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Name | Symbol | Market | Type |
---|---|---|---|
Restaurant Brands International Ltd Partnership (PK) | USOTC:RSTRF | OTCMarkets | Trust |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 69.50 | 67.39 | 70.41 | 0.00 | 21:09:19 |
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Canada
|
|
98-1206431
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
130 King Street West, Suite 300
|
|
M5X 1E1
|
|
Toronto,
|
Ontario
|
|
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
|
Securities registered pursuant to Section 12(b) of the Act:
|
||||
|
|
|
|
|
Title of each class
|
|
Trading Symbols
|
|
Name of each exchange on which registered
|
Class B exchangeable limited partnership units
|
|
QSP
|
|
Toronto Stock Exchange
|
|
|
|
|
|
|
|
Large accelerated filer
|
|
☒
|
|
Accelerated filer
|
|
☐
|
|
|
|
|
|
|
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☐
|
|
|
|
|
|
|
|
Emerging growth company
|
|
☐
|
|
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
|
Item 1.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
As of
|
||||||
|
June 30,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,028
|
|
|
$
|
913
|
|
Accounts and notes receivable, net of allowance of $16 and $14, respectively
|
476
|
|
|
452
|
|
||
Inventories, net
|
81
|
|
|
75
|
|
||
Prepaids and other current assets
|
69
|
|
|
60
|
|
||
Total current assets
|
1,654
|
|
|
1,500
|
|
||
Property and equipment, net of accumulated depreciation and amortization of $680 and $704, respectively
|
2,007
|
|
|
1,996
|
|
||
Operating lease assets, net
|
1,154
|
|
|
—
|
|
||
Intangible assets, net
|
10,543
|
|
|
10,463
|
|
||
Goodwill
|
5,625
|
|
|
5,486
|
|
||
Net investment in property leased to franchisees
|
47
|
|
|
54
|
|
||
Other assets, net
|
695
|
|
|
642
|
|
||
Total assets
|
$
|
21,725
|
|
|
$
|
20,141
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts and drafts payable
|
$
|
486
|
|
|
$
|
513
|
|
Other accrued liabilities
|
699
|
|
|
637
|
|
||
Gift card liability
|
106
|
|
|
167
|
|
||
Current portion of long term debt and finance leases
|
92
|
|
|
91
|
|
||
Total current liabilities
|
1,383
|
|
|
1,408
|
|
||
Term debt, net of current portion
|
11,737
|
|
|
11,823
|
|
||
Finance leases, net of current portion
|
284
|
|
|
226
|
|
||
Operating lease liabilities, net of current portion
|
1,056
|
|
|
—
|
|
||
Other liabilities, net
|
1,730
|
|
|
1,547
|
|
||
Deferred income taxes, net
|
1,575
|
|
|
1,519
|
|
||
Total liabilities
|
17,765
|
|
|
16,523
|
|
||
Partners’ capital:
|
|
|
|
||||
Class A common units; 202,006,067 issued and outstanding at June 30, 2019 and December 31, 2018
|
4,495
|
|
|
4,323
|
|
||
Partnership exchangeable units; 207,337,076 issued and outstanding at June 30, 2019; 207,523,591 issued and outstanding at December 31, 2018
|
746
|
|
|
730
|
|
||
Accumulated other comprehensive income (loss)
|
(1,284
|
)
|
|
(1,437
|
)
|
||
Total Partners’ capital
|
3,957
|
|
|
3,616
|
|
||
Noncontrolling interests
|
3
|
|
|
2
|
|
||
Total equity
|
3,960
|
|
|
3,618
|
|
||
Total liabilities and equity
|
$
|
21,725
|
|
|
$
|
20,141
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
589
|
|
|
$
|
586
|
|
|
$
|
1,111
|
|
|
$
|
1,134
|
|
Franchise and property revenues
|
811
|
|
|
757
|
|
|
1,555
|
|
|
1,463
|
|
||||
Total revenues
|
1,400
|
|
|
1,343
|
|
|
2,666
|
|
|
2,597
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
453
|
|
|
449
|
|
|
859
|
|
|
878
|
|
||||
Franchise and property expenses
|
135
|
|
|
103
|
|
|
268
|
|
|
207
|
|
||||
Selling, general and administrative expenses
|
316
|
|
|
318
|
|
|
628
|
|
|
619
|
|
||||
(Income) loss from equity method investments
|
2
|
|
|
1
|
|
|
—
|
|
|
(13
|
)
|
||||
Other operating expenses (income), net
|
3
|
|
|
(30
|
)
|
|
(14
|
)
|
|
(17
|
)
|
||||
Total operating costs and expenses
|
909
|
|
|
841
|
|
|
1,741
|
|
|
1,674
|
|
||||
Income from operations
|
491
|
|
|
502
|
|
|
925
|
|
|
923
|
|
||||
Interest expense, net
|
137
|
|
|
130
|
|
|
269
|
|
|
270
|
|
||||
Income before income taxes
|
354
|
|
|
372
|
|
|
656
|
|
|
653
|
|
||||
Income tax expense
|
97
|
|
|
58
|
|
|
153
|
|
|
60
|
|
||||
Net income
|
257
|
|
|
314
|
|
|
503
|
|
|
593
|
|
||||
Net income attributable to noncontrolling interests
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Net income attributable to common unitholders
|
$
|
257
|
|
|
$
|
313
|
|
|
$
|
503
|
|
|
$
|
592
|
|
Earnings per unit - basic and diluted
|
|
|
|
|
|
|
|
||||||||
Class A common units
|
$
|
0.70
|
|
|
$
|
0.83
|
|
|
$
|
1.37
|
|
|
$
|
1.56
|
|
Partnership exchangeable units
|
$
|
0.55
|
|
|
$
|
0.67
|
|
|
$
|
1.09
|
|
|
$
|
1.27
|
|
Weighted average units outstanding - basic and diluted
|
|
|
|
|
|
|
|
||||||||
Class A common units
|
202
|
|
|
202
|
|
|
202
|
|
|
202
|
|
||||
Partnership exchangeable units
|
207
|
|
|
218
|
|
|
207
|
|
|
218
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
257
|
|
|
$
|
314
|
|
|
$
|
503
|
|
|
$
|
593
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
199
|
|
|
(255
|
)
|
|
358
|
|
|
(472
|
)
|
||||
Net change in fair value of net investment hedges, net of tax of $13, $(29), $39 and $(38)
|
(40
|
)
|
|
113
|
|
|
(116
|
)
|
|
116
|
|
||||
Net change in fair value of cash flow hedges, net of tax of $22, $(1), $34 and $(10)
|
(57
|
)
|
|
(1
|
)
|
|
(91
|
)
|
|
28
|
|
||||
Amounts reclassified to earnings of cash flow hedges, net of tax of $(1), $0, $(1) and $(2)
|
3
|
|
|
4
|
|
|
2
|
|
|
6
|
|
||||
Other comprehensive income (loss)
|
105
|
|
|
(139
|
)
|
|
153
|
|
|
(322
|
)
|
||||
Comprehensive income (loss)
|
362
|
|
|
175
|
|
|
656
|
|
|
271
|
|
||||
Comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Comprehensive income (loss) attributable to common unitholders
|
$
|
362
|
|
|
$
|
174
|
|
|
$
|
656
|
|
|
$
|
270
|
|
|
Class A Common
Units |
|
Partnership
Exchangeable Units |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Noncontrolling
Interest |
|
Total
|
||||||||||||||||
|
Units
|
|
Amount
|
|
Units
|
|
Amount
|
|
|||||||||||||||||
Balances at December 31, 2018
|
202,006,067
|
|
|
$
|
4,323
|
|
|
207,523,591
|
|
|
$
|
730
|
|
|
$
|
(1,437
|
)
|
|
$
|
2
|
|
|
$
|
3,618
|
|
Cumulative effect adjustment
|
—
|
|
|
12
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|||||
Distributions declared on Class A common units ($0.63 per unit)
|
—
|
|
|
(127
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(127
|
)
|
|||||
Distributions declared on partnership exchangeable units ($0.50 per unit)
|
—
|
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|
—
|
|
|
—
|
|
|
(104
|
)
|
|||||
Exchange of Partnership exchangeable units for RBI common shares
|
—
|
|
|
9
|
|
|
(141,190
|
)
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital contribution from RBI Inc.
|
—
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|||||
Net income
|
—
|
|
|
135
|
|
|
—
|
|
|
111
|
|
|
—
|
|
|
—
|
|
|
246
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
|||||
Balances at March 31, 2019
|
202,006,067
|
|
|
$
|
4,423
|
|
|
207,382,401
|
|
|
$
|
737
|
|
|
$
|
(1,389
|
)
|
|
$
|
2
|
|
|
$
|
3,773
|
|
Distributions declared on Class A common units ($0.63 per unit)
|
—
|
|
|
(128
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(128
|
)
|
|||||
Distributions declared on partnership exchangeable units ($0.50 per unit)
|
—
|
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
—
|
|
|
—
|
|
|
(103
|
)
|
|||||
Exchange of Partnership exchangeable units for RBI common shares
|
—
|
|
|
3
|
|
|
(45,325
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital contribution from RBI Inc.
|
—
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55
|
|
|||||
Restaurant VIE contributions (distributions)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Net income
|
—
|
|
|
142
|
|
|
—
|
|
|
115
|
|
|
—
|
|
|
—
|
|
|
257
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105
|
|
|
—
|
|
|
105
|
|
|||||
Balances at June 30, 2019
|
202,006,067
|
|
|
$
|
4,495
|
|
|
207,337,076
|
|
|
$
|
746
|
|
|
$
|
(1,284
|
)
|
|
$
|
3
|
|
|
$
|
3,960
|
|
|
Class A Common
Units |
|
Partnership
Exchangeable Units |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Noncontrolling
Interest |
|
Total
|
||||||||||||||||
|
Units
|
|
Amount
|
|
Units
|
|
Amount
|
|
|||||||||||||||||
Balances at December 31, 2017
|
202,006,067
|
|
|
$
|
4,168
|
|
|
217,708,924
|
|
|
$
|
1,276
|
|
|
$
|
(884
|
)
|
|
$
|
1
|
|
|
$
|
4,561
|
|
Cumulative effect adjustment
|
—
|
|
|
(132
|
)
|
|
—
|
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
|
(250
|
)
|
|||||
Distributions declared on Class A common units ($0.55 per unit)
|
—
|
|
|
(112
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(112
|
)
|
|||||
Distributions declared on partnership exchangeable units ($0.45 per unit)
|
—
|
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|||||
Exchange of Partnership exchangeable units for RBI common shares
|
—
|
|
|
2
|
|
|
(29,432
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital contribution from RBI Inc.
|
—
|
|
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|||||
Restaurant VIE contributions (distributions)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Net income
|
—
|
|
|
148
|
|
|
—
|
|
|
131
|
|
|
—
|
|
|
—
|
|
|
279
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(183
|
)
|
|
—
|
|
|
(183
|
)
|
|||||
Balances at March 31, 2018
|
202,006,067
|
|
|
$
|
4,118
|
|
|
217,679,492
|
|
|
$
|
1,189
|
|
|
$
|
(1,067
|
)
|
|
$
|
2
|
|
|
$
|
4,242
|
|
Distributions declared on Class A common units ($0.56 per unit)
|
—
|
|
|
(112
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(112
|
)
|
|||||
Distributions declared on partnership exchangeable units ($0.45 per unit)
|
—
|
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|||||
Exchange of Partnership exchangeable units for RBI common shares
|
—
|
|
|
2
|
|
|
(42,923
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital contribution from RBI Inc.
