liabilities (NonCurrent), Net | Other accrued liabilities (current) and other liabilities, net (noncurrent) consist of the following (in millions): As of September 30, December 31, Current: Dividend payable $ 210.9 $ 96.9 Interest payable 93.8 88.6 Accrued compensation and benefits 64.6 66.6 Taxes payable 121.2 401.0 Deferred income 49.7 42.9 Accrued advertising expenses 24.6 27.5 Closed property reserve 8.9 10.8 Restructuring and other provisions 8.8 12.0 Other 95.9 119.4 Other accrued liabilities $ 678.4 $ 865.7 Noncurrent: Derivatives liabilities $ 368.1 $ 498.5 Taxes payable 500.9 495.6 Contract liabilities, net 462.4 10.0 Unfavorable leases 216.4 251.8 Accrued pension 64.7 72.0 Accrued lease straight-lining liability 57.5 46.4 Deferred income 27.2 27.4 Other 41.3 53.4 Other liabilities, net $ 1,738.5 $ 1,455.1 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | Long-term debt consists of the following (in millions): As of September 30, December 31, Term Loan Facility (due February 17, 2024) $ 6,340.3 $ 6,388.7 2017 4.25% Senior Notes (due May 15, 2024) 1,500.0 1,500.0 2015 4.625% Senior Notes (due January 15, 2022) 1,250.0 1,250.0 2017 5.00% Senior Notes (due October 15, 2025) 2,800.0 2,800.0 Other 82.4 89.1 Less: unamortized deferred financing costs and deferred issue discount (148.9 ) (170.1 ) Total debt, net 11,823.8 11,857.7 Less: current maturities of debt (57.0 ) (56.8 ) Total long-term debt $ 11,766.8 $ 11,800.9 |
Summary of Fair Value Measurement | The following table presents the fair value of our variable rate term debt and senior notes, estimated using inputs based on bid and offer prices that are Level 2 inputs, and principal carrying amount (in billions): As of September 30, December 31, Fair value of our variable term debt and senior notes $ 11.7 $ 12.0 Principal carrying amount of our variable term debt and senior notes 11.9 11.9 |
Schedule of Interest Expense, Net | Interest expense, net consists of the following (in millions): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Debt (a) $ 125.3 $ 131.2 $ 375.5 $ 350.1 Capital lease obligations 6.2 5.4 17.7 15.4 Amortization of deferred financing costs and debt issuance discount 7.4 8.5 21.9 25.2 Interest income (4.0 ) (9.1 ) (10.3 ) (15.3 ) Interest expense, net $ 134.9 $ 136.0 $ 404.8 $ 375.4 (a) Amount includes $15.9 million and $39.4 million benefit during the three and nine months ended September 30, 2018 from our adoption of a new hedge accounting standard. See Note 3, New Accounting Pronouncements , for further details of the effects of this change in accounting principle on Interest expense, net. |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Summary of Changes in the Components of Accumulated Other Comprehensive Income (Loss) | The following table displays the changes in the components of accumulated other comprehensive income (loss) (“AOCI”) (in millions): Derivatives Pensions Foreign Currency Translation Accumulated Other Comprehensive Income (Loss) Balances at December 31, 2017 $ 176.8 $ (28.8 ) $ (1,032.3 ) $ (884.3 ) Foreign currency translation adjustment — — (325.4 ) (325.4 ) Net change in fair value of derivatives, net of tax 84.9 — — 84.9 Amounts reclassified to earnings of cash flow hedges, net of tax 13.6 — — 13.6 Pension and post-retirement benefit plans, net of tax — 0.3 — 0.3 Balances at September 30, 2018 $ 275.3 $ (28.5 ) $ (1,357.7 ) $ (1,110.9 ) |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Quantitative Disclosures of Derivative Instruments Including Estimated Fair Values | The following tables present the required quantitative disclosures for our derivative instruments, including their estimated fair values (all estimated using Level 2 inputs) and their location on our condensed consolidated balance sheets (in millions): Gain or (Loss) Recognized in Other Comprehensive Income (Loss) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Derivatives designated as cash flow hedges(1) Interest rate swaps $ 22.0 $ (0.1 ) $ 46.4 $ (20.5 ) Forward-currency contracts $ (5.5 ) $ (5.2 ) $ 7.8 $ (10.7 ) Derivatives designated as net investment hedges Cross-currency rate swaps $ (83.0 ) $ (171.5 ) $ 70.9 $ (349.8 ) (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, 2018 2017 2018 2017 Derivatives designated as cash flow hedges Interest rate swaps Interest expense, net $ (4.8 ) $ (8.2 ) $ (15.9 ) $ (23.1 ) Forward-currency contracts Cost of sales $ (1.7 ) $ (1.2 ) $ 0.9 $ (1.1 ) 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, 2018 2017 2018 2017 Derivatives designated as net investment hedges Cross-currency rate swaps Interest expense, net $ 15.9 $ — $ 39.4 $ — Fair Value as of September 30, 2018 December 31, 2017 Balance Sheet Location Assets: Derivatives designated as cash flow hedges Interest Rate $ 11.0 $ — Other assets, net Foreign currency 2.8 0.5 Prepaids and other current assets Total assets at fair value $ 13.8 $ 0.5 Liabilities: Derivatives designated as cash flow hedges Interest rate $ — $ 42.1 Other liabilities, net Foreign currency 0.6 5.1 Other accrued liabilities Derivatives designated as net investment hedges Foreign currency 368.1 456.4 Other liabilities, net Total liabilities at fair value $ 368.7 $ 503.6 |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Fair Value as of September 30, 2018 December 31, 2017 Balance Sheet Location Assets: Derivatives designated as cash flow hedges Interest Rate $ 11.0 $ — Other assets, net Foreign currency 2.8 0.5 Prepaids and other current assets Total assets at fair value $ 13.8 $ 0.5 Liabilities: Derivatives designated as cash flow hedges Interest rate $ — $ 42.1 Other liabilities, net Foreign currency 0.6 5.1 Other accrued liabilities Derivatives designated as net investment hedges Foreign currency 368.1 456.4 Other liabilities, net Total liabilities at fair value $ 368.7 $ 503.6 |
Other Operating Expenses (Inc_2
Other Operating Expenses (Income), net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Other Income and Expenses [Abstract] | |
Other Operating Expenses (Income), Net | Other operating expenses (income), net consist of the following (in millions): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Net losses (gains) on disposal of assets, restaurant closures, and refranchisings $ 7.5 $ 3.4 $ 17.2 $ 14.9 Litigation settlements (gains) and reserves, net 5.1 0.6 (0.6 ) 1.7 Net losses (gains) on foreign exchange (3.1 ) 17.7 (19.3 ) 64.9 Other, net 16.6 (0.2 ) 12.1 0.6 Other operating expenses (income), net $ 26.1 $ 21.5 $ 9.4 $ 82.1 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Revenues by Geographic Segment | The following table presents revenues, by segment and by country (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2018 As Reported 2018 Amounts Under Previous Standards 2017 2018 As Reported 2018 Amounts Under Previous Standards 2017 Revenues by operating segment: TH $ 853.9 $ 796.5 $ 827.0 $ 2,440.4 $ 2,278.6 $ 2,332.9 BK 416.4 315.5 313.6 1,224.4 914.5 874.3 PLK 105.0 70.0 68.0 307.7 205.0 134.7 Total revenues $ 1,375.3 $ 1,182.0 $ 1,208.6 $ 3,972.5 $ 3,398.1 $ 3,341.9 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues by country (a): Canada $ 776.6 $ 748.7 $ 2,214.3 $ 2,093.6 United States 447.4 310.5 1,318.9 856.1 Other 151.3 149.4 439.3 392.2 Total revenues $ 1,375.3 $ 1,208.6 $ 3,972.5 $ 3,341.9 (a) Only Canada and the United States represented 10% or more of our total revenues in each period presented. |
Reconciliation of Segment Income to Net Income (Loss) | A reconciliation of segment income to net income (loss) consists of the following (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2018 As Reported 2018 Amounts Under Previous Standards 2017 2018 As Reported 2018 Amounts Under Previous Standards 2017 Segment income: TH $ 298.9 $ 294.1 $ 294.4 $ 829.6 $ 833.2 $ 831.7 BK 231.0 237.6 233.9 681.5 684.6 637.8 PLK 41.5 44.0 36.8 120.2 127.3 70.0 Adjusted EBITDA 571.4 575.7 565.1 1,631.3 1,645.1 1,539.5 Share-based compensation and non-cash incentive compensation expense 13.8 13.6 12.5 44.6 44.4 42.9 PLK Transaction costs — — 6.9 9.7 9.7 49.8 Corporate restructuring and tax advisory fees 5.5 5.5 — 19.0 19.0 — Office centralization and relocation costs 4.1 4.1 — 16.5 16.5 — Impact of equity method investments (a) (0.3 ) (1.4 ) (1.3 ) (5.9 ) (10.6 ) (0.1 ) Other operating expenses (income), net 26.1 26.2 21.5 9.4 9.5 82.1 EBITDA 522.2 527.7 525.5 1,538.0 1,556.6 1,364.8 Depreciation and amortization 45.0 44.8 46.2 137.5 137.1 134.9 Income from operations 477.2 482.9 479.3 1,400.5 1,419.5 1,229.9 Interest expense, net 134.9 134.2 136.0 404.8 405.3 375.4 Loss on early extinguishment of debt — — 58.2 — — 78.6 Income tax expense 92.5 93.4 38.3 152.9 157.0 119.0 Net income $ 249.8 $ 255.3 $ 246.8 $ 842.8 $ 857.2 $ 656.9 (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. |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Condensed Consolidating Financial Statements | The following represents the condensed consolidating financial information for the Parent Issuer and its restricted subsidiaries (“Consolidated Borrowers”) on a consolidated basis, together with eliminations, as of and for the periods indicated. The condensed consolidating financial information of Partnership is combined with the financial information of its wholly-owned subsidiaries that are also parent entities of the Parent Issuer and presented in a single column under the heading “RBILP”. The consolidating financial information may not necessarily be indicative of the financial position, results of operations or cash flows had the Issuers and Partnership operated as independent entities. RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions of U.S. dollars) As of September 30, 2018 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,113.0 $ — $ — $ 1,113.0 Accounts and notes receivable, net 481.4 — — 481.4 Inventories, net 91.8 — — 91.8 Prepaids and other current assets 48.7 — — 48.7 Total current assets 1,734.9 — — 1,734.9 Property and equipment, net 2,054.1 — — 2,054.1 Intangible assets, net 10,821.0 — — 10,821.0 Goodwill 5,680.0 — — 5,680.0 Net investment in property leased to franchisees 58.0 — — 58.0 Intercompany receivable — 210.9 (210.9 ) — Investment in subsidiaries — 4,394.8 (4,394.8 ) — Other assets, net 637.7 — — 637.7 Total assets $ 20,985.7 $ 4,605.7 $ (4,605.7 ) $ 20,985.7 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 467.0 $ — $ — $ 467.0 Other accrued liabilities 467.5 210.9 — 678.4 Gift card liability 95.3 — — 95.3 Current portion of long term debt and capital leases 79.6 — — 79.6 Total current liabilities 1,109.4 210.9 — 1,320.3 Term debt, net of current portion 11,766.8 — — 11,766.8 Capital leases, net of current portion 240.6 — — 240.6 Other liabilities, net 1,738.5 — — 1,738.5 Payables to affiliates 210.9 — (210.9 ) — Deferred income taxes, net 1,524.7 — — 1,524.7 Total liabilities 16,590.9 210.9 (210.9 ) 16,590.9 Partners’ capital: Class A common units — 4,255.0 — 4,255.0 Partnership exchangeable units — 1,248.2 — 1,248.2 Common shares 3,614.5 — (3,614.5 ) — Retained Earnings 1,888.7 — (1,888.7 ) — Accumulated other comprehensive income (loss) (1,110.9 ) (1,110.9 ) 1,110.9 (1,110.9 ) Total Partners' capital/shareholders' equity 4,392.3 4,392.3 (4,392.3 ) 4,392.3 Noncontrolling interests 2.5 2.5 (2.5 ) 2.5 Total equity 4,394.8 4,394.8 (4,394.8 ) 4,394.8 Total liabilities and equity $ 20,985.7 $ 4,605.7 $ (4,605.7 ) $ 20,985.7 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions of U.S. dollars) As of December 31, 2017 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,097.4 $ — $ — $ 1,097.4 Accounts and notes receivable, net 488.8 — — 488.8 Inventories, net 78.0 — — 78.0 Prepaids and other current assets 85.4 — — 85.4 Total current assets 1,749.6 — — 1,749.6 Property and equipment, net 2,133.3 — — 2,133.3 Intangible assets, net 11,062.2 — — 11,062.2 Goodwill 5,782.3 — — 5,782.3 Net investment in property leased to franchisees 71.3 — — 71.3 Intercompany receivable — 96.9 (96.9 ) — Investment in subsidiaries — 4,561.0 (4,561.0 ) — Other assets, net 425.2 — — 425.2 Total assets $ 21,223.9 $ 4,657.9 $ (4,657.9 ) $ 21,223.9 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 496.2 $ — $ — $ 496.2 Other accrued liabilities 768.8 96.9 — 865.7 Gift card liability 214.9 — — 214.9 Current portion of long term debt and capital leases 78.2 — — 78.2 Total current liabilities 1,558.1 96.9 — 1,655.0 Term debt, net of current portion 11,800.9 — — 11,800.9 Capital leases, net of current portion 243.8 — — 243.8 Other liabilities, net 1,455.1 — — 1,455.1 Payables to affiliates 96.9 — (96.9 ) — Deferred income taxes, net 1,508.1 — — 1,508.1 Total liabilities 16,662.9 96.9 (96.9 ) 16,662.9 Partners’ capital: Class A common units — 4,167.5 — 4,167.5 Partnership exchangeable units — 1,276.4 — 1,276.4 Common shares 3,515.7 — (3,515.7 ) — Retained Earnings 1,928.2 — (1,928.2 ) — Accumulated other comprehensive income (loss) (884.3 ) (884.3 ) 884.3 (884.3 ) Total Partners' capital/shareholders' equity 4,559.6 4,559.6 (4,559.6 ) 4,559.6 Noncontrolling interests 1.4 1.4 (1.4 ) 1.4 Total equity 4,561.0 4,561.0 (4,561.0 ) 4,561.0 Total liabilities and equity $ 21,223.9 $ 4,657.9 $ (4,657.9 ) $ 21,223.9 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended September 30, 2018 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 609.1 $ — $ — $ 609.1 Franchise and property revenues 766.2 — — 766.2 Total revenues 1,375.3 — — 1,375.3 Operating costs and expenses: Cost of sales 469.9 — — 469.9 Franchise and property expenses 107.6 — — 107.6 Selling, general and administrative expenses 298.3 — — 298.3 (Income) loss from equity method investments (3.8 ) — — (3.8 ) Other operating expenses (income), net 26.1 — — 26.1 Total operating costs and expenses 898.1 — — 898.1 Income from operations 477.2 — — 477.2 Interest expense, net 134.9 — — 134.9 Income before income taxes 342.3 — — 342.3 Income tax expense 92.5 — — 92.5 Net income 249.8 — — 249.8 Equity in earnings of consolidated subsidiaries — 249.8 (249.8 ) — Net income (loss) 249.8 249.8 (249.8 ) 249.8 Net income (loss) attributable to noncontrolling interests 0.1 0.1 (0.1 ) 0.1 Net income (loss) attributable to common unitholders $ 249.7 $ 249.7 $ (249.7 ) $ 249.7 Comprehensive income (loss) $ 345.6 $ 345.6 $ (345.6 ) $ 345.6 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Nine Months Ended September 30, 2018 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 1,743.1 $ — $ — $ 1,743.1 Franchise and property revenues 2,229.4 — — 2,229.4 Total revenues 3,972.5 — — 3,972.5 Operating costs and expenses: Cost of sales 1,347.9 — — 1,347.9 Franchise and property expenses 314.4 — — 314.4 Selling, general and administrative expenses 917.2 — — 917.2 (Income) loss from equity method investments (16.9 ) — — (16.9 ) Other operating expenses (income), net 9.4 — — 9.4 Total operating costs and expenses 2,572.0 — — 2,572.0 Income from operations 1,400.5 — — 1,400.5 Interest expense, net 404.8 — — 404.8 Income before income taxes 995.7 — — 995.7 Income tax expense 152.9 — — 152.9 Net income 842.8 — — 842.8 Equity in earnings of consolidated subsidiaries — 842.8 (842.8 ) — Net income (loss) 842.8 842.8 (842.8 ) 842.8 Net income (loss) attributable to noncontrolling interests 0.5 0.5 (0.5 ) 0.5 Net income (loss) attributable to common unitholders $ 842.3 $ 842.3 $ (842.3 ) $ 842.3 Comprehensive income (loss) $ 616.2 $ 616.2 $ (616.2 ) $ 616.2 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended September 30, 2017 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 631.6 $ — $ — $ 631.6 Franchise and property revenues 577.0 — — 577.0 Total revenues 1,208.6 — — 1,208.6 Operating costs and expenses: Cost of sales 493.3 — — 493.3 Franchise and property expenses 118.5 — — 118.5 Selling, general and administrative expenses 100.1 — — 100.1 (Income) loss from equity method investments (4.1 ) — — (4.1 ) Other operating expenses (income), net 21.5 — — 21.5 Total operating costs and expenses 729.3 — — 729.3 Income from operations 479.3 — — 479.3 Interest expense, net 136.0 — — 136.0 Loss on early extinguishment of debt 58.2 — — 58.2 Income before income taxes 285.1 — — 285.1 Income tax expense 38.3 — — 38.3 Net income 246.8 — — 246.8 Equity in earnings of consolidated subsidiaries — 246.8 (246.8 ) — Net income (loss) 246.8 246.8 (246.8 ) 246.8 Net income (loss) attributable to noncontrolling interests 0.3 0.3 (0.3 ) 0.3 Partnership preferred unit distributions — 67.5 — 67.5 Net income (loss) attributable to common unitholders $ 246.5 $ 179.0 $ (246.5 ) $ 179.0 Comprehensive income (loss) $ 546.5 $ 546.5 $ (546.5 ) $ 546.5 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Nine Months Ended September 30, 2017 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 1,784.1 $ — $ — $ 1,784.1 Franchise and property revenues 1,557.8 — — 1,557.8 Total revenues 3,341.9 — — 3,341.9 Operating costs and expenses: Cost of sales 1,376.9 — — 1,376.9 Franchise and property expenses 343.2 — — 343.2 Selling, general and administrative expenses 318.7 — — 318.7 (Income) loss from equity method investments (8.9 ) — — (8.9 ) Other operating expenses (income), net 82.1 — — 82.1 Total operating costs and expenses 2,112.0 — — 2,112.0 Income from operations 1,229.9 — — 1,229.9 Interest expense, net 375.4 — — 375.4 Loss on early extinguishment of debt 78.6 — — 78.6 Income before income taxes 775.9 — — 775.9 Income tax expense 119.0 — — 119.0 Net income 656.9 — — 656.9 Equity in earnings of consolidated subsidiaries — 656.9 (656.9 ) — Net income (loss) 656.9 656.9 (656.9 ) 656.9 Net income (loss) attributable to noncontrolling interests 1.1 1.1 (1.1 ) 1.1 Partnership preferred unit distributions — 202.5 — 202.5 Net income (loss) attributable to common unitholders $ 655.8 $ 453.3 $ (655.8 ) $ 453.3 Comprehensive income (loss) $ 1,193.6 $ 1,193.6 $ (1,193.6 ) $ 1,193.6 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Nine months ended September 30, 2018 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 842.8 $ 842.8 $ (842.8 ) $ 842.8 Adjustments to reconcile net income to net cash (used for) provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (842.8 ) 842.8 — Depreciation and amortization 137.5 — — 137.5 Amortization of deferred financing costs and debt issuance discount 21.9 — — 21.9 (Income) loss from equity method investments (16.9 ) — — (16.9 ) Loss (gain) on remeasurement of foreign denominated transactions (19.3 ) — — (19.3 ) Net (gains) losses on derivatives (24.4 ) — — (24.4 ) Share-based compensation expense 39.3 — — 39.3 Deferred income taxes 6.1 — — 6.1 Other 11.1 — — 11.1 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (0.3 ) — — (0.3 ) Inventories and prepaids and other current assets (16.3 ) — — (16.3 ) Accounts and drafts payable (24.0 ) — — (24.0 ) Other accrued liabilities and gift card liability (283.6 ) — — (283.6 ) Other long-term assets and liabilities (31.3 ) — — (31.3 ) Net cash (used for) provided by operating activities 642.6 — — 642.6 Cash flows from investing activities: Payments for property and equipment (53.3 ) — — (53.3 ) Proceeds from disposal of assets, restaurant closures, and refranchisings 1.8 — — 1.8 Return of investment on direct financing leases 12.3 — — 12.3 Settlement/sale of derivatives, net 11.2 — — 11.2 Other investing activities, net 0.3 — — 0.3 Net cash provided by (used for) investing activities (27.7 ) — — (27.7 ) Cash flows from financing activities: Repayments of long-term debt and capital leases (65.9 ) — — (65.9 ) Distributions on Class A common, preferred and Partnership exchangeable units — (517.1 ) — (517.1 ) Payments in connection with repurchase of partnership preferred units — (60.1 ) — (60.1 ) Capital contribution from RBI Inc. 52.9 — — 52.9 Distributions from subsidiaries (577.2 ) 577.2 — — Other financing activities, net 1.3 — — 1.3 Net cash provided by (used for) financing activities (588.9 ) — — (588.9 ) Effect of exchange rates on cash and cash equivalents (10.4 ) — — (10.4 ) Increase (decrease) in cash and cash equivalents 15.6 — — 15.6 Cash and cash equivalents at beginning of period 1,097.4 — — 1,097.4 Cash and cash equivalents at end of period $ 1,113.0 $ — $ — $ 1,113.0 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Nine Months Ended September 30, 2017 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 656.9 $ 656.9 $ (656.9 ) $ 656.9 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (656.9 ) 656.9 — Depreciation and amortization 134.9 — — 134.9 Premiums paid and non-cash loss on extinguishment of debt 75.9 — — 75.9 Amortization of deferred financing costs and debt issuance discount 25.2 — — 25.2 (Income) loss from equity method investments (8.9 ) — — (8.9 ) Loss (gain) on remeasurement of foreign denominated transactions 64.7 — — 64.7 Net losses on derivatives 23.1 — — 23.1 Share-based compensation expense 38.0 — — 38.0 Deferred income taxes (3.1 ) — — (3.1 ) Other 12.8 — — 12.8 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable 0.3 — — 0.3 Inventories and prepaids and other current assets (1.0 ) — — (1.0 ) Accounts and drafts payable 6.8 — — 6.8 Other accrued liabilities and gift card liability (161.4 ) — — (161.4 ) Other long-term assets and liabilities (40.0 ) — — (40.0 ) Net cash provided by operating activities 824.2 — — 824.2 Cash flows from investing activities: Payments for property and equipment (16.9 ) — — (16.9 ) Proceeds from disposal of assets, restaurant closures, and refranchisings 19.6 — — 19.6 Net payment for purchase of Popeyes, net of cash acquired (1,635.9 ) — — (1,635.9 ) Return of investment on direct financing leases 11.8 — — 11.8 Settlement/sale of derivatives, net 771.8 — — 771.8 Other investing activities, net (2.3 ) — — (2.3 ) Net cash provided by (used for) investing activities (851.9 ) — — (851.9 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 4,350.0 — — 4,350.0 Repayments of long-term debt and capital leases (1,690.0 ) — — (1,690.0 ) Payment of financing costs (57.0 ) — — (57.0 ) Distributions on Class A common, preferred and Partnership exchangeable units — (451.9 ) — (451.9 ) Capital contribution from RBI Inc. 17.5 — — 17.5 Distributions from subsidiaries (451.9 ) 451.9 — — Other financing activities, net (6.2 ) — — (6.2 ) Net cash provided by (used for) financing activities 2,162.4 — — 2,162.4 Effect of exchange rates on cash and cash equivalents 22.7 — — 22.7 Increase (decrease) in cash and cash equivalents 2,157.4 — — 2,157.4 Cash and cash equivalents at beginning of period 1,435.8 — — 1,435.8 Cash and cash equivalents at end of period $ 3,593.2 $ — $ — $ 3,593.2 |
