UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36787

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in its Charter)


Canada						98-1206431
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)


130 King Street West, Suite 300		M5X 1E1
Toronto,	Ontario
(Address of Principal Executive Offices)		(Zip Code)

(905) 339-6011

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

Title of each class

Trading Symbols

Name of each exchange on which registered

Class B exchangeable limited partnership units

QSP

Toronto Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April ~~26, 2022,~~25, 2023, there were ~~143,460,786~~140,782,568 Class B exchangeable limited partnership units and 202,006,067 Class A common units outstanding.

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RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

TABLE OF CONTENTS



		Page

PART I – Financial Information
Item 1.	Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3331
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4543
Item 4.	Controls and Procedures	4543

PART II – Other Information
Item 1.	Legal Proceedings	46
~~Item 5.~~	~~Other Information~~	4644
Item 6.	Exhibits	4745
	Signatures	4846

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PART I — Financial Information

Item 1. Financial Statements

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In millions of U.S. dollars, except unit data)

(Unaudited)


		As of					As of
		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	895	$	1,087	Cash and cash equivalents	$	1,033	$	1,178
Accounts and notes receivable, net of allowance of $27 and $18, respectively		593		547
Accounts and notes receivable, net of allowance of $41 and $36, respectively						Accounts and notes receivable, net of allowance of $41 and $36, respectively	612		614
Inventories, net	Inventories, net	108		96		Inventories, net	145		133
Prepaids and other current assets	Prepaids and other current assets	90		86		Prepaids and other current assets	103		123
Total current assets	Total current assets	1,686		1,816		Total current assets	1,893		2,048
Property and equipment, net of accumulated depreciation and amortization of $1,014 and $979, respectively		2,023		2,035
Property and equipment, net of accumulated depreciation and amortization of $1,092 and $1,061, respectively						Property and equipment, net of accumulated depreciation and amortization of $1,092 and $1,061, respectively	1,943		1,950
Operating lease assets, net	Operating lease assets, net	1,137		1,130		Operating lease assets, net	1,075		1,082
Intangible assets, net	Intangible assets, net	11,451		11,417		Intangible assets, net	11,005		10,991
Goodwill	Goodwill	6,050		6,006		Goodwill	5,700		5,688
Net investment in property leased to franchisees	Net investment in property leased to franchisees	82		80		Net investment in property leased to franchisees	83		82
Other assets, net	Other assets, net	743		762		Other assets, net	827		905
Total assets	Total assets	$	23,172	$	23,246	Total assets	$	22,526	$	22,746
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts and drafts payable	Accounts and drafts payable	$	637	$	614	Accounts and drafts payable	$	679	$	758
Other accrued liabilities	Other accrued liabilities	917		947		Other accrued liabilities	901		1,001
Gift card liability	Gift card liability	169		221		Gift card liability	174		230
Current portion of long-term debt and finance leases	Current portion of long-term debt and finance leases	105		96		Current portion of long-term debt and finance leases	128		127
Total current liabilities	Total current liabilities	1,828		1,878		Total current liabilities	1,882		2,116
Long-term debt, net of current portion	Long-term debt, net of current portion	12,903		12,916		Long-term debt, net of current portion	12,821		12,839
Finance leases, net of current portion	Finance leases, net of current portion	337		333		Finance leases, net of current portion	310		311
Operating lease liabilities, net of current portion	Operating lease liabilities, net of current portion	1,074		1,070		Operating lease liabilities, net of current portion	1,019		1,027
Other liabilities, net	Other liabilities, net	1,689		1,822		Other liabilities, net	895		872
Deferred income taxes, net	Deferred income taxes, net	1,380		1,374		Deferred income taxes, net	1,288		1,313
Total liabilities	Total liabilities	19,211		19,393		Total liabilities	18,215		18,478
Partners’ capital:	Partners’ capital:					Partners’ capital:
Class A common units; 202,006,067 issued and outstanding at March 31, 2022 and December 31, 2021		8,400		8,421
Partnership exchangeable units; 143,467,558 issued and outstanding at March 31, 2022; 144,993,458 issued and outstanding at December 31, 2021		(3,623)		(3,547)
Class A common units; 202,006,067 issued and outstanding at March 31, 2023 and December 31, 2022						Class A common units; 202,006,067 issued and outstanding at March 31, 2023 and December 31, 2022	8,951		8,735
Partnership exchangeable units; 140,782,568 issued and outstanding at March 31, 2023; 142,996,640 issued and outstanding at December 31, 2022						Partnership exchangeable units; 140,782,568 issued and outstanding at March 31, 2023; 142,996,640 issued and outstanding at December 31, 2022	(3,622)		(3,496)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(819)		(1,024)		Accumulated other comprehensive income (loss)	(1,020)		(973)
Total Partners’ capital	Total Partners’ capital	3,958		3,850		Total Partners’ capital	4,309		4,266
Noncontrolling interests	Noncontrolling interests	3		3		Noncontrolling interests	2		2
Total equity	Total equity	3,961		3,853		Total equity	4,311		4,268
Total liabilities and equity	Total liabilities and equity	$	23,172	$	23,246	Total liabilities and equity	$	22,526	$	22,746

See accompanying notes to condensed consolidated financial statements.

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RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In millions of U.S. dollars, except per unit data)

(Unaudited)


		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Revenues:	Revenues:						Revenues:
Sales	Sales		$	609	$	507	Sales		$	668	$	609
Franchise and property revenues	Franchise and property revenues		615		548		Franchise and property revenues		668		615
Advertising revenues and other services	Advertising revenues and other services		227		205		Advertising revenues and other services		254		227
Total revenues	Total revenues		1,451		1,260		Total revenues		1,590		1,451
Operating costs and expenses:	Operating costs and expenses:						Operating costs and expenses:
Cost of sales	Cost of sales		494		401		Cost of sales		550		494
Franchise and property expenses	Franchise and property expenses		130		116		Franchise and property expenses		123		130
Advertising expenses and other services	Advertising expenses and other services		247		237		Advertising expenses and other services		271		247
General and administrative expenses	General and administrative expenses		133		104		General and administrative expenses		175		133
(Income) loss from equity method investments	(Income) loss from equity method investments		13		2		(Income) loss from equity method investments		7		13
Other operating expenses (income), net	Other operating expenses (income), net		(16)		(42)		Other operating expenses (income), net		17		(16)
Total operating costs and expenses	Total operating costs and expenses		1,001		818		Total operating costs and expenses		1,143		1,001
Income from operations	Income from operations		450		442		Income from operations		447		450
Interest expense, net	Interest expense, net		127		124		Interest expense, net		142		127

Income before income taxes	Income before income taxes		323		318		Income before income taxes		305		323
Income tax expense	Income tax expense		53		47		Income tax expense		28		53
Net income	Net income		270		271		Net income		277		270
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests		1		1		Net income attributable to noncontrolling interests		1		1
Net income attributable to common unitholders	Net income attributable to common unitholders		$	269	$	270	Net income attributable to common unitholders		$	276	$	269
Earnings per unit - basic and diluted	Earnings per unit - basic and diluted						Earnings per unit - basic and diluted
Class A common units	Class A common units		$	0.91	$	0.89	Class A common units		$	0.94	$	0.91
Partnership exchangeable units	Partnership exchangeable units		$	0.59	$	0.59	Partnership exchangeable units		$	0.61	$	0.59
Weighted average units outstanding - basic and diluted (in millions):	Weighted average units outstanding - basic and diluted (in millions):						Weighted average units outstanding - basic and diluted (in millions):
Class A common units	Class A common units		202		202		Class A common units		202		202
Partnership exchangeable units	Partnership exchangeable units		145		155		Partnership exchangeable units		143		145

See accompanying notes to condensed consolidated financial statements.

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RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In millions of U.S. dollars)

(Unaudited)


		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Net income	Net income		$	270	$	271	Net income		$	277	$	270

Foreign currency translation adjustment	Foreign currency translation adjustment		57		54		Foreign currency translation adjustment		40		57
Net change in fair value of net investment hedges, net of tax of $25 and $20			(35)		29
Net change in fair value of cash flow hedges, net of tax of $(60) and $(33)			161		95
Amounts reclassified to earnings of cash flow hedges, net of tax of $(7) and $(8)			21		24
Net change in fair value of net investment hedges, net of tax of $4 and $25							Net change in fair value of net investment hedges, net of tax of $4 and $25		(31)		(35)
Net change in fair value of cash flow hedges, net of tax of $15 and $(60)							Net change in fair value of cash flow hedges, net of tax of $15 and $(60)		(43)		161
Amounts reclassified to earnings of cash flow hedges, net of tax of $5 and $(7)							Amounts reclassified to earnings of cash flow hedges, net of tax of $5 and $(7)		(13)		21
Gain (loss) recognized on other, net of tax of $0 and $0	Gain (loss) recognized on other, net of tax of $0 and $0		1		1		Gain (loss) recognized on other, net of tax of $0 and $0		—		1
Other comprehensive income (loss)	Other comprehensive income (loss)		205		203		Other comprehensive income (loss)		(47)		205
Comprehensive income (loss)	Comprehensive income (loss)		475		474		Comprehensive income (loss)		230		475
Comprehensive income (loss) attributable to noncontrolling interests	Comprehensive income (loss) attributable to noncontrolling interests		1		1		Comprehensive income (loss) attributable to noncontrolling interests		1		1
Comprehensive income (loss) attributable to common unitholders	Comprehensive income (loss) attributable to common unitholders		$	474	$	473	Comprehensive income (loss) attributable to common unitholders		$	229	$	474

See accompanying notes to condensed consolidated financial statements.

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RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidated Statement of Equity

(In millions of U.S. dollars, except units)

(Unaudited)


		Class A Common Units			Partnership Exchangeable Units			Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interest		Total			Class A Common Units			Partnership Exchangeable Units			Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interest		Total
		Units	Amount		Units	Amount									Units	Amount		Units	Amount
Balances at December 31, 2021		202,006,067	$	8,421	144,993,458	$	(3,547)	$	(1,024)	$	3	$	3,853
Distributions declared on Class A common units ($0.83 per unit)		—	(167)		—	—		—		—		(167)
Distributions declared on partnership exchangeable units ($0.54 per unit)		—	—		—	(78)		—		—		(78)
Balances at December 31, 2022														Balances at December 31, 2022	202,006,067	$	8,735	142,996,640	$	(3,496)	$	(973)	$	2	$	4,268
Distributions declared on Class A common units ($0.85 per unit)														Distributions declared on Class A common units ($0.85 per unit)	—	(171)		—	—		—		—		(171)
Distributions declared on partnership exchangeable units ($0.55 per unit)														Distributions declared on partnership exchangeable units ($0.55 per unit)	—	—		—	(77)		—		—		(77)
Exchange of Partnership exchangeable units for RBI common shares	Exchange of Partnership exchangeable units for RBI common shares	—	84		(1,525,900)	(84)		—		—		—		Exchange of Partnership exchangeable units for RBI common shares	—	136		(2,214,072)	(136)		—		—		—
Distribution to RBI for repurchase of RBI common shares		—	(161)		—	—		—		—		(161)

Capital contribution from RBI	Capital contribution from RBI	—	40		—	—		—		—		40		Capital contribution from RBI	—	62		—	—		—		—		62
Restaurant VIE contributions (distributions)	Restaurant VIE contributions (distributions)	—	—		—	—		—		(1)		(1)		Restaurant VIE contributions (distributions)	—	—		—	—		—		(1)		(1)
Net income	Net income	—	183		—	86		—		1		270		Net income	—	189		—	87		—		1		277
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—		—	—		205		—		205		Other comprehensive income (loss)	—	—		—	—		(47)		—		(47)
Balances at March 31, 2022		202,006,067	$	8,400	143,467,558	$	(3,623)	$	(819)	$	3	$	3,961
Balances at March 31, 2023														Balances at March 31, 2023	202,006,067	$	8,951	140,782,568	$	(3,622)	$	(1,020)	$	2	$	4,311

See accompanying notes to condensed consolidated financial statements.

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidated Statement of Equity

(In millions of U.S. dollars, except units)

(Unaudited)


		Class A Common Units			Partnership Exchangeable Units			Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interest		Total			Class A Common Units			Partnership Exchangeable Units			Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interest		Total
		Units	Amount		Units	Amount									Units	Amount		Units	Amount
Balances at December 31, 2020		202,006,067	$	7,994	155,113,338	$	(3,002)	$	(1,275)	$	4	$	3,721
Distributions declared on Class A common units ($0.81 per unit)		—	(163)		—	—		—		—		(163)
Distributions declared on partnership exchangeable units ($0.53 per unit)		—	—		—	(82)		—		—		(82)
Balances at December 31, 2021														Balances at December 31, 2021	202,006,067	$	8,421	144,993,458	$	(3,547)	$	(1,024)	$	3	$	3,853
Distributions declared on Class A common units ($0.83 per unit)														Distributions declared on Class A common units ($0.83 per unit)	—	(167)		—	—		—		—		(167)
Distributions declared on partnership exchangeable units ($0.54 per unit)														Distributions declared on partnership exchangeable units ($0.54 per unit)	—	—		—	(78)		—		—		(78)
Exchange of Partnership exchangeable units for RBI common shares	Exchange of Partnership exchangeable units for RBI common shares	—	5		(72,761)	(5)		—		—		—		Exchange of Partnership exchangeable units for RBI common shares	—	84		(1,525,900)	(84)		—		—		—
Distribution to RBI for repurchase of RBI common shares														Distribution to RBI for repurchase of RBI common shares	—	(161)		—	—		—		—		(161)
Capital contribution from RBI	Capital contribution from RBI	—	51		—	—		—		—		51		Capital contribution from RBI	—	40		—	—		—		—		40
Restaurant VIE contributions (distributions)	Restaurant VIE contributions (distributions)	—	—		—	—		—		1		1		Restaurant VIE contributions (distributions)	—	—		—	—		—		(1)		(1)
Net income	Net income	—	179		—	91		—		1		271		Net income	—	183		—	86		—		1		270
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—		—	—		203		—		203		Other comprehensive income (loss)	—	—		—	—		205		—		205
Balances at March 31, 2021		202,006,067	$	8,066	155,040,577	$	(2,998)	$	(1,072)	$	6	$	4,002
Balances at March 31, 2022														Balances at March 31, 2022	202,006,067	$	8,400	143,467,558	$	(3,623)	$	(819)	$	3	$	3,961

See accompanying notes to condensed consolidated financial statements.

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RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In millions of U.S. dollars)

(Unaudited)


		Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	270	$	271	Net income	$	277	$	270
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	49		49		Depreciation and amortization	46		49

Amortization of deferred financing costs and debt issuance discount	Amortization of deferred financing costs and debt issuance discount	7		7		Amortization of deferred financing costs and debt issuance discount	7		7
(Income) loss from equity method investments	(Income) loss from equity method investments	13		2		(Income) loss from equity method investments	7		13
(Gain) loss on remeasurement of foreign denominated transactions	(Gain) loss on remeasurement of foreign denominated transactions	(21)		(43)		(Gain) loss on remeasurement of foreign denominated transactions	8		(21)
Net (gains) losses on derivatives	Net (gains) losses on derivatives	18		20		Net (gains) losses on derivatives	(34)		18
Share-based compensation and non-cash incentive compensation expense	Share-based compensation and non-cash incentive compensation expense	27		26		Share-based compensation and non-cash incentive compensation expense	45		27
Deferred income taxes	Deferred income taxes	(16)		14		Deferred income taxes	(28)		(16)
Other	Other	9		(8)		Other	1		9
Changes in current assets and liabilities, excluding acquisitions and dispositions:	Changes in current assets and liabilities, excluding acquisitions and dispositions:					Changes in current assets and liabilities, excluding acquisitions and dispositions:
Accounts and notes receivable	Accounts and notes receivable	(46)		24		Accounts and notes receivable	(8)		(46)
Inventories and prepaids and other current assets	Inventories and prepaids and other current assets	(22)		(4)		Inventories and prepaids and other current assets	(20)		(22)
Accounts and drafts payable	Accounts and drafts payable	18		19		Accounts and drafts payable	(81)		18
Other accrued liabilities and gift card liability	Other accrued liabilities and gift card liability	(91)		(117)		Other accrued liabilities and gift card liability	(123)		(91)
Tenant inducements paid to franchisees	Tenant inducements paid to franchisees	(2)		—		Tenant inducements paid to franchisees	(6)		(2)
Other long-term assets and liabilities	Other long-term assets and liabilities	21		6		Other long-term assets and liabilities	4		21
Net cash provided by operating activities	Net cash provided by operating activities	234		266		Net cash provided by operating activities	95		234
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Payments for property and equipment	Payments for property and equipment	(10)		(15)		Payments for property and equipment	(18)		(10)
Net proceeds from disposal of assets, restaurant closures, and refranchisings	Net proceeds from disposal of assets, restaurant closures, and refranchisings	4		11		Net proceeds from disposal of assets, restaurant closures, and refranchisings	4		4

Settlement/sale of derivatives, net	Settlement/sale of derivatives, net	3		2		Settlement/sale of derivatives, net	14		3
Other investing activities, net	Other investing activities, net	4		(5)		Other investing activities, net	—		4
Net cash (used for) provided by investing activities	Net cash (used for) provided by investing activities	1		(7)		Net cash (used for) provided by investing activities	—		1
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from long-term debt	Proceeds from long-term debt	1		—		Proceeds from long-term debt	—		1
Repayments of long-term debt and finance leases	Repayments of long-term debt and finance leases	(21)		(27)		Repayments of long-term debt and finance leases	(32)		(21)

Distributions on Class A common and Partnership exchangeable units	Distributions on Class A common and Partnership exchangeable units	(241)		(239)		Distributions on Class A common and Partnership exchangeable units	(243)		(241)
Distribution to RBI for repurchase of RBI common shares	Distribution to RBI for repurchase of RBI common shares	(161)		—		Distribution to RBI for repurchase of RBI common shares	—		(161)
Capital contribution from RBI	Capital contribution from RBI	3		20		Capital contribution from RBI	6		3
(Payments) proceeds from derivatives	(Payments) proceeds from derivatives	(6)		(16)		(Payments) proceeds from derivatives	29		(6)
Other financing activities, net	Other financing activities, net	(1)		1		Other financing activities, net	—		(1)
Net cash (used for) provided by financing activities	Net cash (used for) provided by financing activities	(426)		(261)		Net cash (used for) provided by financing activities	(240)		(426)
Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	(1)		5		Effect of exchange rates on cash and cash equivalents	—		(1)
Increase (decrease) in cash and cash equivalents	Increase (decrease) in cash and cash equivalents	(192)		3		Increase (decrease) in cash and cash equivalents	(145)		(192)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	1,087		1,560		Cash and cash equivalents at beginning of period	1,178		1,087
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	895	$	1,563	Cash and cash equivalents at end of period	$	1,033	$	895
Supplemental cash flow disclosures:	Supplemental cash flow disclosures:					Supplemental cash flow disclosures:
Interest paid	Interest paid	$	75	$	72	Interest paid	$	163	$	75
Income taxes paid	Income taxes paid	$	42	$	96	Income taxes paid	$	61	$	42

See accompanying notes to condensed consolidated financial statements.

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RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Description of Business and Organization

Restaurant Brands International Limited Partnership (“Partnership”, “we”, “us” or “our”) is a Canadian limited partnership. We franchise and operate quick service restaurants serving premium coffee and other beverage and food products under the Tim Hortons® brand (“Tim Hortons” or “TH”), fast food hamburgers principally under the Burger King® brand (“Burger King” or “BK”), chicken principally under the Popeyes® brand (“Popeyes” or “PLK”) and sandwiches under the Firehouse Subs® brand (“Firehouse” or “FHS”). We are one of the world’s largest quick service restaurant, or QSR, companies as measured by total number of restaurants. As of March 31, ~~2022,~~2023, we franchised or owned ~~5,320~~5,620 Tim Hortons restaurants, ~~19,266~~18,911 Burger King restaurants, ~~3,771~~4,178 Popeyes restaurants and ~~1,219~~1,247 Firehouse Subs restaurants, for a total of ~~29,576~~29,956 restaurants, and operate in more than 100 countries. Approximately 100% of current system-wide restaurants are franchised.

We are a subsidiary of Restaurant Brands International Inc. (“RBI”). RBI is our sole general partner, and as such, RBI has the exclusive right, power and authority to manage, control, administer and operate the business and affairs and to make decisions regarding the undertaking and business of Partnership in accordance with the partnership agreement of Partnership (“partnership agreement”) and applicable laws.

