Home market franchisee profitability increases
30% year-over-year, on average
Global system-wide sales grow nearly 10% for the fourth quarter and
over 12% for 2023
Comparable sales up nearly 6% in Q4, led by over 8% growth at Tim
Hortons Canada and over 6% at Burger King US
Digital sales grow over 20% year-over-year to
$14 billion in 2023, representing
over a third of system-wide sales
Nearly $1.5
billion of capital returned to shareholders in 2023 while
investing for growth and reducing net leverage
TORONTO, Feb. 13,
2024 /PRNewswire/ - Restaurant Brands International
Inc. ("RBI") (TSX: QSR) (NYSE: QSR) (TSX: QSP) today reported
financial results for the full year and fourth quarter ended
December 31, 2023. Josh Kobza,
Chief Executive Officer of RBI commented, "We are delivering better
experiences for our guests, better profitability for our
franchisees and are making the right long-term investments behind
the growth of our brands. We have started 2024 with a foundation of
strong operational performance and I'm thankful to all our teams,
franchisees and their team members who work so hard to make us
successful."
2023 Highlights:
- System-wide Sales Growth of 12.2%
- Net Restaurant Growth of 3.9%
- Income from Operations of $2,051
million versus $1,898 million
in the prior year
- Net Income of $1,718 million
versus $1,482 million in the prior
year
- Diluted EPS of $3.76 versus
$3.25 in the prior year
- Adjusted Operating Income of $2,200
million increased 7.5% organically versus the prior
year
- Adjusted Diluted EPS of $3.24
versus $3.14 in prior year
- Net Cash Provided by Operating Activities of $1,323 million and Free Cash Flow of $1,203 million
Changes to operating and reportable segments and changes to
measure of segment income
Beginning with the fourth quarter of 2023, we are reporting
results under five operating and reportable segments. This shift in
reportable segments reflects how our leadership oversees and
manages the business. As a result of this change, our five
operating and reportable segments consist of the following:
- Tim Hortons brand in Canada
and the U.S. ("TH");
- Burger King brand in the U.S. and Canada ("BK");
- Popeyes Louisiana Kitchen brand in the U.S. and Canada ("PLK");
- Firehouse Subs brand in the U.S. and Canada ("FHS"); and
- International – which includes all operations of each of our
brands outside the U.S. and Canada
("INTL").
We also transitioned our definition of segment income from
Adjusted EBITDA to Adjusted Operating Income ("AOI"). TH AOI, BK
AOI, PLK AOI, FHS AOI and INTL AOI are our measures of segment
profitability. Unlike Adjusted EBITDA, AOI includes depreciation
and amortization (excluding franchise agreement amortization) as
well as share-based compensation and non-cash incentive
compensation expense.
In order to assist investors, we have provided certain unaudited
historical financial and operational data that is on a basis
consistent with our revised segment structure and segment income
definition. This data can be found on the company's investor
relations webpage under "Financial Information." These changes only
affect segment allocation of results and do not revise or restate
our previously reported consolidated financial statements.
Consolidated Operational Highlights
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
System-wide Sales
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
9.0 %
|
|
|
10.5 %
|
|
|
11.0 %
|
|
|
11.7 %
|
|
BK
|
|
4.9 %
|
|
|
5.5 %
|
|
|
6.9 %
|
|
|
2.8 %
|
|
PLK
|
|
11.2 %
|
|
|
6.5 %
|
|
|
10.5 %
|
|
|
5.6 %
|
|
FHS
(a)
|
|
7.8 %
|
|
|
N/A
|
|
|
7.1 %
|
|
|
N/A
|
|
INTL (b)
|
|
12.8 %
|
|
|
18.5 %
|
|
|
17.6 %
|
|
|
25.6 %
|
|
Consolidated
(c)
|
|
9.6 %
|
|
|
11.4 %
|
|
|
12.2 %
|
|
|
12.9 %
|
|
FHS
(a)
|
|
N/A
|
|
|
3.9 %
|
|
|
N/A
|
|
|
4.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide Sales
(in US$ millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
$
|
1,849
|
|
$
|
1,701
|
|
$
|
7,245
|
|
$
|
6,732
|
|
BK
|
$
|
2,903
|
|
$
|
2,768
|
|
$
|
11,474
|
|
$
|
10,747
|
|
PLK
|
$
|
1,503
|
|
$
|
1,351
|
|
$
|
5,886
|
|
$
|
5,338
|
|
FHS
(a)
|
$
|
298
|
|
$
|
301
|
|
$
|
1,194
|
|
$
|
1,154
|
|
INTL (b)
|
$
|
4,332
|
|
$
|
3,813
|
|
$
|
17,087
|
|
$
|
14,700
|
|
Consolidated
(c)
|
$
|
10,885
|
|
$
|
9,934
|
|
$
|
42,886
|
|
$
|
38,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
8.4 %
|
|
|
10.1 %
|
|
|
10.4 %
|
|
|
10.4 %
|
|
BK
|
|
6.3 %
|
|
|
5.0 %
|
|
|
7.4 %
|
|
|
2.3 %
|
|
PLK
|
|
5.5 %
|
|
|
1.7 %
|
|
|
4.8 %
|
|
|
(0.6) %
|
|
FHS
(a)
|
|
3.5 %
|
|
|
N/A
|
|
|
3.8 %
|
|
|
N/A
|
|
INTL(b)
|
|
4.6 %
|
|
|
10.5 %
|
|
|
9.0 %
|
|
|
15.4 %
|
|
Consolidated
(c)
|
|
5.8 %
|
|
|
7.5 %
|
|
|
8.1 %
|
|
|
7.9 %
|
|
FHS
(a)
|
|
N/A
|
|
|
0.4 %
|
|
|
N/A
|
|
|
0.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
0.1 %
|
|
|
(1.1) %
|
|
|
0.1 %
|
|
|
(1.1) %
|
|
BK
|
|
(3.3) %
|
|
|
(0.6) %
|
|
|
(3.3) %
|
|
|
(0.6) %
|
|
PLK
|
|
4.9 %
|
|
|
6.7 %
|
|
|
4.9 %
|
|
|
6.7 %
|
|
FHS
(a)
|
|
3.0 %
|
|
|
2.4 %
|
|
|
3.0 %
|
|
|
2.4 %
|
|
INTL(b)
|
|
8.9 %
|
|
|
9.1 %
|
|
|
8.9 %
|
|
|
9.1 %
|
|
Consolidated
(c)
|
|
3.9 %
|
|
|
4.4 %
|
|
|
3.9 %
|
|
|
4.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System Restaurant
Count at Period End
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
4,525
|
|
|
4,519
|
|
|
4,525
|
|
|
4,519
|
|
BK
|
|
7,144
|
|
|
7,389
|
|
|
7,144
|
|
|
7,389
|
|
PLK
|
|
3,394
|
|
|
3,235
|
|
|
3,394
|
|
|
3,235
|
|
FHS
(a)
|
|
1,265
|
|
|
1,242
|
|
|
1,265
|
|
|
1,242
|
|
INTL (b)
|
|
14,742
|
|
|
13,517
|
|
|
14,742
|
|
|
13,517
|
|
Consolidated
(c)
|
|
31,070
|
|
|
29,902
|
|
|
31,070
|
|
|
29,902
|
|
See "Key Operating
Metrics" for definitions.
|
|
(a)
|
See FHS Segment Results
footnote "a."
|
|
(b)
|
See INTL Segment
Results footnote "a."
|
|
(c)
|
Consolidated
system-wide sales growth and comparable sales do not include the
results of Firehouse Subs for 2022.
|
Consolidated Financial Highlights
|
Three Months Ended December 31,
|
|
Twelve Months Ended December
31,
|
|
(in US$ millions, except per share data,
unaudited)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Total
Revenues
|
$
1,820
|
|
$
1,689
|
|
$
7,022
|
|
$
6,505
|
|
Income from
Operations
|
$
468
|
|
$
346
|
|
$
2,051
|
|
$
1,898
|
|
Net Income
|
$
726
|
|
$
336
|
|
$
1,718
|
|
$
1,482
|
|
Diluted Earnings per
Share
|
$
1.60
|
|
$
0.74
|
|
$
3.76
|
|
$
3.25
|
|
|
|
|
|
|
|
|
|
TH
|
$
231
|
|
$
226
|
|
$
958
|
|
$
925
|
|
BK
|
$
69
|
|
$
87
|
|
$
386
|
|
$
396
|
|
PLK
|
$
56
|
|
$
52
|
|
$
221
|
|
$
205
|
|
FHS
|
$
8
|
|
$
8
|
|
$
38
|
|
$
33
|
|
INTL
|
$
145
|
|
$
133
|
|
$
597
|
|
$
525
|
|
Adjusted Operating Income (a)
|
$
509
|
|
$
506
|
|
$
2,200
|
|
$
2,084
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(a)
|
$
603
|
|
$
588
|
|
$
2,554
|
|
$
2,378
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(a)
|
$
340
|
|
$
326
|
|
$
1,480
|
|
$
1,430
|
|
Adjusted Diluted
Earnings per Share (a)
|
$
0.75
|
|
$
0.72
|
|
$
3.24
|
|
$
3.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December
31,
|
|
(in US$ millions, unaudited)
|
|
|
|
|
2023
|
|
2022
|
|
Net cash provided by
operating activities
|
|
|
|
|
$
1,323
|
|
$
1,490
|
|
Net cash provided by
(used for) investing activities
|
|
|
|
|
$
11
|
|
$
(64)
|
|
Net cash used for
financing activities
|
|
|
|
|
$
(1,374)
|
|
$
(1,307)
|
|
Free Cash Flow
(a)
|
|
|
|
|
$
1,203
|
|
$
1,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31,
|
|
(in US$ millions, unaudited)
|
|
|
|
|
2023
|
|
2022
|
|
Net Debt (a)
|
|
|
|
|
$
12,250
|
|
$
12,210
|
|
Net Income Net Leverage
(c)
|
|
|
|
|
7.1x
|
|
8.2x
|
|
Adjusted EBITDA Net
Leverage (a)
|
|
|
|
|
4.8x
|
|
5.1x
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL ANNUAL DISCLOSURE
(unaudited)
|
|
|
|
|
Year Ended December 31,
|
|
Home Market Franchisee Profitability (b)
(in 000s)
|
|
|
|
|
2023
|
|
2022
|
|
TH — Canada
|
|
|
|
|
C$
280
|
|
C$
220
|
|
BK — US
|
|
|
|
|
$
205
|
|
$
140
|
|
PLK — US
|
|
|
|
|
$
245
|
|
$
210
|
|
FHS — US
|
|
|
|
|
$
110
|
|
$
80
|
|
|
|
|
|
|
|
|
|
Global Digital Sales (d)
(in US$
billions)
|
|
|
|
|
$
14.0
|
|
$
11.6
|
|
(a)
|
Adjusted Operating
Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted
Earnings per Share, Free Cash Flow, Net Debt, and Adjusted EBITDA
Net Leverage are non-GAAP financial measures. Please refer to
"Non-GAAP Financial Measures" for further detail.
