Document and Entity Information
Document and Entity Information - CAD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 11, 2019 | Jun. 30, 2018 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | QSP | ||
Entity Registrant Name | Restaurant Brands International Limited Partnership | ||
Entity Central Index Key | 1,618,755 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 825,283,770 | ||
Partnership exchangeable units | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 207,510,471 | ||
Class A common units | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 202,006,067 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 913 | $ 1,097 |
Accounts and notes receivable, net of allowance of $14 and $16, respectively | 452 | 489 |
Inventories, net | 75 | 78 |
Prepaids and other current assets | 60 | 86 |
Total current assets | 1,500 | 1,750 |
Property and equipment, net of accumulated depreciation and amortization of $704 and $623, respectively | 1,996 | 2,133 |
Intangible assets, net | 10,463 | 11,062 |
Goodwill | 5,486 | 5,782 |
Net investment in property leased to franchisees | 54 | 71 |
Other assets, net | 642 | 426 |
Total assets | 20,141 | 21,224 |
Current liabilities: | ||
Accounts and drafts payable | 513 | 496 |
Other accrued liabilities | 637 | 866 |
Gift card liability | 167 | 215 |
Current portion of long term debt and capital leases | 91 | 78 |
Total current liabilities | 1,408 | 1,655 |
Term debt, net of current portion | 11,823 | 11,801 |
Capital leases, net of current portion | 226 | 244 |
Other liabilities, net | 1,547 | 1,455 |
Deferred income taxes, net | 1,519 | 1,508 |
Total liabilities | 16,523 | 16,663 |
Commitments and contingencies | ||
Partners’ capital: | ||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 4,323 | |
Partnership exchangeable units - 207,523,591 units issued and outstanding at December 31, 2018; 217,708,924 units issued and outstanding at December 31, 2017 | 730 | |
Accumulated other comprehensive income (loss) | (1,437) | (884) |
Total Partners’ capital | 3,616 | 4,560 |
Noncontrolling interests | 2 | 1 |
Total equity | 3,618 | 4,561 |
Total liabilities and equity | 20,141 | 21,224 |
Class A common units | ||
Partners’ capital: | ||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 4,323 | 4,168 |
Total equity | 4,323 | 4,168 |
Partnership exchangeable units | ||
Partners’ capital: | ||
Partnership exchangeable units - 207,523,591 units issued and outstanding at December 31, 2018; 217,708,924 units issued and outstanding at December 31, 2017 | 730 | 1,276 |
Total equity | $ 730 | $ 1,276 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Allowances for trade and notes receivable | $ 14 | $ 16 |
Property and equipment, accumulated depreciation and amortization | $ 704 | $ 623 |
Class A common units | ||
Class A common units, issued (in shares) | 202,006,067 | 202,006,067 |
Class A common units, outstanding (in shares) | 202,006,067 | 202,006,067 |
Partnership exchangeable units | ||
Partnership exchangeable units, issued (in shares) | 207,523,591 | 217,708,924 |
Partnership exchangeable units, outstanding (in shares) | 207,523,591 | 217,708,924 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||||||||||
Total revenues | $ 1,385 | $ 1,375 | $ 1,343 | $ 1,254 | $ 1,234 | $ 1,209 | $ 1,132 | $ 1,001 | $ 5,357 | $ 4,576 | $ 4,146 |
Operating costs and expenses: | |||||||||||
Cost of sales | 1,818 | 1,850 | 1,727 | ||||||||
Franchise and property expenses | 422 | 478 | 454 | ||||||||
Selling, general and administrative expenses | 1,214 | 416 | 319 | ||||||||
(Income) loss from equity method investments | (22) | (12) | (20) | ||||||||
Other operating expenses (income), net | 8 | 109 | (1) | ||||||||
Total operating costs and expenses | 3,440 | 2,841 | 2,479 | ||||||||
Income from operations | $ 516 | $ 477 | $ 503 | $ 421 | $ 505 | $ 479 | $ 415 | $ 336 | 1,917 | 1,735 | 1,667 |
Interest expense, net | 535 | 512 | 467 | ||||||||
Loss on early extinguishment of debt | 0 | 122 | 0 | ||||||||
Income before income taxes | 1,382 | 1,101 | 1,200 | ||||||||
Income tax (benefit) expense | 238 | (134) | 244 | ||||||||
Net income | 1,144 | 1,235 | 956 | ||||||||
Net income attributable to noncontrolling interests | 1 | 2 | 3 | ||||||||
Partnership preferred unit distributions | 0 | 256 | 270 | ||||||||
Gain on redemption of Partnership preferred units | 0 | (234) | 0 | ||||||||
Net income attributable to common unitholders | 1,143 | 1,211 | 683 | ||||||||
Class A common units | |||||||||||
Operating costs and expenses: | |||||||||||
Net income | 612 | 636 | 482 | ||||||||
Net income attributable to common unitholders | $ 612 | $ 626 | $ 346 | ||||||||
Earnings per unit - basic and diluted: | |||||||||||
Earnings per unit - basic and diluted (in dollars per share) | $ 0.81 | $ 0.66 | $ 0.83 | $ 0.73 | $ 1.96 | $ 0.45 | $ 0.44 | $ 0.25 | $ 3.03 | $ 3.10 | $ 1.71 |
Weighted average units outstanding - basic and diluted: | |||||||||||
Weighted average units outstanding - basic and diluted (in shares) | 202 | 202 | 202 | ||||||||
Partnership exchangeable units | |||||||||||
Operating costs and expenses: | |||||||||||
Net income | $ 531 | $ 597 | $ 471 | ||||||||
Net income attributable to common unitholders | $ 531 | $ 585 | $ 337 | ||||||||
Earnings per unit - basic and diluted: | |||||||||||
Earnings per unit - basic and diluted (in dollars per share) | $ 0.65 | $ 0.53 | $ 0.67 | $ 0.60 | $ 1.64 | $ 0.39 | $ 0.38 | $ 0.21 | $ 2.46 | $ 2.59 | $ 1.48 |
Weighted average units outstanding - basic and diluted: | |||||||||||
Weighted average units outstanding - basic and diluted (in shares) | 216.1 | 225.5 | 227.8 | ||||||||
Sales | |||||||||||
Revenues: | |||||||||||
Revenues | $ 2,355 | $ 2,390 | $ 2,205 | ||||||||
Franchise and property revenues | |||||||||||
Revenues: | |||||||||||
Total revenues | $ 3,002 | $ 2,186 | $ 1,941 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,144 | $ 1,235 | $ 956 |
Foreign currency translation adjustment | (831) | 824 | 223 |
Net change in fair value of net investment hedges, net of tax of $(101), $13, and $(12) | 282 | (371) | (99) |
Net change in fair value of cash flow hedges, net of tax of $7, $4, and $7 | (19) | (11) | (20) |
Amounts reclassified to earnings of cash flow hedges, net of tax of $(5), $(9), and $(6) | 14 | 25 | 16 |
Gain (loss) recognized on defined benefit pension plans, net of tax of $0, $2, and $2 | 1 | 4 | (8) |
Other comprehensive income (loss) | (553) | 471 | 112 |
Comprehensive income (loss) | 591 | 1,706 | 1,068 |
Comprehensive income (loss) attributable to noncontrolling interests | 1 | 2 | 3 |
Comprehensive income (loss) attributable to preferred unitholders | 0 | 22 | 270 |
Comprehensive income (loss) attributable to common unitholders | $ 590 | $ 1,682 | $ 795 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Tax effect on change in fair value of investment hedges | $ (101) | $ 13 | $ (12) |
Tax effect on change in fair value of cash flow hedges | 7 | 4 | 7 |
Tax effect on amounts reclassified to earnings of cash flow hedges | (5) | (9) | (6) |
Tax effect on pension and post-retirement benefit plans | $ 0 | $ 2 | $ 2 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Millions | Total | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Class A common units | Partnership exchangeable units |
Class A Beginning Balance, shares at Dec. 31, 2015 | 202,006,067 | ||||
Beginning Balance at Dec. 31, 2015 | $ 2,914 | $ (1,467) | $ 0 | $ 2,878 | $ 1,503 |
Partnership Exchangeable Units Beginning Balance, shares at Dec. 31, 2015 | 233,739,648 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Distributions declared on Class A common units | (145) | (145) | |||
Distributions declared on partnership exchangeable units | (141) | $ (141) | |||
Preferred unit distributions | (270) | (137) | $ (133) | ||
Repurchase of Partnership exchangeable units, shares | 0 | ||||
Repurchase of Partnership exchangeable units | $ 0 | $ 0 | |||
Exchange of Partnership exchange units for RBI common shares, shares | (6,744,244) | 6,744,244 | |||
Exchange of Partnership exchangeable units for RBI common shares | $ 0 | 223 | $ (223) | ||
Capital contribution from RBI Inc. | 63 | 63 | |||
Restaurant VIE distributions | 0 | 0 | |||
Net income | 956 | 3 | $ 482 | 471 | |
Other comprehensive income (loss) | 112 | 112 | |||
Class A Ending Balance, shares at Dec. 31, 2016 | 202,006,067 | ||||
Ending Balance at Dec. 31, 2016 | 3,489 | (1,355) | 3 | $ 3,364 | $ 1,477 |
Partnership Exchangeable Units Ending Balance, shares at Dec. 31, 2016 | 226,995,404 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Distributions declared on Class A common units | (186) | (186) | |||
Distributions declared on partnership exchangeable units | (175) | $ (175) | |||
Preferred unit distributions | (256) | (131) | $ (125) | ||
Repurchase of Partnership exchangeable units, shares | (5,000,000) | ||||
Repurchase of Partnership exchangeable units | $ (330) | $ (330) | |||
Exchange of Partnership exchange units for RBI common shares, shares | (9,286,480) | (4,286,480) | |||
Exchange of Partnership exchangeable units for RBI common shares | $ 0 | 280 | $ (280) | ||
Gain on redemption of partnership preferred units | 234 | 122 | 112 | ||
Capital contribution from RBI Inc. | 83 | 83 | |||
Restaurant VIE distributions | (4) | (4) | |||
Net income | 1,235 | 2 | $ 636 | 597 | |
Other comprehensive income (loss) | 471 | 471 | |||
Class A Ending Balance, shares at Dec. 31, 2017 | 202,006,067 | ||||
Ending Balance at Dec. 31, 2017 | 4,561 | (884) | 1 | $ 4,168 | $ 1,276 |
Partnership Exchangeable Units Ending Balance, shares at Dec. 31, 2017 | 217,708,924 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Cumulative effect adjustment (Note 16) | Accounting Standards Update 2014-09 | (250) | (132) | $ (118) | ||
Distributions declared on Class A common units | (452) | (452) | |||
Distributions declared on partnership exchangeable units | (387) | $ (387) | |||
Repurchase of Partnership exchangeable units, shares | (10,000,000) | ||||
Repurchase of Partnership exchangeable units | $ (561) | $ (561) | |||
Exchange of Partnership exchange units for RBI common shares, shares | (10,185,333) | (185,333) | |||
Exchange of Partnership exchangeable units for RBI common shares | $ 0 | 11 | $ (11) | ||
Capital contribution from RBI Inc. | 116 | 116 | |||
Net income | 1,144 | 1 | $ 612 | 531 | |
Other comprehensive income (loss) | (553) | (553) | |||
Class A Ending Balance, shares at Dec. 31, 2018 | 202,006,067 | ||||
Ending Balance at Dec. 31, 2018 | $ 3,618 | $ (1,437) | $ 2 | $ 4,323 | $ 730 |
Partnership Exchangeable Units Ending Balance, shares at Dec. 31, 2018 | 207,523,591 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Class A common units | |||
Cash dividend declared by board (in dollars per share) | $ 2.23 | $ 0.92 | $ 0.72 |
Partnership exchangeable units | |||
Cash dividend declared by board (in dollars per share) | $ 1.80 | $ 0.78 | $ 0.62 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 1,144 | $ 1,235 | $ 956 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 180 | 182 | 172 |
Premiums paid and non-cash loss on early extinguishment of debt | 0 | 119 | 0 |
Amortization of deferred financing costs and debt issuance discount | 29 | 33 | 39 |
(Income) loss from equity method investments | (22) | (12) | (20) |
Loss (gain) on remeasurement of foreign denominated transactions | (33) | 77 | (20) |
Net (gains) losses on derivatives | (40) | 31 | 21 |
Share-based compensation expense | 48 | 48 | 35 |
Deferred income taxes | 29 | (742) | 80 |
Other | 5 | 18 | 4 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | |||
Accounts and notes receivable | 19 | (30) | (16) |
Inventories and prepaids and other current assets | (7) | 19 | (10) |
Accounts and drafts payable | 41 | 14 | 16 |
Other accrued liabilities and gift card liability | (219) | 360 | (1) |
Tenant inducements paid to franchisees | (52) | (20) | (19) |
Other long-term assets and liabilities | 43 | 99 | (23) |
Net cash provided by operating activities | 1,165 | 1,431 | 1,214 |
Cash flows from investing activities: | |||
Payments for property and equipment | (86) | (37) | (34) |
Proceeds from disposal of assets, restaurant closures and refranchisings | 8 | 26 | 30 |
Net payment for purchase of Popeyes, net of cash acquired | 0 | (1,636) | 0 |
Return of investment on direct financing leases | 16 | 16 | 17 |
Settlement/sale of derivatives, net | 17 | 772 | 11 |
Other investing activities, net | 1 | 1 | 3 |
Net cash provided by (used for) investing activities | (44) | (858) | 27 |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 75 | 5,850 | 0 |
Repayments of long-term debt and capital leases | (74) | (2,742) | (70) |
Distributions to RBI for payments in connection with redemption of preferred shares | (60) | (3,006) | 0 |
Payment of financing costs | (3) | (63) | 0 |
Distributions paid on common, preferred and Partnership exchangeable units | (728) | (664) | (538) |
Repurchase of Partnership exchangeable units | (561) | (330) | 0 |
Capital contribution from RBI Inc. | 61 | 29 | 14 |
Excess tax benefits from share-based compensation | 0 | 0 | 8 |
Other financing activities, net | 5 | (10) | (5) |
Net cash provided by (used for) financing activities | (1,285) | (936) | (591) |
Effect of exchange rates on cash and cash equivalents | (20) | 24 | (2) |
Increase (decrease) in cash and cash equivalents | (184) | (339) | 648 |
Cash and cash equivalents at beginning of period | 1,097 | 1,436 | 788 |