All references to “$” or “dollars” are to the currency of the United States unless otherwise indicated. All references to “Canadian dollars” or “C$” are to the currency of Canada unless otherwise indicated.

Note 2. Basis of Presentation and Consolidation

We have prepared the accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. Therefore, the Financial Statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC and Canadian securities regulatory authorities on February ~~23, 2022.~~22, 2023.

The Financial Statements include our accounts and the accounts of entities in which we have a controlling financial interest, the usual condition of which is ownership of a majority voting interest. Investments in other affiliates that are owned 50% or less where we have significant influence are accounted for by the equity method. All material intercompany balances and transactions have been eliminated in consolidation.

We also consider for consolidation entities in which we have certain interests, where the controlling financial interest may be achieved through arrangements that do not involve voting interests. Such an entity, known as a variable interest entity (“VIE”), is required to be consolidated by its primary beneficiary. The primary beneficiary is the entity that possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. Our maximum exposure to loss resulting from involvement with VIEs is attributable to accounts and notes receivable balances, outstanding loan guarantees and future lease payments, where applicable.

As our franchise and master franchise arrangements provide the franchise and master franchise entities the power to direct the activities that most significantly impact their economic performance, we do not consider ourselves the primary beneficiary of any such entity that might be a VIE.

Tim Hortons has historically entered into certain arrangements in which an operator acquires the right to operate a restaurant, but Tim Hortons owns the restaurant’s assets. We perform an analysis to determine if the legal entity in which operations are conducted is a VIE and consolidate a VIE entity if we also determine Tim Hortons is the entity’s primary beneficiary (“Restaurant VIEs”). As of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, we determined that we are the primary beneficiary of ~~45 and 46~~41 Restaurant VIEs ~~respectively,~~ and accordingly, have consolidated the results of operations, assets and liabilities, and cash flows of these Restaurant VIEs in our Financial Statements. Material intercompany accounts and transactions have been eliminated in consolidation.

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In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included in the Financial Statements. The results for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the full year.

The preparation of consolidated financial statements in conformity with U.S. GAAP and related rules and regulations of the SEC requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

The carrying amounts for cash and cash equivalents, accounts and notes receivable and accounts and drafts payable approximate fair value based on the short-term nature of these amounts.

~~Certain prior year amounts~~Supplier Finance Programs

Our TH business includes individually negotiated contracts with suppliers, which include payment terms that range up to 120 days. A global financial institution offers a voluntary supply chain finance (“SCF”) program to certain TH vendors, which provides suppliers that elect to participate with the ability to elect early payment, which is discounted based on the payment terms and a rate based on RBI's credit rating, which may be beneficial to the vendor. Participation in the ~~accompanying Financial Statements~~SCF program is at the sole discretion of the suppliers and ~~notes~~financial institution and we are not a party to the ~~Financial Statements have been reclassified~~arrangements between the suppliers and the financial institution. Our obligations to suppliers are not affected by the suppliers’ decisions to participate in ~~order to be comparable~~the SCF program and our payment terms remain the same based on the original supplier invoicing terms and conditions. No guarantees are provided by us or any of our subsidiaries in connection with the ~~current year classification. These consist of~~SCF Program.

Our confirmed outstanding obligations under the ~~year-to-date~~SCF program at March 31, ~~2021 reclassification~~2023 and December 31, 2022 totaled $37 million and $47 million, respectively, and are classified as Accounts and drafts payable in our condensed consolidated balance sheets. All activity related to the obligations is classified as Cost of ~~technology fee revenues~~sales in our condensed consolidated statements of operations and presented within cash flows from ~~Franchise and property revenues to Advertising revenues and other services and technology expenses from General and administrative expenses to Advertising expenses and other services, both~~operating activities in our condensed consolidated statements of which were not significant for the three months ended March 31, 2021. These reclassifications did not arise as a result of any changes to accounting policies and relate entirely to presentation with no effect on previously reported net income.cash flows.

Note 3. New Accounting Pronouncements

Accounting Relief for the Transition Away from LIBOR and Certain other Reference Rates – In March 2020 and as clarified in January 2021 and December 2022, the Financial Accounting Standards Board (“FASB”) issued guidance which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This amendment is effective as of March 12, 2020 through December 31, ~~2022.~~2024. The expedients and exceptions provided by this new guidance do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, ~~2022,~~2024, except for hedging relationships existing as of December 31, ~~2022,~~2024, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationships. During ~~the third quarter of~~ 2021, we adopted certain of the expedients as it relates to hedge accounting as certain of our debt agreements and hedging relationships bear interest at variable rates, primarily U.S. dollar LIBOR. The adoption of and future elections under this new guidance did not and are not expected to have a material impact on our Financial Statements. We will continue to monitor the discontinuance of LIBOR on our debt agreements and hedging relationships.

~~Lessors—Certain Leases with Variable Lease Payments~~Liabilities—Supplier Finance Programs – In ~~July 2021,~~September 2022, the FASB issued guidance that requires ~~lessors~~buyers in a supplier finance program to ~~classify~~disclose sufficient information about the program to allow investors to understand the program's nature, activity during the period, changes from period to period, and ~~account for~~potential magnitude. These disclosures would include the key terms of the program, as well as the obligation amount that the buyer has confirmed as valid to the third party that is outstanding at the end of the reporting period, a ~~lease with variable lease payments~~rollforward of that ~~do not depend on~~amount, and a ~~reference index or a rate as an operating lease if (a)~~description of where that amount is presented in the ~~lease would have been classified as a sales-type lease or a direct financing lease in accordance with lease classification criteria and (b) the lessor would have otherwise recognized a day-one loss.~~balance sheet. This amendment is effective in ~~2022~~2023, except for the amendment on rollforward information which is effective in 2024, with early adoption permitted. This guidance ~~may~~should be applied ~~either~~ retrospectively to ~~leases that commenced or were modified~~each period in which a balance sheet is presented, except for the amendment on ~~or after~~rollforward information, which should be applied prospectively. During the ~~adoption~~first quarter of ~~lease guidance~~2023, we adopted this guidance and added necessary disclosures upon adoption as disclosed in ~~2019 or prospectively to leases that commence or are modified on or after the date that this new guidance is applied. The adoption~~Note 2, Basis of ~~this new guidance during the three months ended March 31, 2022 did not have a material impact on our Financial Statements.~~Presentation and Consolidation.

~~Note 4. Firehouse Acquisition~~

~~On December 15, 2021, we completed the acquisition of Firehouse Subs (the “Firehouse Acquisition”) which complements RBI's existing portfolio. Like RBI's other brands, the~~
~~Firehouse Subs~~ brand is managed independently, while benefiting from the global scale and resources of RBI. The Firehouse Acquisition was accounted for as a business combination using the acquisition method of accounting.

Total consideration in connection with the Firehouse Acquisition was $1,018 million, subject to potential further post-closing adjustments. The consideration was funded through cash on hand and $533 million of incremental borrowings under our senior secured term loan facility.

Fees and expenses related to the Firehouse Acquisition and related financings (“FHS Transaction costs”) totaled $1 million during the three months ended March 31, 2022, consisting of professional fees, compensation related expenses and integration costs which are classified as general and administrative expenses in the accompanying condensed consolidated statements of operations.

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During the three months ended March 31, 2022, we adjusted our preliminary estimate of the fair value of net assets acquired. The preliminary allocation of consideration to the net tangible and intangible assets acquired is presented in the table below (in millions):


	~~December 15, 2021~~
~~Total current assets~~	$	21
~~Property and equipment~~	4
~~Firehouse Subs~~ ~~brand~~	~~768~~
~~Operating lease assets~~	9
~~Total liabilities~~	~~(48)~~
~~Total identifiable net assets~~	~~754~~
~~Goodwill~~	~~264~~
~~Total consideration~~	$	~~1,018~~

The adjustments to the preliminary estimate of net assets acquired and a decrease in total consideration resulted in a corresponding increase in estimated goodwill due to the following changes to preliminary estimates of fair values and allocation of purchase price (in millions):


	~~Increase (Decrease) in Goodwill~~
~~Change in:~~
~~Operating lease assets~~	$	~~(9)~~
~~Total liabilities~~	35
~~Total consideration~~	~~(15)~~
~~Total increase in goodwill~~	$	11

The purchase price allocation reflects preliminary fair value estimates based on management's analysis, including preliminary work performed by third-party valuation specialists. We will continue to obtain information to assist in determining the fair value of net assets acquired during the measurement period.

~~The~~ ~~Firehouse Subs~~ brand has been assigned an indefinite life and, therefore, will not be amortized, but rather tested annually for impairment. Goodwill attributable to the Firehouse Acquisition will be amortized and deductible for tax purposes. Goodwill is considered to represent the value associated with the workforce and synergies anticipated to be realized as a combined company. We have not yet allocated goodwill related to the Firehouse Acquisition to reporting units for goodwill impairment testing purposes. Goodwill will be allocated to reporting units when the purchase price allocation is finalized during the measurement period.

The results of operations of Firehouse Subs have been included in our unaudited condensed consolidated financial statements for the three months ended March 31, 2022. The Firehouse Acquisition is not material to our unaudited condensed consolidated financial statements, and therefore, supplemental pro forma financial information for 2021 related to the acquisition is not included herein.

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Note 5.4. Leases

Property revenues consist primarily of lease income from operating leases and earned income on direct financing leases and sales-type leases with franchisees as follows (in millions):


		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Lease income - operating leases	Lease income - operating leases						Lease income - operating leases
Minimum lease payments	Minimum lease payments		$	113	$	113	Minimum lease payments		$	98	$	113
Variable lease payments	Variable lease payments		73		66		Variable lease payments		96		73
Amortization of favorable and unfavorable income lease contracts, net			—		1

Subtotal - lease income from operating leases	Subtotal - lease income from operating leases		186		180		Subtotal - lease income from operating leases		194		186
Earned income on direct financing and sales-type leases	Earned income on direct financing and sales-type leases		2		2		Earned income on direct financing and sales-type leases		2		2
Total property revenues	Total property revenues		$	188	$	182	Total property revenues		$	196	$	188

Note 6.5. Revenue Recognition

Contract Liabilities

Contract liabilities consist of deferred revenue resulting from initial and renewal franchise fees paid by franchisees, as well as upfront fees paid by master franchisees, which are generally recognized on a straight-line basis over the term of the underlying agreement. We may recognize unamortized franchise fees and upfront fees when a contract with a franchisee or master franchisee is modified and is accounted for as a termination of the existing contract. We classify these contract liabilities as Other liabilities, net in our condensed consolidated balance sheets. The following table reflects the change in contract liabilities on a consolidated basis between December 31, ~~2021~~2022 and March 31, ~~2022~~2023 (in millions):

Contract Liabilities TH BK PLK FHS Consolidated
Balance at December 31, 2021 $ 65 $ 410 $ 56 $ — $ 531
Effect of business combination — — — 8 8
Recognized during period and included in the contract liability balance at the beginning of the year (2) (11) (2) — (15)
Increase, excluding amounts recognized as revenue during the period 3 9 3 — 15
Impact of foreign currency translation — (4) — — (4)
Balance at March 31, 2022 $ 66 $ 404 $ 57 $ 8 $ 535


Contract Liabilities
Balance at December 31, 2022	$	540

Recognized during period and included in the contract liability balance at the beginning of the year	(14)
Increase, excluding amounts recognized as revenue during the period	14
Impact of foreign currency translation	2
Balance at March 31, 2023	$	542

The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) on a consolidated basis as of March 31, ~~2022~~2023 (in millions):


Contract liabilities expected to be recognized in	Contract liabilities expected to be recognized in	TH		BK		PLK		FHS		Consolidated		Contract liabilities expected to be recognized in
Remainder of 2022		$	8	$	26	$	3	$	1	$	38
2023		10		33		4		2		49
Remainder of 2023												Remainder of 2023	$	40
2024	2024	9		32		4		1		46		2024	51
2025	2025	8		32		4		1		45		2025	48
2026	2026	7		31		3		1		42		2026	46
2027												2027	42
Thereafter	Thereafter	24		250		39		2		315		Thereafter	315
Total	Total	$	66	$	404	$	57	$	8	$	535	Total	$	542

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Disaggregation of Total Revenues

~~Total revenues consist of the~~The following tables disaggregate revenue by segment (in millions):


		Three Months Ended March 31,			Three months ended March 31, 2023
			2022			2021			TH		BK		PLK		FHS		Total
Sales	Sales		$	609		$	507	Sales	$	618	$	19	$	21	$	10	$	668
Royalties	Royalties		403			346		Royalties	77		273		75		17		442
Property revenues	Property revenues		188			182		Property revenues	137		56		3		—		196
Franchise fees and other revenue	Franchise fees and other revenue		24			20		Franchise fees and other revenue	6		15		3		6		30
Advertising revenues and other services	Advertising revenues and other services		227			205		Advertising revenues and other services	62		121		66		5		254
Total revenues	Total revenues		$	1,451		$	1,260	Total revenues	$	900	$	484	$	168	$	38	$	1,590


	Three months ended March 31, 2022
	TH		BK		PLK		FHS		Total
Sales	$	566	$	16	$	17	$	10	$	609
Royalties	69		251		67		16		403
Property revenues	130		55		3		—		188
Franchise fees and other revenue	7		12		1		4		24
Advertising revenues and other services	57		109		60		1		227
Total revenues	$	829	$	443	$	148	$	31	$	1,451

Note 7.6. Earnings per Unit

Partnership uses the two-class method in the computation of earnings per unit. Pursuant to the terms of the partnership agreement, RBI, as the holder of the Class A common units, is entitled to receive distributions from Partnership in an amount equal to the aggregate dividends payable by RBI to holders of RBI common shares, and the holders of Class B exchangeable limited partnership units (the “Partnership exchangeable units”) are entitled to receive distributions from Partnership in an amount per unit equal to the dividends payable by RBI on each RBI common share. Partnership’s net income available to common unitholders is allocated between the Class A common units and Partnership exchangeable units on a fully-distributed basis and reflects residual net income after noncontrolling interests. Basic and diluted earnings per Class A common unit is determined by dividing net income allocated to Class A common unit holders by the weighted average number of Class A common units outstanding for the period. Basic and diluted earnings per Partnership exchangeable unit is determined by dividing net income allocated to the Partnership exchangeable units by the weighted average number of Partnership exchangeable units outstanding during the period.

There are no dilutive securities for Partnership as RBI equity awards will not affect the number of Class A common units or Partnership exchangeable units outstanding. However, the issuance of RBI shares by RBI in future periods will affect the allocation of net income attributable to common unitholders between Partnership’s Class A common units and Partnership exchangeable units.

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The following table summarizes the basic and diluted earnings per unit calculations (in millions, except per unit amounts):


		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Allocation of net income among partner interests:	Allocation of net income among partner interests:						Allocation of net income among partner interests:
Net income allocated to Class A common unitholders	Net income allocated to Class A common unitholders		$	183	$	179	Net income allocated to Class A common unitholders		$	189	$	183
Net income allocated to Partnership exchangeable unitholders	Net income allocated to Partnership exchangeable unitholders		86		91		Net income allocated to Partnership exchangeable unitholders		87		86
Net income attributable to common unitholders	Net income attributable to common unitholders		$	269	$	270	Net income attributable to common unitholders		$	276	$	269

Denominator - basic and diluted partnership units:	Denominator - basic and diluted partnership units:						Denominator - basic and diluted partnership units:
Weighted average Class A common units	Weighted average Class A common units		202		202		Weighted average Class A common units		202		202
Weighted average Partnership exchangeable units	Weighted average Partnership exchangeable units		145		155		Weighted average Partnership exchangeable units		143		145

Earnings per unit - basic and diluted:	Earnings per unit - basic and diluted:						Earnings per unit - basic and diluted:
Class A common units (a)	Class A common units (a)		$	0.91	$	0.89	Class A common units (a)		$	0.94	$	0.91
Partnership exchangeable units (a)	Partnership exchangeable units (a)		$	0.59	$	0.59	Partnership exchangeable units (a)		$	0.61	$	0.59

(a) Earnings per unit may not recalculate exactly as it is calculated based on unrounded numbers.

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Note 8.7. Intangible Assets, net and Goodwill

Intangible assets, net and goodwill consist of the following (in millions):


		As of													As of
		March 31, 2022						December 31, 2021							March 31, 2023						December 31, 2022
		Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net			Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Identifiable assets subject to amortization:	Identifiable assets subject to amortization:													Identifiable assets subject to amortization:
Franchise agreements	Franchise agreements	$	718	$	(295)	$	423	$	722	$	(290)	$	432	Franchise agreements	$	722	$	(322)	$	400	$	720	$	(313)	$	407
Favorable leases	Favorable leases	101		(62)		39		104		(63)		41		Favorable leases	88		(57)		31		90		(57)		33
Subtotal	Subtotal	819		(357)		462		826		(353)		473		Subtotal	810		(379)		431		810		(370)		440
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:													Indefinite-lived intangible assets:
Tim Hortons brand	Tim Hortons brand	$	6,757	$	—	$	6,757	$	6,695	$	—	$	6,695	Tim Hortons brand	$	6,308	$	—	$	6,308	$	6,292	$	—	$	6,292
Burger King brand	Burger King brand	2,109		—		2,109		2,126		—		2,126		Burger King brand	2,095		—		2,095		2,088		—		2,088
Popeyes brand	Popeyes brand	1,355		—		1,355		1,355		—		1,355		Popeyes brand	1,355		—		1,355		1,355		—		1,355
Firehouse Subs brand	Firehouse Subs brand	768		—		768		768		—		768		Firehouse Subs brand	816		—		816		816		—		816
Subtotal	Subtotal	10,989		—		10,989		10,944		—		10,944		Subtotal	10,574		—		10,574		10,551		—		10,551
Intangible assets, net	Intangible assets, net					$	11,451					$	11,417	Intangible assets, net					$	11,005					$	10,991

Goodwill
Goodwill:														Goodwill:
Tim Hortons segment	Tim Hortons segment	$	4,344					$	4,306					Tim Hortons segment	$	4,069					$	4,059
Burger King segment	Burger King segment	596						601						Burger King segment	592						590
Popeyes segment	Popeyes segment	846						846						Popeyes segment	846						846
Firehouse Subs segment	Firehouse Subs segment	264						253						Firehouse Subs segment	193						193
Total	Total	$	6,050					$	6,006					Total	$	5,700					$	5,688

Amortization expense on intangible assets totaled $9 million and $10 million for the three months ended March 31, 2023 and 2022, ~~and 2021.~~respectively. The change in ~~the~~ brands and goodwill balances during the three months ended March 31, ~~2022~~2023 was due to the impact of foreign currency ~~translation and the impact of adjustments to the preliminary allocation of consideration to the net tangible and intangible assets acquired in the Firehouse Acquisition.~~translation.

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Note 9.8. Equity Method Investments

The aggregate carrying ~~amount~~amounts of our equity method investments ~~was $181~~were $152 million and ~~$194~~$167 million as of March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, and isare included as a component of Other assets, net in our accompanying condensed consolidated balance sheets.

Except for the following equity method investments, no quoted market prices are available for our other equity method investments. The aggregate market value of our ~~15.5%~~15.1% equity interest in Carrols Restaurant Group, Inc. based on the quoted market price on March 31, ~~2022~~2023 was approximately $21 million. The aggregate market value of our 9.4% equity interest in BK Brasil Operação e Assessoria a Restaurantes S.A. based on the quoted market price on March 31, ~~2022~~2023 was approximately ~~$41~~$24 million. ~~We have evaluated recent declines in the~~The aggregate market value of ~~these~~our 4.2% equity ~~method investments and concluded they are not other than temporary and as such no impairments have been recognized at~~interest in TH International Limited based on the quoted market price on March 31, ~~2022.~~2023 was approximately $28 million.

