OAKVILLE, ON, Feb. 16, 2016 /CNW/ - Restaurant Brands
International Inc. (TSX/NYSE: QSR, TSX: QSP) today reported
financial results for the full year and fourth quarter ended
December 31, 2015.
Daniel Schwartz, Chief Executive
Officer of Restaurant Brands International ("RBI") commented, "We
had a great first year as RBI, finishing the fourth quarter with
strong results at both of our iconic brands, TIM
HORTONS® and BURGER KING®. Successful product
launches combined with significant net restaurant growth drove
performance this year and our franchisees achieved meaningful
levels of profitability. We continue to be excited about future
opportunities at TIM HORTONS® and BURGER
KING® and are committed to building long-term
sustainable growth for years to come."
Full Year 2015 Highlights
- Tim Hortons ("TH") comparable sales increased 5.6% and Burger
King ("BK") comparable sales increased 5.4% in constant
currency
- Delivered 155 net restaurant growth (NRG) at TH and 631 NRG at
BK
- System-wide sales grew 9.3% at TH and 10.3% at BK in constant
currency
- RBI Adjusted EBITDA grew 21.4% on an organic basis to
$1,666.2 million versus prior year
pro forma amount
- RBI Adjusted Diluted EPS was $1.18 per share
- Declared Restaurant Brands International Inc. dividends of
$0.44 per share up 46.7% versus prior
year declared dividends at Burger King Worldwide
Fourth Quarter 2015 Highlights:
- TH comparable sales increased 6.3% and BK comparable sales
increased 3.9% in constant currency
- Delivered 69 NRG at TH and 334 NRG at BK
- System-wide sales grew 12.4% at TH and 8.8% at BK in constant
currency
- RBI Adjusted EBITDA was up 25.4% on an organic basis to
$442.6 million versus prior year pro
forma amount
- RBI Adjusted Diluted EPS was $0.35 per share
Consolidated Operational Highlights
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(unaudited)
|
|
(unaudited)
|
Comparable Sales
Growth(1)
|
|
|
|
|
|
|
|
|
|
|
|
TH
(2)
|
|
6.3%
|
|
|
4.1%
|
|
|
5.6%
|
|
|
3.1%
|
BK
|
|
3.9%
|
|
|
3.0%
|
|
|
5.4%
|
|
|
2.1%
|
System Net Restaurant
Growth (NRG)
|
|
|
|
|
|
|
|
|
|
|
|
TH
(2)(4)
|
|
69
|
|
|
61
|
|
|
155
|
|
|
144
|
BK
|
|
334
|
|
|
412
|
|
|
631
|
|
|
705
|
System-wide Sales
Growth(1)
|
|
|
|
|
|
|
|
|
|
|
|
TH
(2)
|
|
12.4%
|
|
|
7.4%
|
|
|
9.3%
|
|
|
6.6%
|
BK
|
|
8.8%
|
|
|
7.7%
|
|
|
10.3%
|
|
|
6.8%
|
System-wide Sales
(3) (in US$ millions)
|
|
|
|
|
|
|
|
|
|
|
|
TH
(2)
|
$
|
1,632.7
|
|
$
|
1,675.9
|
|
$
|
6,349.8
|
|
$
|
6,616.0
|
BK
|
$
|
4,353.2
|
|
$
|
4,308.0
|
|
$
|
17,303.7
|
|
$
|
17,017.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
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Comparable sales
growth and system-wide sales growth are calculated on a constant
currency basis and include sales at franchise restaurants and
company-owned restaurants.
|
|
|
(2)
|
TH 2014 quarter and
annual figures are shown for informational purposes
only.
|
|
|
(3)
|
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 revenue; however, our franchise revenues include royalties
based on a percentage of franchise sales.
|
|
|
(4)
|
Store count excludes
398 and 413 limited service kiosks as of December 31, 2015 and
2014, respectively. NRG excludes limited service kiosks for the
years ended December 31, 2015 and 2014. Commencing in the fourth
quarter of 2015, we revised our presentation of restaurant counts
to exclude limited service kiosks, with the revision applied
retrospectively to the earliest period presented to provide
period-to-period comparability.
|
Consolidated Financial Highlights
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$ millions,
except per share data)
|
2015
|
|
2014
|
|
2014
PF
|
|
2015
|
|
2014
|
|
2014 PF
(7)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
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|
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RBI Total
Revenues
|
$
|
1,057.0
|
|
$
|
417.8
|
|
$
|
1,092.7
|
|
$
|
4,052.2
|
|
$
|
1,198.8
|
|
$
|
4,200.3
|
RBI Net Income (Loss)
Attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Shareholders
|
$
|
51.7
|
|
$
|
(510.8)
|
|
$
|
(3.1)
|
|
$
|
103.9
|
|
$
|
(398.8)
|
|
$
|
(166.6)
|
RBI Diluted Earnings
(Loss) per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to
Common Shareholders
|
$
|
0.25
|
|
$
|
(2.50)
|
|
$
|
(0.02)
|
|
$
|
0.50
|
|
$
|
(2.32)
|
|
$
|
(0.82)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
TH Adjusted EBITDA
(5)
|
$
|
243.4
|
|
$
|
34.9
|
|
$
|
208.8
|
|
$
|
906.7
|
|
$
|
34.9
|
|
$
|
816.4
|
BK Adjusted EBITDA
(5)
|
$
|
199.2
|
|
$
|
189.1
|
|
$
|
189.1
|
|
$
|
759.5
|
|
$
|
726.0
|
|
$
|
726.0
|
RBI Adjusted EBITDA
(6)
|
$
|
442.6
|
|
$
|
224.0
|
|
$
|
397.9
|
|
$
|
1,666.2
|
|
$
|
760.9
|
|
$
|
1,542.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RBI Adjusted Net
Income (Loss) Attributable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to Common
Shareholders (6)
|
$
|
165.7
|
|
|
|
|
$
|
125.8
|
|
$
|
561.1
|
|
|
|
|
$
|
467.6
|
RBI Adjusted Diluted
Earnings (Loss) per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to
Common Shareholders (6)
|
$
|
0.35
|
|
|
|
|
$
|
0.26
|
|
$
|
1.18
|
|
|
|
|
$
|
0.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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(5)
|
TH Adjusted EBITDA
and BK Adjusted EBITDA are our measures of segment
profitability.
|
|
|
(6)
|
RBI Adjusted EBITDA,
RBI Adjusted Net Income (Loss), and RBI Adjusted Diluted Earnings
(Loss) per Share are non-GAAP financial measures. Please refer to
"Non-GAAP Financial Measures" for further detail.
|
|
|
(7)
|
Please refer to RBI's
Form 8-K filed on December 9, 2015 with pro forma financial
information for RBI.
|
Strong comparable sales at both of our brands for 2015 resulted
in RBI Adjusted EBITDA of $1,666.2
million, up 21.4% on an organic basis, excluding the impact
of FX movements, and compared to prior year pro forma results. At
TH, full year comparable sales growth of 5.6% combined with NRG of
155, resulted in 9.3% system-wide sales growth in constant
currency. TH results were driven by continued strength in beverages
as well as compelling new product offerings such as Nutella pockets
and grilled wraps. At BK, comparable sales growth of 5.4% in
conjunction with full year NRG of 631 led to BK system-wide sales
growth of 10.3%. Comparable sales growth at BK was driven by
successful new products and promotions such as the '2 for $5'
platform, Chicken Fries, including Buffalo and Fiery flavors, and
the A.1. Halloween WHOPPER®
sandwich.