Description of Business and O_2
Description of Business and Organization - Additional Information (Details) | Sep. 30, 2018RestaurantCountry |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 25,066 |
Number of countries in which company and franchise restaurants operated (more than) | Country | 100 |
Percentage of franchised Tim Hortons, Burger King, and Popeyes restaurants | 100.00% |
Tim Hortons brand | |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 4,805 |
Burger King brand | |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 17,239 |
Popeyes brand | |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 3,022 |
Basis of Presentation and Con_3
Basis of Presentation and Consolidation - Additional Information (Details) - Restaurant | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Summary Of Accounting Policies [Line Items] | ||
Investment in other affiliates (or less) | 50.00% | |
Restaurant VIEs | ||
Summary Of Accounting Policies [Line Items] | ||
Number of VIE consolidated restaurants | 19 | 31 |
Basis of Presentation and Con_4
Basis of Presentation and Consolidation - Reclassification of certain assets (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||||
Cash and cash equivalents | $ 1,113 | $ 1,097.4 | $ 3,593.2 | $ 1,435.8 |
Accounts and notes receivable, net | 481.4 | 488.8 | ||
Inventories, net | 91.8 | 78 | ||
Advertising fund restricted assets | 0 | |||
Prepaids and other current assets | 48.7 | 85.4 | ||
Total current assets | 1,734.9 | 1,749.6 | ||
Current liabilities: | ||||
Accounts and drafts payable | 467 | 496.2 | ||
Other accrued liabilities | 678.4 | 865.7 | ||
Gift card liability | 95.3 | 214.9 | ||
Advertising fund liabilities | 0 | |||
Current portion of long term debt and capital leases | 79.6 | 78.2 | ||
Total current liabilities | $ 1,320.3 | 1,655 | ||
As Reported | ||||
Current assets: | ||||
Cash and cash equivalents | 1,073.4 | |||
Accounts and notes receivable, net | 455.9 | |||
Inventories, net | 78 | |||
Advertising fund restricted assets | 83.3 | |||
Prepaids and other current assets | 59 | |||
Total current assets | 1,749.6 | |||
Current liabilities: | ||||
Accounts and drafts payable | 412.9 | |||
Other accrued liabilities | 838.2 | |||
Gift card liability | 214.9 | |||
Advertising fund liabilities | 110.8 | |||
Current portion of long term debt and capital leases | 78.2 | |||
Total current liabilities | 1,655 | |||
Reclassification | ||||
Current assets: | ||||
Cash and cash equivalents | 24 | |||
Accounts and notes receivable, net | 32.9 | |||
Inventories, net | 0 | |||
Advertising fund restricted assets | (83.3) | |||
Prepaids and other current assets | 26.4 | |||
Total current assets | 0 | |||
Current liabilities: | ||||
Accounts and drafts payable | 83.3 | |||
Other accrued liabilities | 27.5 | |||
Gift card liability | 0 | |||
Advertising fund liabilities | (110.8) | |||
Current portion of long term debt and capital leases | 0 | |||
Total current liabilities | $ 0 |
New Accounting Pronouncements -
New Accounting Pronouncements - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Interest expense, net | $ (134.9) | $ (136) | $ (404.8) | $ (375.4) | |
Accounting Standards Update 2017-12 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Interest expense, net | $ 15.9 | $ 39.4 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Deferred Revenue Arrangement [Line Items] | ||||||
Other liabilities, net | $ 1,738.5 | $ 1,738.5 | $ 1,455.1 | |||
Other assets, net | 637.7 | 637.7 | 425.2 | |||
Partners' capital | 4,394.8 | 4,394.8 | 4,561 | |||
Deferred income taxes, net | 1,524.7 | 1,524.7 | 1,508.1 | |||
Prepaids and other current assets | 48.7 | 48.7 | 85.4 | |||
Gift card liability | 95.3 | 95.3 | 214.9 | |||
Other accrued liabilities | 678.4 | 678.4 | 865.7 | |||
Revenues | 1,375.3 | $ 1,208.6 | 3,972.5 | $ 3,341.9 | ||
Income tax expense | 92.5 | 38.3 | 152.9 | 119 | ||
Franchise and property expenses | 107.6 | 118.5 | 314.4 | 343.2 | ||
Selling, general and administrative expenses | 298.3 | 100.1 | 917.2 | 318.7 | ||
Interest expense, net | (134.9) | (136) | (404.8) | (375.4) | ||
Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Franchise and property expenses | (0.2) | (0.4) | ||||
Interest expense, net | 0.7 | (0.5) | ||||
Accounting Standards Update 2014-09 | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Cumulative effect adjustment | (249.8) | |||||
Other liabilities, net | $ 1,880.8 | |||||
Other assets, net | 531.8 | |||||
Partners' capital | 4,311.2 | |||||
Deferred income taxes, net | 1,449.9 | |||||
Prepaids and other current assets | 62.4 | |||||
Gift card liability | 171.9 | |||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Cumulative effect adjustment | 249.8 | |||||
Other liabilities, net | (440.5) | (440.5) | 425.7 | |||
Other assets, net | (101.9) | (101.9) | 106.6 | 106.6 | ||
Partners' capital | 264.2 | 264.2 | (249.8) | |||
Deferred income taxes, net | 62.3 | 62.3 | (58.2) | |||
Prepaids and other current assets | 24.1 | 24.1 | (23) | |||
Gift card liability | 43.8 | 43.8 | $ (43) | |||
Revenues | (193.3) | (574.4) | ||||
Income tax expense | 0.9 | 4.1 | ||||
Franchise and property expenses | (0.2) | (0.4) | ||||
Selling, general and administrative expenses | (197.8) | (588.4) | ||||
Interest expense, net | 0.7 | (0.5) | ||||
MFDA arrangements | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Other liabilities, net | 105 | |||||
Partners' capital | 1.6 | |||||
Gift Cards | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Partners' capital | 25.2 | |||||
Deferred income taxes, net | 8.9 | |||||
Gift card liability | (43) | |||||
Other accrued liabilities | 8.9 | |||||
Royalty, Property Revenue, and Franchisor | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Revenues | 766.2 | $ 577 | 2,229.4 | $ 1,557.8 | ||
Royalty, Property Revenue, and Franchisor | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Revenues | 9 | 14 | ||||
Income tax expense | 1.7 | 4.1 | ||||
Royalty, Property Revenue, and Franchisor | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Other liabilities, net | 320.7 | |||||
Deferred income taxes, net | (67.1) | |||||
Revenues | (193.3) | (574.4) | ||||
Advertising Funds | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Revenues | (202.3) | (588.4) | ||||
Income tax expense | (0.8) | 0 | ||||
Advertising Funds | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||
Deferred Revenue Arrangement [Line Items] | ||||||
Partners' capital | (23) | |||||
Prepaids and other current assets | $ (23) | |||||
Selling, general and administrative expenses | $ (197.8) | $ (588.4) |
Revenue Recognition - Change in
Revenue Recognition - Change in contract liabilities (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Change In Contract With Customer Liability [Roll Forward] | |
Beginning balance | $ 455 |
Revenue recognized that was included in the contract liability balance at the beginning of the year | 39.6 |
Increase, excluding amounts recognized as revenue during the period | 57.5 |
Impact of foreign currency translation | (10.5) |
Ending balance | $ 462.4 |
Revenue Recognition - Estimated
Revenue Recognition - Estimated revenue recognition (Details) $ in Millions | Sep. 30, 2018USD ($) |
Revenue from Contract with Customer [Abstract] | |
Contract liabilities expected to be recognized in | $ 462.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Revenue from Contract with Customer [Abstract] | |
Contract liabilities expected to be recognized in | $ 9.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Contract liabilities expected to be recognized in | $ 35.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Contract liabilities expected to be recognized in | $ 34.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Contract liabilities expected to be recognized in | $ 34.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Contract liabilities expected to be recognized in | $ 33.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Contract liabilities expected to be recognized in | $ 315.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of total revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Property revenues | $ 192 | $ 204.1 | $ 560.3 | $ 568.4 |
Revenues | 1,375.3 | 1,208.6 | 3,972.5 | 3,341.9 |
Sales | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 609.1 | 631.6 | 1,743.1 | 1,784.1 |
Royalties | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 556.7 | 332.8 | 1,611 | 883.5 |
Franchise fees and other revenue | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | $ 17.5 | $ 40.1 | $ 58.1 | $ 105.9 |
Revenue Recognition - Adjustmen
Revenue Recognition - Adjustments to balance sheet due to Topic 606 and Pro Forma adjustments (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | |||||
Cash and cash equivalents | $ 1,113 | $ 1,097.4 | $ 3,593.2 | $ 1,435.8 | |
Accounts and notes receivable, net | 481.4 | 488.8 | |||
Inventories, net | 91.8 | 78 | |||
Prepaids and other current assets | 48.7 | 85.4 | |||
Total current assets | 1,734.9 | 1,749.6 | |||
Property and equipment, net | 2,054.1 | 2,133.3 | |||
Intangible assets, net | 10,821 | 11,062.2 | |||
Goodwill | 5,680 | 5,782.3 | |||
Net investment in property leased to franchisees | 58 | 71.3 | |||
Other assets, net | 637.7 | 425.2 | |||
Total assets | 20,985.7 | 21,223.9 | |||
Current liabilities: | |||||
Accounts and drafts payable | 467 | 496.2 | |||
Other accrued liabilities | 678.4 | 865.7 | |||
Gift card liability | 95.3 | 214.9 | |||
Current portion of long term debt and capital leases | 79.6 | 78.2 | |||
Total current liabilities | 1,320.3 | 1,655 | |||
Term debt, net of current portion | 11,766.8 | 11,800.9 | |||
Capital leases, net of current portion | 240.6 | 243.8 | |||
Other liabilities, net | 1,738.5 | 1,455.1 | |||
Deferred income taxes, net | 1,524.7 | 1,508.1 | |||
Total liabilities | 16,590.9 | 16,662.9 | |||
Partners' capital | |||||
Partnership exchangeable units | 1,248.2 | ||||
Accumulated other comprehensive income (loss) | (1,110.9) | (884.3) | |||
Total Partners' capital | 4,392.3 | ||||
Noncontrolling interests | 2.5 | 1.4 | |||
Total equity | 4,394.8 | 4,561 | |||
Total liabilities and equity | 20,985.7 | 21,223.9 | |||
Class A common units | |||||
Partners' capital | |||||
Class A common units | 4,255 | 4,167.5 | |||
Total equity | 4,255 | 4,167.5 | |||
Partnership exchangeable units | |||||
Partners' capital | |||||
Partnership exchangeable units | 1,248.2 | 1,276.4 | |||
Total equity | 1,248.2 | 1,276.4 | |||
Accounting Standards Update 2014-09 | |||||
Current assets: | |||||
Cash and cash equivalents | $ 1,097.4 | ||||
Accounts and notes receivable, net | 488.8 | ||||
Inventories, net | 78 | ||||
Prepaids and other current assets | 62.4 | ||||
Total current assets | 1,726.6 | ||||
Property and equipment, net | 2,133.3 | ||||