We have equity interests in entities that own or franchise Tim Hortons, Burger King and Popeyes restaurants. ~~Franchise~~Sales, franchise and property revenues recognized from franchisees that are owned or franchised by entities in which we have an equity interest consist of the following (in millions):


		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Revenues from affiliates:	Revenues from affiliates:						Revenues from affiliates:
Royalties	Royalties		$	88	$	65	Royalties		$	92	$	88
Advertising revenues and other services	Advertising revenues and other services		16		13		Advertising revenues and other services		18		16
Property revenues	Property revenues		7		8		Property revenues		9		7
Franchise fees and other revenue	Franchise fees and other revenue		4		4		Franchise fees and other revenue		5		4
Sales							Sales		4		4
Total	Total		$	115	$	90	Total		$	128	$	119

At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, we had ~~$50~~$45 million and ~~$48~~$42 million, respectively, of accounts receivable, net from our equity method investments which were recorded in Accounts and notes receivable, net in our condensed consolidated balance sheets.

With respect to our TH business, the most significant equity method investment is our 50% joint venture interest with The Wendy’s Company (the “TIMWEN Partnership”), which jointly holds real estate underlying Canadian combination restaurants. Distributions received from this joint venture were $2 million and $3 million during the three months ended March 31, 2023 and 2022, ~~and 2021.~~respectively.

WeAssociated with the TIMWEN Partnership, we recognized $4 million of rent expense ~~associated with the TIMWEN Partnership~~ during the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.

(Income) loss from equity method investments reflects our share of investee net income or loss and non-cash dilution gains or losses from changes in our ownership interests in equity investees.

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Note ~~10.~~9. Other Accrued Liabilities and Other Liabilities, net

Other accrued liabilities (current) and Other liabilities, net (noncurrent) consist of the following (in millions):


		As of					As of
		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Current:	Current:					Current:
Distribution payable	Distribution payable	$	244	$	241	Distribution payable	$	249	$	243
Interest payable	Interest payable	89		63		Interest payable	99		89
Accrued compensation and benefits	Accrued compensation and benefits	46		99		Accrued compensation and benefits	55		124
Taxes payable	Taxes payable	127		106		Taxes payable	153		190
Deferred income	Deferred income	45		48		Deferred income	55		43
Accrued advertising expenses	Accrued advertising expenses	37		43		Accrued advertising expenses	43		37
Restructuring and other provisions	Restructuring and other provisions	91		90		Restructuring and other provisions	29		29
Current portion of operating lease liabilities	Current portion of operating lease liabilities	144		140		Current portion of operating lease liabilities	138		137
Other	Other	94		117		Other	80		109
Other accrued liabilities	Other accrued liabilities	$	917	$	947	Other accrued liabilities	$	901	$	1,001
Noncurrent:	Noncurrent:					Noncurrent:
Taxes payable	Taxes payable	$	543	$	533	Taxes payable	$	140	$	139
Contract liabilities	Contract liabilities	535		531		Contract liabilities	542		540
Derivatives liabilities	Derivatives liabilities	422		575		Derivatives liabilities	44		34
Unfavorable leases	Unfavorable leases	62		65		Unfavorable leases	48		50
Accrued pension	Accrued pension	48		47		Accrued pension	41		40

Deferred income	Deferred income	47		37		Deferred income	54		44
Other	Other	32		34		Other	26		25
Other liabilities, net	Other liabilities, net	$	1,689	$	1,822	Other liabilities, net	$	895	$	872

Note ~~11.~~10. Long-Term Debt

Long-term debt consists of the following (in millions):


		As of					As of
		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Term Loan B	Term Loan B	$	5,230	$	5,243	Term Loan B	$	5,176	$	5,190
Term Loan A	Term Loan A	1,250		1,250		Term Loan A	1,242		1,250

3.875% First Lien Senior Notes due 2028	3.875% First Lien Senior Notes due 2028	1,550		1,550		3.875% First Lien Senior Notes due 2028	1,550		1,550
3.50% First Lien Senior Notes due 2029	3.50% First Lien Senior Notes due 2029	750		750		3.50% First Lien Senior Notes due 2029	750		750
5.75% First Lien Senior Notes due 2025	5.75% First Lien Senior Notes due 2025	500		500		5.75% First Lien Senior Notes due 2025	500		500
4.375% Second Lien Senior Notes due 2028	4.375% Second Lien Senior Notes due 2028	750		750		4.375% Second Lien Senior Notes due 2028	750		750
4.00% Second Lien Senior Notes due 2030	4.00% Second Lien Senior Notes due 2030	2,900		2,900		4.00% Second Lien Senior Notes due 2030	2,900		2,900
TH Facility and other	TH Facility and other	175		173		TH Facility and other	154		155
Less: unamortized deferred financing costs and deferred issue discount	Less: unamortized deferred financing costs and deferred issue discount	(131)		(138)		Less: unamortized deferred financing costs and deferred issue discount	(105)		(111)
Total debt, net	Total debt, net	12,974		12,978		Total debt, net	12,917		12,934
Less: current maturities of debt	Less: current maturities of debt	(71)		(62)		Less: current maturities of debt	(96)		(95)
Total long-term debt	Total long-term debt	$	12,903	$	12,916	Total long-term debt	$	12,821	$	12,839

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Credit Facilities

Following the discontinuance of the US dollar LIBOR after June 30, 2023, the Financial Conduct Authority (“FCA”) has decided to require the publication of a US dollar LIBOR using a synthetic methodology (“synthetic US dollar LIBOR”) until September 30, 2024. LIBOR is currently used under our Term Loan B facility.

Revolving Credit Facility

As of March 31, ~~2022,~~2023, we had no amounts outstanding under our senior secured revolving credit facility (the “Revolving Credit Facility”), had $2 million of letters of credit issued against the Revolving Credit Facility, and our borrowing availability under our Revolving Credit Facility was $998 million. Funds available under the Revolving Credit Facility may be used to repay other debt, finance debt or RBI share repurchases or repurchases of Class B exchangeable limited partnership units, fund acquisitions or capital expenditures and for other general corporate purposes. We have a $125 million letter of credit sublimit as part of the Revolving Credit Facility, which reduces our borrowing availability thereunder by the cumulative amount of outstanding letters of credit.

TH Facility

~~NaN~~One of our subsidiaries entered into a non-revolving delayed drawdown term credit facility in a total aggregate principal amount of C$225 million with a maturity date of October 4, 2025 (the “TH Facility”). The interest rate applicable to the TH Facility is the Canadian Bankers’ Acceptance rate plus an applicable margin equal to 1.40% or the Prime Rate plus an applicable margin equal to 0.40%, at our option. Obligations under the TH Facility are guaranteed by 4four of our subsidiaries, and amounts borrowed under the TH Facility are secured by certain parcels of real estate. As of March 31, ~~2022,~~2023, we had approximately C$200 million outstanding ~~C$214 million~~ under the TH Facility with a weighted average interest rate of ~~2.33%~~6.33%.

RE Facility

~~NaN~~One of our subsidiaries entered into a non-revolving delayed drawdown term credit facility in a total aggregate principal amount of $50 million with a maturity date of October 12, 2028 (the “RE Facility”). The interest rate applicable to the RE Facility is, at our option, either (i) a base rate, subject to a floor of 0.50%, plus an applicable margin of 0.50% or (ii) Adjusted Term SOFR (Adjusted Term SOFR is calculated as Term SOFR plus a margin based on duration), subject to a floor of 0.00%, plus an applicable margin of 1.50%. Obligations under the RE Facility are guaranteed by 4four of our subsidiaries, and amounts borrowed under the RE Facility are secured by certain parcels of real estate. As of March 31, ~~2022,~~2023, we had approximately $1$2 million outstanding under the RE Facility with a weighted average interest rate of ~~1.77%~~6.42%.

Restrictions and Covenants

As of March 31, ~~2022,~~2023, we were in compliance with all applicable financial debt covenants under our senior secured term loan facilities and Revolving Credit Facility (together the "Credit Facilities"), the TH Facility, the RE Facility, and the indentures governing our Senior Notes.

Fair Value Measurement

The following table presents the fair value of our variable rate term debt and senior notes, estimated using inputs based on bid and offer prices that are Level 2 inputs, and principal carrying amount (in millions):


		As of					As of
		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Fair value of our variable term debt and senior notes	Fair value of our variable term debt and senior notes	$	12,370	$	12,851	Fair value of our variable term debt and senior notes	$	12,120	$	11,885
Principal carrying amount of our variable term debt and senior notes	Principal carrying amount of our variable term debt and senior notes	12,930		12,943		Principal carrying amount of our variable term debt and senior notes	12,868		12,890

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Interest Expense, net

Interest expense, net consists of the following (in millions):
Three Months Ended March 31,
2022 2021
Debt (a) $ 115 $ 113
Finance lease obligations 5 5
Amortization of deferred financing costs and debt issuance discount 7 7
Interest income — (1)
Interest expense, net $ 127 $ 124

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	Three Months Ended March 31,
		2023		2022
Debt (a)		$	138	$	115
Finance lease obligations		4		5
Amortization of deferred financing costs and debt issuance discount		7		7
Interest income		(7)		—
Interest expense, net		$	142	$	127

(a)Amount includes ~~$11~~$15 million and ~~$12~~$11 million benefit during the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, related to the quarterly net settlements of our cross-currency rate swaps and amortization of the Excluded Component as defined in Note ~~14,~~13, ~~Derivatives~~Derivative Instruments.

Note ~~12.~~11. Income Taxes

Our effective tax rate was 9.1% for the three months ended March 31, 2023. The effective tax rate during this period reflects the mix of income from multiple tax jurisdictions, the impact of internal financing arrangements and favorable structural changes in 2022.

Our effective tax rate was 16.6% for the three months ended March 31, 2022. The effective tax rate during this period reflects the mix of income from multiple tax jurisdictions, the impact of internal financing arrangements and favorable structural changes.

Our effective tax rate was 14.7% for the three months ended March 31, 2021. The effective tax rate during this period reflects the mix of income from multiple tax jurisdictions, the impact of internal financing arrangements and the excess tax benefits from equity-based compensation.

Note ~~13.~~12. Equity

During the three months ended March 31, ~~2022,~~2023, Partnership exchanged ~~1,525,900~~2,214,072 Partnership exchangeable units pursuant to exchange notices received. In accordance with the terms of the partnership agreement, Partnership satisfied the exchange notices by exchanging these Partnership exchangeable units for the same number of newly issued RBI common shares. The issuances of shares were accounted for as capital contributions by RBI to Partnership. The exchanges of Partnership exchangeable units were recorded as increases to the Class A common units balance within partners’ capital in our consolidated balance sheet in an amount equal to the market value of the newly issued RBI common shares and a reduction to the Partnership exchangeable units balance within partners’ capital of our consolidated balance sheet in an amount equal to the cash paid by Partnership, if any, and the market value of the newly issued RBI common shares. Pursuant to the terms of the partnership agreement, upon the exchange of Partnership exchangeable units, each such Partnership exchangeable unit is automatically deemed cancelled concurrently with the exchange.

~~Distribution to RBI to Repurchase RBI Common Shares~~

~~During the three months ended March 31, 2022, Partnership distributed to RBI $161 million to repurchase RBI common shares.~~

Accumulated Other Comprehensive Income (Loss)

The following table displays the changes in the components of accumulated other comprehensive income (loss) (“AOCI”) (in millions):


		Derivatives		Pensions		Foreign Currency Translation		Accumulated Other Comprehensive Income (Loss)			Derivatives		Pensions		Foreign Currency Translation		Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2021		$	196	$	(30)	$	(1,190)	$	(1,024)
Balance at December 31, 2022										Balance at December 31, 2022	$	944	$	(24)	$	(1,893)	$	(973)
Foreign currency translation adjustment	Foreign currency translation adjustment	—		—		57		57		Foreign currency translation adjustment	—		—		40		40
Net change in fair value of derivatives, net of tax	Net change in fair value of derivatives, net of tax	126		—		—		126		Net change in fair value of derivatives, net of tax	(74)		—		—		(74)
Amounts reclassified to earnings of cash flow hedges, net of tax	Amounts reclassified to earnings of cash flow hedges, net of tax	21		—		—		21		Amounts reclassified to earnings of cash flow hedges, net of tax	(13)		—		—		(13)
Gain (loss) recognized on other, net of tax		—		1		—		1
Balance at March 31, 2022		$	343	$	(29)	$	(1,133)	$	(819)

Balance at March 31, 2023										Balance at March 31, 2023	$	857	$	(24)	$	(1,853)	$	(1,020)

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Note ~~14.~~13. Derivative Instruments

Disclosures about Derivative Instruments and Hedging Activities

We enter into derivative instruments for risk management purposes, including derivatives designated as cash flow hedges and derivatives designated as net investment ~~hedges and those utilized as economic~~ hedges. We use derivatives to manage our exposure to fluctuations in interest rates and currency exchange rates.

Interest Rate Swaps

At March 31, ~~2022,~~2023, we had outstanding receive-variable, pay-fixed interest rate swaps with a total notional value of $3,500 million to hedge the variability in the interest payments on a portion of our senior secured term loan facilities (the “Term Loan Facilities”), including any subsequent refinancing or replacement of the Term Loan Facilities, beginning August 31, 2021 through the termination date of October 31, 2028. Additionally, at March 31, ~~2022,~~2023, we also had outstanding receive-variable, pay-fixed interest rate swaps with a total notional value of $500 million to hedge the variability in the interest payments on a portion of our Term Loan Facilities effective September 30, 2019 through the termination date of September 30, 2026. At inception, all of these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value are recorded in AOCI, net of tax, and reclassified into interest expense during the period in which the hedged forecasted transaction affects earnings.

~~During 2021, we extended the maturity of our $3,500 million receive-variable, pay-fixed interest rate swaps.~~ The extension of the term resulted in a de-designation and re-designation of the interest rate swaps and the swaps continue to be accounted for as a cash flow hedge for hedge accounting. In connection with the de-designation, we recognized a net ~~unrealized loss of $143 million in AOCI and this amount gets reclassified into Interest expense, net as the original forecasted transaction affects earnings. The~~ amount of pre-tax ~~losses~~gains in connection with ~~this~~these net unrealized ~~loss~~gains in AOCI as of March 31, ~~2022~~2023 that we expect to be reclassified into interest expense within the next 12 months is ~~$28 million.~~

We had previously extended the term of our $3,500 million receive-variable, pay-fixed interest rate swaps in 2019. The extension of the term resulted in a de-designation and re-designation of the interest rate swaps and the swaps continue to be accounted for as a cash flow hedge for hedge accounting. In connection with the de-designation, we recognized a net unrealized loss of $213 million in AOCI and this amount gets reclassified into Interest expense, net as the original forecasted transaction affects earnings. The amount of pre-tax losses in connection with this net unrealized loss in AOCI as of March 31, 2022 that we expect to be reclassified into interest expense within the next 12 months is $50$84 million.

Cross-Currency Rate Swaps

To protect the value of our investments in our foreign operations against adverse changes in foreign currency exchange rates, we hedge a portion of our net investment in one or more of our foreign subsidiaries by using cross-currency rate swaps. At March 31, ~~2022,~~2023, we had outstanding cross-currency rate swap contracts between the Canadian dollar and U.S. dollar and the Euro and U.S. dollar that have been designated as net investment hedges of a portion of our equity in foreign operations in those currencies. The component of the gains and losses on our net investment in these designated foreign operations driven by changes in foreign exchange rates are economically partly offset by movements in the fair value of our cross-currency swap contracts. The fair value of the swaps is calculated each period with changes in fair value reported in AOCI, net of tax. Such amounts will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying foreign operations.

At March 31, ~~2022,~~2023, we had outstanding ~~fixed-to-fixed~~ cross-currency rate swaps that we entered into during 2022 to partially hedge the net investment in our Canadian subsidiaries. At inception, these cross-currency rate swaps were designated as a hedge and are accounted for as net investment hedges. These swaps are contracts ~~to exchange~~in which we receive quarterly fixed-rate interest payments ~~we make on the Canadian dollar notional amount of C$6,754 million for quarterly fixed-rate interest payments we receive~~ on the U.S. dollar notional amount of $5,000 million through the maturity date of ~~June~~September 30, ~~2023.~~

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2028.

At March 31, ~~2022,~~2023, we had outstanding cross-currency rate swaps in which we pay quarterly fixed-rate interest payments on the Euro notional value of €1,108 million and receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $1,200 million. At inception, these cross-currency rate swaps were designated as a hedge and are accounted for as a net investment hedge. During 2018, we extended the term of the swaps from March 31, 2021 to the maturity date of February 17, 2024. The extension of the term resulted in a re-designation of the hedge and the swaps continue to be accounted for as a net investment hedge. Additionally, at March 31, ~~2022,~~2023, we also had outstanding cross-currency rate swaps in which we receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $400 million, entered during 2018, and $500 million, entered during 2019, through the maturity date of February 17, 2024 and $150 million, entered during 2021, through the maturity date of October 31, 2028. At inception, these cross-currency rate swaps were designated as a hedge and are accounted for as a net investment hedge.

The fixed-to-fixed cross-currency rate swaps hedging Canadian dollar and Euro net investments utilized the forward method of effectiveness assessment prior to March 15, 2018. On March 15, 2018, we de-designated and subsequently re-designated the outstanding fixed to fixed cross-currency rate swaps to prospectively use the spot method of hedge effectiveness assessment. Additionally, as a result of adopting new hedge accounting guidance during 2018, we elected to exclude the interest component (the “Excluded Component”) from the accounting hedge without affecting net investment hedge accounting and elected to amortize the Excluded Component over the life of the derivative instrument. The amortization of the Excluded Component is recognized in Interest expense, net in the condensed consolidated statement of operations. The change in fair value that is not related to the Excluded Component is recorded in AOCI and will be reclassified to earnings when the foreign subsidiaries are sold or substantially liquidated.

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Foreign Currency Exchange Contracts

We use foreign exchange derivative instruments to manage the impact of foreign exchange fluctuations on U.S. dollar purchases and payments, such as coffee purchases made by our Canadian Tim Hortons operations. At March 31, ~~2022,~~2023, we had outstanding forward currency contracts to manage this risk in which we sell Canadian dollars and buy U.S. dollars with a notional value of ~~$203~~$205 million with maturities to May ~~2023.~~2024. We have designated these instruments as cash flow hedges, and as such, the unrealized changes in market value of effective hedges are recorded in AOCI and are reclassified into earnings during the period in which the hedged forecasted transaction affects earnings.

Credit Risk

By entering into derivative contracts, we are exposed to counterparty credit risk. Counterparty credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is in an asset position, the counterparty has a liability to us, which creates credit risk for us. We attempt to minimize this risk by selecting counterparties with investment grade credit ratings and regularly monitoring our market position with each counterparty.

Credit-Risk Related Contingent Features

Our derivative instruments do not contain any credit-risk related contingent features.

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Quantitative Disclosures about Derivative Instruments and Fair Value Measurements

The following tables present the required quantitative disclosures for our derivative instruments, including their estimated fair values (all estimated using Level 2 inputs) and their location on our condensed consolidated balance sheets (in millions):


			Gain or (Loss) Recognized in Other Comprehensive Income (Loss)						Gain or (Loss) Recognized in Other Comprehensive Income (Loss)
		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Derivatives designated as cash flow hedges(1)	Derivatives designated as cash flow hedges(1)						Derivatives designated as cash flow hedges(1)
Interest rate swaps	Interest rate swaps		$	223	$	129	Interest rate swaps		$	(57)	$	223
Forward-currency contracts	Forward-currency contracts		$	(2)	$	(1)	Forward-currency contracts		$	(1)	$	(2)
Derivatives designated as net investment hedges	Derivatives designated as net investment hedges						Derivatives designated as net investment hedges
Cross-currency rate swaps	Cross-currency rate swaps		$	(60)	$	9	Cross-currency rate swaps		$	(35)	$	(60)

(1) We did not exclude any components from the cash flow hedge relationships presented in this table.