Cash and cash equivalents at end of period | 913 | 1,097 | 1,436 |
Supplemental cashflow disclosures: | |||
Interest paid | 561 | 447 | 407 |
Income taxes paid | $ 433 | $ 200 | $ 159 |
Description of Business and Org
Description of Business and Organization | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Organization | Description of Business and Organization Description of Business Restaurant Brands International Limited Partnership (“Partnership”, “we”, “us” or “our”) was formed on August 25, 2014 as a general partnership and was registered on October 27, 2014 as a limited partnership in accordance with the laws of the Province of Ontario. Pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended, Partnership is a successor issuer to Burger King Worldwide, Inc. 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”), and chicken under the Popeyes ® brand (“Popeyes” or “PLK”). We are one of the world’s largest quick service restaurant, or QSR, companies as measured by total number of restaurants. As of December 31, 2018 , we franchised or owned 4,846 Tim Hortons restaurants, 17,796 Burger King restaurants, and 3,102 Popeyes restaurants, for a total of 25,744 restaurants, and operate in more than 100 countries and U.S. territories. 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. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) and related rules and regulations of the U.S. Securities and Exchange Commission 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. Principles of Consolidation The consolidated 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. All material intercompany balances and transactions have been eliminated in consolidation. Investments in other affiliates that are owned 50% or less where we have significant influence are accounted for by the equity method. 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. In these arrangements, Tim Hortons has the ability to determine which operators manage the restaurants and for what duration. 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 December 31, 2018 and 2017 , we determined that we are the primary beneficiary of 17 and 31 Restaurant VIEs, respectively, and accordingly, have consolidated the results of operations, assets and liabilities, and cash flows of these Restaurant VIEs in our consolidated financial statements. Material intercompany accounts and transactions have been eliminated in consolidation. Assets and liabilities related to consolidated VIEs are not significant to our total consolidated assets and liabilities. Liabilities recognized as a result of consolidating these VIEs do not necessarily represent additional claims on our general assets; rather, they represent claims against the specific assets of the consolidated VIEs. Conversely, assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims by our creditors as they are not legally included within our general assets. Reclassifications Certain prior year amounts in the accompanying consolidated financial statements and notes to the consolidated financial statements have been reclassified in order to be comparable with the current year classifications. These consist of the reclassification of $20 million and $19 million for the years ended December 31, 2017 and 2016 , respectively, from changes in Other long-term assets and liabilities to Tenant inducements paid to franchisees in the Consolidated Statement of Cash Flows and the December 31, 2017 reclassification of Advertising fund restricted assets to Cash and cash equivalents, Accounts and notes receivable, net and Prepaids and other current assets and the reclassification of Advertising fund liabilities to Accounts and drafts payable and Other accrued liabilities as detailed below (in millions). These reclassifications had no effect on previously reported net income. December 31, 2017 December 31, 2017 As Reported Reclassification As Adjusted Current assets: Cash and cash equivalents $ 1,073 $ 24 $ 1,097 Accounts and notes receivable, net 456 33 489 Inventories, net 78 — 78 Advertising fund restricted assets 83 (83 ) — Prepaids and other current assets 60 26 86 Total current assets $ 1,750 $ — $ 1,750 Current liabilities: Accounts and drafts payable $ 413 $ 83 $ 496 Other accrued liabilities 838 28 866 Gift card liability 215 — 215 Advertising fund liabilities 111 (111 ) — Current portion of long term debt and capital leases 78 — 78 Total current liabilities $ 1,655 $ — $ 1,655 Foreign Currency Translation and Transaction Gains and Losses Our functional currency is the U.S. dollar, since our term loan and senior secured notes are denominated in U.S. dollars. The functional currency of each of our operating subsidiaries is generally the currency of the economic environment in which the subsidiary primarily does business. Our foreign subsidiaries’ financial statements are translated into U.S. dollars using the foreign exchange rates applicable to the dates of the financial statements. Assets and liabilities are translated using the end-of-period spot foreign exchange rates. Income, expenses and cash flows are translated at the average foreign exchange rates for each period. Equity accounts are translated at historical foreign exchange rates. The effects of these translation adjustments are reported as a component of accumulated other comprehensive income (loss) (“AOCI”) in the consolidated statements of equity. For any transaction that is denominated in a currency different from the entity’s functional currency, we record a gain or loss based on the difference between the foreign exchange rate at the transaction date and the foreign exchange rate at the transaction settlement date (or rate at period end, if unsettled) which is included within other operating expenses (income), net in the consolidated statements of operations. Cash and Cash Equivalents All highly liquid investments with original maturities of three months or less and credit card receivables are considered cash equivalents. Inventories Inventories are carried at the lower of cost or net realizable value and consist primarily of raw materials such as green coffee beans and finished goods such as new equipment, parts, paper supplies and restaurant food items. The moving average method is used to determine the cost of raw material and finished goods inventories held for sale to Tim Hortons franchisees. Property and Equipment, net We record property and equipment at historical cost less accumulated depreciation and amortization, which is recognized using the straight-line method over the following estimated useful lives: (i) buildings and improvements – up to 40 years ; (ii) restaurant equipment – up to 17 years ; (iii) furniture, fixtures and other – up to 10 years ; (iv) manufacturing equipment – up to 25 years ; and (v) capital leases – up to 40 years or lease term. Leasehold improvements to properties where we are the lessee are amortized over the lesser of the remaining term of the lease or the estimated useful life of the improvement. We are considered to be the owner of certain restaurants leased from unrelated lessors because Tim Hortons constructed some of the structural elements of those restaurants. Accordingly, lessors’ contributions to the construction costs of these restaurants was recognized as other debt and was $71 million and $83 million at December 31, 2018 and 2017 , respectively. Major improvements are capitalized, while maintenance and repairs are expensed when incurred. Leases We define lease term as the initial term of a lease plus any renewals covered by bargain renewal options or that are reasonably assured of exercise because non-renewal would create an economic penalty, plus any periods that the lessee has use of the property but is not charged rent by a landlord (rent holiday). We record rental income and rental expense for operating leases on a straight-line basis over the lease term, net of any applicable lease incentive amortization. Contingent rental income is recognized on an accrual basis as earned. Assets we acquire as lessee under capital leases are stated at the lower of the present value of future minimum lease payments or fair market value at the date of inception of the lease. Capital lease assets are depreciated using the straight-line method over the shorter of the useful life of the asset or the underlying lease term. We also have net investments in properties leased to franchisees, which meet the criteria of direct financing leases. Investments in direct financing leases are recorded on a net basis, consisting of the gross investment and residual value in the lease, less unearned income. Earned income on direct financing leases is recognized when earned and collectability is reasonably assured. Unearned income is recognized over the lease term yielding a constant periodic rate of return on the net investment in the lease. Direct financing leases are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable based on the payment history under the lease. We have recorded favorable and unfavorable operating leases in connection with the acquisition method of accounting. We amortize favorable and unfavorable leases on a straight-line basis over the remaining term of the leases, as determined at the acquisition date. Goodwill and Intangible Assets Not Subject to Amortization Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed in connection with the acquisition of Popeyes in 2017, the acquisition of Tim Hortons in 2014 and the acquisition of Burger King Holdings, Inc. by 3G Capital Partners Ltd. Our indefinite-lived intangible assets consist of the Tim Hortons brand, the Burger King brand, and the Popeyes brand (each a “Brand” and together, the “Brands”). Goodwill and the Brands are tested for impairment at least annually as of October 1 of each year and more often if an event occurs or circumstances change which indicate impairment might exist. Our annual impairment tests of goodwill and the Brands may be completed through qualitative assessments. We may elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test for any reporting unit or Brand in any period. We can resume the qualitative assessment for any reporting unit or Brand in any subsequent period. Under a qualitative approach, our impairment review for goodwill consists of an assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount. If we elect to bypass the qualitative assessment for any reporting unit, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a two-step quantitative goodwill impairment test. The first step requires us to estimate the fair value of the reporting unit. If the fair value of the reporting unit is less than its carrying amount, the estimated fair value of the reporting unit is allocated to all its underlying assets and liabilities, including both recognized and unrecognized tangible and intangible assets, based on their fair value. If necessary, goodwill is then written down to its implied fair value. Under a qualitative approach, our impairment review for the Brands consists of an assessment of whether it is more-likely-than-not that a Brand’s fair value is less than its carrying amount. If we elect to bypass the qualitative assessment for a Brand, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a Brand exceeds its fair value, we estimate the fair value of the Brand and compare it to its carrying amount. If the carrying amount exceeds fair value, an impairment loss is recognized in an amount equal to that excess. We completed our impairment tests for goodwill and the Brands as of October 1, 2018, 2017 and 2016 and no impairment resulted. Long-Lived Assets Long-lived assets, such as property and equipment and intangible assets subject to amortization, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. Some of the events or changes in circumstances that would trigger an impairment review include, but are not limited to, bankruptcy proceedings or other significant financial distress of a lessee; significant negative industry or economic trends; knowledge of transactions involving the sale of similar property at amounts below the carrying value; or our expectation to dispose of long-lived assets before the end of their estimated useful lives. The impairment test for long-lived assets requires us to assess the recoverability of long-lived assets by comparing their net carrying value to the sum of undiscounted estimated future cash flows directly associated with and arising from use and eventual disposition of the assets or asset group. Long-lived assets are grouped for recognition and measurement of impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. If the net carrying value of a group of long-lived assets exceeds the sum of related undiscounted estimated future cash flows, we record an impairment charge equal to the excess, if any, of the net carrying value over fair value. Other Comprehensive Income (Loss) Other comprehensive income (loss) (“OCI”) refers to revenues, expenses, gains and losses that are included in comprehensive income (loss), but are excluded from net income (loss) as these amounts are recorded directly as an adjustment to equity, net of tax. Our other comprehensive income (loss) is primarily comprised of unrealized gains and losses on foreign currency translation adjustments and unrealized gains and losses on hedging activity, net of tax. Derivative Financial Instruments We recognize and measure all derivative instruments as either assets or