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||
Net income
|
—
|
|
|
167
|
|
|
—
|
|
|
146
|
|
|
—
|
|
|
1
|
|
|
314
|
|
|||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(139
|
)
|
|
—
|
|
|
(139
|
)
|
|||||
Balances at June 30, 2018
|
202,006,067
|
|
|
$
|
4,193
|
|
|
217,636,569
|
|
|
$
|
1,235
|
|
|
$
|
(1,206
|
)
|
|
$
|
3
|
|
|
$
|
4,225
|
|
|
Six Months Ended June 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
503
|
|
|
$
|
593
|
|
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
92
|
|
|
93
|
|
||
Amortization of deferred financing costs and debt issuance discount
|
15
|
|
|
14
|
|
||
(Income) loss from equity method investments
|
—
|
|
|
(13
|
)
|
||
(Gain) loss on remeasurement of foreign denominated transactions
|
(3
|
)
|
|
(16
|
)
|
||
Net (gains) losses on derivatives
|
(34
|
)
|
|
(15
|
)
|
||
Share-based compensation expense
|
39
|
|
|
27
|
|
||
Deferred income taxes
|
23
|
|
|
(58
|
)
|
||
Other
|
(3
|
)
|
|
4
|
|
||
Changes in current assets and liabilities, excluding acquisitions and dispositions:
|
|
|
|
||||
Accounts and notes receivable
|
(16
|
)
|
|
36
|
|
||
Inventories and prepaids and other current assets
|
(10
|
)
|
|
(16
|
)
|
||
Accounts and drafts payable
|
(40
|
)
|
|
(11
|
)
|
||
Other accrued liabilities and gift card liability
|
(166
|
)
|
|
(347
|
)
|
||
Tenant inducements paid to franchisees
|
(8
|
)
|
|
(13
|
)
|
||
Other long-term assets and liabilities
|
83
|
|
|
(13
|
)
|
||
Net cash provided by (used for) operating activities
|
475
|
|
|
265
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Payments for property and equipment
|
(14
|
)
|
|
(22
|
)
|
||
Net proceeds from disposal of assets, restaurant closures, and refranchisings
|
22
|
|
|
3
|
|
||
Settlement/sale of derivatives, net
|
15
|
|
|
11
|
|
||
Other investing activities, net
|
—
|
|
|
9
|
|
||
Net cash provided by (used for) investing activities
|
23
|
|
|
1
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Repayments of long-term debt and finance leases
|
(48
|
)
|
|
(43
|
)
|
||
Distributions on Class A common and Partnership exchangeable units
|
(437
|
)
|
|
(307
|
)
|
||
Distributions to RBI for payments in connection with redemption of preferred shares
|
—
|
|
|
(60
|
)
|
||
Capital contribution from RBI Inc.
|
80
|
|
|
29
|
|
||
Other financing activities, net
|
10
|
|
|
(2
|
)
|
||
Net cash (used for) provided by financing activities
|
(395
|
)
|
|
(383
|
)
|
||
Effect of exchange rates on cash and cash equivalents
|
12
|
|
|
(15
|
)
|
||
Increase (decrease) in cash and cash equivalents
|
115
|
|
|
(132
|
)
|
||
Cash and cash equivalents at beginning of period
|
913
|
|
|
1,097
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,028
|
|
|
$
|
965
|
|
Supplemental cash flow disclosures:
|
|
|
|
||||
Interest paid
|
$
|
292
|
|
|
$
|
274
|
|
Income taxes paid
|
$
|
127
|
|
|
$
|
374
|
|
|
As Reported
|
|
Total
|
|
Adjusted
|
||||||
|
December 31, 2018
|
|
Adjustments
|
|
January 1, 2019
|
||||||
ASSETS
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
913
|
|
|
$
|
—
|
|
|
$
|
913
|
|
Accounts and notes receivable, net
|
452
|
|
|
—
|
|
|
452
|
|
|||
Inventories, net
|
75
|
|
|
—
|
|
|
75
|
|
|||
Prepaids and other current assets
|
60
|
|
|
—
|
|
|
60
|
|
|||
Total current assets
|
1,500
|
|
|
—
|
|
|
1,500
|
|
|||
Property and equipment, net
|
1,996
|
|
|
26
|
|
(a)
|
2,022
|
|
|||
Operating lease assets, net
|
—
|
|
|
1,143
|
|
(b)
|
1,143
|
|
|||
Intangible assets, net
|
10,463
|
|
|
(133
|
)
|
(c)
|
10,330
|
|
|||
Goodwill
|
5,486
|
|
|
—
|
|
|
5,486
|
|
|||
Net investment in property leased to franchisees
|
54
|
|
|
—
|
|
|
54
|
|
|||
Other assets, net
|
642
|
|
|
—
|
|
|
642
|
|
|||
Total assets
|
$
|
20,141
|
|
|
$
|
1,036
|
|
|
$
|
21,177
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
||||||
Current liabilities:
|
|
|
|
|
|
||||||
Accounts and drafts payable
|
$
|
513
|
|
|
$
|
—
|
|
|
$
|
513
|
|
Other accrued liabilities
|
637
|
|
|
114
|
|
(d)
|
751
|
|
|||
Gift card liability
|
167
|
|
|
—
|
|
|
167
|
|
|||
Current portion of long term debt and finance leases
|
91
|
|
|
—
|
|
|
91
|
|
|||
Total current liabilities
|
1,408
|
|
|
114
|
|
|
1,522
|
|
|||
Term debt, net of current portion
|
11,823
|
|
|
(65
|
)
|
(e)
|
11,758
|
|
|||
Finance leases, net of current portion
|
226
|
|
|
62
|
|
(e)
|
288
|
|
|||
Operating lease liabilities, net of current portion
|
—
|
|
|
1,028
|
|
(f)
|
1,028
|
|
|||
Other liabilities, net
|
1,547
|
|
|
(132
|
)
|
(g)
|
1,415
|
|
|||
Deferred income taxes, net
|
1,519
|
|
|
8
|
|
(h)
|
1,527
|
|
|||
Total liabilities
|
16,523
|
|
|
1,015
|
|
|
17,538
|
|
|||
Partners' capital:
|
|
|
|
|
|
||||||
Class A common units
|
4,323
|
|
|
12
|
|
(i)
|
4,335
|
|
|||
Partnership exchangeable units
|
730
|
|
|
9
|
|
(i)
|
739
|
|
|||
Accumulated other comprehensive income (loss)
|
(1,437
|
)
|
|
—
|
|
|
(1,437
|
)
|
|||
Total Partners' capital
|
3,616
|
|
|
21
|
|
|
3,637
|
|
|||
Noncontrolling interests
|
2
|
|
|
—
|
|
|
2
|
|
|||
Total equity
|
3,618
|
|
|
21
|
|
|
3,639
|
|
|||
Total liabilities and equity
|
$
|
20,141
|
|
|
$
|
1,036
|
|
|
$
|
21,177
|
|
(a)
|
Represents the net change in assets recorded in connection with build-to-suit leases.
|
(b)
|
Represents the capitalization of operating lease right-of-use (“ROU”) assets equal to the amount of recognized operating lease liability, adjusted by the net carrying amounts of related favorable lease assets and unfavorable lease liabilities in which we are the lessee and straight-line rent accruals, which were reclassified to operating lease ROU assets.
|
(c)
|
Represents the net carrying amount of favorable lease assets associated with leases in which we are the lessee, which have been reclassified to operating lease ROU assets.
|
(d)
|
Represents the current portion of operating lease liabilities.
|
(e)
|
Represents the net change in liabilities recorded in connection with build-to-suit leases.
|
(f)
|
Represents the recognition of operating lease liabilities, net of current portion.
|
(g)
|
Represents the net carrying amount of unfavorable lease liabilities associated with leases in which we are the lessee and
$64 million
of straight-line rent accruals which have been reclassified to operating lease ROU assets.
|
(h)
|
Represents the net tax effects of the adjustments noted above, with a corresponding adjustment to Partners' capital.
|
(i)
|
Represents net change in assets and liabilities recorded in connection with built-to-suit leases and the tax effects of adjustments noted above.
|
|
As of
|
||
|
June 30, 2019
|
||
Land
|
$
|
920
|
|
Buildings and improvements
|
1,139
|
|
|
Restaurant equipment
|
21
|
|
|
|
2,080
|
|
|
Accumulated depreciation and amortization
|
(441
|
)
|
|
Property and equipment leased, net
|
$
|
1,639
|
|
|
As of
|
||
|
June 30, 2019
|
||
Future rents to be received:
|
|
||
Future minimum lease receipts
|
$
|
53
|
|
Contingent rents (a)
|
23
|
|
|
Estimated unguaranteed residual value
|
15
|
|
|
Unearned income
|
(30
|
)
|
|
|
61
|
|
|
Current portion included within accounts receivables
|
(14
|
)
|
|
Net investment in property leased to franchisees
|
$
|
47
|
|
(a)
|
Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting.