|
|
(b)
|
2023 estimates are
preliminary and rounded down to the nearest $5,000. Estimates based
on unaudited, self-reported franchisee results.
|
|
(c)
|
Net Income Net Leverage
is defined as net debt (total debt less cash and cash equivalents)
divided by Net Income.
|
|
(d)
|
In 2023, RBI changed
its definition of Digital Sales to exclude duplicative sales from
digital coupons. Digital Sales include sales from mobile order and
pay ("MO&P"), digital offers excluding MO&P, first and
third party delivery, loyalty sales, kiosks and digital catering.
Digital Sales for 2022 have been revised to exclude sales from
Russia and to conform to RBI's updated definition of Digital
Sales.
|
The year-over-year increases in Total Revenues on an as reported
and on an organic basis for the full year and fourth quarter were
primarily driven by an increase in system-wide sales in all our
segments. On an as reported basis the increase was partially offset
by unfavorable FX movements which primarily impacted TH.
The year-over-year increase in Income from Operations for the
full year was primarily driven by increases in segment income of
INTL, TH, PLK and FHS and a favorable change from the impact of
equity method investments, partially offset by an unfavorable
change from other operating expenses (income), net, a decrease in
BK segment income and unfavorable FX movements.
The year-over-year increase in Income from Operations for the
fourth quarter was primarily driven by a favorable change from
other operating expenses (income), net, a favorable change from the
impact of equity method investments, the non-recurrence of FHS
Transaction costs and increases in segment income of INTL, TH and
PLK, partially offset by a decrease in BK segment income.
The increase in Net Income for the full year was primarily
driven by the year-over-year increase in Income from Operations and
a greater income tax benefit in the current year than the prior
year, partially offset by an increase in interest expense, net, and
loss on early extinguishment of debt in the current year.
The increase in Net Income for the fourth quarter was primarily
driven by a greater income tax benefit in the current year than the
prior year and the year-over-year increase in Income from
Operations, partially offset by an increase in interest
expense.
The year-over-year change in Adjusted Operating Income on an as
reported and organic basis for the full year was primarily driven
by increases in segment income of INTL, TH, PLK and FHS, partially
offset by a decrease in BK segment income. On an as reported basis,
the change was impacted by unfavorable FX movements.
The year-over-year change in Adjusted Operating Income on an as
reported and organic basis for the fourth quarter was primarily
driven by increases in segment income of INTL, TH and PLK,
partially offset by a decrease in BK segment income. The
year-over-year increase in Adjusted Net Income for the full year
was primarily driven by increases in segment income of INTL, TH,
PLK and FHS, partially offset by an increase in adjusted interest
expense, a decrease in BK segment income and unfavorable FX
movements.
The year-over-year increase in Adjusted Net Income for the
fourth quarter was primarily driven by a decrease in adjusted tax
expense and increases in segment income of INTL, TH and PLK,
partially offset by a decrease in BK segment income and an increase
in adjusted interest expense.
Burger King US Reclaim the Flame
In September 2022, Burger King
shared the details of its "Reclaim the Flame" plan to accelerate
sales growth and drive franchisee profitability. We will be
investing $400 million over the life
of the plan, comprised of $150
million in advertising and digital investments ("Fuel the
Flame") and $250 million in
high-quality remodels and relocations, restaurant technology,
kitchen equipment, and building enhancements ("Royal Reset").
During the quarter ended December 31,
2023, we funded approximately $40
million toward the Fuel the Flame investments, including
$37 million towards our support
behind the Burger King US advertising fund, and $16 million toward our Royal Reset investments,
including $8 million towards
remodels. As of 2023, we have funded a total of $73 million toward the Fuel the Flame investments
and $61 million toward our Royal
Reset investments.
Macro Economic Environment
During 2022 and 2023, there were increases in commodity, labor,
and energy costs which have resulted in inflation, foreign exchange
volatility, rising interest rates and general softening in the
consumer environment which have been exacerbated by conflicts in
the Middle East.
TH Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
(in US$
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
System-wide Sales
Growth
|
|
9.0 %
|
|
|
10.5 %
|
|
|
11.0 %
|
|
|
11.7 %
|
|
System-wide
Sales
|
$
|
1,849
|
|
$
|
1,701
|
|
$
|
7,245
|
|
$
|
6,732
|
|
Comparable
Sales
|
|
8.4 %
|
|
|
10.1 %
|
|
|
10.4 %
|
|
|
10.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
0.1 %
|
|
|
(1.1) %
|
|
|
0.1 %
|
|
|
(1.1) %
|
|
System Restaurant Count
at Period End
|
|
4,525
|
|
|
4,519
|
|
|
4,525
|
|
|
4,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
701
|
|
$
|
694
|
|
$
|
2,725
|
|
$
|
2,631
|
|
Franchise and Property
Revenues
|
$
|
241
|
|
$
|
225
|
|
$
|
955
|
|
$
|
905
|
|
Advertising Revenues
and Other Services
|
$
|
76
|
|
$
|
68
|
|
$
|
292
|
|
$
|
266
|
|
Total
Revenues
|
$
|
1,018
|
|
$
|
987
|
|
$
|
3,972
|
|
$
|
3,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
583
|
|
$
|
573
|
|
$
|
2,231
|
|
$
|
2,131
|
|
Franchise and Property
Expenses
|
$
|
81
|
|
$
|
80
|
|
$
|
325
|
|
$
|
332
|
|
Advertising Expenses
and Other Services
|
$
|
81
|
|
$
|
69
|
|
$
|
309
|
|
$
|
282
|
|
Segment
G&A
|
$
|
47
|
|
$
|
42
|
|
$
|
168
|
|
$
|
151
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise Agreement
Amortization
|
$
|
2
|
|
$
|
2
|
|
$
|
6
|
|
$
|
7
|
|
Cash Distributions
Received from Equity
Method Investments
|
$
|
4
|
|
$
|
2
|
|
$
|
14
|
|
$
|
13
|
|
Adjusted Operating
Income
|
$
|
231
|
|
$
|
226
|
|
$
|
958
|
|
$
|
925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-Based
Compensation and Non-Cash
Incentive Compensation Expense
|
$
|
14
|
|
$
|
11
|
|
$
|
51
|
|
$
|
37
|
|
Depreciation and
Amortization, excluding
Franchise Agreement Amortization
|
$
|
25
|
|
$
|
26
|
|
$
|
101
|
|
$
|
108
|
|
Adjusted EBITDA (a)
|
$
|
271
|
|
$
|
263
|
|
$
|
1,111
|
|
$
|
1,070
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Adjusted EBITDA for TH is
a non-GAAP financial measure. Please refer to "Non-GAAP Financial
Measures" for further detail.
|
For the full year and fourth quarter, the increase in
system-wide sales was primarily driven by comparable sales of 10.4%
and 8.4%, respectively, including Canada comparable sales of 10.9% and 8.7%,
respectively.
The year-over-year increase in Total Revenues for the full year
and fourth quarter on an as reported and on an organic basis was
primarily driven by the increase in system-wide sales as well as
increases in commodity prices passed on to franchisees. The
increase in Total Revenues on an as reported basis was partially
offset by unfavorable FX movements.
The year-over-year increase in Adjusted Operating Income for the
full year and fourth quarter on an as reported and on an organic
basis was primarily driven by the increase in system-wide sales,
partially offset by an increase in Segment G&A, and advertising
expenses and other services exceeding advertising revenues and
other services in the current year periods to a greater extent than
in the prior year periods. Revenues and Adjusted Operating Income
for 2023 were impacted by increased promotional activity and trade
investments in our TH consumer-packaged goods business, which
largely impacted the fourth quarter. The increase in Adjusted
Operating Income on an as reported basis was partially offset by
unfavorable FX movements.
BK Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
(in US$
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
System-wide Sales
Growth
|
|
4.9 %
|
|
|
5.5 %
|
|
|
6.9 %
|
|
|
2.8 %
|
|
System-wide
Sales
|
$
|
2,903
|
|
$
|
2,768
|
|
$
|
11,474
|
|
$
|
10,747
|
|
Comparable
Sales
|
|
6.3 %
|
|
|
5.0 %
|
|
|
7.4 %
|
|
|
2.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
(3.3) %
|
|
|
(0.6) %
|
|
|
(3.3) %
|
|
|
(0.6) %
|
|
System Restaurant Count
at Period End
|
|
7,144
|
|
|
7,389
|
|
|
7,144
|
|
|
7,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
33
|
|
$
|
18
|
|
$
|
97
|
|
$
|
70
|
|
Franchise and Property
Revenues
|
$
|
189
|
|
$
|
174
|
|
$
|
731
|
|
$
|
688
|
|
Advertising Revenues
and Other Services
|
$
|
123
|
|
$
|
117
|
|
$
|
470
|
|
$
|
438
|
|
Total
Revenues
|
$
|
345
|
|
$
|
310
|
|
$
|
1,297
|
|
$
|
1,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
31
|
|
$
|
19
|
|
$
|
90
|
|
$
|
74
|
|
Franchise and Property
Expenses
|
$
|
44
|
|
$
|
37
|
|
$
|
144
|
|
$
|
144
|
|
Advertising Expenses
and Other Services
|
$
|
165
|
|
$
|
134
|
|
$
|
543
|
|
$
|
467
|
|
Segment
G&A
|
$
|
39
|
|
$
|
37
|
|
$
|
145
|
|
$
|
126
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise Agreement
Amortization
|
$
|
3
|
|
$
|
3
|
|
$
|
11
|
|
$
|
11
|
|
Adjusted Operating
Income
|
$
|
69
|
|
$
|
87
|
|
$
|
386
|
|
$
|
396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-Based
Compensation and Non-Cash
Incentive Compensation Expense
|
$
|
9
|
|
$
|
10
|
|
$
|
41
|
|
$
|
30
|
|
Depreciation and
Amortization, excluding
Franchise Agreement Amortization
|
$
|
9
|
|
$
|
9
|
|
$
|
35
|
|
$
|
34
|
|
Adjusted EBITDA (a)
|
$
|
87
|
|
$
|
105
|
|
$
|
462
|
|
$
|
459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Adjusted EBITDA for BK is
a non-GAAP financial measure. Please refer to "Non-GAAP Financial
Measures" for further detail.
|
For the full year and fourth quarter, the increase in
system-wide sales was driven by comparable sales of 7.4% and 6.3%,
respectively, including US comparable sales of 7.5% and 6.4%,
respectively, partially offset by net restaurant growth of
(3.3)%.
