OAKVILLE, ON, Feb. 12,
2018 /PRNewswire/ - Restaurant Brands International Inc. (TSX/NYSE:
QSR, TSX: QSP) today reported financial results for the full year
and fourth quarter ended December 31, 2017.
Daniel Schwartz, Chief Executive
Officer of Restaurant Brands International Inc. ("RBI") commented,
"We are pleased to report another year of strong results. After
acquiring POPEYES® earlier in 2017, we made good progress
integrating the business, and we remain highly encouraged by the
brand's growth potential. We also improved system-wide sales growth
at BURGER KING® this year, driven by accelerated net restaurant
growth and continued comparable sales momentum. At TIM HORTONS®, we
launched our mobile app and our espresso based beverage platform in
Canada and the U.S. and also
opened our first restaurants in Asia, Europe
and Latin America. The continued
growth prospects for each of our three iconic brands excites us,
and we believe we have the right strategy in place to create
further value for all of our stakeholders over the long run."
Full Year 2017 Highlights:
- Total Revenues of $4,576.1
million versus $4,145.8
million in prior year
- Net Income Attributable to Common Shareholders of $626.1 million versus $345.6 million in prior year
- Diluted EPS of $2.54 versus
$1.45 in prior year
- Comparable sales, in constant currency, of (0.1)% at Tim
Hortons ("TH"), 3.1% at Burger King ("BK"), and (1.5)% at Popeyes
Louisiana Kitchen ("PLK")
- Net restaurant growth of 2.9% at TH, 6.5% at BK, and 6.1% at
PLK
- System-wide sales growth, in constant currency, of 3.0% at TH,
10.1% at BK, and 5.1% at PLK
- Adjusted EBITDA of $2,145.8
million
- Combined Adjusted EBITDA growth (including a full year of
Popeyes in both periods) of 8.3% on an organic basis
- Adjusted Diluted EPS of $2.10
versus $1.58 in prior year
Fourth Quarter 2017 Highlights:
- Total Revenues of $1,234.2
million versus $1,111.4
million in prior year period
- Net Income Attributable to Common Shareholders of $395.0 million versus $118.4 million in prior year period
- Diluted EPS of $1.59 versus
$0.50 in prior year period
- Comparable sales, in constant currency, of 0.1% at TH, 4.6% at
BK, and (1.3)% at PLK
- System-wide sales growth, in constant currency, of 2.4% at TH,
12.3% at BK, and 6.8% at PLK
- Adjusted EBITDA of $606.3
million, up 10.8% on an organic basis versus prior year
combined results (including Popeyes)
- Adjusted Diluted EPS of $0.66
versus $0.44 in prior year
period
Capital Structure and Dividend Update:
- During the fourth quarter, RBI completed the previously
announced preferred share redemption and the repurchase of 5
million partnership exchangeable units of Restaurant Brands
International Limited Partnership ("RBI LP")
- RBI announced today that its board of directors declared a
dividend of $0.45 per common share
and partnership exchangeable unit of RBI LP for the first quarter
of 2018
- In connection with the declared dividend, RBI also announced
that it is targeting a total of $1.80
in dividends per common share and partnership exchangeable unit of
RBI LP for 2018
Consolidated Operational Highlights
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(unaudited)
|
|
(unaudited)
|
System-wide Sales
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
2.4%
|
|
|
2.4%
|
|
|
3.0%
|
|
|
5.2%
|
|
BK
|
|
12.3%
|
|
|
8.5%
|
|
|
10.1%
|
|
|
7.8%
|
|
PLK
|
|
6.8%
|
|
|
8.8%
|
|
|
5.1%
|
|
|
7.4%
|
System-wide sales (in
US$ millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
$
|
1,745.1
|
|
$
|
1,622.2
|
|
$
|
6,716.9
|
|
$
|
6,405.2
|
|
BK
|
$
|
5,302.0
|
|
$
|
4,651.6
|
|
$
|
20,075.1
|
|
$
|
18,209.2
|
|
PLK
|
$
|
888.0
|
|
$
|
767.3
|
|
$
|
3,511.5
|
|
$
|
3,286.3
|
Comparable
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
0.1%
|
|
|
0.2%
|
|
|
(0.1)%
|
|
|
2.5%
|
|
BK
|
|
4.6%
|
|
|
2.8%
|
|
|
3.1%
|
|
|
2.3%
|
|
PLK
|
|
(1.3)%
|
|
|
2.8%
|
|
|
(1.5)%
|
|
|
1.7 %
|
Net Restaurant
Growth
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
2.9%
|
|
|
4.5%
|
|
|
2.9%
|
|
|
4.5%
|
|
BK
|
|
6.5%
|
|
|
4.9%
|
|
|
6.5%
|
|
|
4.9%
|
|
PLK
|
|
6.1%
|
|
|
6.2%
|
|
|
6.1%
|
|
|
6.2%
|
System Restaurant
Count at Period End
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
4,748
|
|
|
4,613
|
|
|
4,748
|
|
|
4,613
|
|
BK
|
|
16,767
|
|
|
15,738
|
|
|
16,767
|
|
|
15,738
|
|
PLK
|
|
2,892
|
|
|
2,725
|
|
|
2,892
|
|
|
2,725
|
|
Note: System-wide
sales growth and comparable sales are calculated on a constant
currency basis and include sales at franchise restaurants and
company-owned restaurants. System-wide sales are driven by sales at
franchised restaurants, as approximately 100% of current
restaurants are franchised. We do not record franchise sales as
revenues; however, our franchise revenues include royalties based
on a percentage of franchise sales. For 2016, PLK figures are shown
for informational purposes only.
|
Consolidated Financial Highlights
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$ millions,
except per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(unaudited)
|
|
(unaudited)
|
Total
Revenues
|
$
|
1,234.2
|
|
$
|
1,111.4
|
|
$
|
4,576.1
|
|
$
|
4,145.8
|
Net Income
Attributable to Common
Shareholders
|
$
|
395.0
|
|
$
|
118.4
|
|
$
|
626.1
|
|
$
|
345.6
|
Net Income
Attributable to Common
Shareholders and Noncontrolling Interests
|
$
|
757.9
|
|
$
|
233.2
|
|
$
|
1,211.2
|
|
$
|
682.4
|
Diluted Earnings per
Share
|
$
|
1.59
|
|
$
|
0.50
|
|
$
|
2.54
|
|
$
|
1.45
|
|
|
|
|
|
|
|
|
|
|
|
|
TH Adjusted
EBITDA(1)
|
$
|
304.1
|
|
$
|
278.4
|
|
$
|
1,135.8
|
|
$
|
1,072.3
|
BK Adjusted
EBITDA(1)
|
$
|
265.3
|
|
$
|
234.0
|
|
$
|
903.1
|
|
$
|
815.9
|
PLK Adjusted
EBITDA(1)
|
$
|
36.9
|
|
N/A
|
|
$
|
106.9
|
|
N/A
|
Adjusted
EBITDA(2)
|
$
|
606.3
|
|
$
|
512.4
|
|
$
|
2,145.8
|
|
$
|
1,888.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income(2)
|
$
|
313.5
|
|
$
|
208.3
|
|
$
|
1,001.4
|
|
$
|
744.2
|
Adjusted Diluted
Earnings per Share(2)
|
$
|
0.66
|
|
$
|
0.44
|
|
$
|
2.10
|
|
$
|
1.58
|
|
|
(1)
|
TH Adjusted EBITDA,
BK Adjusted EBITDA, and PLK Adjusted EBITDA are our measures of
segment profitability.
