Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36787 | |
Entity Registrant Name | RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP | |
Entity Incorporation, State or Country Code | Z4 | |
Entity Tax Identification Number | 98-1206431 | |
Entity Address, Address Line One | 130 King Street West, Suite 300 | |
Entity Address, Postal Zip Code | M5X 1E1 | |
Entity Address, City or Town | Toronto, | |
Entity Address, State or Province | ON | |
City Area Code | 905 | |
Local Phone Number | 339-6011 | |
Title of 12(g) Security | Class B exchangeable limited partnership units | |
Trading Symbol | QSP | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001618755 | |
Current Fiscal Year End Date | --12-31 | |
Partnership exchangeable units | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 133,597,764 | |
Class A common units | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 202,006,067 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||||||||
Cash and cash equivalents | $ 1,310 | $ 1,178 | $ 946 | $ 1,087 | ||||
Accounts and notes receivable, net of allowance of $35 and $36, respectively | 692 | 614 | ||||||
Inventories, net | 160 | 133 | ||||||
Prepaids and other current assets | 221 | 123 | ||||||
Total current assets | 2,383 | 2,048 | ||||||
Property and equipment, net of accumulated depreciation and amortization of $1,140 and $1,061, respectively | 1,904 | 1,950 | ||||||
Operating lease assets, net | 1,060 | 1,082 | ||||||
Intangible assets, net | 10,946 | 10,991 | ||||||
Goodwill | 5,681 | 5,688 | ||||||
Other assets, net | 1,103 | 987 | ||||||
Total assets | 23,077 | 22,746 | ||||||
Current liabilities: | ||||||||
Accounts and drafts payable | 693 | 758 | ||||||
Other accrued liabilities | 1,132 | 1,001 | ||||||
Gift card liability | 159 | 230 | ||||||
Current portion of long-term debt and finance leases | 87 | 127 | ||||||
Total current liabilities | 2,071 | 2,116 | ||||||
Long-term debt, net of current portion | 12,862 | 12,839 | ||||||
Finance leases, net of current portion | 305 | 311 | ||||||
Operating lease liabilities, net of current portion | 1,003 | 1,027 | ||||||
Other liabilities, net | 864 | 872 | ||||||
Deferred income taxes, net | 1,308 | 1,313 | ||||||
Total liabilities | 18,413 | 18,478 | ||||||
Partners’ capital: | ||||||||
Accumulated other comprehensive income (loss) | (871) | (973) | ||||||
Total Partners’ capital | 4,662 | 4,266 | ||||||
Noncontrolling interests | 2 | 2 | ||||||
Total equity | 4,664 | $ 4,678 | $ 4,311 | 4,268 | $ 4,039 | $ 3,909 | $ 3,961 | $ 3,853 |
Total liabilities and equity | 23,077 | 22,746 | ||||||
Class A common units | ||||||||
Partners’ capital: | ||||||||
Class A common units; 202,006,067 issued and outstanding at September 30, 2023 and December 31, 2022 | 9,584 | 8,735 | ||||||
Partnership exchangeable units | ||||||||
Partners’ capital: | ||||||||
Partnership exchangeable units; 133,597,764 issued and outstanding at September 30, 2023; 142,996,640 issued and outstanding at December 31, 2022 | $ (4,051) | $ (3,496) |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Financing receivable, allowance for credit loss, current | $ 35 | $ 36 |
Accumulated depreciation and amortization, property, plant, and equipment | $ 1,140 | $ 1,061 |
Class A common units | ||
Class A common units, issued (in shares) | 202,006,067 | 202,006,067 |
Class A common units, outstanding (in shares) | 202,006,067 | 202,006,067 |
Partnership exchangeable units | ||
Partnership exchangeable units, issued (in shares) | 133,597,764 | 142,996,640 |
Partnership exchangeable units, outstanding (in shares) | 133,597,764 | 142,996,640 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues: | ||||||||
Total revenues | $ 1,837 | $ 1,726 | $ 5,202 | $ 4,816 | ||||
Operating costs and expenses: | ||||||||
Cost of sales | 630 | 615 | 1,792 | 1,693 | ||||
Franchise and property expenses | 119 | 137 | 372 | 392 | ||||
Advertising expenses and other services | 326 | 276 | 909 | 782 | ||||
General and administrative expenses | 169 | 156 | 507 | 435 | ||||
(Income) loss from equity method investments | 1 | 8 | 19 | 30 | ||||
Other operating expenses (income), net | 10 | (27) | 20 | (68) | ||||
Total operating costs and expenses | 1,255 | 1,165 | 3,619 | 3,264 | ||||
Income from operations | 582 | 561 | 1,583 | 1,552 | ||||
Interest expense, net | 143 | 133 | 430 | 389 | ||||
Loss on early extinguishment of debt | 16 | 0 | 16 | 0 | ||||
Income before income taxes | 423 | 428 | 1,137 | 1,163 | ||||
Income tax expense (benefit) | 59 | (102) | 145 | 17 | ||||
Net income | 364 | $ 351 | $ 277 | 530 | $ 346 | $ 270 | 992 | 1,146 |
Net income attributable to noncontrolling interests | 1 | 1 | 3 | 3 | ||||
Net income attributable to common unitholders | 363 | 529 | 989 | 1,143 | ||||
Class A common units | ||||||||
Operating costs and expenses: | ||||||||
Net income attributable to common unitholders | $ 252 | $ 360 | $ 682 | $ 779 | ||||
Earnings per unit - basic and diluted | ||||||||
Earnings per unit, basic (in usd per share) | $ 1.25 | $ 1.78 | $ 3.38 | $ 3.86 | ||||
Earnings per unit, diluted (in usd per share) | $ 1.25 | $ 1.78 | $ 3.38 | $ 3.86 | ||||
Weighted average units outstanding - basic and diluted (in millions): | ||||||||
Weighted average number of unit outstanding, basic (in shares) | 202 | 202 | 202 | 202 | ||||
Weighted average number of units outstanding, diluted (in shares) | 202 | 202 | 202 | 202 | ||||
Partnership exchangeable units | ||||||||
Operating costs and expenses: | ||||||||
Net income attributable to common unitholders | $ 111 | $ 169 | $ 307 | $ 364 | ||||
Earnings per unit - basic and diluted | ||||||||
Earnings per unit, basic (in usd per share) | $ 0.80 | $ 1.18 | $ 2.18 | $ 2.53 | ||||
Earnings per unit, diluted (in usd per share) | $ 0.80 | $ 1.18 | $ 2.18 | $ 2.53 | ||||
Weighted average units outstanding - basic and diluted (in millions): | ||||||||
Weighted average number of unit outstanding, basic (in shares) | 139 | 143 | 141 | 144 | ||||
Weighted average number of units outstanding, diluted (in shares) | 139 | 143 | 141 | 144 | ||||
Sales | ||||||||
Revenues: | ||||||||
Total revenues | $ 771 | $ 759 | $ 2,183 | $ 2,076 | ||||
Franchise and property revenues | ||||||||
Revenues: | ||||||||
Total revenues | 753 | 698 | 2,163 | 1,989 | ||||
Advertising revenues and other services | ||||||||
Revenues: | ||||||||
Total revenues | $ 313 | $ 269 | $ 856 | $ 751 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 364 | $ 530 | $ 992 | $ 1,146 |
Foreign currency translation adjustment | (270) | (727) | (36) | (1,015) |
Net change in fair value of net investment hedges, net of tax of $4, $(87), $12 and $(100) | 182 | 384 | 67 | 575 |
Net change in fair value of cash flow hedges, net of tax of $(26), $(55), $(42) and $(145) | 71 | 150 | 114 | 394 |
Amounts reclassified to earnings of cash flow hedges, net of tax of $6, $(2), $17 and $(15) | (17) | 5 | (47) | 42 |
Gain (loss) recognized on other, net of tax of $0, $0, $0 and $0 | 2 | 1 | 4 | 3 |
Other comprehensive income (loss) | (32) | (187) | 102 | (1) |
Comprehensive income (loss) | 332 | 343 | 1,094 | 1,145 |
Comprehensive income (loss) attributable to noncontrolling interests | 1 | 1 | 3 | 3 |
Comprehensive income (loss) attributable to common unitholders | $ 331 | $ 342 | $ 1,091 | $ 1,142 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net change in fair value of net investment hedges, tax | $ 4 | $ (87) | $ 12 | $ (100) |
Net change in fair value of cash flow hedges, tax | (26) | (55) | (42) | (145) |
Amounts reclassified to earnings of cash flow hedges, tax | 6 | (2) | 17 | (15) |
Gain (loss) recognized on other, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Equity - USD ($) $ in Millions | Total | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Class A common units | Class A common units Common Stock | Partnership exchangeable units | Partnership exchangeable units Partnership Exchangeable Units |
Beginning balance Class A (in shares) at Dec. 31, 2021 | 202,006,067 | ||||||
Beginning balances at Dec. 31, 2021 | $ 3,853 | $ (1,024) | $ 3 | $ 8,421 | $ (3,547) | ||
Beginning balance partnership exchangeable unit (in shares) at Dec. 31, 2021 | 144,993,458 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Distributions declared on Class A common units | (167) | (167) | |||||
Distributions declared on partnership exchangeable units | (78) | $ (78) | |||||
Exchange of Partnership exchangeable units for RBI common shares | 0 | 84 | $ (84) | ||||
Exchange of Partnership exchangeable units for RBI common shares (in shares) | (1,525,900) | ||||||
Distribution to RBI for repurchase of RBI common shares | (161) | (161) | |||||
Capital contribution from RBI | 40 | 40 | |||||
Restaurant VIE contributions (distributions) | (1) | (1) | |||||
Net income | 270 | 1 | $ 183 | $ 86 | |||
Other comprehensive income (loss) | 205 | 205 | |||||
Ending balance Class A (in shares) at Mar. 31, 2022 | 202,006,067 | ||||||
Ending balances at Mar. 31, 2022 | 3,961 | (819) | 3 | $ 8,400 | $ (3,623) | ||
Ending balance partnership exchangeable units (in shares) at Mar. 31, 2022 | 143,467,558 | ||||||
Beginning balance Class A (in shares) at Dec. 31, 2021 | 202,006,067 | ||||||
Beginning balances at Dec. 31, 2021 | 3,853 | (1,024) | 3 | $ 8,421 | $ (3,547) | ||
Beginning balance partnership exchangeable unit (in shares) at Dec. 31, 2021 | 144,993,458 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,146 | ||||||
Other comprehensive income (loss) | (1) | ||||||
Ending balance Class A (in shares) at Sep. 30, 2022 | 202,006,067 | ||||||
Ending balances at Sep. 30, 2022 | 4,039 | (1,025) | 2 | $ 8,570 | $ (3,508) | ||
Ending balance partnership exchangeable units (in shares) at Sep. 30, 2022 | 143,298,599 | ||||||
Beginning balance Class A (in shares) at Mar. 31, 2022 | 202,006,067 | ||||||
Beginning balances at Mar. 31, 2022 | 3,961 | (819) | 3 | $ 8,400 | $ (3,623) | ||
Beginning balance partnership exchangeable unit (in shares) at Mar. 31, 2022 | 143,467,558 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Distributions declared on Class A common units | (166) | (166) | |||||
Distributions declared on partnership exchangeable units | (77) | $ (77) | |||||
Exchange of Partnership exchangeable units for RBI common shares | 0 | 8 | $ (8) | ||||
Exchange of Partnership exchangeable units for RBI common shares (in shares) | (151,154) | ||||||
Distribution to RBI for repurchase of RBI common shares | (165) | (165) | |||||
Capital contribution from RBI | 30 | 30 | |||||
Restaurant VIE contributions (distributions) | (1) | (1) | |||||
Net income | 346 | 1 | $ 236 | $ 109 | |||
Other comprehensive income (loss) | (19) | (19) | |||||
Ending balance Class A (in shares) at Jun. 30, 2022 | 202,006,067 | ||||||
Ending balances at Jun. 30, 2022 | 3,909 | (838) | 3 | $ 8,343 | $ (3,599) | ||
Ending balance partnership exchangeable units (in shares) at Jun. 30, 2022 | 143,316,404 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Distributions declared on Class A common units | (165) | (165) | |||||
Distributions declared on partnership exchangeable units | (77) | $ (77) | |||||
Exchange of Partnership exchangeable units for RBI common shares | 0 | 1 | $ (1) | ||||
Exchange of Partnership exchangeable units for RBI common shares (in shares) | (17,805) | ||||||
Capital contribution from RBI | 31 | 31 | |||||
Restaurant VIE contributions (distributions) | (2) | (2) | |||||
Net income | 530 | 1 | $ 360 | $ 169 | |||
Other comprehensive income (loss) | (187) | (187) | |||||
Ending balance Class A (in shares) at Sep. 30, 2022 | 202,006,067 | ||||||
Ending balances at Sep. 30, 2022 | 4,039 | (1,025) | 2 | $ 8,570 | $ (3,508) | ||
Ending balance partnership exchangeable units (in shares) at Sep. 30, 2022 | 143,298,599 | ||||||
Beginning balance Class A (in shares) at Dec. 31, 2022 | 202,006,067 | 202,006,067 | |||||
Beginning balances at Dec. 31, 2022 | 4,268 | (973) | 2 | $ 8,735 | $ (3,496) | ||
Beginning balance partnership exchangeable unit (in shares) at Dec. 31, 2022 | 142,996,640 | 142,996,640 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Distributions declared on Class A common units | (171) | (171) | |||||
Distributions declared on partnership exchangeable units | (77) | $ (77) | |||||
Exchange of Partnership exchangeable units for RBI common shares | 0 | 136 | $ (136) | ||||
Exchange of Partnership exchangeable units for RBI common shares (in shares) | (2,214,072) | ||||||
Capital contribution from RBI | 62 | 62 | |||||
Restaurant VIE contributions (distributions) | (1) | (1) | |||||
Net income | 277 | 1 | $ 189 | $ 87 | |||
Other comprehensive income (loss) | (47) | (47) | |||||
Ending balance Class A (in shares) at Mar. 31, 2023 | 202,006,067 | ||||||
Ending balances at Mar. 31, 2023 | 4,311 | (1,020) | 2 | $ 8,951 | $ (3,622) | ||
Ending balance partnership exchangeable units (in shares) at Mar. 31, 2023 | 140,782,568 | ||||||
Beginning balance Class A (in shares) at Dec. 31, 2022 | 202,006,067 | 202,006,067 | |||||
Beginning balances at Dec. 31, 2022 | 4,268 | (973) | 2 | $ 8,735 | $ (3,496) | ||
Beginning balance partnership exchangeable unit (in shares) at Dec. 31, 2022 | 142,996,640 | 142,996,640 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exchange of Partnership exchangeable units for RBI common shares (in shares) | (9,398,876) | ||||||
Net income | 992 | ||||||
Other comprehensive income (loss) | 102 | ||||||
Ending balance Class A (in shares) at Sep. 30, 2023 | 202,006,067 | 202,006,067 | |||||
Ending balances at Sep. 30, 2023 | 4,664 | (871) | 2 | $ 9,584 | $ (4,051) | ||
Ending balance partnership exchangeable units (in shares) at Sep. 30, 2023 | 133,597,764 | 133,597,764 | |||||
Beginning balance Class A (in shares) at Mar. 31, 2023 | 202,006,067 | ||||||
Beginning balances at Mar. 31, 2023 | 4,311 | (1,020) | 2 | $ 8,951 | $ (3,622) | ||
Beginning balance partnership exchangeable unit (in shares) at Mar. 31, 2023 | 140,782,568 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Distributions declared on Class A common units | (172) | (172) | |||||
Distributions declared on partnership exchangeable units | (77) | $ (77) | |||||
Exchange of Partnership exchangeable units for RBI common shares | 0 | 2 | $ (2) | ||||
Exchange of Partnership exchangeable units for RBI common shares (in shares) | (23,787) | ||||||
Capital contribution from RBI | 85 | 85 | |||||
Restaurant VIE contributions (distributions) | (1) | (1) | |||||
Net income | 351 | 1 | $ 241 | $ 109 | |||
Other comprehensive income (loss) | 181 | 181 | |||||
Ending balance Class A (in shares) at Jun. 30, 2023 | 202,006,067 | ||||||
Ending balances at Jun. 30, 2023 | 4,678 | (839) | 2 | $ 9,107 | $ (3,592) | ||
Ending balance partnership exchangeable units (in shares) at Jun. 30, 2023 | 140,758,781 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Distributions declared on Class A common units | (176) | (176) | |||||
Distributions declared on partnership exchangeable units | (74) | $ (74) | |||||
Exchange of Partnership exchangeable units for RBI common shares | 0 | 496 | $ (496) | ||||
Exchange of Partnership exchangeable units for RBI common shares (in shares) | (7,161,017) | ||||||
Distribution to RBI for repurchase of RBI common shares | (142) | (142) | |||||
Capital contribution from RBI | 47 | 47 | |||||
Restaurant VIE contributions (distributions) | (1) | (1) | |||||
Net income | 364 | 1 | $ 252 | $ 111 | |||
Other comprehensive income (loss) | (32) | (32) | |||||
Ending balance Class A (in shares) at Sep. 30, 2023 | 202,006,067 | 202,006,067 | |||||
Ending balances at Sep. 30, 2023 | $ 4,664 | $ (871) | $ 2 | $ 9,584 | $ (4,051) | ||
Ending balance partnership exchangeable units (in shares) at Sep. 30, 2023 | 133,597,764 | 133,597,764 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Class A common units | ||||||
Cash dividend declared (in usd per share) | $ 0.87 | $ 0.85 | $ 0.85 | $ 0.82 | $ 0.82 | $ 0.83 |
Partnership exchangeable units | ||||||
Cash dividend declared (in usd per share) | $ 0.55 | $ 0.55 | $ 0.55 | $ 0.54 | $ 0.54 | $ 0.54 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 992 | $ 1,146 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 142 | 143 |
Non-cash loss on early extinguishment of debt | 5 | 0 |
Amortization of deferred financing costs and debt issuance discount | 21 | 21 |
(Income) loss from equity method investments | 19 | 30 |
(Gain) loss on remeasurement of foreign denominated transactions | (11) | (82) |
Net (gains) losses on derivatives | (111) | 17 |
Share-based compensation and non-cash incentive compensation expense | 141 | 93 |
Deferred income taxes | (47) | (29) |
Other | 19 | 8 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||
Accounts and notes receivable | (86) | (93) |
Inventories and prepaids and other current assets | (49) | (67) |
Accounts and drafts payable | (62) | 113 |
Other accrued liabilities and gift card liability | (62) | (74) |
Tenant inducements paid to franchisees | (15) | (13) |
Other long-term assets and liabilities | 24 | (146) |
Net cash provided by operating activities | 920 | 1,067 |
Cash flows from investing activities: | ||
Payments for property and equipment | (73) | (52) |
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 23 | 11 |
Net payments in connection with purchase of Firehouse Subs | 0 | (12) |
Settlement/sale of derivatives, net | 40 | 22 |
Other investing activities, net | (1) | (35) |
Net cash (used for) provided by investing activities | (11) | (66) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 55 | 2 |
Repayments of long-term debt and finance leases | (79) | (71) |
Payment of financing costs | (43) | 0 |
Distributions on Class A common and Partnership exchangeable units | (741) | (728) |
Distribution to RBI for repurchase of RBI common shares | (115) | (326) |
Capital contribution from RBI | 52 | 7 |
(Payments) proceeds from derivatives | 100 | 8 |
Other financing activities, net | (3) | (3) |
Net cash (used for) provided by financing activities | (774) | (1,111) |
Effect of exchange rates on cash and cash equivalents | (3) | (31) |
Increase (decrease) in cash and cash equivalents | 132 | (141) |