The year-over-year increase in Total Revenues for the full year
and fourth quarter on an as reported and on an organic basis was
primarily driven by the increase in system-wide sales. Sales and
Cost of Sales for the full year were also impacted by the temporary
acquisition of 17 Company restaurants during the second quarter (of
which we only continue to operate one restaurant) and the
acquisition of 89 Company restaurants during the fourth
quarter.
The year-over-year decrease in Adjusted Operating Income for the
full year and fourth quarter was primarily driven by advertising
expenses and other services exceeding advertising revenues and
other services in the current year periods to a greater extent than
in the prior year periods, partially offset by the increase in
system-wide sales and improved profitability at Company restaurants
resulting in income in the current year periods as compared to net
losses in the prior year periods. In addition, Adjusted Operating
Income for the full year was impacted by an increase in Segment
G&A due to higher compensation-related expenses and Adjusted
Operating Income for the fourth quarter was impacted by an increase
in bad debt expenses.
PLK Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
(in US$
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
System-wide Sales
Growth
|
|
11.2 %
|
|
|
6.5 %
|
|
|
10.5 %
|
|
|
5.6 %
|
|
System-wide
Sales
|
$
|
1,503
|
|
$
|
1,351
|
|
$
|
5,886
|
|
$
|
5,338
|
|
Comparable
Sales
|
|
5.5 %
|
|
|
1.7 %
|
|
|
4.8 %
|
|
|
(0.6) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
4.9 %
|
|
|
6.7 %
|
|
|
4.9 %
|
|
|
6.7 %
|
|
System Restaurant Count
at Period End
|
|
3,394
|
|
|
3,235
|
|
|
3,394
|
|
|
3,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
24
|
|
$
|
20
|
|
$
|
89
|
|
$
|
78
|
|
Franchise and Property
Revenues
|
$
|
79
|
|
$
|
72
|
|
$
|
314
|
|
$
|
284
|
|
Advertising Revenues
and Other Services
|
$
|
79
|
|
$
|
70
|
|
$
|
289
|
|
$
|
256
|
|
Total
Revenues
|
$
|
182
|
|
$
|
162
|
|
$
|
692
|
|
$
|
619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
22
|
|
$
|
18
|
|
$
|
80
|
|
$
|
72
|
|
Franchise and Property
Expenses
|
$
|
2
|
|
$
|
2
|
|
$
|
12
|
|
$
|
11
|
|
Advertising Expenses
and Other Services
|
$
|
81
|
|
$
|
71
|
|
$
|
295
|
|
$
|
261
|
|
Segment
G&A
|
$
|
22
|
|
$
|
20
|
|
$
|
86
|
|
$
|
72
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise Agreement
Amortization
|
$
|
1
|
|
$
|
1
|
|
$
|
2
|
|
$
|
2
|
|
Adjusted Operating
Income
|
$
|
56
|
|
$
|
52
|
|
$
|
221
|
|
$
|
205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-Based
Compensation and Non-Cash
Incentive Compensation Expense
|
$
|
7
|
|
$
|
6
|
|
$
|
26
|
|
$
|
20
|
|
Depreciation and
Amortization, excluding
Franchise Agreement Amortization
|
$
|
2
|
|
$
|
2
|
|
$
|
9
|
|
$
|
8
|
|
Adjusted EBITDA (a)
|
$
|
66
|
|
$
|
60
|
|
$
|
257
|
|
$
|
232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Adjusted EBITDA for PLK
is a non-GAAP financial measure. Please refer to "Non-GAAP
Financial Measures" for further detail.
|
For the full year and fourth quarter, the increase in
system-wide sales was driven by net restaurant growth of 4.9% as
well as comparable sales of 4.8% and 5.5%, respectively, including
US comparable sales of 4.8% and 5.8%, respectively.
The year-over-year increase in Total Revenues for the full year
and fourth quarter was primarily driven by the increase in
system-wide sales.
The year-over-year increase in Adjusted Operating Income for the
full year and fourth quarter was primarily driven by the increases
in system-wide sales, partially offset by higher Segment G&A
due to higher compensation-related expenses.
FHS Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
(in US$
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
System-wide Sales
Growth (a)
|
|
7.8 %
|
|
|
3.9 %
|
|
|
7.1 %
|
|
|
4.2 %
|
|
System-wide Sales
(a)
|
$
|
298
|
|
$
|
301
|
|
$
|
1,194
|
|
$
|
1,154
|
|
Comparable Sales
(a)
|
|
3.5 %
|
|
|
0.4 %
|
|
|
3.8 %
|
|
|
0.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant Growth
(a)
|
|
3.0 %
|
|
|
2.4 %
|
|
|
3.0 %
|
|
|
2.4 %
|
|
System Restaurant Count
at Period End (a)
|
|
1,265
|
|
|
1,242
|
|
|
1,265
|
|
|
1,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
10
|
|
$
|
11
|
|
$
|
39
|
|
$
|
40
|
|
Franchise and Property
Revenues
|
$
|
26
|
|
$
|
22
|
|
$
|
99
|
|
$
|
85
|
|
Advertising Revenues
and Other Services
|
$
|
15
|
|
$
|
3
|
|
$
|
48
|
|
$
|
13
|
|
Total
Revenues
|
$
|
51
|
|
$
|
36
|
|
$
|
187
|
|
$
|
138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
8
|
|
$
|
9
|
|
$
|
34
|
|
$
|
35
|
|
Franchise and Property
Expenses
|
$
|
1
|
|
$
|
1
|
|
$
|
9
|
|
$
|
7
|
|
Advertising Expenses
and Other Services
|
$
|
15
|
|
$
|
4
|
|
$
|
49
|
|
$
|
12
|
|
Segment
G&A
|
$
|
18
|
|
$
|
13
|
|
$
|
58
|
|
$
|
52
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise Agreement
Amortization
|
$
|
—
|
|
$
|
—
|
|
$
|
1
|
|
$
|
1
|
|
Adjusted Operating
Income
|
$
|
8
|
|
$
|
8
|
|
$
|
38
|
|
$
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-Based
Compensation and Non-Cash
Incentive Compensation Expense
|
$
|
6
|
|
$
|
3
|
|
$
|
17
|
|
$
|
8
|
|
Depreciation and
Amortization, excluding
Franchise Agreement Amortization
|
$
|
1
|
|
$
|
1
|
|
$
|
3
|
|
$
|
3
|
|
Adjusted EBITDA (b)
|
$
|
15
|
|
$
|
12
|
|
$
|
58
|
|
$
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
For 2022, FHS
system-wide sales growth, system-wide sales, comparable sales and
net restaurant growth are for the period from December 27, 2021
through December 31, 2022. FHS 2022 system-wide sales growth and
comparable sales figures are shown for informational purposes only.
FHS system-wide sales and restaurant count include 14 FHS
restaurants in Puerto Rico ("FHS PR") in 2022 but not in 2023. For
the purpose of calculating FHS system-wide sales growth, net
restaurant growth and comparable sales, we exclude FHS PR in both
the current and prior year periods.
|
|
(b)
|
Adjusted EBITDA for FHS
is a non-GAAP financial measure. Please refer to "Non-GAAP
Financial Measures" for further detail.
|
For the full year and fourth quarter, the increase in
system-wide sales was driven by net restaurant growth of 3.0%, and
comparable sales of 3.8% and 3.5%, respectively, including US
comparable sales of 4.2% and 3.8%, respectively.
The year-over-year increase in Total Revenues for the full year
was primarily driven by the increase in system-wide sales. In
addition, increases in Advertising Revenues and Other Services and
Advertising Expenses and Other Services reflect our modification of
the Advertising fund arrangements to be more consistent with those
of our other brands.
The year-over-year increase in Adjusted Operating Income for the
full year was primarily driven by the increases in system-wide
sales, partially offset by an increase in Segment G&A. Adjusted
Operating Income for the fourth quarter was relatively flat driven
by an increase in Segment G&A, partially offset by the increase
in system-wide sales. The increase in Segment G&A was primarily
driven by higher compensation-related expenses.