|
(2)
|
Adjusted EBITDA,
Adjusted Net Income, and Adjusted Diluted Earnings per Share are
non-GAAP financial measures. Please refer to "Non-GAAP Financial
Measures" for further detail.
|
Total Revenues for the year and fourth quarter grew primarily as
a result of the inclusion of our PLK segment, as well as
system-wide sales growth at both TH and BK. Net Income Attributable
to Common Shareholders for the year and fourth quarter grew
primarily as a result of one-time benefits related to the
redemption of our preferred shares and a favorable tax impact
resulting from the Tax Cuts and Jobs Act, which was enacted on
December 22, 2017 (the "Tax Act"),
both of which are excluded from our Adjusted Net Income.
Combined Adjusted EBITDA (including a full period of Popeyes'
results in both years) grew versus prior year, primarily driven by
an increase in revenue and effective cost management, at the
following rates:
- Full Year 2017: 9.3% (8.3% excluding the impact of FX
movements)
- Fourth Quarter 2017: 13.7% (10.8% excluding the impact of FX
movements)
TH Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(unaudited)
|
|
(unaudited)
|
System-wide Sales
Growth
|
|
2.4%
|
|
|
2.4%
|
|
|
3.0%
|
|
|
5.2%
|
System-wide
Sales
|
$
|
1,745.1
|
|
$
|
1,622.2
|
|
$
|
6,716.9
|
|
$
|
6,405.2
|
Comparable
Sales
|
|
0.1%
|
|
|
0.2%
|
|
|
(0.1)%
|
|
|
2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
2.9%
|
|
|
4.5%
|
|
|
2.9%
|
|
|
4.5%
|
System Restaurant
Count at Period End
|
|
4,748
|
|
|
4,613
|
|
|
4,748
|
|
|
4,613
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
562.1
|
|
$
|
546.3
|
|
$
|
2,228.9
|
|
$
|
2,112.1
|
Franchise and
Property Revenues
|
$
|
259.6
|
|
$
|
247.6
|
|
$
|
925.7
|
|
$
|
889.3
|
Total
Revenues
|
$
|
821.7
|
|
$
|
793.9
|
|
$
|
3,154.6
|
|
$
|
3,001.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
433.8
|
|
$
|
421.0
|
|
$
|
1,707.6
|
|
$
|
1,647.4
|
Franchise and
Property Expenses
|
$
|
94.9
|
|
$
|
92.3
|
|
$
|
335.6
|
|
$
|
317.1
|
Segment
SG&A
|
$
|
19.6
|
|
$
|
30.6
|
|
$
|
91.0
|
|
$
|
78.9
|
Segment Depreciation
and Amortization
|
$
|
26.8
|
|
$
|
25.2
|
|
$
|
102.7
|
|
$
|
102.1
|
Adjusted
EBITDA(1)(3)
|
$
|
304.1
|
|
$
|
278.4
|
|
$
|
1,135.8
|
|
$
|
1,072.3
|
(3)
|
TH Adjusted EBITDA
includes $3.9 million and $3.2 million of cash distributions
received from equity method investments for the three months ended
December 31, 2017 and 2016, respectively. TH Adjusted EBITDA
includes $12.7 million and $12.2 million of cash distributions
received from equity method investments for the twelve months ended
December 31, 2017 and 2016, respectively.
|
For the year and fourth quarter, system-wide sales growth was
primarily driven by net restaurant growth of 2.9%. For the year and
fourth quarter, comparable sales were relatively flat, including
Canada comparable sales of 0.2%
and 0.8%, respectively.
Total Revenues grew versus prior year, primarily as a result of
system-wide sales growth and a favorable FX impact, at the
following rates:
- Full Year 2017: 5.1% (3.2% excluding the impact of FX
movements)
- Fourth Quarter 2017: 3.5% ((0.9)% excluding the impact of FX
movements)
Adjusted EBITDA grew versus prior year, primarily driven by
revenue growth, a favorable FX impact, and, in the case of fourth
quarter results, a decrease in segment SG&A, at the following
rates:
- Full Year 2017: 5.9% (4.0% excluding the impact of FX
movements)
- Fourth Quarter 2017: 9.2% (4.7% excluding the impact of FX
movements)
BK Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(unaudited)
|
|
(unaudited)
|
System-wide Sales
Growth
|
|
12.3%
|
|
|
8.5%
|
|
|
10.1%
|
|
|
7.8%
|
System-wide
Sales
|
$
|
5,302.0
|
|
$
|
4,651.6
|
|
$
|
20,075.1
|
|
$
|
18,209.2
|
Comparable
Sales
|
|
4.6%
|
|
|
2.8%
|
|
|
3.1%
|
|
|
2.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
6.5%
|
|
|
4.9%
|
|
|
6.5%
|
|
|
4.9%
|
System Restaurant
Count at Period End
|
|
16,767
|
|
|
15,738
|
|
|
16,767
|
|
|
15,738
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
22.1
|
|
$
|
22.9
|
|
$
|
93.7
|
|
$
|
92.6
|
Franchise and
Property Revenues
|
$
|
322.8
|
|
$
|
294.6
|
|
$
|
1,125.5
|
|
$
|
1,051.8
|
Total
Revenues
|
$
|
344.9
|
|
$
|
317.5
|
|
$
|
1,219.2
|
|
$
|
1,144.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
19.7
|
|
$
|
20.6
|
|
$
|
85.8
|
|
$
|
79.9
|
Franchise and
Property Expenses
|
$
|
36.7
|
|
$
|
38.3
|
|
$
|
134.7
|
|
$
|
137.0
|
Segment
SG&A
|
$
|
32.6
|
|
$
|
36.7
|
|
$
|
142.9
|
|
$
|
159.6
|
Segment Depreciation
and Amortization
|
$
|
8.6
|
|
$
|
12.1
|
|
$
|
46.5
|
|
$
|
48.0
|
Adjusted
EBITDA(1)(4)
|
$
|
265.3
|
|
$
|
234.0
|
|
$
|
903.1
|
|
$
|
815.9
|
|
|
(4)
|
BK Adjusted EBITDA
includes $0.8 million of cash distributions received from equity
method investments for the three and twelve months ended December
31, 2017.
|
For the year and fourth quarter, system-wide sales growth was
primarily driven by net restaurant growth of 6.5% as well as
comparable sales of 3.1% and 4.6%, respectively. For the year and
fourth quarter, comparable sales were primarily driven by US
comparable sales of 2.5% and 5.1%, respectively.
