Global digital sales reach $6 billion in 2020, more than doubling in home
markets
Continued strength in off-premise channels
across all brands with global delivery sales also doubling in
2020
Accelerated transformation of drive-thru
experience, 3,600 digital menu boards installed in home markets in
2020
RBI declares 9th consecutive dividend increase
and ends 2020 with $2.6 billion of
available liquidity
TORONTO, Feb. 11, 2021 /PRNewswire/ - Restaurant Brands
International Inc. (TSX: QSR) (NYSE: QSR) (TSX: QSP) today reported
financial results for the full year and fourth quarter ended
December 31, 2020.
Jose Cil, Chief Executive Officer
of Restaurant Brands International Inc. ("RBI") commented, "We
are confident that our efforts in food and beverage quality,
restaurant experience, digital leadership and brand building will
be beneficial to returning our business to the growth we know we
are capable of in all three brands. While we ended 2020 with about
the same restaurant count as 2019, we have been working closely
with our network of franchisees on restarting the development
engine and expect to deliver net restaurant growth roughly in line
with what we delivered in 2018 and 2019. Strong results in 2021
will help pave the way toward our aspiration of achieving 40,000
restaurants in the coming years."
Cil continued, "Driving rapid digital innovation has been
essential to the recovery of our business. We increased support for
and continued to build on our e-commerce platforms, reimagined
service opportunities like curbside pickup and expanded delivery
services into thousands of new restaurants. The outcome has been
the more than doubling of digital sales in North America."
"The quality of our plans today is the result of a team that
refused to be distracted by short-term barriers that we couldn't
control and instead focused on the right long-term priorities to
grow our restaurant brands for many years to come," concluded
Cil."
2020 Highlights:
- System-wide Sales Growth declined (8.6)%
- Net Restaurant Growth declined (0.2)%
- Diluted EPS of $1.60 versus
$2.37 in prior year
- Adjusted Diluted EPS of $2.03
versus $2.72 in prior year
- Net Income Attributable to Common Shareholders and
Noncontrolling Interests of $748
million versus $1,109 million
in prior year
- Adjusted EBITDA of $1,864 million
decreased (18.1)% organically versus the prior year
- Net Cash Provided by Operating Activities of $921 million and Free Cash Flow of $804 million
2020 Corporate Highlights:
- RBI announced its Restaurant Brands for Good evergreen
framework in 2020, available on the company's website and discussed
in the open letter posted today by Jose
Cil
- RBI awarded "Great Place to Work®" certification and achieved
100% on Corporate Equality Index
Dividend Update:
- RBI announced that its board of directors declared a dividend
of $0.53 per common share and
partnership exchangeable unit of Restaurant Brands International
Limited Partnership ("RBI LP") for Q1 of 2021
- In connection with the declared dividend, RBI also announced
that it is targeting a total of $2.12
in dividends per common share and partnership exchangeable unit of
RBI LP for 2021
Consolidated Operational Highlights
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(unaudited)
|
|
(unaudited)
|
System-wide Sales
Growth
|
|
|
|
|
|
|
|
|
|
|
TH
|
(12.9)%
|
|
|
(2.9)%
|
|
|
(17.5)%
|
|
|
(0.3)%
|
BK
|
(8.1)%
|
|
|
8.4%
|
|
|
(11.1)%
|
|
|
9.3%
|
PLK
|
(0.9)%
|
|
|
42.3%
|
|
|
17.7%
|
|
|
18.5%
|
Consolidated
|
(8.0)%
|
|
|
9.9%
|
|
|
(8.6)%
|
|
|
8.3%
|
System-wide Sales (in
US$ millions)
|
|
|
|
|
|
|
|
|
|
|
TH
|
$
|
1,478
|
|
$
|
1,679
|
|
$
|
5,488
|
|
$
|
6,716
|
BK
|
$
|
5,428
|
|
$
|
5,905
|
|
$
|
20,038
|
|
$
|
22,921
|
PLK
|
$
|
1,307
|
|
$
|
1,327
|
|
$
|
5,143
|
|
$
|
4,397
|
Consolidated
|
$
|
8,213
|
|
$
|
8,911
|
|
$
|
30,669
|
|
$
|
34,034
|
Net Restaurant
Growth
|
|
|
|
|
|
|
|
|
|
|
TH
|
0.3%
|
|
|
1.8%
|
|
|
0.3%
|
|
|
1.8%
|
BK
|
(1.1)%
|
|
|
5.9%
|
|
|
(1.1)%
|
|
|
5.9%
|
PLK
|
4.1%
|
|
|
6.9%
|
|
|
4.1%
|
|
|
6.9%
|
Consolidated
|
(0.2)%
|
|
|
5.2%
|
|
|
(0.2)%
|
|
|
5.2%
|
System Restaurant
Count at Period End
|
|
|
|
|
|
|
|
|
|
|
TH
|
4,949
|
|
|
4,932
|
|
|
4,949
|
|
|
4,932
|
BK
|
18,625
|
|
|
18,838
|
|
|
18,625
|
|
|
18,838
|
PLK
|
3,451
|
|
|
3,316
|
|
|
3,451
|
|
|
3,316
|
Consolidated
|
27,025
|
|
|
27,086
|
|
|
27,025
|
|
|
27,086
|
Comparable
Sales
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
(11.0)%
|
|
|
(4.3)%
|
|
|
(15.7)%
|
|
|
(1.5)%
|
BK
|
(7.9)%
|
|
|
2.8%
|
|
|
(7.9)%
|
|
|
3.4%
|
PLK
|
(5.8)%
|
|
|
34.4%
|
|
|
13.8%
|
|
|
12.1%
|
|
Note: 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
franchised restaurants, as approximately 100% of current
restaurants are franchised. We do not record franchise sales as
revenues; however, our franchise revenues include royalties 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
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$ millions,
except per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(unaudited)
|
|
(unaudited)
|
Total
Revenues
|
$
|
1,358
|
|
$
|
1,479
|
|
$
|
4,968
|
|
$
|
5,603
|
Net Income
Attributable to Common Shareholders and
Noncontrolling Interests
|
$
|
138
|
|
$
|
255
|
|
$
|
748
|
|
$
|
1,109
|
Diluted Earnings per
Share
|
$
|
0.30
|
|
$
|
0.54
|
|
$
|
1.60
|
|
$
|
2.37
|
|
|
|
|
|
|
|
|
TH Adjusted
EBITDA(1)
|
$
|
229
|
|
$
|
297
|
|
$
|
823
|
|
$
|
1,122
|
BK Adjusted
EBITDA(1)
|
$
|
218
|
|
$
|
266
|
|
$
|
823
|
|
$
|
994
|
PLK Adjusted
EBITDA(1)
|
$
|
54
|
|
$
|
59
|
|
$
|
218
|
|
$
|
188
|
Adjusted
EBITDA(2)
|
$
|
501
|
|
$
|
622
|
|
$
|
1,864
|
|
$
|
2,304
|
|
|
|
|
|
|
|
|
Adjusted Net
Income(2)
|
$
|
247
|
|
$
|
351
|
|
$
|
948
|
|
$
|
1,274
|
Adjusted Diluted
Earnings per Share(2)
|
$
|
0.53
|
|
$
|
0.75
|
|
$
|
2.03
|
|
$
|
2.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December
31,
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
921
|
|
$
|
1,476
|
|
|
|
|
|
|
Net cash used for
investing activities
|
$
|
(79)
|
|
$
|
(30)
|
|
|
|
|
|
|
Net cash used for
financing activities
|
$
|
(821)
|
|
$
|
(842)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow(2)
|
$
|
804
|
|
$
|
1,414
|
|
|
|
|
|
|
Net Debt
|
$
|
11,418
|
|
$
|
10,763
|
|
|
|
|
|
|
Net
Leverage(2)
|
6.1x
|
|
4.7x
|
|
|
|
|
|
|
|
|
(1)
|
TH Adjusted EBITDA,
BK Adjusted EBITDA, and PLK Adjusted EBITDA are our measures of
segment profitability.