Intangible assets, net | 11,062.2 | ||||
Goodwill | 5,782.3 | ||||
Net investment in property leased to franchisees | 71.3 | ||||
Other assets, net | 531.8 | ||||
Total assets | 21,307.5 | ||||
Current liabilities: | |||||
Accounts and drafts payable | 496.2 | ||||
Other accrued liabilities | 874.6 | ||||
Gift card liability | 171.9 | ||||
Current portion of long term debt and capital leases | 78.2 | ||||
Total current liabilities | 1,620.9 | ||||
Term debt, net of current portion | 11,800.9 | ||||
Capital leases, net of current portion | 243.8 | ||||
Other liabilities, net | 1,880.8 | ||||
Deferred income taxes, net | 1,449.9 | ||||
Total liabilities | 16,996.3 | ||||
Partners' capital | |||||
Accumulated other comprehensive income (loss) | (884.3) | ||||
Total Partners' capital | 4,309.8 | ||||
Noncontrolling interests | 1.4 | ||||
Total equity | 4,311.2 | ||||
Total liabilities and equity | 21,307.5 | ||||
Accounting Standards Update 2014-09 | Class A common units | |||||
Partners' capital | |||||
Class A common units | 4,035.5 | ||||
Accounting Standards Update 2014-09 | Partnership exchangeable units | |||||
Partners' capital | |||||
Partnership exchangeable units | 1,158.6 | ||||
Total Adjustments | Accounting Standards Update 2014-09 | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Accounts and notes receivable, net | 0 | 0 | |||
Inventories, net | 0 | 0 | |||
Prepaids and other current assets | 24.1 | (23) | |||
Total current assets | 24.1 | (23) | |||
Property and equipment, net | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Net investment in property leased to franchisees | 0 | 0 | |||
Other assets, net | (101.9) | $ 106.6 | 106.6 | ||
Total assets | (77.8) | 83.6 | |||
Current liabilities: | |||||
Accounts and drafts payable | 5.6 | 0 | |||
Other accrued liabilities | (13.2) | 8.9 | |||
Gift card liability | 43.8 | (43) | |||
Current portion of long term debt and capital leases | 0 | 0 | |||
Total current liabilities | 36.2 | (34.1) | |||
Term debt, net of current portion | 0 | 0 | |||
Capital leases, net of current portion | 0 | 0 | |||
Other liabilities, net | (440.5) | 425.7 | |||
Deferred income taxes, net | 62.3 | (58.2) | |||
Total liabilities | (342) | 333.4 | |||
Partners' capital | |||||
Class A common units | 141.6 | ||||
Partnership exchangeable units | 122.6 | ||||
Accumulated other comprehensive income (loss) | 0 | 0 | |||
Total Partners' capital | 264.2 | (249.8) | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | 264.2 | (249.8) | |||
Total liabilities and equity | (77.8) | 83.6 | |||
Total Adjustments | Accounting Standards Update 2014-09 | Class A common units | |||||
Partners' capital | |||||
Class A common units | (132) | ||||
Total Adjustments | Accounting Standards Update 2014-09 | Partnership exchangeable units | |||||
Partners' capital | |||||
Partnership exchangeable units | (117.8) | ||||
Amounts Under Previous Standards | |||||
Current assets: | |||||
Cash and cash equivalents | 1,113 | 1,097.4 | |||
Accounts and notes receivable, net | 481.4 | 488.8 | |||
Inventories, net | 91.8 | 78 | |||
Prepaids and other current assets | 72.8 | 85.4 | |||
Total current assets | 1,759 | 1,749.6 | |||
Property and equipment, net | 2,054.1 | 2,133.3 | |||
Intangible assets, net | 10,821 | 11,062.2 | |||
Goodwill | 5,680 | 5,782.3 | |||
Net investment in property leased to franchisees | 58 | 71.3 | |||
Other assets, net | 535.8 | 425.2 | |||
Total assets | 20,907.9 | 21,223.9 | |||
Current liabilities: | |||||
Accounts and drafts payable | 472.6 | 496.2 | |||
Other accrued liabilities | 665.2 | 865.7 | |||
Gift card liability | 139.1 | 214.9 | |||
Current portion of long term debt and capital leases | 79.6 | 78.2 | |||
Total current liabilities | 1,356.5 | 1,655 | |||
Term debt, net of current portion | 11,766.8 | 11,800.9 | |||
Capital leases, net of current portion | 240.6 | 243.8 | |||
Other liabilities, net | 1,298 | 1,455.1 | |||
Deferred income taxes, net | 1,587 | 1,508.1 | |||
Total liabilities | 16,248.9 | 16,662.9 | |||
Partners' capital | |||||
Class A common units | 4,396.6 | ||||
Partnership exchangeable units | 1,370.8 | ||||
Accumulated other comprehensive income (loss) | (1,110.9) | (884.3) | |||
Total Partners' capital | 4,656.5 | 4,559.6 | |||
Noncontrolling interests | 2.5 | 1.4 | |||
Total equity | 4,659 | 4,561 | |||
Total liabilities and equity | $ 20,907.9 | 21,223.9 | |||
Amounts Under Previous Standards | Class A common units | |||||
Partners' capital | |||||
Class A common units | 4,167.5 | ||||
Amounts Under Previous Standards | Partnership exchangeable units | |||||
Partners' capital | |||||
Partnership exchangeable units | $ 1,276.4 |
Revenue Recognition - Pro Forma
Revenue Recognition - Pro Forma adjustments to income statement (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Revenues | $ 1,375.3 | $ 1,208.6 | $ 3,972.5 | $ 3,341.9 |
Operating costs and expenses: | ||||
Cost of sales | 469.9 | 493.3 | 1,347.9 | 1,376.9 |
Franchise and property expenses | 107.6 | 118.5 | 314.4 | 343.2 |
Selling, general and administrative expenses | 298.3 | 100.1 | 917.2 | 318.7 |
(Income) loss from equity method investments | (3.8) | (4.1) | (16.9) | (8.9) |
Other operating expenses (income), net | 26.1 | 21.5 | 9.4 | 82.1 |
Total operating costs and expenses | 898.1 | 729.3 | 2,572 | 2,112 |
Income from operations | 477.2 | 479.3 | 1,400.5 | 1,229.9 |
Interest expense, net | 134.9 | 136 | 404.8 | 375.4 |
Income before income taxes | 342.3 | 285.1 | 995.7 | 775.9 |
Income tax expense | 92.5 | 38.3 | 152.9 | 119 |
Net income | 249.8 | 246.8 | 842.8 | 656.9 |
Net income attributable to noncontrolling interests | 0.1 | 0.3 | 0.5 | 1.1 |
Net income attributable to common unitholders | 249.7 | 179 | 842.3 | 453.3 |
Total Adjustments | ||||
Operating costs and expenses: | ||||
Franchise and property expenses | (0.2) | (0.4) | ||
Interest expense, net | (0.7) | 0.5 | ||
Total Adjustments | Accounting Standards Update 2014-09 | ||||
Revenues: | ||||
Revenues | (193.3) | (574.4) | ||
Operating costs and expenses: | ||||
Cost of sales | 0 | 0 | ||
Franchise and property expenses | (0.2) | (0.4) | ||
Selling, general and administrative expenses | (197.8) | (588.4) | ||
(Income) loss from equity method investments | (1.1) | (4.7) | ||
Other operating expenses (income), net | 0.1 | 0.1 | ||
Total operating costs and expenses | (199) | (593.4) | ||
Income from operations | 5.7 | 19 | ||
Interest expense, net | (0.7) | 0.5 | ||
Income before income taxes | 6.4 | 18.5 | ||
Income tax expense | 0.9 | 4.1 | ||
Net income | 5.5 | 14.4 | ||
Net income attributable to noncontrolling interests | 0 | 0 | ||
Net income attributable to common unitholders | 5.5 | 14.4 | ||
Amounts Under Previous Standards | ||||
Revenues: | ||||
Revenues | 1,182 | 3,398.1 | ||
Operating costs and expenses: | ||||
Cost of sales | 469.9 | 1,347.9 | ||
Franchise and property expenses | 107.4 | 314 | ||
Selling, general and administrative expenses | 100.5 | 328.8 | ||
(Income) loss from equity method investments | (4.9) | (21.6) | ||
Other operating expenses (income), net | 26.2 | 9.5 | ||
Total operating costs and expenses | 699.1 | 1,978.6 | ||
Income from operations | 482.9 | 1,419.5 | ||
Interest expense, net | 134.2 | 405.3 | ||
Income before income taxes | 348.7 | 1,014.2 | ||
Income tax expense | 93.4 | 157 | ||
Net income | 255.3 | 857.2 | ||
Net income attributable to noncontrolling interests | 0.1 | 0.5 | ||
Net income attributable to common unitholders | 255.2 | 856.7 | ||
Sales | ||||
Revenues: | ||||
Sales | 609.1 | 631.6 | 1,743.1 | 1,784.1 |
Sales | Total Adjustments | Accounting Standards Update 2014-09 | ||||
Revenues: | ||||
Sales | 0 | 0 | ||
Sales | Amounts Under Previous Standards | ||||
Revenues: | ||||
Sales | 609.1 | 1,743.1 | ||
Royalty, Property Revenue, and Franchisor | ||||
Revenues: | ||||
Revenues | 766.2 | 577 | 2,229.4 | 1,557.8 |
Royalty, Property Revenue, and Franchisor | Total Adjustments | ||||
Revenues: | ||||
Revenues | 9 | 14 | ||
Operating costs and expenses: | ||||
Income tax expense | 1.7 | 4.1 | ||
Royalty, Property Revenue, and Franchisor | Total Adjustments | Accounting Standards Update 2014-09 | ||||
Revenues: | ||||
Revenues | (193.3) | (574.4) | ||
Royalty, Property Revenue, and Franchisor | Amounts Under Previous Standards | ||||
Revenues: | ||||
Revenues | 572.9 | 1,655 | ||
Class A common units | ||||
Operating costs and expenses: | ||||
Net income | 449 | |||
Net income attributable to common unitholders | $ 133.6 | $ 91.3 | $ 449 | $ 231 |
Earnings per unit - basic and diluted | ||||
Earnings per unit - basic and diluted (in usd per share) | $ 0.66 | $ 0.45 | $ 2.22 | $ 1.14 |
Class A common units | Amounts Under Previous Standards | ||||
Earnings per unit - basic and diluted | ||||
Earnings per unit - basic and diluted (in usd per share) | $ 0.68 | $ 2.25 | ||
Partnership Exchangeable Units | ||||
Operating costs and expenses: | ||||
Net income | $ 393.3 | |||
Net income attributable to common unitholders | $ 116.1 | $ 87.7 | $ 393.3 | $ 222.3 |
Earnings per unit - basic and diluted | ||||
Earnings per unit - basic and diluted (in usd per share) | $ 0.53 | $ 0.39 | $ 1.81 | $ 0.98 |
Partnership Exchangeable Units | Amounts Under Previous Standards | ||||
Earnings per unit - basic and diluted | ||||
Earnings per unit - basic and diluted (in usd per share) | $ 0.55 | $ 1.83 |
Revenue Recognition - Pro For_2
Revenue Recognition - Pro Forma adjustments to cash flow statement (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||||
Net income | $ 249.8 | $ 246.8 | $ 842.8 | $ 656.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 137.5 | 134.9 | ||
Amortization of deferred financing costs and debt issuance discount | 7.4 | 8.5 | 21.9 | 25.2 |
(Income) loss from equity method investments | (3.8) | $ (4.1) | (16.9) | (8.9) |
Loss (gain) on remeasurement of foreign denominated transactions | (19.3) | 64.7 | ||
Net losses on derivatives | (24.4) | 23.1 | ||
Share-based compensation expense | 39.3 | 38 | ||
Deferred income taxes | 6.1 | (3.1) | ||
Other | 11.1 | 12.8 | ||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||||
Accounts and notes receivable | (0.3) | 0.3 | ||
Inventories and prepaids and other current assets | (16.3) | |||
Accounts and drafts payable | (24) | 6.8 | ||
Other accrued liabilities and gift card liability | (283.6) | (161.4) | ||
Other long-term assets and liabilities | (31.3) | (40) | ||
Net cash provided by operating activities | 642.6 | $ 824.2 | ||
Total Adjustments | Accounting Standards Update 2014-09 | ||||
Cash flows from operating activities: | ||||
Net income | 5.5 | 14.4 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 0 | |||
Amortization of deferred financing costs and debt issuance discount | 0 | |||
(Income) loss from equity method investments | (1.1) | (4.7) | ||
Loss (gain) on remeasurement of foreign denominated transactions | 0 | |||
Net losses on derivatives | 0 | |||
Share-based compensation expense | 0 | |||
Deferred income taxes | 4.1 | |||
Other | 0 | |||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||||
Accounts and notes receivable | 0 | |||