Total Revenues grew versus prior year, primarily as a result of
system-wide sales growth, at the following rates:
- Full Year 2017: 6.5% (6.4% excluding the impact of FX
movements)
- Fourth Quarter 2017: 8.6% (7.3% excluding the impact of FX
movements)
Adjusted EBITDA grew versus prior year, primarily as a result of
revenue growth and effective cost management, at the following
rates:
- Full Year 2017: 10.7% (10.6% excluding the impact of FX
movements)
- Fourth Quarter 2017: 13.4% (12.1% excluding the impact of FX
movements)
PLK Segment Results
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
(in US$
millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(unaudited)
|
|
(unaudited)
|
System-wide Sales
Growth
|
|
6.8%
|
|
|
8.8%
|
|
|
5.1%
|
|
|
7.4%
|
System-wide
Sales
|
$
|
888.0
|
|
$
|
767.3
|
|
$
|
3,511.5
|
|
$
|
3,286.3
|
Comparable
Sales
|
|
(1.3)%
|
|
|
2.8%
|
|
|
(1.5)%
|
|
|
1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Restaurant
Growth
|
|
6.1%
|
|
|
6.2%
|
|
|
6.1%
|
|
|
6.2%
|
System Restaurant
Count at Period End
|
|
2,892
|
|
|
2,725
|
|
|
2,892
|
|
|
2,725
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
22.0
|
|
|
N/A
|
|
$
|
67.7
|
|
|
N/A
|
Franchise and
Property Revenues
|
$
|
45.6
|
|
|
N/A
|
|
$
|
134.6
|
|
|
N/A
|
Total
Revenues
|
$
|
67.6
|
|
|
N/A
|
|
$
|
202.3
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
Sales
|
$
|
19.9
|
|
|
N/A
|
|
$
|
56.9
|
|
|
N/A
|
Franchise and
Property Expenses
|
$
|
2.8
|
|
|
N/A
|
|
$
|
7.3
|
|
|
N/A
|
Segment
SG&A
|
$
|
13.0
|
|
|
N/A
|
|
$
|
40.2
|
|
|
N/A
|
Segment Depreciation
and Amortization
|
$
|
5.0
|
|
|
N/A
|
|
$
|
9.0
|
|
|
N/A
|
Adjusted
EBITDA(1)
|
$
|
36.9
|
|
|
N/A
|
|
$
|
106.9
|
|
|
N/A
|
For the year and fourth quarter, system-wide sales growth was
primarily driven by net restaurant growth of 6.1%, partially offset
by comparable sales of (1.5)% and (1.3)%, respectively. For the
year and fourth quarter, comparable sales were primarily driven by
US comparable sales of (2.2)% and (2.5)%, respectively.
Cash and Liquidity
As of December 31, 2017, total debt was $12.3 billion, and net debt (total debt less cash
and cash equivalents of $1.1 billion)
was $11.2 billion. During the fourth
quarter, we completed the redemption of our preferred shares, as
well as the repurchase of 5 million partnership exchangeable units
for approximately $330 million, as
previously announced. On February 12, 2018, RBI announced that
its board of directors declared a dividend of $0.45 per common share and partnership
exchangeable unit of RBI LP for the first quarter of 2018. The
dividend will be payable on April 2, 2018 to shareholders and
unitholders of record at the close of business on March 15,
2018. In connection with the declared dividend, RBI also announced
that it is targeting a total of $1.80
in dividends per common share and partnership exchangeable unit of
RBI LP for 2018.
Investor Conference Call
We will host an investor conference call and webcast at
8:30 a.m. Eastern Time on Monday,
February 12, 2018, to review financial results for the full
year and fourth quarter ended December 31, 2017. The earnings
call will be broadcast live via our investor relations website at
http://investor.rbi.com and a replay will be available for 30
days following the release. The dial-in number is (877) 317-6711
for U.S. callers, (866) 450-4696 for Canadian callers, and (412)
317-5475 for callers from other countries.
About Restaurant Brands International Inc.
Restaurant Brands International Inc. ("RBI") is one of the
world's largest quick service restaurant companies with more than
$30 billion in system-wide sales and
over 24,000 restaurants in more than 100 countries and U.S.
territories. RBI owns three of the world's most prominent and
iconic quick service restaurant brands – TIM HORTONS®, BURGER
KING®, and POPEYES®. These independently operated brands have been
serving their respective guests, franchisees and communities for
over 40 years. To learn more about RBI, please visit the company's
website at www.rbi.com.
Forward-Looking Statements
This press release contains certain forward-looking
statements and information, which reflect management's current
beliefs and expectations regarding future events and operating
performance and speak only as of the date hereof. These
forward-looking statements are not guarantees of future performance
and involve a number of risks and uncertainties. These
forward-looking statements include statements about our
expectations regarding our progress integrating the
POPEYES® business, as well as the brand's growth
potential; expectations regarding the continued growth prospects
for each of our three iconic brands; whether we have the right
strategy in place to create further value for all of our
stakeholders over the long run; our estimates regarding our
anticipated income tax rate for 2018 and other tax matters as a
result of the recently-enacted U.S. tax legislation; and our target
total dividend for 2018. 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; risks related to RBI's ability to compete domestically
and internationally in an intensely competitive industry; risks
related to the complexity of the new U.S. tax legislation and
our ability to accurately interpret and predict its impact on our
financial condition and results; and risks related to our ability
to generate sufficient liquidity to achieve our target total
dividend for 2018 and satisfy our debt service and other
obligations. Other than as required under U.S. federal securities
laws or Canadian securities laws, we do not assume a duty to update
these forward-looking statements, whether as a result of new
information, subsequent events or circumstances, change in
expectations or otherwise.