|
(2)
|
Adjusted EBITDA,
Adjusted Net Income, Adjusted Diluted Earnings per Share, Free Cash
Flow, and Net Leverage are non-GAAP financial measures. Please
refer to "Non-GAAP Financial Measures" for further
detail.
|
The year-over-year change in Total Revenues on an as reported
basis and on an organic basis for the full year was primarily
driven by a decline in system-wide sales at Tim Hortons and Burger
King and a decrease in supply chain sales, partially offset by an
increase in system-wide sales at Popeyes. FX movements also
contributed to the year-over-year decrease in Total Revenues on an
as reported basis.
The year-over-year change in Total Revenues on an as reported
basis and on an organic basis for the fourth quarter was primarily
driven by a decline in system-wide sales at Tim Hortons, Burger
King and Popeyes and a decrease in supply chain sales. Favorable FX
movements partially offset the year-over-year decrease in Total
Revenues on an as reported basis.
The decrease in Net Income Attributable to Common Shareholders
and Noncontrolling Interests for the full year was primarily driven
by a decrease in Tim Hortons and Burger King segment income, an
unfavorable change in the results from other operating expenses
(income), net, an unfavorable increase from the impact of equity
method investments, and an increase in loss on early extinguishment
of debt, partially offset by a decrease in income tax expense, an
increase in Popeyes segment income, and a decrease in interest
expense.
The decrease in Net Income Attributable to Common Shareholders
and Noncontrolling Interests for the fourth quarter was primarily
driven by a decrease in Tim Hortons and Burger King segment
income, an increase in loss on early extinguishment of debt,
partially offset by a decrease in income tax expense.
The year-over year change in Adjusted EBITDA on an as reported
and on an organic basis for the full year was primarily driven by
the decrease in Tim Hortons and Burger King Adjusted EBITDA,
partially offset by an increase in Popeyes Adjusted EBITDA.
The year-over-year change in Adjusted EBITDA on an as reported
and on an organic basis for the fourth quarter was primarily driven
by the decrease in Tim Hortons and Burger King Adjusted EBITDA.
Our results this quarter continued to be impacted by the
COVID-19 global pandemic, primarily through temporary closures of
and restrictions on restaurants in various regions around the
world. While certain markets have opened for dine-in guests, the
capacity may be limited, and local conditions may lead to closures
or increased limitations.
As of the end of December, over 96% of our restaurants were open
worldwide, including substantially all of our restaurants in
North America and Asia Pacific. As of the end of December,
approximately 94% of our restaurants were open in Europe, Middle
East and Africa.
While we do not know the future impact COVID-19 will have on our
business, or when our business will fully return to normal
operations, we expect to see a continued impact from COVID-19 on
our results in 2021.
TH Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(unaudited)
|
|
(unaudited)
|
System-wide Sales
Growth
|
|
(12.9)%
|
|
|
(2.9)%
|
|
|
(17.5)%
|
|
|
(0.3)%
|
System-wide
Sales
|
$
|
1,478
|
|
$
|
1,679
|
|
$
|
5,488
|
|
$
|
6,716
|
Comparable
Sales
|
|
(11.0)%
|
|
|
(4.3)%
|
|
|
(15.7)%
|
|
|
(1.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
0.3%
|
|
|
1.8%
|
|
|
0.3%
|
|
|
1.8%
|
System Restaurant
Count at Period End
|
|
4,949
|
|
|
4,932
|
|
|
4,949
|
|
|
4,932
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
531
|
|
$
|
586
|
|
$
|
1,876
|
|
$
|
2,204
|
Franchise and
Property Revenues
|
$
|
251
|
|
$
|
286
|
|
$
|
934
|
|
$
|
1,140
|
Total
Revenues
|
$
|
782
|
|
$
|
872
|
|
$
|
2,810
|
|
$
|
3,344
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
423
|
|
$
|
444
|
|
$
|
1,484
|
|
$
|
1,677
|
Franchise and
Property Expenses
|
$
|
91
|
|
$
|
90
|
|
$
|
341
|
|
$
|
358
|
Segment
SG&A
|
$
|
73
|
|
$
|
73
|
|
$
|
284
|
|
$
|
309
|
Segment Depreciation
and Amortization
|
$
|
31
|
|
$
|
26
|
|
$
|
113
|
|
$
|
106
|
Adjusted
EBITDA(1)(3)
|
$
|
229
|
|
$
|
297
|
|
$
|
823
|
|
$
|
1,122
|
|
|
(3)
|
TH Adjusted EBITDA
includes $3 million and $5 million of cash distributions received
from equity method investments for the three months ended December
31, 2020 and 2019, respectively. TH Adjusted EBITDA includes $9
million and $16 million of cash distributions received from equity
method investments for the twelve months ended December 31, 2020
and 2019, respectively.
|
For the full year and fourth quarter, the decrease in
system-wide sales was primarily driven by a decrease in comparable
sales of (15.7)% and (11.0)%, respectively, including Canada comparable sales of (16.5)% and
(11.9)%, respectively, for the same periods.