Location of Gain or (Loss) Reclassified from AOCI into Earnings Gain or (Loss) Reclassified from
AOCI into Earnings
Three Months Ended March 31,
2022 2021
Derivatives designated as cash flow hedges
Interest rate swaps Interest expense, net $ (29) $ (30)
Forward-currency contracts Cost of sales $ 1 $ (2)
Location of Gain or (Loss) Recognized in Earnings Gain or (Loss) Recognized in Earnings
(Amount Excluded from Effectiveness Testing)
Three Months Ended March 31,
2022 2021
Derivatives designated as net investment hedges
Cross-currency rate swaps Interest expense, net $ 11 $ 12

Fair Value as of
March 31,
2022 December 31, 2021 Balance Sheet Location
Assets:
Derivatives designated as cash flow hedges
Interest rate $ 20 $ — Other assets, net
Foreign currency 1 2 Prepaids and other current assets
Derivatives designated as net investment hedges
Foreign currency 27 23 Other assets, net
Total assets at fair value $ 48 $ 25
Liabilities:
Derivatives designated as cash flow hedges
Interest rate $ 4 $ 220 Other liabilities, net
Foreign currency 2 — Other accrued liabilities
Derivatives designated as net investment hedges
Foreign currency 418 355 Other liabilities, net
Total liabilities at fair value $ 424 $ 575


	Location of Gain or (Loss) Reclassified from AOCI into Earnings		Gain or (Loss) Reclassified from AOCI into Earnings
		Three Months Ended March 31,
			2023		2022
Derivatives designated as cash flow hedges
Interest rate swaps	Interest expense, net		$	15	$	(29)
Forward-currency contracts	Cost of sales		$	3	$	1

	Location of Gain or (Loss) Recognized in Earnings		Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing)
		Three Months Ended March 31,
			2023		2022
Derivatives designated as net investment hedges
Cross-currency rate swaps	Interest expense, net		$	15	$	11

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	Fair Value as of
	March 31, 2023		December 31, 2022		Balance Sheet Location
Assets:
Derivatives designated as cash flow hedges
Interest rate	$	195	$	280	Other assets, net
Foreign currency	4		7		Prepaids and other current assets
Derivatives designated as net investment hedges
Foreign currency	56		78		Other assets, net



Total assets at fair value	$	255	$	365

Liabilities:
Derivatives designated as cash flow hedges

Foreign currency	$	1	$	—	Other accrued liabilities
Derivatives designated as net investment hedges
Foreign currency	44		34		Other liabilities, net


Total liabilities at fair value	$	45	$	34

Note ~~15.~~14. Other Operating Expenses (Income), net

Other operating expenses (income), net ~~consist~~consists of the following (in millions):


		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings	Net losses (gains) on disposal of assets, restaurant closures, and refranchisings		$	2	$	(2)	Net losses (gains) on disposal of assets, restaurant closures, and refranchisings		$	(2)	$	2
Litigation settlements (gains) and reserves, net	Litigation settlements (gains) and reserves, net		1		2		Litigation settlements (gains) and reserves, net		1		1
Net losses (gains) on foreign exchange	Net losses (gains) on foreign exchange		(21)		(43)		Net losses (gains) on foreign exchange		8		(21)
Other, net	Other, net		2		1		Other, net		10		2
Other operating expenses (income), net	Other operating expenses (income), net		$	(16)	$	(42)	Other operating expenses (income), net		$	17	$	(16)

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 foreign exchange is primarily related to revaluation of foreign denominated assets and ~~liabilities.~~liabilities, primarily those denominated in Euros and Canadian dollars.

Other, net for 2023 is primarily related to payments in connection with FHS area representative buyouts.

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Note ~~16.~~15. Commitments and Contingencies

Litigation

From time to time, we are involved in legal proceedings arising in the ordinary course of business relating to matters including, but not limited to, disputes with franchisees, suppliers, employees and customers, as well as disputes over our intellectual property.

On October 5, 2018, a class action complaint was filed against Burger King Worldwide, Inc. (“BKW”) and Burger King ~~Corporation~~Company, successor in interest, (“BKC”) in the U.S. District Court for the Southern District of Florida by Jarvis Arrington, individually and on behalf of all others similarly situated. On October 18, 2018, a second class action complaint was filed against RBI, BKW and BKC in the U.S. District Court for the Southern District of Florida by Monique Michel, individually and on behalf of all others similarly situated. On October 31, 2018, a third class action complaint was filed against BKC and BKW in the U.S. District Court for the Southern District of Florida by Geneva Blanchard and Tiffany Miller, individually and on behalf of all others similarly situated. On November 2, 2018, a fourth class action complaint was filed against RBI, BKW and BKC in the U.S. District Court for the Southern District of Florida by Sandra ~~Muster,~~Munster, individually and on behalf of all others similarly situated. These complaints have been consolidated and allege that the defendants violated Section 1 of the Sherman Act by incorporating an employee no-solicitation and no-hiring clause in the standard form franchise agreement all Burger King franchisees are required to sign. Each plaintiff seeks injunctive relief and damages for himself or herself and other members of the class. On March 24, 2020, the Court granted BKC’s motion to dismiss for failure to state a claim and on April 20, 2020 the plaintiffs filed a motion for leave to amend their complaint. On April 27, 2020, BKC filed a motion opposing the motion for leave to amend. The court denied the plaintiffs motion for leave to amend their complaint in August 2020 and the plaintiffs appealed this ruling. ~~Oral arguments~~In August 2022, the federal appellate court reversed the lower court's decision to dismiss the case and remanded the case to the lower court for ~~the appeal were heard in September 2021 and the parties await a ruling on the appeal.~~further proceedings. While we currently believe these claims are without merit, we are unable to predict the ultimate outcome of this case or estimate the range of possible loss, if any.

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On June 30, 2020, a class action complaint was filed against Restaurant Brands International Inc., Restaurant Brands International Limited Partnership and The TDL Group Corp. in the Quebec Superior Court by Steve Holcman, individually and on behalf of all Quebec residents who downloaded the Tim Hortons mobile application. On July 2, 2020, a Notice of Action related to a second class action complaint was filed against Restaurant Brands International Inc., in the Ontario Superior Court by Ashley Sitko and Ashley Cadeau, individually and on behalf of all Canadian residents who downloaded the Tim Hortons mobile application. On August 31, 2020, a notice of claim was filed against Restaurant Brands International Inc. in the Supreme Court of British Columbia by Wai Lam Jacky Law on behalf of all persons in Canada who downloaded the Tim Hortons mobile application or the Burger King mobile application. On September 30, 2020, a notice of action was filed against Restaurant Brands International Inc., Restaurant Brands International Limited Partnership, The TDL Group Corp., Burger King Worldwide, Inc. and Popeyes Louisiana Kitchen, Inc. in the Ontario Superior Court of Justice by William Jung on behalf of a to be determined class. All of the complaints allege that the defendants violated the plaintiff’s privacy rights, the Personal Information Protection and Electronic Documents Act, consumer protection and competition laws or app-based undertakings to users, in each case in connection with the collection of geolocation data through the Tim Hortons mobile application, and in certain cases, the Burger King and Popeyes mobile applications. Each plaintiff seeks injunctive relief and monetary damages for himself or herself and other members of the class. These cases are in preliminary stages and we intend to vigorously defend against these lawsuits, but we are unable to predict the ultimate outcome of any of these cases or estimate the range of possible loss, if any.

On October 26, 2020, City of Warwick Municipal Employees Pension Fund, a purported stockholder of ~~Restaurant Brands International Inc.,~~RBI, individually and putatively on behalf of all other stockholders similarly situated, filed a lawsuit in the Supreme Court of the State of New York County of New York naming RBI and certain of ~~its~~our officers, directors and shareholders as defendants alleging violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended, in connection with certain offerings of securities by an affiliate in August and September 2019. The complaint alleges that the shelf registration statement used in connection with such offering contained certain false and/or misleading statements or omissions. The complaint seeks, among other relief, class certification of the lawsuit, unspecified compensatory damages, rescission, pre-judgement and post-judgement interest, costs and expenses. On December 18, 2020 the plaintiffs filed an amended complaint and on February 16, 2021 RBI filed a motion to dismiss the complaint. The plaintiffs filed a brief in opposition to the motion on April 19, 2021 and RBI filed a reply in May 2021. The motion to dismiss was heard in April 2022 and the motion to dismiss was denied in May 2022. ~~We intend~~On June 6, 2022, we filed an answer to ~~vigorously defend. While~~the complaint and on July 8, 2022, we ~~believe these claims are without merit, we are unable~~filed an appeal of the denial of the motion to ~~predict~~dismiss. On November 10, 2022, the ~~ultimate outcome~~appellate division reversed the trial court and ordered that the complaint be dismissed. Plaintiffs moved for leave to appeal to the Court of ~~this case or estimate~~Appeals of the ~~range~~State of ~~possible loss, if any.~~

~~In April 2022, Burger King Corporation was served with 2 separate purported class action complaints relating~~New York, which RBI opposed, and on March 21, 2023, the Court of Appeals denied leave to ~~per- and polyfluoralkly (“PFAS”) in packaging. Hussain vs. Burger King Corporation was filed on April 13, 2022~~appeal. As that decision is now final in the ~~U.S. District Court for the Northern District of California, and Cooper v. Burger King Corporation was filed on April 14, 2022~~New York courts, we do not anticipate any further proceedings in the U.S. District Court for the Southern District of Florida. Both complaints allege that certain food products sold by Burger King Corporation are not safe for human consumption due to the packaging containing allegedly unsafe PFAS and that consumers were misled by the labelling, marketing and packaging claims asserted by Burger King Corporation regarding the safety and sustainability of the packaging and are seeking compensatory, statutory and punitive damages, injunctive relief, corrective action, and attorneys’ fees. While we currently believe these claims are without merit, we are unable to predict the ultimate outcome of these cases or estimate the range of possible loss, if any.

~~Other Disputes~~

In early 2022, we entered into negotiations to resolve business disputes that arose during 2021 with counterparties to the master franchise agreements for Burger King and Popeyes in China. Based on these discussions, we have paid approximately $100 million, $72 million of which was recorded as Litigation settlements and reserves, net in 2021. The majority of this amount relates to Popeyes, resolves our disputes and allows us to move forward in the market with a new master franchisee. Additionally, pursuant to this agreement we and our partner have made equity contributions to the Burger King business in China.

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matter.

Note ~~17.~~16. Segment Reporting

As stated in Note 1, Description of Business and Organization, we manage 4four brands. Under the Tim Hortons brand, we operate in the donut/coffee/tea category of the quick service segment of the restaurant industry. Under the Burger King brand, we operate in the fast food hamburger restaurant category of the quick service segment of the restaurant industry. Under the Popeyes brand, we operate in the chicken category of the quick service segment of the restaurant industry. Under the Firehouse Subs brand, we operate in the specialty subs category of the quick service segment of the restaurant industry. Our business generates revenue from the following sources: (i) ~~franchise and advertising revenues and other services,~~sales, consisting primarily of ~~royalties~~supply chain sales, which represent sales of products, supplies and ~~advertising fund contributions~~restaurant equipment to franchisees, as well as sales to retailers and sales at restaurants owned by us (“Company restaurants”); (ii) franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchise restaurants and franchise fees paid by franchisees; ~~(ii)~~(iii) property revenues from properties we lease or sublease to franchisees; and ~~(iii)~~(iv) advertising revenues and other services, consisting primarily of advertising fund contributions based on a percentage of sales ~~at restaurants owned~~reported by us (“Company restaurants”). In addition, our TH business generates revenue from sales to franchisees related to our supply chain operations, including manufacturing, procurement, warehousing and distribution, as well as sales to retailers.franchise restaurants. We manage each of our brands as an operating segment and each operating segment represents a reportable segment.

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The following tables present revenues, by segment and by country (in millions):


		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Revenues by operating segment:	Revenues by operating segment:						Revenues by operating segment:
TH	TH		$	829	$	710	TH		$	900	$	829
BK	BK		443		407		BK		484		443
PLK	PLK		148		143		PLK		168		148
FHS	FHS		31		—		FHS		38		31
Total revenues	Total revenues		$	1,451	$	1,260	Total revenues		$	1,590	$	1,451


		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Revenues by country (a):	Revenues by country (a):						Revenues by country (a):
Canada	Canada		$	747	$	638	Canada		$	809	$	747
United States	United States		521		478		United States		573		521
Other	Other		183		144		Other		208		183
Total revenues	Total revenues		$	1,451	$	1,260	Total revenues		$	1,590	$	1,451

(a)Only Canada and the United States represented 10% or more of our total revenues in each period presented.

Our measure of segment income is Adjusted EBITDA. Adjusted EBITDA represents earnings (net income or loss) before interest expense, net, loss on early extinguishment of debt, income tax (benefit) expense, and depreciation and amortization, adjusted to exclude (i) the non-cash impact of share-based compensation and non-cash incentive compensation expense, (ii) (income) loss from equity method investments, net of cash distributions received from equity method investments, (iii) other operating expenses (income), net and, (iv) income/expenses from non-recurring projects and non-operating activities. For the periods referenced, income/expenses from non-recurring projects and non-operating activities included (i) non-recurring fees and expense incurred in connection with the Firehouse Acquisition consisting of professional fees, ~~compensation related~~compensation-related expenses and integration costs (“FHS Transaction costs”); and (ii) non-operating costs from professional advisory and consulting services associated with certain transformational corporate restructuring initiatives that rationalize our structure and optimize cash movements, including services related to significant tax reform legislation, regulations and related restructuring initiatives (“Corporate restructuring and tax advisory fees”).

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Adjusted EBITDA is used by management to measure operating performance of the business, excluding these non-cash and other specifically identified items that management believes are not relevant to management’s assessment of our operating performance. A reconciliation of segment income to net income consists of the following (in millions):


		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Segment income:	Segment income:						Segment income:
TH	TH		$	231	$	207	TH		$	251	$	231
BK	BK		229		217		BK		256		229
PLK	PLK		56		56		PLK		66		56
FHS	FHS		14		—		FHS		15		14
Adjusted EBITDA	Adjusted EBITDA		530		480		Adjusted EBITDA		588		530
Share-based compensation and non-cash incentive compensation expense	Share-based compensation and non-cash incentive compensation expense		27		26		Share-based compensation and non-cash incentive compensation expense		45		27
FHS Transaction costs	FHS Transaction costs		1		—		FHS Transaction costs		19		1
Corporate restructuring and tax advisory fees	Corporate restructuring and tax advisory fees		3		1		Corporate restructuring and tax advisory fees		5		3
Impact of equity method investments (a)	Impact of equity method investments (a)		16		4		Impact of equity method investments (a)		9		16
Other operating expenses (income), net	Other operating expenses (income), net		(16)		(42)		Other operating expenses (income), net		17		(16)
EBITDA	EBITDA		499		491		EBITDA		493		499
Depreciation and amortization	Depreciation and amortization		49		49		Depreciation and amortization		46		49
Income from operations	Income from operations		450		442		Income from operations		447		450
Interest expense, net	Interest expense, net		127		124		Interest expense, net		142		127

Income tax expense	Income tax expense		53		47		Income tax expense		28		53
Net income	Net income		$	270	$	271	Net income		$	277	$	270

(a)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.

Note ~~18.~~17. Supplemental Financial Information

1011778 B.C. Unlimited Liability Company (the “Parent Issuer”) and New Red Finance Inc. (the “Co-Issuer” and together with the Parent Issuer, the “Issuers”) entered into an amended credit agreement, as amended from time to time, that provides for obligations under the Credit Facilities. The Issuers entered into the 3.875% First Lien Senior Notes Indenture with respect to the 3.875% First Lien Senior Notes due 2028. The Issuers entered into the 3.500% First Lien Senior Notes Indenture with respect to the 3.500% First Lien Senior Notes due 2029. The Issuers entered into the 5.750% First Lien Senior Notes Indenture with respect to the 5.750% First Lien Senior Notes due 2025. ~~The Issuers entered into the 3.500% First Lien Senior Notes Indenture with respect to the 3.500% First Lien Senior Notes due 2029.~~ The Issuers entered into the 4.375% Second Lien Senior Notes Indenture with respect to the 4.375% Second Lien Senior Notes due 2028. The Issuers entered into the 4.000% Second Lien Senior Notes Indenture with respect to the 4.000% Second Lien Senior Notes due 2030.

The agreement governing our Credit Facilities, the 3.875% First Lien Senior Notes Indenture, the 3.500% First Lien Senior Notes Indenture, the 5.750% First Lien Senior Notes Indenture, the 4.375% Second Lien Senior Notes Indenture and the 4.000% Second Lien Senior Notes Indenture allow the financial reporting obligation of the Parent Issuer to be satisfied through the reporting of Partnership’s consolidated financial information, provided that the consolidated financial information of the Parent Issuer and its restricted subsidiaries is presented on a standalone basis.

The following represents the condensed consolidating financial information for the Parent Issuer and its restricted subsidiaries (“Consolidated Borrowers”) on a consolidated basis, together with eliminations, as of and for the periods indicated. The condensed consolidating financial information of Partnership is combined with the financial information of its wholly-owned subsidiaries that are also parent entities of the Parent Issuer and presented in a single column under the heading “RBILP”. The consolidating financial information may not necessarily be indicative of the financial position, results of operations or cash flows had the Issuers and Partnership operated as independent entities.

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RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

(In millions of U.S. dollars)

As of March 31, ~~2022~~2023


		Consolidated Borrowers		RBILP		Eliminations		Consolidated			Consolidated Borrowers		RBILP		Eliminations		Consolidated
ASSETS	ASSETS									ASSETS
Current assets:	Current assets:									Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	895	$	—	$	—	$	895	Cash and cash equivalents	$	1,033	$	—	$	—	$	1,033
Accounts and notes receivable, net	Accounts and notes receivable, net	593		—		—		593		Accounts and notes receivable, net	612		—		—		612
Inventories, net	Inventories, net	108		—		—		108		Inventories, net	145		—		—		145
Prepaids and other current assets	Prepaids and other current assets	90		—		—		90		Prepaids and other current assets	103		—		—		103
Total current assets	Total current assets	1,686		—		—		1,686		Total current assets	1,893		—		—		1,893
Property and equipment, net	Property and equipment, net	2,023		—		—		2,023		Property and equipment, net	1,943		—		—		1,943
Operating lease assets, net	Operating lease assets, net	1,137		—		—		1,137		Operating lease assets, net	1,075		—		—		1,075
Intangible assets, net	Intangible assets, net	11,451		—		—		11,451		Intangible assets, net	11,005		—		—		11,005
Goodwill	Goodwill	6,050		—		—		6,050		Goodwill	5,700		—		—		5,700
Net investment in property leased to franchisees	Net investment in property leased to franchisees	82		—		—		82		Net investment in property leased to franchisees	83		—		—		83
Intercompany receivable	Intercompany receivable	—		244		(244)		—		Intercompany receivable	—		249		(249)		—
Investment in subsidiaries	Investment in subsidiaries	—		3,961		(3,961)		—		Investment in subsidiaries	—		4,311		(4,311)		—
Other assets, net	Other assets, net	743		—		—		743		Other assets, net	827		—		—		827
Total assets	Total assets	$	23,172	$	4,205	$	(4,205)	$	23,172	Total assets	$	22,526	$	4,560	$	(4,560)	$	22,526
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY									LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:									Current liabilities:
Accounts and drafts payable	Accounts and drafts payable	$	637	$	—	$	—	$	637	Accounts and drafts payable	$	679	$	—	$	—	$	679
Other accrued liabilities	Other accrued liabilities	673		244		—		917		Other accrued liabilities	652		249		—		901
Gift card liability	Gift card liability	169		—		—		169		Gift card liability	174		—		—		174
Current portion of long-term debt and finance leases	Current portion of long-term debt and finance leases	105		—		—		105		Current portion of long-term debt and finance leases	128		—		—		128
Total current liabilities	Total current liabilities	1,584		244		—		1,828		Total current liabilities	1,633		249		—		1,882
Long-term debt, net of current portion	Long-term debt, net of current portion	12,903		—		—		12,903		Long-term debt, net of current portion	12,821		—		—		12,821
Finance leases, net of current portion	Finance leases, net of current portion	337		—		—		337		Finance leases, net of current portion	310		—		—		310
Operating lease liabilities, net of current portion	Operating lease liabilities, net of current portion	1,074		—		—		1,074		Operating lease liabilities, net of current portion	1,019		—		—		1,019
Other liabilities, net	Other liabilities, net	1,689		—		—		1,689		Other liabilities, net	895		—		—		895
Payables to affiliates	Payables to affiliates	244		—		(244)		—		Payables to affiliates	249		—		(249)		—
Deferred income taxes, net	Deferred income taxes, net	1,380		—		—		1,380		Deferred income taxes, net	1,288		—		—		1,288
Total liabilities	Total liabilities	19,211		244		(244)		19,211		Total liabilities	18,215		249		(249)		18,215
Partners’ capital:	Partners’ capital:									Partners’ capital:
Class A common units	Class A common units	—		8,400		—		8,400		Class A common units	—		8,951		—		8,951
Partnership exchangeable units	Partnership exchangeable units	—		(3,623)		—		(3,623)		Partnership exchangeable units	—		(3,622)		—		(3,622)
Common shares	Common shares	2,514		—		(2,514)		—		Common shares	2,556		—		(2,556)		—
Retained earnings	Retained earnings	2,263		—		(2,263)		—		Retained earnings	2,773		—		(2,773)		—
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(819)		(819)		819		(819)		Accumulated other comprehensive income (loss)	(1,020)		(1,020)		1,020		(1,020)
Total Partners' capital/shareholders' equity	Total Partners' capital/shareholders' equity	3,958		3,958		(3,958)		3,958		Total Partners' capital/shareholders' equity	4,309		4,309		(4,309)		4,309
Noncontrolling interests	Noncontrolling interests	3		3		(3)		3		Noncontrolling interests	2		2		(2)		2
Total equity	Total equity	3,961		3,961		(3,961)		3,961		Total equity	4,311		4,311		(4,311)		4,311
Total liabilities and equity	Total liabilities and equity	$	23,172	$	4,205	$	(4,205)	$	23,172	Total liabilities and equity	$	22,526	$	4,560	$	(4,560)	$	22,526