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Operations
|
(In millions of U.S.
dollars, except per share data)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
Sales
|
$
|
606.2
|
|
$
|
569.2
|
|
$
|
2,390.3
|
|
$
|
2,204.7
|
|
Franchise and
property revenues
|
|
628.0
|
|
|
542.2
|
|
|
2,185.8
|
|
|
1,941.1
|
|
|
Total
revenues
|
|
1,234.2
|
|
|
1,111.4
|
|
|
4,576.1
|
|
|
4,145.8
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
473.4
|
|
|
441.6
|
|
|
1,850.3
|
|
|
1,727.3
|
|
Franchise and
property expenses
|
|
134.4
|
|
|
130.6
|
|
|
477.6
|
|
|
454.1
|
|
Selling, general and
administrative expenses
|
|
96.8
|
|
|
90.1
|
|
|
415.5
|
|
|
318.6
|
|
(Income) loss from
equity method investments
|
|
(3.5)
|
|
|
(3.6)
|
|
|
(12.4)
|
|
|
(20.2)
|
|
Other operating
expenses (income), net
|
|
27.1
|
|
|
(38.9)
|
|
|
109.2
|
|
|
(0.7)
|
|
|
Total operating costs
and expenses
|
|
728.2
|
|
|
619.8
|
|
|
2,840.2
|
|
|
2,479.1
|
Income from
operations
|
506.0
|
|
491.6
|
|
1,735.9
|
|
1,666.7
|
Interest expense,
net
|
136.8
|
|
117.3
|
|
512.2
|
|
466.9
|
Loss on early
extinguishment of debt
|
43.4
|
|
—
|
|
122.0
|
|
—
|
Income before income
taxes
|
325.8
|
|
374.3
|
|
1,101.7
|
|
1,199.8
|
|
Income tax (benefit)
expense
|
(252.6)
|
|
72.9
|
|
(133.6)
|
|
243.9
|
Net income
|
578.4
|
|
301.4
|
|
1,235.3
|
|
955.9
|
|
Net income
attributable to noncontrolling interests
|
363.2
|
|
115.5
|
|
586.5
|
|
340.3
|
|
Preferred shares
dividends
|
54.0
|
|
67.5
|
|
256.5
|
|
270.0
|
Gain on redemption of
preferred shares
|
(233.8)
|
|
—
|
|
(233.8)
|
|
—
|
Net income
attributable to common shareholders
|
$
|
395.0
|
|
$
|
118.4
|
|
$
|
626.1
|
|
$
|
345.6
|
Earnings per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.64
|
|
$
|
0.50
|
|
$
|
2.64
|
|
$
|
1.48
|
|
Diluted
|
$
|
1.59
|
|
$
|
0.50
|
|
$
|
2.54
|
|
$
|
1.45
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
241.1
|
|
|
234.2
|
|
|
237.0
|
|
|
232.9
|
|
Diluted
|
|
476.2
|
|
|
470.8
|
|
|
477.4
|
|
|
470.0
|
Dividends per common
share
|
$
|
0.21
|
|
$
|
0.17
|
|
$
|
0.78
|
|
$
|
0.62
|
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Condensed
Consolidated Balance Sheets
|
(In millions of U.S.
dollars, except share data)
|
(Unaudited)
|
|
|
|
December
31,
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
1,073.4
|
|
$
|
1,460.4
|
|
Accounts and notes
receivable, net of allowance of $14.7 and $14.3,
respectively
|
|
455.9
|
|
|
403.5
|
|
Inventories,
net
|
|
78.0
|
|
|
71.8
|
|
Advertising fund
restricted assets
|
|
83.3
|
|
|
57.7
|
|
Prepaids and other
current assets
|
|
59.0
|
|
|
103.6
|
|
|
Total current
assets
|
|
1,749.6
|
|
|
2,097.0
|
Property and
equipment, net of accumulated depreciation and amortization
of $623.3 and $474.5, respectively
|
|
2,133.3
|
|
2,054.7
|
Intangible assets,
net
|
|
11,062.2
|
|
9,228.0
|
Goodwill
|
|
5,782.3
|
|
4,675.1
|
Net investment in
property leased to franchisees
|
|
71.3
|
|
91.9
|
Derivative
assets
|
|
—
|
|
717.9
|
Other assets,
net
|
|
424.8
|
|
260.3
|
|
|
Total
assets
|
$
|
21,223.5
|
|
$
|
19,124.9
|
LIABILITIES,
REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts and drafts
payable
|
$
|
412.9
|
|
$
|
369.8
|
|
Other accrued
liabilities
|
|
838.2
|
|
|
469.3
|
|
Gift card
liability
|
|
214.9
|
|
|
194.4
|
|
Advertising fund
liabilities
|
|
110.8
|
|
|
83.3
|
|
Current portion of
long term debt and capital leases
|
|
78.2
|
|
|
93.9
|
|
|
Total current
liabilities
|
|
1,655.0
|
|
|
1,210.7
|
Term debt, net of
current portion
|
|
11,800.9
|
|
8,410.2
|
Capital leases, net
of current portion
|
|
243.8
|
|
218.4
|
Other liabilities,
net
|
|
1,455.1
|
|
784.9
|
Deferred income
taxes, net
|
|
1,508.1
|
|
1,715.1
|
|
|
Total
liabilities
|
16,662.9
|
|
12,339.3
|
|
|
|
|
|
|
|
|
Redeemable preferred
shares; no par value; 68,530,939 shares authorized, issued
and outstanding at December 31, 2016
|
|
—
|
|
3,297.0
|
Shareholders'
equity:
|
|
|
|
|
|
|
Common shares, no par
value; unlimited shares authorized at December 31,
2017 and December 31, 2016; 243,899,476 shares issued and
outstanding at
December 31, 2017; 234,236,678 shares issued and outstanding at
December 31, 2016
|
|
2,051.5
|
|
1,955.1
|
|
Retained
earnings
|
|
650.6
|
|
445.7
|
|
Accumulated other
comprehensive income (loss)
|
|
(475.7)
|
|
(698.3)
|
|
|
Total Restaurant
Brands International Inc. shareholders' equity
|
2,226.4
|
|
1,702.5
|
|
|
Noncontrolling
interests
|
2,334.2
|
|
1,786.1
|
|
|
Total shareholders'
equity
|
4,560.6
|
|
3,488.6
|
|
|
Total liabilities,
redeemable preferred shares and shareholders' equity
|
$
|
21,223.5
|
|
$
|
19,124.9
|
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Condensed
Consolidated Statements of Cash Flows
|
(In millions of U.S.
