Global system-wide sales grew 11%
year-over-year and accelerated sequentially to +5% compared to
2019
Burger King international system-wide sales grew 25% year-over-year
and +10% compared to 2019
Year-to-date unit growth and pipeline keep RBI on track to return
to pre-pandemic levels in 2021 and accelerate in 2022
Returned over $425 million of capital
to shareholders through dividends and share buybacks
Announced commitment to reduce greenhouse gas emissions 50% by 2030
and reach net zero emissions by 2050 or sooner
TORONTO, Oct. 25, 2021 /PRNewswire/ - Restaurant Brands
International Inc. (TSX: QSR) (NYSE: QSR) (TSX: QSP) today reported
financial results for the third quarter ended September 30, 2021.
José Cil, Chief Executive Officer of Restaurant Brands
International Inc. ("RBI") commented, "Our results this quarter
reflect the value of having a diversified business model across
three brands and in over 100 countries. Overall, we saw a continued
acceleration in system-wide-sales growth relative to 2019,
reflecting improvements in the Tim Hortons Canada business as well
as strength across each of our brand's international
businesses. Our strong restaurant growth this year and
exciting development pipeline keep us on track to return to
pre-pandemic unit growth levels this year and well positioned to
accelerate in 2022 as we continue on our path to 40,000 restaurants
around the world. This quarter, we also took important steps to
focus our attention on the most significant opportunities at Burger
King U.S. to drive long-term, sustainable growth in the
business."
Cil continued, "Our highly efficient business model once again
generated strong free cash flow, enabling us to continue investing
in our business while also enhancing shareholder returns through
both our dividend and recently expanded $1
billion share repurchase program. During the quarter, we
returned over $425 million of capital
to shareholders, including repurchasing just over $180 million of common stock, reflecting the
confidence we have in our long-term outlook and the intrinsic value
of our scalable business."
Cil concluded, "Our big goal is to drive business growth without
carbon growth. I'm so proud of the team's work to set ambitious
goals to reduce our carbon footprint in the world. We have exciting
and important sustainability projects underway across the company,
in green building standards, packaging, recycling, growing our
charitable Foundations and doing the hard work with our suppliers
and franchisees to improve the environmental footprint we have in
the world."
Consolidated
Operational Highlights
|
|
Three Months Ended
September 30,
|
|
|
2021
|
|
|
2020
|
|
|
(Unaudited)
|
System-wide Sales
Growth
|
|
|
|
|
|
TH
|
|
11.1 %
|
|
|
|
(13.7) %
|
|
BK
|
|
12.3 %
|
|
|
|
(7.9) %
|
|
PLK
|
|
4.4 %
|
|
|
|
21.5 %
|
|
Consolidated
|
|
10.8 %
|
|
|
|
(5.4) %
|
|
System-wide Sales (in
US$ millions)
|
|
|
|
|
|
TH
|
$
|
1,774
|
|
|
$
|
1,520
|
|
BK
|
$
|
6,212
|
|
|
$
|
5,484
|
|
PLK
|
$
|
1,392
|
|
|
$
|
1,331
|
|
Consolidated
|
$
|
9,378
|
|
|
$
|
8,335
|
|
Net Restaurant
Growth
|
|
|
|
|
|
TH
|
|
4.1 %
|
|
|
|
1.0 %
|
|
BK
|
|
1.3 %
|
|
|
|
2.4 %
|
|
PLK
|
|
5.5 %
|
|
|
|
7.1 %
|
|
Consolidated
|
|
2.4 %
|
|
|
|
2.7 %
|
|
System Restaurant
Count at Period End
|
|
|
|
|
|
TH
|
|
5,137
|
|
|
|
4,934
|
|
BK
|
|
18,923
|
|
|
|
18,675
|
|
PLK
|
|
3,607
|
|
|
|
3,418
|
|
Consolidated
|
|
27,667
|
|
|
|
27,027
|
|
Comparable
Sales
|
|
|
|
|
|
TH
|
|
8.9 %
|
|
|
|
(12.5) %
|
|
BK
|
|
7.9 %
|
|
|
|
(7.0) %
|
|
PLK
|
|
(2.4) %
|
|
|
|
17.4 %
|
|
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
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
September 30,
|
(in US$ millions,
except per share data)
|
2021
|
|
2020
|
|
(Unaudited)
|
Total
Revenues
|
$
|
1,495
|
|
|
$
|
1,337
|
|
Net Income
Attributable to Common Shareholders and Noncontrolling
Interests
|
$
|
328
|
|
|
$
|
223
|
|
Diluted Earnings per
Share
|
$
|
0.70
|
|
|
$
|
0.47
|
|
|
|
|
|
TH Adjusted
EBITDA(1)
|
$
|
278
|
|
|
$
|
258
|
|
BK Adjusted
EBITDA(1)
|
$
|
272
|
|
|
$
|
245
|
|
PLK Adjusted
EBITDA(1)
|
$
|
57
|
|
|
$
|
58
|
|
Adjusted
EBITDA(2)
|
$
|
607
|
|
|
$
|
561
|
|
|
|
|
|
Adjusted Net
Income(2)
|
$
|
353
|
|
|
$
|
320
|
|
Adjusted Diluted
Earnings per Share(2)
|
$
|
0.76
|
|
|
$
|
0.68
|
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
(Unaudited)
|
Net cash provided by
operating activities
|
$
|
1,255
|
|
|
$
|
608
|
|
Net cash (used for)
provided by investing activities
|
$
|
(69)
|
|
|
$
|
(33)
|
|
Net cash (used for)
provided by financing activities
|
$
|
(970)
|
|
|
$
|
(182)
|
|
|
|
|
|
LTM Free Cash
Flow(2)
|
$
|
1,452
|
|
|
$
|
1,072
|
|
Net Debt
|
$
|
11,185
|
|
|
$
|
10,931
|
|
Net
Leverage(2)
|
5.2x
|
|
|
5.5x
|
|
(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, LTM 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 increase in Total Revenues on an as reported
and on an organic basis was primarily driven by an increase in
system-wide sales in all of our brands. System-wide sales were more
severely impacted by COVID-19 (defined below) during the three
months ended September 30, 2020 than
in the same period in 2021. Favorable FX movements also contributed
to the year-over-year increase in Total Revenues on an as reported
basis.