Inventories and prepaids and other current assets | (1.1) | |||
Accounts and drafts payable | 5.6 | |||
Other accrued liabilities and gift card liability | (3.5) | |||
Other long-term assets and liabilities | (14.8) | |||
Net cash provided by operating activities | 0 | |||
Amounts Under Previous Standards | ||||
Cash flows from operating activities: | ||||
Net income | 255.3 | 857.2 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 137.5 | |||
Amortization of deferred financing costs and debt issuance discount | 21.9 | |||
(Income) loss from equity method investments | $ (4.9) | (21.6) | ||
Loss (gain) on remeasurement of foreign denominated transactions | (19.3) | |||
Net losses on derivatives | (24.4) | |||
Share-based compensation expense | 39.3 | |||
Deferred income taxes | 10.2 | |||
Other | 11.1 | |||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||||
Accounts and notes receivable | (0.3) | |||
Inventories and prepaids and other current assets | (17.4) | |||
Accounts and drafts payable | (18.4) | |||
Other accrued liabilities and gift card liability | (287.1) | |||
Other long-term assets and liabilities | (46.1) | |||
Net cash provided by operating activities | $ 642.6 |
Earnings per Unit - Basic and D
Earnings per Unit - Basic and Diluted Earnings Per Unit (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Allocation of net income among partner interests: | ||||
Net income attributable to common unitholders | $ 249.7 | $ 179 | $ 842.3 | $ 453.3 |
Class A common units | ||||
Allocation of net income among partner interests: | ||||
Net income attributable to common unitholders | $ 133.6 | $ 91.3 | $ 449 | $ 231 |
Denominator - basic and diluted partnership units: | ||||
Total weighted average basic and diluted units outstanding (shares) | 202 | 202 | 202 | 202 |
Earnings per unit - basic and diluted: | ||||
Earnings per unit - basic and diluted (in usd per share) | $ 0.66 | $ 0.45 | $ 2.22 | $ 1.14 |
Partnership Exchangeable Units | ||||
Allocation of net income among partner interests: | ||||
Net income attributable to common unitholders | $ 116.1 | $ 87.7 | $ 393.3 | $ 222.3 |
Denominator - basic and diluted partnership units: | ||||
Total weighted average basic and diluted units outstanding (shares) | 217.6 | 226.8 | 217.6 | 226.9 |
Earnings per unit - basic and diluted: | ||||
Earnings per unit - basic and diluted (in usd per share) | $ 0.53 | $ 0.39 | $ 1.81 | $ 0.98 |
Intangible Assets, net and Go_3
Intangible Assets, net and Goodwill - Schedule of Intangible Assets, net and Goodwill (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Identifiable assets, Gross | $ 1,145.6 | $ 1,180.4 |
Identifiable assets, Accumulated Amortization | (389.1) | (361.7) |
Identifiable assets, Net | 756.5 | 818.7 |
Intangible assets, net | 10,821 | 11,062.2 |
Goodwill | 5,680 | 5,782.3 |
Trade names | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite lived intangible assets: | 10,064.5 | 10,243.5 |
Tim Hortons brand | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Goodwill | 4,229.9 | 4,325.8 |
Tim Hortons brand | Trade names | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite lived intangible assets: | 6,570.7 | 6,727.1 |
Burger King brand | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Goodwill | 604.3 | 610.7 |
Burger King brand | Trade names | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite lived intangible assets: | 2,138.9 | 2,161.5 |
Popeyes brand | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Goodwill | 845.8 | 845.8 |
Popeyes brand | Trade names | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite lived intangible assets: | 1,354.9 | 1,354.9 |
Franchise agreements | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Identifiable assets, Gross | 717.1 | 724.7 |
Identifiable assets, Accumulated Amortization | (187.7) | (168) |
Identifiable assets, Net | 529.4 | 556.7 |
Favorable leases | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Identifiable assets, Gross | 428.5 | 455.7 |
Identifiable assets, Accumulated Amortization | (201.4) | (193.7) |
Identifiable assets, Net | $ 227.1 | $ 262 |
Intangible Assets, net and Go_4
Intangible Assets, net and Goodwill - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense on intangible assets | $ 17.3 | $ 18.7 | $ 53 | $ 54.2 |
Equity Method Investments - Add
Equity Method Investments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||||
Investment in subsidiaries | $ 0 | $ 0 | $ 0 | ||
Joint-venture interest | 50.00% | 50.00% | |||
Increase to carrying value of equity method investment | $ 20.4 | $ 20.4 | |||
Equity Method Investee | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Accounts receivable from equity method investments | 33.2 | 33.2 | 31.9 | ||
Wendy's Company TIMWEN Partnership | Tim Hortons brand | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cash distributions | 3.2 | $ 2.7 | 9 | $ 8.1 | |
Contingent rent expense | 5.1 | $ 5.3 | 14.6 | $ 14.7 | |
Carrols Restaurant Group, Inc. | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Quoted market price | $ 137.5 | $ 137.5 | |||
BK Brasil | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Joint-venture interest | 10.10% | 10.10% | |||
Quoted market price | $ 73.9 | $ 73.9 | |||
Other assets | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Investment in subsidiaries | $ 264.2 | $ 264.2 | $ 155.1 | ||
Canada | Wendy's Company TIMWEN Partnership | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Joint-venture interest | 50.00% | 50.00% | |||
United States | Carrols Restaurant Group, Inc. | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Joint-venture interest | 20.50% | 20.50% |
Equity Method Investments - Sum
Equity Method Investments - Summary of Franchise and Property Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues from affiliates: | ||||
Property revenues | $ 192 | $ 204.1 | $ 560.3 | $ 568.4 |
Revenues | 1,375.3 | 1,208.6 | 3,972.5 | 3,341.9 |
Affiliates | ||||
Revenues from affiliates: | ||||
Property revenues | 8.6 | 7.2 | 26.4 | 20.1 |
Revenues | 86.6 | 50.1 | 250.9 | 155.9 |
Royalties | ||||
Revenues from affiliates: | ||||
Revenues | 556.7 | 332.8 | 1,611 | 883.5 |
Royalties | Affiliates | ||||
Revenues from affiliates: | ||||
Revenues | 75.9 | 39.2 | 217.7 | 121.1 |
Franchise fees and other revenue | ||||
Revenues from affiliates: | ||||
Revenues | 17.5 | 40.1 | 58.1 | 105.9 |
Franchise fees and other revenue | Affiliates | ||||
Revenues from affiliates: | ||||
Revenues | $ 2.1 | $ 3.7 | $ 6.8 | $ 14.7 |
Other Accrued Liabilities and_3
Other Accrued Liabilities and Other Liabilities, net - Schedule of Other Accrued Liabilities (Current) and Other Liabilities (NonCurrent), Net (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Current: | ||
Dividend payable | $ 210.9 | $ 96.9 |
Interest payable | 93.8 | 88.6 |
Accrued compensation and benefits | 64.6 | 66.6 |
Taxes payable | 121.2 | 401 |
Deferred income | 49.7 | 42.9 |
Accrued advertising expenses | 24.6 | 27.5 |
Closed property reserve | 8.9 | 10.8 |
Restructuring and other provisions | 8.8 | 12 |
Other | 95.9 | 119.4 |
Other accrued liabilities | 678.4 | 865.7 |
Noncurrent: | ||
Derivatives liabilities | 368.1 | 498.5 |
Taxes payable | 500.9 | 495.6 |
Contract liabilities, net | 462.4 | 10 |
Unfavorable leases | 216.4 | 251.8 |
Accrued pension | 64.7 | 72 |
Accrued lease straight-lining liability | 57.5 | 46.4 |
Deferred income | 27.2 | 27.4 |
Other | 41.3 | 53.4 |
Other liabilities, net | $ 1,738.5 | $ 1,455.1 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Other | $ 82.4 | $ 89.1 |
Less: unamortized deferred financing costs and deferred issue discount | (148.9) | (170.1) |
Total debt, net | 11,823.8 | 11,857.7 |
Less: current maturities of debt | (57) | (56.8) |
Total long-term debt | 11,766.8 | 11,800.9 |
Term Loan Facility (due February 17, 2024) | ||
Debt Instrument [Line Items] | ||
Term Loan Facility (due February 17, 2024) | 6,340.3 | 6,388.7 |
2017 4.25% Senior Notes (due May 15, 2024) | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 1,500 | 1,500 |
Stated interest rate (as a percent) | 4.25% | |
2015 4.625% Senior Notes (due January 15, 2022) | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 1,250 | 1,250 |
Stated interest rate (as a percent) | 4.625% | |
2017 5.00% Senior Notes (due October 15, 2025) | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 2,800 | $ 2,800 |
Stated interest rate (as a percent) | 5.00% |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facility - Additional Information (Details) - Revolving Credit Facility $ in Millions | Sep. 30, 2018USD ($) |
Line of Credit Facility [Line Items] | |
Amount outstanding under credit facility | $ 0 |
Letter of credit sublimit as part of revolving credit facility | 125 |
Letters of credit issued against credit facility | 4.6 |
Remaining borrowing capacity | $ 495.4 |
Long-Term Debt - Schedule of Fa
Long-Term Debt - Schedule of Fair Value Measurement (Details) - USD ($) $ in Billions | Sep. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Fair value of our variable term debt and senior notes | $ 11.7 | $ 12 |
Principal carrying amount of our variable term debt and senior notes | $ 11.9 | $ 11.9 |
Long-Term Debt - Schedule of In
Long-Term Debt - Schedule of Interest Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |||||
Debt | $ 125.3 | $ 131.2 | $ 375.5 | $ 350.1 | |
Capital lease obligations | 6.2 | 5.4 | 17.7 | 15.4 | |
Amortization of deferred financing costs and debt issuance discount | 7.4 | 8.5 | 21.9 | 25.2 | |
Interest income | (4) | (9.1) | (10.3) | (15.3) | |
Interest expense, net | 134.9 | $ 136 | $ 404.8 | $ 375.4 | |
Accounting Standards Update 2017-12 | |||||
Debt Disclosure [Abstract] | |||||
Interest expense, net | $ (15.9) | $ (39.4) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 27.00% | 13.40% | 15.40% | 15.30% |
Effective income tax rate reconciliation, stock option exercises | 0.90% | 6.80% | 6.90% | 4.50% |
Equity - Additional Information
Equity - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2018shares | |
Partnership Exchangeable Units | |
Stockholders Equity [Line Items] | |
BKW reorganization into Partnership, Shares | 165,333 |
Equity - Summary of Changes in
Equity - Summary of Changes in the Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | $ 4,561 | |||
Foreign currency translation adjustment | $ 147 | $ 423 | (325.4) | $ 884.2 |
Amounts reclassified to earnings of cash flow hedges, net of tax | 7.4 | 6.9 | 13.6 | 17.9 |
Pension and post-retirement benefit plans, net of tax | 0.1 | $ (0.2) | 0.3 | $ 0.1 |
Ending balances | 4,394.8 | 4,394.8 | ||
Derivatives | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | 176.8 | |||
Net change in fair value of derivatives, net of tax | 84.9 | |||
Amounts reclassified to earnings of cash flow hedges, net of tax | 13.6 | |||
Ending balances | 275.3 | 275.3 | ||
Pensions | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | (28.8) | |||
Pension and post-retirement benefit plans, net of tax | 0.3 | |||
Ending balances | (28.5) | (28.5) | ||
Foreign Currency Translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | (1,032.3) | |||