dollars)
|
(Unaudited)
|
|
Twelve Months
Ended December 31,
|
|
2017
|
|
2016
|
Cash flows from
operating activities:
|
|
Net income
|
$
|
1,235.3
|
|
$
|
955.9
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
181.1
|
|
|
172.1
|
|
|
Premiums paid and
non-cash loss on early extinguishment of debt
|
|
119.1
|
|
|
—
|
|
|
Amortization of
deferred financing costs and debt issuance discount
|
|
32.7
|
|
|
38.9
|
|
|
(Income) loss from
equity method investments
|
|
(12.4)
|
|
|
(20.2)
|
|
|
Loss (gain) on
remeasurement of foreign denominated transactions
|
|
77.3
|
|
|
(20.1)
|
|
|
Net losses on
derivatives
|
|
31.0
|
|
|
21.3
|
|
|
Share-based
compensation expense
|
|
48.3
|
|
|
35.1
|
|
|
Deferred income
taxes
|
|
(742.4)
|
|
|
80.1
|
|
|
Other
|
|
18.0
|
|
|
3.5
|
|
Changes in current
assets and liabilities, excluding acquisitions and
dispositions:
|
|
|
|
|
|
|
|
Accounts and notes
receivable
|
|
(30.4)
|
|
|
(15.8)
|
|
|
Inventories and
prepaids and other current assets
|
|
2.9
|
|
|
7.7
|
|
|
Accounts and drafts
payable
|
|
19.9
|
|
|
27.5
|
|
|
Advertising fund
restricted assets and fund liabilities
|
|
1.3
|
|
|
(10.1)
|
|
|
Other accrued
liabilities and gift card liability
|
|
360.1
|
|
|
(1.2)
|
|
Other long-term
assets and liabilities
|
|
40.2
|
|
|
(5.7)
|
|
|
|
Net cash provided by
operating activities
|
|
1,382.0
|
|
|
1,269.0
|
Cash flows from
investing activities:
|
|
|
|
|
|
Payments for property
and equipment
|
(36.7)
|
|
|
(33.7)
|
|
Proceeds from
disposal of assets, restaurant closures and
refranchisings
|
26.1
|
|
|
30.0
|
|
Net payment for
purchase of Popeyes, net of cash acquired
|
(1,635.9)
|
|
|
—
|
|
Return of investment
on direct financing leases
|
15.9
|
|
|
16.6
|
|
Settlement/sale of
derivatives, net
|
772.3
|
|
|
11.0
|
|
Other investing
activities, net
|
0.5
|
|
|
3.0
|
|
|
|
Net cash provided by
(used for) investing activities
|
(857.8)
|
|
|
26.9
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from
issuance of long-term debt
|
5,850.0
|
|
|
—
|
|
Repayments of
long-term debt and capital leases
|
(2,741.5)
|
|
|
(69.7)
|
|
Redemption of
preferred shares
|
(3,005.7)
|
|
|
—
|
|
Payment of financing
costs
|
(62.9)
|
|
|
—
|
|
Payment of dividends
on common and preferred shares and distributions
on Partnership exchangeable units
|
(663.5)
|
|
|
(538.1)
|
|
Repurchase of
Partnership exchangeable units
|
(330.2)
|
|
|
—
|
|
Proceeds from stock
option exercises
|
28.7
|
|
|
13.7
|
|
Excess tax benefits
from share-based compensation
|
—
|
|
|
8.6
|
|
Other financing
activities, net
|
(10.1)
|
|
|
(5.4)
|
|
|
|
Net cash provided by
(used for) financing activities
|
(935.2)
|
|
|
(590.9)
|
|
Effect of exchange
rates on cash and cash equivalents
|
24.0
|
|
|
(2.4)
|
|
Increase (decrease)
in cash and cash equivalents
|
(387.0)
|
|
|
702.6
|
|
Cash and cash
equivalents at beginning of period
|
1,460.4
|
|
|
757.8
|
|
Cash and cash
equivalents at end of period
|
$
|
1,073.4
|
|
$
|
1,460.4
|
Supplemental
cashflow disclosures:
|
|
|
|
|
|
Interest
paid
|
$
|
447.2
|
|
$
|
407.1
|
|
Income taxes
paid
|
$
|
200.2
|
|
$
|
159.3
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
Acquisition of
property with capital lease obligations
|
$
|
36.1
|
|
$
|
32.1
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Key Operating Metrics
We evaluate our restaurants and assess our business based on the
following operating metrics.
System-wide sales growth refers to the percentage change in
sales at all franchise and company-owned restaurants in one period
from the same period in the prior year. Comparable sales refers to
the percentage change in restaurant sales in one period from the
same prior year period for restaurants that have been open for
thirteen months or longer for TH and BK and 65 weeks or longer for
PLK. System-wide sales growth and comparable sales are measured on
a constant currency basis, which means that results exclude the
effect of foreign currency translation and are calculated by
translating prior year results at current year monthly average
exchange rates. We analyze key operating metrics on a constant
currency basis as this helps identify underlying business trends,
without distortion from the effects of currency movements.
System-wide sales represent sales at all franchise restaurants
and company-owned restaurants. We do not record franchise sales as
revenues; however, our franchise revenues include royalties based
on a percentage of franchise sales.
Net restaurant growth is presented on a percentage basis and
reflects the net increase in restaurant count (openings, net of
closures) over a trailing twelve month period, divided by the
restaurant count at the beginning of the trailing twelve month
period.
For 2017, PLK comparable sales, system-wide sales growth and
system-wide sales are for the period from October 1, 2017 through December 31, 2017 and from December 26, 2016 through December 31, 2017 for the three and twelve months
ended December 31, 2017,
respectively. Comparable sales and system-wide sales growth are
calculated using the same period in the prior year (October 1, 2016 through December 31, 2016 and December 26, 2015 through December 31, 2016, respectively). For 2017, PLK
net restaurant growth is for the period from December 26, 2016 through December 31, 2017. PLK restaurant count is as of
December 31, 2017 for the current
period, and as of December 25, 2016
for the comparative period, inclusive of temporary closures. For
2016, PLK figures are shown for informational purposes only and are
consistent with PLK's former fiscal calendar. Consequently, PLK
results for 2017 may not be comparable to those of 2016.
|
Three Months Ended
December 31,
|
|
Twelve Months
Ended December 31,
|
Comparable Sales
by Largest Market
|
2017
|
|
2016
|
|
2017
|
|
2016
|
TH -
Canada
|
0.8%
|
|
(0.2)%
|
|
0.2%
|
|
2.2%
|
BK - US
|
5.1%
|
|
1.8%
|
|
2.5%
|
|
1.0%
|
PLK - US
|
(2.5)%
|
|
3.0%
|
|
(2.2)%
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31,
|
System Restaurant
Count by Largest
Market
|
|
|
|
|
2017
|
|
2016
|
TH -
Canada
|
|
|
|
|
3,913
|
|
3,801
|
BK - US
|
|
|
|
|
7,226
|
|
7,156
|
PLK - US
|
|
|
|
|
2,212
|
|
2,094
|
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)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Segment SG&A
TH(1)
|
$
|
19.6
|
|
$
|
30.6
|
|
$
|
91.0
|
|
$
|
78.9
|
Segment SG&A
BK(1)
|
32.6
|
|
36.7
|
|
142.9
|
|
159.6
|
Segment SG&A
PLK(1)
|
13.0
|
|
—
|
|
40.2
|
|
—
|
Share-based
compensation and non-cash incentive compensation
expense
|
12.0
|
|
11.0
|
|
54.9
|
|
42.0
|
Depreciation and
amortization(2)
|
5.8
|
|
5.8
|
|
22.9
|
|
21.7
|
PLK Transaction
costs
|
11.9
|
|
—
|
|
61.7
|
|
—
|
Corporate
restructuring and tax advisory fees
|
1.9
|
|
—
|
|
1.9
|
|
—
|
Integration
costs
|
—
|
|
6.0
|
|
—
|
|
16.4
|
|
Selling, general and
administrative expenses
|
$
|
96.8
|
|
$
|
90.1
|
|
$
|
415.5
|
|
$
|
318.6
|
|
|
(1)
|
Segment SG&A
includes segment selling expenses and segment general and
administrative expenses and excludes share-based compensation and
non-cash incentive compensation expense, depreciation and
amortization, PLK transaction costs, corporate restructuring and
tax advisory fees, and integration costs.