|
|
|
Three months ended June 30, 2019
|
|
Six months ended June 30, 2019
|
||||
Lease income - operating leases
|
|
|
|
|
||||
Minimum lease payments
|
|
$
|
112
|
|
|
$
|
223
|
|
Variable lease payments
|
|
97
|
|
|
181
|
|
||
Amortization of favorable and unfavorable income lease contracts, net
|
|
2
|
|
|
4
|
|
||
Subtotal - lease income from operating leases
|
|
211
|
|
|
408
|
|
||
Earned income on direct financing leases
|
|
3
|
|
|
5
|
|
||
Total property revenues
|
|
$
|
214
|
|
|
$
|
413
|
|
|
|
Three months ended June 30, 2019
|
|
Six months ended June 30, 2019
|
||||
Operating lease cost
|
|
$
|
53
|
|
|
$
|
106
|
|
Operating lease variable lease cost
|
|
50
|
|
|
100
|
|
||
Finance lease cost:
|
|
|
|
|
||||
Amortization of right-of-use assets
|
|
6
|
|
|
13
|
|
||
Interest on lease liabilities
|
|
6
|
|
|
11
|
|
||
Sublease income
|
|
(164
|
)
|
|
(319
|
)
|
||
Total lease cost (income)
|
|
$
|
(49
|
)
|
|
$
|
(89
|
)
|
Weighted-average remaining lease term (in years):
|
|
|
|
Operating leases
|
|
11.1 years
|
|
Finance leases
|
|
11.2 years
|
|
Weighted-average discount rate:
|
|
|
|
Operating leases
|
|
6.5
|
%
|
Finance leases
|
|
7.6
|
%
|
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
96
|
|
Operating cash flows from finance leases
|
|
$
|
11
|
|
Financing cash flows from finance leases
|
|
$
|
13
|
|
Right-of-use assets obtained in exchange for new finance lease obligations
|
|
$
|
1
|
|
Right-of-use assets obtained in exchange for new operating lease obligations
|
|
$
|
65
|
|
|
Lease Receipts
|
|
Lease Commitments (a)
|
||||||||||||
|
Direct
Financing Leases |
|
Operating
Leases |
|
Finance
Leases |
|
Operating
Leases |
||||||||
Remainder of 2019
|
$
|
7
|
|
|
$
|
213
|
|
|
$
|
24
|
|
|
$
|
97
|
|
2020
|
10
|
|
|
406
|
|
|
46
|
|
|
187
|
|
||||
2021
|
7
|
|
|
382
|
|
|
44
|
|
|
175
|
|
||||
2022
|
5
|
|
|
357
|
|
|
43
|
|
|
163
|
|
||||
2023
|
5
|
|
|
335
|
|
|
39
|
|
|
149
|
|
||||
Thereafter
|
19
|
|
|
1,876
|
|
|
268
|
|
|
941
|
|
||||
Total minimum receipts / payments
|
$
|
53
|
|
|
$
|
3,569
|
|
|
464
|
|
|
1,712
|
|
||
Less amount representing interest (b)
|
|
|
|
|
(153
|
)
|
|
(535
|
)
|
||||||
Present value of minimum lease payments
|
|
|
|
|
311
|
|
|
1,177
|
|
||||||
Current portion of lease obligations
|
|
|
|
|
(27
|
)
|
|
(121
|
)
|
||||||
Long-term portion of lease obligations
|
|
|
|
|
$
|
284
|
|
|
$
|
1,056
|
|
(a)
|
Minimum lease commitments have not been reduced by minimum sublease rentals of
$2,351 million
due in the future under non-cancelable subleases.
|
(b)
|
Calculated using the interest rate for each lease.
|
|
Lease Receipts
|
|
Lease Commitments (a)
|
||||||||||||
|
Direct
Financing Leases |
|
Operating
Leases |
|
Finance
Leases |
|
Operating
Leases |
||||||||
2019
|
$
|
14
|
|
|
$
|
416
|
|
|
$
|
38
|
|
|
$
|
183
|
|
2020
|
10
|
|
|
388
|
|
|
36
|
|
|
172
|
|
||||
2021
|
7
|
|
|
360
|
|
|
34
|
|
|
158
|
|
||||
2022
|
5
|
|
|
331
|
|
|
33
|
|
|
145
|
|
||||
2023
|
5
|
|
|
306
|
|
|
30
|
|
|
130
|
|
||||
Thereafter
|
19
|
|
|
1,704
|
|
|
201
|
|
|
831
|
|
||||
Total minimum receipts / payments
|
$
|
60
|
|
|
$
|
3,505
|
|
|
372
|
|
|
$
|
1,619
|
|
|
Less amount representing interest
|
|
|
|
|
(125
|
)
|
|
|
|||||||
Present value of minimum finance lease payments
|
|
|
|
|
247
|
|
|
|
|||||||
Current portion of finance lease obligation
|
|
|
|
|
(21
|
)
|
|
|
|||||||
Long-term portion of finance lease obligation
|
|
|
|
|
$
|
226
|
|
|
|
(a)
|
Minimum lease commitments have not been reduced by minimum sublease rentals of
$2,290 million
due in the future under non-cancelable subleases.
|
Contract Liabilities
|
|
TH
|
|
BK
|
|
PLK
|
|
Consolidated
|
||||||||
Balance at December 31, 2018
|
|
$
|
62
|
|
|
$
|
405
|
|
|
$
|
19
|
|
|
$
|
486
|
|
Revenue recognized that was included in the contract liability balance at the beginning of the year
|
|
(4
|
)
|
|
(21
|
)
|
|
(1
|
)
|
|
(26
|
)
|
||||
Increase, excluding amounts recognized as revenue during the period
|
|
4
|
|
|
42
|
|
|
4
|
|
|
50
|
|
||||
Impact of foreign currency translation
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Balance at June 30, 2019
|
|
$
|
63
|
|
|
$
|
425
|
|
|
$
|
22
|
|
|
$
|
510
|
|
Contract liabilities expected to be recognized in
|
|
TH
|
|
BK
|
|
PLK
|
|
Consolidated
|
||||||||
Remainder of 2019
|
|
$
|
4
|
|
|
$
|
16
|
|
|
$
|
1
|
|
|
$
|
21
|
|
2020
|
|
8
|
|
|
32
|
|
|
2
|
|
|
42
|
|
||||
2021
|
|
7
|
|
|
31
|
|
|
1
|
|
|
39
|
|
||||
2022
|
|
7
|
|
|
31
|
|
|
1
|
|
|
39
|
|
||||
2023
|
|
6
|
|
|
30
|
|
|
1
|
|
|
37
|
|
||||
Thereafter
|
|
31
|
|
|
285
|
|
|
16
|
|
|
332
|
|
||||
Total
|
|
$
|
63
|
|
|
$
|
425
|
|
|
$
|
22
|
|
|
$
|
510
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Sales
|
$
|
589
|
|
|
$
|
586
|
|
|
$
|
1,111
|
|
|
$
|
1,134
|
|
Royalties
|
576
|
|
|
544
|
|
|
1,104
|
|
|
1,054
|
|
||||
Property revenues
|
214
|
|
|
190
|
|
|
413
|
|
|
368
|
|
||||
Franchise fees and other revenue
|
21
|
|
|
23
|
|
|
38
|
|
|
41
|
|
||||
Total revenues
|
$
|
1,400
|
|
|
$
|
1,343
|
|
|
$
|
2,666
|
|
|
$
|
2,597
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Allocation of net income among partner interests:
|
|
|
|
|
|
|
|
||||||||
Net income allocated to Class A common unitholders
|
$
|
142
|
|
|
$
|
167
|
|
|
$
|
277
|
|
|
$
|
315
|
|
Net income allocated to Partnership exchangeable unitholders
|
115
|
|
|
146
|
|
|
226
|
|
|
277
|
|
||||
Net income attributable to common unitholders
|
$
|
257
|
|
|
$
|
313
|
|
|
$
|
503
|
|
|
$
|
592
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator - basic and diluted partnership units:
|
|
|
|
|
|
|
|
||||||||
Weighted average Class A common units
|
202
|
|
|
202
|
|
|
202
|
|
|
202
|
|
||||
Weighted average Partnership exchangeable units
|
207
|
|
|
218
|
|
|
207
|
|
|
218
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings per unit - basic and diluted:
|
|
|
|
|
|
|
|
||||||||
Class A common units (a)
|
$
|
0.70
|
|
|
$
|
0.83
|
|
|
$
|
1.37
|
|
|
$
|
1.56
|
|
Partnership exchangeable units (a)
|
$
|
0.55
|
|
|
$
|
0.67
|
|
|
$
|
1.09
|
|
|
$
|
1.27
|
|
|
As of
|
||||||||||||||||||||||
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Identifiable assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Franchise agreements
|
$
|
715
|
|
|
$
|
(209
|
)
|
|
$
|
506
|
|
|
$
|
705
|
|
|
$
|
(194
|
)
|
|
$
|
511
|
|
Favorable leases (a)
|
134
|
|
|
(65
|
)
|
|
69
|
|
|
407
|
|
|
(200
|
)
|
|
207
|
|
||||||
Subtotal
|
849
|
|
|
(274
|
)
|
|
575
|
|
|
1,112
|
|
|
(394
|
)
|
|
718
|
|
||||||
Indefinite lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tim Hortons
brand
|
$
|
6,487
|
|
|
$
|
—
|
|
|
$
|
6,487
|
|
|
$
|
6,259
|
|
|
$
|
—
|
|
|
$
|
6,259
|
|
Burger King
brand
|
2,126
|
|
|
—
|
|
|
2,126
|
|
|
2,131
|
|
|
—
|
|
|
2,131
|
|
||||||
Popeyes
brand
|
1,355
|
|
|
—
|
|
|
1,355
|
|
|
1,355
|
|
|
—
|
|
|
1,355
|
|
||||||
Subtotal
|
9,968
|
|
|
—
|
|
|
9,968
|
|
|
9,745
|
|
|
—
|
|
|
9,745
|
|
||||||
Intangible assets, net
|
|
|
|
|
$
|
10,543
|
|
|
|
|
|
|
$
|
10,463
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Goodwill
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tim Hortons segment
|
$
|
4,178
|
|
|
|
|
|
|
$
|
4,038
|
|
|
|
|
|
||||||||
Burger King segment
|
601
|
|
|
|
|
|
|
602
|
|
|
|
|
|
||||||||||
Popeyes segment
|
846
|
|
|
|
|
|
|
846
|
|
|
|
|
|
||||||||||
Total
|
$
|
5,625
|
|
|
|
|
|
|
$
|
5,486
|
|
|
|
|
|
(a)
|
The decrease in favorable leases reflects the reclassification of favorable leases where we are the lessee to operating lease right-of-use assets in connection with our transition to ASC 842. See Note 4,
Leases
.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues from affiliates:
|
|
|
|
|
|
|
|
||||||||
Royalties
|
$
|
87
|
|
|
$
|
74
|
|
|
$
|
165
|
|
|
$
|
142
|
|
Property revenues
|
9
|
|
|
9
|
|
|
17
|
|
|
18
|
|
||||
Franchise fees and other revenue
|
3
|
|
|
2
|
|
|
6
|
|
|
4
|
|
||||
Total
|
$
|
99
|
|
|
$
|
85
|
|
|
$
|
188
|
|
|
$
|
164
|
|
|
As of
|
||||||
|
June 30,
2019 |
|
December 31,
2018 |
||||
Current:
|
|
|
|
||||
Dividend payable
|
$
|
232
|
|
|
$
|
207
|
|
Interest payable
|
88
|
|
|
87
|
|
||
Accrued compensation and benefits
|
48
|
|
|
69
|
|
||
Taxes payable
|
73
|
|
|
113
|
|
||
Deferred income
|
36
|
|
|
27
|
|
||
Accrued advertising expenses
|
20
|
|
|
30
|
|
||
Restructuring and other provisions
|
7
|
|
|
11
|
|
||
Current portion of operating lease liabilities (a)
|
121
|
|
|
—
|
|
||
Other
|
74
|
|
|
93
|
|
||
Other accrued liabilities
|
$
|
699
|
|
|
$
|
637
|
|
Noncurrent:
|
|
|
|
||||
Taxes payable
|
$
|
570
|
|
|
$
|
493
|
|
Contract liabilities, net
|
510
|
|
|
486
|
|
||
Unfavorable leases (b)
|
113
|
|
|
192
|
|
||
Derivatives liabilities
|
397
|
|
|
179
|
|
||
Accrued pension
|
63
|
|
|
64
|
|
||
Accrued lease straight-lining liability (b)
|
—
|
|
|
69
|
|
||
Deferred income
|
31
|
|
|
22
|
|
||
Other
|
46
|
|
|
42
|
|
||
Other liabilities, net
|
$
|
1,730
|
|
|
$
|
1,547
|
|
(a)
|
Represents the current portion of operating lease liabilities recognized in connection with our transition to ASC 842. See Note 4,
Leases
.