INTL Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
(in US$
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
System-wide Sales
Growth (a)
|
|
12.8 %
|
|
|
18.5 %
|
|
|
17.6 %
|
|
|
25.6 %
|
|
System-wide Sales
(a)
|
$
|
4,332
|
|
$
|
3,813
|
|
$
|
17,087
|
|
$
|
14,700
|
|
Comparable Sales
(a)
|
|
4.6 %
|
|
|
10.5 %
|
|
|
9.0 %
|
|
|
15.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant Growth
(a)
|
|
8.9 %
|
|
|
9.1 %
|
|
|
8.9 %
|
|
|
9.1 %
|
|
System Restaurant Count
at Period End (a)
|
|
14,742
|
|
|
13,517
|
|
|
14,742
|
|
|
13,517
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Franchise and Property
Revenues
|
$
|
204
|
|
$
|
178
|
|
$
|
804
|
|
$
|
699
|
|
Advertising Revenues
and Other Services
|
$
|
21
|
|
$
|
16
|
|
$
|
70
|
|
$
|
51
|
|
Total
Revenues
|
$
|
224
|
|
$
|
194
|
|
$
|
874
|
|
$
|
750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Franchise and Property
Expenses
|
$
|
12
|
|
$
|
6
|
|
$
|
22
|
|
$
|
24
|
|
Advertising Expenses
and Other Services
|
$
|
21
|
|
$
|
16
|
|
$
|
77
|
|
$
|
54
|
|
Segment
G&A
|
$
|
50
|
|
$
|
43
|
|
$
|
190
|
|
$
|
160
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise Agreement
Amortization
|
$
|
3
|
|
$
|
3
|
|
$
|
11
|
|
$
|
10
|
|
Cash Distributions
Received from Equity
Method Investments
|
$
|
—
|
|
$
|
1
|
|
$
|
—
|
|
$
|
1
|
|
Adjusted Operating
Income
|
$
|
145
|
|
$
|
133
|
|
$
|
597
|
|
$
|
525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-Based
Compensation and Non-Cash
Incentive Compensation Expense
|
$
|
17
|
|
$
|
13
|
|
$
|
58
|
|
$
|
41
|
|
Depreciation and
Amortization, excluding
Franchise Agreement Amortization
|
$
|
3
|
|
$
|
2
|
|
$
|
11
|
|
$
|
7
|
|
Adjusted EBITDA (b)
|
$
|
164
|
|
$
|
148
|
|
$
|
666
|
|
$
|
573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Excludes results from
FHS PR from January 1, 2021 to December 31, 2022 and includes FHS
PR beginning January 1, 2023. For the purpose of calculating INTL
system-wide sales growth, net restaurant growth and comparable
sales, we include FHS PR in both the current and prior year
periods.
|
|
(b)
|
Adjusted EBITDA
for INTL is a non-GAAP financial measure. Please refer to
"Non-GAAP Financial Measures" for further detail.
|
For the full year and fourth quarter, the increase in
system-wide sales was driven by net restaurant growth of 8.9%, and
comparable sales of 9.0% and 4.6%, respectively.
The year-over-year increase in Total Revenues for the full year
and fourth quarter on an as reported and on an organic basis was
primarily driven by the increase in system-wide sales. The
year-over-year increase in Total Revenues for the fourth quarter on
an as reported basis modestly benefited from favorable FX
movements.
The year-over-year increase in Adjusted Operating Income for the
full year and fourth quarter on an as reported and on an organic
basis was primarily driven by the increases in system-wide sales,
partially offset by higher Segment G&A primarily due to higher
compensation-related expenses. Adjusted Operating Income for the
fourth quarter was also impacted by higher Franchise and Property
Expenses associated with bad debt expense.
Cash and Liquidity
As of December 31, 2023, total
debt was $13.4 billion, and net debt
(total debt less cash and cash equivalents of $1.1 billion) was $12.3
billion, net income net leverage was 7.1x and adjusted
EBITDA net leverage was 4.8x.
The RBI board of directors has declared a dividend of
$0.58 per common share and
partnership exchangeable unit of RBI LP for the first quarter of
2024. The dividend will be payable on April 4, 2024 to
shareholders and unitholders of record at the close of business on
March 21, 2024. In connection with the declared dividend, RBI
also announced that it is targeting a total of $2.32 in dividends per common share and
partnership exchangeable unit of RBI LP for 2024.
Subsequent Events
On January 16, 2024, RBI and
Carrols Restaurant Group, Inc. ("Carrols") announced that they have
reached an agreement for RBI to acquire all of Carrols issued and
outstanding shares that are not already held by RBI or its
affiliates for $9.55 per share in an
all cash transaction, or an aggregate total enterprise value (EV)
of approximately $1.0 billion.
The transaction is expected to close in the second quarter of
2024 subject to customary closing conditions, including receipt of
certain regulatory approvals and approval of the majority of
Carrols common stock, excluding shares held by RBI and its
affiliates and officers of Carrols.
As of February 13, 2024, BK had a
total company restaurant portfolio of 176 following the acquisition
of 38 company restaurants on January 17,
2024.
Investor Conference Call
We will host an investor conference call and webcast at
8:30 a.m. Eastern Time on Tuesday,
February 13, 2024, to review financial results for the full year
and fourth quarter ended December 31,
2023. The earnings call will be broadcast live via our
investor relations website at http://rbi.com/investors and a
replay will be available for 30 days following the release. The
dial-in number is (833) 470-1428 for U.S. callers, (833) 950-0062
for Canadian callers, and (929) 526-1599 for callers from other
countries. For all dial-in numbers please use the following access
code: 189424.
Contacts
Investors: investor@rbi.com
Media: media@rbi.com
About Restaurant Brands International Inc.
Restaurant Brands International Inc. ("RBI") is one of the
world's largest quick service restaurant companies with over
$40 billion in annual system-wide
sales and over 30,000 restaurants in more than 100 countries. RBI
owns four of the world's most prominent and iconic quick service
restaurant brands – TIM HORTONS®, BURGER KING®, POPEYES®, and
FIREHOUSE SUBS®. These independently operated brands have been
serving their respective guests, franchisees and communities for
decades. Through its Restaurant Brands for Good framework,
RBI is improving sustainable outcomes related to its food, the
planet, and people and communities. To learn more about RBI, please
visit the company's website at www.rbi.com.
Forward-Looking Statements
This press release and our investor conference call contain
certain forward-looking statements and information, which reflect
management's current beliefs and expectations regarding future
events and operating performance and speak only as of the date
hereof. These forward-looking statements are not guarantees of
future performance and involve a number of risks and uncertainties.
These forward-looking statements include statements about (i) our
expectations regarding the effects and continued impact of the
macro-economic pressures, such as inflation, rising interest rates
and currency fluctuations, on our results of operations, business,
liquidity, prospects and restaurant operations and those of our
franchisees, (ii) our digital, marketing, remodel and technology
enhancement initiatives and expectations regarding further
expenditures relating to these initiatives, including our "Reclaim
the Flame" plan to accelerate sales growth and drive franchisee
profitability at Burger King; (iii) our expectation that franchisee
contributions to the ad fund will increase in 2025; (iv) our
expectations around our Royal Refresh investments and our remodel
program; (v) our confidence of reaching our target net leverage;
(vi) our expectations regarding G&A (including stock based
compensation), capital expenditures, tenant inducements, remodel
investments and net interest expense in 2024; (vii) our
commitment to growth opportunities, plans and strategies for each
of our brands and ability to enhance operations and drive
long-term, sustainable growth; (viii) our expectations regarding
restaurant closures; and (ix) our 2024 dividend targets. The
factors that could cause actual results to differ materially from
RBI's expectations are detailed in filings of RBI with the
Securities and Exchange Commission and applicable Canadian
securities regulatory authorities, such as its annual and quarterly
reports and current reports on Form 8-K, and include the following:
risks related to our franchisees financial stability and their
ability to access and maintain the liquidity necessary to operate
their business; risks arising from macroeconomic conditions,
including inflation and raising interest rates and its impact on
discretionary spending; risks related to unforeseen events such as
pandemics; risks related to supply chain; risks related to
ownership and leasing of properties; risks related to our nearly
fully franchised business model, including as a result of current
and future legislation, regulations and interpretations relating to
joint employer status and other labor matters; risks related to
RBI's ability to successfully implement its domestic and
international growth strategy and risks related to its
international operations; risks related to RBI's ability to compete
domestically and internationally in an intensely competitive
industry; risks related to technology; risks related to the
conflict between Russia and
Ukraine and the conflict in the
Middle East; our ability to
address environmental and social sustainability issues and changes
in applicable tax and other laws and regulations or interpretations
thereof; and regulatory approvals of the acquisition
of Carrols. Other than as required under U.S. federal
securities laws or Canadian securities laws, we do not assume a
duty to update these forward-looking statements, whether as a
result of new information, subsequent events or circumstances,
change in expectations or otherwise.