liabilities at fair value in the consolidated balance sheets. We may enter into derivatives that are not initially designated as hedging instruments for accounting purposes, but which largely offset the economic impact of certain transactions. Gains or losses resulting from changes in the fair value of derivatives are recognized in earnings or recorded in other comprehensive income (loss) and recognized in the consolidated statements of operations when the hedged item affects earnings, depending on the purpose of the derivatives and whether they qualify for, and we have applied, hedge accounting treatment. When applying hedge accounting, we designate at a derivative’s inception, the specific assets, liabilities or future commitments being hedged, and assess the hedge’s effectiveness at inception and on an ongoing basis. We discontinue hedge accounting when: (i) we determine that the cash flow derivative is no longer effective in offsetting changes in the cash flows of a hedged item; (ii) the derivative expires or is sold, terminated or exercised; (iii) it is no longer probable that the forecasted transaction will occur; or (iv) management determines that designation of the derivatives as a hedge instrument is no longer appropriate. We do not enter into or hold derivatives for speculative purposes. Disclosures about Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market, or if none exists, the most advantageous market, for the specific asset or liability at the measurement date (the exit price). The fair value is based on assumptions that market participants would use when pricing the asset or liability. The fair values are assigned a level within the fair value hierarchy, depending on the source of the inputs into the calculation, as follows: Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Level 3 Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. The carrying amounts for cash and equivalents, accounts and notes receivable and accounts and drafts payable approximate fair value based on the short-term nature of these amounts. We carry all of our derivatives at fair value and value them using various pricing models or discounted cash flow analysis that incorporate observable market parameters, such as interest rate yield curves and currency rates, which are Level 2 inputs. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or us. For disclosures about the fair value measurements of our derivative instruments, see Note 12, Derivative Instruments . 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 billions): As of December 31, 2018 2017 Fair value of our variable term debt and senior notes $ 11 $ 12 Principal carrying amount of our variable term debt and senior notes 12 12 The determinations of fair values of certain tangible and intangible assets for purposes of the application of the acquisition method of accounting to the acquisition of Popeyes were based upon Level 3 inputs. The determination of fair values of our reporting units and the determination of the fair value of the Brands for impairment testing using a quantitative approach during 2018 and 2017 were based upon Level 3 inputs. Revenue Recognition We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts with Customers (“ASC 606”), from ASC Topic 605, Revenue Recognition and ASC Subtopic 952-605, Franchisors - Revenue Recognition (together, the “Previous Standards”) on January 1, 2018 using the modified retrospective transition method. Our Financial Statements reflect the application of ASC 606 guidance beginning in 2018, while our consolidated financial statements for prior periods were prepared under the guidance of the Previous Standards. See Note 16, Revenue Recognition , for further information about our transition to this new revenue recognition model using the modified retrospective transition method. Sales Sales consist primarily of supply chain sales, which represent sales of products, supplies and restaurant equipment to franchisees, as well as sales to retailers and are presented net of any related sales tax. Orders placed by customers specify the goods to be delivered and transaction prices for supply chain sales. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the customer, which is when the customer obtains physical possession of the goods, legal title is transferred, the customer has all risks and rewards of ownership and an obligation to pay for the goods is created. Shipping and handling costs associated with outbound freight for supply chain sales are accounted for as fulfillment costs and classified as cost of sales. Commencing on January 1, 2018, we classify all sales of restaurant equipment to franchisees as Sales and related cost of equipment sold as Cost of sales. In periods prior to January 1, 2018, we classified sales of restaurant equipment at establishment of a restaurant and in connection with renewal or renovation as Franchise and property revenues and related costs as Franchise and property expense. To a much lesser extent, sales also include Company restaurant sales (including Restaurant VIEs), which consist of sales to restaurant guests. Revenue from Company restaurant sales is recognized at the point of sale. Taxes assessed by a governmental authority that we collect are excluded from revenue. Franchise revenues Franchise revenues consist primarily of royalties, advertising fund contributions, initial and renewal franchise fees and upfront fees from development agreements and master franchise and development agreements (“MFDAs”). Under franchise agreements, we provide franchisees with (i) a franchise license, which includes a license to use our intellectual property and, in those markets where our subsidiaries manage an advertising fund, advertising and promotion management, (ii) pre-opening services, such as training and inspections, and (iii) ongoing services, such as development of training materials and menu items and restaurant monitoring and inspections. The services we provide under franchise agreements are highly interrelated and dependent upon the franchise license and we concluded the services do not represent individually distinct performance obligations. Consequently, we bundle the franchise license performance obligation and promises to provide services into a single performance obligation under ASC 606, which we satisfy by providing a right to use our intellectual property over the term of each franchise agreement. Royalties, including franchisee contributions to advertising funds managed by our subsidiaries, are calculated as a percentage of franchise restaurant sales over the term of the franchise agreement. Under our franchise agreements, advertising contributions paid by franchisees must be spent on advertising, product development, marketing and related activities. Initial and renewal franchise fees are payable by the franchisee upon a new restaurant opening or renewal of an existing franchise agreement. Our franchise agreement royalties, inclusive of advertising fund contributions, represent sales-based royalties that are related entirely to our performance obligation under the franchise agreement and are recognized as franchise sales occur. Additionally, under ASC 606, initial and renewal franchise fees are recognized as revenue on a straight-line basis over the term of the respective agreement. Under the Previous Standards, initial franchise fees were recognized as revenue when the related restaurant commenced operations and our completion of all material services and conditions. Renewal franchise fees were recognized as revenue upon execution of a new franchise agreement. Our performance obligation under development agreements other than MFDAs generally consists of an obligation to grant exclusive development rights over a stated term. These development rights are not distinct from franchise agreements, so upfront fees paid by franchisees for exclusive development rights are deferred and apportioned to each franchise restaurant opened by the franchisee. The pro rata amount apportioned to each restaurant is accounted for as an initial franchise fee. We have a distinct performance obligation under our MFDAs to grant subfranchising rights over a stated term. Under the terms of MFDAs, we typically either receive an upfront fee paid in cash and/or receive noncash consideration in the form of an equity interest in the master franchisee or an affiliate of the master franchisee. Under the Previous Standards, we accounted for noncash consideration as a nonmonetary exchange and did not record revenue or a basis in the equity interest received in arrangements where we received noncash consideration. These transactions now fall within the scope of ASC 606, which requires us to record investments in the applicable equity method investee and recognize revenue in an amount equal to the fair value of the equity interest received. In accordance with ASC 606, upfront fees from master franchisees, including the fair value of noncash consideration, are deferred and amortized over the MFDA term on a straight-line basis. We may recognize unamortized upfront fees when a contract with a franchisee or master franchisee is modified and is accounted for as a termination of the existing contract. The portion of gift cards sold to customers which are never redeemed is commonly referred to as gift card breakage. Under ASC 606, we recognize gift card breakage income proportionately as each gift card is redeemed using an estimated breakage rate based on our historical experience. Under the Previous Standards, we recognized gift card breakage income for each gift card's remaining balance when redemption of that balance was deemed remote. Property revenues Property revenues consists of rental income from properties we lease or sublease to franchisees. Property revenues are accounted for in accordance with applicable accounting guidance for leases and are excluded from the scope of ASC 606. Advertising and Promotional Costs Company restaurants and franchise restaurants contribute to advertising funds that our subsidiaries manage in the United States and Canada and certain other international markets. The advertising funds expense the production costs of advertising when the advertisements are first aired or displayed. All other advertising and promotional costs are expensed in the period incurred. Under our franchise agreements, advertising contributions received from franchisees must be spent on advertising, product development, marketing and related activities. As a result of our transition to ASC 606, advertising contributions received from franchisees are included in franchise and property revenues and advertising expenses are included as selling, general and administrative expenses commencing on January 1, 2018. Advertising expenses included in selling, general and administrative expenses totaled $793 million for 2018. Prior to January 1, 2018, since we were deemed to be acting as an agent for these specifically designated contributions in accordance with the Previous Standards, the revenues and expenses of the advertising funds were generally netted in our consolidated statements of operations. Prior to our transition to ASC 606, advertising expenses, which primarily consisted of advertising contributions by Company restaurants (including Restaurant VIEs) based on a percentage of gross sales, totaled $7 million for 2017 and $6 million for 2016 and were included in selling, general and administrative expenses in the accompanying consolidated statements of operations. As a result of our transition to ASC 606, the advertising contributions by Company restaurants (including Restaurant VIEs) are eliminated in consolidation in 2018. Deferred Financing Costs Deferred financing costs are amortized over the term of the related debt agreement into interest expense using the effective interest method. Income Taxes Amounts in the financial statements related to income taxes are calculated using the principles of ASC Topic 740, Income Taxes . Under these principles, deferred tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes, as well as tax credit carry-forwards and loss carry-forwards. These deferred taxes are measured by applying currently enacted tax rates. A deferred tax asset is recognized when it is considered more-likely-than-not to be realized. The effects of changes in tax rates on deferred tax assets and liabilities are recognized in income in the year in which the law is enacted. A valuation allowance reduces deferred tax assets when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. We recognize positions taken or expected to be taken in a tax return in the financial statements when it is more-likely-than-not (i.e., a likelihood of more than 50%) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit with greater than 50% likelihood of being realized upon ultimate settlement. Translation gains and losses resulting from the remeasurement of foreign deferred tax assets or liabilities denominated in a currency other than the functional currency are classified as other operating expenses (income), net in the consolidated statements of operations. Share-based Compensation Compensation expense related to the issuance of share-based awards to our employees is measured at fair value on the grant date. We use the Black-Scholes option pricing model to value stock options. The compensation expense for awards that vest over a future service period is recognized over the requisite service period on a straight-line basis, adjusted for estimated forfeitures of awards that are not expected to vest. The compensation expense for awards that do not require future service is recognized immediately. Upon the end of the service period, compensation expense is adjusted to account for the actual forfeiture rate. Cash settled share-based awards are classified as liabilities and are re-measured at the end of each reporting period. The compensation expense for awards that contain performance conditions is recognized when it is probable that the performance conditions will be achieved. Restructuring The determination of when we accrue for employee involuntary termination benefits depends on whether the termination benefits are provided under an on-going benefit arrangement or under a one-time benefit arrangement. We record charges for ongoing benefit arrangements in accordance with ASC Topic 712, Nonretirement Postemployment Benefits . We record charges for one-time benefit arrangements in accordance with ASC Topic 420, Exit or Disposal Cost Obligations . New Accounting Pronouncements Revenue Recognition – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. We adopted this new guidance on January 1, 2018. See Note 16, Revenue Recognition , for further information about our transition to this new revenue recognition model using the modified retrospective transition method. Lease Accounting – In February 2016, the FASB issued new guidance on leases. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. The new guidance is effective commencing in 2019 and requires a modified retrospective transition approach with application in all comparative periods presented (the “comparative method”), or alternatively, as of the effective date as the date of initial application without restating comparative period financial statements (the “effective date method”). The new guidance also provides several practical expedients and policies that companies may elect under either transition method. We have elected to apply the effective date method and the package of practical expedients under which we will not reassess the classification of our existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. Additionally, we have elected lessee and lessor practical expedients to not separate non-lease components from lease components. We did not elect the practical expedient that permits a reassessment of lease terms for existing leases. We performed an analysis of the impact of the new lease guidance and are in the process of completing the final phase of a comprehensive plan for our implementation of the new guidance, including implementation of a new lease accounting system. The project plan includes analyzing the impact of the new guidance on our current lease contracts, reviewing the completeness of our existing lease portfolio, comparing our accounting policies under current accounting guidance to the new accounting guidance and identifying potential differences from applying the requirement |
Popeyes Acquisition
Popeyes Acquisition | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Popeyes Acquisition | Popeyes Acquisition On March 27, 2017 , we completed the acquisition of all of the outstanding shares of common stock of Popeyes Louisiana Kitchen, Inc. (the “Popeyes Acquisition”). Popeyes Louisiana Kitchen, Inc. is one of the world’s largest chicken quick service restaurant companies and its global footprint complements RBI’s existing portfolio. Like our other brands, the Popeyes brand is managed independently, while benefiting from our global scale and resources. The Popeyes Acquisition was accounted for as a business combination using the acquisition method of accounting. Total consideration in connection with the Popeyes Acquisition was $1,655 million , which includes $33 million for the settlement of equity awards. The consideration was funded through (1) cash on hand of approximately $355 million , and (2) $1,300 million from incremental borrowings under our Term Loan Facility – see Note 9, Long-Term Debt . Fees and expenses related to the Popeyes Acquisition and related financings totaled $34 million consisting primarily of professional fees and compensation related expenses, all of which are classified as selling, general and administrative expenses in the accompanying consolidated statements of operations. These fees and expenses were funded through cash on hand. The final allocation of consideration to the net tangible and intangible assets acquired is presented in the table below (in millions): March 27, 2017 Total current assets $ 64 Property and equipment 114 Intangible assets 1,405 Other assets 1 Total current liabilities (73 ) Total debt and capital lease obligations (159 ) Deferred income taxes (523 ) Other liabilities (20 ) Total identifiable net assets 809 Goodwill 846 Total consideration $ 1,655 Intangible assets include $1,355 million related to the Popeyes brand, $41 million related to franchise agreements and $9 million related to favorable leases. The Popeyes brand has been assigned an indefinite life and, therefore, will not be amortized, but rather tested annually for impairment. Franchise agreements have a weighted average amortization period of 17 years. Favorable leases have a weighted average amortization period of 14 years. Goodwill attributable to the Popeyes Acquisition will not be amortizable or 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. The Popeyes Acquisition is not material to our consolidated financial statements, and therefore, supplemental pro forma financial information related to the acquisition is not included herein. |
Earnings Per Unit
Earnings Per Unit | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Unit | 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, Partnership preferred unit distributions and gain on redemption of Partnership preferred units. Basic and diluted earnings per Class A common unit is determined by dividing net income allocated to Class A common unitholders 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 the exercise of stock options will not affect the numbers of Class A common units or Partnership exchangeable units outstanding. However, the issuance of 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. The following table summarizes the basic and diluted earnings per unit calculations (in millions, except per unit amounts): 2018 2017 2016 Allocation of net income among partner interests: Net income allocated to Class A common unitholders $ 612 $ 626 $ 346 Net income allocated to Partnership exchangeable unitholders 531 585 337 Net income attributable to common unitholders $ 1,143 $ 1,211 $ 683 Denominator - basic and diluted partnership units: Weighted average Class A common units 202 202 202 Weighted average Partnership exchangeable units 216 226 228 Earnings per unit - basic and diluted: Class A common units (a) $ 3.03 $ 3.10 $ 1.71 Partnership exchangeable units (a) $ 2.46 $ 2.59 $ 1.48 (a) Earnings per unit may not recalculate exactly as it is calculated based on unrounded numbers. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment, net, consist of the following (in millions): As of December 31, 2018 2017 Land $ 998 $ 1,020 Buildings and improvements 1,145 1,172 Restaurant equipment 99 122 Furniture, fixtures, and other 182 171 Capital leases 257 256 Construction in progress 19 15 2,700 2,756 Accumulated depreciation and amortization (704 ) (623 ) Property and equipment, net $ 1,996 $ 2,133 Depreciation and amortization expense on property and equipment totaled $148 million for 2018 , $150 million for 2017 and $144 million for 2016 . Included in our property and equipment, net at December 31, 2018 and 2017 are $180 million and $193 million , respectively, of assets leased under capital leases (mostly buildings and improvements), net of accumulated depreciation and amortization of $77 million and $63 million , respectively. |
Intangible Assets, net and Good
Intangible Assets, net and Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, net and Goodwill | Intangible Assets, net and Goodwill Intangible assets, net and goodwill consist of the following (in millions): As of December 31, 2018 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Identifiable assets subject to amortization: Franchise agreements $ 705 $ (194 ) $ 511 $ 725 $ (168 ) $ 557 Favorable leases 407 (200 ) 207 456 (194 ) 262 Subtotal 1,112 (394 ) 718 1,181 (362 ) 819 Indefinite lived intangible assets: Tim Hortons brand $ 6,259 $ — $ 6,259 $ 6,727 $ — $ 6,727 Burger King brand 2,131 — 2,131 2,161 — 2,161 Popeyes brand 1,355 — 1,355 1,355 — 1,355 Subtotal 9,745 — 9,745 10,243 — 10,243 Intangible assets, net $ 10,463 $ 11,062 Goodwill Tim Hortons segment $ 4,038 $ 4,326 Burger King segment 602 610 Popeyes segment 846 846 Total $ 5,486 $ 5,782 Amortization expense on intangible assets totaled $70 million for 2018 , $72 million for 2017 , and $72 million for 2016 . The change in the brands and goodwill balances during 2018 was due principally to the impact of foreign currency translation. As of December 31, 2018 , the estimated future amortization expense on identifiable assets subject to amortization is as follows (in millions): Twelve-months ended December 31, Amount 2019 $ 64 2020 59 2021 55 2022 51 2023 48 Thereafter 441 Total $ 718 |
Equity Method Investments
Equity Method Investments | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The aggregate carrying amount of our equity method investments was $259 million and $155 million as of December 31, 2018 and 2017 , respectively, and is included as a component of Other assets, net in our consolidated balance sheets. The increase in the carrying amount of our equity method investments as of December 31, 2018 compared to December 31, 2017 is primarily attributable to the recognition of investments received in connection with master franchise and development arrangements as a result of our transition to ASC 606. See Note 2, Significant Accounting Policies . TH and BK both have equity method investments. PLK does not have any equity method investments. With respect to our TH business, the most significant equity method investment is our 50.0% 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 $13 million , $12 million and $11 million during 2018 , 2017 and 2016 , respectively. The aggregate market value of our 20.5% equity interest in Carrols Restaurant Group, Inc. (“Carrols”) based on the quoted market price on December 31, 2018 is approximately $93 million . The aggregate market value of our 10.1% equity interest in BK Brasil Operação e Assessoria a Restaurantes S.A. based on the quoted market price on December 31, 2018 is approximately $120 million . No quoted market prices are available for our other equity method investments. We have equity interests in entities that own or franchise Tim Hortons or Burger King restaurants. Franchise and property revenue recognized from franchisees that are owned or franchised by entities in which we have an equity interest consist of the following (in millions): 2018 2017 2016 Revenues from affiliates: Royalties $ 310 $ 175 $ 132 Property revenues 36 27 28 Franchise fees and other revenue 11 26 19 Total $ 357 $ 228 $ 179 We recognized $20 million of rent expense associated with the TIMWEN Partnership during each of 2018 , 2017 and 2016 . At December 31, 2018 and 2017 , we had $41 million and $32 million , respectively, of accounts receivable from our equity method investments which were recorded in accounts and notes receivable, net in our consolidated balance sheets. (Income) loss from equity method investments reflects our share of investee net income or loss, non-cash dilution gains or losses from changes in our ownership interests in equity method investees and basis difference amortization. We recorded increases to the carrying value of our equity method investment balances and non-cash dilution gains in the amounts of $20 million and $12 million during 2018 and 2016 , respectively. No non-cash dilution gains were recorded during 2017 . The dilution gains resulted from the issuance of capital stock by our equity method investees, which reduced our ownership interests in these equity method investments. The dilution gains we recorded in connection with the issuance of capital stock reflect adjustments to the differences between the amount of underlying equity in the net assets of equity method investees before and after their issuance of capital stock. |
Other Accrued Liabilities and O