|
(b)
|
The decreases in unfavorable leases and accrued lease straight-lining liability reflect the reclassification of unfavorable leases and lease straight-lining liability where we are the lessee in the underlying operating lease to the right-of-use assets recorded for the underlying lease in connection with our transition to ASC 842. See Note 4,
Leases
.
|
|
As of
|
||||||
|
June 30,
2019 |
|
December 31,
2018 |
||||
Term Loan Facility (due February 17, 2024)
|
$
|
6,305
|
|
|
$
|
6,338
|
|
2017 4.25% Senior Notes (due May 15, 2024)
|
1,500
|
|
|
1,500
|
|
||
2015 4.625% Senior Notes (due January 15, 2022)
|
1,250
|
|
|
1,250
|
|
||
2017 5.00% Senior Notes (due October 15, 2025)
|
2,800
|
|
|
2,800
|
|
||
Other (a)
|
80
|
|
|
150
|
|
||
Less: unamortized deferred financing costs and deferred issue discount
|
(133
|
)
|
|
(145
|
)
|
||
Total debt, net
|
11,802
|
|
|
11,893
|
|
||
Less: current maturities of debt
|
(65
|
)
|
|
(70
|
)
|
||
Total long-term debt
|
$
|
11,737
|
|
|
$
|
11,823
|
|
(a)
|
The decrease in Other reflects the de-recognition of obligations associated with build-to-suit leases recorded under the Previous Standard. Liabilities associated with build-to-suit leases were remeasured and recorded as finance lease liabilities in conjunction with our transition to ASC 842.
|
|
As of
|
||||||
|
June 30,
2019 |
|
December 31,
2018 |
||||
Fair value of our variable term debt and senior notes
|
$
|
12
|
|
|
$
|
11
|
|
Principal carrying amount of our variable term debt and senior notes
|
12
|
|
|
12
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Debt (a)
|
$
|
128
|
|
|
$
|
120
|
|
|
$
|
252
|
|
|
$
|
250
|
|
Finance lease obligations
|
6
|
|
|
6
|
|
|
11
|
|
|
12
|
|
||||
Amortization of deferred financing costs and debt issuance discount
|
8
|
|
|
7
|
|
|
15
|
|
|
14
|
|
||||
Interest income
|
(5
|
)
|
|
(3
|
)
|
|
(9
|
)
|
|
(6
|
)
|
||||
Interest expense, net
|
$
|
137
|
|
|
$
|
130
|
|
|
$
|
269
|
|
|
$
|
270
|
|
(a)
|
Amount includes
$19 million
and
$20 million
benefit during the
three months ended June 30, 2019 and 2018
, respectively, and
$37 million
and
$24 million
benefit during the
six months ended June 30, 2019 and 2018
, respectively, from our adoption of a new hedge accounting standard in 2018.
|
|
Derivatives
|
|
Pensions
|
|
Foreign Currency Translation
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||
Balances at December 31, 2018
|
$
|
454
|
|
|
$
|
(27
|
)
|
|
$
|
(1,864
|
)
|
|
$
|
(1,437
|
)
|
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
358
|
|
|
358
|
|
||||
Net change in fair value of derivatives, net of tax
|
(207
|
)
|
|
—
|
|
|
—
|
|
|
(207
|
)
|
||||
Amounts reclassified to earnings of cash flow hedges, net of tax
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Balances at June 30, 2019
|
$
|
249
|
|
|
$
|
(27
|
)
|
|
$
|
(1,506
|
)
|
|
$
|
(1,284
|
)
|
|
Gain or (Loss) Recognized in Other Comprehensive Income (Loss)
|
||||||||||||||
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Derivatives designated as cash flow hedges
(1)
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
$
|
(77
|
)
|
|
$
|
(5
|
)
|
|
$
|
(121
|
)
|
|
$
|
24
|
|
Forward-currency contracts
|
$
|
(2
|
)
|
|
$
|
3
|
|
|
$
|
(4
|
)
|
|
$
|
13
|
|
Derivatives designated as net investment hedges
|
|
|
|
|
|
|
|
||||||||
Cross-currency rate swaps
|
$
|
(53
|
)
|
|
$
|
143
|
|
|
$
|
(155
|
)
|
|
$
|
154
|
|
(1)
|
We did not exclude any components from the cash flow hedge relationships presented in this table.
|
|
|
Location of Gain or (Loss) Reclassified from AOCI into Earnings
|
|
Gain or (Loss) Reclassified from AOCI into Earnings
|
||||||||||||||
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
Interest expense, net
|
|
$
|
(6
|
)
|
|
$
|
(5
|
)
|
|
$
|
(7
|
)
|
|
$
|
(11
|
)
|
Forward-currency contracts
|
|
Cost of sales
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Location of Gain or (Loss) Recognized in Earnings
|
|
Gain or (Loss) Recognized in Earnings
(Amount Excluded from Effectiveness Testing)
|
||||||||||||||
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|||||||||||||
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Derivatives designated as net investment hedges
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cross-currency rate swaps
|
|
Interest expense, net
|
|
$
|
19
|
|
|
$
|
20
|
|
|
$
|
37
|
|
|
$
|
24
|
|
|
Fair Value as of
|
|
|
|
|
||||||
|
June 30, 2019
|
|
December 31, 2018
|
|
Balance Sheet Location
|
||||||
Assets:
|
|
|
|
|
|
||||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
||||||
Foreign currency
|
$
|
—
|
|
|
$
|
7
|
|
|
Prepaids and other current assets
|
||
Derivatives designated as net investment hedges
|
|
|
|
|
|
||||||
Foreign currency
|
15
|
|
|
58
|
|
|
Other assets, net
|
||||
Total assets at fair value
|
$
|
15
|
|
|
$
|
65
|
|
|
|
||
|
|
|
|
|
|
||||||
Liabilities:
|
|
|
|
|
|
||||||
Derivatives designated as cash flow hedges
|
|
|
|
|
|
||||||
Interest rate
|
$
|
193
|
|
|
$
|
72
|
|
|
Other liabilities, net
|
||
Foreign currency
|
1
|
|
|
—
|
|
|
Other accrued liabilities
|
||||
Derivatives designated as net investment hedges
|
|
|
|
|
|
||||||
Foreign currency
|
204
|
|
|
107
|
|
|
Other liabilities, net
|
||||
Total liabilities at fair value
|
$
|
398
|
|
|
$
|
179
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings
|
$
|
(10
|
)
|
|
$
|
3
|
|
|
$
|
(7
|
)
|
|
$
|
10
|
|
Litigation settlements (gains) and reserves, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||
Net losses (gains) on foreign exchange
|
12
|
|
|
(33
|
)
|
|
(3
|
)
|
|
(16
|
)
|
||||
Other, net
|
1
|
|
|
—
|
|
|
(4
|
)
|
|
(5
|
)
|
||||
Other operating expenses (income), net
|
$
|
3
|
|
|
$
|
(30
|
)
|
|
$
|
(14
|
)
|
|
$
|
(17
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues by operating segment:
|
|
|
|
|
|
|
|
||||||||
TH
|
$
|
842
|
|
|
$
|
823
|
|
|
$
|
1,591
|
|
|
$
|
1,586
|
|
BK
|
447
|
|
|
418
|
|
|
858
|
|
|
808
|
|
||||
PLK
|
111
|
|
|
102
|
|
|
217
|
|
|
203
|
|
||||
Total revenues
|
$
|
1,400
|
|
|
$
|
1,343
|
|
|
$
|
2,666
|
|
|
$
|
2,597
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues by country (a):
|
|
|
|
|
|
|
|
||||||||
Canada
|
$
|
764
|
|
|
$
|
746
|
|
|
$
|
1,440
|
|
|
$
|
1,438
|
|
United States
|
479
|
|
|
450
|
|
|
923
|
|
|
871
|
|
||||
Other
|
157
|
|
|
147
|
|
|
303
|
|
|
288
|
|
||||
Total revenues
|
$
|
1,400
|
|
|
$
|
1,343
|
|
|
$
|
2,666
|
|
|
$
|
2,597
|
|
(a)
|
Only Canada and the United States represented
10%
or more of our total revenues in each period presented.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Segment income:
|
|
|
|
|
|
|
|
||||||||
TH
|
$
|
287
|
|
|
$
|
286
|
|
|
$
|
524
|
|
|
$
|
531
|
|
BK
|
252
|
|
|
236
|
|
|
474
|
|
|
450
|
|
||||
PLK
|
41
|
|
|
40
|
|
|
82
|
|
|
79
|
|
||||
Adjusted EBITDA
|
580
|
|
|
562
|
|
|
1,080
|
|
|
1,060
|
|
||||
Share-based compensation and non-cash incentive compensation expense
|
19
|
|
|
16
|
|
|
44
|
|
|
31
|
|
||||
PLK Transaction costs
|
—
|
|
|
5
|
|
|
—
|
|
|
10
|
|
||||
Corporate restructuring and tax advisory fees
|
11
|
|
|
7
|
|
|
17
|
|
|
14
|
|
||||
Office centralization and relocation costs
|
2
|
|
|
12
|
|
|
6
|
|
|
12
|
|
||||
Impact of equity method investments (a)
|
9
|
|
|
4
|
|
|
10
|
|
|
(6
|
)
|
||||
Other operating expenses (income), net
|
3
|
|
|
(30
|
)
|
|
(14
|
)
|
|
(17
|
)
|
||||
EBITDA
|
536
|
|
|
548
|
|
|
1,017
|
|
|
1,016
|
|
||||
Depreciation and amortization
|
45
|
|
|
46
|
|
|
92
|
|
|
93
|
|
||||
Income from operations
|
491
|
|
|
502
|
|
|
925
|
|
|
923
|
|
||||
Interest expense, net
|
137
|
|
|
130
|
|
|
269
|
|
|
270
|
|
||||
Income tax expense
|
97
|
|
|
58
|
|
|
153
|
|
|
60
|
|
||||
Net income
|
$
|
257
|
|
|
$
|
314
|
|
|
$
|
503
|
|
|
$
|
593
|
|
(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.