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of
Operations
(In millions of U.S. dollars, except per share data)
(Unaudited)
|
Three Months Ended December
31,
|
|
Twelve Months Ended December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Sales
|
$
767
|
|
$
743
|
|
$
2,950
|
|
$
2,819
|
|
Franchise and property
revenues
|
740
|
|
672
|
|
2,903
|
|
2,661
|
|
Advertising revenues
and other services
|
313
|
|
274
|
|
1,169
|
|
1,025
|
|
Total
revenues
|
1,820
|
|
1,689
|
|
7,022
|
|
6,505
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of
sales
|
643
|
|
619
|
|
2,435
|
|
2,312
|
|
Franchise and property
expenses
|
140
|
|
126
|
|
512
|
|
518
|
|
Advertising expenses
and other services
|
364
|
|
295
|
|
1,273
|
|
1,077
|
|
General and
administrative expenses
|
197
|
|
196
|
|
704
|
|
631
|
|
(Income) loss from
equity method investments
|
(27)
|
|
14
|
|
(8)
|
|
44
|
|
Other operating
expenses (income), net
|
35
|
|
93
|
|
55
|
|
25
|
|
Total operating costs
and expenses
|
1,352
|
|
1,343
|
|
4,971
|
|
4,607
|
|
Income from
operations
|
468
|
|
346
|
|
2,051
|
|
1,898
|
|
Interest expense,
net
|
152
|
|
144
|
|
582
|
|
533
|
|
Loss on early
extinguishment of debt
|
—
|
|
—
|
|
16
|
|
—
|
|
Income before income
taxes
|
316
|
|
202
|
|
1,453
|
|
1,365
|
|
Income tax (benefit)
expense
|
(410)
|
|
(134)
|
|
(265)
|
|
(117)
|
|
Net income
|
726
|
|
336
|
|
1,718
|
|
1,482
|
|
Net income
attributable to noncontrolling interests
|
218
|
|
107
|
|
528
|
|
474
|
|
Net income attributable
to common shareholders
|
$
508
|
|
$
229
|
|
$
1,190
|
|
$
1,008
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
1.63
|
|
$
0.75
|
|
$
3.82
|
|
$
3.28
|
|
Diluted
|
$
1.60
|
|
$
0.74
|
|
$
3.76
|
|
$
3.25
|
|
Weighted average shares
outstanding (in millions):
|
|
|
|
|
|
|
|
|
Basic
|
313
|
|
306
|
|
312
|
|
307
|
|
Diluted
|
453
|
|
455
|
|
456
|
|
455
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions of U.S. dollars, except share data)
(Unaudited)
|
As of
|
|
December 31,
2023
|
|
December 31,
2022
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,139
|
|
$
1,178
|
|
Accounts and notes
receivable, net of allowance of $37 and $36,
respectively
|
749
|
|
614
|
|
Inventories,
net
|
166
|
|
133
|
|
Prepaids and other
current assets
|
119
|
|
123
|
|
Total current
assets
|
2,173
|
|
2,048
|
|
Property and equipment,
net of accumulated depreciation and amortization
of $1,187 and $1,061, respectively
|
1,952
|
|
1,950
|
|
Operating lease assets,
net
|
1,122
|
|
1,082
|
|
Intangible assets,
net
|
11,107
|
|
10,991
|
|
Goodwill
|
5,775
|
|
5,688
|
|
Other assets,
net
|
1,262
|
|
987
|
|
Total
assets
|
$
23,391
|
|
$
22,746
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts and drafts
payable
|
$
790
|
|
$
758
|
|
Other accrued
liabilities
|
1,005
|
|
1,001
|
|
Gift card
liability
|
248
|
|
230
|
|
Current portion of
long-term debt and finance leases
|
101
|
|
127
|
|
Total current
liabilities
|
2,144
|
|
2,116
|
|
Long-term debt, net of
current portion
|
12,854
|
|
12,839
|
|
Finance leases, net of
current portion
|
312
|
|
311
|
|
Operating lease
liabilities, net of current portion
|
1,059
|
|
1,027
|
|
Other liabilities,
net
|
996
|
|
872
|
|
Deferred income taxes,
net
|
1,296
|
|
1,313
|
|
Total
liabilities
|
18,661
|
|
18,478
|
|
Commitments and
contingencies
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
Common shares, no par
value; unlimited shares authorized at December 31,
2023 and December 31, 2022; 312,454,851 shares issued and
outstanding at
December 31, 2023; 307,142,436 shares issued and outstanding at
December
31, 2022
|
1,973
|
|
2,057
|
|
Retained
earnings
|
1,599
|
|
1,121
|
|
Accumulated other
comprehensive income (loss)
|
(706)
|
|
(679)
|
|
Total Restaurant
Brands International Inc. shareholders' equity
|
2,866
|
|
2,499
|
|
Noncontrolling
interests
|
1,864
|
|
1,769
|
|
Total shareholders'
equity
|
4,730
|
|
4,268
|
|
Total liabilities and
shareholders' equity
|
$
23,391
|
|
$
22,746
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash
Flows
(In millions of U.S. dollars)
(Unaudited)
|
Twelve Months Ended
December 31,
|
|
2023
|
|
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
1,718
|
|
$
1,482
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
191
|
|
190
|
|
Premiums paid and
non-cash loss on early extinguishment of debt
|
5
|
|
—
|
|
Amortization of
deferred financing costs and debt issuance discount
|
27
|
|
28
|
|
(Income) loss from
equity method investments
|
(8)
|
|
44
|
|
Loss (gain) on
remeasurement of foreign denominated transactions
|
20
|
|
(4)
|
|
Net (gains) losses on
derivatives
|
(151)
|
|
(9)
|
|
Share-based
compensation and non-cash incentive compensation expense
|
194
|
|
136
|
|
Deferred income
taxes
|
(430)
|
|
(60)
|
|
Other
|
26
|
|
19
|
|
Changes in current
assets and liabilities, excluding acquisitions and
dispositions:
|
|
|
|
|
Accounts and notes
receivable
|
(147)
|
|
(110)
|
|
Inventories and
prepaids and other current assets
|
(43)
|
|
(61)
|
|
Accounts and drafts
payable
|
22
|
|
169
|
|
Other accrued
liabilities and gift card liability
|
9
|
|
37
|
|
Tenant inducements
paid to franchisees
|
(32)
|
|
(26)
|
|
Other long-term assets
and liabilities
|
(78)
|
|
(345)
|
|
Net cash provided by
operating activities
|
1,323
|
|
1,490
|
|
Cash flows from
investing activities:
|
|
|
|
|
Payments for property
and equipment
|
(120)
|
|
(100)
|
|
Net proceeds from
disposal of assets, restaurant closures and
refranchisings
|
37
|
|
12
|
|
Net payment for
purchase of Firehouse Subs, net of cash acquired
|
—
|
|
(12)
|
|
Settlement/sale of
derivatives, net
|
112
|
|
71
|
|
Other investing
activities, net
|
(18)
|
|
(35)
|
|
Net cash provided by
(used for) investing activities
|
11
|
|
(64)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
long-term debt
|
55
|
|
2
|
|
Repayments of
long-term debt and finance leases
|
(92)
|
|
(94)
|
|
Payment of financing
costs
|
(44)
|
|
—
|
|
Payment of dividends
on common shares and distributions on Partnership
exchangeable units
|
(990)
|
|
(971)
|
|
Repurchase of common
shares
|
(500)
|
|
(326)
|
|
Proceeds from stock
option exercises
|
60
|
|
21
|
|
Proceeds from issuance
of common shares
|
—
|
|
30
|
|
Proceeds (payments)
from derivatives
|
141
|
|
34
|
|
Other financing
activities, net
|
(4)
|
|
(3)
|
|
Net cash used for
financing activities
|
(1,374)
|
|
(1,307)
|
|
Effect of exchange
rates on cash and cash equivalents
|
1
|
|
(28)
|
|
(Decrease)
increase in cash and cash equivalents
|
(39)
|
|
91
|
|
Cash and cash
equivalents at beginning of period
|
1,178
|
|
1,087
|
|
Cash and cash
equivalents at end of period
|
$
1,139
|
|
$
1,178
|
|
Supplemental cash
flow disclosures:
|
|
|
|
|
Interest
paid
|
$
761
|
|
$
487
|
|
Net interest paid
(a)
|
$
474
|
|
$
383
|
|
Income taxes paid,
net
|
$
290
|
|
$
275
|
|
(a) Refer to
reconciliation in Non-GAAP Financial Measures.
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Key Operating Metrics
We evaluate our restaurants and assess our business based on the
following operating metrics.
System-wide sales growth refers to the percentage change in
sales at all franchise restaurants and Company restaurants
(referred to as system-wide sales) in one period from the same
period in the prior year. Comparable sales refers to the percentage
change in restaurant sales in one period from the same prior year
period for restaurants that have been open for 13 months or longer
for TH, BK and FHS and 17 months or longer for PLK. Additionally,
if a restaurant is closed for a significant portion of a month, the
restaurant is excluded from the monthly comparable sales
calculation. System-wide sales growth and comparable sales are
measured on a constant currency basis, which means that results
exclude the effect of foreign currency translation ("FX Impact")
and are calculated by translating prior year results at current
year monthly average exchange rates. We analyze key operating
metrics on a constant currency basis as this helps identify
underlying business trends, without distortion from the effects of
currency movements.
System-wide sales represent sales at all franchise restaurants
and company-owned restaurants. We do not record franchise sales as
revenues; however, our royalty revenues and advertising fund
contributions are calculated based on a percentage of franchise
sales.
Net restaurant growth refers to the net change in restaurant
count (openings, net of permanent closures) over a trailing twelve
month period, divided by the restaurant count at the beginning of
the trailing twelve month period. In determining whether a
restaurant meets our definition of a restaurant and will be
included in our NRG, we consider factors such as scope of
operations, format and image, separate franchise agreement, and
minimum sales thresholds. We refer to restaurants that do not meet
our definition as "alternative formats."
These metrics are important indicators of the overall direction
of our business, including trends in sales and the effectiveness of
each brand's marketing, operations and growth initiatives.
2022 consolidated results exclude BK Russia, apart from two
months of royalties in the first quarter of 2022.
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Supplemental Disclosure – Home Market and
International KPIs by Brand
|
|
Three Months Ended
December 31,
|
|
|
Twelve Months Ended
December 31,
|
|
KPIs by
Market
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
(unaudited)
|
|
(unaudited)
|
|
System-wide Sales
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
TH - Canada
|
|
9.3 %
|
|
|
11.2 %
|
|
|
11.5 %
|
|
|
12.9 %
|
|
BK - US
|
|
4.6 %
|
|
|
5.3 %
|
|
|
6.6 %
|
|
|
2.4 %
|
|
PLK - US
|
|
11.2 %
|
|
|
6.1 %
|
|
|
10.2 %
|
|
|
5.1 %
|
|
FHS - US (a)
|
|
7.4 %
|
|
|
4.0 %
|
|
|
6.9 %
|
|
|
3.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
21.4 %
|
|
|
44.6 %
|
|
|
39.7 %
|
|
|
60.2 %
|
|
BK
|
|
10.4 %
|
|
|
16.0 %
|
|
|
15.1 %
|
|
|
23.6 %
|
|
PLK
|
|
55.0 %
|
|
|
66.3 %
|
|
|
61.4 %
|
|
|
60.8 %
|
|
FHS (a)
|
|
51.2 %
|
|
|
N/A
|
|
|
18.3 %
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide Sales
(in US$ millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
TH - Canada
|
$
|
1,654
|
|
$
|
1,518
|
|
$
|
6,494
|
|
$
|
6,032
|
|
BK - US
|
$
|
2,773
|
|
$
|
2,651
|
|
$
|
10,957
|
|
$
|
10,278
|
|
PLK - US
|
$
|
1,404
|
|
$
|
1,262
|
|
$
|
5,511
|
|
$
|
5,001
|
|
FHS - US (a)
|
$
|
283
|
|
$
|
288
|
|
$
|
1,138
|
|
$
|
1,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
$
|
153
|
|
$
|
124
|
|
$
|
600
|
|
$
|
431
|
|
BK
|
$
|
3,911
|
|
$
|
3,507
|
|
$
|
15,545
|
|
$
|
13,656
|
|
PLK
|
$
|
264
|
|
$
|
182
|
|
$
|
927
|
|
$
|
613
|
|
FHS (a)
|
$
|
4
|
|
|
N/A
|
|
$
|
15
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
TH - Canada
|
|
8.7 %
|
|
|
11.0 %
|
|
|
10.9 %
|
|
|
11.6 %
|
|
BK - US
|
|
6.4 %
|
|
|
5.0 %
|
|
|
7.5 %
|
|
|
2.2 %
|
|
PLK - US
|
|
5.8 %
|
|
|
1.5 %
|
|
|
4.8 %
|
|
|
(0.5) %
|
|
FHS - US (a)
|
|
3.8 %
|
|
|
1.0 %
|
|
|
4.2 %
|
|
|
1.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
(6.3) %
|
|
|
(4.3) %
|
|
|
(3.1) %
|
|
|
0.9 %
|
|
BK
|
|
4.6 %
|
|
|
10.2 %
|
|
|
8.9 %
|
|
|
15.3 %
|
|
PLK
|
|
14.9 %
|
|
|
29.2 %
|
|
|
22.5 %
|
|
|
28.4 %
|
|
FHS (a)
|
|
(7.6) %
|
|
|
N/A
|
|
|
(2.9) %
|
|
|
N/A
|
|
(a)
|
See FHS Segment results
footnote "a."