Cash and cash equivalents at beginning of period | 1,178 | 1,087 |
Cash and cash equivalents at end of period | 1,310 | 946 |
Supplemental cash flow disclosures: | ||
Interest paid | 544 | 318 |
Income taxes paid | $ 184 | $ 177 |
Description of Business and Org
Description of Business and Organization | 9 Months Ended |
Sep. 30, 2023 | |
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”) is a Canadian limited partnership. 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”), chicken principally under the Popeyes ® brand (“Popeyes” or “PLK”) and sandwiches under the Firehouse Subs ® brand (“Firehouse” or “FHS”). 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, 2023, we franchised or owned 5,701 Tim Hortons restaurants, 19,035 Burger King restaurants, 4,373 Popeyes restaurants and 1,266 Firehouse Subs restaurants, for a total of 30,375 restaurants, and operate in more than 100 countries. 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, 2023 | |
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 22, 2023. 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. Investments in other affiliates that are owned 50% or less where we have significant influence are accounted for by the equity method. All material intercompany balances and transactions have been eliminated in consolidation. 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. The carrying amounts for cash and cash equivalents, accounts and notes receivable and accounts and drafts payable approximate fair value based on the short-term nature of these amounts. Supplier Finance Programs Our TH business includes individually negotiated contracts with suppliers, which include payment terms that range up to 120 days. A global financial institution offers a voluntary supply chain finance (“SCF”) program to certain TH vendors, which provides suppliers that elect to participate with the ability to elect early payment, which is discounted based on the payment terms and a rate based on RBI's credit rating, which may be beneficial to the vendor. Participation in the SCF program is at the sole discretion of the suppliers and financial institution and we are not a party to the arrangements between the suppliers and the financial institution. Our obligations to suppliers are not affected by the suppliers’ decisions to participate in the SCF program and our payment terms remain the same based on the original supplier invoicing terms and conditions. No guarantees are provided by us or any of our subsidiaries in connection with the SCF Program. Our confirmed outstanding obligations under the SCF program at September 30, 2023 and December 31, 2022 totaled $29 million and $47 million, respectively, and are classified as Accounts and drafts payable in our condensed consolidated balance sheets. All activity related to the obligations is classified as Cost of sales in our condensed consolidated statements of operations and presented within cash flows from operating activities in our condensed consolidated statements of cash flows. |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Relief for the Transition Away from LIBOR and Certain other Reference Rates – In March 2020 and as clarified in January 2021 and December 2022, the Financial Accounting Standards Board (“FASB”) issued guidance which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This amendment is effective as of March 12, 2020 through December 31, 2024. The expedients and exceptions provided by this new guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationships. During 2021, we adopted certain of the expedients as it relates to hedge accounting as certain of our debt agreements and hedging relationships bear interest at variable rates, primarily U.S. dollar LIBOR. Additionally, during the three months ended September 30, 2023, we amended the LIBOR-referencing credit agreement governing our senior secured term loan facilities to reference the Secured Overnight Financing Rate (SOFR) as further disclosed in Note 10, Long-Term Debt . As of September 30, 2023, none of our debt agreements and hedging relationships make reference to LIBOR. The adoption of and future elections under this new guidance did not and are not expected to have a material impact on our Financial Statements. Liabilities—Supplier Finance Programs – In September 2022, the FASB issued guidance that requires buyers in a supplier finance program to disclose sufficient information about the program to allow investors to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. These disclosures would include the key terms of the program, as well as the obligation amount that the buyer has confirmed as valid to the third party that is outstanding at the end of the reporting period, a rollforward of that amount, and a description of where that amount is presented in the balance sheet. This amendment is effective in 2023, except for the amendment on rollforward information which is effective in 2024, with early adoption permitted. This guidance should be applied retrospectively to each period in which a balance sheet is presented, except for the amendment on rollforward information, which should be applied prospectively. During the first quarter of 2023, we adopted this guidance and added necessary disclosures upon adoption as disclosed in Note 2, Basis of Presentation and Consolidation |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases Property revenues consist primarily of lease income from operating leases and earned income on direct financing leases and sales-type leases with franchisees as follows (in millions): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Lease income - operating leases Minimum lease payments $ 95 $ 100 $ 290 $ 314 Variable lease payments 122 112 337 291 Amortization of favorable and unfavorable income lease contracts, net — — 1 1 Subtotal - lease income from operating leases 217 212 628 606 Earned income on direct financing and sales-type leases 4 2 9 5 Total property revenues $ 221 $ 214 $ 637 $ 611 |
Leases | Leases Property revenues consist primarily of lease income from operating leases and earned income on direct financing leases and sales-type leases with franchisees as follows (in millions): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Lease income - operating leases Minimum lease payments $ 95 $ 100 $ 290 $ 314 Variable lease payments 122 112 337 291 Amortization of favorable and unfavorable income lease contracts, net — — 1 1 Subtotal - lease income from operating leases 217 212 628 606 Earned income on direct financing and sales-type leases 4 2 9 5 Total property revenues $ 221 $ 214 $ 637 $ 611 |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition 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 may recognize unamortized franchise fees and upfront fees when a contract with a franchisee or master franchisee is modified and is accounted for as a termination of the existing contract. We classify these contract liabilities as Other liabilities, net in our condensed consolidated balance sheets. The following table reflects the change in contract liabilities on a consolidated basis between December 31, 2022 and September 30, 2023 (in millions): Contract Liabilities Balance at December 31, 2022 $ 540 Recognized during period and included in the contract liability balance at the beginning of the year (44) Increase, excluding amounts recognized as revenue during the period 40 Impact of foreign currency translation (2) Balance at September 30, 2023 $ 534 The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) on a consolidated basis as of September 30, 2023 (in millions): Contract liabilities expected to be recognized in Remainder of 2023 $ 14 2024 52 2025 50 2026 47 2027 44 Thereafter 327 Total $ 534 Disaggregation of Total Revenues The following tables disaggregate revenue by segment (in millions): Three months ended September 30, 2023 TH BK PLK FHS Total Sales $ 717 $ 21 $ 23 $ 10 $ 771 Royalties 94 307 85 17 503 Property revenues 161 57 3 — 221 Franchise fees and other revenue 6 12 2 9 29 Advertising revenues and other services 82 141 75 15 313 Total revenues $ 1,060 $ 538 $ 188 $ 51 $ 1,837 Nine months ended September 30, 2023 TH BK PLK FHS Total Sales $ 2,023 $ 64 $ 66 $ 30 $ 2,183 Royalties 261 882 241 52 1,436 Property revenues 456 171 10 — 637 Franchise fees and other revenue 19 40 10 21 90 Advertising revenues and other services 217 394 211 34 856 Total revenues $ 2,976 $ 1,551 $ 538 $ 137 $ 5,202 Three months ended September 30, 2022 TH BK PLK FHS Total Sales $ 710 $ 19 $ 21 $ 9 $ 759 Royalties 87 274 74 16 451 Property revenues 154 57 3 — 214 Franchise fees and other revenue 9 18 1 5 33 Advertising revenues and other services 73 123 65 8 269 Total revenues $ 1,033 $ 491 $ 164 $ 38 $ 1,726 Nine months ended September 30, 2022 TH BK PLK FHS Total Sales $ 1,937 $ 52 $ 58 $ 29 $ 2,076 Royalties 239 791 213 49 1,292 Property revenues 433 169 9 — 611 Franchise fees and other revenue 22 42 8 14 86 Advertising revenues and other services 199 353 189 10 751 Total revenues $ 2,830 $ 1,407 $ 477 $ 102 $ 4,816 |
Earnings per Unit
Earnings per Unit | 9 Months Ended |
Sep. 30, 2023 | |
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. 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 RBI 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 2023 2022 2023 2022 Allocation of net income among partner interests: Net income allocated to Class A common unitholders $ 252 $ 360 $ 682 $ 779 Net income allocated to Partnership exchangeable unitholders 111 169 307 364 Net income attributable to common unitholders $ 363 $ 529 $ 989 $ 1,143 Denominator - basic and diluted partnership units: Weighted average Class A common units 202 202 202 202 Weighted average Partnership exchangeable units 139 143 141 144 Earnings per unit - basic and diluted: Class A common units (a) $ 1.25 $ 1.78 $ 3.38 $ 3.86 Partnership exchangeable units (a) $ 0.80 $ 1.18 $ 2.18 $ 2.53 (a) Earnings per unit may not recalculate exactly as it is calculated based on unrounded numbers. |
Intangible Assets, net and Good
Intangible Assets, net and Goodwill | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 December 31, 2022 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Identifiable assets subject to amortization: Franchise agreements $ 717 $ (335) $ 382 $ 720 $ (313) $ 407 Favorable leases 81 (53) 28 90 (57) 33 Subtotal 798 (388) 410 810 (370) 440 Indefinite-lived intangible assets: Tim Hortons brand $ 6,285 $ — $ 6,285 $ 6,292 $ — $ 6,292 Burger King brand 2,080 — 2,080 2,088 — 2,088 Popeyes brand 1,355 — 1,355 1,355 — 1,355 Firehouse Subs brand 816 — 816 816 — 816 Subtotal 10,536 — 10,536 10,551 — 10,551 Intangible assets, net $ 10,946 $ 10,991 Goodwill: Tim Hortons segment $ 4,054 $ 4,059 Burger King segment 588 590 Popeyes segment 846 846 Firehouse Subs segment 193 193 Total $ 5,681 $ 5,688 Amortization expense on intangible assets totaled $9 million for the three months ended September 30, 2023 and 2022. Amortization expense on intangible assets totaled $28 million and $29 million for the nine months ended September 30, 2023 and 2022, respectively. The change in brands and goodwill balances during the nine months ended September 30, 2023 was due to the impact of foreign currency translation. |
Equity Method Investments
Equity Method Investments | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The aggregate carrying amounts of our equity method investments were $135 million and $167 million as of September 30, 2023 and December 31, 2022, respectively, and are included as a component of Other assets, net in our accompanying condensed consolidated balance sheets. Except for the following equity method investments, no quoted market prices are available for our other equity method investments. The aggregate market value of our 14.7% equity interest in Carrols Restaurant Group, Inc. based on the quoted market price on September 30, 2023 was approximately $62 million. The aggregate market value of our 9.4% equity interest in BK Brasil Operação e Assessoria a Restaurantes S.A. based on the quoted market price on September 30, 2023 was approximately $32 million. The aggregate market value of our 4.2% equity interest in TH International Limited based on the quoted market price on September 30, 2023 was approximately $12 million. We have equity interests in entities that own or franchise Tim Hortons, Burger King and Popeyes restaurants. Sales, 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 2023 2022 2023 2022 Revenues from affiliates: Royalties $ 106 $ 92 $ 301 $ 266 Advertising revenues and other services 21 20 59 54 Property revenues 6 8 24 23 Franchise fees and other revenue 6 3 15 12 Sales 4 4 14 12 Total $ 143 $ 127 $ 413 $ 367 At September 30, 2023 and December 31, 2022, we had $58 million and $42 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. 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 $4 million and $5 million during the three months ended September 30, 2023 and 2022, respectively. Distributions received from this joint venture were $9 million and $10 million during the nine months ended September 30, 2023 and 2022, respectively. Associated with the TIMWEN Partnership, we recognized $5 million of rent expense during the three months ended September 30, 2023 and 2022, and $15 million and $14 million of rent expense during the nine months ended September 30, 2023 and 2022, respectively. |
Other Accrued Liabilities and O
Other Accrued Liabilities and Other Liabilities, net | 9 Months Ended |
Sep. 30, 2023 | |
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: Distribution payable $ 249 $ 243 Interest payable 88 89 Accrued compensation and benefits 110 124 Taxes payable 255 190 Deferred income 86 43 Accrued advertising expenses 55 37 Restructuring and other provisions 16 29 Current portion of operating lease liabilities 140 137 Other 133 109 Other accrued liabilities $ 1,132 $ 1,001 Noncurrent: Taxes payable $ 164 $ 139 Contract liabilities 534 540 Derivatives liabilities — 34 Unfavorable leases 43 50 Accrued pension 41 40 Deferred income 58 44 Other 24 25 Other liabilities, net $ 864 $ 872 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2023 | |
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 B $ 5,175 $ 5,190 Term Loan A 1,275 1,250 3.875% First Lien Senior Notes due 2028 1,550 1,550 3.50% First Lien Senior Notes due 2029 750 750 5.75% First Lien Senior Notes due 2025 500 500 4.375% Second Lien Senior Notes due 2028 750 750 4.00% Second Lien Senior Notes due 2030 2,900 2,900 TH Facility and other 145 155 Less: unamortized deferred financing costs and deferred issue discount (128) (111) Total debt, net 12,917 12,934 Less: current maturities of debt (55) (95) Total long-term debt $ 12,862 $ 12,839 Credit Facilities On September 21, 2023, two of our subsidiaries (the “Borrowers”) entered into a seventh amendment (the “2023 Amendment”) to the credit agreement governing our senior secured term loan A facility (the “Term Loan A”), our senior secured term loan B facility (the “Term Loan B” and together with the Term Loan A the “Term Loan Facilities”) and our senior secured revolving credit facility (including revolving loans, swingline loans and letters of credit) (the “Revolving Credit Facility” and together with the Term Loan Facilities, the “Credit Facilities”). Under the 2023 Amendment we (i) amended the existing Revolving Credit Facility to increase the availability from $1,000 million to $1,250 million and extended the maturity of the facility to September 21, 2028 without changing the leverage-based spread to adjusted SOFR (Secured Overnight Financing Rate); (ii) increased the Term Loan A to $1,275 million and extended the maturity of the Term Loan A to September 21, 2028 without changing the leverage-based spread to adjusted SOFR; (iii) increased the Term Loan B to $5,175 million, extended the maturity of the Term Loan B to September 21, 2030, and changed the interest rate applicable to borrowings under our Term Loan B to term SOFR, subject to a floor of 0.00%, plus an applicable margin of 2.25%; and (iv) made certain other changes as set forth therein, including removing the 0.10% adjustment to the term SOFR rate across the facilities and changes to certain covenants to provide increased flexibility. The 2023 Amendment made no other material changes to the terms of the Credit Agreement. In connection with the 2023 Amendment, we capitalized approximately $44 million in debt issuance costs and recorded a $16 million loss on early extinguishment of debt that primarily reflects expensing of fees in connection with the 2023 Amendment and the write-off of unamortized debt issuance costs. The principal amount of the Term Loan A amortizes in quarterly installments equal to $8 million beginning March 31, 2025 and $16 million beginning March 31, 2027 until maturity, with the balance payable at maturity. The principal amount of the Term Loan B amortizes in quarterly installments equal to $13 million beginning March 31, 2024 until maturity, with the balance payable at maturity. Revolving Credit Facility As of September 30, 2023, we had no amounts outstanding under our Revolving Credit Facility, had $2 million of letters of credit issued against the Revolving Credit Facility, and our borrowing availability under our Revolving Credit Facility was $1,248 million. Funds available under the Revolving Credit Facility may be used to repay other debt, finance debt or RBI share repurchases or repurchases of Class B exchangeable limited partnership units, fund acquisitions or capital expenditures and for other general corporate purposes. We have a $125 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. TH Facility One of our subsidiaries entered into a non-revolving delayed drawdown term credit facility in a total aggregate principal amount of C$225 million with a maturity date of October 4, 2025 (the “TH Facility”). The interest rate applicable to the TH Facility is the Canadian Bankers’ Acceptance rate plus an applicable margin equal to 1.40% or the Prime Rate plus an applicable margin equal to 0.40%, at our option. Obligations under the TH Facility are guaranteed by four of our subsidiaries, and amounts borrowed under the TH Facility are secured by certain parcels of real estate. As of September 30, 2023, we had approximately C$186 million outstanding under the TH Facility with a weighted average interest rate of 6.77%. Restrictions and Covenants As of September 30, 2023, we were in compliance with all applicable financial debt covenants under our senior secured term loan facilities and Revolving Credit Facility (together the "Credit Facilities"), the TH Facility, and the indentures governing our Senior Notes. 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 millions): As of September 30, December 31, Fair value of our variable term debt and senior notes $ 11,996 $ 11,885 Principal carrying amount of our variable term debt and senior notes 12,900 12,890 Interest Expense, net Interest expense, net consists of the following (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Debt (a) $ 144 $ 124 $ 424 $ 357 Finance lease obligations 5 4 14 14 Amortization of deferred financing costs and debt issuance discount 7 7 21 21 Interest income (13) (2) (29) (3) Interest expense, net $ 143 $ 133 $ 430 $ 389 (a) Amount includes $16 million and $17 million benefit during the three months ended September 30, 2023 and 2022, respectively, and $47 million and $40 million benefit during the nine months ended September 30, 2023 and 2022, respectively, related to the quarterly net settlements of our cross-currency rate swaps and amortization of the Excluded Component as defined in Note 13, Derivative Instruments . |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes |
Equity
Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Equity | Equity During the nine months ended September 30, 2023, Partnership exchanged 9,398,876 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 were accounted for as capital contributions by RBI to Partnership. The exchanges of Partnership exchangeable units were recorded as increases to the Class A common units balance within partners’ 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 partners’ capital of our consolidated balance sheet in an amount equal to the cash paid by Partnership, if any, 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 is automatically deemed cancelled concurrently with the exchange. Distributions to RBI to Repurchase RBI Common Shares During the three and nine months ended September 30, 2023, Partnership distributed to RBI $142 million to repurchase RBI common shares, of which $115 million was paid in cash during three and nine months ended September 30, 2023. 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) Balance at December 31, 2022 $ 944 $ (24) $ (1,893) $ (973) Foreign currency translation adjustment — — (36) (36) Net change in fair value of derivatives, net of tax 181 — — 181 Amounts reclassified to earnings of cash flow hedges, net of tax (47) — — (47) Gain (loss) recognized on other, net of tax — 4 — 4 Balance at September 30, 2023 $ 1,078 $ (20) $ (1,929) $ (871) |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2023 | |
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 and derivatives designated as net investment hedges. We use derivatives to manage our exposure to fluctuations in interest rates and currency exchange rates. Interest Rate Swaps At September 30, 2023, we had outstanding receive-variable, pay-fixed interest rate swaps with a total notional value of $3,500 million to hedge the variability in the interest payments on a portion of our Term Loan Facilities, including any subsequent refinancing or replacement of the Term Loan Facilities, beginning August 31, 2021 through the termination date of October 31, 2028. Additionally, at September 30, 2023, we also had outstanding receive-variable, pay-fixed interest rate swaps with a total notional value of $500 million to hedge the variability in the interest payments on a portion of our Term Loan Facilities effective September 30, 2019 through the termination date of September 30, 2026. Following the discontinuance of the U.S. dollar LIBOR after June 30, 2023, the interest rate on all these interest rate swaps transitioned from LIBOR to SOFR, with no impact to hedge effectiveness and no change in accounting treatment as a result of applicable accounting relief guidance for the transition away from LIBOR. At inception, all of these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value are recorded in AOCI, net of tax, and reclassified into interest expense during the period in which the hedged forecasted transaction affects earnings. The net amount of pre-tax gains in connection with these net unrealized gains in AOCI as of September 30, 2023 that we expect to be reclassified into interest expense within the next 12 months is $130 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, 2023, 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 partly 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. Such amounts will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying foreign operations. At September 30, 2023, we had outstanding cross-currency rate swaps that we entered into during 2022 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 in which we receive quarterly fixed-rate interest payments on the U.S. dollar notional amount of $5,000 million through the maturity date of September 30, 2028. At September 30, 2023, we had outstanding cross-currency rate swaps in which we pay quarterly fixed-rate interest payments on the Euro notional value of €1,108 million and receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $1,200 million. At inception, these cross-currency rate swaps were designated as a hedge and are accounted for as a net investment hedge. During 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, at September 30, 2023, we also had outstanding cross-currency rate swaps in which we receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $400 million, entered during 2018, and $500 million, entered during 2019, through the maturity date of February 17, 2024 and $150 million, entered during 2021, through the maturity date of October 31, 2028. At inception, these cross-currency rate swaps were designated as a hedge and are accounted for as a net investment hedge. In connection with the cross-currency rate swaps hedging Canadian dollar and Euro net investments, we utilize the spot method to exclude the interest component (the “Excluded Component”) from the accounting hedge without affecting net investment hedge accounting and 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. 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, 2023, 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 $176 million with maturities to November 15, 2024. 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 Nine Months Ended 2023 2022 2023 2022 Derivatives designated as cash flow hedges (1) Interest rate swaps $ 91 $ 191 $ 154 $ 521 Forward-currency contracts $ 6 $ 14 $ 2 $ 18 Derivatives designated as net investment hedges Cross-currency rate swaps $ 178 $ 471 $ 55 $ 675 (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 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Derivatives designated as cash flow hedges Interest rate swaps Interest expense, net $ 23 $ (8) $ 58 $ (60) Forward-currency contracts Cost of sales $ — $ 1 $ 6 $ 3 Location of Gain or (Loss) Recognized in Earnings Gain or (Loss) Recognized in Earnings Three Months Ended Nine Months Ended 2023 2022 2023 2022 Derivatives designated as net investment hedges Cross-currency rate swaps Interest expense, net $ 16 $ 17 $ 47 $ 40 Fair Value as of September 30, December 31, 2022 Balance Sheet Location Assets: Derivatives designated as cash flow hedges Interest rate $ 339 $ 280 Other assets, net Foreign currency 3 7 Prepaids and other current assets Derivatives designated as net investment hedges Foreign currency 106 78 Other assets, net Total assets at fair value $ 448 $ 365 Liabilities: Derivatives designated as net investment hedges Foreign currency $ — $ 34 Other liabilities, net Total liabilities at fair value $ — $ 34 |
Other Operating Expenses (Incom
Other Operating Expenses (Income), net | 9 Months Ended |
Sep. 30, 2023 | |
Other Income and Expenses [Abstract] | |
Other Operating Expenses (Income), net | Other Operating Expenses (Income), net Other operating expenses (income), net consists of the following (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net losses (gains) on disposal of assets, restaurant closures, and refranchisings $ 30 $ 1 $ 19 $ 2 Litigation settlements (gains) and reserves, net 1 — (1) 3 Net losses (gains) on foreign exchange (18) (30) (11) (82) Other, net (3) 2 13 9 Other operating expenses (income), net $ 10 $ (27) $ 20 $ (68) 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. The amount for the three and nine months ended September 30, 2023 includes asset write-offs and related costs in connection with the discontinuance of an internally developed software project. Net losses (gains) on foreign exchange is primarily related to revaluation of foreign denominated assets and liabilities, primarily those denominated in Euros and Canadian dollars. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
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 October 5, 2018, a class action complaint was filed against Burger King Worldwide, Inc. (“BKW”) and Burger King Company, successor in interest, (“BKC”) in the U.S. District Court for the Southern District of Florida by Jarvis Arrington, individually and on behalf of all others similarly situated. On October 18, 2018, a second class action complaint was filed against RBI, BKW and BKC in the U.S. District Court for the Southern District of Florida by Monique Michel, individually and on behalf of all others similarly situated. On October 31, 2018, a third class action complaint was filed against BKC and BKW in the U.S. District Court for the Southern District of Florida by Geneva Blanchard and Tiffany Miller, individually and on behalf of all others similarly situated. On November 2, 2018, a fourth class action complaint was filed against RBI, BKW and BKC in the U.S. District Court for the Southern District of Florida by Sandra Munster, individually and on behalf of all others similarly situated. These complaints have been consolidated and allege that the defendants violated Section 1 of the Sherman Act by incorporating an employee no-solicitation and no-hiring clause in the standard form franchise agreement all Burger King franchisees are required to sign. Each plaintiff seeks injunctive relief and damages for himself or herself and other members of the class. On March 24, 2020, the Court granted BKC’s motion to dismiss for failure to state a claim and on April 20, 2020 the plaintiffs filed a motion for leave to amend their complaint. On April 27, 2020, BKC filed a motion opposing the motion for leave to amend. The court denied the plaintiffs motion for leave to amend their complaint in August 2020 and the plaintiffs appealed this ruling. In August 2022, the federal appellate court reversed the lower court's decision to dismiss the case and remanded the case to the lower court for further proceedings. While we currently believe these claims are without merit, we are unable to predict the ultimate outcome of this case or estimate the range of possible loss, if any. On October 26, 2020, City of Warwick Municipal Employees Pension Fund, a purported stockholder of RBI, individually and putatively on behalf of all other stockholders similarly situated, filed a lawsuit in the Supreme Court of the State of New York County of New York naming RBI and certain of our officers, directors and shareholders as defendants alleging violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended, in connection with certain offerings of securities by an affiliate in August and September 2019. The complaint alleges that the shelf registration statement used in connection with such offering contained certain false and/or misleading statements or omissions. The complaint seeks, among other relief, class certification of the lawsuit, unspecified compensatory damages, rescission, pre-judgement and post-judgement interest, costs and expenses. On December 18, 2020 the plaintiffs filed an amended complaint and on February 16, 2021 RBI filed a motion to dismiss the complaint. The plaintiffs filed a brief in opposition to the motion on April 19, 2021 and RBI filed a reply in May 2021. The motion to dismiss was heard in April 2022 and the motion to dismiss was denied in May 2022. On June 6, 2022, we filed an answer to the complaint and on July 8, 2022, we filed an appeal of the denial of the motion to dismiss. On November 10, 2022, the appellate division reversed the trial court and ordered that the complaint be dismissed. Plaintiffs moved for leave to appeal to the Court of Appeals of the State of New York, which RBI opposed, and on March 21, 2023, the Court of Appeals denied leave to appeal. As that decision is now final, we do not anticipate any further proceedings in this matter. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting As stated in Note 1, Description of Business and Organization , we manage four 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. Under the Firehouse Subs brand, we operate in the specialty subs category of the quick service segment of the restaurant industry. Our business generates revenue from the following sources: (i) sales, consisting primarily of supply chain sales, which represent sales of products, supplies and restaurant equipment to franchisees, as well as sales to retailers and sales at restaurants owned by us (“Company restaurants”); (ii) franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchise restaurants and franchise fees paid by franchisees; (iii) property revenues from properties we lease or sublease to franchisees; and (iv) advertising revenues and other services, consisting primarily of advertising fund contributions based on a percentage of sales reported by franchise restaurants. We manage each of our brands as an operating segment and each operating segment represents a reportable segment. The following tables present revenues, by segment and by country (in millions): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenues by operating segment: TH $ 1,060 $ 1,033 $ 2,976 $ 2,830 BK 538 491 1,551 1,407 PLK 188 164 538 477 FHS 51 38 137 102 Total revenues $ 1,837 $ 1,726 $ 5,202 $ 4,816 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenues by country (a): Canada $ 956 $ 940 $ 2,683 $ 2,565 United States 645 587 1,849 1,679 Other 236 199 670 572 Total revenues $ 1,837 $ 1,726 $ 5,202 $ 4,816 (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, loss on early extinguishment of debt, income tax (benefit) expense, and depreciation and amortization, adjusted to exclude (i) the non-cash impact of share-based compensation and non-cash incentive compensation expense, (ii) (income) loss from equity method investments, net of cash distributions received from equity method investments, (iii) other operating expenses (income), net and, (iv) income/expenses from non-recurring projects and non-operating activities. For the periods referenced, income/expenses from non-recurring projects and non-operating activities included (i) non-recurring fees and expense incurred in connection with the acquisition of Firehouse consisting of professional fees, compensation-related expenses and integration costs (“FHS Transaction costs”); and (ii) non-operating costs from professional advisory and consulting services associated with certain transformational corporate restructuring initiatives that rationalize our structure and optimize cash movements as well as services related to significant tax reform legislation and regulations (“Corporate restructuring and advisory fees”). 