The year-over-year change in Total Revenues and Adjusted EBITDA
on an as reported and on an organic basis was primarily driven by
the decrease in system-wide sales and supply chain sales. This
decrease was also driven by unfavorable FX movements for the full
year and partially offset by favorable FX movements for the fourth
quarter on an as reported basis.
BK Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(unaudited)
|
|
(unaudited)
|
System-wide Sales
Growth
|
|
(8.1)%
|
|
|
8.4%
|
|
|
(11.1)%
|
|
|
9.3%
|
System-wide
Sales
|
$
|
5,428
|
|
$
|
5,905
|
|
$
|
20,038
|
|
$
|
22,921
|
Comparable
Sales
|
|
(7.9)%
|
|
|
2.8%
|
|
|
(7.9)%
|
|
|
3.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
(1.1)%
|
|
|
5.9%
|
|
|
(1.1)%
|
|
|
5.9%
|
System Restaurant
Count at Period End
|
|
18,625
|
|
|
18,838
|
|
|
18,625
|
|
|
18,838
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
15
|
|
$
|
19
|
|
$
|
64
|
|
$
|
76
|
Franchise and
Property Revenues
|
$
|
419
|
|
$
|
443
|
|
$
|
1,538
|
|
$
|
1,701
|
Total
Revenues
|
$
|
434
|
|
$
|
462
|
|
$
|
1,602
|
|
$
|
1,777
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
16
|
|
$
|
18
|
|
$
|
65
|
|
$
|
71
|
Franchise and
Property Expenses
|
$
|
47
|
|
$
|
44
|
|
$
|
176
|
|
$
|
168
|
Segment
SG&A
|
$
|
166
|
|
$
|
151
|
|
$
|
588
|
|
$
|
600
|
Segment Depreciation
and Amortization
|
$
|
12
|
|
$
|
12
|
|
$
|
49
|
|
$
|
49
|
Adjusted
EBITDA(1)(4)
|
$
|
218
|
|
$
|
266
|
|
$
|
823
|
|
$
|
994
|
|
|
(4)
|
BK Adjusted EBITDA
includes $4 million and $6 million of cash distributions received
from equity method investments for the three and twelve months
ended December 31, 2019, respectively. No significant cash
distributions were received during 2020.
|
For the full year and fourth quarter, the decrease in
system-wide sales was primarily driven by a decrease in comparable
sales of (7.9)% in both periods, including US comparable sales
growth of (5.6)% and (2.9)%, respectively.
The year-over-year change in Total Revenues and Adjusted EBITDA
on an as reported and on an organic basis was primarily driven by
the decrease in system-wide sales. This decrease was also driven by
FX movements for the full year on an as reported basis.
PLK Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(unaudited)
|
|
(unaudited)
|
System-wide Sales
Growth
|
|
(0.9)%
|
|
|
42.3%
|
|
|
17.7%
|
|
|
18.5%
|
System-wide
Sales
|
$
|
1,307
|
|
$
|
1,327
|
|
$
|
5,143
|
|
$
|
4,397
|
Comparable
Sales
|
|
(5.8)%
|
|
|
34.4%
|
|
|
13.8%
|
|
|
12.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
4.1%
|
|
|
6.9%
|
|
|
4.1%
|
|
|
6.9%
|
System Restaurant
Count at Period End
|
|
3,451
|
|
|
3,316
|
|
|
3,451
|
|
|
3,316
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
17
|
|
$
|
22
|
|
$
|
73
|
|
$
|
82
|
Franchise and
Property Revenues
|
$
|
125
|
|
$
|
123
|
|
$
|
483
|
|
$
|
400
|
Total
Revenues
|
$
|
142
|
|
$
|
145
|
|
$
|
556
|
|
$
|
482
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
15
|
|
$
|
17
|
|
$
|
61
|
|
$
|
65
|
Franchise and
Property Expenses
|
$
|
2
|
|
$
|
5
|
|
$
|
11
|
|
$
|
14
|
Segment
SG&A
|
$
|
72
|
|
$
|
66
|
|
$
|
273
|
|
$
|
225
|
Segment Depreciation
and Amortization
|
$
|
2
|
|
$
|
3
|
|
$
|
8
|
|
$
|
11
|
Adjusted
EBITDA(1)
|
$
|
54
|
|
$
|
59
|
|
$
|
218
|
|
$
|
188
|
For the full year, system-wide sales were primarily driven by
comparable sales growth and net restaurant growth of 4.1%. For the
full year, comparable sales were 13.8%, including US comparable
sales of 15.7%.
For the fourth quarter, the decrease in system-wide sales was
primarily driven by the decrease in comparable sales, partially
offset by net restaurant growth of 4.1%. For the fourth quarter,
comparable sales were (5.8)%, including US comparable sales of
(6.4)%.
The change in Total Revenues and Adjusted EBITDA for the full
year on an as reported and on an organic basis was primarily driven
by system-wide sales growth. The change in Adjusted EBITDA was also
driven by an increase in segment Selling General and Administrative
expenses.
The change in Total Revenues and Adjusted EBITDA for the quarter
on an as reported and on an organic basis was primarily driven by
the decrease in system-wide sales.
Cash and Liquidity
As of December 31, 2020, total
debt was $13.0 billion, and net debt
(total debt less cash and cash equivalents of $1.6 billion) was $11.4
billion, and net leverage was 6.1x. In the fourth quarter,
we took advantage of favorable market conditions to issue
$2.9 billion of 4.0% Second Lien
Notes due 2030 and redeemed $2.8
billion of our 5% Second Lien Notes due 2025. We also issued
$750 million of 3.5% First Lien Notes
due in 2029 and redeemed $725 million
of 4.25% First Lien Notes due 2024.
The RBI board of directors has declared a dividend of
$0.53 per common share and
partnership exchangeable unit of RBI LP for the first quarter of
2021. The dividend will be payable on April 6, 2021 to
shareholders and unitholders of record at the close of business on
March 23, 2021. In connection with the declared dividend, RBI
also announced that it is targeting a total of $2.12 in dividends per common share and
partnership exchangeable unit of RBI LP for 2021.