TH Segment Results (2)
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
2015
|
|
2014
|
|
2014
PF
|
|
2015
|
|
2014
|
|
2014
PF
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Sales
Growth (1)(2)
|
|
6.3%
|
|
|
4.1%
|
|
|
4.1%
|
|
|
5.6%
|
|
|
3.1%
|
|
3.1%
|
System-wide Sales
Growth (1)(2)
|
|
12.4%
|
|
|
7.4%
|
|
|
7.4%
|
|
|
9.3%
|
|
|
6.6%
|
|
6.6%
|
System-wide Sales
(2)(3)
|
$
|
1,632.7
|
|
$
|
1,675.9
|
|
$
|
1,675.9
|
|
$
|
6,349.8
|
|
$
|
6,616.0
|
|
$
|
6,616.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
System Net Restaurant
Growth (NRG) (2)(4)
|
|
69
|
|
|
61
|
|
|
61
|
|
|
155
|
|
|
144
|
|
144
|
System Restaurant
Count at Period End (4)
|
|
4,413
|
|
|
4,258
|
|
|
4,258
|
|
|
4,413
|
|
|
4,258
|
|
4,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
(11)
|
$
|
533.1
|
|
$
|
92.8
|
|
$
|
552.0
|
|
$
|
2,074.3
|
|
$
|
92.8
|
|
$
|
2,188.6
|
Franchise and
Property Revenues (11)
|
$
|
238.4
|
|
$
|
50.8
|
|
$
|
266.5
|
|
$
|
882.6
|
|
$
|
50.8
|
|
$
|
956.5
|
TH Total Revenues
(11)
|
$
|
771.5
|
|
$
|
143.6
|
|
$
|
818.5
|
|
$
|
2,956.9
|
|
$
|
143.6
|
|
$
|
3,145.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales
(11)
|
$
|
435.3
|
|
$
|
92.1
|
|
$
|
469.4
|
|
$
|
1,728.1
|
|
$
|
92.1
|
|
$
|
1,873.0
|
Franchise &
Property Expenses (11)
|
$
|
100.0
|
|
$
|
26.1
|
|
$
|
131.5
|
|
$
|
360.7
|
|
$
|
26.1
|
|
$
|
426.2
|
Segment SG&A
(8)(11)
|
$
|
24.6
|
|
$
|
6.6
|
|
$
|
48.9
|
|
$
|
93.2
|
|
$
|
6.6
|
|
$
|
174.5
|
Segment depreciation
and amortization (9)(11)
|
$
|
28.2
|
|
$
|
4.3
|
|
$
|
35.9
|
|
$
|
117.7
|
|
$
|
4.3
|
|
$
|
130.9
|
TH Adjusted EBITDA
(5) (10) (11)
|
$
|
243.4
|
|
$
|
34.9
|
|
$
|
208.8
|
|
$
|
906.7
|
|
$
|
34.9
|
|
$
|
816.4
|
|
|
(8)
|
Segment selling,
general and administrative expenses consists of segment selling
expenses and segment management general and administrative
expenses.
|
|
|
(9)
|
Segment depreciation
and amortization consists of depreciation and amortization included
in cost of sales and franchise and property expenses.
|
|
|
(10)
|
TH Adjusted EBITDA
for the three months ended December 31, 2015 includes $3.6 million
of cash distributions received from equity method investments, with
no impact from acquisition accounting on cost of sales. TH Adjusted
EBITDA for the year ended December 31, 2015 excludes $(0.5) million
of acquisition accounting impact on cost of sales and includes
$13.6 million of cash distributions received from equity method
investments. TH pro forma Adjusted EBITDA for the three months and
year ended December 31, 2014 includes $4.0 million and $14.1
million, respectively, of cash distributions received from equity
method investments.
|
|
|
(11)
|
TH 2014 financials
reflects results from 12/12/2014 to 12/31/2014.
|
TH full year system-wide sales growth of 9.3%, in constant
currency, was driven by favorable comparable sales growth and NRG
over the full year. In 2015, we achieved consolidated TH comparable
sales growth of 5.6%, with TH Canada and TH US comparable sales
growth of 5.5% and 6.4%, respectively. We achieved unit growth of
3.6% with NRG of 155 during the year. We ended the year with a TH
restaurant count of 4,413.
Comparing to prior year pro forma results, fourth quarter TH
Total Revenues grew 10.7% to $771.5
million while TH Adjusted EBITDA grew 36.9% to $243.4 million on an organic basis, excluding the
impact of FX movements. For the full year, TH Total Revenues grew
8.8 % to $2,956.9 million while TH
Adjusted EBITDA grew 28.8% on an organic basis to $906.7 million.
BK Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable Sales
Growth (1)
|
|
3.9%
|
|
|
3.0%
|
|
|
5.4%
|
|
|
2.1%
|
System-wide Sales
Growth (1)
|
|
8.8%
|
|
|
7.7%
|
|
|
10.3%
|
|
|
6.8%
|
System-wide
Sales(3)
|
$
|
4,353.2
|
|
$
|
4,308.0
|
|
$
|
17,303.7
|
|
$
|
17,017.1
|
|
|
|
|
|
|
|
|
|
|
|
|
System Net Restaurant
Growth (NRG)
|
|
334
|
|
|
412
|
|
|
631
|
|
|
705
|
System Restaurant
Count at Period End
|
|
15,003
|
|
|
14,372
|
|
|
15,003
|
|
|
14,372
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
22.7
|
|
$
|
18.9
|
|
$
|
94.7
|
|
$
|
74.6
|
Franchise and
Property Revenues
|
$
|
262.8
|
|
$
|
255.3
|
|
$
|
1,000.6
|
|
$
|
980.6
|
BK Total
Revenues
|
$
|
285.5
|
|
$
|
274.2
|
|
$
|
1,095.3
|
|
$
|
1,055.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
19.6
|
|
$
|
16.6
|
|
$
|
81.4
|
|
$
|
64.3
|
Franchise &
Property Expenses
|
$
|
38.0
|
|
$
|
38.4
|
|
$
|
142.5
|
|
$
|
152.9
|
Segment SG&A
(8)
|
$
|
40.2
|
|
$
|
42.0
|
|
$
|
159.0
|
|
$
|
162.5
|
Segment depreciation
and amortization (9)
|
$
|
11.5
|
|
$
|
11.9
|
|
$
|
47.1
|
|
$
|
50.5
|
BK Adjusted EBITDA
(5)
|
$
|
199.2
|
|
$
|
189.1
|
|
$
|
759.5
|
|
$
|
726.0
|
BK delivered strong comparable sales growth and net restaurant
growth in 2015 resulting in system-wide sales growth of 10.3% in
constant currency versus prior year results. BK sales momentum was
due to a well-balanced promotional mix and compelling product
launches throughout the year. Full year global comparable sales
growth of 5.4% was led by strong performances in U.S. and
Canada ("US&C"), Europe, the Middle
East, and Africa ("EMEA"),
Latin America and the Caribbean ("LAC"), and Asia Pacific ("APAC"). BK added 631 net new
restaurants for the full year, ending the year with total
restaurant count of 15,003, a 4.4% increase in total units versus
the prior year unit count.