Other Accrued Liabilities and Other Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities and Other Liabilities | Other Accrued Liabilities and Other Liabilities Other accrued liabilities (current) and other liabilities, net (non-current) consist of the following (in millions): As of December 31, 2018 2017 Current: Dividend payable $ 207 $ 97 Interest payable 87 89 Accrued compensation and benefits 69 67 Taxes payable 113 401 Deferred income 27 43 Accrued advertising expenses 30 27 Closed property reserve 9 11 Restructuring and other provisions 11 12 Other 84 119 Other accrued liabilities $ 637 $ 866 Non-current: Derivatives liabilities $ 179 $ 499 Taxes payable 493 496 Contract liabilities, net 486 10 Unfavorable leases 192 252 Accrued pension 64 72 Accrued lease straight-lining liability 69 46 Deferred income 22 27 Other 42 53 Other liabilities, net $ 1,547 $ 1,455 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consist of the following (in millions): As of December 31, 2018 2017 Term Loan Facility (due February 17, 2024) $ 6,338 $ 6,389 2017 4.25% Senior Notes (due May 15, 2024) 1,500 1,500 2015 4.625% Senior Notes (due January 15, 2022) 1,250 1,250 2017 5.00% Senior Notes (due October 15, 2025) 2,800 2,800 Other 150 89 Less: unamortized deferred financing costs and deferred issuance discount (145 ) (170 ) Total debt, net 11,893 11,858 Less: current maturities of debt (70 ) (57 ) Total long-term debt $ 11,823 $ 11,801 Credit Facilities On February 17, 2017, two of our subsidiaries (the “Borrowers”) entered into a second amendment (the “Second Amendment”) to the credit agreement governing our senior secured term loan facility (the “Term Loan Facility”) and our senior secured revolving credit facility of up to $500 million of revolving extensions of credit outstanding at any time (including revolving loans, swingline loans and letters of credit) (the “Revolving Credit Facility” and together with the Term Loan Facility, the “Credit Facilities”). Under the Second Amendment, (i) the outstanding aggregate principal amount under our Term Loan Facility was decreased to $4,900 million as a result of a repayment of $146 million from cash on hand, (ii) the interest rate applicable to our Term Loan Facility was reduced to, at our option, either (a) a base rate plus an applicable margin equal to 1.25% , or (b) a Eurocurrency rate plus an applicable margin equal to 2.25% , (iii) the maturity of our Term Loan Facility was extended from December 12, 2021 to February 17, 2024 , and (iv) the Borrowers and their subsidiaries were provided with additional flexibility under certain negative covenants, including incurrence of indebtedness, making of investments, dispositions and restricted payments, and prepayment of subordinated indebtedness. Except as described herein, the Second Amendment did not materially change the terms of the Credit Facilities. In connection with the Second Amendment, we capitalized approximately $11 million in debt issuance costs and recorded a loss on early extinguishment of debt of $20 million during 2017 . The loss on early extinguishment of debt primarily reflects the write-off of unamortized debt issuance costs and discounts. Incremental Term Loans In connection with the Popeyes Acquisition, we obtained an incremental term loan in the aggregate principal amount of $1,300 million (the “Incremental Term Loan No. 1”) under our Term Loan Facility. Also, simultaneously and in connection with the issuance of the 2017 4.25% Senior Notes (described below), we obtained an additional incremental term loan in the aggregate principal amount of $250 million (the “Incremental Term Loan No. 2” and together with the Incremental Term Loan No. 1, the “Incremental Term Loans”) under our Term Loan Facility. The Incremental Term Loans bear interest at the same rate as the Term Loan Facility and also mature on February 17, 2024 . In connection with the Incremental Term Loan No. 1, Popeyes Louisiana Kitchen, Inc. was included as loan guarantor and its assets as collateral under the Credit Facilities. Except as described herein, there were no other material changes to the terms of the Credit Facilities. Debt issuance costs capitalized in connection with the Incremental Term Loans were approximately $23 million . Revolving Credit Facility As of December 31, 2018 , we had no amounts outstanding under our Revolving Credit Facility. Funds available under the Revolving Credit Facility may be used to repay other debt, finance debt or share repurchases, to 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. As of December 31, 2018 , we had $20 million of letters of credit issued against the Revolving Credit Facility, and our borrowing availability was $480 million . During 2017, the Borrowers extended the maturity date of the Revolving Credit Facility from December 12, 2019 to October 13, 2022 . The extension was effected through the termination of the existing revolving credit commitments and the entry into Incremental Facility Amendment No. 3 (the “Third Amendment”) to the credit agreement. The Third Amendment maintained the same $500 million in aggregate principal amount of the commitments under the Revolving Credit Facility but reduced interest rates and commitment fees. As amended, the Revolving Credit Facility matures on October 13, 2022 , provided that if, on October 15, 2021 , more than an aggregate of $150 million of the 2015 4.625% Senior Notes (as defined below) are outstanding, then the maturity date of the Revolving Credit Facility shall be October 15, 2021 . Except as described herein, there were no other material changes to the Revolving Credit Facility. In connection with the Third Amendment we capitalized approximately $1 million in debt issuance costs. Interest Rate Applicable to the Credit Facilities The interest rate applicable to the Credit Facilities is, at our option, either (i) a base rate plus an applicable margin equal to 1.25% in respect of the Term Loan Facility and ranging from 0.25% to 1.00% , depending on our leverage ratio, in respect of the Revolving Credit Facility, or (ii) a Eurocurrency rate plus an applicable margin equal to 2.25% in respect of the Term Loan Facility and ranging from 1.25% to 2.00% , depending on our leverage ratio, in respect of the Revolving Credit Facility. Borrowings are subject to a floor of 2.00% in the case of the base rate and a floor of 1.00% in the case of Eurocurrency rate. Amounts drawn under each letter of credit that is issued and outstanding under this facility bear interest ranging from 1.25% to 2.00% , depending on our leverage ratio. The unused portion of the Revolving Credit Facility is subject to a commitment fee of 0.25% . We are also required to pay (i) letters of credit fees on the aggregate face amounts of outstanding letters of credit plus a fronting fee to the issuing bank and (ii) administration fees. As of December 31, 2018 , the weighted average interest rate on our Term Loan Facility was 4.77% . The principal amount of the Term Loan Facility amortizes in quarterly installments equal to $16 million , with the balance payable at maturity. Obligations under the Credit Facilities are guaranteed on a senior secured basis, jointly and severally, by the direct parent company of one of the Borrowers and substantially all of its Canadian and U.S. subsidiaries, including The TDL Group Corp., Burger King Worldwide, Inc., Popeyes Louisiana Kitchen, Inc. and substantially all of their respective Canadian and U.S. subsidiaries (the “Credit Guarantors”). Amounts borrowed under the Credit Facilities are secured on a first priority basis by a perfected security interest in substantially all of the present and future property (subject to certain exceptions) of each Borrower and Credit Guarantor. 2017 4.25% Senior Notes During 2017, the Borrowers entered into an indenture (the “2017 4.25% Senior Notes Indenture”) in connection with the issuance of $1,500 million of 4.25% first lien senior notes due May 15, 2024 (the “2017 4.25% Senior Notes”). No principal payments are due until maturity and interest is paid semi-annually. The net proceeds from the offering of the 2017 4.25% Senior Notes, together with other sources of liquidity, were used to redeem all of the outstanding RBI Class A 9.0% cumulative compounding perpetual voting preferred shares (see Note 13, Partnership Preferred Units ) and for other general corporate purposes. In connection with the issuance of the 2017 4.25% Senior Notes, we capitalized approximately $13 million in debt issuance costs. Obligations under the 2017 4.25% Senior Notes are guaranteed on a senior secured basis, jointly and severally, by the Borrowers and substantially all of the Borrowers' Canadian and U.S. subsidiaries, including The TDL Group Corp., Burger King Worldwide, Inc., Popeyes Louisiana Kitchen, Inc. and substantially all of their respective Canadian and U.S. subsidiaries (the “Note Guarantors”). The 2017 4.25% Senior Notes are first lien senior secured obligations and rank equal in right of payment with all of the existing and future senior debt of the Borrowers and Note Guarantors, including borrowings and guarantees of the Credit Facilities. Our 2017 4.25% Senior Notes may be redeemed in whole or in part, on or after May 15, 2020 at the redemption prices set forth in the 2017 4.25% Senior Notes Indenture, plus accrued and unpaid interest, if any, at the date of redemption. The 2017 4.25% Senior Notes Indenture also contains optional redemption provisions related to tender offers, change of control and equity offerings, among others. 2017 5.00% Senior Notes During 2017, the Borrowers entered into an indenture (the “2017 5.00% Senior Notes Indenture”) in connection with the issuance of $2,800 million of 5.00% second lien senior notes due October 15, 2025 (the “2017 5.00% Senior Notes”). No principal payments are due until maturity and interest is paid semi-annually. The net proceeds from the offering of the 2017 5.00% Senior Notes were used to redeem the entire outstanding principal balance of $2,250 million of 6.00% second lien secured notes due April 1, 2022 (the “2014 6.00% Senior Notes”), pay related redemption premiums, fees and expenses, and for general corporate purposes. In connection with the issuance of the 2017 5.00% Senior Notes, we capitalized approximately $15 million in debt issuance costs. In connection with the full redemption of the 2014 6.00% Senior Notes, we recorded a loss on early extinguishment of debt of $102 million that primarily reflects the payment of premiums to redeem the notes and the write-off of unamortized debt issuance costs. Obligations under the 2017 5.00% Senior Notes are guaranteed on a second priority senior secured basis, jointly and severally, by the Note Guarantors. The 2017 5.00% Senior Notes are second lien senior secured obligations and rank equal in right of payment with all of the existing and future senior debt of the Borrowers and Note Guarantors, including borrowings and guarantees of the Credit Facilities. Our 2017 5.00% Senior Notes may be redeemed in whole or in part, on or after October 15, 2020 at the redemption prices set forth in the 2017 5.00% Senior Notes Indenture, plus accrued and unpaid interest, if any, at the date of redemption. The 2017 5.00% Senior Notes Indenture also contains optional redemption provisions related to tender offers, change of control and equity offerings, among others. 2015 4.625% Senior Notes The Borrowers are also party to an indenture (the “2015 4.625% Senior Notes Indenture”) in connection with the issuance of $1,250 million of 4.625% first lien senior notes due January 15, 2022 (the “2015 4.625% Senior Notes”). No principal payments are due until maturity and interest is paid semi-annually. Obligations under the 2015 4.625% Senior Notes are guaranteed on a senior secured basis, jointly and severally, by the Note Guarantors. The 2015 4.625% Senior Notes are first lien senior secured obligations and rank equal in right of payment with all of the existing and future senior debt of the Borrowers and Note Guarantors, including borrowings and guarantees of the Credit Facilities. Our 2015 4.625% Senior Notes may be redeemed in whole or in part, on or after October 1, 2017 , at the redemption prices set forth in the corresponding indenture, plus accrued and unpaid interest, if any, at the date of redemption. The 2015 4.625% Senior Notes Indenture also contains optional redemption provisions related to tender offers, change of control and equity offerings, among others. Restrictions and Covenants Our Credit Facilities, 2017 4.25% Senior Notes Indenture, 2017 5.00% Senior Notes Indenture and 2015 4.625% Senior Notes Indenture contain a number of customary affirmative and negative covenants that, among other things, limit or restrict our ability and the ability of certain of our subsidiaries to: incur additional indebtedness; incur liens; engage in mergers, consolidations, liquidations and dissolutions; sell assets; pay dividends and make other payments in respect of capital stock; make investments, loans and advances; pay or modify the terms of certain indebtedness; engage in certain transactions with affiliates. In addition, the Borrowers are not permitted to exceed a first lien senior secured leverage ratio of 6.50 to 1.00 when, as of the end of any fiscal quarter, the sum of (i) the amount of letters of credit outstanding exceeding $50 million (other than those that are cash collateralized); (ii) outstanding amounts under the Revolving Credit Facility and (iii) outstanding amounts of swing line loans, exceeds 30.0% of the commitments under the Revolving Credit Facility. The restrictions under the Credit Facilities, the 2017 4.25% Senior Notes Indenture, the 2017 5.00% Senior Notes Indenture, the 2015 4.625% Senior Notes Indenture have resulted in substantially all of our consolidated assets being restricted. As of December 31, 2018 , we were in compliance with all debt covenants under the Credit Facilities, 2017 4.25% Senior Notes Indenture, 2017 5.00% Senior Notes Indenture and 2015 4.625% Senior Notes Indenture and there were no limitations on our ability to draw on the remaining availability under our Revolving Credit Facility. Other On October 11, 2018, one of our subsidiaries entered into a non-revolving delayed drawdown term credit facility in a total aggregate principal amount of C$100 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 three of our subsidiaries, and amounts borrowed under the TH Facility are and will be secured by certain parcels of real estate. As of December 31, 2018 , we had drawn down the entire C$100 million available under the TH Facility with a weighted average interest rate of 3.64% . On March 27, 2017, we repaid $156 million of debt assumed in connection with the Popeyes Acquisition. Additionally, $36 million of Tim Hortons Series 1 notes were repaid on June 1, 2017, the original maturity date. Debt Issuance Costs During 2017, we incurred aggregate deferred financing costs of $63 million . No significant deferred financing costs were incurred in 2018 and 2016. Loss on Early Extinguishment of Debt During 2017, we recorded a $122 million loss on early extinguishment of debt, which primarily reflects the payment of premiums to redeem our 2014 6.00% Senior Notes and the write-off of unamortized debt issuance costs and discounts in connection with the refinancing of our Term Loan Facility and the redemption of our 2014 6.00% Senior Notes. Maturities The aggregate maturities of our long-term debt as of December 31, 2018 are as follows (in millions): Year Ended December 31, Principal Amount 2019 $ 70 2020 74 2021 72 2022 1,324 2023 78 Thereafter 10,420 Total $ 12,038 Interest Expense, net Interest expense, net consists of the following (in millions): 2018 2017 2016 Debt (a) $ 498 $ 484 $ 412 Capital lease obligations 23 21 20 Amortization of deferred financing costs and debt issuance discount 29 33 39 Interest income (15 ) (26 ) (4 ) Interest expense, net $ 535 $ 512 $ 467 (a) Amount includes $60 million benefit during 2018 from our adoption of a new hedge accounting standard. See Note 2, Significant Accounting Policies – New Accounting Pronouncements , for further details of the effects of this change in accounting principle on Interest expense, net. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Leases | Leases Partnership as Lessor As of December 31, 2018 , we leased or subleased 5,284 restaurant properties to franchisees and 129 non-restaurant properties to third parties under operating leases and direct financing leases where we are the lessor. Initial lease terms generally range from 10 to 20 years . Most leases to franchisees provide for fixed monthly payments and many provide for future rent escalations and renewal options. Certain leases also include provisions for contingent rent, determined as a percentage of sales, generally when annual sales exceed specific levels. Lessees typically bear the cost of maintenance, insurance and property taxes. Assets leased to franchisees and others under operating leases where we are the lessor and which are included within our property and equipment, net are as follows (in millions): As of December 31, 2018 2017 Land $ 906 $ 931 Buildings and improvements 1,175 1,215 Restaurant equipment 17 17 2,098 2,163 Accumulated depreciation and amortization (475 ) (407 ) Property and equipment leased, net $ 1,623 $ 1,756 Our net investment in direct financing leases is as follows (in millions): As of December 31, 2018 2017 Future rents to be received: Future minimum lease receipts $ 60 $ 77 Contingent rents (a) 29 39 Estimated unguaranteed residual value 16 17 Unearned income (35 ) (45 ) 70 88 Current portion included within accounts receivables (16 ) (17 ) Net investment in property leased to franchisees $ 54 $ 71 (a) Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting. Property revenues are comprised primarily of rental income from operating leases and earned income on direct financing leases with franchisees as follows (in millions): 2018 2017 2016 Rental income: Minimum $ 454 $ 464 $ 451 Contingent 273 284 282 Amortization of favorable and unfavorable income lease contracts, net 8 8 9 Total rental income 735 756 742 Earned income on direct financing leases 9 9 11 Total property revenues $ 744 $ 765 $ 753 Partnership as Lessee In addition, we lease land, building, equipment, office space and warehouse space, including 675 restaurant buildings under capital leases where we are the lessee. Land and building leases generally have an initial term of 10 to 30 years , while land-only lease terms can extend longer, and most leases provide for fixed monthly payments. Many of these leases provide for future rent escalations and renewal options. Certain leases also include provisions for contingent rent, determined as a percentage of sales, generally when annual sales exceed specific levels. Most leases also obligate us to pay the cost of maintenance, insurance and property taxes. Rent expense associated with these lease commitments is as follows (in millions): 2018 2017 2016 Rental expense: Minimum $ 201 $ 198 $ 193 Contingent 71 71 71 Amortization of favorable and unfavorable payable lease contracts, net 9 10 9 Total rental expense (a) $ 281 $ 279 $ 273 (a) Amounts include rental expense related to properties subleased to franchisees of $263 million for 2018 , $263 million for 2017 , and $254 million for 2016 . As of December 31, 2018 , future minimum lease receipts and commitments are as follows (in millions): Lease Receipts Lease Commitments (a) Direct Operating Capital Operating 2019 $ 14 $ 416 $ 38 $ 183 2020 10 388 36 172 2021 7 360 34 158 2022 5 331 33 145 2023 5 306 30 130 Thereafter 19 1,704 201 831 Total minimum receipts / payments $ 60 $ 3,505 372 $ 1,619 Less amount representing interest (125 ) Present value of minimum capital lease payments 247 Current portion of capital lease obligation (21 ) Long-term portion of capital lease obligation $ 226 (a) Minimum lease payments have not been reduced by minimum sublease rentals of $2,290 million due in the future under non-cancelable subleases. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Tax Act In December 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) that significantly revises the U.S. tax code generally effective January 1, 2018 by, among other changes, lowering the corporate income tax rate from 35% to 21%, limiting deductibility of interest expense and performance based incentive compensation and implementing a modified territorial tax system. As a Canadian entity, we generally would be classified as a foreign entity (and, therefore, a non-U.S. tax resident) under general rules of U.S. federal income taxation. However, we have subsidiaries subject to U.S. federal income taxation and therefore the Tax Act impacted our consolidated results of operations during 2017 and 2018, and is expected to continue to impact our consolidated results of operations in future periods. The impacts to our consolidated statement of operations consist of the following (the “Tax Act Impact”): • A provisional benefit of $420 million recorded in our provision from income taxes for 2017 and a favorable adjustment of $9 million recorded for 2018, as a result of the remeasurement of net deferred tax liabilities. • Provisional charges of $103 million recorded in 2017 and a favorable adjustment of $3 million recorded in 2018, related to certain deductions allowed to be carried forward before the Tax Act, which potentially may not be carried forward and deductible under the Tax Act. • A provisional estimate for a one-time transitional repatriation tax on unremitted foreign earnings (the “Transition Tax”) of $119 million recorded in 2017, most of which had been previously accrued with respect to certain undistributed foreign earnings, and a favorable adjustment of $15 million (primarily related to utilization of foreign tax credits) recorded in 2018. In accordance with Staff Accounting Bulletin No. 118 issued by the staff of the SEC, adjustments to provisional amounts were recorded as discrete items in the provision for income taxes in 2018, the period in which those adjustments became reasonably estimable, as described above. The ultimate impact of the Tax Act on our effective tax rate in future periods will depend on interpretations and regulatory changes from the Internal Revenue Service, the SEC, the FASB and various tax jurisdictions, or actions we may take. Income (loss) before income taxes, classified by source of income (loss), is as follows (in millions): 2018 2017 2016 Canadian $ 1,111 $ 1,223 $ 1,050 Foreign 271 (122 ) 150 Income before income taxes $ 1,382 $ 1,101 $ 1,200 Income tax (benefit) expense attributable to income from continuing operations consists of the following (in millions): 2018 2017 2016 Current: Canadian $ 25 $ 438 $ 79 U.S. Federal 95 113 45 U.S. state, net of federal income tax benefit 17 3 2 Other Foreign 72 54 38 $ 209 $ 608 $ 164 Deferred: Canadian $ 78 $ (302 ) $ 49 U.S. Federal (65 ) (473 ) 37 U.S. state, net of federal income tax benefit 13 34 (7 ) Other Foreign 3 (1 ) 1 $ 29 $ (742 ) $ 80 Income tax (benefit) expense $ 238 $ (134 ) $ 244 The statutory rate reconciles to the effective income tax rate as follows: 2018 2017 2016 Statutory rate 26.5 % 26.5 % 26.5 % Costs and taxes related to foreign operations 4.2 8.9 9.6 Foreign exchange gain (loss) (0.1 ) (7.7 ) 0.1 Foreign tax rate differential (6.1 ) (1.9 ) (1.0 ) Change in valuation allowance 3.2 12.0 0.2 Change in accrual for tax uncertainties 0.1 (0.4 ) 1.0 Intercompany financing (4.4 ) (19.5 ) (16.0 ) Impact of Tax Act (1.9 ) (27.4 ) — Benefit from stock option exercises (5.0 ) (4.9 ) — Other 0.7 2.3 (0.1 ) Effective income tax rate 17.2 % (12.1 )% 20.3 % Income tax (benefit) expense allocated to continuing operations and amounts separately allocated to other items was (in millions): 2018 2017 2016 Income tax (benefit) expense from continuing operations $ 238 $ (134 ) $ 244 Cash flow hedge in accumulated other comprehensive income (loss) (2 ) 5 (2 ) Net investment hedge in accumulated other comprehensive income (loss) 101 (13 ) 12 Pension liability in accumulated other comprehensive income (loss) — (2 ) (2 ) Stock option tax benefit in common shares — — (9 ) Total $ 337 $ (144 ) $ 243 The significant components of deferred income tax (benefit) expense attributable to income from continuing operations are as follows (in millions): 2018 2017 2016 Deferred income tax (benefit) expense $ (14 ) $ (449 ) $ 78 Change in valuation allowance 43 133 2 Change in effective Canadian income tax rate (3 ) — — Change in effective U.S. federal income tax rate (8 ) (433 ) — Change in effective U.S. state income tax rate 15 4 (3 ) Change in effective foreign income tax rate (4 ) 3 3 Total $ 29 $ (742 ) $ 80 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (in millions): As of December 31, 2018 2017 Deferred tax assets: Accounts and notes receivable $ 5 $ 5 Accrued employee benefits 49 49 Unfavorable leases 123 146 Liabilities not currently deductible for tax 176 74 Tax loss and credit carryforwards 509 550 Derivatives 25 136 Other 8 — Total gross deferred tax assets 895 960 Valuation allowance (325 ) (282 ) Net deferred tax assets 570 678 Less deferred tax liabilities: Property and equipment, principally due to differences in depreciation 43 33 Intangible assets 1,734 1,791 Leases 105 129 Statutory impairment 31 26 Outside basis difference 35 68 Total gross deferred tax liabilities 1,948 2,047 Net deferred tax liability $ 1,378 $ 1,369 The valuation allowance had a net increase of $43 million during 2018 primarily due to the change in provisional estimates related to the utilization of foreign tax credits. This increase was partially offset by a release due to the utilization of capital losses that had been previously valued. Changes in the valuation allowance are as follows (in millions): 2018 2017 2016 Beginning balance $ 282 $ 133 $ 125 Additions due to acquisition — 9 — Change in estimates recorded to deferred income tax expense 43 133 2 Changes from foreign currency exchange rates — 6 (1 ) True-ups from changes in losses and credits — 1 7 Ending balance $ 325 $ 282 $ 133 The gross amount and expiration dates of operating loss and tax credit carry-forwards as of December 31, 2018 are as follows (in millions): Amount Expiration Date Canadian net operating loss carryforwards $ 735 2036-2038 Canadian capital loss carryforwards 1,139 Indefinite U.S. state net operating loss carryforwards 595 2019-2038 U.S. foreign tax credits 81 2019-2028 Other foreign net operating loss carryforwards 192 Indefinite Other foreign net operating loss carryforwards 57 2020-2037 Other foreign capital loss carryforward 30 Indefinite Foreign credits 2 2019-2036 Total $ 2,831 In prior periods, we provided deferred taxes on certain undistributed foreign earnings. Under our transition to a modified territorial tax system whereby all previously untaxed undistributed foreign earnings are subject to a transition tax charge at reduced rates and future repatriations of foreign earnings will generally be exempt from U.S. tax, we wrote off the existing deferred tax liability on undistributed foreign earnings and recorded the impact of the new transition tax charge on foreign earnings. We will continue to monitor available evidence and our plans for foreign earnings and expect to continue to provide any applicable deferred taxes based on the tax liability or withholding taxes that would be due upon repatriation of amounts not considered permanently reinvested. We had $441 million of unrecognized tax benefits at December 31, 2018 , which if recognized, would favorably affect the effective income tax rate. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in millions): 2018 2017 2016 Beginning balance $ 461 $ 241 $ 239 Additions on tax position related to the current year 1 186 2 Additions for tax positions of prior years 18 41 6 Additions for tax positions taken in conjunction with acquisition of Tim Hortons — 2 — Reductions for tax positions of prior year (18 ) — (1 ) Reductions for settlement (18 ) (2 ) (5 ) Reductions due to statute expiration (3 ) (7 ) — Ending balance $ 441 $ 461 $ 241 During the twelve months beginning January 1, 2019, it is reasonably possible we will reduce unrecognized tax benefits by approximately $6 million , primarily as a result of the expiration of certain statutes of limitations and the resolution of audits. We recognize interest and penalties related to unrecognized tax benefits in income tax expense. The total amount of accrued interest and penalties was $51 million and $37 million at December 31, 2018 and 2017 , respectively. Potential interest and penalties associated with uncertain tax positions recognized was $14 million during 2018 , $10 million during 2017 and $11 million during 2016 . To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. We file income tax returns with Canada and its provinces and territories. Generally we are subject to routine examinations by the Canada Revenue Agency (“CRA”). The CRA is conducting examinations of the 2013 through 2015 taxation years. Additionally, income tax returns filed with various provincial jurisdictions are generally open to examination for periods of three to five years subsequent to the filing of the respective return. We also file income tax returns, including returns for our subsidiaries, with U.S. federal, U.S. state, and foreign jurisdictions. Generally we are subject to routine examination by taxing authorities in the U.S. jurisdictions, as well as foreign tax jurisdictions. None of the foreign jurisdictions should be individually material. The examination of our U.S. federal income tax returns for fiscal 2009, 2010, the period July 1, 2010 through October 18, 2010 and the period October 19, 2010 through December 31, 2010 was closed during the first half of 2018. The U.S. federal income tax returns for our U.S. companies for fiscal years 2014, 2015 and 2016 are currently under audit by the U.S. Internal Revenue Service. We have various U.S. state and foreign income tax returns in the process of examination. From time to time, these audits result in proposed assessments where the ultimate resolution may result in owing additional taxes. We believe that our tax positions comply with applicable tax law and that we have adequately provided for these matters. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | 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, 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 During 2018, we entered into a series of receive-variable, pay-fixed interest rate swaps with a notional value of $3,500 million to hedge the variability in the interest payments on a portion of our senior secured term loan facility (the “Term Loan Facility”) beginning March 29, 2018 through the expiration of the final swap on February 17, 2024 , resetting each March. At inception, these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value are recorded in AOCI and reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. During 2015, we entered into a series of receive-variable, pay-fixed interest rate swaps with a notional value of $2,500 million to hedge the variability in the interest payments on a portion of our Term Loan Facility beginning May 28, 2015. All of these interest rate swaps were settled on April 26, 2018 for an insignificant cash receipt. At inception, these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value were recorded in AOCI and reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. During 2015, we settled certain interest rate swaps and recognized a net unrealized loss of $85 million in AOCI at the date of settlement. This amount gets reclassified into Interest expense, net as the original hedged forecasted transaction affects earnings. The amount of pre-tax losses in AOCI as of December 31, 2018 that we expect to be reclassified into interest expense within the next 12 months is $12 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 December 31, 2018 , 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 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. During 2017, we terminated and settled our previous cross-currency rate swaps with an aggregate notional value of $5,000 million , between the Canadian dollar and U.S. dollar. In connection with this termination, we received $764 million which is reflected as a source of cash provided by investing activities in the consolidated statement of cash flows. The unrealized gains totaled $533 million , net of tax, as of the termination date and will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying foreign operations. Additionally during 2017, we entered into new fixed-to-fixed cross-currency rate swaps 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 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 30, 2023 . In making such changes, we effectively realigned our Canadian dollar hedges to reflect our current cash flow mix and capital structure maturity profile. At December 31, 2018 , we also had outstanding cross-currency rate swaps in which we pay quarterly fixed-rate interest payments on the Euro notional amount of € 1,108 million and receive quarterly fixed-rate interest payments on the U.S. dollar notional amount 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, during 2018, we entered into cross-currency rate swaps in which we receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $400 million through the maturity date of February 17, 2024 . At inception, these cross-currency rate swaps were designated as a hedge 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 dedesignated and subsequently redesignated the outstanding fixed to fixed cross-currency rate swaps to prospectively use the spot method of hedge effectiveness assessment. We also 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 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. See Note 2, Significant Accounting Policies - New Accounting Pronouncements , for further information on the adoption of this new guidance. 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 December 31, 2018 , 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 $124 million with maturities to January 2020 . 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. 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 consolidated balance sheets (in millions): Gain (Loss) Recognized in 2018 2017 2016 Derivatives designated as cash flow hedges (1) Interest rate swaps $ (37 ) $ (6 ) $ (23 ) Forward-currency contracts $ 11 $ (9 ) $ (5 ) Derivatives designated as net investment hedges Cross-currency rate swaps $ 383 $ (384 ) $ (87 ) (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 2018 2017 2016 Derivatives designated as cash flow hedges Interest rate swaps Interest expense, net $ (19 ) $ (31 ) $ (21 ) Forward-currency contracts Cost of sales $ (1 ) $ (3 ) $ — Location of Gain or (Loss) Recognized in Earnings Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) 2018 2017 2016 Derivatives designated as net investment hedges Cross-currency rate swaps Interest expense, net $ 60 $ — $ — Fair Value as of 2018 2017 Balance Sheet Location Assets: Derivatives designated as cash flow hedges Foreign currency $ 7 $ 1 Prepaids and other current assets Derivatives designated as net investment hedges Foreign currency 58 — Other assets, net Total assets at fair value $ 65 $ 1 Liabilities: Derivatives designated as cash flow hedges Interest rate $ 72 $ 42 Other liabilities, net Foreign currency — 5 Other accrued liabilities Derivatives designated as net investment hedges Foreign currency 107 456 Other liabilities, net Total liabilities at fair value $ 179 $ 503 |
Partnership Preferred Units
Partnership Preferred Units | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Partnership Preferred Units | Partnership Preferred Units On December 12, 2014 we issued 68,530,939 Partnership preferred units to RBI. Under the terms of the partnership agreement, Partnership was required to make distributions to RBI on the Partnership preferred units in amounts equal to (i) preferred dividends declared and payable by RBI on the 68,530,939 Class A 9.0% cumulative compounding perpetual voting preferred shares issued by RBI (the “Preferred Shares”) and (ii) in the event RBI redeemed the Preferred Shares, the redemption amount of the Preferred Shares. Upon payment of a distribution to RBI to fund the redemption of the Preferred Shares, the Partnership preferred units remain outstanding, but provide no economic rights to RBI, other than a nominal dividend of $100 per year. The distribution provisions of the partnership agreement requiring Partnership to fund RBI's redemption of the Preferred Shares were accounted for as an in-substance redemption provision of the Partnership preferred units. The Partnership preferred units were classified as temporary equity as a result of Partnership's lack of control over this distribution provision. In 2014, Partnership adjusted the carrying value of the Partnership preferred units to reflect the Preferred Shares redemption price of $48.109657 per Preferred Share (the “redemption price”). On December 12, 2017 (the “Redemption Date”), RBI redeemed all of the issued and outstanding Preferred Shares for aggregate consideration of $3,116 million (the “Redemption Consideration”), including $54 million of accrued and unpaid Preferred Share dividends up to the Redemption Date. Partnership made a distribution to RBI in an equal amount under the terms of the partnership agreement described above. Partnership accounted for $54 million of this distribution as a preferred unit distribution, with the remainder accounted for as an in-substance redemption of the Partnership preferred units. The difference between (i) the Redemption Consideration and related transaction costs, net of the $54 million preferred unit distribution and (ii) the carrying amount of the Partnership preferred units on the Redemption Date is reflected as a $234 million increase in net income attributable to common unitholders and partner's capital. During 2018, RBI made a payment, which was funded by Partnership through a distribution, in connection with the settlement of certain provisions associated with the 2017 redemption of the Preferred Shares as a result of recently proposed Treasury regulations included within Other operating expense (income), net in our consolidated statements of operations. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Equity | Equity Pursuant to the terms of the partnership agreement, RBI, as the holder of Class A common units, is entitled to distributions from Partnership in an amount equal to the aggregate dividends payable by RBI to holders of RBI common shares, and the holders of Partnership exchangeable units are entitled to receive distributions from Partnership in an amount per unit equal to the dividend payable by RBI on each RBI common share. Additionally, if RBI proposes to redeem, repurchase or otherwise acquire any RBI common shares, the partnership agreement requires that Partnership, immediately prior to such redemption, repurchase or acquisition, make a distribution to RBI on the Class A common units in an amount sufficient for RBI to fund such redemption, repurchase or acquisition, as the case may be. Each holder of a Partnership exchangeable unit is entitled to vote in respect of matters on which holders of RBI common shares are entitled to vote through one special voting share of RBI. Since December 12, 2015, a holder of a Partnership exchangeable unit may require Partnership to exchange all or any portion of such holder’s Partnership exchangeable units for RBI common shares at a ratio of one common share for each Partnership exchangeable unit, subject to RBI’s right as the general partner of Partnership, in its sole discretion, to deliver a cash payment in lieu of RBI common shares. If RBI elects to make a cash payment in lieu of issuing common shares, the amount of the payment will be the weighted average trading price of the RBI common shares on the New York Stock Exchange for the 20 consecutive trading days ending on the last business day prior to the exchange date. During 2018 , Partnership exchanged 10,185,333 Partnership exchangeable units, pursuant to exchange notices received. In accordance with the terms of the partnership agreement, Partnership satisfied the exchange notices by repurchasing 10,000,000 Partnership exchangeable units for approximately $561 million in cash and exchanging 185,333 Partnership exchangeable units for the same number of newly issued RBI common shares. During 2017 , Partnership exchanged 9,286,480 Partnership exchangeable units, pursuant to exchange notices received. In accordance with the terms of the partnership agreement, Partnership satisfied the exchange notices by repurchasing 5,000,000 Partnership exchangeable units for approximately $330 million in cash and exchanging 4,286,480 Partnership exchangeable units for the same number of newly issued RBI common shares. During 2016 , Partnership exchanged 6,744,244 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 exchanges of Partnership exchangeable units were recorded as increases to the Class A common units balance within partner’s capital in our consolidated balance sheets 