Investor Conference Call
We will host an investor conference call and webcast at
8:30 a.m. Eastern Time on Thursday,
February 11, 2021, to review financial results for the full
year and fourth quarter ended December 31, 2020. The earnings
call will be broadcast live via our investor relations website at
http://investor.rbi.com and a replay will be available for 30
days following the release. The dial-in number is (877) 317-6711
for U.S. callers, (866) 450-4696 for Canadian callers, and (412)
317-5475 for callers from other countries.
About Restaurant Brands International Inc.
Restaurant Brands International Inc. ("RBI") is one of the
world's largest quick service restaurant companies with
approximately $31 billion in annual
system-wide sales and 27,000 restaurants in more than 100 countries
and U.S. territories. RBI owns three of the world's most prominent
and iconic quick service restaurant brands – TIM HORTONS®, BURGER
KING®, and POPEYES®. These independently operated brands have been
serving their respective guests, franchisees and communities for
over 45 years. 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 of the COVID-19 pandemic on our
results of operations, liquidity and prospects and those of our
franchisees and our ability to continue to navigate the impact of
the pandemic, our expectations regarding our 2021 and long-term
restaurant growth goals and our progress toward those goals, the
impact of our strategic initiatives on the long-term growth
prospects of our brands, the timing of technology roll out, our
future plans with respect to our brands and our total dividend
target for 2021. 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 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; and changes in applicable tax laws 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
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues:
|
|
|
|
|
|
|
|
Sales
|
$
|
563
|
|
$
|
627
|
|
$
|
2,013
|
|
$
|
2,362
|
Franchise and property
revenues
|
795
|
|
852
|
|
2,955
|
|
3,241
|
Total
revenues
|
1,358
|
|
1,479
|
|
4,968
|
|
5,603
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
454
|
|
479
|
|
1,610
|
|
1,813
|
Franchise and property
expenses
|
140
|
|
139
|
|
528
|
|
540
|
Selling, general and
administrative expenses
|
342
|
|
316
|
|
1,264
|
|
1,264
|
(Income) loss from
equity method investments
|
3
|
|
—
|
|
39
|
|
(11)
|
Other operating
expenses (income), net
|
46
|
|
34
|
|
105
|
|
(10)
|
Total operating costs
and expenses
|
985
|
|
968
|
|
3,546
|
|
3,596
|
Income from
operations
|
373
|
|
511
|
|
1,422
|
|
2,007
|
Interest expense,
net
|
132
|
|
126
|
|
508
|
|
532
|
Loss on early
extinguishment of debt
|
98
|
|
19
|
|
98
|
|
23
|
Income before income
taxes
|
143
|
|
366
|
|
816
|
|
1,452
|
Income tax
expense
|
4
|
|
109
|
|
66
|
|
341
|
Net income
|
139
|
|
257
|
|
750
|
|
1,111
|
Net income
attributable to noncontrolling interests
|
48
|
|
92
|
|
264
|
|
468
|
Net income
attributable to common shareholders
|
$
|
91
|
|
$
|
165
|
|
$
|
486
|
|
$
|
643
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.30
|
|
$
|
0.55
|
|
$
|
1.61
|
|
$
|
2.40
|
Diluted
|
$
|
0.30
|
|
$
|
0.54
|
|
$
|
1.60
|
|
$
|
2.37
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
304
|
|
298
|
|
302
|
|
268
|
Diluted
|
464
|
|
469
|
|
468
|
|
469
|
Cash dividends
declared per common share
|
$
|
0.52
|
|
$
|
0.50
|
|
$
|
2.08
|
|
$
|
2.00
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions of U.S. dollars, except share data)
(Unaudited)
|
As
of
|
|
December 31,
2020
|
|
December 31,
2019
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
1,560
|
|
$
|
1,533
|
Accounts and notes
receivable, net of allowance of $42 and $13,
respectively
|
536
|
|
527
|
Inventories,
net
|
96
|
|
84
|
Prepaids and other
current assets
|
72
|
|
52
|
Total current
assets
|
2,264
|
|
2,196
|
Property and
equipment, net of accumulated depreciation and amortization of
$879 and $746, respectively
|
2,031
|
|
2,007
|
Operating lease
assets, net
|
1,152
|
|
1,176
|
Intangible assets,
net
|
10,701
|
|
10,563
|
Goodwill
|
5,739
|
|
5,651
|
Net investment in
property leased to franchisees
|
66
|
|
48
|
Other assets,
net
|
824
|
|
719
|
Total
assets
|
$
|
22,777
|
|
$
|
22,360
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts and drafts
payable
|
$
|
464
|
|
$
|
644
|
Other accrued
liabilities
|
835
|
|
790
|
Gift card
liability
|
191
|
|
168
|
Current portion of
long-term debt and finance leases
|
111
|
|
101
|
Total current
liabilities
|
1,601
|
|
1,703
|
Long-term debt, net
of current portion
|
12,397
|
|
11,759
|
Finance leases, net
of current portion
|
315
|
|
288
|
Operating lease
liabilities, net of current portion
|
1,082
|
|
1,089
|
Other liabilities,
net
|
2,236
|
|
1,698
|
Deferred income
taxes, net
|
1,425
|
|
1,564
|
Total
liabilities
|
19,056
|
|
18,101
|
Commitments and
contingencies
|
|
|
|
Shareholders'
equity:
|
|
|
|
Common shares, no par
value; unlimited shares authorized at December 31,
2020 and December 31, 2019; 304,718,749 shares issued and
outstanding at
December 31, 2020; 298,281,081 shares issued and outstanding at
December
31, 2019
|
2,399
|
|
2,478
|
Retained
earnings
|
622
|
|
775
|
Accumulated other