BK Q4 revenues grew 9.7% to $285.5
million, while BK Adjusted EBITDA grew 12.6% to $199.2 million, excluding the impact of FX
movements. For the full year, BK Total Revenues grew 10.4% to
$1,095.3 million, while BK Adjusted
EBITDA grew 13.1% to $759.5 million,
excluding the impact of FX movements.
Cash and Liquidity
As of December 31, 2015, total
debt was $8.9 billion and net debt,
after adjustment for $0.8 billion of
cash and cash equivalents, was $8.2
billion, excluding original issue discounts. Our cash
balance of $0.8 billion was down
$1.0 billion versus the prior year,
primarily as a result of excess cash on hand at the end of 2014 for
the January 2015 tender offer to
purchase approximately $1.0 billion
of TH legacy notes.
On February 16, 2016, our Board of
Directors declared a dividend of $0.14 per common share and Class B exchangeable
partnership unit of Restaurants Brands International Limited
Partnership for the first quarter of 2016. The dividend is payable
on April 4, 2016, to shareholders of
record at the close of business on March 3,
2016.
Investor Conference Call
We will host an investor conference call and webcast at
8:30 a.m. Eastern Time on
Tuesday, February 16, 2016, to review
financial results for the full year and quarter ended December 31, 2015. 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
Restaurant Brands International Inc. is one of the world's
largest quick service restaurant companies with over $23 billion in system-wide sales and over 19,000
restaurants in approximately 100 countries and US territories. RBI
owns two of the world's most prominent and iconic quick service
restaurant brands – TIM HORTONS® and BURGER KING®. These
independently operated brands have been serving their respective
guests, franchisees and communities for over 50 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 RBI's current
expectations regarding expansion opportunities at TIM HORTONS® and
BURGER KING® and its ability to build long-term sustainable growth
for years to come, cost reduction efforts and efficiencies
resulting from our restructuring plan and the reinvestment of
resources generated from such efforts, and the incurrence of
further TH transaction and restructuring costs after 2015. 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 RBI's ability to successfully implement its
domestic and international growth strategy; and risks related to
RBI's ability to compete domestically and internationally in an
intensely competitive industry. Other than as required under US
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.
Pro Forma (PF) Financial Information
This press release contains pro forma financial information of
Restaurant Brands International Inc. ("RBI"), Tim Hortons ("TH")
and Burger King Worldwide ("BKW").
As discussed in our Form 8-K filed on December 9, 2015 with the Securities and Exchange
Commission ("SEC") and Canadian securities regulatory authorities
(the "Pro Forma Form 8-K"), the historical results of operations
for the year ended December 31, 2014
have been adjusted to give pro forma effect to those events that
are directly attributable to (i) the BKW merger with TH (the
"Combination"), (ii) our entry into a new $6,750.0 million term loan facility, (iii) our
issuance of $2,250.0 million
aggregate principal amount of second lien senior secured notes,
(iv) our issuance of $3.0 billion of
9% cumulative compounding perpetual voting preferred shares and the
warrant to purchase our common shares to a subsidiary of Berkshire
Hathaway, Inc., (v) the repayment of $2,923.4 million of existing BKW indebtedness,
(vi) extinguishment of approximately $1.0
billion of TH legacy notes (as detailed in the Pro Forma
Form 8-K, (i) through (vi) collectively, the "Transactions"), (vii)
the issuance of $1,250.0 million of
first lien senior secured notes, and (viii) an amendment to our
credit agreement and repayment of $1,550.0
million of our term loan facility (as detailed in the Pro
Forma Form 8-K, (vii) and (viii), the "Refinancing"), as if the
Transactions and Refinancing occurred on the first day of fiscal
2014.
The pro forma statements of operations in the Pro Forma Form 8-K
include the impact of acquisition accounting adjustments resulting
from the application of acquisition accounting to the Combination
and adjustments to interest expense resulting from the Combination
and Refinancing as if the Transactions and Refinancing occurred on
the first day of fiscal 2014. For more information regarding the
pro forma financial information, please refer to our Pro Forma Form
8-K.
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,
|
|
2015
|
|
2014
|
|
2014
PF
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
555.8
|
|
$
|
111.7
|
|
$
|
570.9
|
|
Franchise and
property revenues
|
|
501.2
|
|
|
306.1
|
|
|
521.8
|
|
Total
revenues
|
|
1,057.0
|
|
|
417.8
|
|
|
1,092.7
|
Cost of
sales
|
|
454.9
|
|
|
108.7
|
|
|
486.0
|
Franchise and
property expenses
|
|
138.0
|
|
|
64.5
|
|
|
169.9
|
Selling, general and
administrative expenses
|
|
120.4
|
|
|
171.9
|
|
|
113.3
|
(Income) loss from
equity method investments
|
|
(1.6)
|
|
|
3.7
|
|
|
0.6
|
Other operating
expenses (income), net
|
|
23.3
|
|
|
171.6
|
|
|
26.1
|
|
Total operating costs
and expenses
|
|
735.0
|
|
|
520.4
|
|
|
795.9
|
Income from
operations
|
|
322.0
|
|
|
(102.6)
|
|
|
296.8
|
Interest expense,
net
|
|
116.0
|
|
|
127.8
|
|
|
111.3
|
Loss on early
extinguishment of debt
|
|
-
|
|
|
155.4
|
|
|
-
|
Income (loss) before
income taxes
|
|
206.0
|
|
|
(385.8)
|
|
|
185.5
|
|
Income tax expense
(benefit)
|
|
21.5
|
|
|
(4.5)
|
|
|
131.5
|
Net income
(loss)
|
|
184.5
|
|
|
(381.3)
|
|
|
54.0
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
65.3
|
|
|
(430.7)
|
|
|
(10.4)
|
|
Preferred share
dividends
|
|
67.5
|
|
|
13.8
|
|
|
67.5
|
|
Accretion of
preferred shares to redemption value
|
|
-
|
|
|
546.4
|
|
|
-
|
Net income (loss)
attributable to common shareholders
|
$
|
51.7
|
|
$
|
(510.8)
|
|
$
|
(3.1)
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.25
|
|
$
|
(1.60)
|
|
$
|
(0.02)
|
|
Diluted
|
$
|
0.25
|
|
$
|
(2.50)
|
|
$
|
(0.02)
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
206.9
|
|
|
319.1
|
|
|
202.1
|
|
Diluted
|
|
474.7
|
|
|
376.7
|
|
|
467.1
|
Cash dividends
declared per common share
|
$
|
0.13
|
|
$
|
0.08
|
|
|
|
|
|
Memo: Basic earnings
(loss) per common share is determined by dividing net income (loss)
attributable to common shareholders by the weighted average number
of common shares outstanding during the period. For the three
months ended December 31, 2015, diluted EPS of $0.25 per share
assumes $64.8 million net income (loss) available to common
shareholders and noncontrolling interests related to the Class B
exchangeable limited partnership units of RBI LP ("Partnership
exchangeable units") and assumes conversion of Partnership
exchangeable units to RBI common shares. The diluted earnings
(loss) per share calculation assumes conversion of 100% of the
Partnership exchangeable units under the "if converted"
method.