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 our operating performance. A reconciliation of segment income to net income consists of the following (in millions): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Segment income: TH $ 311 $ 305 $ 852 $ 810 BK 298 262 842 761 PLK 75 62 214 179 FHS 14 13 43 40 Adjusted EBITDA 698 642 1,951 1,790 Share-based compensation and non-cash incentive compensation expense 49 34 141 93 FHS Transaction costs — 3 19 8 Corporate restructuring and advisory fees 5 12 17 21 Impact of equity method investments (a) 5 13 29 41 Other operating expenses (income), net 10 (27) 20 (68) EBITDA 629 607 1,725 1,695 Depreciation and amortization 47 46 142 143 Income from operations 582 561 1,583 1,552 Interest expense, net 143 133 430 389 Loss on early extinguishment of debt 16 — 16 — Income tax expense (benefit) 59 (102) 145 17 Net income $ 364 $ 530 $ 992 $ 1,146 (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, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information 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, as amended from time to time, that provides for obligations under the Credit Facilities. The Issuers entered into the 3.875% First Lien Senior Notes Indenture with respect to the 3.875% First Lien Senior Notes due 2028. The Issuers entered into the 3.500% First Lien Senior Notes Indenture with respect to the 3.500% First Lien Senior Notes due 2029. The Issuers entered into the 5.750% First Lien Senior Notes Indenture with respect to the 5.750% First Lien Senior Notes due 2025. The Issuers entered into the 4.375% Second Lien Senior Notes Indenture with respect to the 4.375% Second Lien Senior Notes due 2028. The Issuers entered into the 4.000% Second Lien Senior Notes Indenture with respect to the 4.000% Second Lien Senior Notes due 2030. The agreement governing our Credit Facilities, the 3.875% First Lien Senior Notes Indenture, the 3.500% First Lien Senior Notes Indenture, the 5.750% First Lien Senior Notes Indenture, the 4.375% Second Lien Senior Notes Indenture and the 4.000% Second Lien 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, 2023 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,310 $ — $ — $ 1,310 Accounts and notes receivable, net 692 — — 692 Inventories, net 160 — — 160 Prepaids and other current assets 221 — — 221 Total current assets 2,383 — — 2,383 Property and equipment, net 1,904 — — 1,904 Operating lease assets, net 1,060 — — 1,060 Intangible assets, net 10,946 — — 10,946 Goodwill 5,681 — — 5,681 Intercompany receivable — 249 (249) — Investment in subsidiaries — 4,664 (4,664) — Other assets, net 1,103 — — 1,103 Total assets $ 23,077 $ 4,913 $ (4,913) $ 23,077 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 693 $ — $ — $ 693 Other accrued liabilities 883 249 — 1,132 Gift card liability 159 — — 159 Current portion of long-term debt and finance leases 87 — — 87 Total current liabilities 1,822 249 — 2,071 Long-term debt, net of current portion 12,862 — — 12,862 Finance leases, net of current portion 305 — — 305 Operating lease liabilities, net of current portion 1,003 — — 1,003 Other liabilities, net 864 — — 864 Payables to affiliates 249 — (249) — Deferred income taxes, net 1,308 — — 1,308 Total liabilities 18,413 249 (249) 18,413 Partners’ capital: Class A common units — 9,584 — 9,584 Partnership exchangeable units — (4,051) — (4,051) Common shares 2,546 — (2,546) — Retained earnings 2,987 — (2,987) — Accumulated other comprehensive income (loss) (871) (871) 871 (871) Total Partners' capital/shareholders' equity 4,662 4,662 (4,662) 4,662 Noncontrolling interests 2 2 (2) 2 Total equity 4,664 4,664 (4,664) 4,664 Total liabilities and equity $ 23,077 $ 4,913 $ (4,913) $ 23,077 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions of U.S. dollars) As of December 31, 2022 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,178 $ — $ — $ 1,178 Accounts and notes receivable, net 614 — — 614 Inventories, net 133 — — 133 Prepaids and other current assets 123 — — 123 Total current assets 2,048 — — 2,048 Property and equipment, net 1,950 — — 1,950 Operating lease assets. net 1,082 — — 1,082 Intangible assets, net 10,991 — — 10,991 Goodwill 5,688 — — 5,688 Intercompany receivable — 243 (243) — Investment in subsidiaries — 4,268 (4,268) — Other assets, net 987 — — 987 Total assets $ 22,746 $ 4,511 $ (4,511) $ 22,746 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 758 $ — $ — $ 758 Other accrued liabilities 758 243 — 1,001 Gift card liability 230 — — 230 Current portion of long-term debt and finance leases 127 — — 127 Total current liabilities 1,873 243 — 2,116 Long-term debt, net of current portion 12,839 — — 12,839 Finance leases, net of current portion 311 — — 311 Operating lease liabilities, net of current portion 1,027 — — 1,027 Other liabilities, net 872 — — 872 Payables to affiliates 243 — (243) — Deferred income taxes, net 1,313 — — 1,313 Total liabilities 18,478 243 (243) 18,478 Partners’ capital: Class A common units — 8,735 — 8,735 Partnership exchangeable units — (3,496) — (3,496) Common shares 2,494 — (2,494) — Retained earnings 2,745 — (2,745) — Accumulated other comprehensive income (loss) (973) (973) 973 (973) Total Partners' capital/shareholders' equity 4,266 4,266 (4,266) 4,266 Noncontrolling interests 2 2 (2) 2 Total equity 4,268 4,268 (4,268) 4,268 Total liabilities and equity $ 22,746 $ 4,511 $ (4,511) $ 22,746 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended September 30, 2023 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 771 $ — $ — $ 771 Franchise and property revenues 753 — — 753 Advertising revenues and other services 313 — — 313 Total revenues 1,837 — — 1,837 Operating costs and expenses: Cost of sales 630 — — 630 Franchise and property expenses 119 — — 119 Advertising expenses and other services 326 — — 326 General and administrative expenses 169 — — 169 (Income) loss from equity method investments 1 — — 1 Other operating expenses (income), net 10 — — 10 Total operating costs and expenses 1,255 — — 1,255 Income from operations 582 — — 582 Interest expense, net 143 — — 143 Loss on early extinguishment of debt 16 — — 16 Income before income taxes 423 — — 423 Income tax expense 59 — — 59 Net income 364 — — 364 Equity in earnings of consolidated subsidiaries — 364 (364) — Net income (loss) 364 364 (364) 364 Net income (loss) attributable to noncontrolling interests 1 1 (1) 1 Net income (loss) attributable to common unitholders $ 363 $ 363 $ (363) $ 363 Comprehensive income (loss) $ 332 $ 332 $ (332) $ 332 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Nine Months Ended September 30, 2023 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 2,183 $ — $ — $ 2,183 Franchise and property revenues 2,163 — — 2,163 Advertising revenues and other services 856 — — 856 Total revenues 5,202 — — 5,202 Operating costs and expenses: Cost of sales 1,792 — — 1,792 Franchise and property expenses 372 — — 372 Advertising expenses and other services 909 — — 909 General and administrative expenses 507 — — 507 (Income) loss from equity method investments 19 — — 19 Other operating expenses (income), net 20 — — 20 Total operating costs and expenses 3,619 — — 3,619 Income from operations 1,583 — — 1,583 Interest expense, net 430 — — 430 Loss on early extinguishment of debt 16 — — 16 Income before income taxes 1,137 — — 1,137 Income tax expense 145 — — 145 Net income 992 — — 992 Equity in earnings of consolidated subsidiaries — 992 (992) — Net income (loss) 992 992 (992) 992 Net income (loss) attributable to noncontrolling interests 3 3 (3) 3 Net income (loss) attributable to common unitholders $ 989 $ 989 $ (989) $ 989 Comprehensive income (loss) $ 1,094 $ 1,094 $ (1,094) $ 1,094 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended September 30, 2022 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 759 $ — $ — $ 759 Franchise and property revenues 698 — — 698 Advertising revenues and other services 269 — — 269 Total revenues 1,726 — — 1,726 Operating costs and expenses: Cost of sales 615 — — 615 Franchise and property expenses 137 — — 137 Advertising expenses and other services 276 — — 276 General and administrative expenses 156 — — 156 (Income) loss from equity method investments 8 — — 8 Other operating expenses (income), net (27) — — (27) Total operating costs and expenses 1,165 — — 1,165 Income from operations 561 — — 561 Interest expense, net 133 — — 133 Income before income taxes 428 — — 428 Income tax expense (benefit) (102) — — (102) Net income 530 — — 530 Equity in earnings of consolidated subsidiaries — 530 (530) — Net income (loss) 530 530 (530) 530 Net income (loss) attributable to noncontrolling interests 1 1 (1) 1 Net income (loss) attributable to common unitholders $ 529 $ 529 $ (529) $ 529 Comprehensive income (loss) $ 343 $ 343 $ (343) $ 343 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Nine Months Ended September 30, 2022 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 2,076 $ — $ — $ 2,076 Franchise and property revenues 1,989 — — 1,989 Advertising revenues and other services 751 — — 751 Total revenues 4,816 — — 4,816 Operating costs and expenses: Cost of sales 1,693 — — 1,693 Franchise and property expenses 392 — — 392 Advertising expenses and other services 782 — — 782 General and administrative expenses 435 — — 435 (Income) loss from equity method investments 30 — — 30 Other operating expenses (income), net (68) — — (68) Total operating costs and expenses 3,264 — — 3,264 Income from operations 1,552 — — 1,552 Interest expense, net 389 — — 389 Income before income taxes 1,163 — — 1,163 Income tax expense 17 — — 17 Net income 1,146 — — 1,146 Equity in earnings of consolidated subsidiaries — 1,146 (1,146) — Net income (loss) 1,146 1,146 (1,146) 1,146 Net income (loss) attributable to noncontrolling interests 3 3 (3) 3 Net income (loss) attributable to common unitholders $ 1,143 $ 1,143 $ (1,143) $ 1,143 Comprehensive income (loss) $ 1,145 $ 1,145 $ (1,145) $ 1,145 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Nine months ended September 30, 2023 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 992 $ 992 $ (992) $ 992 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (992) 992 — Depreciation and amortization 142 — — 142 Non-cash loss on early extinguishment of debt 5 — — 5 Amortization of deferred financing costs and debt issuance discount 21 — — 21 (Income) loss from equity method investments 19 — — 19 (Gain) loss on remeasurement of foreign denominated transactions (11) — — (11) Net (gains) losses on derivatives (111) — — (111) Share-based compensation and non-cash incentive compensation expense 141 — — 141 Deferred income taxes (47) — — (47) Other 19 — — 19 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (86) — — (86) Inventories and prepaids and other current assets (49) — — (49) Accounts and drafts payable (62) — — (62) Other accrued liabilities and gift card liability (62) — — (62) Tenant inducements paid to franchisees (15) — — (15) Other long-term assets and liabilities 24 — — 24 Net cash provided by operating activities 920 — — 920 Cash flows from investing activities: Payments for property and equipment (73) — — (73) Net proceeds from disposal of assets, restaurant closures, and refranchisings 23 — — 23 Settlement/sale of derivatives, net 40 — — 40 Other investing activities, net (1) — — (1) Net cash (used for) provided by investing activities (11) — — (11) Cash flows from financing activities: Proceeds from long-term debt 55 — — 55 Repayments of long-term debt and finance leases (79) — — (79) Payment of financing costs (43) — — (43) Distributions on Class A common and Partnership exchangeable units — (741) — (741) Distribution to RBI for repurchase of RBI common shares — (115) — (115) Capital contribution from RBI 52 — — 52 Distributions from subsidiaries (856) 856 — — (Payments) proceeds from derivatives 100 — — 100 Other financing activities, net (3) — — (3) Net cash (used for) provided by financing activities (774) — — (774) Effect of exchange rates on cash and cash equivalents (3) — — (3) Increase (decrease) in cash and cash equivalents 132 — — 132 Cash and cash equivalents at beginning of period 1,178 — — 1,178 Cash and cash equivalents at end of period $ 1,310 $ — $ — $ 1,310 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Nine Months Ended September 30, 2022 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 1,146 $ 1,146 $ (1,146) $ 1,146 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (1,146) 1,146 — Depreciation and amortization 143 — — 143 Amortization of deferred financing costs and debt issuance discount 21 — — 21 (Income) loss from equity method investments 30 — — 30 (Gain) loss on remeasurement of foreign denominated transactions (82) — — (82) Net (gains) losses on derivatives 17 — — 17 Share-based compensation and non-cash incentive compensation expense 93 — — 93 Deferred income taxes (29) — — (29) Other 8 — — 8 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (93) — — (93) Inventories and prepaids and other current assets (67) — — (67) Accounts and drafts payable 113 — — 113 Other accrued liabilities and gift card liability (74) — — (74) Tenant inducements paid to franchisees (13) — — (13) Other long-term assets and liabilities (146) — — (146) Net cash provided by operating activities 1,067 — — 1,067 Cash flows from investing activities: Payments for property and equipment (52) — — (52) Net proceeds from disposal of assets, restaurant closures, and refranchisings 11 — — 11 Net payments in connection with purchase of Firehouse Subs (12) — — (12) Settlement/sale of derivatives, net 22 — — 22 Other investing activities, net (35) — — (35) Net cash (used for) provided by investing activities (66) — — (66) Cash flows from financing activities: Proceeds from long-term debt 2 — — 2 Repayments of long-term debt and finance leases (71) — — (71) Distributions on Class A common and Partnership exchangeable units — (728) — (728) Distribution to RBI for repurchase of RBI common shares — (326) — (326) Capital contribution from RBI 7 — — 7 Distributions from subsidiaries (1,054) 1,054 — — (Payments) proceeds from derivatives 8 — — 8 Other financing activities, net (3) — — (3) Net cash (used for) provided by financing activities (1,111) — — (1,111) Effect of exchange rates on cash and cash equivalents (31) — — (31) Increase (decrease) in cash and cash equivalents (141) — — (141) Cash and cash equivalents at beginning of period 1,087 — — 1,087 Cash and cash equivalents at end of period $ 946 $ — $ — $ 946 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Cash Distributions/Dividends On October 4, 2023, RBI paid a cash dividend of $0.55 per RBI common share to common shareholders of record on September 20, 2023. 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 $0.55 per exchangeable unit to holders of record on September 20, 2023. Subsequent to September 30, 2023, the RBI board of directors declared a cash dividend of $0.55 per RBI common share, which will be paid on January 4, 2024 to RBI common shareholders of record on December 21, 2023. 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 $0.55 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. Derivatives In October 2023, we entered into new cross-currency rate swap contracts between the Euro and U.S. dollar in which we receive quarterly fixed-rate interest payments on the U.S. dollar aggregate amount of $1,400 million through the maturity date of October 31, 2026. At inception, these cross-currency rate swaps were designated as hedges and are accounted for as net investment hedges. In connection with these new cross-currency rate swaps, we settled our existing cross-currency rate swap contracts between the Euro and U.S. dollar with a notional value of $400 million and $500 million with a maturity date of February 17, 2024 and received $59 million in cash as part of this settlement. Distributions to RBI to Repurchase RBI Common Shares |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Basis of Presentation and Con_2
Basis of Presentation and Consolidation (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | 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 22, 2023. |
Use of Estimates | 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.The carrying amounts for cash and cash equivalents, accounts and notes receivable and accounts and drafts payable approximate fair value based on the short-term nature of these amounts. |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Relief for the Transition Away from LIBOR and Certain other Reference Rates – In March 2020 and as clarified in January 2021 and December 2022, the Financial Accounting Standards Board (“FASB”) issued guidance which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This amendment is effective as of March 12, 2020 through December 31, 2024. The expedients and exceptions provided by this new guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationships. During 2021, we adopted certain of the expedients as it relates to hedge accounting as certain of our debt agreements and hedging relationships bear interest at variable rates, primarily U.S. dollar LIBOR. Additionally, during the three months ended September 30, 2023, we amended the LIBOR-referencing credit agreement governing our senior secured term loan facilities to reference the Secured Overnight Financing Rate (SOFR) as further disclosed in Note 10, Long-Term Debt . As of September 30, 2023, none of our debt agreements and hedging relationships make reference to LIBOR. The adoption of and future elections under this new guidance did not and are not expected to have a material impact on our Financial Statements. Liabilities—Supplier Finance Programs – In September 2022, the FASB issued guidance that requires buyers in a supplier finance program to disclose sufficient information about the program to allow investors to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. These disclosures would include the key terms of the program, as well as the obligation amount that the buyer has confirmed as valid to the third party that is outstanding at the end of the reporting period, a rollforward of that amount, and a description of where that amount is presented in the balance sheet. This amendment is effective in 2023, except for the amendment on rollforward information which is effective in 2024, with early adoption permitted. This guidance should be applied retrospectively to each period in which a balance sheet is presented, except for the amendment on rollforward information, which should be applied prospectively. During the first quarter of 2023, we adopted this guidance and added necessary disclosures upon adoption as disclosed in Note 2, Basis of Presentation and Consolidation |
Contract Liabilities | Contract LiabilitiesContract 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 may recognize unamortized franchise fees and upfront fees when a contract with a franchisee or master franchisee is modified and is accounted for as a termination of the existing contract. |
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. 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 RBI 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. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Property Revenues | Property revenues consist primarily of lease income from operating leases and earned income on direct financing leases and sales-type leases with franchisees as follows (in millions): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Lease income - operating leases Minimum lease payments $ 95 $ 100 $ 290 $ 314 Variable lease payments 122 112 337 291 Amortization of favorable and unfavorable income lease contracts, net — — 1 1 Subtotal - lease income from operating leases 217 212 628 606 Earned income on direct financing and sales-type leases 4 2 9 5 Total property revenues $ 221 $ 214 $ 637 $ 611 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Change in Contract Liabilities | The following table reflects the change in contract liabilities on a consolidated basis between December 31, 2022 and September 30, 2023 (in millions): Contract Liabilities Balance at December 31, 2022 $ 540 Recognized during period and included in the contract liability balance at the beginning of the year (44) Increase, excluding amounts recognized as revenue during the period 40 Impact of foreign currency translation (2) Balance at September 30, 2023 $ 534 |