|
|
Consolidated Borrowers
|
|
RBILP
|
|
Eliminations
|
|
Consolidated
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
1,028
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,028
|
|
Accounts and notes receivable, net
|
476
|
|
|
—
|
|
|
—
|
|
|
476
|
|
||||
Inventories, net
|
81
|
|
|
—
|
|
|
—
|
|
|
81
|
|
||||
Prepaids and other current assets
|
69
|
|
|
—
|
|
|
—
|
|
|
69
|
|
||||
Total current assets
|
1,654
|
|
|
—
|
|
|
—
|
|
|
1,654
|
|
||||
Property and equipment, net
|
2,007
|
|
|
—
|
|
|
—
|
|
|
2,007
|
|
||||
Operating lease assets, net
|
1,154
|
|
|
—
|
|
|
—
|
|
|
1,154
|
|
||||
Intangible assets, net
|
10,543
|
|
|
—
|
|
|
—
|
|
|
10,543
|
|
||||
Goodwill
|
5,625
|
|
|
—
|
|
|
—
|
|
|
5,625
|
|
||||
Net investment in property leased to franchisees
|
47
|
|
|
—
|
|
|
—
|
|
|
47
|
|
||||
Intercompany receivable
|
—
|
|
|
232
|
|
|
(232
|
)
|
|
—
|
|
||||
Investment in subsidiaries
|
—
|
|
|
3,960
|
|
|
(3,960
|
)
|
|
—
|
|
||||
Other assets, net
|
695
|
|
|
—
|
|
|
—
|
|
|
695
|
|
||||
Total assets
|
$
|
21,725
|
|
|
$
|
4,192
|
|
|
$
|
(4,192
|
)
|
|
$
|
21,725
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts and drafts payable
|
$
|
486
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
486
|
|
Other accrued liabilities
|
467
|
|
|
232
|
|
|
—
|
|
|
699
|
|
||||
Gift card liability
|
106
|
|
|
—
|
|
|
—
|
|
|
106
|
|
||||
Current portion of long term debt and finance leases
|
92
|
|
|
—
|
|
|
—
|
|
|
92
|
|
||||
Total current liabilities
|
1,151
|
|
|
232
|
|
|
—
|
|
|
1,383
|
|
||||
Term debt, net of current portion
|
11,737
|
|
|
—
|
|
|
—
|
|
|
11,737
|
|
||||
Finance leases, net of current portion
|
284
|
|
|
—
|
|
|
—
|
|
|
284
|
|
||||
Operating lease liabilities, net of current portion
|
1,056
|
|
|
—
|
|
|
—
|
|
|
1,056
|
|
||||
Other liabilities, net
|
1,730
|
|
|
—
|
|
|
—
|
|
|
1,730
|
|
||||
Payables to affiliates
|
232
|
|
|
—
|
|
|
(232
|
)
|
|
—
|
|
||||
Deferred income taxes, net
|
1,575
|
|
|
—
|
|
|
—
|
|
|
1,575
|
|
||||
Total liabilities
|
17,765
|
|
|
232
|
|
|
(232
|
)
|
|
17,765
|
|
||||
Partners’ capital:
|
|
|
|
|
|
|
|
||||||||
Class A common units
|
—
|
|
|
4,495
|
|
|
—
|
|
|
4,495
|
|
||||
Partnership exchangeable units
|
—
|
|
|
746
|
|
|
—
|
|
|
746
|
|
||||
Common shares
|
3,197
|
|
|
—
|
|
|
(3,197
|
)
|
|
—
|
|
||||
Retained Earnings
|
2,044
|
|
|
—
|
|
|
(2,044
|
)
|
|
—
|
|
||||
Accumulated other comprehensive income (loss)
|
(1,284
|
)
|
|
(1,284
|
)
|
|
1,284
|
|
|
(1,284
|
)
|
||||
Total Partners' capital/shareholders' equity
|
3,957
|
|
|
3,957
|
|
|
(3,957
|
)
|
|
3,957
|
|
||||
Noncontrolling interests
|
3
|
|
|
3
|
|
|
(3
|
)
|
|
3
|
|
||||
Total equity
|
3,960
|
|
|
3,960
|
|
|
(3,960
|
)
|
|
3,960
|
|
||||
Total liabilities and equity
|
$
|
21,725
|
|
|
$
|
4,192
|
|
|
$
|
(4,192
|
)
|
|
$
|
21,725
|
|
|
Consolidated Borrowers
|
|
RBILP
|
|
Eliminations
|
|
Consolidated
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
||||||||
Current assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
913
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
913
|
|
Accounts and notes receivable, net
|
452
|
|
|
—
|
|
|
—
|
|
|
452
|
|
||||
Inventories, net
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
||||
Prepaids and other current assets
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
||||
Total current assets
|
1,500
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
||||
Property and equipment, net
|
1,996
|
|
|
—
|
|
|
—
|
|
|
1,996
|
|
||||
Intangible assets, net
|
10,463
|
|
|
—
|
|
|
—
|
|
|
10,463
|
|
||||
Goodwill
|
5,486
|
|
|
—
|
|
|
—
|
|
|
5,486
|
|
||||
Net investment in property leased to franchisees
|
54
|
|
|
—
|
|
|
—
|
|
|
54
|
|
||||
Intercompany receivable
|
—
|
|
|
207
|
|
|
(207
|
)
|
|
—
|
|
||||
Investment in subsidiaries
|
—
|
|
|
3,618
|
|
|
(3,618
|
)
|
|
—
|
|
||||
Other assets, net
|
642
|
|
|
—
|
|
|
—
|
|
|
642
|
|
||||
Total assets
|
$
|
20,141
|
|
|
$
|
3,825
|
|
|
$
|
(3,825
|
)
|
|
$
|
20,141
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
||||||||
Current liabilities:
|
|
|
|
|
|
|
|
||||||||
Accounts and drafts payable
|
$
|
513
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
513
|
|
Other accrued liabilities
|
430
|
|
|
207
|
|
|
—
|
|
|
637
|
|
||||
Gift card liability
|
167
|
|
|
—
|
|
|
—
|
|
|
167
|
|
||||
Current portion of long term debt and finance leases
|
91
|
|
|
—
|
|
|
—
|
|
|
91
|
|
||||
Total current liabilities
|
1,201
|
|
|
207
|
|
|
—
|
|
|
1,408
|
|
||||
Term debt, net of current portion
|
11,823
|
|
|
—
|
|
|
—
|
|
|
11,823
|
|
||||
Capital leases, net of current portion
|
226
|
|
|
—
|
|
|
—
|
|
|
226
|
|
||||
Other liabilities, net
|
1,547
|
|
|
—
|
|
|
—
|
|
|
1,547
|
|
||||
Payables to affiliates
|
207
|
|
|
—
|
|
|
(207
|
)
|
|
—
|
|
||||
Deferred income taxes, net
|
1,519
|
|
|
—
|
|
|
—
|
|
|
1,519
|
|
||||
Total liabilities
|
16,523
|
|
|
207
|
|
|
(207
|
)
|
|
16,523
|
|
||||
Partners’ capital:
|
|
|
|
|
|
|
|
||||||||
Class A common units
|
—
|
|
|
4,323
|
|
|
—
|
|
|
4,323
|
|
||||
Partnership exchangeable units
|
—
|
|
|
730
|
|
|
—
|
|
|
730
|
|
||||
Common shares
|
3,071
|
|
|
—
|
|
|
(3,071
|
)
|
|
—
|
|
||||
Retained Earnings
|
1,982
|
|
|
—
|
|
|
(1,982
|
)
|
|
—
|
|
||||
Accumulated other comprehensive income (loss)
|
(1,437
|
)
|
|
(1,437
|
)
|
|
1,437
|
|
|
(1,437
|
)
|
||||
Total Partners' capital/shareholders' equity
|
3,616
|
|
|
3,616
|
|
|
(3,616
|
)
|
|
3,616
|
|
||||
Noncontrolling interests
|
2
|
|
|
2
|
|
|
(2
|
)
|
|
2
|
|
||||
Total equity
|
3,618
|
|
|
3,618
|
|
|
(3,618
|
)
|
|
3,618
|
|
||||
Total liabilities and equity
|
$
|
20,141
|
|
|
$
|
3,825
|
|
|
$
|
(3,825
|
)
|
|
$
|
20,141
|
|
|
Consolidated Borrowers
|
|
RBILP
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
589
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
589
|
|
Franchise and property revenues
|
811
|
|
|
—
|
|
|
—
|
|
|
811
|
|
||||
Total revenues
|
1,400
|
|
|
—
|
|
|
—
|
|
|
1,400
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
453
|
|
|
—
|
|
|
—
|
|
|
453
|
|
||||
Franchise and property expenses
|
135
|
|
|
—
|
|
|
—
|
|
|
135
|
|
||||
Selling, general and administrative expenses
|
316
|
|
|
—
|
|
|
—
|
|
|
316
|
|
||||
(Income) loss from equity method investments
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Other operating expenses (income), net
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Total operating costs and expenses
|
909
|
|
|
—
|
|
|
—
|
|
|
909
|
|
||||
Income from operations
|
491
|
|
|
—
|
|
|
—
|
|
|
491
|
|
||||
Interest expense, net
|
137
|
|
|
—
|
|
|
—
|
|
|
137
|
|
||||
Income before income taxes
|
354
|
|
|
—
|
|
|
—
|
|
|
354
|
|
||||
Income tax expense
|
97
|
|
|
—
|
|
|
—
|
|
|
97
|
|
||||
Net income
|
257
|
|
|
—
|
|
|
—
|
|
|
257
|
|
||||
Equity in earnings of consolidated subsidiaries
|
—
|
|
|
257
|
|
|
(257
|
)
|
|
—
|
|
||||
Net income (loss)
|
257
|
|
|
257
|
|
|
(257
|
)
|
|
257
|
|
||||
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) attributable to common unitholders
|
$
|
257
|
|
|
$
|
257
|
|
|
$
|
(257
|
)
|
|
$
|
257
|
|
Comprehensive income (loss)
|
$
|
362
|
|
|
$
|
362
|
|
|
$
|
(362
|
)
|
|
$
|
362
|
|
|
Consolidated Borrowers
|
|
RBILP
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,111
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,111
|
|
Franchise and property revenues
|
1,555
|
|
|
—
|
|
|
—
|
|
|
1,555
|
|
||||
Total revenues
|
2,666
|
|
|
—
|
|
|
—
|
|
|
2,666
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
859
|
|
|
—
|
|
|
—
|
|
|
859
|
|
||||
Franchise and property expenses
|
268
|
|
|
—
|
|
|
—
|
|
|
268
|
|
||||
Selling, general and administrative expenses
|
628
|
|
|
—
|
|
|
—
|
|
|
628
|
|
||||
(Income) loss from equity method investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other operating expenses (income), net
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||
Total operating costs and expenses
|
1,741
|
|
|
—
|
|
|
—
|
|
|
1,741
|
|
||||
Income from operations
|
925
|
|
|
—
|
|
|
—
|
|
|
925
|
|
||||
Interest expense, net
|
269
|
|
|
—
|
|
|
—
|
|
|
269
|
|
||||
Income before income taxes
|
656
|
|
|
—
|
|
|
—
|
|
|
656
|
|
||||
Income tax expense
|
153
|
|
|
—
|
|
|
—
|
|
|
153
|
|
||||
Net income
|
503
|
|
|
—
|
|
|
—
|
|
|
503
|
|
||||
Equity in earnings of consolidated subsidiaries
|
—
|
|
|
503
|
|
|
(503
|
)
|
|
—
|
|
||||
Net income (loss)
|
503
|
|
|
503
|
|
|
(503
|
)
|
|
503
|
|
||||
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) attributable to common unitholders
|
$
|
503
|
|
|
$
|
503
|
|
|
$
|
(503
|
)
|
|
$
|
503
|
|
Comprehensive income (loss)
|
$
|
656
|
|
|
$
|
656
|
|
|
$
|
(656
|
)
|
|
$
|
656
|
|
|
Consolidated Borrowers
|
|
RBILP
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
586
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
586
|
|
Franchise and property revenues
|
757
|
|
|
—
|
|
|
—
|
|
|
757
|
|
||||
Total revenues
|
1,343
|
|
|
—
|
|
|
—
|
|
|
1,343
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
449
|
|
|
—
|
|
|
—
|
|
|
449
|
|
||||
Franchise and property expenses
|
103
|
|
|
—
|
|
|
—
|
|
|
103
|
|
||||
Selling, general and administrative expenses
|
318
|
|
|
—
|
|
|
—
|
|
|
318
|
|
||||
(Income) loss from equity method investments
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Other operating expenses (income), net
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
||||
Total operating costs and expenses
|
841
|
|
|
—
|
|
|
—
|
|
|
841
|
|
||||
Income from operations
|
502
|
|
|
—
|
|
|
—
|
|
|
502
|
|
||||
Interest expense, net
|
130
|
|
|
—
|
|