|
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Operations
|
(In millions of U.S.
dollars, except per share data)
|
(Unaudited)
|
|
|
|
Twelve Months
Ended December 31,
|
|
2015
|
|
2014
|
|
2014
PF
|
Revenues:
|
|
|
|
|
|
Sales
|
$
|
2,169.0
|
|
$
|
167.4
|
|
$
|
2,263.2
|
|
Franchise and
property revenues
|
|
1,883.2
|
|
|
1,031.4
|
|
|
1,937.1
|
|
Total
revenues
|
|
4,052.2
|
|
|
1,198.8
|
|
|
4,200.3
|
Cost of
sales
|
|
1,809.5
|
|
|
156.4
|
|
|
1,937.3
|
Franchise and
property expenses
|
|
503.2
|
|
|
179.0
|
|
|
579.1
|
Selling, general and
administrative expenses
|
|
437.7
|
|
|
345.4
|
|
|
422.7
|
(Income) loss from
equity method investments
|
|
4.1
|
|
|
9.5
|
|
|
(3.6)
|
Other operating
expenses (income), net
|
|
105.5
|
|
|
327.4
|
|
|
39.6
|
|
Total operating costs
and expenses
|
|
2,860.0
|
|
|
1,017.7
|
|
|
2,975.1
|
Income from
operations
|
|
1,192.2
|
|
|
181.1
|
|
|
1,225.2
|
Interest expense,
net
|
|
478.3
|
|
|
279.7
|
|
|
452.3
|
Loss on early
extinguishment of debt
|
|
40.0
|
|
|
155.4
|
|
|
-
|
Income (loss) before
income taxes
|
|
673.9
|
|
|
(254.0)
|
|
|
772.9
|
|
Income tax
expense
|
|
162.2
|
|
|
15.3
|
|
|
335.8
|
Net income
(loss)
|
|
511.7
|
|
|
(269.3)
|
|
|
437.1
|
|
Net income (loss)
attributable to noncontrolling interests
|
|
136.6
|
|
|
(430.7)
|
|
|
(212.7)
|
|
Preferred share
dividends
|
|
271.2
|
|
|
13.8
|
|
|
270.0
|
|
Accretion of
preferred shares to redemption value
|
|
-
|
|
|
546.4
|
|
|
546.4
|
Net income (loss)
attributable to common shareholders
|
$
|
103.9
|
|
$
|
(398.8)
|
|
$
|
(166.6)
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.51
|
|
$
|
(1.16)
|
|
$
|
(0.82)
|
|
Diluted
|
$
|
0.50
|
|
$
|
(2.32)
|
|
$
|
(0.82)
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
203.5
|
|
|
343.7
|
|
|
202.1
|
|
Diluted
|
|
476.0
|
|
|
358.2
|
|
|
467.1
|
Cash dividends
declared per common share
|
$
|
0.44
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Memo: Basic earnings
(loss) per common share is determined by dividing net income (loss)
attributable to common shareholders by the weighted average number
of common shares outstanding during the period. For the twelve
months ended December 31, 2015, diluted EPS of $0.50 per share
assumes $133.2 million net income (loss) available to common
shareholders and noncontrolling interests related to the
Partnership exchangeable units and assumes conversion of
Partnership exchangeable units to RBI common shares. The diluted
earnings (loss) per share calculation assumes conversion of 100% of
the Partnership exchangeable units under the "if converted"
method.
|
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
(In millions of U.S.
dollars, except share data)
|
(Unaudited)
|
|
As
of
|
|
December 31,
2015
|
|
December 31,
2014
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
757.8
|
|
$
|
1,803.2
|
|
Restricted cash and
cash equivalents
|
|
-
|
|
|
84.5
|
|
Trade and notes
receivable, net of allowance of $14.2 million and $20.1 million,
respectively
|
|
422.0
|
|
|
441.2
|
|
Inventories and other
current assets, net
|
|
132.2
|
|
|
172.3
|
|
Advertising fund
restricted assets
|
|
57.5
|
|
|
53.0
|
|
Deferred income
taxes, net
|
|
-
|
|
|
86.6
|
|
|
Total current
assets
|
|
1,369.5
|
|
|
2,640.8
|
|
|
|
|
|
|
Property and
equipment, net of accumulated depreciation of $339.3
million
|
|
|
|
|
|
|
|
and $225.1 million,
respectively
|
|
2,150.6
|
|
|
2,436.5
|
Intangible assets,
net
|
|
9,147.8
|
|
|
10,445.1
|
Goodwill
|
|
4,574.4
|
|
|
5,235.7
|
Net investment in
property leased to franchisees
|
|
117.2
|
|
|
140.5
|
Other assets,
net
|
|
1,051.6
|
|
|
444.4
|
|
|
Total
assets
|
$
|
18,411.1
|
|
$
|
21,343.0
|
LIABILITIES,
REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts and drafts
payable
|
$
|
361.5
|
|
$
|
223.0
|
|
Accrued
advertising
|
|
45.2
|
|
|
25.9
|
|
Other accrued
liabilities
|
|
441.3
|
|
|
335.6
|
|
Gift card
liability
|
|
168.5
|
|
|
187.0
|
|
Advertising fund
liabilities
|
|
48.4
|
|
|
45.5
|
|
Current portion of
long term debt and capital leases
|
|
56.1
|
|
|
1,128.8
|
|
|
Total current
liabilities
|
|
1,121.0
|
|
|
1,945.8
|
|
|
|
|
|
|
Term debt, net of
current portion
|
|
8,462.3
|
|
|
8,826.5
|
Capital leases, net
of current portion
|
|
203.4
|
|
|
243.7
|
Other liabilities,
net
|
|
795.9
|
|
|
707.8
|
Deferred income
taxes, net
|
|
1,618.8
|
|
|
1,982.8
|
|
|
Total
liabilities
|
|
12,201.4
|
|
|
13,706.6
|
|
|
|
|
|
|
Redeemable preferred
shares; $43.775848 par value;
|
|
|
|
|
|
|
68,530,939 shares
authorized, issued and outstanding at December 31, 2015 and
December 31, 2014
|
|
3,297.0
|
|
|
3,297.0
|
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
|
|
|
Common shares; no par
value; unlimited shares authorized;
|
|
|
|
|
|
|
|
225,707,588 shares
issued and outstanding at December 31, 2015;
|
|
|
|
|
|
|
|
202,052,741 shares
issued and outstanding at December 31, 2014
|
|
1,824.5
|
|
|
1,755.0
|
|
Retained
earnings
|
|
245.8
|
|
|
231.0
|
|
Accumulated other
comprehensive income (loss)
|
|
(733.7)
|
|
|
(107.8)
|
|
|
Total Restaurant
Brands International Inc. shareholders' equity
|
|
1,336.6
|
|
|
1,878.2
|
|
|
Noncontrolling
interests
|
|
1,576.1
|
|
|
2,461.2
|
|
|
Total shareholders'
equity
|
|
2,912.7
|
|
|
4,339.4
|
|
|
Total liabilities,
redeemable preferred shares and shareholders' equity
|
$
|
18,411.1
|
|
$
|
21,343.0
|
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
(In millions of U.S.