The increase in Net Income Attributable to Common Shareholders
and Noncontrolling Interests for the third quarter was primarily
driven by increases in segment income in our BK and TH segments and
a favorable change in the results from other operating expenses
(income), net.
The year-over-year increase in Adjusted EBITDA on an as reported
and on an organic basis was primarily driven by increases in
Tim Hortons and Burger King Adjusted
EBITDA.
The year-over-year increase in Adjusted Net Income was primarily
driven by the increase in Adjusted EBITDA in our TH and BK brands,
partially offset by an increase in adjusted income tax
expense. Refer to "Non-GAAP Financial Measures" footnote four
and six for further details on income tax expense.
COVID-19
The global crisis resulting from the spread of coronavirus
("COVID-19") impacted our global restaurant operations for the
three and nine months ended September 30,
2021 and 2020.
While the impact of COVID-19 on system-wide sales growth,
system-wide sales, comparable sales and net restaurant growth was
significant for the three and nine months ended September 30, 2020, in the 2021 periods these
metrics were affected to a lesser extent, with variations among
brands and regions. During 2020 and the nine months ended
September 30, 2021, substantially all
TH, BK and PLK restaurants remained open in the U.S. and
Canada, some with limited
operations, such as drive-thru, takeout and delivery (where
applicable), reduced, if any, dine-in capacity, and/or restrictions
on hours of operation. During the three months ended September 30, 2021, on average 97% of our
restaurants were open worldwide, including approximately 98% of our
restaurants in the U.S. and Canada
and approximately 96% of our restaurants in the rest of the world.
By contrast, during the three months ended September 30, 2020, on average 94% of our
restaurants were open worldwide, including approximately 97% of our
restaurants in the U.S. and Canada
and approximately 91% of our restaurants in the rest of the world.
During the nine months ended September 30,
2020, a number of markets required temporary complete
closures while implementing lockdown orders. While many regions
have since eased restrictions, certain markets continue to be
impacted and re-imposed restrictions in the nine months ended
September 30, 2021. We expect local
conditions to continue to dictate limitations on restaurant
operations, capacity, and hours of operation.
During the three and nine months ended September 30, 2021, COVID-19 contributed to labor
challenges, which in some regions resulted in reduced operating
hours and service modes at select restaurants as well as supply
chain pressures.
With the pandemic affecting consumer behavior, the importance of
digital sales, including delivery, has grown. We expect to continue
to support enhancements of our digital and marketing capabilities.
While we do not know the full future impact COVID-19 will have on
our business, we expect to see a continued impact from COVID-19 on
our results in 2021.
Reclassification of Advertising Revenues and Expenses
Certain prior year amounts in the statement of operations and
accompanying segment results have been reclassified in order to be
comparable with the current year classifications. These consist of
the quarter and year to date September 30,
2020 reclassification of advertising fund contributions from
Franchise and property revenues to Advertising revenues and
advertising fund expenses from Selling, general and administrative
expenses to Advertising expenses, with General and administrative
expenses now presented separately. Depreciation and amortization
expenses related to the advertising funds have also been
reclassified from Franchise and property expenses to Advertising
expenses. These reclassifications did not arise as a result of any
changes to accounting policies and relate entirely to presentation
with no effect on previously reported net income.
TH Segment Results
|
Three Months Ended
September 30,
|
(in US$
millions)
|
2021
|
|
2020
|
|
(Unaudited)
|
System-wide Sales
Growth
|
|
11.1 %
|
|
|
(13.7)%
|
System-wide
Sales
|
$
|
1,774
|
|
$
|
1,520
|
Comparable
Sales
|
|
8.9 %
|
|
|
(12.5)%
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
4.1 %
|
|
|
1.0 %
|
System Restaurant
Count at Period End
|
|
5,137
|
|
|
4,934
|
|
|
|
|
|
|
Sales
|
$
|
592
|
|
$
|
506
|
Franchise and
Property Revenues
|
$
|
230
|
|
$
|
205
|
Advertising
Revenues
|
$
|
63
|
|
$
|
51
|
Total
Revenues
|
$
|
885
|
|
$
|
762
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
462
|
|
$
|
388
|
Franchise and
Property Expenses
|
$
|
84
|
|
$
|
80
|
Advertising
Expenses
|
$
|
67
|
|
$
|
46
|
Segment
G&A
|
$
|
27
|
|
$
|
20
|
Segment Depreciation
and Amortization
|
$
|
31
|
|
$
|
28
|
Adjusted
EBITDA(1)(3)
|
$
|
278
|
|
$
|
258
|
(3)
|
TH Adjusted EBITDA
includes $3 million and $2 million of cash distributions received
from equity method investments for the three months ended September
30, 2021 and 2020, respectively.
|
For the third quarter of 2021, the increase in system-wide sales
was primarily driven by comparable sales of 8.9%, including
Canada comparable sales of 9.5%,
as well as a decrease in the impact of temporary closures of
certain restaurants related to the COVID-19 pandemic, and net
restaurant growth of 4.1%.