|
—
|
|
|
130
|
|
||||
Income before income taxes
|
372
|
|
|
—
|
|
|
—
|
|
|
372
|
|
||||
Income tax expense
|
58
|
|
|
—
|
|
|
—
|
|
|
58
|
|
||||
Net income
|
314
|
|
|
—
|
|
|
—
|
|
|
314
|
|
||||
Equity in earnings of consolidated subsidiaries
|
—
|
|
|
314
|
|
|
(314
|
)
|
|
—
|
|
||||
Net income (loss)
|
314
|
|
|
314
|
|
|
(314
|
)
|
|
314
|
|
||||
Net income (loss) attributable to noncontrolling interests
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
||||
Net income (loss) attributable to common unitholders
|
$
|
313
|
|
|
$
|
313
|
|
|
$
|
(313
|
)
|
|
$
|
313
|
|
Comprehensive income (loss)
|
$
|
175
|
|
|
$
|
175
|
|
|
$
|
(175
|
)
|
|
$
|
175
|
|
|
Consolidated Borrowers
|
|
RBILP
|
|
Eliminations
|
|
Consolidated
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Sales
|
$
|
1,134
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,134
|
|
Franchise and property revenues
|
1,463
|
|
|
—
|
|
|
—
|
|
|
1,463
|
|
||||
Total revenues
|
2,597
|
|
|
—
|
|
|
—
|
|
|
2,597
|
|
||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|||||||
Cost of sales
|
878
|
|
|
—
|
|
|
—
|
|
|
878
|
|
||||
Franchise and property expenses
|
207
|
|
|
—
|
|
|
—
|
|
|
207
|
|
||||
Selling, general and administrative expenses
|
619
|
|
|
—
|
|
|
—
|
|
|
619
|
|
||||
(Income) loss from equity method investments
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||
Other operating expenses (income), net
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
||||
Total operating costs and expenses
|
1,674
|
|
|
—
|
|
|
—
|
|
|
1,674
|
|
||||
Income from operations
|
923
|
|
|
—
|
|
|
—
|
|
|
923
|
|
||||
Interest expense, net
|
270
|
|
|
—
|
|
|
—
|
|
|
270
|
|
||||
Income before income taxes
|
653
|
|
|
—
|
|
|
—
|
|
|
653
|
|
||||
Income tax expense
|
60
|
|
|
—
|
|
|
—
|
|
|
60
|
|
||||
Net income
|
593
|
|
|
—
|
|
|
—
|
|
|
593
|
|
||||
Equity in earnings of consolidated subsidiaries
|
—
|
|
|
593
|
|
|
(593
|
)
|
|
—
|
|
||||
Net income (loss)
|
593
|
|
|
593
|
|
|
(593
|
)
|
|
593
|
|
||||
Net income (loss) attributable to noncontrolling interests
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
1
|
|
||||
Net income (loss) attributable to common unitholders
|
$
|
592
|
|
|
$
|
592
|
|
|
$
|
(592
|
)
|
|
$
|
592
|
|
Comprehensive income (loss)
|
$
|
271
|
|
|
$
|
271
|
|
|
$
|
(271
|
)
|
|
$
|
271
|
|
|
Consolidated Borrowers
|
|
RBILP
|
|
Eliminations
|
|
Consolidated
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
503
|
|
|
$
|
503
|
|
|
$
|
(503
|
)
|
|
$
|
503
|
|
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Equity in loss (earnings) of consolidated subsidiaries
|
—
|
|
|
(503
|
)
|
|
503
|
|
|
—
|
|
||||
Depreciation and amortization
|
92
|
|
|
—
|
|
|
—
|
|
|
92
|
|
||||
Amortization of deferred financing costs and debt issuance discount
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||
(Income) loss from equity method investments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
(Gain) loss on remeasurement of foreign denominated transactions
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Net (gains) losses on derivatives
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
||||
Share-based compensation expense
|
39
|
|
|
—
|
|
|
—
|
|
|
39
|
|
||||
Deferred income taxes
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Other
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||
Changes in current assets and liabilities, excluding acquisitions and dispositions:
|
|
|
|
|
|
|
|
||||||||
Accounts and notes receivable
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
||||
Inventories and prepaids and other current assets
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
||||
Accounts and drafts payable
|
(40
|
)
|
|
—
|
|
|
—
|
|
|
(40
|
)
|
||||
Other accrued liabilities and gift card liability
|
(166
|
)
|
|
—
|
|
|
—
|
|
|
(166
|
)
|
||||
Tenant inducements paid to franchisees
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
||||
Other long-term assets and liabilities
|
83
|
|
|
—
|
|
|
—
|
|
|
83
|
|
||||
Net cash provided by (used for) operating activities
|
475
|
|
|
—
|
|
|
—
|
|
|
475
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Payments for property and equipment
|
(14
|
)
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
||||
Net proceeds from disposal of assets, restaurant closures, and refranchisings
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||
Settlement/sale of derivatives, net
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||
Net cash provided by (used for) investing activities
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Repayments of long-term debt and finance leases
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(48
|
)
|
||||
Distributions on Class A common and Partnership exchangeable units
|
—
|
|
|
(437
|
)
|
|
—
|
|
|
(437
|
)
|
||||
Capital contribution from RBI Inc.
|
80
|
|
|
—
|
|
|
—
|
|
|
80
|
|
||||
Distributions from subsidiaries
|
(437
|
)
|
|
437
|
|
|
—
|
|
|
—
|
|
||||
Other financing activities, net
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Net cash provided by (used for) financing activities
|
(395
|
)
|
|
—
|
|
|
—
|
|
|
(395
|
)
|
||||
Effect of exchange rates on cash and cash equivalents
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Increase (decrease) in cash and cash equivalents
|
115
|
|
|
—
|
|
|
—
|
|
|
115
|
|
||||
Cash and cash equivalents at beginning of period
|
913
|
|
|
—
|
|
|
—
|
|
|
913
|
|
||||
Cash and cash equivalents at end of period
|
$
|
1,028
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,028
|
|
|
Consolidated Borrowers
|
|
RBILP
|
|
Eliminations
|
|
Consolidated
|
||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
593
|
|
|
$
|
593
|
|
|
$
|
(593
|
)
|
|
$
|
593
|
|
Adjustments to reconcile net income to net cash (used for) provided by operating activities:
|
|
|
|
|
|
|
|
||||||||
Equity in loss (earnings) of consolidated subsidiaries
|
—
|
|
|
(593
|
)
|
|
593
|
|
|
—
|
|
||||
Depreciation and amortization
|
93
|
|
|
—
|
|
|
—
|
|
|
93
|
|
||||
Amortization of deferred financing costs and debt issuance discount
|
14
|
|
|
—
|
|
|
—
|
|
|
14
|
|
||||
(Income) loss from equity method investments
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||
(Gain) loss on remeasurement of foreign denominated transactions
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
||||
Net (gains) losses on derivatives
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||
Share-based compensation expense
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||
Deferred income taxes
|
(58
|
)
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
||||
Other
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Changes in current assets and liabilities, excluding acquisitions and dispositions:
|
|
|
|
|
|
|
|
||||||||
Accounts and notes receivable
|
36
|
|
|
—
|
|
|
—
|
|
|
36
|
|
||||
Inventories and prepaids and other current assets
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
||||
Accounts and drafts payable
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
||||
Other accrued liabilities and gift card liability
|
(347
|
)
|
|
—
|
|
|
—
|
|
|
(347
|
)
|
||||
Tenant inducements paid to franchisees
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||
Other long-term assets and liabilities
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
||||
Net cash provided by (used for) operating activities
|
265
|
|
|
—
|
|
|
—
|
|
|
265
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
||||||||
Payments for property and equipment
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
(22
|
)
|
||||
Net proceeds from disposal of assets, restaurant closures, and refranchisings
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Settlement/sale of derivatives, net
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Other investing activities, net
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Net cash provided by (used for) investing activities
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||||||
Repayments of long-term debt and finance leases
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
||||
Distributions on Class A common and Partnership exchangeable units
|
—
|
|
|
(307
|
)
|
|
—
|
|
|
(307
|
)
|
||||
Distributions to RBI for payments in connections with redemption of preferred shares
|
—
|
|
|
(60
|
)
|
|
—
|
|
|
(60
|
)
|
||||
Capital contribution from RBI Inc.
|
29
|
|
|
—
|
|
|
—
|
|
|
29
|
|
||||
Distributions from subsidiaries
|
(367
|
)
|
|
367
|
|
|
—
|
|
|
—
|
|
||||
Other financing activities, net
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Net cash (used for) provided by financing activities
|
(383
|
)
|
|
—
|
|
|
—
|
|
|
(383
|
)
|
||||
Effect of exchange rates on cash and cash equivalents
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
||||
Increase (decrease) in cash and cash equivalents
|
(132
|
)
|
|
—
|
|
|
—
|
|
|
(132
|
)
|
||||
Cash and cash equivalents at beginning of period
|
1,097
|
|
|
—
|
|
|
—
|
|
|
1,097
|
|
||||
Cash and cash equivalents at end of period
|
$
|
965
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
965
|
|
•
|
System-wide sales growth refers to the percentage change in sales at all franchise restaurants and Company restaurants (referred to as system-wide sales) in one period from the same period in the prior year.
|
•
|
Comparable sales refers to the percentage change in restaurant sales in one period from the same prior year period for restaurants that have been open for 13 months or longer for TH and BK and 17 months or longer for PLK.
