Consolidated system-wide sales growth of +15%
year-over-year
Global comparable sales of +10%, led by +16%
at TH Canada,12% at BK International and +9% at BK US
Sales momentum translates into strong
bottom-line growth for franchisees and the company
TORONTO, May 2, 2023
/PRNewswire/ - Restaurant Brands International Inc. ("RBI") (TSX:
QSR) (NYSE: QSR) (TSX: QSP) today reported financial results for
the first quarter ended March 31,
2023. Josh Kobza, Chief
Executive Officer of RBI commented, "Our teams delivered a solid
start to the year, with double-digit comparable sales and
system-wide sales growth. Top line sales momentum translated into
bottom line growth for our franchisees and our company. I am
confident in our plans for future growth and would like to thank
our teams who are focused on improving operations and delivering a
great guest experience every day at our restaurants."
First Quarter 2023 Highlights:
- Consolidated comparable sales increased 10.3% and net
restaurants grew 4.2% versus the prior year
- System-wide sales increased 14.7% year-over-year
- Net Income of $277 million versus
$270 million in prior year
- Adjusted EBITDA of $588 million
increased 15.6% organically versus the prior year
- Diluted EPS was $0.61 versus
$0.59 in prior year
- Adjusted Diluted EPS of $0.75
increased 22.1% organically versus the prior year
Consolidated
Operational Highlights
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
|
(Unaudited)
|
System-wide Sales
Growth
|
|
|
|
|
|
TH
|
|
17.9 %
|
|
|
12.9 %
|
BK
|
|
14.3 %
|
|
|
16.2 %
|
PLK
|
|
14.4 %
|
|
|
4.1 %
|
FHS
|
|
7.5 %
|
|
|
N/A
|
Consolidated
(a)
|
|
14.7 %
|
|
|
13.5 %
|
FHS (a)
|
|
N/A
|
|
|
7.4 %
|
System-wide Sales (in
US$ millions)
|
|
|
|
|
|
TH
|
$
|
1,731
|
|
$
|
1,556
|
BK
|
$
|
6,241
|
|
$
|
5,647
|
PLK
|
$
|
1,568
|
|
$
|
1,383
|
FHS
|
$
|
292
|
|
$
|
272
|
Consolidated
|
$
|
9,832
|
|
$
|
8,858
|
Net Restaurant
Growth
|
|
|
|
|
|
TH
|
|
5.6 %
|
|
|
6.7 %
|
BK
|
|
2.5 %
|
|
|
2.9 %
|
PLK
|
|
10.8 %
|
|
|
7.9 %
|
FHS
|
|
2.3 %
|
|
|
N/A
|
Consolidated
(a)
|
|
4.2 %
|
|
|
4.3 %
|
FHS
(a)
|
|
N/A
|
|
|
1.8 %
|
System Restaurant Count
at Period End
|
|
|
|
|
|
TH
|
|
5,620
|
|
|
5,320
|
BK
|
|
18,911
|
|
|
18,446
|
PLK
|
|
4,178
|
|
|
3,771
|
FHS
|
|
1,247
|
|
|
1,219
|
Consolidated
|
|
29,956
|
|
|
28,756
|
Comparable
Sales
|
|
|
|
|
|
TH
|
|
13.8 %
|
|
|
8.4 %
|
BK
|
|
10.8 %
|
|
|
9.9 %
|
PLK
|
|
5.6 %
|
|
|
(3.0) %
|
FHS
|
|
6.1 %
|
|
|
N/A
|
Consolidated
(a)
|
|
10.3 %
|
|
|
7.4 %
|
FHS
(a)
|
|
N/A
|
|
|
4.2 %
|
|
(a) Consolidated
system-wide sales growth, consolidated comparable sales and
consolidated net restaurant growth do not include the results of
Firehouse Subs for 2022. FHS 2022 growth figures are shown for
informational purposes only.
|
Notes: (1) In our 2022
financial reports, our key business metrics included results from
our franchised Burger King restaurants in Russia, with supplemental
disclosure provided excluding these restaurants. We did not
generate any new profits from restaurants in Russia in 2022 and do
not expect to generate any new profits in 2023. Consequently,
beginning in the first quarter of 2023, our reported key business
metrics exclude the results from Russia for all periods presented.
(2) System-wide sales growth and comparable sales are calculated on
a constant currency basis and include sales at franchise
restaurants and company-owned restaurants. System-wide sales are
driven by sales at franchise restaurants, as approximately 100% of
current restaurants are franchised. 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. Additionally, if a restaurant is closed for a
significant portion of a month, the restaurant is excluded from the
monthly comparable sales calculation.
|
Consolidated Financial Highlights
|
Three Months Ended
March 31,
|
(in US$ millions,
except per share data)
|
2023
|
|
2022
|
|
(Unaudited)
|
Total
Revenues
|
$
1,590
|
|
$
1,451
|
Net Income
|
$
277
|
|
$
270
|
Diluted Earnings per
Share
|
$
0.61
|
|
$
0.59
|
|
|
|
|
TH Adjusted
EBITDA(1)
|
$
251
|
|
$
231
|
BK Adjusted
EBITDA(1)
|
$
256
|
|
$
229
|
PLK Adjusted
EBITDA(1)
|
$
66
|
|
$
56
|
FHS Adjusted
EBITDA(1)
|
$
15
|
|
$
14
|
Adjusted
EBITDA(2)
|
$
588
|
|
$
530
|
|
|
|
|
Adjusted Net
Income(2)
|
$
340
|
|
$
295
|
Adjusted Diluted
Earnings per Share(2)
|
$
0.75
|
|
$
0.64
|
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
|
(Unaudited)
|
Net cash provided by
operating activities
|
$
95
|
|
$
234
|
Net cash (used for)
provided by investing activities
|
$
—
|
|
$
1
|
Net cash (used for)
provided by financing activities
|
$
(240)
|
|
$
(426)
|
|
|
|
|
LTM Free Cash
Flow(2)
|
$
1,243
|
|
$
1,593
|
Net Debt
|
$
12,331
|
|
$
12,581
|
Net Income Net
Leverage(3)
|
8.3x
|
|
10.0x
|
Adjusted EBITDA Net
Leverage(2)
|
5.1x
|
|
5.5x
|
|
|
(1)
|
TH Adjusted EBITDA, BK
Adjusted EBITDA, PLK Adjusted EBITDA and FHS Adjusted EBITDA are
our measures of segment profitability.