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Supplemental Disclosure – Home Market and International KPIs by
Brand
|
|
|
|
|
As of December
31,
|
|
KPIs by
Market
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
(unaudited)
|
|
Net Restaurant
Growth
|
|
|
|
|
|
|
|
|
TH - Canada
|
|
|
|
|
(0.1) %
|
|
(1.3) %
|
|
BK - US
|
|
|
|
|
(3.7) %
|
|
(0.9) %
|
|
PLK - US
|
|
|
|
|
4.5 %
|
|
6.1 %
|
|
FHS - US (a)
|
|
|
|
|
0.7 %
|
|
2.0 %
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
TH
|
|
|
|
|
21.0 %
|
|
50.1 %
|
|
BK
|
|
|
|
|
5.7 %
|
|
5.3 %
|
|
PLK
|
|
|
|
|
37.5 %
|
|
27.0 %
|
|
FHS (a)
|
|
|
|
|
21.4 %
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Restaurant
Count
|
|
|
|
|
|
|
|
|
TH - Canada
|
|
|
|
|
3,894
|
|
3,896
|
|
BK - US
|
|
|
|
|
6,778
|
|
7,042
|
|
PLK - US
|
|
|
|
|
3,051
|
|
2,921
|
|
FHS - US (a)
|
|
|
|
|
1,195
|
|
1,187
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
TH
|
|
|
|
|
1,308
|
|
1,081
|
|
BK
|
|
|
|
|
12,240
|
|
11,580
|
|
PLK
|
|
|
|
|
1,177
|
|
856
|
|
FHS (a)
|
|
|
|
|
17
|
|
N/A
|
|
(a)
|
See FHS Segment results
footnote "a."
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Supplemental Disclosure
(Unaudited)
General and Administrative Expenses
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
(in US$
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Segment G&A
TH(a)
|
$
47
|
|
$
42
|
|
$
168
|
|
$
151
|
|
Segment G&A
BK(a)
|
39
|
|
37
|
|
145
|
|
126
|
|
Segment G&A
PLK(a)
|
22
|
|
20
|
|
86
|
|
72
|
|
Segment G&A
FHS(a)
|
18
|
|
13
|
|
58
|
|
52
|
|
Segment G&A
INTL(a)
|
50
|
|
43
|
|
190
|
|
160
|
|
FHS Transaction
costs
|
—
|
|
16
|
|
19
|
|
24
|
|
Corporate restructuring
and advisory fees
|
21
|
|
25
|
|
38
|
|
46
|
|
General and
administrative expenses
|
$
197
|
|
$
196
|
|
$
704
|
|
$
631
|
|
(a)
|
Segment G&A
includes segment general and administrative expenses and excludes
FHS Transaction costs and corporate restructuring and advisory
fees.
|
Other Operating Expenses (Income), net
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
(in US$
millions)
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net losses (gains) on
disposal of assets, restaurant
closures, and refranchisings(a)
|
$
(3)
|
|
$
2
|
|
$
16
|
|
$
4
|
|
Litigation settlements
and reserves, net
|
2
|
|
8
|
|
1
|
|
11
|
|
Net losses (gains) on
foreign exchange(b)
|
31
|
|
78
|
|
20
|
|
(4)
|
|
Other, net
|
5
|
|
5
|
|
18
|
|
14
|
|
Other operating
expenses (income), net
|
$
35
|
|
$
93
|
|
$
55
|
|
$
25
|
|
(a)
|
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.
|
|
(b)
|
Net losses (gains) on
foreign exchange are primarily related to revaluation of foreign
denominated assets and liabilities.
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
(Unaudited)
Below, we define the non-GAAP financial measures, provide a
reconciliation of each non-GAAP financial measure to the most
directly comparable financial measure calculated in accordance with
U.S. Generally Accepted Accounting Principles ("GAAP"), and discuss
the reasons why we believe this information is useful to management
and may be useful to investors. These measures do not have
standardized meanings under GAAP and may differ from similarly
captioned measures of other companies in our industry.
Non-GAAP Measures
To supplement our condensed consolidated financial statements
presented on a GAAP basis, RBI reports the following non-GAAP
financial measures: Adjusted Operating Income ("AOI"), EBITDA,
Adjusted EBITDA (on a consolidated and a segment basis), Adjusted
Net Income, Adjusted Interest Expense, Adjusted Diluted Earnings
per Share ("Adjusted Diluted EPS"), Organic revenue growth, Organic
Adjusted Operating Income growth, Organic Adjusted EBITDA growth,
Organic Net Income growth, Organic Adjusted Net Income Growth,
Organic Adjusted Diluted EPS growth, Free Cash Flow, Net Debt, and
Adjusted EBITDA Net Leverage. We believe that these non-GAAP
measures are useful to investors in assessing our operating
performance or liquidity, as they provide them with the same tools
that management uses to evaluate our performance or liquidity and
are responsive to questions we receive from both investors and
analysts. By disclosing these non-GAAP measures, we intend to
provide investors with a consistent comparison of our operating
results and trends for the periods presented.
Adjusted Operating Income ("AOI") represents income from
operations adjusted to exclude (i) franchise agreement amortization
as a result of acquisition accounting, (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 in the
following financial results, income/expenses from non-recurring
projects and non-operating activities included (i) non-recurring
fees and expense incurred in connection with the Firehouse
Acquisition 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"). Management believes that these types of
expenses are either not related to our underlying profitability
drivers or not likely to re-occur in the foreseeable future and the
varied timing, size and nature of these projects may cause
volatility in our results unrelated to the performance of our core
business that does not reflect trends of our core operations. AOI
is used by management to measure operating performance of the
business, excluding these other specifically identified items that
management believes are not relevant to management's assessment of
our operating performance. AOI, as defined above, also represents
our measure of segment income for each of our five operating
segments.
EBITDA is defined as earnings (net income or loss) before
interest expense, net, (gain) loss on early extinguishment of debt,
income tax (benefit) expense, and depreciation and amortization and
is used by management to measure operating performance of the
business. Adjusted EBITDA is defined as EBITDA excluding (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 or expense from non-recurring projects and non-operating
activities (as described above). Adjusted EBITDA for each of the
five reporting segments is defined as Adjusted Operating Income for
the respective segment operations adjusted to exclude (i) the
non-cash impact of share-based compensation and non-cash incentive
compensation expense associated with the segment and (ii)
depreciation and amortization (excluding franchise agreement
amortization as a result of acquisition accounting) associated with
the segment.
Adjusted Net Income is defined as net income excluding (i)
franchise agreement amortization as a result of acquisition
accounting, (ii) amortization of deferred financing costs and debt
issuance discount, (iii) loss on early extinguishment of debt and
interest expense, which represents non-cash interest expense
related to losses reclassified from accumulated comprehensive
income (loss) into interest expense in connection with interest
rate swaps de-designated in May 2015,
November 2019 and September 2021, (iv) (income) loss from equity
method investments, net of cash distributions received from equity
method investments, (v) other operating expenses (income), net, and
(vi) income or expense from non-recurring projects and
non-operating activities (as described above).
Adjusted Interest Expense is defined as interest expense, net
less (i) amortization of deferred financing costs and debt issuance
discount and (ii) non-cash interest expense related to losses
reclassified from accumulated comprehensive income (loss) into
interest expense in connection with interest rate swaps
de-designated in May 2015,
November 2019 and September 2021.
Adjusted Diluted EPS is calculated by dividing Adjusted Net
Income by the weighted average diluted shares outstanding of RBI
during the reporting period. Adjusted Net Income and Adjusted
Diluted EPS are used by management to evaluate the operating
performance of the business, excluding certain non-cash and other
specifically identified items that management believes are not
relevant to management's assessment of operating performance.
Net Debt is defined as Total Debt less cash and cash
equivalents. Total Debt is defined as long-term debt, net of
current portion plus (i) Finance leases, net of current portion,
(ii) Current portion of long-term debt and finance leases and (iii)
Unamortized deferred financing costs and deferred issue discount.
Net Debt is used by management to evaluate the Company's liquidity.
We believe this measure is an important indicator of the Company's
ability to service its debt obligations.
Adjusted EBITDA Net Leverage is defined as net debt (total debt
less cash and cash equivalents) divided by Adjusted EBITDA. Net
Income Net Leverage is defined as Net Debt divided by Net Income.
Both of these metrics are operating performance measures that we
believe provides investors a more complete understanding of our
leverage position and borrowing capacity after factoring in cash
and cash equivalents that eventually could be used to repay
outstanding debt.