The year-over-year increase in Total Revenues on an as reported
and on an organic basis was primarily driven by an increase in
system-wide sales. This increase in Total Revenues was also driven
by favorable FX movements on an as reported basis.
The year-over-year increase in Adjusted EBITDA on an as reported
and on an organic basis was primarily driven by an increase in
system-wide sales, partially offset by advertising fund expenses
exceeding advertising revenues in the current year compared to
advertising revenues exceeding advertising fund expenses in the
prior year and an increase in Segment G&A. This increase in
Adjusted EBITDA was also driven by favorable FX movements on an as
reported basis.
BK Segment Results
|
Three Months Ended
September 30,
|
(in US$
millions)
|
2021
|
|
2020
|
|
(Unaudited)
|
System-wide Sales
Growth
|
|
12.3 %
|
|
|
(7.9) %
|
System-wide
Sales
|
$
|
6,212
|
|
$
|
5,484
|
Comparable
Sales
|
|
7.9 %
|
|
|
(7.0) %
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
1.3 %
|
|
|
2.4 %
|
System Restaurant
Count at Period End
|
|
18,923
|
|
|
18,675
|
|
|
|
|
|
|
Sales
|
$
|
16
|
|
$
|
17
|
Franchise and
Property Revenues
|
$
|
337
|
|
$
|
305
|
Advertising
Revenues
|
$
|
114
|
|
$
|
111
|
Total
Revenues
|
$
|
467
|
|
$
|
433
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
16
|
|
$
|
16
|
Franchise and
Property Expenses
|
$
|
34
|
|
$
|
42
|
Advertising
Expenses
|
$
|
110
|
|
$
|
105
|
Segment
G&A
|
$
|
47
|
|
$
|
37
|
Segment Depreciation
and Amortization
|
$
|
12
|
|
$
|
13
|
Adjusted
EBITDA(1)
|
$
|
272
|
|
$
|
245
|
For the third quarter of 2021, the increase in system-wide sales
was driven by comparable sales of 7.9%, including rest of the world
comparable sales of 16.2% and a decrease in US comparable sales of
(1.6)%, as well as a decrease in the impact of temporary closures
of certain restaurants related to the COVID-19 pandemic, and net
restaurant growth of 1.3%.
The year-over-year change in Total Revenues on an as reported
and on an organic basis was primarily driven by the increase in
system-wide sales. This increase in Total Revenues was also driven
by favorable FX movements on an as reported basis.
The year-over-year change in Adjusted EBITDA on an as reported
and on an organic basis was primarily driven by the increase in
system-wide sales and bad debt recoveries in the current year
compared to bad debt expense in the prior year, partially offset by
an increase in Segment G&A. This increase in Adjusted EBITDA
was also driven by favorable FX movements on an as reported
basis.
PLK Segment Results
|
Three Months Ended
September 30,
|
(in US$
millions)
|
2021
|
|
2020
|
|
(Unaudited)
|
System-wide Sales
Growth
|
|
4.4 %
|
|
|
21.5 %
|
System-wide
Sales
|
$
|
1,392
|
|
$
|
1,331
|
Comparable
Sales
|
|
(2.4) %
|
|
|
17.4 %
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
5.5 %
|
|
|
7.1 %
|
System Restaurant
Count at Period End
|
|
3,607
|
|
|
3,418
|
|
|
|
|
|
|
Sales
|
$
|
13
|
|
$
|
18
|
Franchise and
Property Revenues
|
$
|
72
|
|
$
|
67
|
Advertising
Revenues
|
$
|
58
|
|
$
|
57
|
Total
Revenues
|
$
|
143
|
|
$
|
142
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
12
|
|
$
|
14
|
Franchise and
Property Expenses
|
$
|
3
|
|
$
|
3
|
Advertising
Expenses
|
$
|
60
|
|
$
|
58
|
Segment
G&A
|
$
|
15
|
|
$
|
12
|
Segment Depreciation
and Amortization
|
$
|
2
|
|
$
|
2
|
Adjusted
EBITDA(1)
|
$
|
57
|
|
$
|
58
|
For the third quarter of 2021, the increase in system-wide sales
growth was driven by net restaurant growth of 5.5% and, to a lesser
extent, a decrease in the impact of temporary closures of
certain restaurants related to the COVID-19 pandemic, partially
offset by a decrease in comparable sales of (2.4)%, including a
decrease in US comparable sales of (4.5)%.
Total Revenues and Adjusted EBITDA on an as reported and on an
organic basis were consistent year-over-year.
Cash and Liquidity
As of September 30, 2021, total debt was $13.0 billion, net debt (total debt less cash and
cash equivalents of $1.8 billion) was
$11.2 billion, and net leverage was
5.2x. During the third quarter we issued $800 million of 3.875% First Lien Notes due 2028
and redeemed $775 million of our
4.25% First Lien Notes due 2024. During the third quarter we
also repurchased 2.8 million RBI common shares for $182 million under our $1
billion share repurchase program and as of
September 30, 2021 had $818
million remaining under the authorization.
The RBI Board of Directors has declared a dividend of
$0.53 per common share and
partnership exchangeable unit of Restaurant Brands International
Limited Partnership for the third quarter of 2021. The dividend
will be payable on January 5, 2022 to shareholders and
unitholders of record at the close of business on December 21,
2021.