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) on a consolidated basis as of September 30, 2023 (in millions): Contract liabilities expected to be recognized in Remainder of 2023 $ 14 2024 52 2025 50 2026 47 2027 44 Thereafter 327 Total $ 534 |
Disaggregation of Total Revenues | The following tables disaggregate revenue by segment (in millions): Three months ended September 30, 2023 TH BK PLK FHS Total Sales $ 717 $ 21 $ 23 $ 10 $ 771 Royalties 94 307 85 17 503 Property revenues 161 57 3 — 221 Franchise fees and other revenue 6 12 2 9 29 Advertising revenues and other services 82 141 75 15 313 Total revenues $ 1,060 $ 538 $ 188 $ 51 $ 1,837 Nine months ended September 30, 2023 TH BK PLK FHS Total Sales $ 2,023 $ 64 $ 66 $ 30 $ 2,183 Royalties 261 882 241 52 1,436 Property revenues 456 171 10 — 637 Franchise fees and other revenue 19 40 10 21 90 Advertising revenues and other services 217 394 211 34 856 Total revenues $ 2,976 $ 1,551 $ 538 $ 137 $ 5,202 Three months ended September 30, 2022 TH BK PLK FHS Total Sales $ 710 $ 19 $ 21 $ 9 $ 759 Royalties 87 274 74 16 451 Property revenues 154 57 3 — 214 Franchise fees and other revenue 9 18 1 5 33 Advertising revenues and other services 73 123 65 8 269 Total revenues $ 1,033 $ 491 $ 164 $ 38 $ 1,726 Nine months ended September 30, 2022 TH BK PLK FHS Total Sales $ 1,937 $ 52 $ 58 $ 29 $ 2,076 Royalties 239 791 213 49 1,292 Property revenues 433 169 9 — 611 Franchise fees and other revenue 22 42 8 14 86 Advertising revenues and other services 199 353 189 10 751 Total revenues $ 2,830 $ 1,407 $ 477 $ 102 $ 4,816 |
Earnings per Unit (Tables)
Earnings per Unit (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 2023 2022 2023 2022 Allocation of net income among partner interests: Net income allocated to Class A common unitholders $ 252 $ 360 $ 682 $ 779 Net income allocated to Partnership exchangeable unitholders 111 169 307 364 Net income attributable to common unitholders $ 363 $ 529 $ 989 $ 1,143 Denominator - basic and diluted partnership units: Weighted average Class A common units 202 202 202 202 Weighted average Partnership exchangeable units 139 143 141 144 Earnings per unit - basic and diluted: Class A common units (a) $ 1.25 $ 1.78 $ 3.38 $ 3.86 Partnership exchangeable units (a) $ 0.80 $ 1.18 $ 2.18 $ 2.53 (a) Earnings per unit may not recalculate exactly as it is calculated based on unrounded numbers. |
Intangible Assets, net and Go_2
Intangible Assets, net and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 December 31, 2022 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Identifiable assets subject to amortization: Franchise agreements $ 717 $ (335) $ 382 $ 720 $ (313) $ 407 Favorable leases 81 (53) 28 90 (57) 33 Subtotal 798 (388) 410 810 (370) 440 Indefinite-lived intangible assets: Tim Hortons brand $ 6,285 $ — $ 6,285 $ 6,292 $ — $ 6,292 Burger King brand 2,080 — 2,080 2,088 — 2,088 Popeyes brand 1,355 — 1,355 1,355 — 1,355 Firehouse Subs brand 816 — 816 816 — 816 Subtotal 10,536 — 10,536 10,551 — 10,551 Intangible assets, net $ 10,946 $ 10,991 Goodwill: Tim Hortons segment $ 4,054 $ 4,059 Burger King segment 588 590 Popeyes segment 846 846 Firehouse Subs segment 193 193 Total $ 5,681 $ 5,688 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Franchise and Property Revenues | Sales, 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 2023 2022 2023 2022 Revenues from affiliates: Royalties $ 106 $ 92 $ 301 $ 266 Advertising revenues and other services 21 20 59 54 Property revenues 6 8 24 23 Franchise fees and other revenue 6 3 15 12 Sales 4 4 14 12 Total $ 143 $ 127 $ 413 $ 367 |
Other Accrued Liabilities and_2
Other Accrued Liabilities and Other Liabilities, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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: Distribution payable $ 249 $ 243 Interest payable 88 89 Accrued compensation and benefits 110 124 Taxes payable 255 190 Deferred income 86 43 Accrued advertising expenses 55 37 Restructuring and other provisions 16 29 Current portion of operating lease liabilities 140 137 Other 133 109 Other accrued liabilities $ 1,132 $ 1,001 Noncurrent: Taxes payable $ 164 $ 139 Contract liabilities 534 540 Derivatives liabilities — 34 Unfavorable leases 43 50 Accrued pension 41 40 Deferred income 58 44 Other 24 25 Other liabilities, net $ 864 $ 872 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 B $ 5,175 $ 5,190 Term Loan A 1,275 1,250 3.875% First Lien Senior Notes due 2028 1,550 1,550 3.50% First Lien Senior Notes due 2029 750 750 5.75% First Lien Senior Notes due 2025 500 500 4.375% Second Lien Senior Notes due 2028 750 750 4.00% Second Lien Senior Notes due 2030 2,900 2,900 TH Facility and other 145 155 Less: unamortized deferred financing costs and deferred issue discount (128) (111) Total debt, net 12,917 12,934 Less: current maturities of debt (55) (95) Total long-term debt $ 12,862 $ 12,839 |
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 millions): As of September 30, December 31, Fair value of our variable term debt and senior notes $ 11,996 $ 11,885 Principal carrying amount of our variable term debt and senior notes 12,900 12,890 |
Schedule of Interest Expense, Net | Interest expense, net consists of the following (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Debt (a) $ 144 $ 124 $ 424 $ 357 Finance lease obligations 5 4 14 14 Amortization of deferred financing costs and debt issuance discount 7 7 21 21 Interest income (13) (2) (29) (3) Interest expense, net $ 143 $ 133 $ 430 $ 389 (a) Amount includes $16 million and $17 million benefit during the three months ended September 30, 2023 and 2022, respectively, and $47 million and $40 million benefit during the nine months ended September 30, 2023 and 2022, respectively, related to the quarterly net settlements of our cross-currency rate swaps and amortization of the Excluded Component as defined in Note 13, Derivative Instruments . |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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) Balance at December 31, 2022 $ 944 $ (24) $ (1,893) $ (973) Foreign currency translation adjustment — — (36) (36) Net change in fair value of derivatives, net of tax 181 — — 181 Amounts reclassified to earnings of cash flow hedges, net of tax (47) — — (47) Gain (loss) recognized on other, net of tax — 4 — 4 Balance at September 30, 2023 $ 1,078 $ (20) $ (1,929) $ (871) |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 Nine Months Ended 2023 2022 2023 2022 Derivatives designated as cash flow hedges (1) Interest rate swaps $ 91 $ 191 $ 154 $ 521 Forward-currency contracts $ 6 $ 14 $ 2 $ 18 Derivatives designated as net investment hedges Cross-currency rate swaps $ 178 $ 471 $ 55 $ 675 (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 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Derivatives designated as cash flow hedges Interest rate swaps Interest expense, net $ 23 $ (8) $ 58 $ (60) Forward-currency contracts Cost of sales $ — $ 1 $ 6 $ 3 Location of Gain or (Loss) Recognized in Earnings Gain or (Loss) Recognized in Earnings Three Months Ended Nine Months Ended 2023 2022 2023 2022 Derivatives designated as net investment hedges Cross-currency rate swaps Interest expense, net $ 16 $ 17 $ 47 $ 40 |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Fair Value as of September 30, December 31, 2022 Balance Sheet Location Assets: Derivatives designated as cash flow hedges Interest rate $ 339 $ 280 Other assets, net Foreign currency 3 7 Prepaids and other current assets Derivatives designated as net investment hedges Foreign currency 106 78 Other assets, net Total assets at fair value $ 448 $ 365 Liabilities: Derivatives designated as net investment hedges Foreign currency $ — $ 34 Other liabilities, net Total liabilities at fair value $ — $ 34 |
Other Operating Expenses (Inc_2
Other Operating Expenses (Income), net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Income and Expenses [Abstract] | |
Other Operating Expenses (Income), Net | Other operating expenses (income), net consists of the following (in millions): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Net losses (gains) on disposal of assets, restaurant closures, and refranchisings $ 30 $ 1 $ 19 $ 2 Litigation settlements (gains) and reserves, net 1 — (1) 3 Net losses (gains) on foreign exchange (18) (30) (11) (82) Other, net (3) 2 13 9 Other operating expenses (income), net $ 10 $ (27) $ 20 $ (68) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Revenues by Geographic Segment | The following tables present revenues, by segment and by country (in millions): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenues by operating segment: TH $ 1,060 $ 1,033 $ 2,976 $ 2,830 BK 538 491 1,551 1,407 PLK 188 164 538 477 FHS 51 38 137 102 Total revenues $ 1,837 $ 1,726 $ 5,202 $ 4,816 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Revenues by country (a): Canada $ 956 $ 940 $ 2,683 $ 2,565 United States 645 587 1,849 1,679 Other 236 199 670 572 Total revenues $ 1,837 $ 1,726 $ 5,202 $ 4,816 (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 consists of the following (in millions): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Segment income: TH $ 311 $ 305 $ 852 $ 810 BK 298 262 842 761 PLK 75 62 214 179 FHS 14 13 43 40 Adjusted EBITDA 698 642 1,951 1,790 Share-based compensation and non-cash incentive compensation expense 49 34 141 93 FHS Transaction costs — 3 19 8 Corporate restructuring and advisory fees 5 12 17 21 Impact of equity method investments (a) 5 13 29 41 Other operating expenses (income), net 10 (27) 20 (68) EBITDA 629 607 1,725 1,695 Depreciation and amortization 47 46 142 143 Income from operations 582 561 1,583 1,552 Interest expense, net 143 133 430 389 Loss on early extinguishment of debt 16 — 16 — Income tax expense (benefit) 59 (102) 145 17 Net income $ 364 $ 530 $ 992 $ 1,146 (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, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Consolidating Balance Sheets | 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, 2023 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,310 $ — $ — $ 1,310 Accounts and notes receivable, net 692 — — 692 Inventories, net 160 — — 160 Prepaids and other current assets 221 — — 221 Total current assets 2,383 — — 2,383 Property and equipment, net 1,904 — — 1,904 Operating lease assets, net 1,060 — — 1,060 Intangible assets, net 10,946 — — 10,946 Goodwill 5,681 — — 5,681 Intercompany receivable — 249 (249) — Investment in subsidiaries — 4,664 (4,664) — Other assets, net 1,103 — — 1,103 Total assets $ 23,077 $ 4,913 $ (4,913) $ 23,077 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 693 $ — $ — $ 693 Other accrued liabilities 883 249 — 1,132 Gift card liability 159 — — 159 Current portion of long-term debt and finance leases 87 — — 87 Total current liabilities 1,822 249 — 2,071 Long-term debt, net of current portion 12,862 — — 12,862 Finance leases, net of current portion 305 — — 305 Operating lease liabilities, net of current portion 1,003 — — 1,003 Other liabilities, net 864 — — 864 Payables to affiliates 249 — (249) — Deferred income taxes, net 1,308 — — 1,308 Total liabilities 18,413 249 (249) 18,413 Partners’ capital: Class A common units — 9,584 — 9,584 Partnership exchangeable units — (4,051) — (4,051) Common shares 2,546 — (2,546) — Retained earnings 2,987 — (2,987) — Accumulated other comprehensive income (loss) (871) (871) 871 (871) Total Partners' capital/shareholders' equity 4,662 4,662 (4,662) 4,662 Noncontrolling interests 2 2 (2) 2 Total equity 4,664 4,664 (4,664) 4,664 Total liabilities and equity $ 23,077 $ 4,913 $ (4,913) $ 23,077 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions of U.S. dollars) As of December 31, 2022 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,178 $ — $ — $ 1,178 Accounts and notes receivable, net 614 — — 614 Inventories, net 133 — — 133 Prepaids and other current assets 123 — — 123 Total current assets 2,048 — — 2,048 Property and equipment, net 1,950 — — 1,950 Operating lease assets. net 1,082 — — 1,082 Intangible assets, net 10,991 — — 10,991 Goodwill 5,688 — — 5,688 Intercompany receivable — 243 (243) — Investment in subsidiaries — 4,268 (4,268) — Other assets, net 987 — — 987 Total assets $ 22,746 $ 4,511 $ (4,511) $ 22,746 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 758 $ — $ — $ 758 Other accrued liabilities 758 243 — 1,001 Gift card liability 230 — — 230 Current portion of long-term debt and finance leases 127 — — 127 Total current liabilities 1,873 243 — 2,116 Long-term debt, net of current portion 12,839 — — 12,839 Finance leases, net of current portion 311 — — 311 Operating lease liabilities, net of current portion 1,027 — — 1,027 Other liabilities, net 872 — — 872 Payables to affiliates 243 — (243) — Deferred income taxes, net 1,313 — — 1,313 Total liabilities 18,478 243 (243) 18,478 Partners’ capital: Class A common units — 8,735 — 8,735 Partnership exchangeable units — (3,496) — (3,496) Common shares 2,494 — (2,494) — Retained earnings 2,745 — (2,745) — Accumulated other comprehensive income (loss) (973) (973) 973 (973) Total Partners' capital/shareholders' equity 4,266 4,266 (4,266) 4,266 Noncontrolling interests 2 2 (2) 2 Total equity 4,268 4,268 (4,268) 4,268 Total liabilities and equity $ 22,746 $ 4,511 $ (4,511) $ 22,746 |
Condensed Consolidating Statements of Operations | Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended September 30, 2023 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 771 $ — $ — $ 771 Franchise and property revenues 753 — — 753 Advertising revenues and other services 313 — — 313 Total revenues 1,837 — — 1,837 Operating costs and expenses: Cost of sales 630 — — 630 Franchise and property expenses 119 — — 119 Advertising expenses and other services 326 — — 326 General and administrative expenses 169 — — 169 (Income) loss from equity method investments 1 — — 1 Other operating expenses (income), net 10 — — 10 Total operating costs and expenses 1,255 — — 1,255 Income from operations 582 — — 582 Interest expense, net 143 — — 143 Loss on early extinguishment of debt 16 — — 16 Income before income taxes 423 — — 423 Income tax expense 59 — — 59 Net income 364 — — 364 Equity in earnings of consolidated subsidiaries — 364 (364) — Net income (loss) 364 364 (364) 364 Net income (loss) attributable to noncontrolling interests 1 1 (1) 1 Net income (loss) attributable to common unitholders $ 363 $ 363 $ (363) $ 363 Comprehensive income (loss) $ 332 $ 332 $ (332) $ 332 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Nine Months Ended September 30, 2023 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 2,183 $ — $ — $ 2,183 Franchise and property revenues 2,163 — — 2,163 Advertising revenues and other services 856 — — 856 Total revenues 5,202 — — 5,202 Operating costs and expenses: Cost of sales 1,792 — — 1,792 Franchise and property expenses 372 — — 372 Advertising expenses and other services 909 — — 909 General and administrative expenses 507 — — 507 (Income) loss from equity method investments 19 — — 19 Other operating expenses (income), net 20 — — 20 Total operating costs and expenses 3,619 — — 3,619 Income from operations 1,583 — — 1,583 Interest expense, net 430 — — 430 Loss on early extinguishment of debt 16 — — 16 Income before income taxes 1,137 — — 1,137 Income tax expense 145 — — 145 Net income 992 — — 992 Equity in earnings of consolidated subsidiaries — 992 (992) — Net income (loss) 992 992 (992) 992 Net income (loss) attributable to noncontrolling interests 3 3 (3) 3 Net income (loss) attributable to common unitholders $ 989 $ 989 $ (989) $ 989 Comprehensive income (loss) $ 1,094 $ 1,094 $ (1,094) $ 1,094 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended September 30, 2022 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 759 $ — $ — $ 759 Franchise and property revenues 698 — — 698 Advertising revenues and other services 269 — — 269 Total revenues 1,726 — — 1,726 Operating costs and expenses: Cost of sales 615 — — 615 Franchise and property expenses 137 — — 137 Advertising expenses and other services 276 — — 276 General and administrative expenses 156 — — 156 (Income) loss from equity method investments 8 — — 8 Other operating expenses (income), net (27) — — (27) Total operating costs and expenses 1,165 — — 1,165 Income from operations 561 — — 561 Interest expense, net 133 — — 133 Income before income taxes 428 — — 428 Income tax expense (benefit) (102) — — (102) Net income 530 — — 530 Equity in earnings of consolidated subsidiaries — 530 (530) — Net income (loss) 530 530 (530) 530 Net income (loss) attributable to noncontrolling interests 1 1 (1) 1 Net income (loss) attributable to common unitholders $ 529 $ 529 $ (529) $ 529 Comprehensive income (loss) $ 343 $ 343 $ (343) $ 343 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Nine Months Ended September 30, 2022 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 2,076 $ — $ — $ 2,076 Franchise and property revenues 1,989 — — 1,989 Advertising revenues and other services 751 — — 751 Total revenues 4,816 — — 4,816 Operating costs and expenses: Cost of sales 1,693 — — 1,693 Franchise and property expenses 392 — — 392 Advertising expenses and other services 782 — — 782 General and administrative expenses 435 — — 435 (Income) loss from equity method investments 30 — — 30 Other operating expenses (income), net (68) — — (68) Total operating costs and expenses 3,264 — — 3,264 Income from operations 1,552 — — 1,552 Interest expense, net 389 — — 389 Income before income taxes 1,163 — — 1,163 Income tax expense 17 — — 17 Net income 1,146 — — 1,146 Equity in earnings of consolidated subsidiaries — 1,146 (1,146) — Net income (loss) 1,146 1,146 (1,146) 1,146 Net income (loss) attributable to noncontrolling interests 3 3 (3) 3 Net income (loss) attributable to common unitholders $ 1,143 $ 1,143 $ (1,143) $ 1,143 Comprehensive income (loss) $ 1,145 $ 1,145 $ (1,145) $ 1,145 |