Revenue growth, Adjusted Operating Income growth and Adjusted
EBITDA growth, Adjusted Net Income growth and Adjusted Diluted EPS
growth on an organic basis, are non-GAAP measures that exclude the
impact of FX movements. Management believes that organic growth is
an important metric for measuring the operating performance of our
business as it helps identify underlying business trends, without
distortion from the effects of FX movements. We calculate the
impact of FX movements by translating prior year results at current
year monthly average exchange rates.
Free Cash Flow is the total of Net cash provided by operating
activities minus Payments for property and equipment. Free Cash
Flow is a liquidity measure used by management as one factor in
determining the amount of cash that is available for working
capital needs or other uses of cash, however, it does not represent
residual cash flows available for discretionary expenditures.
Net Interest Paid is the total of cash interest paid in the
period, cash proceeds (payments) related to derivatives, net from
both investing activities and financing activities and cash
interest income received. This liquidity measure is used by
management to understand the net effect of interest paid, received
and related hedging payments and receipts.
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures | Organic Growth
Three Months Ended December 31,
2023
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Impact of FX
|
|
|
|
|
|
|
Actual
|
|
Q4 '23 vs. Q4 '22
|
|
Movements
|
|
Organic Growth
|
|
(in US$ millions,
except per share data)
|
|
Q4 '23
|
|
Q4 '22
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
1,018
|
|
$
987
|
|
$
31
|
|
3.2 %
|
|
$
(2)
|
|
$
33
|
|
3.4 %
|
|
BK
|
|
$
345
|
|
$
310
|
|
$
35
|
|
11.0 %
|
|
$
—
|
|
$
35
|
|
11.0 %
|
|
PLK
|
|
$
182
|
|
$
162
|
|
$
20
|
|
12.4 %
|
|
$
—
|
|
$
20
|
|
12.4 %
|
|
FHS
|
|
$
51
|
|
$
36
|
|
$
15
|
|
41.9 %
|
|
$
—
|
|
$
15
|
|
41.9 %
|
|
INTL
|
|
$
224
|
|
$
194
|
|
$
30
|
|
15.8 %
|
|
$
3
|
|
$
27
|
|
13.8 %
|
|
Total
Revenues
|
|
$
1,820
|
|
$
1,689
|
|
$
131
|
|
7.8 %
|
|
$
1
|
|
$
130
|
|
7.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations
|
|
$
468
|
|
$
346
|
|
$
122
|
|
35.8 %
|
|
$
(4)
|
|
$
126
|
|
37.5 %
|
|
Net Income
|
|
$
726
|
|
$
336
|
|
$
390
|
|
116.1 %
|
|
$
(1)
|
|
$
391
|
|
116.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
231
|
|
$
226
|
|
$
5
|
|
2.4 %
|
|
$
(1)
|
|
$
6
|
|
2.7 %
|
|
BK
|
|
$
69
|
|
$
87
|
|
$
(18)
|
|
(21.4) %
|
|
$
—
|
|
$
(18)
|
|
(21.4) %
|
|
PLK
|
|
$
56
|
|
$
52
|
|
$
4
|
|
8.8 %
|
|
$
—
|
|
$
4
|
|
8.9 %
|
|
FHS
|
|
$
8
|
|
$
8
|
|
$
—
|
|
(4.5) %
|
|
$
—
|
|
$
—
|
|
(4.5) %
|
|
INTL
|
|
$
145
|
|
$
133
|
|
$
12
|
|
8.7 %
|
|
$
1
|
|
$
11
|
|
8.0 %
|
|
Adjusted Operating
Income
|
|
$
509
|
|
$
506
|
|
$
3
|
|
0.5 %
|
|
$
—
|
|
$
3
|
|
0.5 %
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
271
|
|
$
263
|
|
$
8
|
|
3.2 %
|
|
$
(1)
|
|
$
9
|
|
3.4 %
|
|
BK
|
|
$
87
|
|
$
105
|
|
$
(18)
|
|
(17.8) %
|
|
$
—
|
|
$
(18)
|
|
(17.8) %
|
|
PLK
|
|
$
66
|
|
$
60
|
|
$
6
|
|
10.2 %
|
|
$
—
|
|
$
6
|
|
10.2 %
|
|
FHS
|
|
$
15
|
|
$
12
|
|
$
3
|
|
23.2 %
|
|
$
—
|
|
$
3
|
|
23.2 %
|
|
INTL
|
|
$
164
|
|
$
148
|
|
$
16
|
|
11.5 %
|
|
$
1
|
|
$
15
|
|
10.7 %
|
|
Adjusted
EBITDA
|
|
$
603
|
|
$
588
|
|
$
15
|
|
2.6 %
|
|
$
—
|
|
$
15
|
|
2.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income
|
|
$
340
|
|
$
326
|
|
$
14
|
|
3.9 %
|
|
$
—
|
|
$
14
|
|
3.8 %
|
|
Adjusted Diluted
Earnings per Share
|
|
$
0.75
|
|
$
0.72
|
|
$
0.03
|
|
4.5 %
|
|
$
—
|
|
$
0.03
|
|
4.4 %
|
|
Note: Percentage
changes may not recalculate due to rounding.
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures | Organic Growth
Twelve Months Ended December 31,
2023
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Impact of FX
|
|
|
|
|
|
|
Actual
|
|
2023 vs. 2022
|
|
Movements
|
|
Organic Growth
|
|
(in US$ millions,
except per share data)
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
3,972
|
|
$
3,801
|
|
$
171
|
|
4.5 %
|
|
$
(115)
|
|
$
286
|
|
7.7 %
|
|
BK
|
|
$
1,297
|
|
$
1,196
|
|
$
101
|
|
8.4 %
|
|
$
(2)
|
|
$
103
|
|
8.6 %
|
|
PLK
|
|
$
692
|
|
$
619
|
|
$
73
|
|
11.9 %
|
|
$
(1)
|
|
$
74
|
|
12.0 %
|
|
FHS
|
|
$
187
|
|
$
138
|
|
$
49
|
|
34.9 %
|
|
$
—
|
|
$
49
|
|
34.9 %
|
|
INTL
|
|
$
874
|
|
$
751
|
|
$
123
|
|
16.5 %
|
|
$
—
|
|
$
123
|
|
16.6 %
|
|
Total
Revenues
|
|
$
7,022
|
|
$
6,505
|
|
$
517
|
|
7.9 %
|
|
$
(118)
|
|
$
635
|
|
9.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations
|
|
$
2,051
|
|
$
1,898
|
|
$
153
|
|
8.1 %
|
|
$
(37)
|
|
$
190
|
|
10.3 %
|
|
Net Income
|
|
$
1,718
|
|
$
1,482
|
|
$
236
|
|
16.0 %
|
|
$
(34)
|
|
$
270
|
|
18.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
958
|
|
$
925
|
|
$
33
|
|
3.6 %
|
|
$
(28)
|
|
$
61
|
|
6.9 %
|
|
BK
|
|
$
386
|
|
$
396
|
|
$
(10)
|
|
(2.6) %
|
|
$
(1)
|
|
$
(9)
|
|
(2.4) %
|
|
PLK
|
|
$
221
|
|
$
205
|
|
$
16
|
|
8.0 %
|
|
$
—
|
|
$
16
|
|
8.3 %
|
|
FHS
|
|
$
38
|
|
$
33
|
|
$
5
|
|
14.4 %
|
|
$
—
|
|
$
5
|
|
14.4 %
|
|
INTL
|
|
$
597
|
|
$
525
|
|
$
72
|
|
13.8 %
|
|
$
(8)
|
|
$
80
|
|
15.5 %
|
|
Adjusted Operating
Income
|
|
$
2,200
|
|
$
2,084
|
|
$
116
|
|
5.6 %
|
|
$
(37)
|
|
$
153
|
|
7.5 %
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
1,111
|
|
$
1,070
|
|
$
41
|
|
3.8 %
|
|
$
(33)
|
|
$
74
|
|
7.1 %
|
|
BK
|
|
$
462
|
|
$
459
|
|
$
3
|
|
0.5 %
|
|
$
(1)
|
|
$
4
|
|
0.6 %
|
|
PLK
|
|
$
257
|
|
$
232
|
|
$
25
|
|
10.5 %
|
|
$
—
|
|
$
25
|
|
10.8 %
|
|
FHS
|
|
$
58
|
|
$
44
|
|
$
14
|
|
33.1 %
|
|
$
—
|
|
$
14
|
|
33.1 %
|
|
INTL
|
|
$
666
|
|
$
573
|
|
$
93
|
|
16.4 %
|
|
$
(7)
|
|
$
100
|
|
17.9 %
|
|
Adjusted
EBITDA
|
|
$
2,554
|
|
$
2,378
|
|
$
176
|
|
7.4 %
|
|
$
(41)
|
|
$
217
|
|
9.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income
|
|
$
1,480
|
|
$
1,430
|
|
$
50
|
|
3.5 %
|
|
$
(32)
|
|
$
82
|
|
5.9 %
|
|
Adjusted Diluted
Earnings per Share
|
|
$
3.24
|
|
$
3.14
|
|
$
0.10
|
|
3.3 %
|
|
$
(0.07)
|
|
$
0.17
|
|
5.6 %
|
|
Note: Percentage
changes may not recalculate due to rounding.