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RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

(In millions of U.S. dollars)

As of December 31, ~~2021~~2022


		Consolidated Borrowers		RBILP		Eliminations		Consolidated			Consolidated Borrowers		RBILP		Eliminations		Consolidated
ASSETS	ASSETS									ASSETS
Current assets:	Current assets:									Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	1,087	$	—	$	—	$	1,087	Cash and cash equivalents	$	1,178	$	—	$	—	$	1,178
Accounts and notes receivable, net	Accounts and notes receivable, net	547		—		—		547		Accounts and notes receivable, net	614		—		—		614
Inventories, net	Inventories, net	96		—		—		96		Inventories, net	133		—		—		133
Prepaids and other current assets	Prepaids and other current assets	86		—		—		86		Prepaids and other current assets	123		—		—		123
Total current assets	Total current assets	1,816		—		—		1,816		Total current assets	2,048		—		—		2,048
Property and equipment, net	Property and equipment, net	2,035		—		—		2,035		Property and equipment, net	1,950		—		—		1,950
Operating lease assets. net	Operating lease assets. net	1,130		—		—		1,130		Operating lease assets. net	1,082		—		—		1,082
Intangible assets, net	Intangible assets, net	11,417		—		—		11,417		Intangible assets, net	10,991		—		—		10,991
Goodwill	Goodwill	6,006		—		—		6,006		Goodwill	5,688		—		—		5,688
Net investment in property leased to franchisees	Net investment in property leased to franchisees	80		—		—		80		Net investment in property leased to franchisees	82		—		—		82
Intercompany receivable	Intercompany receivable	—		241		(241)		—		Intercompany receivable	—		243		(243)		—
Investment in subsidiaries	Investment in subsidiaries	—		3,853		(3,853)		—		Investment in subsidiaries	—		4,268		(4,268)		—
Other assets, net	Other assets, net	762		—		—		762		Other assets, net	905		—		—		905
Total assets	Total assets	$	23,246	$	4,094	$	(4,094)	$	23,246	Total assets	$	22,746	$	4,511	$	(4,511)	$	22,746
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY									LIABILITIES AND EQUITY
Current liabilities:	Current liabilities:									Current liabilities:
Accounts and drafts payable	Accounts and drafts payable	$	614	$	—	$	—	$	614	Accounts and drafts payable	$	758	$	—	$	—	$	758
Other accrued liabilities	Other accrued liabilities	706		241		—		947		Other accrued liabilities	758		243		—		1,001
Gift card liability	Gift card liability	221		—		—		221		Gift card liability	230		—		—		230
Current portion of long-term debt and finance leases	Current portion of long-term debt and finance leases	96		—		—		96		Current portion of long-term debt and finance leases	127		—		—		127
Total current liabilities	Total current liabilities	1,637		241		—		1,878		Total current liabilities	1,873		243		—		2,116
Long-term debt, net of current portion	Long-term debt, net of current portion	12,916		—		—		12,916		Long-term debt, net of current portion	12,839		—		—		12,839
Finance leases, net of current portion	Finance leases, net of current portion	333		—		—		333		Finance leases, net of current portion	311		—		—		311
Operating lease liabilities, net of current portion	Operating lease liabilities, net of current portion	1,070		—		—		1,070		Operating lease liabilities, net of current portion	1,027		—		—		1,027
Other liabilities, net	Other liabilities, net	1,822		—		—		1,822		Other liabilities, net	872		—		—		872
Payables to affiliates	Payables to affiliates	241		—		(241)		—		Payables to affiliates	243		—		(243)		—
Deferred income taxes, net	Deferred income taxes, net	1,374		—		—		1,374		Deferred income taxes, net	1,313		—		—		1,313
Total liabilities	Total liabilities	19,393		241		(241)		19,393		Total liabilities	18,478		243		(243)		18,478
Partners’ capital:	Partners’ capital:									Partners’ capital:
Class A common units	Class A common units	—		8,421		—		8,421		Class A common units	—		8,735		—		8,735
Partnership exchangeable units	Partnership exchangeable units	—		(3,547)		—		(3,547)		Partnership exchangeable units	—		(3,496)		—		(3,496)
Common shares	Common shares	2,635		—		(2,635)		—		Common shares	2,494		—		(2,494)		—
Retained earnings	Retained earnings	2,239		—		(2,239)		—		Retained earnings	2,745		—		(2,745)		—
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(1,024)		(1,024)		1,024		(1,024)		Accumulated other comprehensive income (loss)	(973)		(973)		973		(973)
Total Partners' capital/shareholders' equity	Total Partners' capital/shareholders' equity	3,850		3,850		(3,850)		3,850		Total Partners' capital/shareholders' equity	4,266		4,266		(4,266)		4,266
Noncontrolling interests	Noncontrolling interests	3		3		(3)		3		Noncontrolling interests	2		2		(2)		2
Total equity	Total equity	3,853		3,853		(3,853)		3,853		Total equity	4,268		4,268		(4,268)		4,268
Total liabilities and equity	Total liabilities and equity	$	23,246	$	4,094	$	(4,094)	$	23,246	Total liabilities and equity	$	22,746	$	4,511	$	(4,511)	$	22,746

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RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Statements of Operations

(In millions of U.S. dollars)

Three Months Ended March 31, 2023


	Consolidated Borrowers		RBILP		Eliminations		Consolidated
Revenues:
Sales	$	668	$	—	$	—	$	668
Franchise and property revenues	668		—		—		668
Advertising revenues and other services	254		—		—		254
Total revenues	1,590		—		—		1,590
Operating costs and expenses:
Cost of sales	550		—		—		550
Franchise and property expenses	123		—		—		123
Advertising expenses and other services	271		—		—		271
General and administrative expenses	175		—		—		175
(Income) loss from equity method investments	7		—		—		7
Other operating expenses (income), net	17		—		—		17
Total operating costs and expenses	1,143		—		—		1,143
Income from operations	447		—		—		447
Interest expense, net	142		—		—		142

Income before income taxes	305		—		—		305
Income tax expense	28		—		—		28
Net income	277		—		—		277
Equity in earnings of consolidated subsidiaries	—		277		(277)		—
Net income (loss)	277		277		(277)		277
Net income (loss) attributable to noncontrolling interests	1		1		(1)		1
Net income (loss) attributable to common unitholders	$	276	$	276	$	(276)	$	276
Comprehensive income (loss)	$	230	$	230	$	(230)	$	230

Table of Contents

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Statements of Operations

(In millions of U.S. dollars)

Three Months Ended March 31, 2022


	Consolidated Borrowers		RBILP		Eliminations		Consolidated
Revenues:
Sales	$	609	$	—	$	—	$	609
Franchise and property revenues	615		—		—		615
Advertising revenues and other services	227		—		—		227
Total revenues	1,451		—		—		1,451
Operating costs and expenses:
Cost of sales	494		—		—		494
Franchise and property expenses	130		—		—		130
Advertising expenses and other services	247		—		—		247
General and administrative expenses	133		—		—		133
(Income) loss from equity method investments	13		—		—		13
Other operating expenses (income), net	(16)		—		—		(16)
Total operating costs and expenses	1,001		—		—		1,001
Income from operations	450		—		—		450
Interest expense, net	127		—		—		127

Income before income taxes	323		—		—		323
Income tax expense	53		—		—		53
Net income	270		—		—		270
Equity in earnings of consolidated subsidiaries	—		270		(270)		—
Net income (loss)	270		270		(270)		270
Net income (loss) attributable to noncontrolling interests	1		1		(1)		1
Net income (loss) attributable to common unitholders	$	269	$	269	$	(269)	$	269
Comprehensive income (loss)	$	475	$	475	$	(475)	$	475

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~~RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES~~

~~Condensed Consolidating Statements of Operations~~

~~(In millions of U.S. dollars)~~

~~Three Months Ended March 31, 2021~~

Consolidated Borrowers RBILP Eliminations Consolidated
Revenues:
Sales $ 507 $ — $ — $ 507
Franchise and property revenues 548 — — 548
Advertising revenues and other services 205 — — 205
Total revenues 1,260 — — 1,260
Operating costs and expenses:
Cost of sales 401 — — 401
Franchise and property expenses 116 — — 116
Advertising expenses and other services 237 — — 237
General and administrative expenses 104 — — 104
(Income) loss from equity method investments 2 — — 2
Other operating expenses (income), net (42) — — (42)
Total operating costs and expenses 818 — — 818
Income from operations 442 — — 442
Interest expense, net 124 — — 124
Income before income taxes 318 — — 318
Income tax expense 47 — — 47
Net income 271 — — 271
Equity in earnings of consolidated subsidiaries — 271 (271) —
Net income (loss) 271 271 (271) 271
Net income (loss) attributable to noncontrolling interests 1 1 (1) 1
Net income (loss) attributable to common unitholders $ 270 $ 270 $ (270) $ 270
Comprehensive income (loss) $ 474 $ 474 $ (474) $ 474

~~Table of Contents~~

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Statements of Cash Flows

(In millions of U.S. dollars)

Three months ended March 31, ~~2022~~2023


		Consolidated Borrowers		RBILP		Eliminations		Consolidated			Consolidated Borrowers		RBILP		Eliminations		Consolidated
Cash flows from operating activities:	Cash flows from operating activities:									Cash flows from operating activities:
Net income	Net income	$	270	$	270	$	(270)	$	270	Net income	$	277	$	277	$	(277)	$	277
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:									Adjustments to reconcile net income to net cash provided by operating activities:
Equity in loss (earnings) of consolidated subsidiaries	Equity in loss (earnings) of consolidated subsidiaries	—		(270)		270		—		Equity in loss (earnings) of consolidated subsidiaries	—		(277)		277		—
Depreciation and amortization	Depreciation and amortization	49		—		—		49		Depreciation and amortization	46		—		—		46

Amortization of deferred financing costs and debt issuance discount	Amortization of deferred financing costs and debt issuance discount	7		—		—		7		Amortization of deferred financing costs and debt issuance discount	7		—		—		7
(Income) loss from equity method investments	(Income) loss from equity method investments	13		—		—		13		(Income) loss from equity method investments	7		—		—		7
(Gain) loss on remeasurement of foreign denominated transactions	(Gain) loss on remeasurement of foreign denominated transactions	(21)		—		—		(21)		(Gain) loss on remeasurement of foreign denominated transactions	8		—		—		8
Net (gains) losses on derivatives	Net (gains) losses on derivatives	18		—		—		18		Net (gains) losses on derivatives	(34)		—		—		(34)
Share-based compensation and non-cash incentive compensation expense	Share-based compensation and non-cash incentive compensation expense	27		—		—		27		Share-based compensation and non-cash incentive compensation expense	45		—		—		45
Deferred income taxes	Deferred income taxes	(16)		—		—		(16)		Deferred income taxes	(28)		—		—		(28)
Other	Other	9		—		—		9		Other	1		—		—		1
Changes in current assets and liabilities, excluding acquisitions and dispositions:	Changes in current assets and liabilities, excluding acquisitions and dispositions:									Changes in current assets and liabilities, excluding acquisitions and dispositions:
Accounts and notes receivable	Accounts and notes receivable	(46)		—		—		(46)		Accounts and notes receivable	(8)		—		—		(8)
Inventories and prepaids and other current assets	Inventories and prepaids and other current assets	(22)		—		—		(22)		Inventories and prepaids and other current assets	(20)		—		—		(20)
Accounts and drafts payable	Accounts and drafts payable	18		—		—		18		Accounts and drafts payable	(81)		—		—		(81)
Other accrued liabilities and gift card liability	Other accrued liabilities and gift card liability	(91)		—		—		(91)		Other accrued liabilities and gift card liability	(123)		—		—		(123)
Tenant inducements paid to franchisees	Tenant inducements paid to franchisees	(2)		—		—		(2)		Tenant inducements paid to franchisees	(6)		—		—		(6)
Other long-term assets and liabilities	Other long-term assets and liabilities	21		—		—		21		Other long-term assets and liabilities	4		—		—		4
Net cash provided by operating activities	Net cash provided by operating activities	234		—		—		234		Net cash provided by operating activities	95		—		—		95
Cash flows from investing activities:	Cash flows from investing activities:									Cash flows from investing activities:
Payments for property and equipment	Payments for property and equipment	(10)		—		—		(10)		Payments for property and equipment	(18)		—		—		(18)
Net proceeds from disposal of assets, restaurant closures, and refranchisings	Net proceeds from disposal of assets, restaurant closures, and refranchisings	4		—		—		4		Net proceeds from disposal of assets, restaurant closures, and refranchisings	4		—		—		4

Settlement/sale of derivatives, net	Settlement/sale of derivatives, net	3		—		—		3		Settlement/sale of derivatives, net	14		—		—		14
Other investing activities, net		4		—		—		4

Net cash (used for) provided by investing activities	Net cash (used for) provided by investing activities	1		—		—		1		Net cash (used for) provided by investing activities	—		—		—		—
Cash flows from financing activities:	Cash flows from financing activities:									Cash flows from financing activities:
Proceeds from revolving line of credit and long-term debt		1		—		—		1

Repayments of long-term debt and finance leases	Repayments of long-term debt and finance leases	(21)		—		—		(21)		Repayments of long-term debt and finance leases	(32)		—		—		(32)

Distributions on Class A common and Partnership exchangeable units	Distributions on Class A common and Partnership exchangeable units	—		(241)		—		(241)		Distributions on Class A common and Partnership exchangeable units	—		(243)		—		(243)
Distribution to RBI for repurchase of RBI common shares		—		(161)		—		(161)

Capital contribution from RBI	Capital contribution from RBI	3		—		—		3		Capital contribution from RBI	6		—		—		6
Distributions from subsidiaries	Distributions from subsidiaries	(402)		402		—		—		Distributions from subsidiaries	(243)		243		—		—
(Payments) proceeds from derivatives	(Payments) proceeds from derivatives	(6)		—		—		(6)		(Payments) proceeds from derivatives	29		—		—		29
Other financing activities, net		(1)		—		—		(1)

Net cash (used for) provided by financing activities	Net cash (used for) provided by financing activities	(426)		—		—		(426)		Net cash (used for) provided by financing activities	(240)		—		—		(240)
Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	(1)		—		—		(1)		Effect of exchange rates on cash and cash equivalents	—		—		—		—
Increase (decrease) in cash and cash equivalents	Increase (decrease) in cash and cash equivalents	(192)		—		—		(192)		Increase (decrease) in cash and cash equivalents	(145)		—		—		(145)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	1,087		—		—		1,087		Cash and cash equivalents at beginning of period	1,178		—		—		1,178
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	895	$	—	$	—	$	895	Cash and cash equivalents at end of period	$	1,033	$	—	$	—	$	1,033

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RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Statements of Cash Flows

(In millions of U.S. dollars)

Three Months Ended March 31, ~~2021~~2022


		Consolidated Borrowers		RBILP		Eliminations		Consolidated			Consolidated Borrowers		RBILP		Eliminations		Consolidated
Cash flows from operating activities:	Cash flows from operating activities:									Cash flows from operating activities:
Net income	Net income	$	271	$	271	$	(271)	$	271	Net income	$	270	$	270	$	(270)	$	270
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:									Adjustments to reconcile net income to net cash provided by operating activities:
Equity in loss (earnings) of consolidated subsidiaries	Equity in loss (earnings) of consolidated subsidiaries	—		(271)		271		—		Equity in loss (earnings) of consolidated subsidiaries	—		(270)		270		—
Depreciation and amortization	Depreciation and amortization	49		—		—		49		Depreciation and amortization	49		—		—		49

Amortization of deferred financing costs and debt issuance discount	Amortization of deferred financing costs and debt issuance discount	7		—		—		7		Amortization of deferred financing costs and debt issuance discount	7		—		—		7
(Income) loss from equity method investments	(Income) loss from equity method investments	2		—		—		2		(Income) loss from equity method investments	13		—		—		13
(Gain) loss on remeasurement of foreign denominated transactions	(Gain) loss on remeasurement of foreign denominated transactions	(43)		—		—		(43)		(Gain) loss on remeasurement of foreign denominated transactions	(21)		—		—		(21)
Net (gains) losses on derivatives	Net (gains) losses on derivatives	20		—		—		20		Net (gains) losses on derivatives	18		—		—		18
Share-based compensation and non-cash incentive compensation expense	Share-based compensation and non-cash incentive compensation expense	26		—		—		26		Share-based compensation and non-cash incentive compensation expense	27		—		—		27
Deferred income taxes	Deferred income taxes	14		—		—		14		Deferred income taxes	(16)		—		—		(16)
Other	Other	(8)		—		—		(8)		Other	9		—		—		9
Changes in current assets and liabilities, excluding acquisitions and dispositions:	Changes in current assets and liabilities, excluding acquisitions and dispositions:									Changes in current assets and liabilities, excluding acquisitions and dispositions:
Accounts and notes receivable	Accounts and notes receivable	24		—		—		24		Accounts and notes receivable	(46)		—		—		(46)
Inventories and prepaids and other current assets	Inventories and prepaids and other current assets	(4)		—		—		(4)		Inventories and prepaids and other current assets	(22)		—		—		(22)
Accounts and drafts payable	Accounts and drafts payable	19		—		—		19		Accounts and drafts payable	18		—		—		18
Other accrued liabilities and gift card liability	Other accrued liabilities and gift card liability	(117)		—		—		(117)		Other accrued liabilities and gift card liability	(91)		—		—		(91)

Tenant inducements paid to franchisees										Tenant inducements paid to franchisees	(2)		—		—		(2)
Other long-term assets and liabilities	Other long-term assets and liabilities	6		—		—		6		Other long-term assets and liabilities	21		—		—		21
Net cash provided by operating activities	Net cash provided by operating activities	266		—		—		266		Net cash provided by operating activities	234		—		—		234
Cash flows from investing activities:	Cash flows from investing activities:									Cash flows from investing activities:
Payments for property and equipment	Payments for property and equipment	(15)		—		—		(15)		Payments for property and equipment	(10)		—		—		(10)
Net proceeds from disposal of assets, restaurant closures, and refranchisings	Net proceeds from disposal of assets, restaurant closures, and refranchisings	11		—		—		11		Net proceeds from disposal of assets, restaurant closures, and refranchisings	4		—		—		4

Settlement/sale of derivatives, net	Settlement/sale of derivatives, net	2		—		—		2		Settlement/sale of derivatives, net	3		—		—		3
Other investing activities, net	Other investing activities, net	(5)		—		—		(5)		Other investing activities, net	4		—		—		4
Net cash (used for) provided by investing activities	Net cash (used for) provided by investing activities	(7)		—		—		(7)		Net cash (used for) provided by investing activities	1		—		—		1
Cash flows from financing activities:	Cash flows from financing activities:									Cash flows from financing activities:

Repayments of revolving line of credit, long-term debt and finance leases		(27)		—		—		(27)
Proceeds from long-term debt										Proceeds from long-term debt	1		—		—		1
Repayments of long-term debt and finance leases										Repayments of long-term debt and finance leases	(21)		—		—		(21)

Distributions on Class A common and Partnership exchangeable units	Distributions on Class A common and Partnership exchangeable units	—		(239)		—		(239)		Distributions on Class A common and Partnership exchangeable units	—		(241)		—		(241)
Distribution to RBI for repurchase of RBI common shares										Distribution to RBI for repurchase of RBI common shares	—		(161)		—		(161)
Capital contribution from RBI	Capital contribution from RBI	20		—		—		20		Capital contribution from RBI	3		—		—		3
Distributions from subsidiaries	Distributions from subsidiaries	(239)		239		—		—		Distributions from subsidiaries	(402)		402		—		—
(Payments) proceeds from derivatives	(Payments) proceeds from derivatives	(16)		—		—		(16)		(Payments) proceeds from derivatives	(6)		—		—		(6)
Other financing activities, net	Other financing activities, net	1		—		—		1		Other financing activities, net	(1)		—		—		(1)
Net cash (used for) provided by financing activities	Net cash (used for) provided by financing activities	(261)		—		—		(261)		Net cash (used for) provided by financing activities	(426)		—		—		(426)
Effect of exchange rates on cash and cash equivalents	Effect of exchange rates on cash and cash equivalents	5		—		—		5		Effect of exchange rates on cash and cash equivalents	(1)		—		—		(1)
Increase (decrease) in cash and cash equivalents	Increase (decrease) in cash and cash equivalents	3		—		—		3		Increase (decrease) in cash and cash equivalents	(192)		—		—		(192)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	1,560		—		—		1,560		Cash and cash equivalents at beginning of period	1,087		—		—		1,087
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	1,563	$	—	$	—	$	1,563	Cash and cash equivalents at end of period	$	895	$	—	$	—	$	895

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Note ~~19.~~18. Subsequent Events

Cash Distributions/Dividends

On April ~~6, 2022,~~5, 2023, RBI paid a cash dividend of ~~$0.54~~$0.55 per RBI common share to common shareholders of record on March ~~23, 2022.~~22, 2023. Partnership made a distribution to RBI as holder of Class A common units in the amount of the aggregate dividends declared and paid by RBI on RBI common shares and also made a distribution in respect of each Partnership exchangeable unit in the amount of ~~$0.54~~$0.55 per exchangeable unit to holders of record on March ~~23, 2022.~~22, 2023.