Investor Conference Call
We will host an investor conference call and webcast at
8:30 a.m. Eastern Time on Monday,
October 25, 2021, to review financial results for the third
quarter ended September 30, 2021. 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.
Contacts
Investors: investor@rbi.com
Media: media@rbi.com
About Restaurant Brands International Inc.
Restaurant Brands International Inc. is one of the world's
largest quick service restaurant companies with approximately
$34 billion in annual system-wide
sales and over 27,000 restaurants in more than 100 countries. 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.
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 COVID-19 pandemic on our results of
operations, business, liquidity, prospects and restaurant
operations and those of our franchisees, including local conditions
and government-imposed limitations and restrictions, and our
ability to continue to navigate the impact of the pandemic, our
long-term growth goals, outlook and prospects, our investments in
digital and marketing initiatives, our ability to continue to
return capital to our shareholders through dividends and share
repurchases, our ability to grow throughout 2021 at pre-pandemic
levels and accelerate growth into 2022 and the impact of our
year-to-date growth and development pipeline on that future growth,
our ability to achieve our long-term restaurant growth goals, and
our goals with respect to reduction in greenhouse gas emissions.
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 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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues:
|
|
|
|
|
|
|
|
Sales
|
$
|
621
|
|
|
$
|
541
|
|
|
$
|
1,718
|
|
|
$
|
1,450
|
|
Franchise and property
revenues
|
639
|
|
|
577
|
|
|
1,801
|
|
|
1,552
|
|
Advertising
revenues
|
235
|
|
|
219
|
|
|
674
|
|
|
608
|
|
Total
revenues
|
1,495
|
|
|
1,337
|
|
|
4,193
|
|
|
3,610
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
Cost of
sales
|
490
|
|
|
418
|
|
|
1,358
|
|
|
1,156
|
|
Franchise and property
expenses
|
121
|
|
|
125
|
|
|
358
|
|
|
380
|
|
Advertising
expenses
|
237
|
|
|
209
|
|
|
711
|
|
|
638
|
|
General and
administrative expenses
|
123
|
|
|
96
|
|
|
341
|
|
|
292
|
|
(Income) loss from
equity method investments
|
7
|
|
|
18
|
|
|
12
|
|
|
36
|
|
Other operating
expenses (income), net
|
(16)
|
|
|
54
|
|
|
(50)
|
|
|
59
|
|
Total operating costs
and expenses
|
962
|
|
|
920
|
|
|
2,730
|
|
|
2,561
|
|
Income from
operations
|
533
|
|
|
417
|
|
|
1,463
|
|
|
1,049
|
|
Interest expense,
net
|
128
|
|
|
129
|
|
|
378
|
|
|
376
|
|
Loss on early
extinguishment of debt
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
Income before income
taxes
|
394
|
|
|
288
|
|
|
1,074
|
|
|
673
|
|
Income tax
expense
|
65
|
|
|
65
|
|
|
83
|
|
|
62
|
|
Net income
|
329
|
|
|
223
|
|
|
991
|
|
|
611
|
|
Net income
attributable to noncontrolling interests
|
108
|
|
|
78
|
|
|
332
|
|
|
216
|
|
Net income
attributable to common shareholders
|
$
|
221
|
|
|
$
|
145
|
|
|
$
|
659
|
|
|
$
|
395
|
|
Earnings per common
share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.71
|
|
|
$
|
0.48
|
|
|
$
|
2.14
|
|
|
$
|
1.31
|
|
Diluted
|
$
|
0.70
|
|
|
$
|
0.47
|
|
|
$
|
2.12
|
|
|
$
|
1.30
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
Basic
|
311
|
|
|
303
|
|
|
308
|
|
|
301
|
|
Diluted
|
465
|
|
|
470
|
|
|
465
|
|
|
469
|
|
Cash dividends
declared per common share
|
$
|
0.53
|
|
|
$
|
0.52
|
|
|
$
|
1.59
|
|
|
$
|
1.56
|
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In millions of U.S. dollars, except share data)
(Unaudited)
|
As
of
|
|
September 30,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
1,773
|
|
|
$
|
1,560
|
|
Accounts and notes
receivable, net of allowance of $18 and $42,
respectively
|
537
|
|
|
536
|
|
Inventories,
net
|
96
|
|
|
96
|
|
Prepaids and other
current assets
|
178
|
|
|
72
|
|
Total current
assets
|
2,584
|
|
|
2,264
|
|
Property and
equipment, net of accumulated depreciation
and amortization of $963 and $879, respectively
|
2,013
|
|
|
2,031
|
|
Operating lease
assets, net
|
1,118
|
|
|
1,152
|
|
Intangible assets,
net
|
10,652
|
|
|
10,701
|
|
Goodwill
|
5,743
|
|
|
5,739
|
|
Net investment in
property leased to franchisees
|
79
|