Condensed Consolidating Statements of Cash Flows | Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Nine months ended September 30, 2023 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 992 $ 992 $ (992) $ 992 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (992) 992 — Depreciation and amortization 142 — — 142 Non-cash loss on early extinguishment of debt 5 — — 5 Amortization of deferred financing costs and debt issuance discount 21 — — 21 (Income) loss from equity method investments 19 — — 19 (Gain) loss on remeasurement of foreign denominated transactions (11) — — (11) Net (gains) losses on derivatives (111) — — (111) Share-based compensation and non-cash incentive compensation expense 141 — — 141 Deferred income taxes (47) — — (47) Other 19 — — 19 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (86) — — (86) Inventories and prepaids and other current assets (49) — — (49) Accounts and drafts payable (62) — — (62) Other accrued liabilities and gift card liability (62) — — (62) Tenant inducements paid to franchisees (15) — — (15) Other long-term assets and liabilities 24 — — 24 Net cash provided by operating activities 920 — — 920 Cash flows from investing activities: Payments for property and equipment (73) — — (73) Net proceeds from disposal of assets, restaurant closures, and refranchisings 23 — — 23 Settlement/sale of derivatives, net 40 — — 40 Other investing activities, net (1) — — (1) Net cash (used for) provided by investing activities (11) — — (11) Cash flows from financing activities: Proceeds from long-term debt 55 — — 55 Repayments of long-term debt and finance leases (79) — — (79) Payment of financing costs (43) — — (43) Distributions on Class A common and Partnership exchangeable units — (741) — (741) Distribution to RBI for repurchase of RBI common shares — (115) — (115) Capital contribution from RBI 52 — — 52 Distributions from subsidiaries (856) 856 — — (Payments) proceeds from derivatives 100 — — 100 Other financing activities, net (3) — — (3) Net cash (used for) provided by financing activities (774) — — (774) Effect of exchange rates on cash and cash equivalents (3) — — (3) Increase (decrease) in cash and cash equivalents 132 — — 132 Cash and cash equivalents at beginning of period 1,178 — — 1,178 Cash and cash equivalents at end of period $ 1,310 $ — $ — $ 1,310 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Nine Months Ended September 30, 2022 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 1,146 $ 1,146 $ (1,146) $ 1,146 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (1,146) 1,146 — Depreciation and amortization 143 — — 143 Amortization of deferred financing costs and debt issuance discount 21 — — 21 (Income) loss from equity method investments 30 — — 30 (Gain) loss on remeasurement of foreign denominated transactions (82) — — (82) Net (gains) losses on derivatives 17 — — 17 Share-based compensation and non-cash incentive compensation expense 93 — — 93 Deferred income taxes (29) — — (29) Other 8 — — 8 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (93) — — (93) Inventories and prepaids and other current assets (67) — — (67) Accounts and drafts payable 113 — — 113 Other accrued liabilities and gift card liability (74) — — (74) Tenant inducements paid to franchisees (13) — — (13) Other long-term assets and liabilities (146) — — (146) Net cash provided by operating activities 1,067 — — 1,067 Cash flows from investing activities: Payments for property and equipment (52) — — (52) Net proceeds from disposal of assets, restaurant closures, and refranchisings 11 — — 11 Net payments in connection with purchase of Firehouse Subs (12) — — (12) Settlement/sale of derivatives, net 22 — — 22 Other investing activities, net (35) — — (35) Net cash (used for) provided by investing activities (66) — — (66) Cash flows from financing activities: Proceeds from long-term debt 2 — — 2 Repayments of long-term debt and finance leases (71) — — (71) Distributions on Class A common and Partnership exchangeable units — (728) — (728) Distribution to RBI for repurchase of RBI common shares — (326) — (326) Capital contribution from RBI 7 — — 7 Distributions from subsidiaries (1,054) 1,054 — — (Payments) proceeds from derivatives 8 — — 8 Other financing activities, net (3) — — (3) Net cash (used for) provided by financing activities (1,111) — — (1,111) Effect of exchange rates on cash and cash equivalents (31) — — (31) Increase (decrease) in cash and cash equivalents (141) — — (141) Cash and cash equivalents at beginning of period 1,087 — — 1,087 Cash and cash equivalents at end of period $ 946 $ — $ — $ 946 |
Description of Business and O_2
Description of Business and Organization (Details) | Sep. 30, 2023 restaurant brand country |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 30,375 |
Number of countries in which company and franchise restaurants operated (more than) | country | 100 |
Percentage of franchised restaurants | 100% |
Tim Hortons brand | |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 5,701 |
Burger King brand | |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 19,035 |
Popeyes brand | |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 4,373 |
Firehouse Subs restaurants | |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | brand | 1,266 |
Basis of Presentation and Con_3
Basis of Presentation and Consolidation (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Supplier finance programs, term | 120 days | |
Supply chain finance | $ 29 | $ 47 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Lease income - operating leases | ||||
Minimum lease payments | $ 95 | $ 100 | $ 290 | $ 314 |
Variable lease payments | 122 | 112 | 337 | 291 |
Amortization of favorable and unfavorable income lease contracts, net | 0 | 0 | 1 | 1 |
Subtotal - lease income from operating leases | 217 | 212 | 628 | 606 |
Earned income on direct financing and sales-type leases | 4 | 2 | 9 | 5 |
Total property revenues | $ 221 | $ 214 | $ 637 | $ 611 |
Revenue Recognition - Change In
Revenue Recognition - Change In Contract Liabilities (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Change In Contract With Customer Liability [Roll Forward] | |
Beginning balance | $ 540 |
Recognized during period and included in the contract liability balance at the beginning of the year | (44) |
Increase, excluding amounts recognized as revenue during the period | 40 |
Impact of foreign currency translation | (2) |
Ending balance | $ 534 |
Revenue Recognition - Estimated
Revenue Recognition - Estimated Revenue Recognition (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 534 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 14 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 52 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 50 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 47 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 44 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 327 |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Property revenues | $ 221 | $ 214 | $ 637 | $ 611 |
Total revenues | 1,837 | 1,726 | 5,202 | 4,816 |
TH | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Property revenues | 161 | 154 | 456 | 433 |
Total revenues | 1,060 | 1,033 | 2,976 | 2,830 |
BK | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Property revenues | 57 | 57 | 171 | 169 |
Total revenues | 538 | 491 | 1,551 | 1,407 |
PLK | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Property revenues | 3 | 3 | 10 | 9 |
Total revenues | 188 | 164 | 538 | 477 |
FHS | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Property revenues | 0 | 0 | 0 | 0 |
Total revenues | 51 | 38 | 137 | 102 |
Sales | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 771 | 759 | 2,183 | 2,076 |
Total revenues | 771 | 759 | 2,183 | 2,076 |
Sales | TH | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 717 | 710 | 2,023 | 1,937 |
Sales | BK | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 21 | 19 | 64 | 52 |
Sales | PLK | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 23 | 21 | 66 | 58 |
Sales | FHS | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 10 | 9 | 30 | 29 |
Royalties | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 503 | 451 | 1,436 | 1,292 |
Royalties | TH | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 94 | 87 | 261 | 239 |
Royalties | BK | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 307 | 274 | 882 | 791 |
Royalties | PLK | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 85 | 74 | 241 | 213 |
Royalties | FHS | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 17 | 16 | 52 | 49 |
Franchise fees and other revenue | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 29 | 33 | 90 | 86 |
Franchise fees and other revenue | TH | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 6 | 9 | 19 | 22 |
Franchise fees and other revenue | BK | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 12 | 18 | 40 | 42 |
Franchise fees and other revenue | PLK | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 2 | 1 | 10 | 8 |
Franchise fees and other revenue | FHS | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 9 | 5 | 21 | 14 |
Advertising revenues and other services | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 313 | 269 | 856 | 751 |
Total revenues | 313 | 269 | 856 | 751 |
Advertising revenues and other services | TH | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 82 | 73 | 217 | 199 |
Advertising revenues and other services | BK | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 141 | 123 | 394 | 353 |
Advertising revenues and other services | PLK | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | 75 | 65 | 211 | 189 |
Advertising revenues and other services | FHS | ||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||||
Revenues | $ 15 | $ 8 | $ 34 | $ 10 |
Earnings per Unit (Details)
Earnings per Unit (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Allocation of net income among partner interests: | ||||
Net income attributable to common unitholders | $ 363 | $ 529 | $ 989 | $ 1,143 |
Class A common units | ||||
Allocation of net income among partner interests: | ||||
Net income attributable to common unitholders | $ 252 | $ 360 | $ 682 | $ 779 |
Denominator - basic and diluted partnership units: | ||||
Weighted average number of unit outstanding, basic (in shares) | 202 | 202 | 202 | 202 |
Weighted average number of units outstanding, diluted (in shares) | 202 | 202 | 202 | 202 |
Earnings per unit - basic and diluted: | ||||
Earnings per unit, basic (in usd per share) | $ 1.25 | $ 1.78 | $ 3.38 | $ 3.86 |
Earnings per unit, diluted (in usd per share) | $ 1.25 | $ 1.78 | $ 3.38 | $ 3.86 |
Partnership exchangeable units | ||||
Allocation of net income among partner interests: | ||||
Net income attributable to common unitholders | $ 111 | $ 169 | $ 307 | $ 364 |
Denominator - basic and diluted partnership units: | ||||
Weighted average number of unit outstanding, basic (in shares) | 139 | 143 | 141 | 144 |
Weighted average number of units outstanding, diluted (in shares) | 139 | 143 | 141 | 144 |
Earnings per unit - basic and diluted: | ||||
Earnings per unit, basic (in usd per share) | $ 0.80 | $ 1.18 | $ 2.18 | $ 2.53 |
Earnings per unit, diluted (in usd per share) | $ 0.80 | $ 1.18 | $ 2.18 | $ 2.53 |
Intangible Assets, net and Go_3
Intangible Assets, net and Goodwill - Schedule of Intangible Assets, net and Goodwill (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 798 | $ 810 |
Accumulated Amortization | (388) | (370) |
Net | 410 | 440 |
Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, net | 10,946 | 10,991 |
Goodwill [Line Items] | ||
Goodwill | 5,681 | 5,688 |
Tim Hortons brand | ||
Goodwill [Line Items] | ||
Goodwill | 4,054 | 4,059 |
Burger King brand | ||
Goodwill [Line Items] | ||
Goodwill | 588 | 590 |
Popeyes brand | ||
Goodwill [Line Items] | ||
Goodwill | 846 | 846 |
Firehouse Subs brand | ||
Goodwill [Line Items] | ||
Goodwill | 193 | 193 |
Trade names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 10,536 | 10,551 |
Trade names | Tim Hortons brand | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 6,285 | 6,292 |
Trade names | Burger King brand | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 2,080 | 2,088 |
Trade names | Popeyes brand | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 1,355 | 1,355 |
Trade names | Firehouse Subs brand | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 816 | 816 |
Franchise agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 717 | 720 |
Accumulated Amortization | (335) | (313) |
Net | 382 | 407 |
Favorable leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 81 | 90 |
Accumulated Amortization | (53) | (57) |
Net | $ 28 | $ 33 |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense on intangible assets | $ 9 | $ 9 | $ 28 | $ 29 |
Equity Method Investments - Add
Equity Method Investments - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||
Investment in subsidiaries | $ 0 | $ 0 | $ 0 | ||
Related Party | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Accounts receivable, net | 58 | 58 | 42 | ||
Carrols Restaurant Group, Inc. | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Quoted market price | $ 62 | $ 62 | |||
BK Brasil | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Joint-venture interest | 9.40% | 9.40% | |||
Quoted market price | $ 32 | $ 32 | |||
TH International Limited | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Joint-venture interest | 4.20% | 4.20% | |||
Quoted market price | $ 12 | $ 12 | |||
Wendy's Company TIMWEN Partnership | Tim Hortons brand | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Cash distributions | 4 | $ 5 | 9 | $ 10 | |
Rent expense | $ 5 | $ 5 | $ 15 | $ 14 | |
United States | Carrols Restaurant Group, Inc. | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Joint-venture interest | 14.70% | 14.70% | |||
Canada | Wendy's Company TIMWEN Partnership | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Joint-venture interest | 50% | 50% | |||
Other assets | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Investment in subsidiaries | $ 135 | $ 135 | $ 167 |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues from affiliates: | ||||
Property revenues | $ 221 | $ 214 | $ 637 | $ 611 |
Total revenues | 1,837 | 1,726 | 5,202 | 4,816 |
Affiliates | ||||
Revenues from affiliates: | ||||
Total revenues | 143 | 127 | 413 | 367 |
Royalties | ||||
Revenues from affiliates: | ||||
Revenues | 503 | 451 | 1,436 | 1,292 |
Royalties | Affiliates | ||||
Revenues from affiliates: | ||||
Revenues | 106 | 92 | 301 | 266 |
Advertising revenues and other services | ||||
Revenues from affiliates: | ||||
Revenues | 313 | 269 | 856 | 751 |
Total revenues | 313 | 269 | 856 | 751 |
Advertising revenues and other services | Affiliates | ||||
Revenues from affiliates: | ||||
Revenues | 21 | 20 | 59 | 54 |
Property revenues | Affiliates | ||||
Revenues from affiliates: | ||||
Property revenues | 6 | 8 | 24 | 23 |
Franchise fees and other revenue | ||||
Revenues from affiliates: | ||||
Revenues | 29 | 33 | 90 | 86 |
Franchise fees and other revenue | Affiliates | ||||
Revenues from affiliates: | ||||
Revenues | 6 | 3 | 15 | 12 |
Sales | Affiliates | ||||
Revenues from affiliates: | ||||
Revenues | $ 4 | $ 4 | $ 14 | $ 12 |
Other Accrued Liabilities and_3
Other Accrued Liabilities and Other Liabilities, net (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Current: | ||
Distribution payable | $ 249 | $ 243 |
Interest payable | 88 | 89 |
Accrued compensation and benefits | 110 | 124 |
Taxes payable | 255 | 190 |
Deferred income | 86 | 43 |
Accrued advertising expenses | 55 | 37 |
Restructuring and other provisions | 16 | 29 |
Current portion of operating lease liabilities | 140 | 137 |
Other | 133 | 109 |
Other accrued liabilities | 1,132 | 1,001 |
Noncurrent: | ||
Taxes payable | 164 | 139 |
Contract liabilities | 534 | 540 |
Derivatives liabilities | 0 | 34 |
Unfavorable leases | 43 | 50 |
Accrued pension | 41 | 40 |
Deferred income | 58 | 44 |
Other | 24 | 25 |
Other liabilities, net | $ 864 | $ 872 |
Operating lease, liability, current, statement of financial position [Extensible Enumeration] | Other accrued liabilities | Other accrued liabilities |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
TH Facility and other | $ 145 | $ 155 |
Less: unamortized deferred financing costs and deferred issue discount | (128) | (111) |
Total debt, net | 12,917 | 12,934 |
Less: current maturities of debt | (55) | (95) |
Total long-term debt | 12,862 | 12,839 |
Term Loan B | ||
Debt Instrument [Line Items] | ||
Term loan facility | 5,175 | 5,190 |
Term Loan A | ||
Debt Instrument [Line Items] | ||
Term loan facility | $ 1,275 | 1,250 |
3.875% First Lien Senior Notes due 2028 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 3.875% | |
Senior notes | $ 1,550 | 1,550 |
3.50% First Lien Senior Notes due 2029 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 3.50% | |
Senior notes | $ 750 | 750 |
5.75% First Lien Senior Notes due 2025 | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 5.75% | |
5.75% First Lien Senior Notes due 2025 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 5.75% | |
Senior notes | $ 500 | 500 |
4.375% Second Lien Senior Notes due 2028 | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 4.375% | |
4.375% Second Lien Senior Notes due 2028 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 4.375% | |
Senior notes | $ 750 | 750 |
4.00% Second Lien Senior Notes due 2030 | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 4% | |
4.00% Second Lien Senior Notes due 2030 | Senior Notes | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 4% | |
Senior notes | $ 2,900 | $ 2,900 |
Long-Term Debt - Credit Facilit
Long-Term Debt - Credit Facility (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 21, 2023 USD ($) subsidiary | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 20, 2023 USD ($) | |
Line of Credit Facility [Line Items] | ||||||
Loss on early extinguishment of debt | $ 16,000,000 | $ 0 | $ 16,000,000 | $ 0 | ||
Secured Debt | ||||||
Line of Credit Facility [Line Items] | ||||||
Capitalized debt issuance costs | $ 44,000,000 | |||||
Loss on early extinguishment of debt | $ 16,000,000 | |||||
Term Loan A Due September 21, 2028 | ||||||
Line of Credit Facility [Line Items] | ||||||
Number of subsidiaries | subsidiary | 2 | |||||