Subsequent to March 31, ~~2022,~~2023, the RBI board of directors declared a cash dividend of ~~$0.54~~$0.55 per RBI common share, which will be paid on July 6, ~~2022~~2023 to RBI common shareholders of record on June 22, ~~2022.~~2023. Partnership will make a distribution to RBI as holder of Class A common units in the amount of the aggregate dividends declared and paid by RBI on RBI common shares. Partnership will also make a distribution in respect of each Partnership exchangeable unit in the amount of ~~$0.54~~$0.55 per Partnership exchangeable unit, and the record date and payment date for such distribution will be the same as the record date and payment date for the cash dividend per RBI common share set forth above.

*****

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion together with our unaudited condensed consolidated financial statements and the related notes thereto included in Part I, Item 1 “Financial Statements” of this report.

The following discussion includes information regarding future financial performance and plans, targets, aspirations, expectations, and objectives of management, which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of Canadian securities laws as described in further detail under “Special Note Regarding Forward-Looking Statements” set forth below. Actual results may differ materially from the results discussed in the forward-looking statements. Please refer to the risks and further discussion in the “Special Note Regarding Forward-Looking Statements” below.

We prepare our financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”). However, this Management’s Discussion and Analysis of Financial Condition and Results of Operations also contains certain non-GAAP financial measures to assist readers in understanding our performance. Non-GAAP financial measures either exclude or include amounts that are not reflected in the most directly comparable measure calculated and presented in accordance with GAAP. Where non-GAAP financial measures are used, we have provided the most directly comparable measures calculated and presented in accordance with U.S. GAAP, a reconciliation to GAAP measures and a discussion of the reasons why management believes this information is useful to it and may be useful to investors.

Operating results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for the fiscal year and our key business measures, as discussed below, may decrease for any future period. Unless the context otherwise requires, all references in this section to “Partnership”, “we”, “us” or “our” are to Restaurant Brands International Limited Partnership and its subsidiaries, collectively.

Overview

We are one of the world’s largest quick service restaurant (“QSR”) companies with over $35 billion in annual system-wide sales and ~~over 29,000~~approximately 30,000 restaurants in more than 100 countries as of March 31, ~~2022.~~2023. Our Tim Hortons®, Burger King®, Popeyes®, and Firehouse Subs® brands have similar franchised business models with complementary daypart mixes and product platforms. Our four iconic brands are managed independently while benefiting from global scale and sharing of best practices.

Tim Hortons restaurants are quick service restaurants with a menu that includes premium blend ~~coffee, tea, espresso-based~~coffees, hot and cold specialty drinks, alongside breakfast sandwiches, fresh baked goods, ~~including donuts,~~ ~~Timbits®, bagels,~~ muffins, cookies and pastries, ~~grilled paninis, classic~~ sandwiches, bowls, wraps, soups and more. Burger King restaurants are quick service restaurants that feature flame-grilled hamburgers, chicken, and other specialty sandwiches, french fries, soft drinks, and other affordably-priced food items. Popeyes restaurants are quick service restaurants featuring a unique “Louisiana” style menu that includes bone in fried chicken, chicken sandwiches, chicken tenders, fried shrimp ~~and other seafood, red beans and rice,~~ and other regional items. Firehouse Subs restaurants are quick service restaurants featuring hot and hearty subs piled high with quality meats and cheese as well as chopped salads, chili and soups, signature and other sides, soft drinks and local specialties.

~~Commencing upon the acquisition of Firehouse Subs in December 2021, we~~We have four operating and reportable segments: (1) Tim Hortons (“TH”); (2) Burger King (“BK”); (3) Popeyes Louisiana Kitchen (“PLK”); and (4) Firehouse Subs (“FHS”). Our business generates revenue from the following sources: (i) ~~franchise and advertising revenues and other services,~~sales, consisting primarily of ~~royalties~~supply chain sales, which represent sales of products, supplies and ~~advertising fund contributions~~restaurant equipment to franchisees, as well as sales to retailers and sales at restaurants owned by us (“Company restaurants”); (ii) franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchise restaurants and franchise fees paid by franchisees; ~~(ii)~~(iii) property revenues from properties we lease or sublease to franchisees; and ~~(iii)~~(iv) advertising revenues and other services, consisting primarily of advertising fund contributions based on a percentage of sales ~~at restaurants owned~~reported by us (“Company restaurants”). In addition, our TH business generates revenue from sales to franchisees related to our supply chain operations, including manufacturing, procurement, warehousing, and distribution, as well as sales to retailers.franchise restaurants.

In September 2021, we announced targets to reduce greenhouse gas emissions by 50% by 2030, as approved by the Science Based Targets initiative, as well as a commitment to achieving net-zero emissions by 2050. While most of the impact is from scope 3 emissions that are not under our direct control, reaching these targets will require us to devote resources to support changes by suppliers and franchisees.

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~~COVID-19~~

The global crisis resulting from the spread of coronavirus (“COVID-19”) impacted our global restaurant operations for the three months ended March 31, 2022 and 2021, though in 2022 the impact was more modest than in the prior year.

During the three months ended March 31, 2022 and 2021, substantially all restaurants remained open, some with limited operations, such as drive-thru, takeout and delivery (where applicable), reduced, if any, dine-in capacity, and/or restrictions on hours of operation. Certain markets periodically required temporary closures while implementing government mandated lockdown orders. For example, while most regions have eased restrictions, increases in cases and new variants at the beginning of 2022 caused certain markets to re-impose temporary restrictions as a result of government mandates. We expect local conditions to continue to dictate limitations on restaurant operations, capacity, and hours of operation.

During the three months ended March 31, 2022, COVID-19 contributed to labor challenges, which in some regions resulted in reduced operating hours and service modes at select restaurants as well as supply chain pressures.

~~With the pandemic affecting consumer behavior, the importance of digital sales, including delivery, has grown. We expect to continue to support enhancements of our digital and marketing capabilities.~~

~~War in Ukraine~~

Burger King entered Russia ten years ago through a joint venture, of which we own a 15% minority stake that we've recently announced intentions to dispose. Burger King is our only brand with restaurants in Russia, and in 2021, represented 2.0% of consolidated system-wide sales, 2.9% of consolidated restaurant count excluding Firehouse Subs, 4.5% of consolidated net restaurant growth, 0.6% of consolidated revenues, and 1.7% of consolidated Adjusted EBITDA. During the first quarter of 2022, we shared a number of actions that we have taken to date as a result of the tragic events related to Russia’s military invasion of Ukraine. We have suspended all corporate support for the Russian market, including operations, marketing, and supply chain support in addition to refusing approvals for new investment and expansion. While we currently include Russia within reported key business metrics, we do not expect to recognize any profits in 2022.

Operating Metrics

We evaluate our restaurants and assess our business based on the following operating metrics:

•System-wide sales growth refers to the percentage change in sales at all franchise restaurants and Company restaurants (referred to as system-wide sales) in one period from the same period in the prior year.

•Comparable sales refers to the percentage change in restaurant sales in one period from the same prior year period for restaurants that have been open for 13 months or longer for TH, BK and FHS and 17 months or longer for PLK. Additionally, if a restaurant is closed for a significant portion of a month, the restaurant is excluded from the monthly comparable sales calculation.

•System-wide sales growth and comparable sales are measured on a constant currency basis, which means the results exclude the effect of foreign currency translation (“FX Impact”). For system-wide sales growth and comparable sales, we calculate the FX Impact by translating prior year results at current year monthly average exchange rates.

•Unless otherwise stated, system-wide sales growth, system-wide sales and comparable sales are presented on a system-wide basis, which means they include franchise restaurants and Company restaurants. System-wide results are driven by our franchise restaurants, as approximately 100% of system-wide restaurants are franchised. Franchise sales represent sales at all franchise restaurants and are revenues to our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and advertising fund contributions are calculated based on a percentage of franchise sales.

•Net restaurant growth refers to the net increase in restaurant count (openings, net of permanent closures) over a trailing twelve month period, divided by the restaurant count at the beginning of the trailing twelve month period.

These metrics are important indicators of the overall direction of our business, including trends in sales and the effectiveness of each brand’s marketing, operations and growth initiatives.

In our 2022 financial reports, our key business metrics included results from our franchised Burger King restaurants in Russia, with supplemental disclosure provided excluding these restaurants. We did not generate any new profits from restaurants in Russia in 2022 and do not expect to generate any new profits in 2023. Consequently, beginning in the first quarter of 2023, our reported key business metrics exclude the results from Russia for all periods presented.

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	Three Months Ended March 31,
Key Business Metrics		2023			2022
System-wide sales growth
TH		17.9		%	12.9		%
BK		14.3		%	16.2		%
PLK		14.4		%	4.1		%
FHS		7.5		%	N/A
Consolidated (a)		14.7		%	13.5		%
FHS (b)		N/A			7.4		%
System-wide sales (in US$ millions)
TH		$	1,731		$	1,556
BK		$	6,241		$	5,647
PLK		$	1,568		$	1,383
FHS		$	292		$	272
Consolidated		$	9,832		$	8,858
Comparable sales
TH		13.8		%	8.4		%
BK		10.8		%	9.9		%
PLK		5.6		%	(3.0)		%
FHS		6.1		%	N/A
Consolidated (a)		10.3		%	7.4		%
FHS (b)		N/A			4.2		%

		As of March 31,
		2023			2022
Net restaurant growth
TH		5.6		%	6.7		%
BK		2.5		%	2.9		%
PLK		10.8		%	7.9		%
FHS		2.3		%	N/A
Consolidated (a)		4.2		%	4.3		%
FHS (b)		N/A			1.8		%
Restaurant count
TH		5,620			5,320
BK		18,911			18,446
PLK		4,178			3,771
FHS		1,247			1,219
Consolidated		29,956			28,756

(a) Consolidated system-wide sales growth, consolidated comparable sales and consolidated net restaurant growth do not include the results of Firehouse Subs for 2022.

(b) 2022 Firehouse Subs growth figures are shown for informational purposes only.

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Macro Economic Environment

During the three months ended March 31, 2023 and 2022, there were increases in commodity, labor, and energy costs partially due to the macroeconomic impact of both the War in Ukraine and COVID-19. Further significant increases in inflation could affect the global, Canadian and U.S. economies, resulting in foreign exchange volatility and rising interest rates which could have an adverse impact on our business and results of operations if we and our franchisees are not able to adjust prices sufficiently to offset the effect of cost increases without negatively impacting consumer demand.

In addition, the global crisis resulting from the spread of COVID-19 impacted our restaurant operations during the three months ended March 31, 2022. Certain markets, including Canada and China, were significantly impacted as a result of governments mandated lockdowns. The lockdowns, which have since been lifted, resulted in restrictions to restaurant operations, such as reduced, if any, dine-in capacity, and/or restrictions on hours of operation in those markets.

Sustainability

In September 2021, we announced targets to reduce greenhouse gas emissions by 50% by 2030 versus a 2019 baseline, as approved by the Science Based Targets initiative, as well as a commitment to achieving net-zero emissions by 2050. While most of the impact is from scope 3 emissions that are not under our direct control, reaching these targets will require us to devote resources to support changes by suppliers and franchisees.

Results of Operations for the Three Months Ended March 31, ~~2022~~2023 and ~~2021~~2022

Tabular amounts in millions of U.S. dollars unless noted otherwise. ~~Segment~~Total revenues for each segment and segment income may not calculate exactly due to rounding.


Consolidated	Consolidated		Three Months Ended March 31,			Variance		FX Impact (a)		Variance Excluding FX Impact		Consolidated						Three Months Ended March 31,	Variance		FX Impact (a)		Variance Excluding FX Impact
		2022	2021	Favorable / (Unfavorable)												2023	2022	Favorable / (Unfavorable)
Revenues:	Revenues:														Revenues:
Sales	Sales			$	609	$	507	$	102	$	—		$	102	Sales				$	668	$	609	$	59	$	(32)	$	91
Franchise and property revenues	Franchise and property revenues			615		548		67		(8)			75		Franchise and property revenues				668		615		53		(21)		74
Advertising revenues and other services	Advertising revenues and other services			227		205		22		—			22		Advertising revenues and other services				254		227		27		(3)		30
Total revenues	Total revenues			1,451		1,260		191		(8)			199		Total revenues				1,590		1,451		139		(56)		195
Operating costs and expenses:	Operating costs and expenses:														Operating costs and expenses:
Cost of sales	Cost of sales			494		401		(93)		—			(93)		Cost of sales				550		494		(56)		25		(81)
Franchise and property expenses	Franchise and property expenses			130		116		(14)		—			(14)		Franchise and property expenses				123		130		7		5		2
Advertising expenses and other services	Advertising expenses and other services			247		237		(10)		—			(10)		Advertising expenses and other services				271		247		(24)		4		(28)
General and administrative expenses	General and administrative expenses			133		104		(29)		1			(30)		General and administrative expenses				175		133		(42)		3		(45)
(Income) loss from equity method investments	(Income) loss from equity method investments			13		2		(11)		—			(11)		(Income) loss from equity method investments				7		13		6		—		6
Other operating expenses (income), net	Other operating expenses (income), net			(16)		(42)		(26)		(3)			(23)		Other operating expenses (income), net				17		(16)		(33)		29		(62)
Total operating costs and expenses	Total operating costs and expenses			1,001		818		(183)		(2)			(181)		Total operating costs and expenses				1,143		1,001		(142)		66		(208)
Income from operations	Income from operations			450		442		8		(10)			18		Income from operations				447		450		(3)		10		(13)
Interest expense, net	Interest expense, net			127		124		(3)		—			(3)		Interest expense, net				142		127		(15)		—		(15)

Income before income taxes	Income before income taxes			323		318		5		(10)			15		Income before income taxes				305		323		(18)		10		(28)
Income tax expense	Income tax expense			53		47		(6)		1			(7)		Income tax expense				28		53		25		1		24
Net income	Net income			$	270	$	271	$	(1)	$	(9)		$	8	Net income				$	277	$	270	$	7	$	11	$	(4)

(a)We calculate the FX Impact by translating prior year results at current year monthly average exchange rates. We analyze these results on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements.

TH Segment Three Months Ended March 31, Variance FX Impact (a) Variance Excluding FX Impact
2022 2021 Favorable / (Unfavorable)
Revenues:
Sales $ 566 $ 473 $ 93 $ — $ 93
Franchise and property revenues 206 190 16 — 16
Advertising revenues and other services 57 47 10 — 10
Total revenues 829 710 119 — 119
Cost of sales 453 370 (83) — (83)
Franchise and property expenses 81 81 — — —
Advertising expenses and other services 67 62 (5) — (5)
Segment G&A 29 24 (5) — (5)
Segment depreciation and amortization (b) 29 31 2 — 2
Segment income (c) 231 207 24 — 24

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TH Segment		Three Months Ended March 31,			Variance		FX Impact (a)		Variance Excluding FX Impact
	2023	2022	Favorable / (Unfavorable)
Revenues:
Sales			$	618	$	566	$	52	$	(32)	$	84
Franchise and property revenues			220		206		14		(12)		26
Advertising revenues and other services			62		57		5		(3)		8
Total revenues			900		829		71		(47)		118
Cost of sales			505		453		(52)		25		(77)
Franchise and property expenses			79		81		2		5		(3)
Advertising expenses and other services			65		67		2		4		(2)
Segment G&A			29		29		—		1		(1)
Segment depreciation and amortization (b)			25		29		4		2		2
Segment income (c)			251		231		20		(13)		33

(b)Segment depreciation and amortization consists of depreciation and amortization included in cost of sales, franchise and property expenses and advertising expenses and other services.

(c)TH segment income includes $3 million of cash distributions received from equity method investments for the three months ended March 31, ~~2022~~2023 and ~~2021.~~2022.


BK Segment		Three Months Ended March 31,			Variance		FX Impact (a)		Variance Excluding FX Impact
	2023	2022	Favorable / (Unfavorable)
Revenues:
Sales			$	19	$	16	$	3	$	—	$	3
Franchise and property revenues			344		318		26		(8)		34
Advertising revenues and other services			121		109		12		—		12
Total revenues			484		443		41		(8)		49
Cost of sales			17		17		—		—		—
Franchise and property expenses			40		45		5		—		5
Advertising expenses and other services			135		119		(16)		—		(16)
Segment G&A			48		45		(3)		1		(4)
Segment depreciation and amortization (b)			12		12		—		—		—
Segment income			256		229		27		(7)		34


PLK Segment		Three Months Ended March 31,			Variance		FX Impact (a)		Variance Excluding FX Impact
	2023	2022	Favorable / (Unfavorable)
Revenues:
Sales			$	21	$	17	$	4	$	—	$	4
Franchise and property revenues			80		71		9		(1)		10
Advertising revenues and other services			66		60		6		—		6
Total revenues			168		148		20		(1)		21
Cost of sales			19		16		(3)		—		(3)
Franchise and property expenses			2		2		—		—		—
Advertising expenses and other services			67		61		(6)		—		(6)
Segment G&A			15		15		—		—		—
Segment depreciation and amortization (b)			2		2		—		—		—
Segment income			66		56		10		(1)		11

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BK Segment			Three Months Ended March 31,			Variance		FX Impact (a)		Variance Excluding FX Impact
FHS Segment														FHS Segment				Three Months Ended March 31,			Variance		FX Impact (a)		Variance Excluding FX Impact
		2022	2021	Favorable / (Unfavorable)											2023	2022	Favorable / (Unfavorable)
Revenues:	Revenues:													Revenues:
Sales	Sales			$	16	$	16	$	—	$	—	$	—	Sales					$	10	$	10	$	—	$	—	$	—
Franchise and property revenues	Franchise and property revenues			318		289		29		(8)		37		Franchise and property revenues					23		20		3		—		3
Advertising revenues and other services	Advertising revenues and other services			109		102		7		—		7		Advertising revenues and other services					4		1		3		—		3
Total revenues	Total revenues			443		407		36		(8)		44		Total revenues					37		31		6		—		6
Cost of sales	Cost of sales			17		16		(1)		—		(1)		Cost of sales					8		8		—		—		—
Franchise and property expenses	Franchise and property expenses			45		33		(12)		—		(12)		Franchise and property expenses					2		2		—		—		—
Advertising expenses and other services	Advertising expenses and other services			119		118		(1)		—		(1)		Advertising expenses and other services					5		—		(5)		—		(5)
Segment G&A	Segment G&A			45		35		(10)		1		(11)		Segment G&A					8		8		—		—		—
Segment depreciation and amortization (b)				12		12		—		—		—

Segment income	Segment income			229		217		12		(7)		19		Segment income					15		14		1		—		1

PLK Segment Three Months Ended March 31, Variance FX Impact (a) Variance Excluding FX Impact
2022 2021 Favorable / (Unfavorable)
Revenues:
Sales $ 17 $ 18 $ (1) $ — $ (1)
Franchise and property revenues 71 69 2 — 2
Advertising revenues and other services 60 56 4 — 4
Total revenues 148 143 5 — 5
Cost of sales 16 15 (1) — (1)
Franchise and property expenses 2 2 — — —
Advertising expenses and other services 61 57 (4) — (4)
Segment G&A 15 14 (1) — (1)
Segment depreciation and amortization (b) 2 2 — — —
Segment income 56 56 — — —


~~FHS Segment~~	~~Three Months Ended March 31, 2022~~
~~Revenues:~~
~~Sales~~	$	10
~~Franchise and property revenues~~	20
~~Advertising revenues and other services~~	1
~~Total revenues~~	31
~~Cost of sales~~	8
~~Franchise and property expenses~~	2

~~Segment G&A~~	8

~~Segment income~~	14

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Three Months Ended
March 31,
Key Business Metrics 2022 2021
System-wide sales growth
    TH 12.9 % (4.9) %
    BK 16.5 % 1.8 %
    PLK 4.1 % 7.0 %
    Consolidated (a) 13.7 % 1.4 %
    FHS (b) 7.4 % 27.0 %
System-wide sales
    TH $ 1,556 $ 1,379
    BK $ 5,818 $ 5,173
    PLK $ 1,383 $ 1,344
    FHS $ 272 $ —
    Consolidated (a) $ 9,029 $ 7,896
    FHS (b) $ — $ 254
Comparable sales
    TH 8.4 % (2.3) %
    BK 10.3 % 0.7 %
    PLK (3.0) % 1.5 %
    FHS (b) 4.2 % 24.2 %
As of March 31,
2022 2021
Net restaurant growth
    TH 6.7 % 1.3 %
    BK 3.1 % (0.8) %
    PLK 7.9 % 4.8 %
    Consolidated (a) 4.4 % 0.2 %
    FHS (b) 1.8 % 1.7 %
Restaurant count
    TH 5,320 4,987
    BK 19,266 18,691
    PLK 3,771 3,495
    FHS 1,219 —
    Consolidated 29,576 27,173
    FHS (b) — 1,198

(a) Consolidated system-wide sales growth and consolidated net restaurant growth do not include the results of Firehouse Subs for all of the periods presented. Consolidated system-wide sales do not include the results of Firehouse Subs for 2021.