comprehensive income (loss)
|
(854)
|
|
(763)
|
Total Restaurant
Brands International Inc. shareholders' equity
|
2,167
|
|
2,490
|
Noncontrolling
interests
|
1,554
|
|
1,769
|
Total shareholders'
equity
|
3,721
|
|
4,259
|
Total liabilities and
shareholders' equity
|
$
|
22,777
|
|
$
|
22,360
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash
Flows
(In millions of U.S. dollars)
(Unaudited)
|
Twelve Months
Ended December 31,
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
750
|
|
$
|
1,111
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
189
|
|
185
|
Premiums paid and
non-cash loss on early extinguishment of debt
|
97
|
|
16
|
Amortization of
deferred financing costs and debt issuance discount
|
26
|
|
29
|
(Income) loss from
equity method investments
|
39
|
|
(11)
|
Loss (gain) on
remeasurement of foreign denominated transactions
|
100
|
|
(14)
|
Net (gains) losses on
derivatives
|
32
|
|
(49)
|
Share-based
compensation expense
|
74
|
|
68
|
Deferred income
taxes
|
(208)
|
|
58
|
Other
|
28
|
|
6
|
Changes in current
assets and liabilities, excluding acquisitions and
dispositions:
|
|
|
|
Accounts and notes
receivable
|
(30)
|
|
(53)
|
Inventories and
prepaids and other current assets
|
(10)
|
|
(15)
|
Accounts and drafts
payable
|
(183)
|
|
112
|
Other accrued
liabilities and gift card liability
|
16
|
|
(51)
|
Tenant inducements
paid to franchisees
|
(22)
|
|
(54)
|
Other long-term assets
and liabilities
|
23
|
|
138
|
Net cash provided by
operating activities
|
921
|
|
1,476
|
Cash flows from
investing activities:
|
|
|
|
Payments for property
and equipment
|
(117)
|
|
(62)
|
Net proceeds from
disposal of assets, restaurant closures and
refranchisings
|
12
|
|
8
|
Settlement/sale of
derivatives, net
|
33
|
|
24
|
Other investing
activities, net
|
(7)
|
|
—
|
Net cash used for
investing activities
|
(79)
|
|
(30)
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from issuance
of long-term debt
|
5,235
|
|
2,250
|
Repayments of
long-term debt and finance leases
|
(4,708)
|
|
(2,266)
|
Payment of financing
costs
|
(43)
|
|
(50)
|
Payment of dividends
on common shares and distributions on Partnership
exchangeable units
|
(959)
|
|
(901)
|
Repurchase of
Partnership exchangeable units
|
(380)
|
|
—
|
Proceeds from stock
option exercises
|
82
|
|
102
|
(Payments) proceeds
from derivatives
|
(46)
|
|
23
|
Other financing
activities, net
|
(2)
|
|
—
|
Net cash used for
financing activities
|
(821)
|
|
(842)
|
Effect of exchange
rates on cash and cash equivalents
|
6
|
|
16
|
Increase (decrease) in
cash and cash equivalents
|
27
|
|
620
|
Cash and cash
equivalents at beginning of period
|
1,533
|
|
913
|
Cash and cash
equivalents at end of period
|
$
|
1,560
|
|
$
|
1,533
|
Supplemental cash
flow disclosures:
|
|
|
|
Interest
paid
|
$
|
463
|
|
$
|
584
|
Income taxes
paid
|
$
|
267
|
|
$
|
248
|
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 and company-owned restaurants 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 .
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 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 franchise revenues include royalties based
on a percentage of franchise sales.
Net restaurant growth refers to the net increase/(decrease) 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.
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
KPIs by
Market
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(unaudited)
|
|
(unaudited)
|
System-wide
Sales Growth
|
|
|
|
|
|
|
|
|
|
|
|
TH - Canada
|
|
(14.3)
|
%
|
|
|
(3.3)
|
%
|
|
|
(18.5)
|
%
|
|
|
(0.4)
|
%
|
TH - Rest of
World
|
|
(3.8)
|
%
|
|
|
(0.1)
|
%
|
|
|
(10.7)
|
%
|
|
|
0.5
|
%
|
TH - Global
|
|
(12.9)
|
%
|
|
|
(2.9)
|
%
|
|
|
(17.5)
|
%
|
|
|
(0.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
BK - US
|
|
(3.0)
|
%
|
|
|
1.4
|
%
|
|
|
(5.4)
|
%
|
|
|
2.7
|
%
|
BK - Rest of
World
|
|
(12.1)
|
%
|
|
|
14.5
|
%
|
|
|
(15.8)
|
%
|
|
|
15.3
|
%
|
BK - Global
|
|
(8.1)
|
%
|
|
|
8.4
|
%
|
|
|
(11.1)
|
%
|
|
|
9.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
PLK - US
|
|
(2.0)
|
%
|
|
|
45.0
|
%
|
|
|
20.3
|
%
|
|
|
18.4
|
%
|
PLK - Rest of
World
|
|
7.4
|
%
|
|
|
25.2
|
%
|
|
|
(0.5)
|
%
|
|
|
19.1
|
%
|
PLK -
Global
|
|
(0.9)
|
%
|
|
|
42.3
|
%
|
|
|
17.7
|
%
|
|
|
18.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
System-wide
Sales (in US$ millions)
|
|
|
|
|
|
|
|
|
|
|
|
TH - Canada
|
$
|
1,264
|
|
$
|
1,457
|
|
$
|
4,720
|
|
$
|
5,856
|
TH - Rest of
World
|
$
|
214
|
|
$
|
222
|
|
$
|
768
|
|
$
|
860
|
TH - Global
|
$
|
1,478
|
|
$
|
1,679
|
|
$
|
5,488
|
|
$
|
6,716
|
|
|
|
|
|
|
|
|
|
|
|
|
BK - US
|
$
|
2,489
|
|
$
|
2,565
|
|
$
|
9,657
|
|
$
|
10,204
|
BK - Rest of
World
|
$
|
2,939
|
|
$
|
3,340
|
|
$
|
10,381
|
|
$
|
12,717
|
BK - Global
|
$
|
5,428
|
|
$
|
5,905
|
|
$
|
20,038
|
|
$
|
22,921
|
|
|
|
|
|
|
|
|
|
|
|
|
PLK - US
|
$
|
1,141
|
|
$
|
1,164
|
|
$
|
4,587
|
|
$
|
3,812
|
PLK - Rest of
World
|
$
|
166
|
|
$
|
163
|
|
$
|
556
|
|
$
|
585
|
PLK -
Global
|
$
|
1,307
|
|
$
|
1,327
|
|
$
|
5,143
|
|
$
|
4,397
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable
Sales
|
|
|
|
|
|
|
|
|
|
|
|
TH - Canada
|
|
(11.9)
|
%
|
|
|
(4.6)
|
%
|
|
|
(16.5)
|
%
|
|
|
(1.4)
|
%
|
TH - Rest of
World