|
(2)
|
Segment depreciation
and amortization reflects depreciation and amortization included in
the respective segment cost of sales and the respective segment
franchise and property expenses. Depreciation and amortization
included in selling, general and administrative expenses reflects
all other depreciation and amortization.
|
Other Operating
Expenses (Income), net
|
|
|
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in US$
millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net losses (gains) on
disposal of assets, restaurant closures,
and refranchisings(3)
|
$
|
13.7
|
|
$
|
(1.9)
|
|
$
|
28.6
|
|
$
|
17.7
|
Litigation
settlements and reserves, net
|
0.4
|
|
(0.4)
|
|
2.1
|
|
1.6
|
Net losses (gains) on
foreign exchange(4)
|
12.4
|
|
(36.2)
|
|
77.3
|
|
(20.1)
|
Other, net
|
0.6
|
|
(0.4)
|
|
1.2
|
|
0.1
|
Other operating
expenses (income), net
|
$
|
27.1
|
|
$
|
(38.9)
|
|
$
|
109.2
|
|
$
|
(0.7)
|
|
|
(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. Net losses
(gains) on disposals of assets, restaurant closures, and
refranchisings for the three and twelve months ended December 31,
2017 and the three and twelve months ended December 31, 2016
primarily reflects losses in connection with
refranchisings.
|
(4)
|
Net losses (gains) on
foreign exchange is primarily related to revaluation of foreign
denominated assets and liabilities.
|
RESTAURANT BRANDS INTERNATIONAL INC. AND
SUBSIDIARIES
Non-GAAP Financial Measures
(Unaudited)
Below, we define the non-GAAP financial measures, provide a
reconciliation of each non-GAAP financial measure to the most
directly comparable financial measure calculated in accordance with
U.S. Generally Accepted Accounting Principles ("GAAP"), and discuss
the reasons why we believe this information is useful to management
and may be useful to investors. These measures do not have
standardized meanings under GAAP and may differ from similarly
captioned measures of other companies in our industry.
Non-GAAP Measures
To supplement our condensed consolidated financial statements
presented on a GAAP basis, RBI reports the following non-GAAP
financial measures: EBITDA, Adjusted EBITDA, Adjusted Net Income,
Adjusted Diluted Earnings per Share ("Adjusted Diluted EPS"),
Combined Total Revenues, Combined Adjusted EBITDA, Organic revenue
growth and Organic Adjusted EBITDA growth. We believe that these
non-GAAP measures are useful to investors in assessing our
operating performance, as it provides them with the same tools that
management uses to evaluate our performance and is responsive to
questions we receive from both investors and analysts. By
disclosing these non-GAAP measures, we intend to provide investors
with a consistent comparison of our operating results and trends
for the periods presented.
EBITDA is defined as earnings (net income or loss) before
interest expense, net, (gain) loss on early extinguishment of debt,
income tax (benefit) expense, and depreciation and amortization and
is used by management to measure operating performance of the
business.
Adjusted EBITDA is defined as EBITDA excluding the non-cash
impact of share-based compensation and non-cash incentive
compensation expense and (income) loss from equity method
investments, net of cash distributions received from equity method
investments, as well as other operating expenses (income), net.
Other specifically identified costs associated with non-recurring
projects are also excluded from Adjusted EBITDA, including PLK
transaction costs associated with the acquisition of Popeyes,
corporate restructuring and tax advisory fees, and integration
costs associated with the acquisition of Tim Hortons. 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 operating performance or the performance
of an acquired business. Adjusted EBITDA, as defined above, also
represents our measure of segment income for each of our three
operating segments. PLK revenues and segment income from
March 28, 2017 through December 31, 2017 are included in our
consolidated statement of operations for the twelve months ended
December 31, 2017.
Combined Total Revenues and Combined Adjusted EBITDA include
results of PLK prior to the acquisition.
Adjusted Net Income is defined as net income excluding (i)
franchise agreement amortization, which is a non-cash expense
arising as a result of acquisition accounting that may hinder the
comparability of our operating results to our industry peers, (ii)
amortization of deferred financing costs and debt issuance
discount, a non-cash component of interest expense, and (gains)
losses on early extinguishment of debt, which are non-cash charges
that vary by the timing, terms and size of debt financing
transactions, (iii) (income) loss from equity method investments,
net of cash distributions received from equity method investments,
(iv) other operating expenses (income), net, and (v) other
specifically identified costs associated with non-recurring
projects. Adjusted Net Income includes preferred share
dividends.
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 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.
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 current year results at prior year monthly average
exchange rates. In addition, for organic growth comparative
purposes, we are presenting PLK pre- and post-combination results,
including Popeyes' pre-combination Adjusted EBITDA determined in
accordance with RBI's methodology as reflected in the
reconciliation table.
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Non-GAAP Financial
Measures
|
Organic Growth in
Revenue and Adjusted EBITDA
|
Three and Twelve
Months Ended December 31, 2017
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of
FX
|
|
|
|
|
Actual
|
|
Q4 '17 vs. Q4
'16
|
|
Movements
|
|
Organic
Growth
|
(in US$
millions)
|
|
Q4
'17
|
|
Q4
'16
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
Calculation:
|
|
|
|
A
|
|
B
|
|
|
|
C
|
|
B-C=D
|
|
D/A
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
|
821.7
|
|
$
|
793.9
|
|
$
|
27.8
|
|
3.5%
|
|
$
|
34.6
|
|
$
|
(6.8)
|
|
(0.9)%
|
BK
|
|
$
|
344.9
|
|
$
|
317.5
|
|
$
|
27.4
|
|
8.6%
|
|
$
|
4.1
|
|
$
|
23.3
|
|
7.3%
|
PLK(a)
|
|
$
|
67.6
|
|
$
|
61.0
|
|
$
|
6.6
|
|
10.8%
|
|
$
|
—
|
|
$
|
6.6
|
|
10.8%
|
Combined Total
Revenues(a)
|
|
$
|
1,234.2
|
|
$
|
1,172.4
|
|
$
|
61.8
|
|
5.3%
|
|
$
|
38.7
|
|
$
|
23.1
|
|
2.0%
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
|
$
|
304.1
|
|
$
|
278.4
|
|
$
|
25.7
|
|
9.2%
|
|
$
|
12.6
|
|
$
|
13.1
|
|
4.7%
|
BK
|
|
$
|
265.3
|
|
$
|
234.0
|
|
$
|
31.3
|
|
13.4%
|
|
$
|
2.9
|
|
$
|
28.4
|
|
12.1%
|
PLK(a)
|
|
$
|
36.9
|
|
$
|
21.0
|
|
$
|
15.9
|
|
75.7%
|
|
$
|
—
|
|
$
|
15.9
|
|
75.7%
|
Combined Adjusted
EBITDA(a)
|
|
$
|
606.3
|
|
$
|
533.4
|
|
$
|
72.9
|
|
13.7%
|
|
$
|
15.5
|
|
$
|
57.4
|
|
10.8%
|
(a) RBI acquired
Popeyes Louisiana Kitchen, Inc. ("Popeyes") on March 27, 2017.