~~(b) 2021 Firehouse Subs figures are shown for informational purposes only, consistent with its fiscal calendar.~~

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~~Comparable~~System-wide Sales

For ~~TH and BK, restaurant operations were less impacted by COVID-19 during~~ the three months ended March 31, ~~2022 than~~2023, the increase in ~~the same period in 2021, resulting in significant increases in~~TH system-wide sales ~~growth and~~of 17.9% was primarily driven by comparable sales ~~during~~of 13.8%, including Canada comparable sales of 15.5%, and net restaurant growth of 5.6%.

For the three months ended March 31, ~~2022.~~

~~TH comparable~~2023, the increase in BK system-wide sales ~~were 8.4% during the three months ended March 31, 2022, including Canada~~of 14.3% was primarily driven by comparable sales of ~~10.1%.~~

~~BK comparable sales were 10.3% during the three months ended March 31, 2022,~~10.8%, including rest of the world comparable sales of ~~20.1%~~12.3% and ~~relatively flat~~ U.S. comparable ~~sales.~~sales of 8.7%, and net restaurant growth of 2.5%.

~~PLK comparable sales were (3.0)% during~~For the three months ended March 31, ~~2022,~~2023, the increase in PLK system-wide sales of 14.4% was primarily driven by net restaurant growth of 10.8% and comparable sales of 5.6%, including U.S. comparable sales of ~~(4.6)%~~3.4%.

~~FHS comparable sales were 4.2% during~~For the three months ended March 31, ~~2022,~~2023, the increase in FHS system-wide sales of 7.5% was primarily driven by comparable sales of 6.1%, including U.S. comparable sales of ~~4.5%~~6.7%, and net restaurant growth of 2.3%.

Sales and Cost of Sales

Sales include TH supply chain sales and sales from Company restaurants. TH supply chain sales represent sales of products, supplies and restaurant equipment, as well as sales to retailers. Sales from Company restaurants ~~including sales by our consolidated TH Restaurant VIEs,~~ represent restaurant-level sales to our guests.

Cost of sales includes costs associated with the management of our TH supply chain, including cost of goods, direct labor and depreciation, as well as the cost of products sold to retailers. Cost of sales also includes food, paper and labor costs of Company ~~restaurants, including our consolidated TH Restaurants VIEs.~~restaurants.

During the three months ended March 31, ~~2022,~~2023, the increase in sales was driven by an increase of ~~$93~~$84 million in our TH segment, ~~and the inclusion~~an increase of ~~FHS of $10 million, partially offset by a decrease of $1~~$4 million in our PLK ~~segment.~~segment, and an increase of $3 million in our BK segment, partially offset by an unfavorable FX Impact of $32 million. The increase in our TH segment was primarily driven by an increase in supply chain sales due to an increase in system-wide sales as well as increases in commodity prices passed on to franchisees and an increase in sales to retailers.

During the three months ended March 31, ~~2022,~~2023, the increase in cost of sales was driven by an increase of ~~$83~~$77 million in our TH segment, ~~the inclusion of FHS of $8 million, an increase of $1 million in our BK segment,~~ and an increase of $1$3 million in our PLK ~~segment.~~segment, partially offset by a favorable FX Impact of $25 million. The increase in our TH segment was primarily driven by an increase in supply chain sales, ~~as well as~~ increases in commodity prices and an increase in sales to retailers.

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Franchise and Property

Franchise and property revenues consist primarily of royalties earned on franchise sales, rents from real estate leased or subleased to franchisees, franchise fees, and other revenue. Franchise and property expenses consist primarily of depreciation of properties leased to franchisees, rental expense associated with properties subleased to franchisees, amortization of franchise agreements, and bad debt expense (recoveries).

During the three months ended March 31, ~~2022,~~2023, the increase in franchise and property revenues was driven by an increase of ~~$37~~$34 million in our BK segment, ~~the inclusion of FHS of $20 million,~~ an increase of ~~$16~~$26 million in our TH segment, an increase of $10 million in our PLK segment, and an increase of $2$3 million in our ~~PLK~~FHS segment, partially offset by an unfavorable FX Impact of $8$21 million. The increases were primarily driven by increases in royalties in all of our ~~TH, BK and PLK~~ segments and increases in rent in our TH segment, as a result of increases in system-wide sales.

During the three months ended March 31, ~~2022,~~2023, the ~~increase~~decrease in franchise and property expenses was driven by ~~an increase~~a decrease of ~~$12~~$5 million in our BK segment and ~~the inclusion~~a favorable FX impact of ~~FHS~~$5 million, partially offset by an increase of ~~$2 million.~~$3 million in our TH segment. The ~~increase~~decrease in our BK segment was primarily related to a decrease in bad debt ~~expenses~~expense in the current ~~year, primarily related to Russia, compared to bad debt recoveries in the prior~~ year.

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Advertising and ~~other services~~Other Services

Advertising revenues and other services consist primarily of advertising contributions earned on franchise sales and are based on a percentage of ~~system-wide~~ sales reported by franchise restaurants and intended to fund advertising expenses. ~~Other~~This line item also includes other services ~~consists~~which consist primarily of fees from digital sales that partially offset expenses related to technology initiatives. Advertising expenses and other services consist primarily of expenses relating to marketing, advertising and promotion, including market research, production, advertising costs, sales promotions, social media campaigns, technology initiatives, depreciation and amortization and other related support functions for the respective brands. We generally manage advertising expenses to equal advertising revenues in the long term, however in some periods there may be a mismatch in the timing of revenues and ~~expense.~~expense or higher expenses due to our support initiatives behind the marketing programs.

During the three months ended March 31, ~~2022,~~2023, the increase in advertising revenues and other services was driven by an increase of ~~$10~~$12 million in our BK segment, an increase of $8 million in our TH segment, an increase of ~~$7 million in our BK segment, an increase of $4~~$6 million in our PLK segment, and ~~the inclusion~~an increase of $3 million in our FHS segment, partially offset by an unfavorable FX Impact of $1$3 million. The increases in our TH, BK and PLK segments were primarily driven by increases in system-wide sales. Increases in our FHS segment reflect our ongoing process to align the advertising fund arrangements to be more consistent with those of our other brands.

During the three months ended March 31, ~~2022,~~2023, the increase in advertising expenses and other services was driven by an increase of $16 million in our BK segment, an increase of $6 million in our PLK segment, an increase of $5 million in our FHS segment, and an increase of $2 million in our TH segment, ~~an increase~~partially offset by a favorable FX Impact of $4 ~~million~~million. The increases in our BK and PLK segments were driven primarily by increases in advertising revenues and other services. Additionally, our BK segment reflects our support behind the marketing program in the U.S. and an increase ~~of $1 million~~in expenses related to technology initiatives. Increases in our ~~BK segment.~~FHS segment reflect our ongoing process to align the advertising fund arrangements to be more consistent with those of our other brands.

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General and Administrative Expenses

Our general and administrative expenses consisted of the following:


		Three Months Ended March 31,		Variance										Three Months Ended March 31,		Variance
				$		%					Three Months Ended March 31,						$	%
			2022	2021		Favorable / (Unfavorable)									2023		2022	Favorable / (Unfavorable)
Segment G&A:	Segment G&A:													Segment G&A:
TH	TH			$	29	$	24	$	(5)	(20.8)		%	TH							$	29		$	29		$	—		—		%
BK	BK			45		35		(10)		(28.6)	%	BK							48			45			(3)			(7)		%
PLK	PLK			15		14		(1)		(7.1)	%	PLK							15			15			—			—		%
FHS	FHS			8		—		(8)		NM		FHS							8			8			—			—		%
Share-based compensation and non-cash incentive compensation expense	Share-based compensation and non-cash incentive compensation expense			27		26		(1)		(3.8)	%	Share-based compensation and non-cash incentive compensation expense							45			27			(18)			(67)		%
Depreciation and amortization	Depreciation and amortization			5		4		(1)		(25.0)	%	Depreciation and amortization							6			5			(1)			(20)		%
FHS Transaction costs	FHS Transaction costs			1		—		(1)		NM		FHS Transaction costs							19			1			(18)			NM
Corporate restructuring and tax advisory fees	Corporate restructuring and tax advisory fees			3		1		(2)		NM		Corporate restructuring and tax advisory fees							5			3			(2)			(67)		%
General and administrative expenses	General and administrative expenses			$	133	$	104	$	(29)	(27.9)	%	General and administrative expenses							$	175		$	133		$	(42)		(32)		%

NM - not meaningful

Segment general and administrative expenses (“Segment G&A”) consist primarily of salary and employee-related costs for non-restaurant employees, professional fees, information technology systems, and general overhead for our corporate offices. Segment G&A excludes share-based compensation and non-cash incentive compensation expense, depreciation and amortization, FHS Transaction costs and Corporate restructuring and tax advisory fees.

During the three months ended March 31, ~~2022,~~2023, Segment G&A for each of our segments was relatively consistent with the prior year.

During the three months ended March 31, 2023, the increase in ~~Segment G&A for our TH, BK~~share-based compensation and ~~PLK segments~~non-cash incentive compensation expense was primarily ~~driven~~due to an increase in equity awards granted during 2023 and 2022, including equity awards granted to our executive chairman during the fourth quarter of 2022, and increases in expense related to previously granted performance-based equity awards. In addition, the increase in share-based compensation and non-cash incentive compensation expense was also impacted by ~~higher salary and employee-related costs~~shorter vesting periods for ~~non-restaurant employees, largely a result of hiring across a number of key areas.~~equity awards granted beginning in 2021.

In connection with the Firehouse Subs acquisition, we incurred certain non-recurring fees and expenses (“FHS Transaction costs”) consisting of professional fees, compensation related expenses and integration costs. We do not expect to incur additional FHS Transaction costs during the remainder of ~~2022.~~2023.

In connection with certain transformational corporate restructuring initiatives that rationalize our structure and optimize cash movement within our structure, including services related to significant tax reform legislation, regulations and related restructuring initiatives, we incurred non-operating expenses primarily from professional advisory and consulting services (“Corporate

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restructuring and tax advisory fees”). We expect to incur additional Corporate restructuring and tax advisory fees during the remainder of ~~2022.~~2023.

(Income) Loss from Equity Method Investments

(Income) loss from equity method investments reflects our share of investee net income or loss and non-cash dilution gains or losses from changes in our ownership interests in equity method investees.

The change in (income) loss from equity method investments during the three months ended March 31, ~~2022~~2023 was primarily driven by ~~an increase~~a decrease in equity method investment net losses that we recognized during the current year.

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Other Operating Expenses (Income), net

Our other operating expenses (income), net ~~were comprised~~consisted of the following:


		Three Months Ended March 31,						Three Months Ended March 31,
			2022		2021				2023		2022
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings	Net losses (gains) on disposal of assets, restaurant closures, and refranchisings		$	2	$	(2)	Net losses (gains) on disposal of assets, restaurant closures, and refranchisings		$	(2)	$	2
Litigation settlements (gains) and reserves, net	Litigation settlements (gains) and reserves, net		1		2		Litigation settlements (gains) and reserves, net		1		1
Net losses (gains) on foreign exchange	Net losses (gains) on foreign exchange		(21)		(43)		Net losses (gains) on foreign exchange		8		(21)
Other, net	Other, net		2		1		Other, net		10		2
Other operating expenses (income), net	Other operating expenses (income), net		$	(16)	$	(42)	Other operating expenses (income), net		$	17	$	(16)

Net losses (gains) on foreign exchange is primarily related to revaluation of foreign denominated assets and ~~liabilities.~~liabilities, primarily those denominated in Euros and Canadian dollars.

Other, net for 2023 is primarily related to payments in connection with FHS area representative buyouts.

Interest Expense, net

Our interest expense, net and the weighted average interest rate on our long-term debt were as follows:


		Three Months Ended March 31,								Three Months Ended March 31,
			2022			2021					2023			2022
Interest expense, net	Interest expense, net		$	127		$	124		Interest expense, net		$	142		$	127
Weighted average interest rate on long-term debt	Weighted average interest rate on long-term debt		4.0		%	4.2		%	Weighted average interest rate on long-term debt		4.9		%	4.0		%

During the three months ended March 31, ~~2022,~~2023, interest expense, net ~~was consistent year-over-year.~~increased primarily due to an increase in the weighted average interest rate driven by increases in interest rates.

Income Tax Expense

Our effective tax rate was ~~16.6%~~9.1% and ~~14.7%~~16.6% for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. Our effective tax rate for the three months ended March 31, 2023 was ~~unfavorably~~favorably impacted by structural changes implemented in the latter part of 2022, changes to the relative mix of our income from multiple tax jurisdictions and ~~lower~~higher excess tax benefits from equity-based ~~compensation, partially offset by favorable structural changes.~~compensation. There may continue to be some quarter-to-quarter volatility of our effective tax rate as our mix of income from multiple tax jurisdictions and related income forecasts change due to recent macroeconomic events such as the ~~effects~~COVID-19 pandemic, the war in Ukraine and higher levels of ~~COVID-19.~~

On December 28, 2021, the U.S. Treasury Department released final regulations (T.D. 9959, published in the Federal Register on January 4, 2022) restricting the ability to credit certain foreign taxes, applicable prospectively starting January 1, 2022. Due to these new regulations, we released discretely this quarter a portion of the valuation allowance on our foreign tax credit carryforwards. Based on our current analysis, we do not expect these regulations to have a material, ongoing impact as we anticipate being in an excess credit position prospectively.

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inflation.

Net Income

We reported net income of $277 million for the three months ended March 31, 2023, compared to net income of $270 million for the three months ended March 31, ~~2022, compared to net income of $271 million for the three months ended March 31, 2021.~~2022. The ~~decrease~~increase in net income is primarily due to a ~~$26~~$27 million increase in BK segment income, a $25 million decrease in income tax expense, a $20 million increase in TH segment income, a $10 million increase in PLK segment income, a $7 million favorable change from the impact of equity method investments, a $3 million decrease in depreciation and amortization, and a $1 million increase in FHS segment income. These factors were partially offset by a $33 million unfavorable change in the results from other operating expenses (income), net, ~~a $12 million unfavorable change from the impact of equity method investments, a $6~~an $18 million increase in ~~income tax~~share-based compensation and non-cash incentive compensation expense, an $18 million increase in FHS transaction costs, a $3$15 million increase in interest expense, net, and a $2 million increase in Corporate restructuring and tax advisory fees, a $1 million increase in share-based compensation and non-cash incentive compensation expense and $1 million of FHS transaction costs. These factors were partially offset by a $24 million increase in TH segment income, the inclusion of FHS segment income of $14 million, and a $12 million increase in BK segment income.fees. Amounts above include a total ~~unfavorable~~favorable FX Impact to net income of $9$11 million.

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Non-GAAP Reconciliations

The table below contains information regarding EBITDA and Adjusted EBITDA, which are non-GAAP measures. These non-GAAP measures do not have a standardized meaning under U.S. GAAP and may differ from similar captioned measures of other companies in our industry. We believe that these non-GAAP measures are useful to investors in assessing our operating performance, as they provide them with the same tools that management uses to evaluate our performance and isare 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, loss on early extinguishment of debt, income tax (benefit) expense, and depreciation and amortization and is used by management to measure operating performance of the business. Adjusted EBITDA is defined as EBITDA excluding (i) the non-cash impact of share-based compensation and non-cash incentive compensation expense, (ii) (income) loss from equity method investments, net of cash distributions received from equity method investments, (iii) other operating expenses (income), net and, (iv) income/expenses from non-recurring projects and non-operating activities. For the periods referenced, income/expenses from non-recurring projects and non-operating activities included (i) non-recurring fees and expense incurred in connection with the Firehouse Acquisition consisting of professional fees, compensation related expenses and integration costs; and (ii) non-operating costs from professional advisory and consulting services associated with certain transformational corporate restructuring initiatives that rationalize our structure and optimize cash movements, including services related to significant tax reform legislation, regulations and related restructuring initiatives. Management believes that these types of expenses are either not related to our underlying profitability drivers or not likely to re-occur in the foreseeable future and the varied timing, size and nature of these projects may cause volatility in our results unrelated to the performance of our core business that does not reflect trends of our core operations.

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Adjusted EBITDA is used by management to measure operating performance of the business, excluding these non-cash and other specifically identified items that management believes are not relevant to management’s assessment of our operating performance. Adjusted EBITDA, as defined above, also represents our measure of segment income for each of our four operating segments.