|
•
|
System-wide sales growth and comparable sales are measured on a constant currency basis, which means the results exclude the effect of foreign currency translation (“FX Impact”). For system-wide sales growth and comparable sales, we calculate the FX Impact by translating prior year results at current year monthly average exchange rates.
|
•
|
Unless otherwise stated, system-wide sales growth, system-wide sales and comparable sales are presented on a system-wide basis, which means they include franchise restaurants and Company restaurants. System-wide results are driven by our franchise restaurants, as approximately 100% of current system-wide restaurants are franchised. Franchise sales represent sales at all franchise restaurants and are revenues to our franchisees. We do not record franchise sales as revenues; however, our royalty revenues are calculated based on a percentage of franchise sales.
|
•
|
Net restaurant growth reflects the percentage change in restaurant count (openings, net of closures) over a trailing twelve-month period, divided by the restaurant count at the beginning of the trailing twelve month period.
|
•
|
Beginning on January 1, 2019, we record lease income and lease cost on a gross basis for lessee reimbursements of costs such as property taxes and maintenance when we are the lessor in the lease. Although there was no net impact to our consolidated statement of operations from this change, the presentation resulted in total increases to both franchise and property revenues and franchise and property expenses of
$33 million
(
$22 million
related to our TH segment,
$10 million
related to our BK segment and
$1 million
related to our PLK segment) during the
three months ended June 30, 2019
and
$67 million
(
$43 million
related to our TH segment,
$23 million
related to our BK segment and
$1 million
related to our PLK segment) during the
six months ended June 30, 2019
, compared to the
three and six months ended June 30, 2018
, respectively, when such amounts were recorded on a net basis.
|
•
|
As described in Note 4,
Leases
, to the accompanying unaudited condensed consolidated financial statements, the transition provisions of ASC 842 required the reclassification of favorable lease assets and unfavorable lease liabilities where we are the lessee in the underlying lease to the right-of-use (“ROU”) asset recorded for the underlying lease. As a result of this reclassification, the amortization period for certain favorable lease assets and unfavorable lease liabilities was reduced, resulting in $2 million and $4 million net increases in non-cash amortization expense during the
three and six months ended June 30, 2019
, respectively, compared to the
three and six months ended June 30, 2018
, respectively. Favorable lease assets and unfavorable lease liabilities associated with leases where we are the lessor were not impacted by our transition to ASC 842.
|
Consolidated
|
Three Months Ended June 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
|
Six Months Ended June 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Sales
|
$
|
589
|
|
|
$
|
586
|
|
|
$
|
3
|
|
|
$
|
(17
|
)
|
|
$
|
20
|
|
|
$
|
1,111
|
|
|
$
|
1,134
|
|
|
$
|
(23
|
)
|
|
$
|
(39
|
)
|
|
$
|
16
|
|
Franchise and property revenues
|
811
|
|
|
757
|
|
|
54
|
|
|
(18
|
)
|
|
72
|
|
|
1,555
|
|
|
1,463
|
|
|
92
|
|
|
(41
|
)
|
|
133
|
|
||||||||||
Total revenues
|
1,400
|
|
|
1,343
|
|
|
57
|
|
|
(35
|
)
|
|
92
|
|
|
2,666
|
|
|
2,597
|
|
|
69
|
|
|
(80
|
)
|
|
149
|
|
||||||||||
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cost of sales
|
453
|
|
|
449
|
|
|
(4
|
)
|
|
13
|
|
|
(17
|
)
|
|
859
|
|
|
878
|
|
|
19
|
|
|
30
|
|
|
(11
|
)
|
||||||||||
Franchise and property expenses
|
135
|
|
|
103
|
|
|
(32
|
)
|
|
3
|
|
|
(35
|
)
|
|
268
|
|
|
207
|
|
|
(61
|
)
|
|
6
|
|
|
(67
|
)
|
||||||||||
Selling, general and administrative expenses
|
316
|
|
|
318
|
|
|
2
|
|
|
4
|
|
|
(2
|
)
|
|
628
|
|
|
619
|
|
|
(9
|
)
|
|
9
|
|
|
(18
|
)
|
||||||||||
(Income) loss from equity method investments
|
2
|
|
|
1
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
|
(3
|
)
|
|
(10
|
)
|
||||||||||
Other operating expenses (income), net
|
3
|
|
|
(30
|
)
|
|
(33
|
)
|
|
(3
|
)
|
|
(30
|
)
|
|
(14
|
)
|
|
(17
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
||||||||||
Total operating costs and expenses
|
909
|
|
|
841
|
|
|
(68
|
)
|
|
17
|
|
|
(85
|
)
|
|
1,741
|
|
|
1,674
|
|
|
(67
|
)
|
|
40
|
|
|
(107
|
)
|
||||||||||
Income from operations
|
491
|
|
|
502
|
|
|
(11
|
)
|
|
(18
|
)
|
|
7
|
|
|
925
|
|
|
923
|
|
|
2
|
|
|
(40
|
)
|
|
42
|
|
||||||||||
Interest expense, net
|
137
|
|
|
130
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
269
|
|
|
270
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||||||||
Income before income taxes
|
354
|
|
|
372
|
|
|
(18
|
)
|
|
(18
|
)
|
|
—
|
|
|
656
|
|
|
653
|
|
|
3
|
|
|
(40
|
)
|
|
43
|
|
||||||||||
Income tax expense
|
97
|
|
|
58
|
|
|
(39
|
)
|
|
1
|
|
|
(40
|
)
|
|
153
|
|
|
60
|
|
|
(93
|
)
|
|
2
|
|
|
(95
|
)
|
||||||||||
Net income
|
$
|
257
|
|
|
$
|
314
|
|
|
$
|
(57
|
)
|
|
$
|
(17
|
)
|
|
$
|
(40
|
)
|
|
$
|
503
|
|
|
$
|
593
|
|
|
$
|
(90
|
)
|
|
$
|
(38
|
)
|
|
$
|
(52
|
)
|
(a)
|
We calculate the FX Impact by translating prior year results at current year monthly average exchange rates. We analyze these results on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements.
|
TH Segment
|
Three Months Ended June 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
|
Six Months Ended June 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Sales
|
$
|
551
|
|
|
$
|
548
|
|
|
$
|
3
|
|
|
$
|
(17
|
)
|
|
$
|
20
|
|
|
$
|
1,034
|
|
|
$
|
1,056
|
|
|
$
|
(22
|
)
|
|
$
|
(39
|
)
|
|
$
|
17
|
|
Franchise and property revenues
|
291
|
|
|
275
|
|
|
16
|
|
|
(8
|
)
|
|
24
|
|
|
557
|
|
|
530
|
|
|
27
|
|
|
(19
|
)
|
|
46
|
|
||||||||||
Total revenues
|
842
|
|
|
823
|
|
|
19
|
|
|
(25
|
)
|
|
44
|
|
|
1,591
|
|
|
1,586
|
|
|
5
|
|
|
(58
|
)
|
|
63
|
|
||||||||||
Cost of sales
|
420
|
|
|
417
|
|
|
(3
|
)
|
|
13
|
|
|
(16
|
)
|
|
792
|
|
|
813
|
|
|
21
|
|
|
30
|
|
|
(9
|
)
|
||||||||||
Franchise and property expenses
|
90
|
|
|
68
|
|
|
(22
|
)
|
|
2
|
|
|
(24
|
)
|
|
177
|
|
|
138
|
|
|
(39
|
)
|
|
5
|
|
|
(44
|
)
|
||||||||||
Segment SG&A
|
77
|
|
|
80
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
159
|
|
|
162
|
|
|
3
|
|
|
6
|
|
|
(3
|
)
|
||||||||||
Segment depreciation and amortization (b)
|
26
|
|
|
26
|
|
|
—
|
|
|
1
|
|
|
(1
|
)
|
|
52
|
|
|
52
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
||||||||||
Segment income (c)
|
287
|
|
|
286
|
|
|
1
|
|
|
(9
|
)
|
|
10
|
|
|
524
|
|
|
531
|
|
|
(7
|
)
|
|
(20
|
)
|
|
13
|
|
(b)
|
Segment depreciation and amortization consists of depreciation and amortization included in cost of sales and franchise and property expenses.
|
(c)
|
TH segment income includes
$5 million
and
$3 million
of cash distributions received from equity method investments for the
three months ended June 30, 2019 and 2018
, respectively. TH segment income includes
$8 million
and
$6 million
of cash distributions received from equity method investments for the
six months ended June 30, 2019 and 2018
, respectively.
|
BK Segment
|
Three Months Ended June 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
|
Six Months Ended June 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Sales
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Franchise and property revenues
|
428
|
|
|
399
|
|
|
29
|
|
|
(9
|
)
|
|
38
|
|
|
820
|
|
|
770
|
|
|
50
|
|
|
(21
|
)
|
|
71
|
|
||||||||||
Total revenues
|
447
|
|
|
418
|
|
|
29
|
|
|
(9
|
)
|
|
38
|
|
|
858
|
|
|
808
|
|
|
50
|
|
|
(21
|
)
|
|
71
|
|
||||||||||
Cost of sales
|
17
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35
|
|
|
33
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||||||||
Franchise and property expenses
|
42
|
|
|
32
|
|
|
(10
|
)
|
|
1
|
|
|
(11
|
)
|
|
85
|
|
|
64
|
|
|
(21
|
)
|
|
1
|
|
|
(22
|
)
|
||||||||||
Segment SG&A
|
149
|
|
|
146
|
|
|
(3
|
)
|
|
1
|
|
|
(4
|
)
|
|
290
|
|
|
286
|
|
|
(4
|
)
|
|
2
|
|
|
(6
|
)
|
||||||||||
Segment depreciation and amortization (b)
|
12
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|
24
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||||
Segment income (d)
|
252
|
|
|
236
|
|
|
16
|
|
|
(8
|
)
|
|
24
|
|
|
474
|
|
|
450
|
|
|
24
|
|
|
(19
|
)
|
|
43
|
|
(d)
|
BK segment income includes
$1 million
of cash distributions received from equity method investments for the
three months ended June 30, 2019
. No cash distributions were received from equity method investments for the
three months ended June 30, 2018
. BK segment income includes
$2 million
and
$1 million
of cash distributions received from equity method investments for the
six months ended June 30, 2019 and 2018
, respectively.