|
(2)
|
Adjusted EBITDA,
Adjusted Net Income, Adjusted Diluted Earnings per Share, LTM Free
Cash Flow, and Adjusted EBITDA Net Leverage are non-GAAP financial
measures. Please refer to "Non-GAAP Financial Measures" for further
detail.
|
(3)
|
Net Income Net Leverage
is defined as net debt (total debt less cash and cash equivalents)
divided by LTM Net Income (compliant with SEC guidance regarding
non-GAAP financial measures).
|
We have four operating segments: Tim
Hortons (TH), Burger King (BK), Popeyes Louisiana Kitchen
(PLK) and Firehouse Subs (FHS). Our financial results and
operational highlights are disclosed based on these segments each
quarter.
The year-over-year increases in Total Revenues on an as reported
and on an organic basis were primarily driven by increases in
system-wide sales in all of our segments. On an as reported basis
the increase was partially offset by unfavorable FX movements.
The year-over-year increase in Net Income was primarily driven
by increases in segment income in all our segments, a decrease in
income tax expense and a favorable change from the impact of equity
method investments. These factors were partially offset by
unfavorable FX movements, an unfavorable change from other
operating expenses (income), net, an increase in share-based
compensation and non-cash incentive compensation expense, an
increase in FHS Transaction costs, and an increase in interest
expense, net.
The year-over-year increase in Adjusted EBITDA on an as reported
basis was largely driven by increases in BK, TH and PLK Adjusted
EBITDA, partially offset by unfavorable FX movements which
primarily impacted TH and BK Adjusted EBITDA.
The year-over-year increase in Adjusted EBITDA on an organic
basis was primarily driven by increases in BK, TH and PLK Adjusted
EBITDA.
The year-over-year increase in Adjusted Net Income was primarily
driven by increases in Adjusted EBITDA in our TH, BK and PLK brands
and a decrease in adjusted income tax expense, partially offset by
unfavorable FX movements, an increase in adjusted interest expense
and an increase in share-based compensation and non-cash incentive
compensation 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 March 31,
2023, we funded approximately $7
million toward the Fuel the Flame investment and
$7 million toward our Royal Reset
investment. As of March 31, 2023, we
have funded a total of $20 million
toward the Fuel the Flame investment and $25
million toward our Royal Reset investment.
Macro Economic Environment
During 2022 and the first quarter of 2023, there were increases
in commodity, labor, and energy costs partially due to the
macroeconomic impact of both the war in Ukraine and COVID-19. Further significant
increases in inflation could affect the global, Canadian and U.S.
economies, resulting in foreign exchange volatility and rising
interest rates which could have an adverse impact on our business
and results of operations if we and our franchisees are not able to
adjust prices sufficiently to offset the effect of cost increases
without negatively impacting consumer demand.
In addition, the global crisis resulting from the spread of
COVID-19 impacted our restaurant operations during the three months
ended March 31, 2022. Certain
markets, including Canada and
China, were significantly impacted
as a result of government mandated lockdowns. These lockdowns,
which have since been lifted, resulted in restrictions to
restaurant operations, such as reduced, if any, dine-in capacity,
and/or restrictions on hours of operation in those markets.
TH Segment Results
|
Three Months Ended
March 31,
|
(in US$
millions)
|
2023
|
|
2022
|
|
(Unaudited)
|
System-wide Sales
Growth
|
|
17.9 %
|
|
|
12.9 %
|
System-wide
Sales
|
$
|
1,731
|
|
$
|
1,556
|
Comparable
Sales
|
|
13.8 %
|
|
|
8.4 %
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
5.6 %
|
|
|
6.7 %
|
System Restaurant Count
at Period End
|
|
5,620
|
|
|
5,320
|
|
|
|
|
|
|
Sales
|
$
|
618
|
|
$
|
566
|
Franchise and Property
Revenues
|
$
|
220
|
|
$
|
206
|
Advertising Revenues
and Other Services
|
$
|
62
|
|
$
|
57
|
Total
Revenues
|
$
|
900
|
|
$
|
829
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
505
|
|
$
|
453
|
Franchise and Property
Expenses
|
$
|
79
|
|
$
|
81
|
Advertising Expenses
and Other Services
|
$
|
65
|
|
$
|
67
|
Segment
G&A
|
$
|
29
|
|
$
|
29
|
Segment Depreciation
and Amortization
|
$
|
25
|
|
$
|
29
|
Adjusted
EBITDA(1)(4)
|
$
|
251
|
|
$
|
231
|
|
(4) TH Adjusted
EBITDA includes $3 million of cash distributions received from
equity method investments for the three months ended March 31, 2023
and 2022.
|
For the first quarter of 2023, the increase in system-wide sales
was primarily driven by comparable sales of 13.8%, including
Canada comparable sales of 15.5%,
and net restaurant growth of 5.6%.
The year-over-year increases in Total Revenues on an as reported
and on an organic basis were primarily driven by an increase in
system-wide sales as well as increases in commodity prices passed
on to franchisees and an increase in sales to retailers. The
increase in Total Revenues on an as reported basis was partially
offset by unfavorable FX movements.
The year-over-year increases in Adjusted EBITDA on an as
reported and on an organic basis were primarily driven by the
increase in system-wide sales and by advertising expenses exceeding
advertising revenues in the current year period to a lesser extent
than in the prior year period, partially offset by an increase in
cost of sales including the impact of increases in commodity
prices. The increase in Adjusted EBITDA on an as reported basis was
partially offset by unfavorable FX movements.