|
|
(5.4)
|
%
|
|
|
(2.5)
|
%
|
|
|
(9.9)
|
%
|
|
|
(2.1)
|
%
|
TH - Global
|
|
(11.0)
|
%
|
|
|
(4.3)
|
%
|
|
|
(15.7)
|
%
|
|
|
(1.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
BK - US
|
|
(2.9)
|
%
|
|
|
0.6
|
%
|
|
|
(5.6)
|
%
|
|
|
1.7
|
%
|
BK - Rest of
World
|
|
(11.9)
|
%
|
|
|
4.7
|
%
|
|
|
(10.1)
|
%
|
|
|
4.9
|
%
|
BK - Global
|
|
(7.9)
|
%
|
|
|
2.8
|
%
|
|
|
(7.9)
|
%
|
|
|
3.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
PLK - US
|
|
(6.4)
|
%
|
|
|
37.9
|
%
|
|
|
15.7
|
%
|
|
|
13.0
|
%
|
PLK - Rest of
World
|
|
(1.1)
|
%
|
|
|
10.3
|
%
|
|
|
(2.0)
|
%
|
|
|
5.7
|
%
|
PLK -
Global
|
|
(5.8)
|
%
|
|
|
34.4
|
%
|
|
|
13.8
|
%
|
|
|
12.1
|
%
|
|
As of December
31,
|
KPIs by
Market
|
2020
|
|
2019
|
|
(unaudited)
|
Net Restaurant
Growth
|
|
|
|
TH - Canada
|
(1.9)%
|
|
1.5%
|
TH - Rest of
World
|
10.3%
|
|
3.0%
|
TH - Global
|
0.3%
|
|
1.8%
|
|
|
|
|
BK - US
|
(3.6)%
|
|
0.2%
|
BK - Rest of
World
|
0.5%
|
|
9.8%
|
BK - Global
|
(1.1)%
|
|
5.9%
|
|
|
|
|
PLK - US
|
5.3%
|
|
5.5%
|
PLK - Rest of
World
|
0.4%
|
|
11.3%
|
PLK -
Global
|
4.1%
|
|
6.9%
|
|
|
|
|
Restaurant
Count
|
|
|
|
TH - Canada
|
3,936
|
|
4,014
|
TH - Rest of
World
|
1,013
|
|
918
|
TH - Global
|
4,949
|
|
4,932
|
|
|
|
|
BK - US
|
7,081
|
|
7,346
|
BK - Rest of
World
|
11,544
|
|
11,492
|
BK - Global
|
18,625
|
|
18,838
|
|
|
|
|
PLK - US
|
2,608
|
|
2,476
|
PLK - Rest of
World
|
843
|
|
840
|
PLK -
Global
|
3,451
|
|
3,316
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Supplemental Disclosure
(Unaudited)
Selling, General and Administrative Expenses
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Segment SG&A
TH(1)
|
$
|
73
|
|
$
|
73
|
|
$
|
284
|
|
$
|
309
|
Segment SG&A
BK(1)
|
166
|
|
151
|
|
588
|
|
600
|
Segment SG&A
PLK(1)
|
72
|
|
66
|
|
273
|
|
225
|
Share-based
compensation and non-cash incentive compensation expense
|
21
|
|
12
|
|
84
|
|
74
|
Depreciation and
amortization(2)
|
5
|
|
5
|
|
19
|
|
19
|
Corporate
restructuring and tax advisory fees
|
5
|
|
9
|
|
16
|
|
31
|
Office centralization
and relocation costs
|
—
|
|
—
|
|
—
|
|
6
|
Selling, general and
administrative expenses
|
$
|
342
|
|
$
|
316
|
|
$
|
1,264
|
|
$
|
1,264
|
|
|
(1)
|
Segment SG&A
includes segment selling expenses, including advertising fund
expenses, and segment general and administrative expenses and
excludes share-based compensation and non-cash incentive
compensation expense, depreciation and amortization, corporate
restructuring and tax advisory fees, and office
centralization and relocation costs.
|
(2)
|
Segment depreciation
and amortization reflects depreciation and amortization included in
the respective segment cost of sales and the respective segment
franchise and property expenses. Depreciation and amortization
included in selling, general and administrative expenses reflects
all other depreciation and amortization.
|
Other Operating Expenses (Income), net
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net losses (gains) on
disposal of assets, restaurant
closures, and refranchisings(3)
|
$
|
4
|
|
$
|
8
|
|
$
|
6
|
|
$
|
7
|
Litigation
settlements and reserves, net
|
2
|
|
1
|
|
7
|
|
2
|
Net losses (gains) on
foreign exchange(4)
|
46
|
|
23
|
|
100
|
|
(15)
|
Other, net
|
(6)
|
|
2
|
|
(8)
|
|
(4)
|
Other operating
expenses (income), net
|
$
|
46
|
|
$
|
34
|
|
$
|
105
|
|
$
|
(10)
|
|
|
(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.
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
(Unaudited)
Below, we define the non-GAAP financial measures, provide a
reconciliation of each non-GAAP financial measure to the most
directly comparable financial measure calculated in accordance with
U.S. Generally Accepted Accounting Principles ("GAAP"), and discuss
the reasons why we believe this information is useful to management
and may be useful to investors. These measures do not have
standardized meanings under GAAP and may differ from similarly
captioned measures of other companies in our industry.
Non-GAAP Measures
To supplement our condensed consolidated financial statements
presented on a GAAP basis, RBI reports the following non-GAAP
financial measures: EBITDA, Adjusted EBITDA, Adjusted Net Income,
Adjusted Diluted Earnings per Share ("Adjusted Diluted EPS"),
Organic revenue growth, Organic Adjusted EBITDA growth, Free Cash
Flow, and Net Leverage. We believe that these non-GAAP measures are
useful to investors in assessing our operating performance or
liquidity, as these provide them with the same tools that
management uses to evaluate our performance and is 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 costs
incurred in connection with the centralization and relocation
of our Canadian and U.S. restaurant support centers to new offices
in Toronto, Ontario, and
Miami, Florida, respectively and
from professional advisory and consulting services associated with
certain transformational corporate restructuring initiatives that
rationalize our structure and optimize cash movements, including
consulting services related to the interpretation of final and
proposed regulations and guidance under the Tax Cuts and Jobs Act
(the "Tax Act"). 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 three operating segments.