|
|
66
|
|
Other assets,
net
|
739
|
|
|
824
|
|
Total
assets
|
$
|
22,928
|
|
|
$
|
22,777
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts and drafts
payable
|
$
|
592
|
|
|
$
|
464
|
|
Other accrued
liabilities
|
910
|
|
|
835
|
|
Gift card
liability
|
137
|
|
|
191
|
|
Current portion of
long-term debt and finance leases
|
113
|
|
|
111
|
|
Total current
liabilities
|
1,752
|
|
|
1,601
|
|
Long-term debt, net
of current portion
|
12,379
|
|
|
12,397
|
|
Finance leases, net
of current portion
|
328
|
|
|
315
|
|
Operating lease
liabilities, net of current portion
|
1,056
|
|
|
1,082
|
|
Other liabilities,
net
|
1,898
|
|
|
2,236
|
|
Deferred income
taxes, net
|
1,407
|
|
|
1,425
|
|
Total
liabilities
|
18,820
|
|
|
19,056
|
|
Shareholders'
equity:
|
|
|
|
Common shares, no par
value; unlimited shares authorized at September 30, 2021
and December 31, 2020; 315,065,839 shares issued and
outstanding at September 30, 2021;
304,718,749 shares issued and outstanding at December 31,
2020
|
2,490
|
|
|
2,399
|
|
Retained
earnings
|
779
|
|
|
622
|
|
Accumulated other
comprehensive income (loss)
|
(753)
|
|
|
(854)
|
|
Total Restaurant
Brands International Inc. shareholders' equity
|
2,516
|
|
|
2,167
|
|
Noncontrolling
interests
|
1,592
|
|
|
1,554
|
|
Total shareholders'
equity
|
4,108
|
|
|
3,721
|
|
Total liabilities and
shareholders' equity
|
$
|
22,928
|
|
|
$
|
22,777
|
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of Cash
Flows
(In millions of U.S. dollars)
(Unaudited)
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
991
|
|
|
$
|
611
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
150
|
|
|
139
|
|
Premiums paid and
non-cash loss on early extinguishment of debt
|
11
|
|
|
—
|
|
Amortization of
deferred financing costs and debt issuance discount
|
20
|
|
|
19
|
|
(Income) loss from
equity method investments
|
12
|
|
|
36
|
|
(Gain) loss on
remeasurement of foreign denominated transactions
|
(58)
|
|
|
54
|
|
Net (gains) losses on
derivatives
|
65
|
|
|
14
|
|
Share-based
compensation expense
|
62
|
|
|
55
|
|
Deferred income
taxes
|
35
|
|
|
(120)
|
|
Other
|
(14)
|
|
|
23
|
|
Changes in current
assets and liabilities, excluding acquisitions and
dispositions:
|
|
|
|
Accounts and notes
receivable
|
11
|
|
|
(83)
|
|
Inventories and
prepaids and other current assets
|
(3)
|
|
|
(21)
|
|
Accounts and drafts
payable
|
129
|
|
|
(110)
|
|
Other accrued
liabilities and gift card liability
|
(78)
|
|
|
(12)
|
|
Tenant inducements
paid to franchisees
|
(5)
|
|
|
(7)
|
|
Other long-term assets
and liabilities
|
(73)
|
|
|
10
|
|
Net cash provided by
operating activities
|
1,255
|
|
|
608
|
|
Cash flows from
investing activities:
|
|
|
|
Payments for property
and equipment
|
(70)
|
|
|
(71)
|
|
Net proceeds from
disposal of assets, restaurant closures, and
refranchisings
|
14
|
|
|
9
|
|
Settlement/sale of
derivatives, net
|
2
|
|
|
29
|
|
Other investing
activities, net
|
(15)
|
|
|
—
|
|
Net cash (used for)
provided by investing activities
|
(69)
|
|
|
(33)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
revolving line of credit and long-term debt
|
802
|
|
|
1,585
|
|
Repayments of
revolving line of credit, long-term debt and finance
leases
|
(865)
|
|
|
(1,071)
|
|
Payment of financing
costs
|
(7)
|
|
|
(10)
|
|
Payment of dividends
on common shares and distributions on Partnership exchangeable
units
|
(730)
|
|
|
(716)
|
|
Repurchase of common
shares
|
(182)
|
|
|
—
|
|
Proceeds from stock
option exercises
|
60
|
|
|
60
|
|
(Payments) proceeds
from derivatives
|
(45)
|
|
|
(29)
|
|
Other financing
activities, net
|
(3)
|
|
|
(1)
|
|
Net cash (used for)
provided by financing activities
|
(970)
|
|
|
(182)
|
|
Effect of exchange
rates on cash and cash equivalents
|
(3)
|
|
|
(7)
|
|
Increase (decrease) in
cash and cash equivalents
|
213
|
|
|
386
|
|
Cash and cash
equivalents at beginning of period
|
1,560
|
|
|
1,533
|
|
Cash and cash
equivalents at end of period
|
$
|
1,773
|
|
|
$
|
1,919
|
|
Supplemental cash
flow disclosures:
|
|
|
|
Interest
paid
|
$
|
281
|
|
|
$
|
315
|
|
Income taxes
paid
|
$
|
189
|
|
|
$
|
163
|
|
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 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 ("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.