BK Segment Results
|
Three Months Ended
March 31,
|
(in US$
millions)
|
2023
|
|
2022
|
|
(Unaudited)
|
System-wide Sales
Growth
|
|
14.3 %
|
|
|
16.2 %
|
System-wide
Sales
|
$
|
6,241
|
|
$
|
5,647
|
Comparable
Sales
|
|
10.8 %
|
|
|
9.9 %
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
2.5 %
|
|
|
2.9 %
|
System Restaurant Count
at Period End
|
|
18,911
|
|
|
18,446
|
|
|
|
|
|
|
Sales
|
$
|
19
|
|
$
|
16
|
Franchise and Property
Revenues
|
$
|
344
|
|
$
|
318
|
Advertising Revenues
and Other Services
|
$
|
121
|
|
$
|
109
|
Total
Revenues
|
$
|
484
|
|
$
|
443
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
17
|
|
$
|
17
|
Franchise and Property
Expenses
|
$
|
40
|
|
$
|
45
|
Advertising Expenses
and Other Services
|
$
|
135
|
|
$
|
119
|
Segment
G&A
|
$
|
48
|
|
$
|
45
|
Segment Depreciation
and Amortization
|
$
|
12
|
|
$
|
12
|
Adjusted
EBITDA(1)
|
$
|
256
|
|
$
|
229
|
For the first quarter of 2023, the increase in system-wide sales
was driven by comparable sales of 10.8%, including US comparable
sales of 8.7% and rest of the world comparable sales of 12.3%, and
net restaurant growth of 2.5%.
The year-over-year increases in Total Revenues on an as reported
and on an organic basis were primarily driven by the increase in
system-wide sales as well as an increase in sales from Company
restaurants. The increase in Total Revenues on an as reported basis
was partially offset by unfavorable FX movements.
The year-over-year changes in Adjusted EBITDA on an as reported
and on an organic basis were primarily driven by the increase in
system-wide sales and a decrease in bad debt expenses as compared
to the prior year. This was partially offset by advertising
expenses exceeding advertising revenues in the current year to a
greater extent than the prior year due to the Fuel the Flame
investment, and higher Segment G&A largely as a result of
hiring across a number of key areas including operations and
franchising. The increase in Adjusted EBITDA on an as reported
basis was partially offset by unfavorable FX
movements.
PLK Segment Results
|
Three Months Ended
March 31,
|
(in US$
millions)
|
2023
|
|
2022
|
|
(Unaudited)
|
System-wide Sales
Growth
|
|
14.4 %
|
|
|
4.1 %
|
System-wide
Sales
|
$
|
1,568
|
|
$
|
1,383
|
Comparable
Sales
|
|
5.6 %
|
|
|
(3.0) %
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
10.8 %
|
|
|
7.9 %
|
System Restaurant Count
at Period End
|
|
4,178
|
|
|
3,771
|
|
|
|
|
|
|
Sales
|
$
|
21
|
|
$
|
17
|
Franchise and Property
Revenues
|
$
|
80
|
|
$
|
71
|
Advertising Revenues
and Other Services
|
$
|
66
|
|
$
|
60
|
Total
Revenues
|
$
|
168
|
|
$
|
148
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
19
|
|
$
|
16
|
Franchise and Property
Expenses
|
$
|
2
|
|
$
|
2
|
Advertising Expenses
and Other Services
|
$
|
67
|
|
$
|
61
|
Segment
G&A
|
$
|
15
|
|
$
|
15
|
Segment Depreciation
and Amortization
|
$
|
2
|
|
$
|
2
|
Adjusted
EBITDA(1)
|
$
|
66
|
|
$
|
56
|
For the first quarter of 2023, the increase in system-wide sales
was driven by net restaurant growth of 10.8% and comparable sales
of 5.6%, including US comparable sales of 3.4%.
The year-over-year increases in Total Revenues on an as reported
and on an organic basis were primarily driven by the increase in
system-wide sales including an increase in sales from Company
restaurants. The increase in Total Revenues on an as reported basis
was partially offset by unfavorable FX movements.
The year-over-year increases in Adjusted EBITDA on an as
reported and on an organic basis were primarily driven by the
increase in system-wide sales, partially offset by an increase in
cost of sales. The increase in Adjusted EBITDA on an as reported
basis was partially offset by unfavorable FX movements.
FHS Segment Results
|
Three Months Ended
March 31,
|
(in US$
millions)
|
2023
|
|
2022
|
|
(Unaudited)
|
System-wide Sales
Growth (a)
|
|
7.5 %
|
|
|
7.4 %
|
System-wide
Sales
|
$
|
292
|
|
$
|
272
|
Comparable Sales
(a)
|
|
6.1 %
|
|
|
4.2 %
|
|
|
|
|
|
|
Net Restaurant Growth
(a)
|
|
2.3 %
|
|
|
1.8 %
|
System Restaurant Count
at Period End
|
|
1,247
|
|
|
1,219
|
|
|
|
|
|
|
Sales
|
$
|
10
|
|
$
|
10
|
Franchise and Property
Revenues
|
$
|
23
|
|
$
|
20
|
Advertising Revenues
and Other Services
|
$
|
4
|
|
$
|
1
|
Total
Revenues
|
$
|
37
|
|
$
|
31
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
8
|
|
$
|
8
|
Franchise and Property
Expenses
|
$
|
2
|
|
$
|
2
|
Advertising Expenses
and Other Services
|
$
|
5
|
|
$
|
—
|
Segment
G&A
|
$
|
8
|
|
$
|
8
|
Adjusted
EBITDA(1)
|
$
|
15
|
|
$
|
14
|
|
(a) FHS 2022 growth
figures are shown for informational purposes only.
|
For the first quarter of 2023, the increase in system-wide sales
was driven by comparable sales of 6.1%, including US comparable
sales of 6.7%, and net restaurant growth of 2.3%.