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Reconciliation of Income from Operations to Adjusted Operating
Income and Net Income to
Adjusted EBITDA
(Unaudited)
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
(in US$
millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
$
468
|
|
$
346
|
|
$
2,051
|
|
$
1,898
|
|
Franchise agreement
amortization
|
|
8
|
|
8
|
|
31
|
|
32
|
|
FHS Transaction
costs(2)
|
|
—
|
|
16
|
|
19
|
|
24
|
|
Corporate
restructuring and advisory fees(3)
|
|
21
|
|
25
|
|
38
|
|
46
|
|
Impact of equity
method investments(4)
|
|
(23)
|
|
18
|
|
6
|
|
59
|
|
Other operating
expenses (income), net
|
|
35
|
|
93
|
|
55
|
|
25
|
|
Adjusted Operating
Income
|
|
$
509
|
|
$
506
|
|
$
2,200
|
|
$
2,084
|
|
|
|
|
|
|
|
|
|
|
Segment
income:
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
231
|
|
$
226
|
|
$
958
|
|
$
925
|
|
BK
|
|
69
|
|
87
|
|
386
|
|
396
|
|
PLK
|
|
56
|
|
52
|
|
221
|
|
205
|
|
FHS
|
|
8
|
|
8
|
|
38
|
|
33
|
|
INTL
|
|
145
|
|
133
|
|
597
|
|
525
|
|
Adjusted Operating
Income
|
|
$
509
|
|
$
506
|
|
$
2,200
|
|
$
2,084
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
(in US$
millions)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
726
|
|
$
336
|
|
$
1,718
|
|
$
1,482
|
|
Income tax (benefit)
expense(5)
|
|
(410)
|
|
(134)
|
|
(265)
|
|
(117)
|
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
16
|
|
—
|
|
Interest expense,
net
|
|
152
|
|
144
|
|
582
|
|
533
|
|
Income from
operations
|
|
468
|
|
346
|
|
2,051
|
|
1,898
|
|
Depreciation and
amortization
|
|
49
|
|
47
|
|
191
|
|
190
|
|
EBITDA
|
|
517
|
|
393
|
|
2,242
|
|
2,088
|
|
Share-based
compensation and non-cash
incentive compensation expense(1)
|
|
53
|
|
43
|
|
194
|
|
136
|
|
FHS Transaction
costs(2)
|
|
—
|
|
16
|
|
19
|
|
24
|
|
Corporate
restructuring and advisory fees(3)
|
|
21
|
|
25
|
|
38
|
|
46
|
|
Impact of equity
method investments(4)
|
|
(23)
|
|
18
|
|
6
|
|
59
|
|
Other operating
expenses (income), net
|
|
35
|
|
93
|
|
55
|
|
25
|
|
Adjusted EBITDA
|
|
$
603
|
|
$
588
|
|
$
2,554
|
|
$
2,378
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA by
segment:
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
271
|
|
$
263
|
|
$
1,111
|
|
$
1,070
|
|
BK
|
|
87
|
|
105
|
|
462
|
|
459
|
|
PLK
|
|
66
|
|
60
|
|
257
|
|
232
|
|
FHS
|
|
15
|
|
12
|
|
58
|
|
44
|
|
INTL
|
|
164
|
|
148
|
|
666
|
|
573
|
|
Adjusted EBITDA
|
|
$
603
|
|
$
588
|
|
$
2,554
|
|
$
2,378
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Reconciliation of Net Income to Adjusted Net Income and Adjusted
Diluted Earnings Per Share
(Unaudited)
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
(in US$ millions,
except per share data)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net income
|
|
$
726
|
|
$
336
|
|
$
1,718
|
|
$
1,482
|
|
Income tax (benefit)
expense(5)
|
|
(410)
|
|
(134)
|
|
(265)
|
|
(117)
|
|
Income before income
taxes
|
|
316
|
|
202
|
|
1,453
|
|
1,365
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Franchise agreement
amortization
|
|
8
|
|
8
|
|
31
|
|
32
|
|
Amortization of
deferred financing costs and debt
issuance discount
|
|
6
|
|
7
|
|
27
|
|
28
|
|
Interest expense and
loss on extinguished debt(6)
|
|
12
|
|
16
|
|
65
|
|
64
|
|
FHS Transaction
costs(2)
|
|
—
|
|
16
|
|
19
|
|
24
|
|
Corporate
restructuring and advisory fees(3)
|
|
21
|
|
25
|
|
38
|
|
46
|
|
Impact of equity
method investments(4)
|
|
(23)
|
|
18
|
|
6
|
|
59
|
|
Other operating
expenses (income), net
|
|
35
|
|
93
|
|
55
|
|
25
|
|
Total
adjustments
|
|
59
|
|
183
|
|
241
|
|
278
|
|
Adjusted income before
income taxes
|
|
375
|
|
385
|
|
1,694
|
|
1,643
|
|
Adjusted income tax
expense(5)(7)
|
|
35
|
|
59
|
|
214
|
|
213
|
|
Adjusted net
income
|
|
$
340
|
|
$
326
|
|
$
1,480
|
|
$
1,430
|
|
Adjusted diluted
earnings per share
|
|
$
0.75
|
|
$
0.72
|
|
$
3.24
|
|
$
3.14
|
|
Weighted average
diluted shares outstanding (in millions)
|
|
453
|
|
455
|
|
456
|
|
455
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Reconciliation of Net Leverage, Free Cash Flow and Net Interest
Paid
(Unaudited)
|
|
As of
December 31,
|
|
(in US$ millions,
except ratio)
|
|
2023
|
|
2022
|
|
Long-term debt, net of
current portion
|
|
$
12,854
|
|
$
12,839
|
|
Finance leases, net of
current portion
|
|
312
|
|
311
|
|
Current portion of
long-term debt and finance leases
|
|
101
|
|
127
|
|
Unamortized deferred
financing costs and deferred issue discount
|
|
122
|
|
111
|
|
Total
debt
|
|
$
13,389
|
|
$
13,388
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
1,139
|
|
$
1,178
|
|
Net debt
|
|
12,250
|
|
12,210
|
|
|
|
|
|
|
Net income
|
|
1,718
|
|
1,482
|
|
Net Income Net
leverage
|
|
7.1x
|
|
8.2x
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
2,554
|
|
2,378
|
|
Adjusted EBITDA Net
leverage
|
|
4.8x
|
|
5.1x
|
|
|
Twelve Months
Ended December 31,
|
|
Nine Months
Ended
September 30,
|
|
Three Months
Ended
December 31,
|
|
(in US$
millions)
|
|
2023
|
|
2023
|
|
2023
|
|
Calculation:
|
|
A
|
|
B
|
|
A - B
|
|
Net cash provided by
operating activities
|
|
$
1,323
|
|
$
920
|
|
$
403
|
|
Payments for property
and equipment
|
|
(120)
|
|
(73)
|
|
(47)
|
|
Free cash
flow
|
|
$
1,203
|
|
$
847
|
|
$
356
|
|
|
Twelve Months Ended
December 31,
|
|
(in US$
millions)
|
|
2023
|
|
2022
|
|
Interest
Paid
|
|
$
761
|
|
$
487
|
|
|
|
|
|
|
Proceeds (payments)
from derivatives, net within investing activities (a)
|
|
106
|
|
63
|
|
Proceeds (payments)
from derivatives, net within financing activities
|
|
141
|
|
34
|
|
Interest
income
|
|
40
|
|
7
|
|
Net Interest
Paid
|
|
$
474
|
|
$
383
|
|
(a) Twelve months ended
December 31, 2023 and 2022 excludes $6 million and $8 million,
respectively, of forward currency contracts included within cost of
sales in earnings.
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Footnotes
to Reconciliation Tables
|
(1)
|
Represents share-based
compensation expense associated with equity awards for the periods
indicated; also includes the portion of annual non-cash incentive
compensation expense that eligible employees elected to receive or
are expected to elect to receive as common equity in lieu of their
2022 and 2023 cash bonus, respectively.
|
|
(2)
|
In connection with the
acquisition and integration of Firehouse Subs, we incurred certain
non-recurring general and administrative expenses during the three
months ended March 31, 2023 and three and twelve months ended
December 31, 2022, primarily consisting of professional fees,
compensation related expenses and integration costs.
|
|
(3)
|
Non-operating costs
arising primarily from professional advisory and consulting
services associated with certain transformational corporate
restructuring initiatives that rationalize our structure and
optimize cash movements, including services related to significant
tax reform legislation and regulations.
|
|
(4)
|
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.
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(5)
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The effective tax rate
for the three and twelve months ended December 31, 2023 reflects a
$367 million increase in net deferred tax assets related to
non-refundable tax credits and certain intangibles recognized in
connection with intra-group reorganizations centralizing the
management of various international business and financing
operations, which reduced the effective tax rate by 115.8% and
25.3% for the three and twelve months ended December 31, 2023,
respectively. Additionally, the effective tax rate for the three
and twelve months ended December 31, 2023 included a net decrease
in tax reserves of $91 million related primarily to expiring
statute of limitations for certain prior tax years which decreased
the effective tax rate by 28.6% and 6.2% for the three and twelve
months ended December 31, 2023, respectively. The impact of net
reserves releases decreased the adjusted income tax expense by $14
million for the three and twelve months ended December 31, 2023,
respectively, and our adjusted effective tax rate by 3.7% and 0.8%
for the three and twelve months ended December 31, 2023,
respectively.
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The effective tax rate
for the three and twelve months ended December 31, 2022 included a
net decrease in tax reserves of $193 million and $364 million,
respectively, related primarily to expiring statute of limitations
for certain prior tax years which decreased the effective tax rate
by 95.6% and 26.7% for the three and twelve months ended December
31, 2022, respectively. The impact of the net reserves release
decreased the adjusted income tax expense by $42 million and $86
million for the three and twelve months ended December 31, 2022,
respectively, and our adjusted effective tax rate by 10.9% and 5.2%
for the three and twelve months ended December 31, 2022,
respectively.
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(6)
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Represents loss on
early extinguishment of debt and interest expense. Interest expense
included in this amount represents non-cash interest expense
related to losses reclassified from accumulated comprehensive
income (loss) into interest expense in connection with interest
rate swaps de-designated in May 2015, November 2019 and September
2021.
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(7)
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Adjusted income tax
expense includes the tax impact of the non-GAAP adjustments and is
calculated using our statutory tax rate in the jurisdiction in
which the costs were incurred. For the three and twelve months
ended December 31, 2023 and 2022, adjusted income tax expense has
been adjusted to remove the net tax benefits associated with the
release of tax reserves related to certain prior corporate
restructurings that when previously incurred were excluded from
adjusted income tax expense as non-cash adjustments that did not
impact our core operational results. Subsequent interest accrued on
such reserves was treated as impacting core operational results and
included in adjusted income tax expense, accordingly, the reversal
of such interest is included in adjusted income tax expense. The
Company views interest on tax reserves as a normal course of
business expense regardless of the origin of the underlying tax
reserve.
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SOURCE Restaurant Brands International Inc.