|
Three Months Ended
September 30,
|
KPIs by
Market
|
2021
|
|
2020
|
|
(Unaudited)
|
System-wide
Sales Growth
|
|
|
|
|
|
TH -
Canada
|
|
9.8 %
|
|
|
(15.2) %
|
TH - Rest of
World
|
|
19.7 %
|
|
|
(2.7) %
|
TH -
Global
|
|
11.1 %
|
|
|
(13.7) %
|
|
|
|
|
|
|
BK - US
|
|
(2.4) %
|
|
|
(3.0) %
|
BK - Rest of
World
|
|
25.2 %
|
|
|
(11.9) %
|
BK -
Global
|
|
12.3 %
|
|
|
(7.9) %
|
|
|
|
|
|
|
PLK - US
|
|
1.3 %
|
|
|
24.1 %
|
PLK - Rest of
World
|
|
28.3 %
|
|
|
4.5 %
|
PLK -
Global
|
|
4.4%
|
|
|
21.5 %
|
|
|
|
|
|
|
System-wide
Sales (in US$ millions)
|
|
|
|
|
|
TH -
Canada
|
$
|
1,521
|
|
$
|
1,310
|
TH - Rest of
World
|
$
|
253
|
|
$
|
210
|
TH -
Global
|
$
|
1,774
|
|
$
|
1,520
|
|
|
|
|
|
|
BK - US
|
$
|
2,530
|
|
$
|
2,591
|
BK - Rest of
World
|
$
|
3,682
|
|
$
|
2,893
|
BK -
Global
|
$
|
6,212
|
|
$
|
5,484
|
|
|
|
|
|
|
PLK - US
|
$
|
1,194
|
|
$
|
1,178
|
PLK - Rest of
World
|
$
|
198
|
|
$
|
153
|
PLK -
Global
|
$
|
1,392
|
|
$
|
1,331
|
|
|
|
|
|
|
Comparable
Sales
|
|
|
|
|
|
TH -
Canada
|
|
9.5 %
|
|
|
(13.7) %
|
TH - Rest of
World
|
|
4.5 %
|
|
|
(3.6) %
|
TH -
Global
|
|
8.9 %
|
|
|
(12.5) %
|
|
|
|
|
|
|
BK - US
|
|
(1.6) %
|
|
|
(3.2) %
|
BK - Rest of
World
|
|
16.2 %
|
|
|
(10.3) %
|
BK -
Global
|
|
7.9 %
|
|
|
(7.0) %
|
|
|
|
|
|
|
PLK - US
|
|
(4.5) %
|
|
|
19.7 %
|
PLK - Rest of
World
|
|
14.8 %
|
|
|
(0.3) %
|
PLK -
Global
|
|
(2.4) %
|
|
|
17.4 %
|
|
As
of
|
KPIs by
Market
|
September 30,
2021
|
|
September 30,
2020
|
|
(Unaudited)
|
Net Restaurant
Growth
|
|
|
|
TH -
Canada
|
(1.0) %
|
|
(0.3) %
|
TH - Rest of
World
|
25.6 %
|
|
6.4 %
|
TH -
Global
|
4.1 %
|
|
1.0 %
|
|
|
|
|
BK - US
|
(1.7) %
|
|
(1.1) %
|
BK - Rest of
World
|
3.2 %
|
|
4.8 %
|
BK -
Global
|
1.3 %
|
|
2.4 %
|
|
|
|
|
PLK - US
|
5.6 %
|
|
5.8 %
|
PLK - Rest of
World
|
5.4 %
|
|
11.0 %
|
PLK -
Global
|
5.5 %
|
|
7.1 %
|
|
|
|
|
Restaurant
Count
|
|
|
|
TH -
Canada
|
3,940
|
|
3,981
|
TH - Rest of
World
|
1,197
|
|
953
|
TH -
Global
|
5,137
|
|
4,934
|
|
|
|
|
BK - US
|
7,093
|
|
7,216
|
BK - Rest of
World
|
11,830
|
|
11,459
|
BK -
Global
|
18,923
|
|
18,675
|
|
|
|
|
PLK - US
|
2,693
|
|
2,551
|
PLK - Rest of
World
|
914
|
|
867
|
PLK -
Global
|
3,607
|
|
3,418
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Supplemental Disclosure
(Unaudited)
General and Administrative Expenses
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in US$
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Segment G&A
TH(1)
|
$
|
27
|
|
|
$
|
20
|
|
|
$
|
77
|
|
|
$
|
65
|
|
Segment G&A
BK(1)
|
47
|
|
|
37
|
|
|
128
|
|
|
104
|
|
Segment G&A
PLK(1)
|
15
|
|
|
12
|
|
|
42
|
|
|
35
|
|
Share-based
compensation and non-cash incentive compensation expense
|
25
|
|
|
19
|
|
|
71
|
|
|
63
|
|
Depreciation and
amortization(2)
|
5
|
|
|
5
|
|
|
15
|
|
|
14
|
|
Corporate
restructuring and tax advisory fees
|
4
|
|
|
3
|
|
|
8
|
|
|
11
|
|
General and
administrative expenses
|
$
|
123
|
|
|
$
|
96
|
|
|
$
|
341
|
|
|
$
|
292
|
|
(1)
|
Segment G&A
includes segment general and administrative expenses and excludes
share-based compensation and non-cash incentive compensation
expense, depreciation and amortization, 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. Depreciation and amortization
included in general and administrative expenses reflects all other
depreciation and amortization.
|
Other Operating Expenses (Income), net
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in US$
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net losses (gains) on
disposal of assets, restaurant closures, and
refranchisings(3)
|
$
|
2
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
2
|
|
Litigation settlement
(gains) and reserves, net
|
4
|
|
|
4
|
|
|
7
|
|
|
5
|
|
Net losses (gains) on
foreign exchange(4)
|
(23)
|
|
|
44
|
|
|
(58)
|
|
|
54
|
|
Other, net
|
1
|
|
|
2
|
|
|
—
|
|
|
(2)
|
|
Other operating expenses
(income), net
|
$
|
(16)
|
|
|
$
|
54
|
|
|
$
|
(50)
|
|
|
$
|
59
|
|
(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, 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 and Net Leverage. We
believe that these non-GAAP measures are useful to investors in
assessing our operating performance or liquidity, as it provides
them with the same tools that management uses to evaluate our
performance or liquidity 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 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 three operating segments.