Foreign currency translation adjustment | (325.4) | |||
Ending balances | (1,357.7) | (1,357.7) | ||
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balances | (884.3) | |||
Foreign currency translation adjustment | (325.4) | |||
Net change in fair value of derivatives, net of tax | 84.9 | |||
Amounts reclassified to earnings of cash flow hedges, net of tax | 13.6 | |||
Pension and post-retirement benefit plans, net of tax | 0.3 | |||
Ending balances | $ (1,110.9) | $ (1,110.9) |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2018EUR (€) | Aug. 31, 2018USD ($) | Jun. 30, 2017CAD ($) | |
Maximum | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional value | $ 143,000,000 | |||||
Interest expense, net | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Amount of pre-tax losses in AOCI expect to be reclassified into interest expense | (12,300,000) | |||||
Interest rate swaps | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional value | 3,500,000,000 | $ 2,500,000,000 | ||||
Interest rate swaps | Interest expense, net | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Net unrealized loss remaining in AOCI | $ 84,600,000 | |||||
Cross Currency Interest Rate Contract | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional value | $ 5,000,000,000 | |||||
Cash received on hedge | 763,500,000 | |||||
Net unrealized gains as of termination date | 533,400,000 | |||||
Cross Currency Interest Rate Contract | Fixed Income Interest Rate | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional value | $ 5,000,000,000 | $ 400,000,000 | $ 6,753,500,000 | |||
Cross Currency Interest Rate Contract | Fixed Income Interest Rate | Hedge Funds | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Notional value | $ 1,200,000,000 | € 1,107,800,000 |
Derivative Instruments - Quanti
Derivative Instruments - Quantitative Disclosures of Derivative Instruments Including Estimated Fair Values (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Interest rate swaps | Derivatives designated as cash flow hedges | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain or (Loss) Recognized in Other Comprehensive Income (Loss) | $ 22 | $ (0.1) | $ 46.4 | $ (20.5) |
Forward-currency contracts | Derivatives designated as cash flow hedges | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain or (Loss) Recognized in Other Comprehensive Income (Loss) | (5.5) | (5.2) | 7.8 | (10.7) |
Cross-currency rate swaps | Derivatives designated as net investment hedges | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain or (Loss) Recognized in Other Comprehensive Income (Loss) | (83) | (171.5) | 70.9 | (349.8) |
Interest expense, net | Interest rate swaps | Derivatives designated as cash flow hedges | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain or (Loss) Reclassified from AOCI into Earnings | (4.8) | (8.2) | (15.9) | (23.1) |
Interest expense, net | Cross-currency rate swaps | Derivatives designated as net investment hedges | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) | 15.9 | 0 | 39.4 | 0 |
Cost of sales | Forward-currency contracts | Derivatives designated as cash flow hedges | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain or (Loss) Reclassified from AOCI into Earnings | $ (1.7) | $ (1.2) | $ 0.9 | $ (1.1) |
Derivative Instruments - Summar
Derivative Instruments - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives assets | $ 13.8 | $ 0.5 |
Derivatives liabilities | 368.7 | 503.6 |
Derivatives designated as cash flow hedges | Interest rate | Other assets, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives assets | 11 | 0 |
Derivatives designated as cash flow hedges | Interest rate | Other liabilities, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives liabilities | 0 | 42.1 |
Derivatives designated as cash flow hedges | Foreign currency | Prepaids and other current assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives assets | 2.8 | 0.5 |
Derivatives designated as cash flow hedges | Foreign currency | Other accrued liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives liabilities | 0.6 | 5.1 |
Derivatives designated as net investment hedges | Foreign currency | Other liabilities, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives liabilities | $ 368.1 | $ 456.4 |
Other Operating Expenses (Inc_3
Other Operating Expenses (Income), net - Other Operating Expenses (Income), Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | ||||
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings | $ 7.5 | $ 3.4 | $ 17.2 | $ 14.9 |
Litigation settlements (gains) and reserves, net | 5.1 | 0.6 | (0.6) | 1.7 |
Net losses (gains) on foreign exchange | (3.1) | 17.7 | (19.3) | 64.9 |
Other, net | 16.6 | (0.2) | 12.1 | 0.6 |
Other operating expenses (income), net | $ 26.1 | $ 21.5 | $ 9.4 | $ 82.1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - plaintiff | Oct. 06, 2017 | Jun. 19, 2017 |
Pending litigation | ||
Loss Contingencies [Line Items] | ||
Number of plaintiffs | 2 | 2 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2018SegmentBrand | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |
Number of brands | Brand | 3 |
Tim Hortons Burger King And Popeyes Brand | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |
Number of operating segments | 3 |
Number of reportable segments | 3 |
Segment Reporting - Revenues by
Segment Reporting - Revenues by Operating Segment and Country (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 1,375.3 | $ 1,208.6 | $ 3,972.5 | $ 3,341.9 |
Canada | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 776.6 | 748.7 | 2,214.3 | 2,093.6 |
United States | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 447.4 | 310.5 | 1,318.9 | 856.1 |
Other | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 151.3 | 149.4 | 439.3 | 392.2 |
Tim Hortons brand | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 853.9 | 827 | 2,440.4 | 2,332.9 |
Burger King brand | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 416.4 | 313.6 | 1,224.4 | 874.3 |
Popeyes brand | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 105 | $ 68 | 307.7 | $ 134.7 |
Amounts Under Previous Standards | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 1,182 | 3,398.1 | ||
Amounts Under Previous Standards | Tim Hortons brand | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 796.5 | 2,278.6 | ||
Amounts Under Previous Standards | Burger King brand | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 315.5 | 914.5 | ||
Amounts Under Previous Standards | Popeyes brand | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 70 | $ 205 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Income to Net Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Adjusted EBITDA | $ 571.4 | $ 565.1 | $ 1,631.3 | $ 1,539.5 |
Impact of equity method investments | (3.8) | (4.1) | (16.9) | (8.9) |
Other operating expenses (income), net | 26.1 | 21.5 | 9.4 | 82.1 |
EBITDA | 522.2 | 525.5 | 1,538 | 1,364.8 |
Depreciation and amortization | 45 | 46.2 | 137.5 | 134.9 |
Income from operations | 477.2 | 479.3 | 1,400.5 | 1,229.9 |
Interest expense, net | 134.9 | 136 | 404.8 | 375.4 |
Loss on early extinguishment of debt | 0 | 58.2 | 0 | 78.6 |
Income tax expense | 92.5 | 38.3 | 152.9 | 119 |
Net income | 249.8 | 246.8 | 842.8 | 656.9 |
Popeyes Acquisition | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
PLK Transaction costs | 0 | 6.9 | 9.7 | 49.8 |
Unallocated Management G&A | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Share-based compensation and non-cash incentive compensation expense | 13.8 | 12.5 | 44.6 | 42.9 |
Corporate restructuring and tax advisory fees | 5.5 | 0 | 19 | 0 |
Office centralization and relocation costs | 4.1 | 0 | 16.5 | 0 |
Impact of equity method investments | (0.3) | (1.3) | (5.9) | (0.1) |
Other operating expenses (income), net | 26.1 | 21.5 | 9.4 | 82.1 |
Tim Hortons brand | Operating Segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Adjusted EBITDA | 298.9 | 294.4 | 829.6 | 831.7 |
Burger King brand | Operating Segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Adjusted EBITDA | 231 | 233.9 | 681.5 | 637.8 |
Popeyes brand | Operating Segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Adjusted EBITDA | 41.5 | $ 36.8 | 120.2 | $ 70 |
Amounts Under Previous Standards | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Adjusted EBITDA | 575.7 | 1,645.1 | ||
Impact of equity method investments | (4.9) | (21.6) | ||
Other operating expenses (income), net | 26.2 | 9.5 | ||
EBITDA | 527.7 | 1,556.6 | ||
Depreciation and amortization | 44.8 | 137.1 | ||
Income from operations | 482.9 | 1,419.5 | ||
Interest expense, net | 134.2 | 405.3 | ||
Loss on early extinguishment of debt | 0 | 0 | ||
Income tax expense | 93.4 | 157 | ||
Net income | 255.3 | 857.2 | ||
Amounts Under Previous Standards | Popeyes Acquisition | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
PLK Transaction costs | 0 | 9.7 | ||
Amounts Under Previous Standards | Unallocated Management G&A | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Share-based compensation and non-cash incentive compensation expense | 13.6 | 44.4 | ||
Corporate restructuring and tax advisory fees | 5.5 | 19 | ||
Office centralization and relocation costs | 4.1 | 16.5 | ||
Impact of equity method investments | (1.4) | (10.6) | ||
Other operating expenses (income), net | 26.2 | 9.5 | ||
Amounts Under Previous Standards | Tim Hortons brand | Operating Segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Adjusted EBITDA | 294.1 | 833.2 | ||
Amounts Under Previous Standards | Burger King brand | Operating Segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Adjusted EBITDA | 237.6 | 684.6 | ||
Amounts Under Previous Standards | Popeyes brand | Operating Segments | ||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||
Adjusted EBITDA | $ 44 | $ 127.3 |
Supplemental Financial Inform_3
Supplemental Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||||
Cash and cash equivalents | $ 1,113 | $ 1,097.4 | $ 3,593.2 | $ 1,435.8 |
Accounts and notes receivable, net | 481.4 | 488.8 | ||
Inventories, net | 91.8 | 78 | ||
Prepaids and other current assets | 48.7 | 85.4 | ||
Total current assets | 1,734.9 | 1,749.6 | ||
Property and equipment, net | 2,054.1 | 2,133.3 | ||
Intangible assets, net | 10,821 | 11,062.2 | ||
Goodwill | 5,680 | 5,782.3 | ||
Net investment in property leased to franchisees | 58 | 71.3 | ||
Intercompany receivable | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Other assets, net | 637.7 | 425.2 | ||
Total assets | 20,985.7 | 21,223.9 | ||
Current liabilities: | ||||
Accounts and drafts payable | 467 | 496.2 | ||
Other accrued liabilities | 678.4 | 865.7 | ||
Gift card liability | 95.3 | 214.9 | ||
Current portion of long term debt and capital leases | 79.6 | 78.2 | ||
Total current liabilities | 1,320.3 | 1,655 | ||
Term debt, net of current portion | 11,766.8 | 11,800.9 | ||
Capital leases, net of current portion | 240.6 | 243.8 | ||
Other liabilities, net | 1,738.5 | 1,455.1 | ||
Payables to affiliates | 0 | 0 | ||
Deferred income taxes, net | 1,524.7 | 1,508.1 | ||
Total liabilities | 16,590.9 | 16,662.9 | ||