dollars)
|
(Unaudited)
|
|
Twelve Months
Ended December 31,
|
Cash flows from
operating activities:
|
2015
|
|
2014
|
|
Net income
(loss)
|
$
|
511.7
|
|
$
|
(269.3)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
182.0
|
|
|
68.8
|
|
|
(Gain) loss on early
extinguishment of debt
|
|
40.0
|
|
|
127.3
|
|
|
Amortization of
deferred financing costs and debt issuance discount
|
|
34.9
|
|
|
60.2
|
|
|
(Income) loss from
equity method investments
|
|
4.1
|
|
|
9.5
|
|
|
Loss (gain) on
remeasurement of foreign denominated transactions
|
|
37.0
|
|
|
(6.2)
|
|
|
Amortization of
defined benefit pension and postretirement items
|
|
(0.4)
|
|
|
(3.9)
|
|
|
Net losses (gains) on
derivatives
|
|
53.6
|
|
|
297.5
|
|
|
Net losses (gains) on
refranchisings and dispositions of assets
|
|
5.4
|
|
|
17.6
|
|
|
Bad debt expense
(recoveries), net
|
|
4.1
|
|
|
1.9
|
|
|
Share-based
compensation expense
|
|
50.8
|
|
|
43.1
|
|
|
Acquisition
accounting impact on cost of sales
|
|
0.5
|
|
|
11.8
|
|
|
Deferred income
taxes
|
|
(32.3)
|
|
|
(61.9)
|
|
Changes in current
assets and liabilities, excluding acquisitions and
dispositions:
|
|
|
|
|
|
|
Reclassification of
restricted cash to cash and cash equivalents
|
|
79.2
|
|
|
(36.4)
|
|
|
Trade and notes
receivable
|
|
(26.5)
|
|
|
(24.5)
|
|
|
Inventories and other
current assets
|
|
9.2
|
|
|
(24.1)
|
|
|
Accounts and drafts
payable
|
|
191.2
|
|
|
(17.9)
|
|
|
Accrued
advertising
|
|
32.9
|
|
|
(35.9)
|
|
|
Other accrued
liabilities
|
|
56.2
|
|
|
123.1
|
|
Other long-term
assets and liabilities
|
|
(28.8)
|
|
|
(21.4)
|
|
|
Net cash provided by
operating activities
|
|
1,204.8
|
|
|
259.3
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Payments for property
and equipment
|
|
(115.3)
|
|
|
(30.9)
|
|
Proceeds (payments)
from refranchisings, disposition of assets and restaurant
closures
|
|
19.6
|
|
|
(7.8)
|
|
Net payments for
acquired and disposed franchisee operations, net of cash
acquired
|
|
-
|
|
|
(3.9)
|
|
Net payment for
purchase of Tim Hortons, net of cash acquired
|
|
-
|
|
|
(7,374.7)
|
|
Return of investment
on direct financing leases
|
|
16.3
|
|
|
15.5
|
|
Settlement of
derivatives, net
|
|
14.2
|
|
|
(388.9)
|
|
Other investing
activities, net
|
|
3.7
|
|
|
(0.1)
|
|
|
Net cash provided by
(used for) investing activities
|
|
(61.5)
|
|
|
(7,790.8)
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from term
debt
|
|
-
|
|
|
6,682.5
|
|
Proceeds from Senior
Notes
|
|
1,250.0
|
|
|
2,250.0
|
|
Proceeds from
issuance of preferred shares, net
|
|
-
|
|
|
2,998.2
|
|
Repayments of term
debt, Tim Hortons Notes and capital leases
|
|
(2,627.8)
|
|
|
(3,102.0)
|
|
Payment of financing
costs
|
|
(81.3)
|
|
|
(158.0)
|
|
Dividends paid on
common shares and preferred shares
|
|
(362.4)
|
|
|
(105.6)
|
|
Repurchase of
Partnership exchangeable units
|
|
(293.7)
|
|
|
-
|
|
Proceeds from stock
option exercises
|
|
3.0
|
|
|
0.5
|
|
Proceeds from
issuance of shares
|
|
2.1
|
|
|
-
|
|
Excess tax benefits
from share-based compensation
|
|
0.5
|
|
|
-
|
|
Other financing
activities
|
|
(5.6)
|
|
|
-
|
|
|
Net cash provided by
(used for) financing activities
|
|
(2,115.2)
|
|
|
8,565.6
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
(73.5)
|
|
|
(17.8)
|
|
Increase (decrease)
in cash and cash equivalents
|
|
(1,045.4)
|
|
|
1,016.3
|
|
Cash and cash
equivalents at beginning of period
|
|
1,803.2
|
|
|
786.9
|
|
Cash and cash
equivalents at end of period
|
$
|
757.8
|
|
$
|
1,803.2
|
|
Supplemental
cashflow disclosures:
|
|
|
|
|
|
|
|
Interest
paid
|
$
|
408.3
|
|
$
|
199.9
|
|
|
Income taxes
paid
|
$
|
208.3
|
|
$
|
35.2
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
|
|
Acquisition of
property with capital lease obligations
|
$
|
16.7
|
|
$
|
-
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Key Business Metrics
We evaluate our restaurants and assess our business based on the
following operating metrics.
System-wide sales growth refers to the change in sales at all
company-owned and franchise restaurants in one period from the same
period in the prior year. Comparable sales growth refers to the
change in restaurant sales in one period from the same prior year
period for restaurants that have been open for thirteen months or
longer. Company-owned restaurants refranchised during a quarterly
period are included with franchise restaurants for the purpose of
calculating comparable sales growth for the quarter. Comparable
sales and sales growth 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 ("impact of FX movements").
System-wide sales represent sales at all Company restaurants and
franchise restaurants. We do not record franchise sales as
revenues; however, our franchise revenues include royalties based
on a percentage of franchise sales.