LTM Adjusted EBITDA is defined as Adjusted EBITDA for the last
twelve month period to the date reported. LTM Adjusted EBITDA as of
September 30, 2021 is the sum of the Adjusted EBITDA for the
quarters ended September 30, 2021,
June 30, 2021, March 31, 2021 and December 31, 2020, while
LTM Adjusted EBITDA as of September 30, 2020 is the sum of the
Adjusted EBITDA for the quarters ended September 30, 2020, June
30, 2020, March 31, 2020 and
December 31, 2019. A
reconciliation of Adjusted EBITDA for each of those quarters was
included in our press release attached as Exhibit 99 to our Form
8-Ks filed with the SEC on July 30,
2021, April 30, 2021 and
February 11, 2021.
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 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 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.
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Organic Growth in Revenue and Adjusted EBITDA
Three Months Ended September 30,
2021
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Impact of
FX
|
|
|
|
|
|
|
Actual
|
|
Q3 '21 vs. Q3
'20
|
|
Movements
|
|
Organic
Growth
|
(in US$
millions)
|
|
Q3
'21
|
|
Q3
'20
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
|
885
|
|
|
$
|
762
|
|
|
$
|
123
|
|
|
16.1
|
%
|
|
$
|
39
|
|
|
$
|
84
|
|
|
10.5
|
%
|
BK
|
|
$
|
467
|
|
|
$
|
433
|
|
|
$
|
34
|
|
|
7.9
|
%
|
|
$
|
2
|
|
|
$
|
32
|
|
|
7.2
|
%
|
PLK
|
|
$
|
143
|
|
|
$
|
142
|
|
|
$
|
1
|
|
|
1.2
|
%
|
|
$
|
—
|
|
|
$
|
1
|
|
|
1.1
|
%
|
Total Revenues
|
|
$
|
1,495
|
|
|
$
|
1,337
|
|
|
$
|
158
|
|
|
11.8
|
%
|
|
$
|
41
|
|
|
$
|
117
|
|
|
8.5
|
%
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
|
278
|
|
|
$
|
258
|
|
|
$
|
20
|
|
|
7.6
|
%
|
|
$
|
13
|
|
|
$
|
7
|
|
|
2.4
|
%
|
BK
|
|
$
|
272
|
|
|
$
|
245
|
|
|
$
|
27
|
|
|
10.8
|
%
|
|
$
|
2
|
|
|
$
|
25
|
|
|
10.0
|
%
|
PLK
|
|
$
|
57
|
|
|
$
|
58
|
|
|
$
|
(1)
|
|
|
(2.6)
|
%
|
|
$
|
—
|
|
|
$
|
(1)
|
|
|
(2.7)
|
%
|
Adjusted
EBITDA
|
|
$
|
607
|
|
|
$
|
561
|
|
|
$
|
46
|
|
|
8.0
|
%
|
|
$
|
15
|
|
|
$
|
31
|
|
|
5.1
|
%
|
Note: Percentage changes may not recalculate due to
rounding.
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Reconciliation of EBITDA and Adjusted EBITDA to Net Income
(Unaudited)
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
(in US$
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Segment
income:
|
|
|
|
|
|
|
|
TH
|
$
|
278
|
|
|
$
|
258
|
|
|
$
|
738
|
|
|
$
|
594
|
|
BK
|
272
|
|
|
245
|
|
|
755
|
|
|
605
|
|
PLK
|
57
|
|
|
58
|
|
|
171
|
|
|
164
|
|
Adjusted
EBITDA
|
607
|
|
|
561
|
|
|
1,664
|
|
|
1,363
|
|
Share-based
compensation and non-cash incentive compensation
expense(1)
|
25
|
|
|
19
|
|
|
71
|
|
|
63
|
|
Corporate
restructuring and tax advisory fees(2)
|
4
|
|
|
3
|
|
|
8
|
|
|
11
|
|
Impact of equity
method investments(3)
|
11
|
|
|
20
|
|
|
22
|
|
|
42
|
|
Other operating
expenses (income), net
|
(16)
|
|
|
54
|
|
|
(50)
|
|
|
59
|
|
EBITDA
|
583
|
|
|
465
|
|
|
1,613
|
|
|
1,188
|
|
Depreciation and
amortization
|
50
|
|
|
48
|
|
|
150
|
|
|
139
|
|
Income from
operations
|
533
|
|
|
417
|
|
|
1,463
|
|
|
1,049
|
|
Interest expense,
net
|
128
|
|
|
129
|
|
|
378
|
|
|
376
|
|
Loss on early
extinguishment of debt
|
11
|
|
|
—
|
|
|
11
|
|
|
—
|
|
Income tax (benefit)
expense(4)
|
65
|
|
|
65
|
|
|
83
|
|
|
62
|
|
Net income
|
$
|
329
|
|
|
$
|
223
|
|
|
$
|
991
|
|
|
$
|
611
|
|
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
September 30,
|
|
Nine Months Ended
September 30,
|
(in US$ millions,
except per share data)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income
|
$
|
329
|
|
|
$
|
223
|
|
|
$
|
991
|
|
|
$
|
611
|
|
Income tax
expense(4)
|
65
|
|
|
65
|
|
|
83
|
|
|
62
|
|
Income before income
taxes
|
394
|
|
|
288
|
|
|
1,074
|
|
|
673
|
|
Adjustments:
|
|
|
|
|
|
|
|
Franchise agreement
amortization
|
8
|
|
|
9
|
|
|
24
|
|
|
25
|
|
Amortization of
deferred financing costs and debt issuance discount
|
7
|
|
|
7
|
|
|
20
|
|
|
19
|
|
Interest expense and
loss on extinguished debt(5)
|
24
|
|
|
8
|
|
|
39
|
|
|
23
|
|
Corporate
restructuring and tax advisory fees(2)
|
4
|
|
|
3
|
|
|
8
|
|
|
11
|
|
Impact of equity
method investments(3)
|
11
|
|
|
20
|
|
|
22
|
|
|
42
|
|
Other operating
expenses (income), net
|
(16)
|
|
|
54
|
|
|
(50)
|
|
|
59
|
|
Total
adjustments
|
38