Partners’ capital: | ||||
Partnership exchangeable units | 1,248.2 | |||
Common shares | 0 | 0 | ||
Retained Earnings | 0 | 0 | ||
Accumulated other comprehensive income (loss) | (1,110.9) | (884.3) | ||
Total Partners’ capital | 4,392.3 | 4,559.6 | ||
Noncontrolling interests | 2.5 | 1.4 | ||
Total equity | 4,394.8 | 4,561 | ||
Total liabilities and equity | 20,985.7 | 21,223.9 | ||
Class A common units | ||||
Partners’ capital: | ||||
Class A common units | 4,255 | 4,167.5 | ||
Total equity | 4,255 | 4,167.5 | ||
Partnership exchangeable units | ||||
Partners’ capital: | ||||
Partnership exchangeable units | 1,248.2 | 1,276.4 | ||
Total equity | 1,248.2 | 1,276.4 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | 0 | 0 |
Accounts and notes receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Prepaids and other current assets | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Net investment in property leased to franchisees | 0 | 0 | ||
Intercompany receivable | (210.9) | (96.9) | ||
Investment in subsidiaries | (4,394.8) | (4,561) | ||
Other assets, net | 0 | 0 | ||
Total assets | (4,605.7) | (4,657.9) | ||
Current liabilities: | ||||
Accounts and drafts payable | 0 | 0 | ||
Other accrued liabilities | 0 | 0 | ||
Gift card liability | 0 | 0 | ||
Current portion of long term debt and capital leases | 0 | 0 | ||
Total current liabilities | 0 | 0 | ||
Term debt, net of current portion | 0 | 0 | ||
Capital leases, net of current portion | 0 | 0 | ||
Other liabilities, net | 0 | 0 | ||
Payables to affiliates | (210.9) | (96.9) | ||
Deferred income taxes, net | 0 | 0 | ||
Total liabilities | (210.9) | (96.9) | ||
Partners’ capital: | ||||
Common shares | (3,614.5) | (3,515.7) | ||
Retained Earnings | (1,888.7) | (1,928.2) | ||
Accumulated other comprehensive income (loss) | 1,110.9 | 884.3 | ||
Total Partners’ capital | (4,392.3) | (4,559.6) | ||
Noncontrolling interests | (2.5) | (1.4) | ||
Total equity | (4,394.8) | (4,561) | ||
Total liabilities and equity | (4,605.7) | (4,657.9) | ||
Eliminations | Class A common units | ||||
Partners’ capital: | ||||
Class A common units | 0 | 0 | ||
Eliminations | Partnership exchangeable units | ||||
Partners’ capital: | ||||
Partnership exchangeable units | 0 | 0 | ||
Consolidated Borrowers | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 1,113 | 1,097.4 | 3,593.2 | 1,435.8 |
Accounts and notes receivable, net | 481.4 | 488.8 | ||
Inventories, net | 91.8 | 78 | ||
Prepaids and other current assets | 48.7 | 85.4 | ||
Total current assets | 1,734.9 | 1,749.6 | ||
Property and equipment, net | 2,054.1 | 2,133.3 | ||
Intangible assets, net | 10,821 | 11,062.2 | ||
Goodwill | 5,680 | 5,782.3 | ||
Net investment in property leased to franchisees | 58 | 71.3 | ||
Intercompany receivable | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Other assets, net | 637.7 | 425.2 | ||
Total assets | 20,985.7 | 21,223.9 | ||
Current liabilities: | ||||
Accounts and drafts payable | 467 | 496.2 | ||
Other accrued liabilities | 467.5 | 768.8 | ||
Gift card liability | 95.3 | 214.9 | ||
Current portion of long term debt and capital leases | 79.6 | 78.2 | ||
Total current liabilities | 1,109.4 | 1,558.1 | ||
Term debt, net of current portion | 11,766.8 | 11,800.9 | ||
Capital leases, net of current portion | 240.6 | 243.8 | ||
Other liabilities, net | 1,738.5 | 1,455.1 | ||
Payables to affiliates | 210.9 | 96.9 | ||
Deferred income taxes, net | 1,524.7 | 1,508.1 | ||
Total liabilities | 16,590.9 | 16,662.9 | ||
Partners’ capital: | ||||
Common shares | 3,614.5 | 3,515.7 | ||
Retained Earnings | 1,888.7 | 1,928.2 | ||
Accumulated other comprehensive income (loss) | (1,110.9) | (884.3) | ||
Total Partners’ capital | 4,392.3 | 4,559.6 | ||
Noncontrolling interests | 2.5 | 1.4 | ||
Total equity | 4,394.8 | 4,561 | ||
Total liabilities and equity | 20,985.7 | 21,223.9 | ||
Consolidated Borrowers | Reportable Legal Entities | Class A common units | ||||
Partners’ capital: | ||||
Class A common units | 0 | 0 | ||
Consolidated Borrowers | Reportable Legal Entities | Partnership exchangeable units | ||||
Partners’ capital: | ||||
Partnership exchangeable units | 0 | 0 | ||
RBILP | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 |
Accounts and notes receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Prepaids and other current assets | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Net investment in property leased to franchisees | 0 | 0 | ||
Intercompany receivable | 210.9 | 96.9 | ||
Investment in subsidiaries | 4,394.8 | 4,561 | ||
Other assets, net | 0 | 0 | ||
Total assets | 4,605.7 | 4,657.9 | ||
Current liabilities: | ||||
Accounts and drafts payable | 0 | 0 | ||
Other accrued liabilities | 210.9 | 96.9 | ||
Gift card liability | 0 | 0 | ||
Current portion of long term debt and capital leases | 0 | 0 | ||
Total current liabilities | 210.9 | 96.9 | ||
Term debt, net of current portion | 0 | 0 | ||
Capital leases, net of current portion | 0 | 0 | ||
Other liabilities, net | 0 | 0 | ||
Payables to affiliates | 0 | 0 | ||
Deferred income taxes, net | 0 | 0 | ||
Total liabilities | 210.9 | 96.9 | ||
Partners’ capital: | ||||
Common shares | 0 | 0 | ||
Retained Earnings | 0 | 0 | ||
Accumulated other comprehensive income (loss) | (1,110.9) | (884.3) | ||
Total Partners’ capital | 4,392.3 | 4,559.6 | ||
Noncontrolling interests | 2.5 | 1.4 | ||
Total equity | 4,394.8 | 4,561 | ||
Total liabilities and equity | 4,605.7 | 4,657.9 | ||
RBILP | Reportable Legal Entities | Class A common units | ||||
Partners’ capital: | ||||
Class A common units | 4,255 | 4,167.5 | ||
RBILP | Reportable Legal Entities | Partnership exchangeable units | ||||
Partners’ capital: | ||||
Partnership exchangeable units | $ 1,248.2 | $ 1,276.4 |
Supplemental Financial Inform_4
Supplemental Financial Information - Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Franchise and property revenues | $ 766.2 | $ 577 | $ 2,229.4 | $ 1,557.8 |
Revenues | 1,375.3 | 1,208.6 | 3,972.5 | 3,341.9 |
Operating costs and expenses: | ||||
Cost of sales | 469.9 | 493.3 | 1,347.9 | 1,376.9 |
Franchise and property expenses | 107.6 | 118.5 | 314.4 | 343.2 |
Selling, general and administrative expenses | 298.3 | 100.1 | 917.2 | 318.7 |
(Income) loss from equity method investments | (3.8) | (4.1) | (16.9) | (8.9) |
Other operating expenses (income), net | 26.1 | 21.5 | 9.4 | 82.1 |
Total operating costs and expenses | 898.1 | 729.3 | 2,572 | 2,112 |
Income from operations | 477.2 | 479.3 | 1,400.5 | 1,229.9 |
Interest expense, net | 134.9 | 136 | 404.8 | 375.4 |
Loss on early extinguishment of debt | 0 | 58.2 | 0 | 78.6 |
Income before income taxes | 342.3 | 285.1 | 995.7 | 775.9 |
Income tax expense | 92.5 | 38.3 | 152.9 | 119 |
Net income | 249.8 | 246.8 | 842.8 | 656.9 |
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 |
Net income | 249.8 | 246.8 | 842.8 | 656.9 |
Comprehensive income (loss) attributable to noncontrolling interests | 0.1 | 0.3 | 0.5 | 1.1 |
Partnership preferred unit distributions | 0 | 67.5 | 0 | 202.5 |
Net income attributable to common unitholders | 249.7 | 179 | 842.3 | 453.3 |
Comprehensive income (loss) | 345.6 | 546.5 | 616.2 | 1,193.6 |
Eliminations | ||||
Revenues: | ||||
Franchise and property revenues | 0 | 0 | 0 | 0 |
Revenues | 0 | 0 | 0 | |
Operating costs and expenses: | ||||
Cost of sales | 0 | 0 | 0 | 0 |
Franchise and property expenses | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 | 0 | 0 |
(Income) loss from equity method investments | 0 | 0 | 0 | 0 |
Other operating expenses (income), net | 0 | 0 | 0 | 0 |
Total operating costs and expenses | 0 | 0 | 0 | |
Income from operations | 0 | 0 | 0 | |
Interest expense, net | 0 | 0 | 0 | 0 |
Loss on early extinguishment of debt | 0 | 0 | ||
Income before income taxes | 0 | 0 | 0 | |
Income tax expense | 0 | 0 | 0 | 0 |
Net income | 0 | 0 | 0 | |
Equity in earnings of consolidated subsidiaries | (249.8) | (246.8) | (842.8) | (656.9) |
Net income | (249.8) | (246.8) | (842.8) | (656.9) |
Comprehensive income (loss) attributable to noncontrolling interests | (0.1) | (0.3) | (0.5) | (1.1) |
Partnership preferred unit distributions | 0 | 0 | ||
Net income attributable to common unitholders | (249.7) | (246.5) | (842.3) | (655.8) |
Comprehensive income (loss) | (345.6) | (546.5) | (616.2) | (1,193.6) |
Consolidated Borrowers | Reportable Legal Entities | ||||
Revenues: | ||||
Franchise and property revenues | 766.2 | 577 | 2,229.4 | 1,557.8 |
Revenues | 1,375.3 | 1,208.6 | 3,972.5 | 3,341.9 |
Operating costs and expenses: | ||||
Cost of sales | 469.9 | 493.3 | 1,347.9 | 1,376.9 |
Franchise and property expenses | 107.6 | 118.5 | 314.4 | 343.2 |
Selling, general and administrative expenses | 298.3 | 100.1 | 917.2 | 318.7 |
(Income) loss from equity method investments | (3.8) | (4.1) | (16.9) | (8.9) |
Other operating expenses (income), net | 26.1 | 21.5 | 9.4 | 82.1 |
Total operating costs and expenses | 898.1 | 729.3 | 2,572 | 2,112 |
Income from operations | 477.2 | 479.3 | 1,400.5 | 1,229.9 |
Interest expense, net | 134.9 | 136 | 404.8 | 375.4 |
Loss on early extinguishment of debt | 58.2 | 78.6 | ||
Income before income taxes | 342.3 | 285.1 | 995.7 | 775.9 |
Income tax expense | 92.5 | 38.3 | 152.9 | 119 |
Net income | 249.8 | 246.8 | 842.8 | 656.9 |
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 |
Net income | 249.8 | 246.8 | 842.8 | 656.9 |
Comprehensive income (loss) attributable to noncontrolling interests | 0.1 | 0.3 | 0.5 | 1.1 |
Partnership preferred unit distributions | 0 | 0 | ||
Net income attributable to common unitholders | 249.7 | 246.5 | 842.3 | 655.8 |
Comprehensive income (loss) | 345.6 | 546.5 | 616.2 | 1,193.6 |
RBILP | Reportable Legal Entities | ||||
Revenues: | ||||
Franchise and property revenues | 0 | 0 | 0 | 0 |
Revenues | 0 | 0 | 0 | |
Operating costs and expenses: | ||||
Cost of sales | 0 | 0 | 0 | 0 |
Franchise and property expenses | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 | 0 | 0 |
(Income) loss from equity method investments | 0 | 0 | 0 | 0 |
Other operating expenses (income), net | 0 | 0 | 0 | 0 |
Total operating costs and expenses | 0 | 0 | 0 | |
Income from operations | 0 | 0 | 0 | |
Interest expense, net | 0 | 0 | 0 | 0 |
Loss on early extinguishment of debt | 0 | 0 | ||
Income before income taxes | 0 | 0 | 0 | |
Income tax expense | 0 | 0 | 0 | 0 |
Net income | 0 | 0 | 0 | |
Equity in earnings of consolidated subsidiaries | 249.8 | 246.8 | 842.8 | 656.9 |
Net income | 249.8 | 246.8 | 842.8 | 656.9 |
Comprehensive income (loss) attributable to noncontrolling interests | 0.1 | 0.3 | 0.5 | 1.1 |
Partnership preferred unit distributions | 67.5 | 202.5 | ||
Net income attributable to common unitholders | 249.7 | 179 | 842.3 | 453.3 |
Comprehensive income (loss) | 345.6 | 546.5 | 616.2 | 1,193.6 |
Sales | ||||
Revenues: | ||||
Sales | 609.1 | 631.6 | 1,743.1 | 1,784.1 |
Sales | Eliminations | ||||
Revenues: | ||||
Sales | 0 | 0 | 0 | |
Sales | Consolidated Borrowers | Reportable Legal Entities | ||||
Revenues: | ||||
Sales | 609.1 | 631.6 | $ 1,743.1 | 1,784.1 |
Sales | RBILP | Reportable Legal Entities | ||||
Revenues: | ||||