Prior to its acquisition by RBI, Popeyes operated on a fiscal
period basis consisting of a 16-week first fiscal quarter and
12-week second through fourth fiscal quarters. Subsequent to its
acquisition by RBI, Popeyes commenced reporting on a calendar
quarter basis consistent with RBI. Q4'17 and FY'17 for PLK
represents the period from October 1, 2017 through December 31,
2017 and December 26, 2016 through December 31, 2017, respectively,
while Q4'16 and FY'16 for PLK represents the 12 weeks ended and 52
weeks ended December 25, 2016, respectively. Combined Total
Revenues and Combined Adjusted EBITDA include results of PLK prior
to the acquisition. Consequently, PLK results for the prior year
period may not be comparable.
|
|
|
|
|
|
|
|
|
Impact of
FX
|
|
|
|
|
|
|
Actual
YTD
|
|
2017 vs.
2016
|
|
Movements
|
|
Organic
Growth
|
(in US$
millions)
|
2017
|
|
2016
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
Calculation:
|
|
|
A
|
|
B
|
|
|
|
C
|
|
B-C=D
|
|
D/A
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
$
|
3,154.6
|
|
$
|
3,001.4
|
|
$
|
153.2
|
|
5.1%
|
|
$
|
55.9
|
|
$
|
97.3
|
|
3.2%
|
BK
|
$
|
1,219.2
|
|
$
|
1,144.4
|
|
$
|
74.8
|
|
6.5%
|
|
$
|
2.1
|
|
$
|
72.7
|
|
6.4%
|
PLK(a)
|
$
|
266.5
|
|
$
|
268.9
|
|
$
|
(2.4)
|
|
(0.9)%
|
|
$
|
(0.4)
|
|
$
|
(2.0)
|
|
(0.7)%
|
Combined Total
Revenues(a)
|
$
|
4,640.3
|
|
$
|
4,414.7
|
|
$
|
225.6
|
|
5.1%
|
|
$
|
57.6
|
|
$
|
168.0
|
|
3.8%
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TH
|
$
|
1,135.8
|
|
$
|
1,072.3
|
|
$
|
63.5
|
|
5.9%
|
|
$
|
20.2
|
|
$
|
43.3
|
|
4.0%
|
BK
|
$
|
903.1
|
|
$
|
815.9
|
|
$
|
87.2
|
|
10.7%
|
|
$
|
0.7
|
|
$
|
86.5
|
|
10.6%
|
PLK(a)
|
$
|
129.5
|
|
$
|
95.5
|
|
$
|
34.0
|
|
35.6%
|
|
$
|
(0.4)
|
|
$
|
34.4
|
|
36.0%
|
Combined Adjusted
EBITDA(a)
|
$
|
2,168.4
|
|
$
|
1,983.7
|
|
$
|
184.7
|
|
9.3%
|
|
$
|
20.5
|
|
$
|
164.2
|
|
8.3%
|
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Non-GAAP Financial
Measures
|
Reconciliation of
Adjusted EBITDA to Net Income
|
(Unaudited)
|
Historical Popeyes
Adjusted EBITDA
|
|
|
Q1
'16
|
|
Q2
'16
|
|
Q3
'16
|
|
Q4
'16
|
|
Q1 '
17
|
|
FY
16
|
(in US$
millions)
|
16 Weeks
Ended
4/17/16(a)
|
|
12 Weeks
Ended
7/10/16(b)
|
|
12 Weeks
Ended
10/2/16(c)
|
|
12 weeks
Ended
12/25/16(d)
|
|
12/26/16
through
3/27/17(e)
|
|
Fiscal Year
Ended
12/25/16(d)
|
Revenues
|
$
|
82.2
|
|
$
|
61.7
|
|
$
|
64.0
|
|
$
|
61.0
|
|
$
|
64.2
|
|
$
|
268.9
|
Reconciliation of
Adjusted EBITDA to Net Income
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
12.9
|
|
$
|
10.3
|
|
$
|
10.4
|
|
$
|
9.2
|
|
$
|
(1.2)
|
|
$
|
42.8
|
Interest expense,
net
|
1.3
|
|
1.0
|
|
1.1
|
|
1.2
|
|
1.3
|
|
4.6
|
Income tax expense
(benefit)
|
7.9
|
|
6.2
|
|
6.2
|
|
6.8
|
|
(15.0)
|
|
27.1
|
Depreciation and
amortization
|
3.0
|
|
2.3
|
|
2.4
|
|
2.4
|
|
2.4
|
|
10.1
|
Share-based
compensation
|
2.0
|
|
1.9
|
|
2.0
|
|
0.9
|
|
1.4
|
|
6.8
|
Popeyes transaction
costs
|
—
|
|
—
|
|
—
|
|
—
|
|
33.5
|
|
—
|
Other operating
expenses (income), net
|
(0.1)
|
|
—
|
|
3.7
|
|
0.5
|
|
0.2
|
|
4.1
|
Adjusted
EBITDA
|
$
|
27.0
|
|
$
|
21.7
|
|
$
|
25.8
|
|
$
|
21.0
|
|
$
|
22.6
|
|
$
|
95.5
|
|
(a)Derived
from Form 8-K filed with the Securities and Exchange Commission
("SEC") by Popeyes Louisiana Kitchen, Inc. ("Popeyes") on May 25,
2016.
|
(b)Derived
from Form 8-K filed with the SEC by Popeyes on August 16,
2016.
|
(c)Derived
from Form 8-K filed with the SEC by Popeyes on November 9,
2016.
|
(d)Derived
from Form 8-K filed with the SEC by Popeyes on February 22,
2017.
|
(e)Derived
from Popeyes internal records.