The year-over-year increases in Total Revenues and Adjusted
EBITDA were 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 ongoing
process to align the Advertising fund arrangements to be more
consistent with those of our other brands.
Cash and Liquidity
As of March 31, 2023, total debt was $13.4 billion, net debt (total debt less cash and
cash equivalents of $1.0 billion) was
$12.3 billion, net income net
leverage was 8.3x and adjusted EBITDA net leverage was 5.1x.
The RBI Board of Directors has declared a dividend of
$0.55 per common share and
partnership exchangeable unit of Restaurant Brands International
Limited Partnership for the second quarter of 2023. The dividend
will be payable on July 6, 2023 to shareholders and
unitholders of record at the close of business on June 22,
2023.
Investor Conference Call
We will host an investor conference call and webcast at
8:30 a.m. Eastern Time on Tuesday,
May 2, 2023, to review financial results for the first quarter
ended March 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 1 (833)-470-1428 for U.S. callers, 1
(226)-828-7575 for Canadian callers, and 1 (929)-526-1599 for
callers from other countries. For all dial-in numbers please use
the following access code: 623742.
About Restaurant Brands International Inc.
Restaurant Brands International Inc. is one of the world's
largest quick service restaurant companies with over $35 billion in annual system-wide sales and
approximately 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 contains 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 our expectations regarding the effects and
continued impact of the macroeconomic environment from the war in
Ukraine, the COVID-19 pandemic,
and related 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 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, our growth opportunities,
plans and strategies for each of our brands and ability to drive
long-term, sustainable growth, including through global expansion
and restaurant openings, and our suspension of operations in and
financial results from Russia. 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 unforeseen events such as pandemics; risks related
to supply chain; risks related to ownership and leasing of
properties; risks related to our franchisees financial stability
and their ability to access and maintain the liquidity necessary to
operate their business; risks related to our fully franchised
business model, 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; evolving
legislation and regulations in the area of franchise and labor and
employment law; risks related to the conflict between Russia and Ukraine, our ability to address environmental
and social sustainability issues and changes in applicable tax and
other laws and regulations or interpretations thereof. 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
March 31,
|
|
2023
|
|
2022
|
Revenues:
|
|
|
|
Sales
|
$
668
|
|
$
609
|
Franchise and property
revenues
|
668
|
|
615
|
Advertising revenues
and other services
|
254
|
|
227
|
Total
revenues
|
1,590
|
|
1,451
|
Operating costs and
expenses:
|
|
|
|
Cost of
sales
|
550
|
|
494
|
Franchise and property
expenses
|
123
|
|
130
|
Advertising expenses
and other services
|
271
|
|
247
|
General and
administrative expenses
|
175
|
|
133
|
(Income) loss from
equity method investments
|
7
|
|
13
|
Other operating
expenses (income), net
|
17
|
|
(16)
|
Total operating costs
and expenses
|
1,143
|
|
1,001
|
Income from
operations
|
447
|
|
450
|
Interest expense,
net
|
142
|
|
127
|
Income before income
taxes
|
305
|
|
323
|
Income tax
expense
|
28
|
|
53
|
Net income
|
277
|
|
270
|
Net income
attributable to noncontrolling interests
|
88
|
|
87
|
Net income attributable
to common shareholders
|
$
189
|
|
$
183
|
Earnings per common
share
|
|
|
|
Basic
|
$
0.61
|
|
$
0.59
|
Diluted
|
$
0.61
|
|
$
0.59
|
Weighted average shares
outstanding (in millions):
|
|
|
|
Basic
|
309
|
|
309
|
Diluted
|
456
|
|
458
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions of U.S. dollars, except share data)
(Unaudited)
|
As of
|
|
March 31,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,033
|
|
$
1,178
|
Accounts and notes
receivable, net of allowance of $41 and $36,
respectively
|
612
|
|
614
|
Inventories,
net
|
145
|
|
133
|
Prepaids and other
current assets
|
103
|
|
123
|
Total current
assets
|
1,893
|
|
2,048
|
Property and equipment,
net of accumulated depreciation and amortization of
$1,092 and $1,061, respectively
|
1,943
|
|
1,950
|
Operating lease assets,
net
|
1,075
|
|
1,082
|
Intangible assets,
net
|
11,005
|
|
10,991
|
Goodwill
|
5,700
|
|
5,688
|
Net investment in
property leased to franchisees
|
83
|
|
82
|
Other assets,
net
|
827
|
|
905
|
Total
assets
|
$
22,526
|
|
$
22,746