Secured debt | $ 1,275,000,000 | |||||
Term Loan A Due September 21, 2028 | Beginning March 31, 2025 | ||||||
Line of Credit Facility [Line Items] | ||||||
Periodic payment | 8,000,000 | |||||
Term Loan A Due September 21, 2028 | Beginning March 31, 2027 | ||||||
Line of Credit Facility [Line Items] | ||||||
Periodic payment | 16,000,000 | |||||
Term Loan A Due September 21, 2028 | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Aggregate principal amount outstanding | 1,250,000,000 | $ 1,000,000,000 | ||||
Term Loan B Due September 21, 2030 | ||||||
Line of Credit Facility [Line Items] | ||||||
Secured debt | $ 5,175,000,000 | |||||
Interest rate, base rate floor (as a percent) | 0% | |||||
Term Loan B Due September 21, 2030 | Beginning March 31, 2024 | ||||||
Line of Credit Facility [Line Items] | ||||||
Periodic payment | $ 13,000,000 | |||||
Term Loan B Due September 21, 2030 | SOFR | ||||||
Line of Credit Facility [Line Items] | ||||||
Basis spread on variable rate | 2.25% | |||||
Interest rate adjustment percent | 0.10% |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facility (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | ||
Amount outstanding under credit facility | $ 12,917,000,000 | $ 12,934,000,000 |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Amount outstanding under credit facility | 0 | |
Letters of credit issued against credit facility | 2,000,000 | |
Remaining borrowing capacity | 1,248,000,000 | |
Letter of credit sublimit as part of revolving credit facility | $ 125,000,000 |
Long-Term Debt - TH facility (D
Long-Term Debt - TH facility (Details) $ in Millions | 9 Months Ended | ||
Sep. 30, 2023 USD ($) subsidiary | Sep. 30, 2023 CAD ($) subsidiary | Dec. 31, 2022 USD ($) | |
Line of Credit Facility [Line Items] | |||
Amount outstanding under credit facility | $ 12,917 | $ 12,934 | |
TH Facility | |||
Line of Credit Facility [Line Items] | |||
Aggregate principal amount outstanding | $ 225,000,000 | ||
Amount outstanding under credit facility | $ 186,000,000 | ||
Interest rate | 6.77% | 6.77% | |
TH Facility | Canadian Bankers' Acceptance Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.40% | ||
TH Facility | Prime Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.40% | ||
TH Facility | Line of Credit | |||
Line of Credit Facility [Line Items] | |||
Number of subsidiaries | subsidiary | 1 | 1 | |
Number of guaranteed subsidiaries | subsidiary | 4 | 4 |
Long-Term Debt - Schedule of Fa
Long-Term Debt - Schedule of Fair Value Measurement (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Fair value of our variable term debt and senior notes | $ 11,996 | $ 11,885 |
Principal carrying amount of our variable term debt and senior notes | $ 12,900 | $ 12,890 |
Long-Term Debt - Schedule of In
Long-Term Debt - Schedule of Interest Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Disclosure [Abstract] | ||||
Debt | $ 144 | $ 124 | $ 424 | $ 357 |
Finance lease obligations | 5 | 4 | 14 | 14 |
Amortization of deferred financing costs and debt issuance discount | 7 | 7 | 21 | 21 |
Interest income | (13) | (2) | (29) | (3) |
Interest expense, net | 143 | 133 | 430 | 389 |
Cross-currency rate swaps | Derivatives designated as net investment hedges | Interest expense, net | ||||
Debt Instrument [Line Items] | ||||
Gain reclassified to earnings, net investment hedge | $ 16 | $ 17 | $ 47 | $ 40 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 14% | (23.80%) | 12.80% | 1.50% |
Effective tax rate, net reserve releases | $ 171 | $ 171 | ||
Effective tax rate, net reserve releases, percent | 39.90% | 14.70% |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Stockholders Equity [Line Items] | ||
Distribution to RBI for repurchase of RBI common shares | $ 142 | $ 142 |
Distribution to RBI for repurchase of RBI common shares | $ 115 | $ 115 |
Partnership exchangeable units | ||
Stockholders Equity [Line Items] | ||
BKW reorganization into Partnership (in shares) | 9,398,876 |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss) | ||||
Beginning balances | $ 4,678 | $ 3,909 | $ 4,268 | $ 3,853 |
Foreign currency translation adjustment | (270) | (727) | (36) | (1,015) |
Net change in fair value of derivatives, net of tax | 181 | |||
Amounts reclassified to earnings of cash flow hedges, net of tax | (17) | 5 | (47) | 42 |
Gain (loss) recognized on other, net of tax | 2 | 1 | 4 | 3 |
Ending balances | 4,664 | 4,039 | 4,664 | 4,039 |
Derivatives | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Beginning balances | 944 | |||
Net change in fair value of derivatives, net of tax | 181 | |||
Amounts reclassified to earnings of cash flow hedges, net of tax | (47) | |||
Ending balances | 1,078 | 1,078 | ||
Pensions | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Beginning balances | (24) | |||
Gain (loss) recognized on other, net of tax | 4 | |||
Ending balances | (20) | (20) | ||
Foreign Currency Translation | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Beginning balances | (1,893) | |||
Foreign currency translation adjustment | (36) | |||
Ending balances | (1,929) | (1,929) | ||
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Beginning balances | (839) | (838) | (973) | (1,024) |
Ending balances | $ (871) | $ (1,025) | $ (871) | $ (1,025) |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) € in Millions | 9 Months Ended | ||||
Sep. 30, 2023 USD ($) | Sep. 30, 2023 EUR (€) | Dec. 31, 2021 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2018 USD ($) | |
Interest Rate Swaps - Period One | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | $ 3,500,000,000 | ||||
Interest Rate Swaps - Period Two | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | 500,000,000 | ||||
Interest Rate Swap | Interest expense, net | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Loss reclassified from OACI to Income | 130,000,000 | ||||
Cross Currency Interest Rate Contract | Fixed Income Interest Rate | Hedge Funds | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | 1,200,000,000 | € 1,108 | |||
Cross Currency Interest Rate Contract | Derivatives designated as net investment hedges | Fixed Income Interest Rate | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | 5,000,000,000 | $ 150,000,000 | $ 500,000,000 | $ 400,000,000 | |
Foreign Exchange Contract | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Notional amount | $ 176,000,000 |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
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) | $ 91 | $ 191 | $ 154 | $ 521 |
Interest rate swaps | Interest expense, net | Derivatives designated as cash flow hedges | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain or (Loss) Reclassified from AOCI into Earnings | 23 | (8) | 58 | (60) |
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) | 6 | 14 | 2 | 18 |
Forward-currency contracts | Cost of sales | Derivatives designated as cash flow hedges | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain or (Loss) Reclassified from AOCI into Earnings | 0 | 1 | 6 | 3 |
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) | 178 | 471 | 55 | 675 |
Cross-currency rate swaps | Interest expense, net | 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) | $ 16 | $ 17 | $ 47 | $ 40 |
Derivative Instruments - Summar
Derivative Instruments - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives assets | $ 448 | $ 365 |
Derivatives liabilities | 0 | 34 |
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 | 339 | 280 |
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 | 3 | 7 |
Derivatives designated as net investment hedges | Foreign currency | Other assets, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives assets | 106 | 78 |
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 | $ 0 | $ 34 |
Other Operating Expenses (Inc_3
Other Operating Expenses (Income), net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Other Income and Expenses [Abstract] | ||||
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings | $ 30 | $ 1 | $ 19 | $ 2 |
Litigation settlements (gains) and reserves, net | 1 | 0 | (1) | 3 |
Net losses (gains) on foreign exchange | (18) | (30) | (11) | (82) |
Other, net | (3) | 2 | 13 | 9 |
Other operating expenses (income), net | $ 10 | $ (27) | $ 20 | $ (68) |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2023 brand | |
Segment Reporting [Abstract] | |
Number of brands | 4 |
Segment Reporting - Revenues by
Segment Reporting - Revenues by Operating Segment and Country (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 1,837 | $ 1,726 | $ 5,202 | $ 4,816 |
Canada | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 956 | $ 940 | $ 2,683 | $ 2,565 |
Canada | Revenue Benchmark | Geographic Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 10% | 10% | 10% | 10% |
United States | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 645 | $ 587 | $ 1,849 | $ 1,679 |
United States | Revenue Benchmark | Geographic Concentration Risk | ||||
Revenue, Major Customer [Line Items] | ||||
Concentration risk, percentage | 10% | 10% | 10% | 10% |
Other | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 236 | $ 199 | $ 670 | $ 572 |
TH | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 1,060 | 1,033 | 2,976 | 2,830 |
BK | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 538 | 491 | 1,551 | 1,407 |
PLK | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | 188 | 164 | 538 | 477 |
FHS | ||||
Revenue, Major Customer [Line Items] | ||||
Total revenues | $ 51 | $ 38 | $ 137 | $ 102 |
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, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||
Adjusted EBITDA | $ 698 | $ 642 | $ 1,951 | $ 1,790 | ||||
Impact of equity method investments | 1 | 8 | 19 | 30 | ||||
Other operating expenses (income), net | 10 | (27) | 20 | (68) | ||||
EBITDA | 629 | 607 | 1,725 | 1,695 | ||||
Depreciation and amortization | 47 | 46 | 142 | 143 | ||||
Income from operations | 582 | 561 | 1,583 | 1,552 | ||||
Interest expense, net | 143 | 133 | 430 | 389 | ||||
Loss on early extinguishment of debt | 16 | 0 | 16 | 0 | ||||
Income tax expense (benefit) | 59 | (102) | 145 | 17 | ||||
Net income | 364 | $ 351 | $ 277 | 530 | $ 346 | $ 270 | 992 | 1,146 |
Unallocated Management G&A | ||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||
Share-based compensation and non-cash incentive compensation expense | 49 | 34 | 141 | 93 | ||||
Corporate restructuring and advisory fees | 5 | 12 | 17 | 21 | ||||
Impact of equity method investments | 5 | 13 | 29 | 41 | ||||
Other operating expenses (income), net | 10 | (27) | 20 | (68) | ||||
Unallocated Management G&A | Firehouse Subs brand | ||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||
FHS Transaction costs | 0 | 3 | 19 | 8 | ||||
TH | Operating Segments | ||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||
Adjusted EBITDA | 311 | 305 | 852 | 810 | ||||
BK | Operating Segments | ||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||
Adjusted EBITDA | 298 | 262 | 842 | 761 | ||||
PLK | Operating Segments | ||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||
Adjusted EBITDA | 75 | 62 | 214 | 179 | ||||
FHS | Operating Segments | ||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||||||||
Adjusted EBITDA | $ 14 | $ 13 | $ 43 | $ 40 |
Supplemental Financial Inform_3
Supplemental Financial Information - Narrative (Details) | Sep. 30, 2023 |
3.875% First Lien Senior Notes due 2028 | Senior Notes | |
Stated interest rate (as a percent) | 3.875% |
3.50% First Lien Senior Notes due 2029 | |
Stated interest rate (as a percent) | 3.50% |
5.75% First Lien Senior Notes due 2025 | |
Stated interest rate (as a percent) | 5.75% |
5.75% First Lien Senior Notes due 2025 | Senior Notes | |
Stated interest rate (as a percent) | 5.75% |
4.375% Second Lien Senior Notes due 2028 | |
Stated interest rate (as a percent) | 4.375% |
4.375% Second Lien Senior Notes due 2028 | Senior Notes | |
Stated interest rate (as a percent) | 4.375% |
4.00% Second Lien Senior Notes due 2030 | |
Stated interest rate (as a percent) | 4% |
4.00% Second Lien Senior Notes due 2030 | Senior Notes | |
Stated interest rate (as a percent) | 4% |
Supplemental Financial Inform_4
Supplemental Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||||||||
Cash and cash equivalents | $ 1,310 | $ 1,178 | $ 946 | $ 1,087 | ||||
Accounts and notes receivable, net | 692 | 614 | ||||||
Inventories, net | 160 | 133 | ||||||
Prepaids and other current assets | 221 | 123 | ||||||
Total current assets | 2,383 | 2,048 | ||||||
Property and equipment, net | 1,904 | 1,950 | ||||||
Operating lease assets, net | 1,060 | 1,082 | ||||||
Intangible assets, net | 10,946 | 10,991 | ||||||
Goodwill | 5,681 | 5,688 | ||||||
Investment in subsidiaries | 0 | 0 | ||||||
Other assets, net | 1,103 | 987 | ||||||
Total assets | 23,077 | 22,746 | ||||||
Current liabilities: | ||||||||
Accounts and drafts payable | 693 | 758 | ||||||
Other accrued liabilities | 1,132 | 1,001 | ||||||
Gift card liability | 159 | 230 | ||||||
Current portion of long-term debt and finance leases | 87 | 127 | ||||||
Total current liabilities | 2,071 | 2,116 | ||||||
Long-term debt, net of current portion | 12,862 | 12,839 | ||||||
Finance leases, net of current portion | 305 | 311 | ||||||
Operating lease liabilities, net of current portion | 1,003 | 1,027 | ||||||
Other liabilities, net | 864 | 872 | ||||||
Deferred income taxes, net | 1,308 | 1,313 | ||||||
Total liabilities | 18,413 | 18,478 | ||||||
Partners’ capital: | ||||||||
Common shares | 0 | 0 | ||||||
Retained earnings | 0 | 0 | ||||||
Accumulated other comprehensive income (loss) | (871) | (973) | ||||||
Total Partners’ capital | 4,662 | 4,266 | ||||||
Noncontrolling interests | 2 | 2 | ||||||
Total equity | 4,664 | $ 4,678 | $ 4,311 | 4,268 | 4,039 | $ 3,909 | $ 3,961 | 3,853 |
Total liabilities and equity | 23,077 | 22,746 | ||||||
Related Party | ||||||||
Current assets: | ||||||||
Intercompany receivable | 0 | 0 | ||||||
Current liabilities: | ||||||||
Other liabilities, net | 0 | 0 | ||||||
Nonrelated Party | ||||||||
Current liabilities: | ||||||||
Other liabilities, net | 864 | |||||||
Deferred income taxes, net | 1,313 | |||||||
Class A common units | ||||||||
Partners’ capital: | ||||||||
Class A common units | 9,584 | 8,735 | ||||||
Partnership exchangeable units | ||||||||
Partners’ capital: | ||||||||
Partnership exchangeable units | (4,051) | (3,496) | ||||||
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 | ||||||
Operating lease assets, net | 0 | 0 | ||||||
Intangible assets, net | 0 | 0 | ||||||
Goodwill | 0 | 0 | ||||||
Investment in subsidiaries | (4,664) | (4,268) | ||||||
Other assets, net | 0 | 0 | ||||||
Total assets | (4,913) | (4,511) | ||||||
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 finance leases | 0 | 0 | ||||||
Total current liabilities | 0 | 0 | ||||||
Long-term debt, net of current portion | 0 | 0 | ||||||
Finance leases, net of current portion | 0 | 0 | ||||||
Operating lease liabilities, net of current portion | 0 | 0 | ||||||
Other liabilities, net | 0 | |||||||
Deferred income taxes, net | 0 | |||||||
Total liabilities | (249) | (243) | ||||||
Partners’ capital: | ||||||||
Common shares | (2,546) | (2,494) | ||||||
Retained earnings | (2,987) | (2,745) | ||||||
Accumulated other comprehensive income (loss) | 871 | 973 | ||||||
Total Partners’ capital | (4,662) | (4,266) | ||||||
Noncontrolling interests | (2) | (2) | ||||||
Total equity | (4,664) | (4,268) | ||||||
Total liabilities and equity | (4,913) | (4,511) | ||||||
Eliminations | Related Party | ||||||||
Current assets: | ||||||||
Intercompany receivable | (249) | (243) | ||||||
Current liabilities: | ||||||||
Other liabilities, net | (249) | (243) | ||||||
Eliminations | Nonrelated Party | ||||||||
Current liabilities: | ||||||||
Other liabilities, net | 0 | |||||||
Deferred income taxes, net | 0 | |||||||
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 | 1,310 | 1,178 | 946 | 1,087 | ||||
Accounts and notes receivable, net | 692 | 614 | ||||||
Inventories, net | 160 | 133 | ||||||
Prepaids and other current assets | 221 | 123 | ||||||
Total current assets | 2,383 | 2,048 | ||||||
Property and equipment, net | 1,904 | 1,950 | ||||||
Operating lease assets, net | 1,060 | 1,082 | ||||||
Intangible assets, net | 10,946 | 10,991 | ||||||
Goodwill | 5,681 | 5,688 | ||||||
Investment in subsidiaries | 0 | 0 | ||||||
Other assets, net | 1,103 | 987 | ||||||
Total assets | 23,077 | 22,746 | ||||||
Current liabilities: | ||||||||
Accounts and drafts payable | 693 | 758 | ||||||
Other accrued liabilities | 883 | 758 | ||||||
Gift card liability | 159 | 230 | ||||||
Current portion of long-term debt and finance leases | 87 | 127 | ||||||
Total current liabilities | 1,822 | 1,873 | ||||||
Long-term debt, net of current portion | 12,862 | 12,839 | ||||||
Finance leases, net of current portion | 305 | 311 | ||||||
Operating lease liabilities, net of current portion | 1,003 | 1,027 | ||||||
Other liabilities, net | 872 | |||||||
Deferred income taxes, net | 1,308 | |||||||
Total liabilities | 18,413 | 18,478 | ||||||
Partners’ capital: | ||||||||
Common shares | 2,546 | 2,494 | ||||||
Retained earnings | 2,987 | 2,745 | ||||||
Accumulated other comprehensive income (loss) | (871) | (973) | ||||||
Total Partners’ capital | 4,662 | 4,266 | ||||||
Noncontrolling interests | 2 | 2 | ||||||
Total equity | 4,664 | 4,268 | ||||||
Total liabilities and equity | 23,077 | 22,746 | ||||||
Consolidated Borrowers | Reportable Legal Entities | Related Party | ||||||||
Current assets: | ||||||||
Intercompany receivable | 0 | 0 | ||||||
Current liabilities: | ||||||||
Other liabilities, net | 249 | 243 | ||||||
Consolidated Borrowers | Reportable Legal Entities | Nonrelated Party | ||||||||
Current liabilities: | ||||||||
Other liabilities, net | 864 | |||||||
Deferred income taxes, net | 1,313 | |||||||
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 | ||||||
Operating lease assets, net | 0 | 0 | ||||||
Intangible assets, net | 0 | 0 | ||||||
Goodwill | 0 | 0 | ||||||
Investment in subsidiaries | 4,664 | 4,268 | ||||||
Other assets, net | 0 | 0 | ||||||