|
PLK Segment
|
Three Months Ended June 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
|
Six Months Ended June 30,
|
|
Variance
|
|
FX Impact (a)
|
|
Variance Excluding FX Impact
|
||||||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Sales
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
$
|
40
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
Franchise and property revenues
|
92
|
|
|
83
|
|
|
9
|
|
|
(1
|
)
|
|
10
|
|
|
178
|
|
|
163
|
|
|
15
|
|
|
(1
|
)
|
|
16
|
|
||||||||||
Total revenues
|
111
|
|
|
102
|
|
|
9
|
|
|
(1
|
)
|
|
10
|
|
|
217
|
|
|
203
|
|
|
14
|
|
|
(1
|
)
|
|
15
|
|
||||||||||
Cost of sales
|
16
|
|
|
15
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
32
|
|
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||||
Franchise and property expenses
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
5
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||||
Segment SG&A
|
54
|
|
|
47
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
103
|
|
|
93
|
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
||||||||||
Segment depreciation and amortization (b)
|
3
|
|
|
2
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
6
|
|
|
5
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||||||||
Segment income
|
41
|
|
|
40
|
|
|
1
|
|
|
(1
|
)
|
|
2
|
|
|
82
|
|
|
79
|
|
|
3
|
|
|
(1
|
)
|
|
4
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Key Business Metrics
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
System-wide sales growth
|
|
|
|
|
|
|
|
||||||||
TH
|
1.6
|
%
|
|
2.2
|
%
|
|
1.1
|
%
|
|
2.1
|
%
|
||||
BK
|
9.8
|
%
|
|
8.4
|
%
|
|
9.0
|
%
|
|
9.8
|
%
|
||||
PLK
|
8.8
|
%
|
|
10.7
|
%
|
|
7.8
|
%
|
|
10.8
|
%
|
||||
Consolidated
|
7.9
|
%
|
|
7.3
|
%
|
|
7.2
|
%
|
|
8.2
|
%
|
||||
System-wide sales
|
|
|
|
|
|
|
|
||||||||
TH
|
$
|
1,716
|
|
|
$
|
1,742
|
|
|
$
|
3,263
|
|
|
$
|
3,350
|
|
BK
|
$
|
5,717
|
|
|
$
|
5,403
|
|
|
$
|
11,006
|
|
|
$
|
10,552
|
|
PLK
|
$
|
1,012
|
|
|
$
|
938
|
|
|
$
|
1,967
|
|
|
$
|
1,841
|
|
Consolidated
|
$
|
8,445
|
|
|
$
|
8,083
|
|
|
$
|
16,236
|
|
|
$
|
15,743
|
|
Comparable sales
|
|
|
|
|
|
|
|
||||||||
TH
|
0.5
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(0.1
|
)%
|
||||
BK
|
3.6
|
%
|
|
1.8
|
%
|
|
2.9
|
%
|
|
2.8
|
%
|
||||
PLK
|
3.0
|
%
|
|
2.9
|
%
|
|
1.8
|
%
|
|
3.1
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
As of June 30,
|
||||||||||
|
|
|
|
|
2019
|
|
2018
|
||||||||
Net restaurant growth
|
|
|
|
|
|
|
|
||||||||
TH
|
|
|
|
|
1.6
|
%
|
|
3.0
|
%
|
||||||
BK
|
|
|
|
|
5.8
|
%
|
|
6.4
|
%
|
||||||
PLK
|
|
|
|
|
6.1
|
%
|
|
7.5
|
%
|
||||||
Consolidated
|
|
|
|
|
5.0
|
%
|
|
5.8
|
%
|
||||||
Restaurant count
|
|
|
|
|
|
|
|
||||||||
TH
|
|
|
|
|
4,872
|
|
|
4,794
|
|
||||||
BK
|
|
|
|
|
18,008
|
|
|
17,022
|
|
||||||
PLK
|
|
|
|
|
3,156
|
|
|
2,975
|
|
||||||
Consolidated
|
|
|
|
|
26,036
|
|
|
24,791
|
|
|
Three Months Ended June 30,
|
|
Variance
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||||||||||||||||
|
|
$
|
|
%
|
|
|
$
|
|
%
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||
Segment SG&A:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
TH
|
$
|
77
|
|
|
$
|
80
|
|
|
$
|
3
|
|
|
3.8
|
%
|
|
$
|
159
|
|
|
$
|
162
|
|
|
$
|
3
|
|
|
1.9
|
%
|
BK
|
149
|
|
|
146
|
|
|
(3
|
)
|
|
(2.1
|
)%
|
|
290
|
|
|
286
|
|
|
(4
|
)
|
|
(1.4
|
)%
|
||||||
PLK
|
54
|
|
|
47
|
|
|
(7
|
)
|
|
(14.9
|
)%
|
|
103
|
|
|
93
|
|
|
(10
|
)
|
|
(10.8
|
)%
|
||||||
Share-based compensation and non-cash incentive compensation expense
|
19
|
|
|
16
|
|
|
(3
|
)
|
|
(18.8
|
)%
|
|
44
|
|
|
31
|
|
|
(13
|
)
|
|
(41.9
|
)%
|
||||||
Depreciation and amortization
|
4
|
|
|
5
|
|
|
1
|
|
|
20.0
|
%
|
|
9
|
|
|
11
|
|
|
2
|
|
|
18.2
|
%
|
||||||
PLK Transaction costs
|
—
|
|
|
5
|
|
|
5
|
|
|
NM
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|
NM
|
|
||||||
Corporate restructuring and tax advisory fees
|
11
|
|
|
7
|
|
|
(4
|
)
|
|
(57.1
|
)%
|
|
17
|
|
|
14
|
|
|
(3
|
)
|
|
(21.4
|
)%
|
||||||
Office centralization and relocation costs
|
2
|
|
|
12
|
|
|
10
|
|
|
83.3
|
%
|
|
6
|
|
|
12
|
|
|
6
|
|
|
50.0
|
%
|
||||||
Selling, general and administrative expenses
|
$
|
316
|
|
|
$
|
318
|
|
|
$
|
2
|
|
|
0.6
|
%
|
|
$
|
628
|
|
|
$
|
619
|
|
|
$
|
(9
|
)
|
|
(1.5
|
)%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings
|
$
|
(10
|
)
|
|
$
|
3
|
|
|
$
|
(7
|
)
|
|
$
|
10
|
|
Litigation settlements (gains) and reserves, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||
Net losses (gains) on foreign exchange
|
12
|
|
|
(33
|
)
|
|
(3
|
)
|
|
(16
|
)
|
||||
Other, net
|
1
|
|
|
—
|
|
|
(4
|
)
|
|
(5
|
)
|
||||
Other operating expenses (income), net
|
$
|
3
|
|
|
$
|
(30
|
)
|
|
$
|
(14
|
)
|
|
$
|
(17
|
)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Interest expense, net
|
$
|
137
|
|
|
$
|
130
|
|
|
$
|
269
|
|
|
$
|
270
|
|
Weighted average interest rate on long-term debt
|
5.2
|
%
|
|
4.9
|
%
|
|
5.1
|
%
|
|
4.8
|
%
|
|
Three Months Ended June 30,
|
|
Variance
|
|
Six Months Ended June 30,
|
|
Variance
|
||||||||||||||||||||||
|
|
$
|
|
%
|
|
|
$
|
|
%
|
||||||||||||||||||||
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
|
2019
|
|
2018
|
|
Favorable / (Unfavorable)
|
||||||||||||||||||
Segment income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
TH
|
$
|
287
|
|
|
$
|
286
|
|
|
$
|
1
|
|
|
0.3
|
%
|
|
$
|
524
|
|
|
$
|
531
|
|
|
$
|
(7
|
)
|
|
(1.3
|
)%
|
BK
|
252
|
|
|
236
|
|
|
16
|
|
|
6.5
|
%
|
|
474
|
|
|
450
|
|
|
24
|
|
|
5.3
|
%
|
||||||
PLK
|
41
|
|
|
40
|
|
|
1
|
|
|
3.9
|
%
|
|
82
|
|
|
79
|
|
|
3
|
|
|
3.8
|
%
|
||||||
Adjusted EBITDA
|
580
|
|
|
562
|
|
|
18
|
|
|
3.2
|
%
|
|
1,080
|
|
|
1,060
|
|
|
20
|
|
|
1.9
|
%
|
||||||
Share-based compensation and non-cash incentive compensation expense
|
19
|
|
|
16
|
|
|
(3
|
)
|
|
(18.8
|
)%
|
|
44
|
|
|
31
|
|
|
(13
|
)
|
|
(41.9
|
)%
|
||||||
PLK Transaction costs
|
—
|
|
|
5
|
|
|
5
|
|
|
NM
|
|
|
—
|
|
|
10
|
|
|
10
|
|
|
NM
|
|
||||||
Corporate restructuring and tax advisory fees
|
11
|
|
|
7
|
|
|
(4
|
)
|
|
(57.1
|
)%
|
|
17
|
|
|
14
|
|
|
(3
|
)
|
|
(21.4
|
)%
|
||||||
Office centralization and relocation costs
|
2
|
|
|
12
|
|
|
10
|
|
|
83.3
|
%
|
|
6
|
|
|
12
|
|
|
6
|
|
|
50.0
|
%
|
||||||
Impact of equity method investments (a)
|
9
|
|
|
4
|
|
|
(5
|
)
|
|
NM
|
|
|
10
|
|
|
(6
|
)
|
|
(16
|
)
|
|
NM
|
|
||||||
Other operating expenses (income), net
|
3
|
|
|
(30
|
)
|
|
(33
|
)
|
|
110.0
|
%
|
|
(14
|
)
|
|
(17
|
)
|
|
(3
|
)
|
|
17.6
|
%
|
||||||
EBITDA
|
536
|
|
|
548
|
|
|
(12
|
)
|
|
(2.2
|
)%
|
|
1,017
|
|
|
1,016
|
|
|
1
|
|
|
0.1
|
%
|
||||||
Depreciation and amortization
|
45
|
|
|
46
|
|
|
1
|
|
|
2.2
|
%
|
|
92
|
|
|
93
|
|
|
1
|
|
|
1.1
|
%
|
||||||
Income from operations
|
491
|
|
|
502
|
|
|
(11
|
)
|
|
(2.2
|
)%
|
|
925
|
|
|
923
|
|
|
2
|
|
|
0.2
|
%
|
||||||
Interest expense, net
|
137
|
|
|
130
|
|
|
(7
|
)
|
|
(5.4
|
)%
|
|
269
|
|
|
270
|
|
|
1
|
|
|
0.4
|
%
|
||||||
Income tax expense
|
97
|
|
|
58
|
|
|
(39
|
)
|
|
(67.2
|
)%
|
|
153
|
|
|
60
|
|
|
(93
|
)
|
|
(155.0
|
)%
|
||||||
Net income
|
$
|
257
|
|
|
$
|
314
|
|
|
$
|
(57
|
)
|
|
(18.2
|
)%
|
|
$
|
503
|
|
|
$
|
593
|
|
|
$
|
(90
|
)
|
|
(15.2
|
)%
|
(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.
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
10.63
*
|
|
|
|
|
|
10.64
*
|
|
|
|
|
|
10.65
*
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
104
|
|
Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP
|
||||
|
|
|
|
By:
|
|
Restaurant Brands International Inc., its general partner
|
||
|
|
|
|
|||||
Date: August 2, 2019
|
|
|
|
By:
|
|
/s/ Matthew Dunnigan
|
||
|
|
|
|
|
|
Name:
|
|
Matthew Dunnigan
|
|
|
|
|
|
|
Title:
|
|
Chief Financial Officer of Restaurant Brands International Inc.
(principal financial officer)
(duly authorized officer)
|
1 Year Restaurant Brands Intern... (PK) Chart |
1 Month Restaurant Brands Intern... (PK) Chart |
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