Sales | $ 0 | $ 0 | $ 0 |
Supplemental Financial Inform_5
Supplemental Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||||
Net income | $ 249.8 | $ 246.8 | $ 842.8 | $ 656.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Equity in loss (earnings) of consolidated subsidiaries | 0 | 0 | 0 | 0 |
Depreciation and amortization | 137.5 | 134.9 | ||
Premiums paid and non-cash loss on extinguishment of debt | 0 | 75.9 | ||
Amortization of deferred financing costs and debt issuance discount | 7.4 | 8.5 | 21.9 | 25.2 |
(Income) loss from equity method investments | (3.8) | (4.1) | (16.9) | (8.9) |
Loss (gain) on remeasurement of foreign denominated transactions | (19.3) | 64.7 | ||
Net (gains) losses on derivatives | (24.4) | 23.1 | ||
Share-based compensation expense | 39.3 | 38 | ||
Deferred income taxes | 6.1 | (3.1) | ||
Other | 11.1 | 12.8 | ||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||||
Accounts and notes receivable | (0.3) | 0.3 | ||
Inventories and prepaids and other current assets | (16.3) | (1) | ||
Accounts and drafts payable | (24) | 6.8 | ||
Other accrued liabilities and gift card liability | (283.6) | (161.4) | ||
Other long-term assets and liabilities | (31.3) | (40) | ||
Net cash provided by operating activities | 642.6 | 824.2 | ||
Cash flows from investing activities: | ||||
Payments for property and equipment | (53.3) | (16.9) | ||
Proceeds from disposal of assets, restaurant closures, and refranchisings | 1.8 | 19.6 | ||
Net payment for purchase of Popeyes, net of cash acquired | 0 | (1,635.9) | ||
Return of investment on direct financing leases | 12.3 | 11.8 | ||
Settlement/sale of derivatives, net | 11.2 | 771.8 | ||
Other investing activities, net | 0.3 | (2.3) | ||
Net cash provided by (used for) investing activities | (27.7) | (851.9) | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of long-term debt | 0 | 4,350 | ||
Repayments of long-term debt and capital leases | (65.9) | (1,690) | ||
Payment of financing costs | 0 | (57) | ||
Distributions on Class A common, preferred and Partnership exchangeable units | (517.1) | (451.9) | ||
Payments in connection with repurchase of partnership preferred units | (60.1) | 0 | ||
Capital contribution from RBI Inc. | 52.9 | 17.5 | ||
Distributions from subsidiaries | 0 | 0 | ||
Other financing activities, net | 1.3 | (6.2) | ||
Net cash (used for) provided by financing activities | (588.9) | 2,162.4 | ||
Effect of exchange rates on cash and cash equivalents | (10.4) | 22.7 | ||
Increase (decrease) in cash and cash equivalents | 15.6 | 2,157.4 | ||
Cash and cash equivalents at beginning of period | 1,097.4 | 1,435.8 | ||
Cash and cash equivalents at end of period | 1,113 | 3,593.2 | 1,113 | 3,593.2 |
Eliminations | ||||
Cash flows from operating activities: | ||||
Net income | (249.8) | (246.8) | (842.8) | (656.9) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Equity in loss (earnings) of consolidated subsidiaries | 249.8 | 246.8 | 842.8 | 656.9 |
Depreciation and amortization | 0 | 0 | ||
Premiums paid and non-cash loss on extinguishment of debt | 0 | |||
Amortization of deferred financing costs and debt issuance discount | 0 | 0 | ||
(Income) loss from equity method investments | 0 | 0 | 0 | 0 |
Loss (gain) on remeasurement of foreign denominated transactions | 0 | 0 | ||
Net (gains) losses on derivatives | 0 | 0 | ||
Share-based compensation expense | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other | 0 | 0 | ||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||||
Accounts and notes receivable | 0 | 0 | ||
Inventories and prepaids and other current assets | 0 | 0 | ||
Accounts and drafts payable | 0 | 0 | ||
Other accrued liabilities and gift card liability | 0 | 0 | ||
Other long-term assets and liabilities | 0 | 0 | ||
Net cash provided by operating activities | 0 | 0 | ||
Cash flows from investing activities: | ||||
Payments for property and equipment | 0 | 0 | ||
Proceeds from disposal of assets, restaurant closures, and refranchisings | 0 | 0 | ||
Net payment for purchase of Popeyes, net of cash acquired | 0 | |||
Return of investment on direct financing leases | 0 | 0 | ||
Settlement/sale of derivatives, net | 0 | 0 | ||
Other investing activities, net | 0 | 0 | ||
Net cash provided by (used for) investing activities | 0 | 0 | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of long-term debt | 0 | |||
Repayments of long-term debt and capital leases | 0 | 0 | ||
Payment of financing costs | 0 | |||
Distributions on Class A common, preferred and Partnership exchangeable units | 0 | 0 | ||
Payments in connection with repurchase of partnership preferred units | 0 | |||
Capital contribution from RBI Inc. | 0 | 0 | ||
Distributions from subsidiaries | 0 | 0 | ||
Other financing activities, net | 0 | 0 | ||
Net cash (used for) provided by financing activities | 0 | 0 | ||
Effect of exchange rates on cash and cash equivalents | 0 | 0 | ||
Increase (decrease) in cash and cash equivalents | 0 | 0 | ||
Cash and cash equivalents at beginning of period | 0 | 0 | ||
Cash and cash equivalents at end of period | 0 | 0 | 0 | 0 |
Consolidated Borrowers | Reportable Legal Entities | ||||
Cash flows from operating activities: | ||||
Net income | 249.8 | 246.8 | 842.8 | 656.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Equity in loss (earnings) of consolidated subsidiaries | 0 | 0 | 0 | 0 |
Depreciation and amortization | 137.5 | 134.9 | ||
Premiums paid and non-cash loss on extinguishment of debt | 75.9 | |||
Amortization of deferred financing costs and debt issuance discount | 21.9 | 25.2 | ||
(Income) loss from equity method investments | (3.8) | (4.1) | (16.9) | (8.9) |
Loss (gain) on remeasurement of foreign denominated transactions | (19.3) | 64.7 | ||
Net (gains) losses on derivatives | (24.4) | 23.1 | ||
Share-based compensation expense | 39.3 | 38 | ||
Deferred income taxes | 6.1 | (3.1) | ||
Other | 11.1 | 12.8 | ||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||||
Accounts and notes receivable | (0.3) | 0.3 | ||
Inventories and prepaids and other current assets | (16.3) | (1) | ||
Accounts and drafts payable | (24) | 6.8 | ||
Other accrued liabilities and gift card liability | (283.6) | (161.4) | ||
Other long-term assets and liabilities | (31.3) | (40) | ||
Net cash provided by operating activities | 642.6 | 824.2 | ||
Cash flows from investing activities: | ||||
Payments for property and equipment | (53.3) | (16.9) | ||
Proceeds from disposal of assets, restaurant closures, and refranchisings | 1.8 | 19.6 | ||
Net payment for purchase of Popeyes, net of cash acquired | (1,635.9) | |||
Return of investment on direct financing leases | 12.3 | 11.8 | ||
Settlement/sale of derivatives, net | 11.2 | 771.8 | ||
Other investing activities, net | 0.3 | (2.3) | ||
Net cash provided by (used for) investing activities | (27.7) | (851.9) | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of long-term debt | 4,350 | |||
Repayments of long-term debt and capital leases | (65.9) | (1,690) | ||
Payment of financing costs | (57) | |||
Distributions on Class A common, preferred and Partnership exchangeable units | 0 | 0 | ||
Payments in connection with repurchase of partnership preferred units | 0 | |||
Capital contribution from RBI Inc. | 52.9 | 17.5 | ||
Distributions from subsidiaries | (577.2) | (451.9) | ||
Other financing activities, net | 1.3 | (6.2) | ||
Net cash (used for) provided by financing activities | (588.9) | 2,162.4 | ||
Effect of exchange rates on cash and cash equivalents | (10.4) | 22.7 | ||
Increase (decrease) in cash and cash equivalents | 15.6 | 2,157.4 | ||
Cash and cash equivalents at beginning of period | 1,097.4 | 1,435.8 | ||
Cash and cash equivalents at end of period | 1,113 | 3,593.2 | 1,113 | 3,593.2 |
RBILP | Reportable Legal Entities | ||||
Cash flows from operating activities: | ||||
Net income | 249.8 | 246.8 | 842.8 | 656.9 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Equity in loss (earnings) of consolidated subsidiaries | (249.8) | (246.8) | (842.8) | (656.9) |
Depreciation and amortization | 0 | 0 | ||
Premiums paid and non-cash loss on extinguishment of debt | 0 | |||
Amortization of deferred financing costs and debt issuance discount | 0 | 0 | ||
(Income) loss from equity method investments | 0 | 0 | 0 | 0 |
Loss (gain) on remeasurement of foreign denominated transactions | 0 | 0 | ||
Net (gains) losses on derivatives | 0 | 0 | ||
Share-based compensation expense | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Other | 0 | 0 | ||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||||
Accounts and notes receivable | 0 | 0 | ||
Inventories and prepaids and other current assets | 0 | 0 | ||
Accounts and drafts payable | 0 | 0 | ||
Other accrued liabilities and gift card liability | 0 | 0 | ||
Other long-term assets and liabilities | 0 | 0 | ||
Net cash provided by operating activities | 0 | 0 | ||
Cash flows from investing activities: | ||||
Payments for property and equipment | 0 | 0 | ||
Proceeds from disposal of assets, restaurant closures, and refranchisings | 0 | 0 | ||
Net payment for purchase of Popeyes, net of cash acquired | 0 | |||
Return of investment on direct financing leases | 0 | 0 | ||
Settlement/sale of derivatives, net | 0 | 0 | ||
Other investing activities, net | 0 | 0 | ||
Net cash provided by (used for) investing activities | 0 | 0 | ||
Cash flows from financing activities: | ||||
Proceeds from issuance of long-term debt | 0 | |||
Repayments of long-term debt and capital leases | 0 | 0 | ||
Payment of financing costs | 0 | |||
Distributions on Class A common, preferred and Partnership exchangeable units | (517.1) | (451.9) | ||
Payments in connection with repurchase of partnership preferred units | (60.1) | |||
Capital contribution from RBI Inc. | 0 | 0 | ||
Distributions from subsidiaries | 577.2 | 451.9 | ||
Other financing activities, net | 0 | 0 | ||
Net cash (used for) provided by financing activities | 0 | 0 | ||
Effect of exchange rates on cash and cash equivalents | 0 | 0 | ||
Increase (decrease) in cash and cash equivalents | 0 | 0 | ||
Cash and cash equivalents at beginning of period | 0 | 0 | ||
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event - $ / shares | Oct. 01, 2018 | Nov. 06, 2018 | Oct. 24, 2018 |
Subsequent Event [Line Items] | |||
Cash dividend paid per common share (in usd per share) | $ 0.45 | ||
Cash dividend declared by board (in usd per share) | $ 0.45 | ||
Partnership exchangeable units | Restaurant Brands International Limited Partnership | |||
Subsequent Event [Line Items] | |||
Cash dividend paid per exchangeable unit (in usd per share) | $ 0.45 | $ 0.45 | |
Scenario, Forecast | Restaurant Brands International Limited Partnership | |||
Subsequent Event [Line Items] | |||
Partnership units, exchange notice, number of exchangeable units (in shares) | 11,106,925 | ||
Scenario, Forecast | Partnership exchangeable units | Restaurant Brands International Limited Partnership | |||
Subsequent Event [Line Items] | |||
Partners' capital units, treasury units repurchased (in shares) | 10,000,000 | ||
Partnership exchangeable units, number converted (in shares) | 1,106,925 |