Total assets | 4,913 | 4,511 | ||||||
Current liabilities: | ||||||||
Accounts and drafts payable | 0 | 0 | ||||||
Other accrued liabilities | 249 | 243 | ||||||
Gift card liability | 0 | 0 | ||||||
Current portion of long-term debt and finance leases | 0 | 0 | ||||||
Total current liabilities | 249 | 243 | ||||||
Long-term debt, net of current portion | 0 | 0 | ||||||
Finance leases, net of current portion | 0 | 0 | ||||||
Operating lease liabilities, net of current portion | 0 | 0 | ||||||
Other liabilities, net | 0 | |||||||
Deferred income taxes, net | 0 | |||||||
Total liabilities | 249 | 243 | ||||||
Partners’ capital: | ||||||||
Common shares | 0 | 0 | ||||||
Retained earnings | 0 | 0 | ||||||
Accumulated other comprehensive income (loss) | (871) | (973) | ||||||
Total Partners’ capital | 4,662 | 4,266 | ||||||
Noncontrolling interests | 2 | 2 | ||||||
Total equity | 4,664 | 4,268 | ||||||
Total liabilities and equity | 4,913 | 4,511 | ||||||
RBILP | Reportable Legal Entities | Related Party | ||||||||
Current assets: | ||||||||
Intercompany receivable | 249 | 243 | ||||||
Current liabilities: | ||||||||
Other liabilities, net | 0 | 0 | ||||||
RBILP | Reportable Legal Entities | Nonrelated Party | ||||||||
Current liabilities: | ||||||||
Other liabilities, net | 0 | |||||||
Deferred income taxes, net | 0 | |||||||
RBILP | Reportable Legal Entities | Class A common units | ||||||||
Partners’ capital: | ||||||||
Class A common units | 9,584 | 8,735 | ||||||
RBILP | Reportable Legal Entities | Partnership exchangeable units | ||||||||
Partners’ capital: | ||||||||
Partnership exchangeable units | $ (4,051) | $ (3,496) |
Supplemental Financial Inform_5
Supplemental Financial Information - Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues: | ||||||||
Total revenues | $ 1,837 | $ 1,726 | $ 5,202 | $ 4,816 | ||||
Operating costs and expenses: | ||||||||
Cost of sales | 630 | 615 | 1,792 | 1,693 | ||||
Franchise and property expenses | 119 | 137 | 372 | 392 | ||||
Advertising expenses and other services | 326 | 276 | 909 | 782 | ||||
General and administrative expenses | 169 | 156 | 507 | 435 | ||||
(Income) loss from equity method investments | 1 | 8 | 19 | 30 | ||||
Other operating expenses (income), net | 10 | (27) | 20 | (68) | ||||
Total operating costs and expenses | 1,255 | 1,165 | 3,619 | 3,264 | ||||
Income from operations | 582 | 561 | 1,583 | 1,552 | ||||
Interest expense, net | 143 | 133 | 430 | 389 | ||||
Loss on early extinguishment of debt | 16 | 0 | 16 | 0 | ||||
Income before income taxes | 423 | 428 | 1,137 | 1,163 | ||||
Income tax expense (benefit) | 59 | (102) | 145 | 17 | ||||
Net income | 364 | 530 | 992 | 1,146 | ||||
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 | ||||
Net income | 364 | $ 351 | $ 277 | 530 | $ 346 | $ 270 | 992 | 1,146 |
Net income (loss) attributable to noncontrolling interests | 1 | 1 | 3 | 3 | ||||
Net income attributable to common unitholders | 363 | 529 | 989 | 1,143 | ||||
Comprehensive income (loss) | 332 | 343 | 1,094 | 1,145 | ||||
Eliminations | ||||||||
Revenues: | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Operating costs and expenses: | ||||||||
Cost of sales | 0 | 0 | 0 | 0 | ||||
Franchise and property expenses | 0 | 0 | 0 | 0 | ||||
Advertising expenses and other services | 0 | 0 | 0 | 0 | ||||
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 | 0 | ||||
Income from operations | 0 | 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 | 0 | ||||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||||
Net income | 0 | 0 | 0 | 0 | ||||
Equity in earnings of consolidated subsidiaries | (364) | (530) | (992) | (1,146) | ||||
Net income | (364) | (530) | (992) | (1,146) | ||||
Net income (loss) attributable to noncontrolling interests | (1) | (1) | (3) | (3) | ||||
Net income attributable to common unitholders | (363) | (529) | (989) | (1,143) | ||||
Comprehensive income (loss) | (332) | (343) | (1,094) | (1,145) | ||||
Consolidated Borrowers | Reportable Legal Entities | ||||||||
Revenues: | ||||||||
Total revenues | 1,837 | 1,726 | 5,202 | 4,816 | ||||
Operating costs and expenses: | ||||||||
Cost of sales | 630 | 615 | 1,792 | 1,693 | ||||
Franchise and property expenses | 119 | 137 | 372 | 392 | ||||
Advertising expenses and other services | 326 | 276 | 909 | 782 | ||||
General and administrative expenses | 169 | 156 | 507 | 435 | ||||
(Income) loss from equity method investments | 1 | 8 | 19 | 30 | ||||
Other operating expenses (income), net | 10 | (27) | 20 | (68) | ||||
Total operating costs and expenses | 1,255 | 1,165 | 3,619 | 3,264 | ||||
Income from operations | 582 | 561 | 1,583 | 1,552 | ||||
Interest expense, net | 143 | 133 | 430 | 389 | ||||
Loss on early extinguishment of debt | 16 | 16 | ||||||
Income before income taxes | 423 | 428 | 1,137 | 1,163 | ||||
Income tax expense (benefit) | 59 | (102) | 145 | 17 | ||||
Net income | 364 | 530 | 992 | 1,146 | ||||
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | 0 | ||||
Net income | 364 | 530 | 992 | 1,146 | ||||
Net income (loss) attributable to noncontrolling interests | 1 | 1 | 3 | 3 | ||||
Net income attributable to common unitholders | 363 | 529 | 989 | 1,143 | ||||
Comprehensive income (loss) | 332 | 343 | 1,094 | 1,145 | ||||
RBILP | Reportable Legal Entities | ||||||||
Revenues: | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Operating costs and expenses: | ||||||||
Cost of sales | 0 | 0 | 0 | 0 | ||||
Franchise and property expenses | 0 | 0 | 0 | 0 | ||||
Advertising expenses and other services | 0 | 0 | 0 | 0 | ||||
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 | 0 | ||||
Income from operations | 0 | 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 | 0 | ||||
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ||||
Net income | 0 | 0 | 0 | 0 | ||||
Equity in earnings of consolidated subsidiaries | 364 | 530 | 992 | 1,146 | ||||
Net income | 364 | 530 | 992 | 1,146 | ||||
Net income (loss) attributable to noncontrolling interests | 1 | 1 | 3 | 3 | ||||
Net income attributable to common unitholders | 363 | 529 | 989 | 1,143 | ||||
Comprehensive income (loss) | 332 | 343 | 1,094 | 1,145 | ||||
Sales | ||||||||
Revenues: | ||||||||
Total revenues | 771 | 759 | 2,183 | 2,076 | ||||
Sales | Eliminations | ||||||||
Revenues: | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Sales | Consolidated Borrowers | Reportable Legal Entities | ||||||||
Revenues: | ||||||||
Total revenues | 771 | 759 | 2,183 | 2,076 | ||||
Sales | RBILP | Reportable Legal Entities | ||||||||
Revenues: | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Franchise and property revenues | ||||||||
Revenues: | ||||||||
Total revenues | 753 | 698 | 2,163 | 1,989 | ||||
Franchise and property revenues | Eliminations | ||||||||
Revenues: | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Franchise and property revenues | Consolidated Borrowers | Reportable Legal Entities | ||||||||
Revenues: | ||||||||
Total revenues | 753 | 698 | 2,163 | 1,989 | ||||
Franchise and property revenues | RBILP | Reportable Legal Entities | ||||||||
Revenues: | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Advertising revenues and other services | ||||||||
Revenues: | ||||||||
Total revenues | 313 | 269 | 856 | 751 | ||||
Advertising revenues and other services | Eliminations | ||||||||
Revenues: | ||||||||
Total revenues | 0 | 0 | 0 | 0 | ||||
Advertising revenues and other services | Consolidated Borrowers | Reportable Legal Entities | ||||||||
Revenues: | ||||||||
Total revenues | 313 | 269 | 856 | 751 | ||||
Advertising revenues and other services | RBILP | Reportable Legal Entities | ||||||||
Revenues: | ||||||||
Total revenues | $ 0 | $ 0 | $ 0 | $ 0 |
Supplemental Financial Inform_6
Supplemental Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||||||||
Net income | $ 364 | $ 351 | $ 277 | $ 530 | $ 346 | $ 270 | $ 992 | $ 1,146 |
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 | 142 | 143 | ||||||
Non-cash loss on early extinguishment of debt | 5 | 0 | ||||||
Amortization of deferred financing costs and debt issuance discount | 7 | 7 | 21 | 21 | ||||
(Income) loss from equity method investments | 1 | 8 | 19 | 30 | ||||
(Gain) loss on remeasurement of foreign denominated transactions | (11) | (82) | ||||||
Net (gains) losses on derivatives | (111) | 17 | ||||||
Share-based compensation and non-cash incentive compensation expense | 141 | 93 | ||||||
Deferred income taxes | (47) | (29) | ||||||
Other | 19 | 8 | ||||||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||||||||
Accounts and notes receivable | (86) | (93) | ||||||
Inventories and prepaids and other current assets | (49) | (67) | ||||||
Accounts and drafts payable | (62) | 113 | ||||||
Other accrued liabilities and gift card liability | (62) | (74) | ||||||
Tenant inducements paid to franchisees | (15) | (13) | ||||||
Other long-term assets and liabilities | 24 | (146) | ||||||
Net cash provided by operating activities | 920 | 1,067 | ||||||
Cash flows from investing activities: | ||||||||
Payments for property and equipment | (73) | (52) | ||||||
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 23 | 11 | ||||||
Net payments in connection with purchase of Firehouse Subs | 0 | (12) | ||||||
Settlement/sale of derivatives, net | 40 | 22 | ||||||
Other investing activities, net | (1) | (35) | ||||||
Net cash (used for) provided by investing activities | (11) | (66) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from long-term debt | 55 | 2 | ||||||
Repayments of long-term debt and finance leases | (79) | (71) | ||||||
Payment of financing costs | (43) | 0 | ||||||
Distributions on Class A common and Partnership exchangeable units | (741) | (728) | ||||||
Distribution to RBI for repurchase of RBI common shares | (115) | (326) | ||||||
Capital contribution from RBI | 52 | 7 | ||||||
Distributions from subsidiaries | 0 | 0 | ||||||
(Payments) proceeds from derivatives | 100 | 8 | ||||||
Other financing activities, net | (3) | (3) | ||||||
Net cash (used for) provided by financing activities | (774) | (1,111) | ||||||
Effect of exchange rates on cash and cash equivalents | (3) | (31) | ||||||
Increase (decrease) in cash and cash equivalents | 132 | (141) | ||||||
Cash and cash equivalents at beginning of period | 1,178 | 1,087 | 1,178 | 1,087 | ||||
Cash and cash equivalents at end of period | 1,310 | 946 | 1,310 | 946 | ||||
Eliminations | ||||||||
Cash flows from operating activities: | ||||||||
Net income | (364) | (530) | (992) | (1,146) | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Equity in loss (earnings) of consolidated subsidiaries | 364 | 530 | 992 | 1,146 | ||||
Depreciation and amortization | 0 | 0 | ||||||
Non-cash loss on early 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 | ||||
(Gain) loss on remeasurement of foreign denominated transactions | 0 | 0 | ||||||
Net (gains) losses on derivatives | 0 | 0 | ||||||
Share-based compensation and non-cash incentive 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 | ||||||
Tenant inducements paid to franchisees | 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 | ||||||
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 0 | 0 | ||||||
Net payments in connection with purchase of Firehouse Subs | 0 | |||||||
Settlement/sale of derivatives, net | 0 | 0 | ||||||
Other investing activities, net | 0 | 0 | ||||||
Net cash (used for) provided by investing activities | 0 | 0 | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from long-term debt | 0 | 0 | ||||||
Repayments of long-term debt and finance leases | 0 | 0 | ||||||
Payment of financing costs | 0 | |||||||
Distributions on Class A common and Partnership exchangeable units | 0 | 0 | ||||||
Distribution to RBI for repurchase of RBI common shares | 0 | 0 | ||||||
Capital contribution from RBI | 0 | 0 | ||||||
Distributions from subsidiaries | 0 | 0 | ||||||
(Payments) proceeds from derivatives | 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 | 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 | 364 | 530 | 992 | 1,146 | ||||
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 | 142 | 143 | ||||||
Non-cash loss on early extinguishment of debt | 5 | |||||||
Amortization of deferred financing costs and debt issuance discount | 21 | 21 | ||||||
(Income) loss from equity method investments | 1 | 8 | 19 | 30 | ||||
(Gain) loss on remeasurement of foreign denominated transactions | (11) | (82) | ||||||
Net (gains) losses on derivatives | (111) | 17 | ||||||
Share-based compensation and non-cash incentive compensation expense | 141 | 93 | ||||||
Deferred income taxes | (47) | (29) | ||||||
Other | 19 | 8 | ||||||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||||||||
Accounts and notes receivable | (86) | (93) | ||||||
Inventories and prepaids and other current assets | (49) | (67) | ||||||
Accounts and drafts payable | (62) | 113 | ||||||
Other accrued liabilities and gift card liability | (62) | (74) | ||||||
Tenant inducements paid to franchisees | (15) | (13) | ||||||
Other long-term assets and liabilities | 24 | (146) | ||||||
Net cash provided by operating activities | 920 | 1,067 | ||||||
Cash flows from investing activities: | ||||||||
Payments for property and equipment | (73) | (52) | ||||||
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 23 | 11 | ||||||
Net payments in connection with purchase of Firehouse Subs | (12) | |||||||
Settlement/sale of derivatives, net | 40 | 22 | ||||||
Other investing activities, net | (1) | (35) | ||||||
Net cash (used for) provided by investing activities | (11) | (66) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from long-term debt | 55 | 2 | ||||||
Repayments of long-term debt and finance leases | (79) | (71) | ||||||
Payment of financing costs | (43) | |||||||
Distributions on Class A common and Partnership exchangeable units | 0 | 0 | ||||||
Distribution to RBI for repurchase of RBI common shares | 0 | 0 | ||||||
Capital contribution from RBI | 52 | 7 | ||||||
Distributions from subsidiaries | (856) | (1,054) | ||||||
(Payments) proceeds from derivatives | 100 | 8 | ||||||
Other financing activities, net | (3) | (3) | ||||||
Net cash (used for) provided by financing activities | (774) | (1,111) | ||||||
Effect of exchange rates on cash and cash equivalents | (3) | (31) | ||||||
Increase (decrease) in cash and cash equivalents | 132 | (141) | ||||||
Cash and cash equivalents at beginning of period | 1,178 | 1,087 | 1,178 | 1,087 | ||||
Cash and cash equivalents at end of period | 1,310 | 946 | 1,310 | 946 | ||||
RBILP | Reportable Legal Entities | ||||||||
Cash flows from operating activities: | ||||||||
Net income | 364 | 530 | 992 | 1,146 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Equity in loss (earnings) of consolidated subsidiaries | (364) | (530) | (992) | (1,146) | ||||
Depreciation and amortization | 0 | 0 | ||||||
Non-cash loss on early 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 | ||||
(Gain) loss on remeasurement of foreign denominated transactions | 0 | 0 | ||||||
Net (gains) losses on derivatives | 0 | 0 | ||||||
Share-based compensation and non-cash incentive 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 | ||||||
Tenant inducements paid to franchisees | 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 | ||||||
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 0 | 0 | ||||||
Net payments in connection with purchase of Firehouse Subs | 0 | |||||||
Settlement/sale of derivatives, net | 0 | 0 | ||||||
Other investing activities, net | 0 | 0 | ||||||
Net cash (used for) provided by investing activities | 0 | 0 | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from long-term debt | 0 | 0 | ||||||
Repayments of long-term debt and finance leases | 0 | 0 | ||||||
Payment of financing costs | 0 | |||||||
Distributions on Class A common and Partnership exchangeable units | (741) | (728) | ||||||
Distribution to RBI for repurchase of RBI common shares | (115) | (326) | ||||||
Capital contribution from RBI | 0 | 0 | ||||||
Distributions from subsidiaries | 856 | 1,054 | ||||||
(Payments) proceeds from derivatives | 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 | 0 | 0 | ||||
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||
Feb. 17, 2024 | Jan. 04, 2024 | Oct. 04, 2023 | Nov. 02, 2023 | Oct. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | Dec. 31, 2018 | |
Subsequent Event [Line Items] | ||||||||||||||||
Settlement/sale of derivatives, net | $ 40,000,000 | $ 22,000,000 | ||||||||||||||
Repurchased of common value | $ 142,000,000 | 142,000,000 | ||||||||||||||
Cross Currency Interest Rate Contract | Derivatives designated as net investment hedges | Fixed Income Interest Rate | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Notional amount | $ 5,000,000,000 | $ 5,000,000,000 | $ 150,000,000 | $ 500,000,000 | $ 400,000,000 | |||||||||||
Forecast | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock dividends paid (in usd per share) | $ 0.55 | |||||||||||||||
Forecast | Interest Rate Swap | Derivatives designated as net investment hedges | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Settlement/sale of derivatives, net | $ 59,000,000 | |||||||||||||||
Partnership exchangeable units | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Cash dividend declared (in usd per share) | $ 0.55 | $ 0.55 | $ 0.55 | $ 0.54 | $ 0.54 | $ 0.54 | ||||||||||
Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Common stock dividends paid (in usd per share) | $ 0.55 | |||||||||||||||
Cash dividend declared (in usd per share) | $ 0.55 | |||||||||||||||
Repurchased of common shares (in shares) | 5,539,777 | |||||||||||||||
Repurchased of common value | $ 358,000,000 | |||||||||||||||
Subsequent Event | Cross Currency Interest Rate Contract | Derivatives designated as net investment hedges | Fixed Income Interest Rate | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Notional amount | $ 1,400,000,000 | |||||||||||||||
Subsequent Event | Partnership exchangeable units | Restaurant Brands International Limited Partnership | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Cash dividend paid per exchangeable unit (in usd per share) | $ 0.55 | $ 0.55 |