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts and drafts
payable
|
$
679
|
|
$
758
|
Other accrued
liabilities
|
901
|
|
1,001
|
Gift card
liability
|
174
|
|
230
|
Current portion of
long-term debt and finance leases
|
128
|
|
127
|
Total current
liabilities
|
1,882
|
|
2,116
|
Long-term debt, net of
current portion
|
12,821
|
|
12,839
|
Finance leases, net of
current portion
|
310
|
|
311
|
Operating lease
liabilities, net of current portion
|
1,019
|
|
1,027
|
Other liabilities,
net
|
895
|
|
872
|
Deferred income taxes,
net
|
1,288
|
|
1,313
|
Total
liabilities
|
18,215
|
|
18,478
|
Shareholders'
equity:
|
|
|
|
Common shares, no par
value; unlimited shares authorized at March 31, 2023
and December 31, 2022; 311,171,545 shares issued and
outstanding at
March 31, 2023; 307,142,436 shares issued and outstanding
at
December 31, 2022
|
2,157
|
|
2,057
|
Retained
earnings
|
1,134
|
|
1,121
|
Accumulated other
comprehensive income (loss)
|
(716)
|
|
(679)
|
Total Restaurant
Brands International Inc. shareholders' equity
|
2,575
|
|
2,499
|
Noncontrolling
interests
|
1,736
|
|
1,769
|
Total shareholders'
equity
|
4,311
|
|
4,268
|
Total liabilities and
shareholders' equity
|
$
22,526
|
|
$
22,746
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash
Flows
(In millions of U.S. dollars)
(Unaudited)
|
Three Months Ended
March 31,
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
277
|
|
$
270
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
46
|
|
49
|
Amortization of
deferred financing costs and debt issuance discount
|
7
|
|
7
|
(Income) loss from
equity method investments
|
7
|
|
13
|
(Gain) loss on
remeasurement of foreign denominated transactions
|
8
|
|
(21)
|
Net (gains) losses on
derivatives
|
(34)
|
|
18
|
Share-based
compensation and non-cash incentive compensation expense
|
45
|
|
27
|
Deferred income
taxes
|
(28)
|
|
(16)
|
Other
|
1
|
|
9
|
Changes in current
assets and liabilities, excluding acquisitions and
dispositions:
|
|
|
|
Accounts and notes
receivable
|
(8)
|
|
(46)
|
Inventories and
prepaids and other current assets
|
(20)
|
|
(22)
|
Accounts and drafts
payable
|
(81)
|
|
18
|
Other accrued
liabilities and gift card liability
|
(123)
|
|
(91)
|
Tenant inducements
paid to franchisees
|
(6)
|
|
(2)
|
Other long-term assets
and liabilities
|
4
|
|
21
|
Net cash provided by
operating activities
|
95
|
|
234
|
Cash flows from
investing activities:
|
|
|
|
Payments for property
and equipment
|
(18)
|
|
(10)
|
Net proceeds from
disposal of assets, restaurant closures, and
refranchisings
|
4
|
|
4
|
Settlement/sale of
derivatives, net
|
14
|
|
3
|
Other investing
activities, net
|
—
|
|
4
|
Net cash (used for)
provided by investing activities
|
—
|
|
1
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
long-term debt
|
—
|
|
1
|
Repayments of
long-term debt and finance leases
|
(32)
|
|
(21)
|
Payment of dividends
on common shares and distributions on Partnership exchangeable
units
|
(243)
|
|
(241)
|
Repurchase of common
shares
|
—
|
|
(161)
|
Proceeds from stock
option exercises
|
6
|
|
3
|
(Payments) proceeds
from derivatives
|
29
|
|
(6)
|
Other financing
activities, net
|
—
|
|
(1)
|
Net cash (used for)
provided by financing activities
|
(240)
|
|
(426)
|
Effect of exchange
rates on cash and cash equivalents
|
—
|
|
(1)
|
Increase (decrease) in
cash and cash equivalents
|
(145)
|
|
(192)
|
Cash and cash
equivalents at beginning of period
|
1,178
|
|
1,087
|
Cash and cash
equivalents at end of period
|
$
1,033
|
|
$
895
|
Supplemental cash
flow disclosures:
|
|
|
|
Interest
paid
|
$
163
|
|
$
75
|
Net interest paid
(a)
|
$
116
|
|
$
78
|
Income taxes
paid
|
$
61
|
|
$
42
|
(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 increase 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.
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.
In our 2022 financial reports, our key business metrics included
results from our franchised Burger King restaurants in Russia, with supplemental disclosure provided
excluding these restaurants. We did not generate any new profits
from restaurants in Russia in 2022
and do not expect to generate any new profits in 2023.
Consequently, beginning in the first quarter of 2023, our reported
key business metrics exclude the results from Russia for all periods presented.
|
Three Months Ended
March 31,
|
KPIs by
Market
|
2023
|
|
2022
|
|
(Unaudited)
|
System-wide Sales
Growth
|
|
|
|
|
|
TH - Canada
|
|
16.6 %
|
|
|
11.7 %
|
TH - Rest of
World
|
|
24.3 %
|
|
|
19.4 %
|
TH - Global
|
|
17.9 %
|
|
|
12.9 %
|
|
|
|
|
|
|
BK - US
|
|
8.1 %
|
|
|
0.2 %
|
BK - Rest of
World
|
|
19.0 %
|
|
|
31.4 %
|
BK - Global
|
|
14.3 %
|
|
|
16.2 %
|
|
|
|
|
|
|
PLK - US
|
|
9.1 %
|
|
|
0.6 %
|
PLK - Rest of
World
|
|
48.1 %
|
|
|
31.6 %
|
PLK - Global
|
|
14.4 %
|
|
|
4.1 %
|
|
|
|
|
|
|
FHS - US
|
|