		Three Months Ended March 31,		Variance										Three Months Ended March 31,	Variance
				$		%					Three Months Ended March 31,					$		%
																	2023		2022				Favorable / (Unfavorable)

Net income												Net income								$	277			$	270		$	7		2.6		%
Income tax expense												Income tax expense								28				53			25			47.2		%

Interest expense, net												Interest expense, net								142				127			(15)			(11.8)		%
Income from operations												Income from operations								447				450			(3)			(0.7)		%
Depreciation and amortization												Depreciation and amortization								46				49			3			6.1		%
EBITDA												EBITDA								493				499			(6)			(1.2)		%
Share-based compensation and non-cash incentive compensation expense												Share-based compensation and non-cash incentive compensation expense								45				27			(18)			(66.7)		%
FHS Transaction costs												FHS Transaction costs								19				1			(18)			NM
Corporate restructuring and tax advisory fees												Corporate restructuring and tax advisory fees								5				3			(2)			(66.7)		%
Impact of equity method investments (a)												Impact of equity method investments (a)								9				16			7			43.8		%
Other operating expenses (income), net												Other operating expenses (income), net								17				(16)			(33)			NM
Adjusted EBITDA												Adjusted EBITDA								$	588			$	530		$	58		11.0		%
			2022	2021		Favorable / (Unfavorable)
Segment income:	Segment income:											Segment income:
TH	TH			$	231	$	207	$	24	11.7		%	TH								$	251			$	231		$	20		8.4		%
BK	BK			229		217		12		5.5	%	BK								256				229			27			11.8		%
PLK	PLK			56		56		—		0.3	%	PLK								66				56			10			18.0		%
FHS	FHS			14		—		14		NM		FHS								15				14			1			12.7		%
Adjusted EBITDA	Adjusted EBITDA			530		480		50		10.4	%	Adjusted EBITDA								$	588			$	530		$	58		11.0		%
Share-based compensation and non-cash incentive compensation expense				27		26		(1)		(3.8)	%
FHS Transaction costs				1		—		(1)		NM
Corporate restructuring and tax advisory fees				3		1		(2)		NM
Impact of equity method investments (a)				16		4		(12)		NM
Other operating expenses (income), net				(16)		(42)		(26)		61.9	%
EBITDA				499		491		8		1.6	%
Depreciation and amortization				49		49		—		—	%
Income from operations				450		442		8		1.8	%
Interest expense, net				127		124		(3)		(2.4)	%

Income tax expense				53		47		(6)		NM
Net income				$	270	$	271	$	(1)	(0.4)	%

NM - not meaningful

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The increase in Adjusted ~~EBITDA for three months ended March 31, 2022 reflects the increases in segment income in our TH and BK segments, the inclusion of FHS and an unfavorable FX Impact of $7 million.~~

~~The increase in~~ EBITDA for the three months ended March 31, ~~2022 is primarily due to~~2023 reflects the increases in segment income in each of our ~~TH and BK~~ segments and the inclusion of FHS, partially offset by an unfavorable change from other operating expenses (income) net, and an unfavorable change from the impact of equity method investments. The increase in EBITDA includes an unfavorable FX Impact of ~~$10 million.~~$21 million for the three months ended March 31, 2023.

Liquidity and Capital Resources

Our primary sources of liquidity are cash on hand, cash generated by operations, and borrowings available under our Revolving Credit Facility (as defined below). We have used, and may in the future use, our liquidity to make required interest and/or principal payments, to make distributions to RBI for RBI to repurchase its common shares, to repurchase Class B exchangeable limited partnership units of Partnership (“Partnership exchangeable units”), to voluntarily prepay and repurchase our or one of our affiliate’s outstanding debt, to fund acquisitions ~~such as the Firehouse Acquisition~~ and other investing activities, such as capital expenditures and joint ventures, and to make distributions on Class A common units and distributions on the Partnership exchangeable units. As a result of our borrowings, we are highly leveraged. Our liquidity requirements are significant, primarily due to debt service requirements.

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As of March 31, ~~2022,~~2023, we had cash and cash equivalents of ~~$895~~$1,033 million and borrowing availability of $998 million under our senior secured revolving credit facility (the “Revolving Credit Facility”). Based on our current level of operations and available cash, we believe our cash flow from operations, combined with our availability under our Revolving Credit Facility, will provide sufficient liquidity to fund our current obligations, debt service requirements and capital spending over the next twelve months.

In September 2022, Burger King shared the details of its “Reclaim the Flame” plan to accelerate sales growth and drive franchisee profitability. We are investing $400 million over the life of the plan, comprised of $150 million in advertising and digital investments (“Fuel the Flame”) and $250 million in high-quality remodels and relocations, restaurant technology, kitchen equipment, and building enhancements (“Royal Reset”). During the three months ended March 31, 2023, we funded $7 million toward the Fuel the Flame investment and $7 million toward our Royal Reset investment and as of March 31, 2023, we have funded a total of $20 million toward the Fuel the Flame investment and $25 million toward our Royal Reset investment.

On July 28, 2021, the RBI board of directors approved a share repurchase authorization wherein RBI may purchase up to $1,000 million of RBI common shares until August 10, 2023. Repurchases under RBI’s authorization will be made in the open market or through privately negotiated transactions. If RBI repurchases any RBI common shares, pursuant to the partnership agreement, Partnership will, immediately prior to such repurchase, make a distribution to RBI on its Class A common units in an amount sufficient for RBI to fund such repurchase. During the three months ended March 31, ~~2022,~~2023, RBI ~~repurchased 2,860,002~~did not repurchase any RBI common ~~shares on the open market for $161 million and Partnership made a distribution to RBI in an amount sufficient for RBI to fund these repurchases.~~shares. As of March 31, ~~2022,~~2023, RBI had ~~$288~~$123 million remaining under its share repurchase authorization.

We generally provide applicable deferred taxes based on the tax liability or withholding taxes that would be due upon repatriation of cash associated with unremitted earnings. We will continue to monitor our plans for such cash and related foreign earnings but our expectation is to continue to provide taxes on unremitted earnings that we expect to distribute.

Debt Instruments and Debt Service Requirements

As of March 31, ~~2022,~~2023, our long-term debt consists primarily of borrowings under our Credit Facilities (as defined below), amounts outstanding under our 3.875% First Lien Senior Notes due 2028, 5.75% First Lien Senior Notes due 2025, 3.50% First Lien Senior Notes due 2029, 4.375% Second Lien Senior Notes due 2028, 4.00% Second Lien Senior Notes due 2030 (together, the “Senior Notes”), TH Facility, RE Facility, and obligations under finance leases. For further information about our long-term debt, see Note 1110 to the accompanying unaudited condensed consolidated financial statements included in this report.

As of March 31, ~~2022,~~2023, there was ~~$6,480~~$6,418 million outstanding principal amount under our senior secured term loan facilities (the “Term Loan Facilities” and together with the Revolving Credit Facility, the “Credit Facilities”) with a weighted average interest rate of ~~2.10%~~6.48%. The interest rate applicable to borrowings under our Term Loan A and Revolving Credit Facility is, at our option, either (i) a base rate, subject to a floor of 1.00%, plus an applicable margin varying from 0.00% to 0.50%, or (ii) Adjusted Term SOFR (Adjusted Term SOFR is calculated as Term SOFR plus a 0.10% adjustment), subject to a floor of 0.00%, plus an applicable margin varying between 0.75% to 1.50%, in each case, determined by reference to a net first lien leverage based pricing grid. The interest rate applicable to borrowings under our Term Loan B is, at our option, either (i) a base rate, subject to a floor of 1.00%, plus an applicable margin of 0.75% or (ii) a Eurocurrency rate, subject to a floor of 0.00%, plus an applicable margin of 1.75%.

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Based on the amounts outstanding under the Term Loan Facilities and LIBOR/SOFR (Secured Overnight Financing Rate) as of March 31, ~~2022,~~2023, subject to a floor of 0.00%, required debt service for the next twelve months is estimated to be approximately ~~$138~~$422 million in interest payments and ~~$61~~$85 million in principal payments. In addition, based on LIBOR as of March 31, ~~2022,~~2023, net cash settlements that we expect to ~~pay~~receive on our $4,000 million interest rate ~~swap~~swaps are estimated to be approximately ~~$45~~$119 million for the next twelve months. Based on the amounts outstanding at March 31, ~~2022,~~2023, required debt service for the next twelve months on all of the Senior Notes outstanding is approximately $264 million in interest payments. Based on the amounts outstanding under the TH Facility as of March 31, ~~2022,~~2023, required debt service for the next twelve months is estimated to be approximately $4$9 million in interest payments and $9$11 million in principal payments. Based on the amounts outstanding under the RE Facility as of March 31, 2023, required debt service for the next twelve months is not material.

Restrictions and Covenants

As of March 31, ~~2022,~~2023, we were in compliance with all applicable financial debt covenants under the Credit Facilities, the TH Facility, RE Facility and the indentures governing our Senior Notes.

Cash Distributions/Dividends

During the three months ended March 31, 2022, RBI repurchased 2,860,002 RBI common shares on the open market for $161 million and Partnership made a distribution to RBI in an amount sufficient for RBI to fund these repurchases.

On April ~~6, 2022,~~5, 2023, RBI paid a cash dividend of ~~$0.54~~$0.55 per RBI common share. Partnership made a distribution to RBI as holder of Class A common units in the amount of the aggregate dividends declared and paid by RBI on RBI common shares and also made a distribution of ~~$0.54~~$0.55 in respect of each Partnership exchangeable unit.

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The RBI board of directors has declared a cash dividend of ~~$0.54~~$0.55 per RBI common share, which will be paid on July 6, ~~2022~~2023 to RBI common shareholders of record on June 22, ~~2022.~~2023. Partnership will make a distribution to RBI as holder of Class A common units in the amount of the aggregate dividends declared and paid by RBI on RBI common shares. Partnership will also make a distribution in respect of each Partnership exchangeable unit in the amount of ~~$0.54~~$0.55 per Partnership exchangeable unit, and the record date and payment date for such distribution will be the same as the record date and payment date for the cash dividend per RBI common share set forth above.

In addition, because we are a holding company, our ability to pay cash distributions on our Partnership exchangeable units may be limited by restrictions under our debt agreements.

Outstanding Security Data

As of April ~~26, 2022,~~25, 2023, we had outstanding 202,006,067 Class A common units issued to RBI and ~~143,460,786~~140,782,568 Partnership exchangeable units. During the three months ended March 31, ~~2022,~~2023, Partnership exchanged ~~1,525,900~~2,214,072 Partnership exchangeable units pursuant to exchange notices received.

One special voting share of RBI is held by a trustee, entitling the trustee to that number of votes on matters on which holders of RBI common shares are entitled to vote equal to the number of Partnership exchangeable units outstanding. The trustee is required to cast such votes in accordance with voting instructions provided by holders of Partnership exchangeable units. At any shareholder meeting of RBI, holders of RBI common shares vote together as a single class with the special voting share except as otherwise provided by law. For information on RBI's share-based compensation and its outstanding equity awards, see Note 14 to the audited consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the SEC and Canadian securities regulatory authorities on February ~~23, 2022.~~22, 2023.

~~Since December 12, 2015, the holders~~Holders of Partnership exchangeable units have ~~had~~ the right to require Partnership to exchange all or any portion of such holder’s Partnership exchangeable units for RBI common shares at a ratio of one share for each Partnership exchangeable unit, subject to RBI’s right as the general partner of Partnership to determine to settle any such exchange for a cash payment in lieu of RBI common shares.

Comparative Cash Flows

Operating Activities

Cash provided by operating activities was ~~$234~~$95 million for the three months ended March 31, ~~2022,~~2023, compared to ~~$266~~$234 million during the same period in the prior year. The decrease in cash provided by operating activities was driven by an increase in interest payments, an increase in cash used for working capital and an increase in income tax payments, partially offset by an increase in segment income in each of our ~~TH and BK segments, the inclusion~~segments.

Table of ~~FHS segment income and a decrease in income tax payments.~~Contents

Investing Activities

~~Cash~~There was no net cash provided by or used from investing activities ~~was $1 million~~ for the three months ended March 31, ~~2022,~~2023, compared to $1 million of cash ~~used for~~provided by investing activities ~~of $7 million~~ during the same period in the prior year. This change was primarily driven ~~primarily~~ by an increase in proceeds from ~~other investing activities~~derivatives, partially offset by an increase in ~~the current year compared to payments from other investing activities in the prior year.~~capital expenditures.

Financing Activities

Cash used for financing activities was ~~$426~~$240 million for the three months ended March 31, ~~2022,~~2023, compared to ~~$261~~$426 million during the same period in the prior year. The change in cash used for financing activities was driven primarily by ~~cash used to repurchase~~the non-recurrence of RBI common ~~shares~~share repurchases in the current ~~year.~~year and proceeds from derivatives in the current year compared to payments from derivatives in the prior year, partially offset by an increase in long-term debt repayments.

Critical Accounting Policies and Estimates

For information regarding our Critical Accounting Policies and Estimates, see the “Critical Accounting Policies and Estimates” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on February ~~23, 2022.~~22, 2023.

New Accounting Pronouncements

See Note 3 – New Accounting Pronouncements in the notes to the accompanying unaudited condensed consolidated financial statements.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

There were no material changes during the three months ended March 31, ~~2022~~2023 to the disclosures made in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 filed with the SEC and Canadian securities regulatory authorities on February ~~23, 2022.~~22, 2023.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was conducted under the supervision and with the participation of management of RBI, as the general partner of Partnership, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of RBI, of the effectiveness of Partnership’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and Exchange Act Rules 15d-15(e)) as of March 31, ~~2022.~~2023. Based on that evaluation, the CEO and CFO of RBI concluded that Partnership’s disclosure controls and procedures were effective as of such date.

~~Changes in Internal Controls~~

~~We are in the process of integrating Firehouse Subs into our overall internal control over financial reporting processes.~~

Internal Control Over Financial Reporting

The management of RBI, as general partner of Partnership, including the CEO and CFO, confirm there were no changes in Partnership’s internal control over financial reporting during the three months ended March 31, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, Partnership’s internal control over financial reporting.

Special Note Regarding Forward-Looking Statements

Certain information contained in this report, including information regarding future financial performance and plans, targets, aspirations, expectations, and objectives of management, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of Canadian securities laws. We refer to all of these as forward-looking statements. Forward-looking statements are forward-looking in nature and, accordingly, are subject to risks and uncertainties. These forward-looking statements can generally be identified by the use of words such as “believe”, “anticipate”, “expect”, “intend”, “estimate”, “plan”, “continue”, “will”, “may”, “could”, “would”, “target”, “potential” and other similar expressions and include, without limitation, statements regarding our expectations or beliefs regarding (i) the effects and continued impact of the COVID-19 pandemic, the war in Ukraine and related macro-economic pressures, such as inflation, rising interest rates and currency fluctuations on our results of operations, business, liquidity, prospects and restaurant operations and those of our ~~franchisees, including local conditions and government-imposed limitations and restrictions;~~franchisees; (ii) our digital, marketing, remodel and ~~marketing~~technology enhancement initiatives and expectations regarding further expenditures relating to these ~~initiatives;~~initiatives, including our “Reclaim the Flame” plan to accelerate sales growth and drive franchisee profitability at Burger King; (iii) our

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discontinuation of operations in and financial results from Russia; (iv) the ~~incurrence~~amount and timing of future ~~FHS Transaction costs and~~ Corporate restructuring and tax advisory ~~fees;~~fees and the expectation that no additional FHS Transaction costs will be incurred during the remainder of 2023; (v) our future financial obligations, including annual debt service requirements, capital expenditures and distribution payments, our ability to meet such obligations and the source of funds used to satisfy such obligations; (vi) our ~~goals~~targets with respect to reduction in greenhouse gas emissions; (vii) our exposure to changes in interest rates and foreign currency exchange rates and the impact of changes in interest rates and foreign currency exchange rates on the ~~resolutions~~amount of ~~the dispute in China on~~ our interest payments, future ~~growth prospects in that market;~~earnings and cash flows; (viii) certain tax matters, including our estimates with respect to tax matters and their impact on future periods; (ix) the amount of net cash settlements we expect to pay or receive on our derivative instruments; and (x) certain accounting matters.

Our forward-looking statements, included in this report and elsewhere, represent management’s expectations as of the date that they are made. Our forward-looking statements are based on assumptions and analyses made by Partnership in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, these forward-looking statements are subject to a number of risks and uncertainties and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results, level of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, among other things, risks related to: (1) our substantial indebtedness, which could adversely affect our financial condition and prevent us from fulfilling our obligations; (2) global economic or other business conditions that may affect the desire or ability of our customers to purchase our products, such as the effects of the COVID-19 pandemic, inflationary pressures, high unemployment levels, declines in median income growth, consumer confidence and consumer discretionary spending and changes in consumer perceptions of dietary health and food safety; (3) our relationship with, and the success of, our franchisees and risks related to our fully franchised business model; (4) our franchisees’ financial stability and their ability to access and maintain the liquidity necessary to operate their businesses; (5)

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our supply chain operations; (6) our ownership and leasing of real estate; (7) the effectiveness of our marketing, advertising and digital programs and franchisee support of these programs; (8) significant and rapid fluctuations in interest rates and in the currency exchange markets and the effectiveness of our hedging activity; (9) our ability to successfully implement our domestic and international growth strategy for each of our brands and risks related to our international operations; (10) our reliance on franchisees, including subfranchisees, to accelerate restaurant growth; (11) ~~our ability to resolve disputes with master franchisees; (12)~~ the ability of the counterparties to our credit facilities and derivatives to fulfill their commitments and/or obligations; (12) evolving legislation and regulations in the area of franchise and labor and employment law; (13) changes in applicable tax laws or interpretations thereof, and our ability to accurately interpret and predict the impact of such changes or interpretations on our financial condition and ~~results.~~results; and (14) our ability to address environmental and social sustainability issues.

We operate in a very competitive and rapidly changing environment and our inability to successfully manage any of the above risks may permit our competitors to increase their market share and may decrease our profitability. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 filed with the SEC and Canadian securities regulatory authorities on February ~~23, 2022,~~22, 2023, as well as other materials that we from time to time file with, or furnish to, the SEC or file with Canadian securities regulatory authorities. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this section and elsewhere in this report. Other than as required under 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, changes in expectations or otherwise.

Part II – Other Information

Item 1. Legal Proceedings

See Part I, Notes to Condensed Consolidated Financial Statements, Note ~~16,~~15, Commitments and ~~Contingencies~~Contingencies.

~~Item 5. Other Information.~~

~~Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers~~

(e) On April 11, 2022, the Compensation Committee approved discretionary awards of 149,452, 124,543, 49,817, 59,780 and 39,853 performance share units, or “PSUs”, to Messrs. Cil, Kobza, Dunnigan, Shear and Curtis, respectively. The performance metrics for the PSUs are based on three-year targets for organic Adjusted EBITDA (weighted 50%), net restaurant growth (weighted 20%) and comparable sales (weighted 30%), in each case on a consolidated basis. The PSUs can be earned based on these components at 50% for threshold performance and at 150% for maximum performance. Additionally, the number of PSUs earned is subject to a multiplier based on the relative total shareholder return of our common shares on the NYSE compared to the performance of the S&P 500 for the period from December 31, 2021 to December 31, 2024. The Compensation Committee established this multiplier to be 50% below the 25th percentile, 100% between the 40th and 60th percentile and 150% at or above the 75th percentile, with linear interpolation between these multipliers. This allows the final payout to range from 25% for threshold performance to 225% at maximum performance. Once earned, the PSUs will cliff vest on February 25, 2025. In addition, if an executive’s service to RBI is terminated (other than due to death or disability) prior to February 25, 2024, he or she will forfeit the entire award. A copy of the form of Performance Award Agreement between RBI and each of the named executive officers is filed herewith as Exhibit 10.36(f). This summary is qualified in its entirety to the full text of the Performance Award Agreement.

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Item 6. Exhibits



Exhibit Number						Description

~~10.36(f)~~						Form of Performance Award Agreement (Performance Measures and TSR) under the Amended and Restated 2014 Omnibus Incentive Plan (incorporated herein by reference to Exhibit 10.36(f) to the Form 10-Q of Restaurant Brands International Inc. filed on May 3, 2022).

~~10.8~~0						Offer Letter dated December 8, 2020 among Burger King Europe GmbH, PLK Europe GmbH, and Tim Hortons Restaurants International GmbH and David Shear (incorporated herein by reference to Exhibit 10.80 to the Form 10-Q of Restaurant Brands International Inc. filed on May 3, 2022).

~~10.81~~						Tax Equalization Agreement dated April 30, 2021 between Burger King Europe GmbH and David Shear (incorporated herein by reference to Exhibit 10.81 to the Form 10-Q of Restaurant Brands International Inc. filed on May 3, 2022).

31.1						Certification of Chief Executive Officer of Restaurant Brands International Inc., as general partner of Restaurant Brands International Limited Partnership, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of Chief Financial Officer of Restaurant Brands International Inc., as general partner of Restaurant Brands International Limited Partnership, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1						Certification of Chief Executive Officer of Restaurant Brands International Inc., as general partner of Restaurant Brands International Limited Partnership, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification of Chief Financial Officer of Restaurant Brands International Inc., as general partner of Restaurant Brands International Limited Partnership, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH						XBRL Taxonomy Extension Schema Document

101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						XBRL Taxonomy Extension Label Linkbase Document

101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document

104						Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP

By:

Restaurant Brands International Inc., its general partner

Date: May ~~3, 2022~~2, 2023

By:

/s/ Matthew Dunnigan

Name:

Matthew Dunnigan

Title:

Chief Financial Officer of Restaurant Brands International Inc.
(principal financial officer)
(duly authorized officer)

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