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
and November 2019, (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 or the
performance of an acquired business.
Net Leverage is defined as net debt (total debt less cash and
cash equivalents) divided by LTM Adjusted EBITDA. Net Leverage is a
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.
Management believes that organic growth is an important metric for
measuring the operating performance of our business as it helps
identify underlying business trends, without distortion from the
effects of FX movements. We calculate the impact of FX movements by
translating prior year results at current year monthly average
exchange rates.
Free Cash Flow is the total of Net cash provided by (used for)
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.
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Organic Growth in Revenue and Adjusted EBITDA
Three and Twelve Months Ended December 31,
2020
(Unaudited)
|
|
|
|
|
|
|
|
|
Impact of
FX
|
|
|
|
|
|
Actual
|
|
Q4 '20 vs. Q4
'19
|
|
Movements
|
|
Organic
Growth
|
(in US$
millions)
|
Q4
'20
|
|
Q4
'19
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
$
|
782
|
|
$
|
872
|
|
$
|
(90)
|
|
(10.4)%
|
|
$
|
10
|
|
$
|
(100)
|
|
(11.4)%
|
BK
|
$
|
434
|
|
$
|
462
|
|
$
|
(28)
|
|
(6.0)%
|
|
$
|
—
|
|
$
|
(28)
|
|
(6.0)%
|
PLK
|
$
|
142
|
|
$
|
145
|
|
$
|
(3)
|
|
(1.7)%
|
|
$
|
—
|
|
$
|
(3)
|
|
(1.5)%
|
Total
Revenues
|
$
|
1,358
|
|
$
|
1,479
|
|
$
|
(121)
|
|
(8.2)%
|
|
$
|
10
|
|
$
|
(131)
|
|
(8.8)%
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
$
|
229
|
|
$
|
297
|
|
$
|
(68)
|
|
(23.2)%
|
|
$
|
3
|
|
$
|
(71)
|
|
(24.1)%
|
BK
|
$
|
218
|
|
$
|
266
|
|
$
|
(48)
|
|
(18.2)%
|
|
$
|
—
|
|
$
|
(48)
|
|
(18.2)%
|
PLK
|
$
|
54
|
|
$
|
59
|
|
$
|
(5)
|
|
(8.3)%
|
|
$
|
—
|
|
$
|
(5)
|
|
(7.8)%
|
Adjusted
EBITDA
|
$
|
501
|
|
$
|
622
|
|
$
|
(121)
|
|
(19.7)%
|
|
$
|
3
|
|
$
|
(124)
|
|
(20.1)%
|
Note: Percentage
changes may not recalculate due to rounding.
|
The change in Adjusted EBITDA during the three months ended
December 31, 2020 compared to the
three months ended December 31, 2019
includes a decrease of $6 million
related to the temporary mismatch between advertising fund revenues
and expenses which had a negative impact of approximately (1.0)% on
the organic Adjusted EBITDA growth rate.
|
|
|
|
|
|
|
|
|
|
Impact of
FX
|
|
|
|
|
|
|
Actual
|
|
2020 vs.
2019
|
|
Movements
|
|
Organic
Growth
|
(in US$
millions)
|
|
2020
|
|
2019
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
|
2,810
|
|
|
$
|
3,344
|
|
|
$
|
(534)
|
|
|
(16.0)
|
%
|
|
$
|
(30)
|
|
|
$
|
(504)
|
|
|
(15.2)
|
%
|
BK
|
|
$
|
1,602
|
|
|
$
|
1,777
|
|
|
$
|
(175)
|
|
|
(9.8)
|
%
|
|
$
|
(18)
|
|
|
$
|
(157)
|
|
|
(8.9)
|
%
|
PLK
|
|
$
|
556
|
|
|
$
|
482
|
|
|
$
|
74
|
|
|
15.3
|
%
|
|
$
|
(1)
|
|
|
$
|
75
|
|
|
15.5
|
%
|
Total
Revenues
|
|
$
|
4,968
|
|
|
$
|
5,603
|
|
|
$
|
(635)
|
|
|
(11.3)
|
%
|
|
$
|
(49)
|
|
|
$
|
(586)
|
|
|
(10.5)
|
%
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
|
823
|
|
|
$
|
1,122
|
|
|
$
|
(299)
|
|
|
(26.7)
|
%
|
|
$
|
(10)
|
|
|
$
|
(289)
|
|
|
(26.0)
|
%
|
BK
|
|
$
|
823
|
|
|
$
|
994
|
|
|
$
|
(171)
|
|
|
(17.2)
|
%
|
|
$
|
(17)
|
|
|
$
|
(154)
|
|
|
(15.8)
|
%
|
PLK
|
|
$
|
218
|
|
|
$
|
188
|
|
|
$
|
30
|
|
|
15.8
|
%
|
|
$
|
(1)
|
|
|
$
|
31
|
|
|
16.5
|
%
|
Adjusted
EBITDA
|
|
$
|
1,864
|
|
|
$
|
2,304
|
|
|
$
|
(440)
|
|
|
(19.1)
|
%
|
|
$
|
(28)
|
|
|
$
|
(412)
|
|
|
(18.1)
|
%
|
Note:
Percentage changes may not recalculate due to rounding.
|
The change in Adjusted EBITDA during the twelve months ended
December 31, 2020 compared to the
twelve months ended December 31, 2019
includes a decrease of $24 million
related to the temporary mismatch between advertising fund revenues
and expenses which had a negative impact of approximately (1.1)% on
the organic Adjusted EBITDA growth rate.