7.4 %
|
|
|
6.7 %
|
FHS - Rest of
World
|
|
8.1 %
|
|
|
24.2 %
|
FHS - Global
|
|
7.5 %
|
|
|
7.4 %
|
|
|
|
|
|
|
System-wide Sales
(in US$ millions)
|
|
|
|
|
|
TH - Canada
|
$
|
1,420
|
|
$
|
1,301
|
TH - Rest of
World
|
$
|
311
|
|
$
|
255
|
TH - Global
|
$
|
1,731
|
|
$
|
1,556
|
|
|
|
|
|
|
BK - US
|
$
|
2,568
|
|
$
|
2,375
|
BK - Rest of
World
|
$
|
3,673
|
|
$
|
3,272
|
BK - Global
|
$
|
6,241
|
|
$
|
5,647
|
|
|
|
|
|
|
PLK - US
|
$
|
1,292
|
|
$
|
1,184
|
PLK - Rest of
World
|
$
|
276
|
|
$
|
199
|
PLK - Global
|
$
|
1,568
|
|
$
|
1,383
|
|
|
|
|
|
|
FHS - US
|
$
|
276
|
|
$
|
260
|
FHS - Rest of
World
|
$
|
16
|
|
$
|
12
|
FHS - Global
|
$
|
292
|
|
$
|
272
|
|
|
|
|
|
|
Comparable
Sales
|
|
|
|
|
|
TH - Canada
|
|
15.5 %
|
|
|
10.1 %
|
TH - Rest of
World
|
|
5.2 %
|
|
|
(1.2) %
|
TH - Global
|
|
13.8 %
|
|
|
8.4 %
|
|
|
|
|
|
|
BK - US
|
|
8.7 %
|
|
|
(0.5) %
|
BK - Rest of
World
|
|
12.3 %
|
|
|
19.7 %
|
BK - Global
|
|
10.8 %
|
|
|
9.9 %
|
|
|
|
|
|
|
PLK - US
|
|
3.4 %
|
|
|
(4.6) %
|
PLK - Rest of
World
|
|
20.9 %
|
|
|
9.2 %
|
PLK - Global
|
|
5.6 %
|
|
|
(3.0) %
|
|
|
|
|
|
|
FHS - US
|
|
6.7 %
|
|
|
4.5 %
|
FHS - Rest of
World
|
|
(3.0) %
|
|
|
(3.5) %
|
FHS - Global
|
|
6.1 %
|
|
|
4.2 %
|
|
As of
|
KPIs by
Market
|
March 31,
2023
|
|
March 31,
2022
|
|
(Unaudited)
|
Net Restaurant
Growth
|
|
|
|
TH - Canada
|
(1.2) %
|
|
(0.2) %
|
TH - Rest of
World
|
24.9 %
|
|
32.3 %
|
TH - Global
|
5.6 %
|
|
6.7 %
|
|
|
|
|
BK - US
|
(1.7) %
|
|
(0.1) %
|
BK - Rest of
World
|
5.2 %
|
|
4.9 %
|
BK - Global
|
2.5 %
|
|
2.9 %
|
|
|
|
|
PLK - US
|
5.9 %
|
|
5.7 %
|
PLK - Rest of
World
|
24.7 %
|
|
14.5 %
|
PLK - Global
|
10.8 %
|
|
7.9 %
|
|
|
|
|
FHS - US
|
0.4 %
|
|
1.0 %
|
FHS - Rest of
World
|
46.0 %
|
|
22.0 %
|
FHS - Global
|
2.3 %
|
|
1.8 %
|
|
|
|
|
Restaurant
Count
|
|
|
|
TH - Canada
|
3,882
|
|
3,928
|
TH - Rest of
World
|
1,738
|
|
1,392
|
TH - Global
|
5,620
|
|
5,320
|
|
|
|
|
BK - US
|
6,964
|
|
7,088
|
BK - Rest of
World
|
11,947
|
|
11,358
|
BK - Global
|
18,911
|
|
18,446
|
|
|
|
|
PLK - US
|
2,947
|
|
2,784
|
PLK - Rest of
World
|
1,231
|
|
987
|
PLK - Global
|
4,178
|
|
3,771
|
|
|
|
|
FHS - US
|
1,174
|
|
1,169
|
FHS - Rest of
World
|
73
|
|
50
|
FHS - Global
|
1,247
|
|
1,219
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Supplemental Disclosure
(Unaudited)
General and Administrative Expenses
|
Three Months Ended
March 31,
|
(in US$
millions)
|
2023
|
|
2022
|
Segment G&A
TH(1)
|
$
29
|
|
$
29
|
Segment G&A
BK(1)
|
48
|
|
45
|
Segment G&A
PLK(1)
|
15
|
|
15
|
Segment G&A
FHS(1)
|
8
|
|
8
|
Share-based
compensation and non-cash incentive compensation expense
|
45
|
|
27
|
Depreciation and
amortization(2)
|
6
|
|
5
|
FHS Transaction
costs
|
19
|
|
1
|
Corporate restructuring
and tax advisory fees
|
5
|
|
3
|
General and
administrative expenses
|
$
175
|
|
$
133
|
|
|
(1)
|
Segment G&A
includes segment general and administrative expenses and excludes
share-based compensation and non-cash incentive compensation
expense, depreciation and amortization, FHS Transaction costs and
Corporate restructuring and tax advisory fees.
|
(2)
|
Segment depreciation
and amortization reflects depreciation and amortization included in
the respective segment cost of sales, franchise and property
expenses and advertising expenses and other services. Depreciation
and amortization included in general and administrative expenses
reflects all other depreciation and amortization.
|
Other Operating Expenses (Income), net
|
Three Months Ended
March 31,
|
(in US$
millions)
|
2023
|
|
2022
|
Net losses (gains) on
disposal of assets, restaurant closures, and
refranchisings(3)
|
$
(2)
|
|
$
2
|
Litigation settlement
(gains) and reserves, net
|
1
|
|
1
|
Net losses (gains) on
foreign exchange(4)
|
8
|
|
(21)
|
Other, net
(5)
|
10
|
|
2
|
Other operating expenses
(income), net
|
$
17
|
|
$
(16)
|
|
|
(3)
|
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.
|
(4)
|
Net losses (gains) on
foreign exchange is primarily related to revaluation of foreign
denominated assets and liabilities, primarily those denominated in
Euros and Canadian dollars.
|
(5)
|
Other, net for 2023 is
primarily related to payments in connection with FHS area
representative buyouts.
|
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. See
reconciliation of these Non-GAAP financial measures in the
following pages.
Non-GAAP Measures
To supplement our condensed consolidated financial statements
presented on a GAAP basis, RBI reports the following non-GAAP
financial measures: EBITDA, Adjusted EBITDA, LTM Adjusted EBITDA,
Adjusted Net Income, Adjusted Diluted Earnings per Share ("Adjusted
Diluted EPS"), Organic revenue growth, Organic Adjusted EBITDA
growth, Free Cash Flow, LTM Free Cash Flow, Net Interest Paid, 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.