|
|
|
101
|
|
|
63
|
|
|
179
|
|
Adjusted income
before income taxes
|
432
|
|
|
389
|
|
|
1,137
|
|
|
852
|
|
Adjusted income tax
expense(4)(6)
|
79
|
|
|
69
|
|
|
169
|
|
|
151
|
|
Adjusted net
income
|
$
|
353
|
|
|
$
|
320
|
|
|
$
|
968
|
|
|
$
|
701
|
|
Adjusted diluted
earnings per share
|
$
|
0.76
|
|
|
$
|
0.68
|
|
|
$
|
2.08
|
|
|
$
|
1.49
|
|
Weighted average
diluted shares outstanding
|
465
|
|
|
470
|
|
|
465
|
|
|
469
|
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
Net Leverage and Reconciliation of Free Cash Flow
(Unaudited)
|
|
As
of
|
(in US$ millions,
except ratio)
|
|
September 30,
2021
|
|
September 30,
2020
|
Long-term debt, net of
current portion
|
|
$
|
12,379
|
|
|
$
|
12,300
|
|
Finance leases, net of
current portion
|
|
328
|
|
|
304
|
|
Current portion of
long-term debt and finance leases
|
|
113
|
|
|
107
|
|
Unamortized deferred
financing costs and deferred issue discount
|
|
138
|
|
|
139
|
|
Total
debt
|
|
12,958
|
|
|
12,850
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
1,773
|
|
|
1,919
|
|
Net debt
|
|
11,185
|
|
|
10,931
|
|
LTM adjusted
EBITDA
|
|
2,165
|
|
|
1,985
|
|
Net
leverage
|
|
5.2x
|
|
|
5.5x
|
|
|
|
Nine Months Ended
September 30,
|
|
Twelve Months
Ended
December 31,
|
|
Twelve Months
Ended
September 30,
|
(in US$
millions)
|
|
2021
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
2021
|
|
2020
|
Calculation:
|
|
A
|
|
B
|
|
C
|
|
D
|
|
E
|
|
A + D - B
|
|
B + E - C
|
Net cash provided by
operating activities
|
|
$
|
1,255
|
|
|
$
|
608
|
|
|
$
|
911
|
|
|
$
|
921
|
|
|
$
|
1,476
|
|
|
$
|
1,568
|
|
|
$
|
1,173
|
|
Payments for property
and equipment
|
|
(70)
|
|
|
(71)
|
|
|
(32)
|
|
|
(117)
|
|
|
(62)
|
|
|
(116)
|
|
|
(101)
|
|
Free Cash
flow
|
|
$
|
1,185
|
|
|
$
|
537
|
|
|
$
|
879
|
|
|
$
|
804
|
|
|
$
|
1,414
|
|
|
$
|
1,452
|
|
|
$
|
1,072
|
|
(in US$
millions)
|
|
Nine Months Ended
September 30,
|
|
Six Months Ended
June 30,
|
|
Three Months Ended
September 30,
|
Calculation:
|
|
2021
|
|
2021
|
|
2021
|
Net cash provided by
operating activities
|
|
$
|
1,255
|
|
|
$
|
745
|
|
|
$
|
510
|
|
Payments for property
and equipment
|
|
(70)
|
|
|
(46)
|
|
|
(24)
|
|
Free Cash
flow
|
|
$
|
1,185
|
|
|
$
|
699
|
|
|
$
|
486
|
|
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 2020 and 2021 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 services related to significant tax reform
legislation, regulations and related restructuring
initiatives.
|
|
|
(3)
|
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 is
included in segment income.
|
|
|
(4)
|
The effective tax
rate for the nine months ended September 30, 2021 included a net
decrease in tax reserves of $87 million related primarily to
expiring statute of limitations for certain prior tax years which
decreased the effective tax rate by 8.1%. The impact of the net
reserves release decreased our adjusted effective tax rate by 2.0%
for the nine months ended September 30, 2021. The effective tax
rate during the nine months ended September 30, 2020 reflects a $64
million increase in deferred tax assets which decreased the
effective tax rate by 9.5% during the nine months ended September
30, 2020. Based on the analysis of final guidance related to the
Tax Cuts and Jobs Act (the "Tax Act") received during the second
quarter of 2020, a deferred tax asset was recorded. Adjusted income
tax expense excludes the impact of this adjustment.
|
|
|
(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. For the nine months ended September
30, 2021, Adjusted income tax expense has been adjusted to remove
the net tax benefits associated with the release of tax reserves
related to certain prior corporate restructurings that when
previously incurred were excluded from adjusted income tax expense
as non-cash adjustments that did not impact our core operational
results. Subsequent interest accrued on such reserves was treated
as impacting core operational results and included in adjusted
income tax expense, accordingly, the reversal of such interest is
included in adjusted income tax expense. The Company views interest
on tax reserves as a normal course of business expense regardless
of the origin of the underlying tax reserve.
|
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SOURCE Restaurant Brands International Inc.