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Reconciliation of EBITDA and Adjusted EBITDA to Net Income
(Unaudited)
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in US$
millions)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Segment
income:
|
|
|
|
|
|
|
|
TH
|
$
|
229
|
|
$
|
297
|
|
$
|
823
|
|
$
|
1,122
|
BK
|
218
|
|
266
|
|
823
|
|
994
|
PLK
|
54
|
|
59
|
|
218
|
|
188
|
Adjusted
EBITDA
|
501
|
|
622
|
|
1,864
|
|
2,304
|
Share-based
compensation and non-cash incentive
compensation expense(1)
|
21
|
|
12
|
|
84
|
|
74
|
Corporate
restructuring and tax advisory fees(2)
|
5
|
|
9
|
|
16
|
|
31
|
Office centralization
and relocation costs(3)
|
—
|
|
—
|
|
—
|
|
6
|
Impact of equity
method investments(4)
|
6
|
|
10
|
|
48
|
|
11
|
Other operating
expenses (income), net
|
46
|
|
34
|
|
105
|
|
(10)
|
EBITDA
|
423
|
|
557
|
|
1,611
|
|
2,192
|
Depreciation and
amortization
|
50
|
|
46
|
|
189
|
|
185
|
Income from
operations
|
373
|
|
511
|
|
1,422
|
|
2,007
|
Interest expense,
net
|
132
|
|
126
|
|
508
|
|
532
|
Loss on early
extinguishment of debt
|
98
|
|
19
|
|
98
|
|
23
|
Income tax
expense(5)(6)
|
4
|
|
109
|
|
66
|
|
341
|
Net income
|
$
|
139
|
|
$
|
257
|
|
$
|
750
|
|
$
|
1,111
|
Reconciliation of Net Income to Adjusted Net
Income and Adjusted Diluted EPS
(Unaudited)
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in US$ millions,
except per share data)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
|
$
|
139
|
|
$
|
257
|
|
$
|
750
|
|
$
|
1,111
|
Income tax
expense(5)(6)
|
4
|
|
109
|
|
66
|
|
341
|
Income before income
taxes
|
143
|
|
366
|
|
816
|
|
1,452
|
Adjustments:
|
|
|
|
|
|
|
|
Franchise agreement
amortization
|
8
|
|
8
|
|
33
|
|
31
|
Amortization of
deferred financing costs and debt
issuance discount
|
7
|
|
7
|
|
26
|
|
29
|
Interest expense and
loss on extinguished debt(7)
|
106
|
|
24
|
|
129
|
|
37
|
Corporate
restructuring and tax advisory fees(2)
|
5
|
|
9
|
|
16
|
|
31
|
Office centralization
and relocation costs(3)
|
—
|
|
—
|
|
—
|
|
6
|
Impact of equity
method investments(4)
|
6
|
|
10
|
|
48
|
|
11
|
Other operating
expenses (income), net
|
46
|
|
34
|
|
105
|
|
(10)
|
Total
adjustments
|
178
|
|
92
|
|
357
|
|
135
|
Adjusted income
before income taxes
|
321
|
|
458
|
|
1,173
|
|
1,587
|
Adjusted income tax
expense(5)(6)(8)
|
74
|
|
107
|
|
225
|
|
313
|
Adjusted net
income
|
$
|
247
|
|
$
|
351
|
|
$
|
948
|
|
$
|
1,274
|
Adjusted diluted
earnings per share
|
$
|
0.53
|
|
$
|
0.75
|
|
$
|
2.03
|
|
$
|
2.72
|
Weighted average
diluted shares outstanding
|
464
|
|
469
|
|
468
|
|
469
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Reconciliation of Net Leverage and Free Cash Flow
(Unaudited)
|
As of
December 31,
|
(in US$ millions,
except ratio)
|
2020
|
|
2019
|
Term debt, net of
current portion
|
$
|
12,397
|
|
$
|
11,759
|
Finance leases, net of
current portion
|
315
|
|
288
|
Current portion of
long term debt and finance leases
|
111
|
|
101
|
Unamortized deferred
financing costs and deferred issue discount
|
155
|
|
148
|
Total
debt
|
$
|
12,978
|
|
$
|
12,296
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,560
|
|
$
|
1,533
|
Net debt
|
11,418
|
|
10,763
|
Adjusted
EBITDA
|
1,864
|
|
2,304
|
Net
leverage
|
6.1x
|
|
4.7x
|
|
Twelve Months
Ended
December 31,
|
(in US$
millions)
|
2020
|
|
2019
|
Net cash provided by
operating activities
|
$
|
921
|
|
$
|
1,476
|
Payments for property
and equipment
|
(117)
|
|
(62)
|
Free cash
flow
|
$
|
804
|
|
$
|
1,414
|
|
Twelve
Months
Ended
December
31,
|
|
Nine
Months
Ended
September
30,
|
|
Three
Months
Ended
December
31,
|
(in US$
millions)
|
2020
|
|
2020
|
|
2020
|
Calculation:
|
A
|
|
B
|
|
A - B
|
Net cash provided by
operating activities
|
$
|
921
|
|
$
|
608
|
|
$
|
313
|
Payments for property
and equipment
|
(117)
|
|
(71)
|
|
(46)
|
Free cash
flow
|
$
|
804
|
|
$
|
537
|
|
$
|
267
|
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 2019 and 2020 cash bonus, respectively.
|
|
|
(2)
|
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 consulting services related to the
interpretation of final and proposed regulations and guidance under
the Tax Cuts and Jobs Act (the "Tax Act").
|
|
|
(3)
|
In connection with
the centralization and relocation of our Canadian and U.S.
restaurant support centers to new offices in Toronto, Ontario, and
Miami, Florida, respectively, we incurred certain non-operational
expenses consisting primarily of duplicate rent expense, moving
costs, and relocation-driven compensation expenses.
|
|
|
(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)
|
The effective tax
rate for the twelve months ended December 31, 2020 reflects a $105
million increase in deferred tax assets, consisting of $64 million
related to the analysis of final guidance related to the Tax Act
received during 2020 and $41 million due to Swiss tax reform
transition relief. This increase in deferred tax assets reduced the
effective tax rate by 12.9% during 2020. The effective tax rate for
the twelve months ended December 31, 2019 reflects a $37 million
income tax expense provision adjustment related to a prior
restructuring transaction not applicable to ongoing operations
which increased our effective tax rate by 2.5% during 2019.
Adjusted income tax expense excludes the impact of these
adjustments.
|
|
|
(6)
|
The effective tax
rate was reduced by 0.3% and 2.2% for the twelve months ended
December 31, 2020 and 2019, respectively, and our adjusted
effective tax rate was reduced by 0.2% and 2.0% for the
twelve months ended December 31, 2020 and 2019, respectively, as a
result of benefits from stock option exercises.
|
|
|
(7)
|
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 and November 2019.
|
|
|
(8)
|
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.
|
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SOURCE Restaurant Brands International Inc.