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. For the periods referenced, this included non-recurring
fees and expenses incurred in connection with the Firehouse Subs
acquisition and integration consisting of professional fees,
compensation-related expenses and integration costs as well as
costs 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,
regulations and related restructuring initiatives. 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. Adjusted EBITDA is used by management to
measure operating performance of the business, excluding these
non-cash and other specifically identified items that management
believes are not relevant to management's assessment of our
operating performance. Adjusted EBITDA, as defined above, also
represents our measure of segment income for each of our four
operating segments.
LTM Adjusted EBITDA is defined as Adjusted EBITDA for the last
twelve month period to the date reported.
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 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.
Adjusted EBITDA Net Leverage is defined as net debt (total debt
less cash and cash equivalents) divided by LTM Adjusted EBITDA.
Adjusted EBITDA Net Leverage is an operating performance measure
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 and Adjusted EBITDA growth, on an organic basis,
are non-GAAP measures that exclude the impact of FX movements and
also exclude the results of Firehouse Subs for the first four full
fiscal quarters following the acquisition. 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 and the Firehouse Subs acquisition. 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. LTM
Free Cash Flow is defined as Free Cash Flow for the last
twelve-month period to the date reported.
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 in Revenue and Adjusted EBITDA
(Unaudited)
|
|
Three Months
Ended
March
31,
|
|
Variance
|
|
Impact of FX
Movements
|
|
Organic
Growth
|
(in US$
millions)
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
900
|
|
$
829
|
|
$
71
|
|
8.5 %
|
|
$
(47)
|
|
$
118
|
|
15.0 %
|
BK
|
|
$
484
|
|
$
443
|
|
$
41
|
|
9.2 %
|
|
$
(8)
|
|
$
49
|
|
11.3 %
|
PLK
|
|
$
168
|
|
$
148
|
|
$
20
|
|
13.8 %
|
|
$
(1)
|
|
$
21
|
|
14.2 %
|
FHS
|
|
$
38
|
|
$
31
|
|
$
7
|
|
20.0 %
|
|
$
—
|
|
$
7
|
|
20.0 %
|
Total
Revenues
|
|
$
1,590
|
|
$
1,451
|
|
$
139
|
|
9.5 %
|
|
$
(56)
|
|
$
195
|
|
13.9 %
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
251
|
|
$
231
|
|
$
20
|
|
8.4 %
|
|
$
(13)
|
|
$
33
|
|
15.1 %
|
BK
|
|
$
256
|
|
$
229
|
|
$
27
|
|
11.8 %
|
|
$
(7)
|
|
$
34
|
|
15.5 %
|
PLK
|
|
$
66
|
|
$
56
|
|
$
10
|
|
18.0 %
|
|
$
(1)
|
|
$
11
|
|
19.1 %
|
FHS
|
|
$
15
|
|
$
14
|
|
$
1
|
|
12.7 %
|
|
$
—
|
|
$
1
|
|
12.7 %
|
Adjusted
EBITDA
|
|
$
588
|
|
$
530
|
|
$
58
|
|
11.0 %
|
|
$
(21)
|
|
$
79
|
|
15.6 %
|
|
Note: Percentage
changes may not recalculate due to rounding.
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
(Unaudited)
|
Three Months
Ended March 31,
|
(in US$
millions)
|
2023
|
|
2022
|
Net Income
|
$
277
|
|
$
270
|
Income tax
expense
|
28
|
|
53
|
Interest
expense
|
142
|
|
127
|
Income from
operations
|
447
|
|
450
|
Depreciation and
amortization
|
46
|
|
49
|
EBITDA
|
493
|
|
499
|
Share-based
compensation and non-cash incentive compensation
expense(1)
|
45
|
|
27
|
FHS Transaction
costs(2)
|
19
|
|
1
|
Corporate
restructuring and tax advisory fees(3)
|
5
|
|
3
|
Impact of equity
method investments(4)
|
9
|
|
16
|
Other operating
expenses (income), net
|
17
|
|
(16)
|
Adjusted
EBITDA
|
$
588
|
|
$
530
|
|
|
|
|
Segment
income:
|
|
|
|
TH
|
$
251
|
|
$
231
|
BK
|
256
|
|
229
|
PLK
|
66
|
|
56
|
FHS
|
15
|
|
14
|
Adjusted
EBITDA
|
$
588
|
|
$
530
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Reconciliation of Net Income to Adjusted Net Income and Adjusted
Diluted EPS
(Unaudited)
|
Three
Months Ended March 31,
|
(in US$ millions,
except per share data)
|
2023
|
|
2022
|
Net income
|
$
277
|
|
$
270
|
Income tax
expense
|
28
|
|
53
|
Income before income
taxes
|
305
|
|
323
|
Adjustments:
|
|
|
|
Franchise agreement
amortization
|
8
|
|
8
|
Amortization of
deferred financing costs and debt issuance discount
|
7
|
|
7
|
Interest expense and
loss on extinguished debt(5)
|
12
|
|
16
|
FHS Transaction
costs(2)
|
19
|
|
1
|
Corporate
restructuring and tax advisory fees(3)
|
5
|
|
3
|
Impact of equity
method investments(4)
|
9
|
|
16
|
Other operating
expenses (income), net
|
17
|
|
(16)
|
Total
adjustments
|
77
|
|
35
|
Adjusted income before
income taxes
|
382
|
|
358
|
Adjusted income tax
expense(6)
|
42
|
|
63
|
Adjusted net
income
|
$
340
|
|
$
295
|
Adjusted diluted
earnings per share
|
$
0.75
|
|
$
0.64
|
Weighted average
diluted shares outstanding
|
456
|
|
458
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial
Measures
Net Leverage, Reconciliation of Free Cash Flow and Net Interest
Paid
(Unaudited)
|
|
As of
|
(in US$ millions,
except ratio)
|
|
March 31,
2023
|
|
March 31,
2022
|
Long-term debt, net of
current portion
|
|
$
12,821
|
|
$
12,903
|
Finance leases, net of
current portion
|
|
310
|
|
337
|
Current portion of
long-term debt and finance leases
|
|
128
|
|
105
|
Unamortized deferred
financing costs and deferred issue discount
|
|
105
|
|
131
|
Total
debt
|
|
13,364
|
|
13,476
|
|
|
|
|
|
Cash and cash
equivalents
|
|
1,033
|
|
895
|
Net debt
|
|
12,331
|
|
12,581
|
|
|
|
|
|
LTM Net
Income
|
|
1,489
|
|
1,252
|
Net Income Net
leverage
|
|
8.3x
|
|
10.0x
|
|
|
|
|
|
LTM adjusted
EBITDA
|
|
2,436
|
|
2,298
|
Adjusted EBITDA Net
leverage
|
|
5.1x
|
|
5.5x
|
|
|
Three Months Ended
March 31,
|
|
Twelve Months Ended
December 31,
|
|
Twelve Months Ended
March 31,
|
(in US$
millions)
|
|
2023
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2023
|
|
2022
|
Calculation:
|
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
|
A + D - B
|
|
B + E - C
|
Net cash provided by
operating activities
|
|
$
95
|
|
$
234
|
|
$
266
|
|
$
1,490
|
|
$
1,726
|
|
$
1,351
|
|
$
1,694
|
Payments for property
and equipment
|
|
(18)
|
|
(10)
|
|
(15)
|
|
(100)
|
|
(106)
|
|
(108)
|
|
(101)
|
Free Cash
flow
|
|
$
77
|
|
$
224
|
|
$
251
|
|
$
1,390
|
|
$
1,620
|
|
$
1,243
|
|
$
1,593
|
|
|
Three Months Ended
March 31,
|
(in US$
millions)
|
|
2023
|
|
2022
|
Interest
Paid
|
|
$
163
|
|
$
75
|
|
|
|
|
|
Proceeds (payments)
from derivatives, net within investing activities (a)
|
|
11
|
|
3
|
Proceeds (payments)
from derivatives, net within financing activities
|
|
29
|
|
(6)
|
Interest
income
|
|
7
|
|
—
|
Net Interest
Paid
|
|
$
116
|
|
$
78
|
(a) Three months ended
March 31, 2023 excludes $3 million of forward currency contracts
included within cost of sales in
earnings.
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Reconciliation of EBITDA and Adjusted EBITDA to Net Income
(Unaudited)
|
|
Three Months Ended
March 31,
|
|
Twelve Months Ended
December 31,
|
|
Twelve Months Ended
March 31,
|
(in US$
millions)
|
|
2023
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
2023
|
|
2022
|
Calculation:
|
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
|
A + D - B
|
|
B + E - C
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
277
|
|
$
270
|
|
$
271
|
|
$
1,482
|
|
$
1,253
|
|
$
1,489
|
|
$
1,252
|
Income tax expense
(benefit)
|
|
28
|
|
53
|
|
47
|
|
(117)
|
|
110
|
|
(142)
|
|
116
|
Loss on early
extinguishment of debt
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11
|
|
—
|
|
11
|
Interest expense,
net
|
|
142
|
|
127
|
|
124
|
|
533
|
|
505
|
|
548
|
|
508
|
Income from
operations
|
|
447
|
|
450
|
|
442
|
|
1,898
|
|
1,879
|
|
1,895
|
|
1,887
|
Depreciation and
amortization
|
|
46
|
|
49
|
|
49
|
|
190
|
|
201
|
|
187
|
|
201
|
EBITDA
|
|
493
|
|
499
|
|
491
|
|
2,088
|
|
2,080
|
|
2,082
|
|
2,088
|
Share-based
compensation and
non-cash incentive compensation expense(1)
|
|
45
|
|
27
|
|
26
|
|
136
|
|
102
|
|
154
|
|
103
|
FHS Transaction
costs(2)
|
|
19
|
|
1
|
|
—
|
|
24
|
|
18
|
|
42
|
|
19
|
Corporate
restructuring and tax advisory fees(3)
|
|
5
|
|
3
|
|
1
|
|
46
|
|
16
|
|
48
|
|
18
|
Impact of equity
method investments(4)
|
|
9
|
|
16
|
|
4
|
|
59
|
|
25
|
|
52
|
|
37
|
Other operating
expenses (income), net
|
|
17
|
|
(16)
|
|
(42)
|
|
25
|
|
7
|
|
58
|
|
33
|
Adjusted
EBITDA
|
|
$
588
|
|
$
530
|
|
$
480
|
|
$
2,378
|
|
$
2,248
|
|
$
2,436
|
|
$
2,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
251
|
|
$
231
|
|
$
207
|
|
$
1,073
|
|
$
997
|
|
$
1,093
|
|
$
1,021
|
BK
|
|
256
|
|
229
|
|
217
|
|
1,007
|
|
1,021
|
|
1,034
|
|
1,033
|
PLK
|
|
66
|
|
56
|
|
56
|
|
242
|
|
228
|
|
252
|
|
228
|
FHS
|
|
15
|
|
14
|
|
—
|
|
56
|
|
2
|
|
57
|
|
16
|
Adjusted
EBITDA
|
|
$
588
|
|
$
530
|
|
$
480
|
|
$
2,378
|
|
$
2,248
|
|
$
2,436
|
|
$
2,298
|
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 of Firehouse Subs, we incurred certain non-recurring
general and administrative expenses during the three months ended
March 31, 2023 and 2022, primarily consisting of professional fees,
compensation related expenses and integration costs. We do not
expect to incur additional FHS Transaction costs during the
remainder of 2023.
|
|
|
(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, regulations and related restructuring
initiatives.
|
|
|
(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.
|
|
|
(5)
|
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.
|
|
|
(6)
|
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.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/restaurant-brands-international-inc-reports-first-quarter-2023-results-301812398.html
SOURCE Restaurant Brands International Inc.