|
RESTAURANT BRANDS
INTERNATIONAL INC. AND SUBSIDIARIES
|
Non-GAAP Financial
Measures
|
Reconciliation of
EBITDA and Adjusted EBITDA to Net Income
|
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in US$
millions)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Segment
income:
|
|
|
|
|
|
|
|
|
TH
|
$
|
304.1
|
|
$
|
278.4
|
|
$
|
1,135.8
|
|
$
|
1,072.3
|
|
BK
|
265.3
|
|
234.0
|
|
903.1
|
|
815.9
|
|
PLK
|
36.9
|
|
—
|
|
106.9
|
|
—
|
|
|
Adjusted
EBITDA
|
606.3
|
|
512.4
|
|
2,145.8
|
|
1,888.2
|
Share-based
compensation and non-cash incentive
compensation
expense(1)
|
12.0
|
|
11.0
|
|
54.9
|
|
42.0
|
PLK Transaction
costs(2)
|
11.9
|
|
—
|
|
61.7
|
|
—
|
Corporate
restructuring and tax advisory fees(3)
|
1.9
|
|
—
|
|
1.9
|
|
—
|
Integration
costs(4)
|
—
|
|
6.0
|
|
—
|
|
16.4
|
Impact of equity
method investments(5)
|
1.2
|
|
(0.4)
|
|
1.1
|
|
(8.0)
|
Other operating
expenses (income), net
|
27.1
|
|
(38.9)
|
|
109.2
|
|
(0.7)
|
|
|
EBITDA
|
552.2
|
|
534.7
|
|
1,917.0
|
|
1,838.5
|
Depreciation and
amortization
|
46.2
|
|
43.1
|
|
181.1
|
|
171.8
|
|
Income from
operations
|
506.0
|
|
491.6
|
|
1,735.9
|
|
1,666.7
|
Interest expense,
net
|
136.8
|
|
117.3
|
|
512.2
|
|
466.9
|
Loss on early
extinguishment of debt
|
43.4
|
|
—
|
|
122.0
|
|
—
|
Income tax (benefit)
expense(6)
|
(252.6)
|
|
72.9
|
|
(133.6)
|
|
243.9
|
|
|
Net income
|
$
|
578.4
|
|
$
|
301.4
|
|
$
|
1,235.3
|
|
$
|
955.9
|
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
December 31,
|
|
Twelve Months
Ended
December 31,
|
(in US$ millions,
except per share data)
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
income
|
$
|
578.4
|
|
$
|
301.4
|
|
$
|
1,235.3
|
|
$
|
955.9
|
|
Income tax (benefit)
expense(6)
|
(252.6)
|
|
72.9
|
|
(133.6)
|
|
243.9
|
Income before
income taxes
|
325.8
|
|
374.3
|
|
1,101.7
|
|
1,199.8
|
Adjustments:
|
|
|
|
|
|
|
|
|
Franchise agreement
amortization
|
7.8
|
|
6.9
|
|
30.0
|
|
27.3
|
|
Amortization of
deferred financing costs and debt issuance discount
|
7.5
|
|
9.8
|
|
32.7
|
|
38.9
|
|
Interest expense and
loss on extinguished debt(7)
|
46.5
|
|
3.1
|
|
134.5
|
|
12.6
|
|
PLK Transaction
costs(2)
|
11.9
|
|
—
|
|
61.7
|
|
—
|
|
Corporate
restructuring and tax advisory fees(3)
|
1.9
|
|
—
|
|
1.9
|
|
—
|
|
Integration
costs(4)
|
—
|
|
6.0
|
|
—
|
|
16.4
|
|
Impact of equity
method investments(5)
|
1.2
|
|
(0.4)
|
|
1.1
|
|
(8.0)
|
|
Other operating
expenses (income), net
|
27.1
|
|
(38.9)
|
|
109.2
|
|
(0.7)
|
|
Total
adjustments
|
103.9
|
|
(13.5)
|
|
371.1
|
|
86.5
|
Adjusted income
before income taxes
|
429.7
|
|
360.8
|
|
1,472.8
|
|
1,286.3
|
|
Adjusted income tax
expense(6)(8)
|
62.2
|
|
85.0
|
|
214.9
|
|
272.1
|
Adjusted net income
before preferred share dividends
|
367.5
|
|
275.8
|
|
1,257.9
|
|
1,014.2
|
|
Preferred share
dividends
|
54.0
|
|
67.5
|
|
256.5
|
|
270.0
|
Adjusted net
income
|
$
|
313.5
|
|
$
|
208.3
|
|
$
|
1,001.4
|
|
$
|
744.2
|
Adjusted diluted
earnings per share
|
$
|
0.66
|
|
$
|
0.44
|
|
$
|
2.10
|
|
$
|
1.58
|
Weighted average
diluted shares outstanding
|
476.2
|
|
470.8
|
|
477.4
|
|
470.0
|
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 2016 and 2017 cash bonus, respectively.
|
|
|
(2)
|
In connection with
the acquisition of Popeyes Louisiana Kitchen, Inc., we incurred
certain non-recurring selling, general and administrative expenses
during the three and twelve months ended December 31, 2017,
respectively, primarily consisting of professional fees and
compensation related expenses.
|
|
|
(3)
|
Costs associated with
corporate restructuring initiatives and professional advisory and
consulting services related to the interpretation and
implementation of the Tax Act.
|
|
|
(4)
|
In connection with
the implementation of initiatives to integrate the back-office
processes of TH and BK to enhance efficiencies, we incurred certain
non-recurring selling, general and administrative expenses related
to these initiatives during the three and twelve months ended
December 31, 2016, respectively, primarily consisting of
professional fees.
|
|
|
(5)
|
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.
|
|
|
(6)
|
On January 1, 2017,
we adopted a new accounting standard related to the tax impact of
equity based compensation. As a result, our effective tax rate was
reduced by 10.8% and 6.4% for the three and twelve months ended
December 31, 2017, respectively, and our effective adjusted tax
rate was reduced by 8.2% and 4.8% for the three and twelve months
ended December 31, 2017, respectively. There was no impact to our
results for the three and twelve months ended December 31,
2016.
|
|
|
(7)
|
Represents loss on
early extinguishment of debt and non-cash interest expense related
to losses reclassified from accumulated other comprehensive income
(loss) into interest expense in connection with interest rate swaps
settled in May 2015.
|
|
|
(8)
|
Adjusted income tax
expense includes the tax impact of the non-GAAP adjustments and is
calculated using our statutory tax rate in the jurisdiction in
which the costs were incurred. For the three and twelve months
ended December 31, 2016, the tax impacts of non-GAAP adjustments
amounted to $12.1 million and $28.2 million, respectively. For the
three and twelve months ended December 31, 2017, the tax impacts of
non-GAAP adjustments amounted to $14.1 million and $47.8 million,
respectively. Adjusted income tax expense for both the three and
twelve months ended December 31, 2017 also excludes the net $300.7
million benefit arising from the enactment of the Tax Act due
to (i) remeasurements and (ii) taxes imposed by the Tax
Act.
|
SOURCE Restaurant Brands International Inc.