Key Business Metrics by Brand
Market
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
Twelve
Months Ended December 31,
|
Key Business
Metrics
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
System-wide Sales
Growth
|
|
|
|
|
|
|
|
|
TH - Canada
(a)
|
|
12.4 %
|
|
7.0 %
|
|
9.1 %
|
|
6.1 %
|
TH - US
(a)
|
|
11.3 %
|
|
9.1 %
|
|
10.7 %
|
|
10.5 %
|
TH - International
(a)
|
|
29.1 %
|
|
33.9 %
|
|
28.2 %
|
|
38.2 %
|
BK -
US&C
|
|
2.8 %
|
|
3.8 %
|
|
5.7 %
|
|
1.7 %
|
BK - EMEA
|
|
14.5 %
|
|
10.5 %
|
|
14.6 %
|
|
11.8 %
|
BK - LAC
|
|
18.3 %
|
|
13.7 %
|
|
18.0 %
|
|
13.3 %
|
BK - APAC
|
|
16.0 %
|
|
15.2 %
|
|
15.7 %
|
|
15.1 %
|
|
|
|
|
|
|
|
|
|
Comparable Sales
Growth
|
|
|
|
|
|
|
|
|
TH - Canada
(a)
|
|
6.4 %
|
|
4.1 %
|
|
5.5 %
|
|
2.9 %
|
TH - US
(a)
|
|
5.8 %
|
|
5.1 %
|
|
6.4 %
|
|
4.9 %
|
TH - International
(a)
|
|
5.9 %
|
|
1.7 %
|
|
4.6 %
|
|
2.9 %
|
BK -
US&C
|
|
2.8 %
|
|
4.2 %
|
|
5.7 %
|
|
2.1 %
|
BK - EMEA
|
|
4.6 %
|
|
0.9 %
|
|
4.5 %
|
|
1.9 %
|
BK - LAC
|
|
8.7 %
|
|
2.0 %
|
|
8.4 %
|
|
0.9 %
|
BK - APAC
|
|
4.4 %
|
|
2.9 %
|
|
3.4 %
|
|
3.6 %
|
|
|
|
|
|
|
|
|
|
System NRG
|
|
|
|
|
|
|
|
|
TH - Canada
(a)
|
|
35
|
|
52
|
|
99
|
|
111
|
TH - US
(a)
|
|
(8)
|
|
7
|
|
1
|
|
13
|
TH - International
(a)
|
|
42
|
|
2
|
|
55
|
|
20
|
BK -
US&C
|
|
37
|
|
38
|
|
1
|
|
(30)
|
BK - EMEA
|
|
100
|
|
171
|
|
275
|
|
352
|
BK - LAC
|
|
65
|
|
86
|
|
95
|
|
148
|
BK - APAC
|
|
132
|
|
117
|
|
260
|
|
235
|
|
|
|
|
|
|
|
|
|
(a) TH 2014 quarter
and annual figures are shown for informational purposes
only.
|
|
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)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
$
|
2.4
|
|
$
|
1.5
|
|
$
|
13.7
|
|
$
|
2.4
|
Management general
and administrative expenses
|
|
|
62.4
|
|
|
47.1
|
|
|
238.5
|
|
|
166.7
|
Share-based
compensation and non-cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
incentive
compensation expense
|
|
|
14.3
|
|
|
25.1
|
|
|
51.8
|
|
|
37.3
|
Depreciation and
amortization
|
|
|
4.3
|
|
|
3.9
|
|
|
17.0
|
|
|
14.0
|
Tim Hortons
transaction and restructuring costs
|
|
|
37.0
|
|
|
94.3
|
|
|
116.7
|
|
|
125.0
|
Total general and
administrative expenses
|
|
|
118.0
|
|
|
170.4
|
|
|
424.0
|
|
|
343.0
|
|
Selling, general and
administrative expenses
|
|
$
|
120.4
|
|
$
|
171.9
|
|
$
|
437.7
|
|
$
|
345.4
|
Other Operating
Expenses (Income), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
Net losses on
disposal of assets, restaurant closures and
refranchisings
(a)
|
|
$
|
28.6
|
|
$
|
9.1
|
|
$
|
22.0
|
|
$
|
25.4
|
Litigation
settlements and reserves, net
|
|
|
(0.5)
|
|
|
0.2
|
|
|
1.3
|
|
|
4.0
|
Net losses on
derivatives (b)
|
|
|
-
|
|
|
143.0
|
|
|
37.3
|
|
|
290.9
|
Foreign exchange net
losses (gains) (c)
|
|
|
1.6
|
|
|
17.6
|
|
|
46.7
|
|
|
(3.8)
|
Other, net
|
|
|
(6.4)
|
|
|
1.7
|
|
|
(1.8)
|
|
|
10.9
|
|
Other operating
expenses (income), net
|
|
$
|
23.3
|
|
$
|
171.6
|
|
$
|
105.5
|
|
$
|
327.4
|
|
(a) Net losses on
disposal of assets, restaurant closures and refranchisings
consisted of net losses associated with refranchisings and net
losses associated with asset disposals and restaurant
closures.
|
|
(b) During 2015, net
losses on derivatives primarily reflects the reclassification of
losses on cash flow hedges from accumulated other comprehensive
income (loss) to earnings as a result of de-designation and
settlement of certain interest rate swaps. During 2014, net losses
on derivatives primarily reflects the change in fair value and
deferred premium expense on derivatives related to the TH
transaction which were entered into in order to align U.S. dollar
denominated financing sources with the Canadian dollar purchase
price obligations under the definitive agreement entered into with
The TDL Group Corp.
|
|
(c) 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
GAAP, and discuss the reasons that we believe this information is
useful to management and may be useful to investors. These measures
may differ from similarly captioned measures of other companies in
our industry.
Non-GAAP Measures:
To supplement its condensed consolidated financial statements
presented on a U.S. Generally Accepted Accounting Principles
("GAAP") basis, RBI reports the following non-GAAP financial
measures: EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted
Diluted EPS, Organic revenue growth and Organic Adjusted EBITDA
growth.
EBITDA is defined as earnings (net income or loss) before
interest, (gain) loss on early extinguishment of debt, taxes, and
depreciation and amortization and is used by management to measure
operating performance of the business.
Adjusted EBITDA is defined as EBITDA excluding the impact of
share-based compensation and non-cash incentive compensation
expense, (income) loss from equity method investments, net of cash
distributions received from equity method investments, other
operating (income) expenses, net, and all other specifically
identified costs associated with non-recurring projects, including
acquisition accounting impact on cost of sales and Tim Hortons
transaction and restructuring costs. Adjusted EBITDA is used by
management to measure operating performance of the business,
excluding specifically identified items that management believes do
not directly reflect our core operations, and represents our
measure of segment income.
Adjusted Net Income is defined as net income excluding the
impact of those same items excluded from Adjusted EBITDA and also
excluding franchise agreement amortization, amortization of
deferred financing costs and original issue discount, interest
expense and loss (gain) on extinguished debt. Adjusted Diluted EPS
is calculated by dividing Adjusted Net Income by the number of
diluted shares of RBI during the reporting period. Adjusted Net
Income and Adjusted Diluted EPS are used by management to evaluate
the core operating performance of the business.
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 core operating performance of the business as it
excludes the impact of foreign currency exchange rates. We
calculate the impact of FX movements by translating current year
results at prior year monthly average exchange rates.
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Organic Growth in
Revenue and Adjusted EBITDA
|
Three Months Ended
December 31, 2015
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of
FX
|
|
|
|
|
|
|
|
Actual
|
|
Q4 '15 vs. Q4
'14
|
|
Movements
|
|
Organic
Growth
|
(in US$
millions)
|
|
Q4
'15
|
|
Q4
'14
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
|
Calculation:
|
|
|
|
|
A
|
|
B
|
|
|
|
C
|
|
B-C=D
|
|
D/A
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
|
771.5
|
|
$
|
818.5
|
{a}
|
$
|
(47.0)
|
|
(5.7)%
|
|
$
|
(134.9)
|
|
$
|
87.9
|
|
10.7 %
|
BK
|
|
$
|
285.5
|
|
$
|
274.2
|
|
$
|
11.3
|
|
4.1 %
|
|
$
|
(15.4)
|
|
$
|
26.7
|
|
9.7 %
|
|
RBI
|
|
$
|
1,057.0
|
|
$
|
1,092.7
|
{a}
|
$
|
(35.7)
|
|
(3.3)%
|
|
$
|
(150.3)
|
|
$
|
114.6
|
|
10.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
|
243.4
|
|
$
|
208.8
|
{a}
|
$
|
34.6
|
|
16.6 %
|
|
$
|
(42.5)
|
|
$
|
77.1
|
|
36.9 %
|
BK
|
|
$
|
199.2
|
|
$
|
189.1
|
|
$
|
10.1
|
|
5.3 %
|
|
$
|
(13.8)
|
|
$
|
23.9
|
|
12.6 %
|
|
RBI
|
|
$
|
442.6
|
|
$
|
397.9
|
{a}
|
$
|
44.7
|
|
11.2 %
|
|
$
|
(56.3)
|
|
$
|
101.0
|
|
25.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
{a} 2014 TH Pro
Forma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Organic Growth in
Revenue and Adjusted EBITDA
|
Twelve Months Ended
December 31, 2015
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Impact of
FX
|
|
|
|
|
|
|
Actual
|
|
2015 vs.
2014
|
|
Movements
|
|
Organic
Growth
|
(in US$
millions)
|
|
|
2015
|
|
|
2014
|
|
|
$
|
|
%
|
|
|
$
|
|
|
$
|
|
%
|
|
Calculation:
|
|
|
|
|
A
|
|
|
B
|
|
|
|
|
C
|
|
|
B-C=D
|
|
D/A
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
|
2,956.9
|
|
$
|
3,145.1
|
{a}
|
$
|
(188.2)
|
|
(6.0)%
|
|
$
|
(465.1)
|
|
$
|
276.9
|
|
8.8 %
|
BK
|
|
$
|
1,095.3
|
|
$
|
1,055.2
|
|
$
|
40.1
|
|
3.8 %
|
|
$
|
(69.8)
|
|
$
|
109.9
|
|
10.4 %
|
|
RBI
|
|
$
|
4,052.2
|
|
$
|
4,200.3
|
{a}
|
$
|
(148.1)
|
|
(3.5)%
|
|
$
|
(534.9)
|
|
$
|
386.8
|
|
9.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
|
906.7
|
|
$
|
816.4
|
{a}
|
$
|
90.3
|
|
11.1 %
|
|
$
|
(144.8)
|
|
$
|
235.1
|
|
28.8 %
|
BK
|
|
$
|
759.5
|
|
$
|
726.0
|
|
$
|
33.5
|
|
4.6 %
|
|
$
|
(61.9)
|
|
$
|
95.4
|
|
13.1 %
|
|
RBI
|
|
$
|
1,666.2
|
|
$
|
1,542.4
|
{a}
|
$
|
123.8
|
|
8.0 %
|
|
$
|
(206.7)
|
|
$
|
330.5
|
|
21.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
{a} 2014 TH Pro
Forma
|
RESTAURANT BRANDS
INTERNATIONAL, INC. AND SUBSIDIARIES
|
Non-GAAP Financial
Measures
|
Reconciliation of
EBITDA and Adjusted EBITDA to Net Income (Loss)
|
(Unaudited)
|
|
(in US$
millions)
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
Segment
Income:
|
|
2015
|
|
2014
PF
|
|
TH
|
|
$
|
243.4
|
|
$
|
208.8
|
|
BK
|
|
|
199.2
|
|
|
189.1
|
|
|
Adjusted
EBITDA
|
|
|
442.6
|
|
|
397.9
|
|
|
|
|
|
|
|
|
|
Share-based
compensation and non-cash
|
|
|
|
|
|
|
|
incentive
compensation expense(2)
|
|
|
14.3
|
|
|
19.3
|
TH transaction and
restructuring costs(3)
|
|
|
37.0
|
|
|
-
|
Impact of equity
method investments(4)
|
|
|
2.0
|
|
|
4.6
|
Other operating
expenses (income), net
|
|
|
23.3
|
|
|
26.1
|
|
EBITDA
|
|
|
366.0
|
|
|
347.9
|
Depreciation and
amortization
|
|
|
44.0
|
|
|
51.1
|
|
Income from
operations
|
|
|
322.0
|
|
|
296.8
|
Interest expense,
net
|
|
|
116.0
|
|
|
111.3
|
Income tax
expense
|
|
|
21.5
|
|
|
131.5
|
|
Net income
|
|
$
|
184.5
|
|
$
|
54.0
|
RESTAURANT BRANDS
INTERNATIONAL, INC. AND SUBSIDIARIES
|
Non-GAAP Financial
Measures
|
Reconciliation of
EBITDA and Adjusted EBITDA to Net Income (Loss)
|
(Unaudited)
|
|
(in US$
millions)
|
|
Twelve Months
Ended December 31,
|
|
|
2015
|
|
2014
PF
|
Segment
Income:
|
|
|
|
|
TH
|
|
$
|
906.7
|
|
$
|
816.4
|
|
BK
|
|
|
759.5
|
|
|
726.0
|
|
|
Adjusted
EBITDA
|
|
|
1,666.2
|
|
|
1,542.4
|
Share-based
compensation and non-cash
|
|
|
|
|
|
|
|
incentive
compensation expense(2)
|
|
|
51.8
|
|
|
39.1
|
Acquisition
accounting impact on cost of sales
|
|
|
0.5
|
|
|
-
|
TH transaction and
restructuring costs(3)
|
|
|
116.7
|
|
|
33.9
|
Impact of equity
method investments(4)
|
|
|
17.7
|
|
|
10.2
|
Other operating
expenses (income), net
|
|
|
105.5
|
|
|
39.6
|
|
EBITDA
|
|
|
1,374.0
|
|
|
1,419.6
|
Depreciation and
amortization
|
|
|
181.8
|
|
|
194.4
|
|
Income from
operations
|
|
|
1,192.2
|
|
|
1,225.2
|
Interest expense,
net
|
|
|
478.3
|
|
|
452.3
|
Loss on early
extinguishment of debt
|
|
|
40.0
|
|
|
-
|
Income tax
expense
|
|
|
162.2
|
|
|
335.8
|
|
Net income
|
|
$
|
511.7
|
|
$
|
437.1
|
RESTAURANT BRANDS
INTERNATIONAL, INC. AND SUBSIDIARIES
|
Non-GAAP Financial
Measures
|
Reconciliation of Net
Income (Loss) to Adjusted Net Income Attributable to Common
Shareholders and Adjusted Diluted EPS
|
(Unaudited)
|
|
(in US$ millions,
except per share data)
|
|
Three Months Ended
December 31,
|
|
|
|
|
2015
|
|
2014
PF
|
|
|
|
|
|
|
Net
income
|
|
$
|
184.5
|
|
$
|
54.0
|
|
Income tax
expense
|
|
|
21.5
|
|
|
131.5
|
Income before
income taxes
|
|
|
206.0
|
|
|
185.5
|
Adjustments:
|
|
|
|
|
|
|
|
Franchise agreement
amortization
|
|
|
7.3
|
|
|
7.3
|
|
Amortization of
deferred financing costs and
|
|
|
|
|
|
|
|
|
original issue
discount
|
|
|
9.9
|
|
|
8.2
|
|
Interest expense and
loss on extinguished debt(1)
|
|
|
3.2
|
|
|
-
|
|
Share-based
compensation and non-cash
|
|
|
|
|
|
|
|
|
incentive
compensation expense(2)
|
|
|
14.3
|
|
|
19.3
|
|
TH transaction and
restructuring costs(3)
|
|
|
37.0
|
|
|
-
|
|
Impact of equity
method investments(4)
|
|
|
2.0
|
|
|
4.6
|
|
Other operating
expenses (income), net
|
|
|
23.3
|
|
|
26.1
|
|
Total
adjustments
|
|
|
97.0
|
|
|
65.5
|
Adjusted income
before income taxes
|
|
|
303.0
|
|
|
251.0
|
|
Adjusted income tax
expense(5)
|
|
|
69.8
|
|
|
57.7
|
Adjusted net
income
|
|
|
233.2
|
|
|
193.3
|
|
Preferred share
dividends
|
|
|
67.5
|
|
|
67.5
|
Adjusted net
income attributable to common shareholders
|
|
$
|
165.7
|
|
$
|
125.8
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
|
$
|
0.35
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
Diluted average
shares outstanding
|
|
|
474.7
|
|
|
476.1
|
RESTAURANT BRANDS
INTERNATIONAL, INC. AND SUBSIDIARIES
|
Non-GAAP Financial
Measures
|
Reconciliation of Net
Income (Loss) to Adjusted Net Income Attributable to Common
Shareholders and Adjusted Diluted EPS
|
(Unaudited)
|
|
|
|
|
|
|
(in US$ millions,
except per share data)
|
|
Twelve Months
Ended December 31,
|
|
|
|
|
2015
|
|
2014
PF
|
|
|
|
Net
income
|
|
$
|
511.7
|
|
$
|
437.1
|
|
Income tax
expense
|
|
|
162.2
|
|
|
335.8
|
Income before
income taxes
|
|
|
673.9
|
|
|
772.9
|
Adjustments:
|
|
|
|
|
|
|
|
Franchise agreement
amortization
|
|
|
27.8
|
|
|
29.4
|
|
Amortization of
deferred financing costs and
|
|
|
|
|
|
|
|
|
original issue
discount
|
|
|
34.9
|
|
|
32.8
|
|
Interest expense and
loss on extinguished debt(1)
|
|
|
53.2
|
|
|
-
|
|
Share-based
compensation and non-cash
|
|
|
|
|
|
|
|
|
incentive
compensation expense(2)
|
|
|
51.8
|
|
|
39.1
|
|
Acquisition
accounting impact on cost of sales
|
|
|
0.5
|
|
|
-
|
|
TH transaction and
restructuring costs(3)
|
|
|
116.7
|
|
|
33.9
|
|
Impact of equity
method investments(4)
|
|
|
17.7
|
|
|
10.2
|
|
Other operating
expenses (income), net
|
|
|
105.5
|
|
|
39.6
|
|
Total
adjustments
|
|
|
408.1
|
|
|
185.0
|
Adjusted income
before income taxes
|
|
|
1,082.0
|
|
|
957.9
|
|
Adjusted income tax
expense(5)
|
|
|
249.7
|
|
|
220.3
|
Adjusted net
income
|
|
|
832.3
|
|
|
737.6
|
|
Preferred share
dividends
|
|
|
271.2
|
|
|
270.0
|
Adjusted net
income attributable to common shareholders
|
|
$
|
561.1
|
|
$
|
467.6
|
|
|
|
|
|
|
|
|
|
Adjusted diluted
earnings per share
|
|
$
|
1.18
|
|
$
|
0.98
|
|
|
|
|
|
|
|
|
|
Diluted average
shares outstanding
|
|
|
476.0
|
|
|
476.1
|
Non-GAAP Financial Measures
Footnotes
to Reconciliation Tables
(1)
|
Represents (gain)
loss on early extinguishment of debt, $3.2 million and $11.3
million of non-cash interest expense for the three and twelve
months ended December 31, 2015, respectively, related to losses
reclassified from accumulated other comprehensive income (loss)
into interest expense in connection with interest rate swaps
settled in May 2015 and $1.9 million of incremental interest
expense for the twelve months ended December 31, 2015 related to
the redemption of the Tim Hortons Notes and the March 2015
mandatory prepayment of our term loan.
|
|
|
(2)
|
Represents
share-based compensation expense associated with employee stock
options for the periods indicated; also includes the portion of
annual non-cash incentive compensation that eligible employees
elected to receive or are expected to elect to receive as common
equity in lieu of their 2014 and 2015 cash bonus,
respectively.
|
|
|
(3)
|
In connection with
the Transactions and a series of post-closing transactions during
2015 that resulted in changes to our legal and capital structure,
we incurred certain non-recurring financing, legal and advisory
fees. We also incurred non-recurring costs to realign our
global structure to better accommodate the needs of the combined
business and support successful global growth. In addition,
after consummation of the Transactions, we implemented a
restructuring plan that resulted in work force reductions
throughout our TH business and as a result incurred incremental
costs. The restructuring is part of our on-going cost
reduction efforts with the goal of driving efficiencies and
creating fiscal resources that will be reinvested into our TH
business. The non-recurring general and administrative
expenses include financing, legal and advisory fees, severance
benefits and other compensation costs, and training expenses.
Lastly, in connection with the Refinancing, we incurred
non-recurring financing, legal and advisory fees. We do not expect
to incur any additional TH transaction and restructuring costs
after 2015.
|
|
|
(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)
|
Adjusted income tax
expense for the years ended December 31, 2015 and 2014,
respectively, is calculated using RBI's statutory tax rate in the
jurisdiction in which the costs were incurred.
|
SOURCE Restaurant Brands International