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 partner’s capital of our consolidated balance sheets in an amount equal to the cash paid by Partnership 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 was cancelled concurrently with the exchange. Accumulated Other Comprehensive Income (Loss) The following table displays the change in the components of AOCI (in millions): Derivatives Pensions Foreign Accumulated Balances at December 31, 2015 $ 637 $ (24 ) $ (2,080 ) $ (1,467 ) Foreign currency translation adjustment — — 223 223 Net change in fair value of derivatives, net of tax (119 ) — — (119 ) Amounts reclassified to earnings of cash flow hedges, net of tax 16 — — 16 Pension and post-retirement benefit plans, net of tax — (8 ) — (8 ) Balances at December 31, 2016 $ 534 $ (32 ) $ (1,857 ) $ (1,355 ) Foreign currency translation adjustment — — 824 824 Net change in fair value of derivatives, net of tax (382 ) — — (382 ) Amounts reclassified to earnings of cash flow hedges, net of tax 25 — — 25 Pension and post-retirement benefit plans, net of tax — 4 — 4 Balances at December 31, 2017 $ 177 $ (28 ) $ (1,033 ) $ (884 ) Foreign currency translation adjustment — — (831 ) (831 ) Net change in fair value of derivatives, net of tax 263 — — 263 Amounts reclassified to earnings of cash flow hedges, net of tax 14 — — 14 Pension and post-retirement benefit plans, net of tax — 1 — 1 Balances at December 31, 2018 $ 454 $ (27 ) $ (1,864 ) $ (1,437 ) |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | Share-based Compensation Share-based compensation expense associated with the participation of Partnership and its subsidiaries in RBI’s share-based compensation plans is recognized in Partnership’s financial statements. On January 30, 2015, RBI’s board of directors approved: (i) adoption of the Restaurant Brands International Inc. 2014 Omnibus Incentive Plan, currently the Amended and Restated 2014 Omnibus Incentive Plan, (the “Omnibus Plan”), to provide for the grant of awards to employees, directors, consultants and other persons who provide services to RBI and its subsidiaries; (ii) assumption and amendment of various legacy plans of BK, and assumption of the obligation for all BK stock options and restricted stock units (“RSUs”) outstanding; and (iii) assumption and amendment of various legacy plans of TH, and assumption of the obligation for each vested and unvested TH stock option issued with tandem stock appreciation rights (“SARs”) that was not surrendered in connection with the Tim Hortons transaction on the same terms and conditions of the original awards, as adjusted. No new awards may be granted under these legacy BK plans or legacy TH plans. RBI is currently issuing awards under the Omnibus Plan and the number of shares available for issuance under such plan as of December 31, 2018 was 16,945,969 . The Omnibus Plan permits the grant of several types of awards with respect to RBI common shares, including stock options, time-vested RSUs, and performance-based RSUs, which may include RBI and/or individual performance based-vesting conditions. Under the terms of the Omnibus Plan, RSUs are entitled to dividend equivalents, unless otherwise noted. Dividends are not distributed unless the awards vest. Upon vesting, the amount of the dividend, which is distributed in additional RSUs, except in the case of RSUs awarded to non-management members of RBI's board of directors, is equal to the equivalent of the aggregate dividends declared on common shares during the period from the date of grant of the award compounded until the date the shares underlying the award are delivered. Stock option awards are granted with an exercise price or market value equal to the closing price of RBI's common shares on the trading day preceding the date of grant. RBI satisfies stock option exercises through the issuance of authorized but previously unissued common shares. New stock option grants generally cliff vest 5 years from the original grant date, provided the employee is continuously employed by RBI or one of our subsidiaries, and the stock options expire 10 years following the grant date. Additionally, if RBI terminates the employment of a stock option holder without cause prior to the vesting date, or if the employee retires or becomes disabled, the employee will become vested in the number of stock options as if the stock options vested 20% on each anniversary of the grant date. If the employee dies, the employee will become vested in the number of stock options as if the stock options vested 20% on the first anniversary of the grant date, 40% on the second anniversary of the grant date and 100% on the third anniversary of the grant date. If an employee is terminated with cause or resigns before vesting, all stock options are forfeited. If there is an event such as a return of capital or dividend that is determined to be dilutive, the exercise price of the awards will be adjusted accordingly. Share-based compensation expense consists of the following for the periods presented (in millions): 2018 2017 2016 Stock options, stock options with tandem SARs and RSUs (a) $ 48 $ 48 $ 35 Accelerated vesting of Popeyes stock options (b) — 12 — Total share-based compensation expense (c) $ 48 $ 60 $ 35 (a) Includes $2 million , $5 million , and $1 million due to modification of awards in 2018 , 2017 and 2016 , respectively. (b) Represents expense attributed to the post-combination service associated with the accelerated vesting of stock options in connection with the Popeyes Acquisition. (c) Generally classified as selling, general and administrative expenses in the consolidated statements of operations. As of December 31, 2018 , total unrecognized compensation cost related to share-based compensation arrangements was $126 million and is expected to be recognized over a weighted-average period of approximately 3.3 years . The following assumptions were used in the Black-Scholes option-pricing model to determine the fair value of stock option awards at the grant date: 2018 2017 2016 Risk-free interest rate 2.13% 1.23% - 1.25% 0.85% Expected term (in years) 6.39 6.74 6.74 Expected volatility 25.2% 24.5% 26.6% Expected dividend yield 3.08% 1.37% 1.81% The risk-free interest rate was based on the U.S. Treasury or Canadian Sovereign bond yield with a remaining term equal to the expected option life assumed at the date of grant. The expected term was calculated based on the analysis of a three to five -year vesting period coupled with our expectations of exercise activity. Expected volatility was based on the historical equity volatility of RBI and a review of the equity volatilities of publicly-traded guideline companies. The expected dividend yield is based on the annual dividend yield at the time of grant. The following is a summary of stock option activity under our plans for the year ended December 31, 2018 : Total Number of Weighted Aggregate Weighted Outstanding at January 1, 2018 20,071 $ 25.15 Granted 1,548 $ 58.19 Exercised (7,268 ) $ 8.37 Forfeited (748 ) $ 48.26 Outstanding at December 31, 2018 13,603 $ 36.41 $ 231,988 6.2 Exercisable at December 31, 2018 3,118 $ 16.32 $ 112,215 3.8 Vested or expected to vest at December 31, 2018 12,479 $ 35.75 $ 220,320 6.1 (a) The intrinsic value represents the amount by which the fair value of our stock exceeds the option exercise price at December 31, 2018 . The weighted-average grant date fair value per stock option granted was $10.82 , $12.57 , and $7.53 during 2018 , 2017 and 2016 , respectively. The total intrinsic value of stock options exercised was $371 million during 2018 , $288 million during 2017 , and $47 million during 2016 . The fair value of the time-vested RSUs and performance-based RSUs is based on the closing price of RBI’s common shares on the trading day preceding the date of grant. New grants generally cliff vest five years from the original grant date. RBI has awarded a limited number of performance-based RSUs that proportionally vest over a four year period. Time-vested RSUs and performance-based RSUs are expensed over the vesting period, based upon the probability that the performance target will be met. RBI grants fully vested RSUs, with dividend equivalent rights that accrue in cash, to non-employee members of RBI's board of directors in lieu of a cash retainer and committee fees. All such RSUs will settle and common shares of RBI will be issued upon termination of service by the board member. The time-vested RSUs generally cliff vest five years from December 31 st of the year preceding the grant date and performance-based RSUs generally cliff vest five years from the grant date (in each case, the “Anniversary Date”). If the employee is terminated for any reason within the first two years of the Anniversary Date, 100% of the time-vested RSUs granted will be forfeited. If RBI terminates the employment of a time-vested RSU holder without cause two years after the Anniversary Date, or if the employee retires, the employee will become vested in the number of time-vested RSUs as if the time-vested RSUs vested 20% for each year after the Anniversary Date. If the employee is terminated for any reason within the first three years of the Anniversary Date, 100% of the performance-based RSUs granted will be forfeited. If RBI terminates the employment of a performance-based RSU holder without cause between three and five years after the Anniversary Date, or if the employee retires, the employee will become vested in 50% of the performance-based RSUs on the fourth anniversary date. An alternate ratable vesting schedule applies to the extent the participant ends employment by reason of death or disability. The following is a summary of time-vested RSUs and performance-based RSUs activity for the year ended December 31, 2018 : Time-vested RSUs Performance-based RSUs Total Number of Weighted Average Total Number of Weighted Average Outstanding at January 1, 2018 1,293 $ 38.64 1,590 $ 36.31 Granted 329 $ 57.68 920 $ 58.49 Vested and settled (43 ) $ 41.62 (81 ) $ 34.68 Dividend equivalents granted 31 $ — 58 $ — Forfeited (110 ) $ 51.05 (80 ) $ 34.65 Outstanding at December 31, 2018 1,500 $ 41.88 2,407 $ 45.25 The total intrinsic value, determined as of the date of vesting, of RSUs vested and converted to common shares of RBI during 2018 , 2017 and 2016 was $7 million , $6 million and $3 million , respectively. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Revenue from Contracts with Customers We transitioned to ASC 606 from the Previous Standards on January 1, 2018 using the modified retrospective transition method. Our Financial Statements reflect the application of ASC 606 guidance beginning in 2018, while our consolidated financial statements for prior periods were prepared under the guidance of the Previous Standards. The $250 million cumulative effect of our transition to ASC 606 is reflected as an adjustment to January 1, 2018 Partners' capital. Our transition to ASC 606 represents a change in accounting principle. ASC 606 eliminates industry-specific guidance and provides a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of ASC 606 is that a reporting entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the reporting entity expects to be entitled for the exchange of those goods or services. 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 classify these contract liabilities as Other liabilities, net in our consolidated balance sheets. The following table reflects the change in contract liabilities by segment and on a consolidated basis between the date of adoption (January 1, 2018) and December 31, 2018 (in millions): Contract Liabilities TH BK PLK Consolidated Balance at January 1, 2018 $ 47 $ 402 $ 6 $ 455 Revenue recognized that was included in the contract liability balance at the beginning of the year (6 ) (43 ) — (49 ) Increase, excluding amounts recognized as revenue during the period 24 58 13 95 Impact of foreign currency translation (3 ) (12 ) — (15 ) Balance at December 31, 2018 $ 62 $ 405 $ 19 $ 486 The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) by segment and on a consolidated basis as of December 31, 2018 (in millions): Contract liabilities expected to be recognized in TH BK PLK Consolidated 2019 $ 7 $ 30 $ 1 $ 38 2020 7 29 1 37 2021 7 28 1 36 2022 6 28 1 35 2023 6 27 1 34 Thereafter 29 263 14 306 Total $ 62 $ 405 $ 19 $ 486 Disaggregation of Total Revenues Total revenues consist of the following (in millions): 2018 2017 2016 Sales $ 2,355 $ 2,390 $ 2,205 Royalties 2,165 1,215 993 Property revenues 744 765 753 Franchise fees and other revenue 93 206 195 Total revenues $ 5,357 $ 4,576 $ 4,146 Financial Statement Impact of Transition to ASC 606 As noted above, we transitioned to ASC 606 using the modified retrospective method on January 1, 2018. The cumulative effect of this transition to applicable contracts with customers that were not completed as of January 1, 2018 was recorded as an adjustment to Partners’ capital as of this date. As a result of applying the modified retrospective method to transition to ASC 606, the following adjustments were made to the consolidated balance sheet as of January 1, 2018 (in millions): As Reported Total Adjusted December 31, 2017 Adjustments January 1, 2018 ASSETS Current assets: Cash and cash equivalents $ 1,097 $ — $ 1,097 Accounts and notes receivable, net 489 — 489 Inventories, net 78 — 78 Prepaids and other current assets 86 (23 ) 63 Total current assets 1,750 (23 ) 1,727 Property and equipment, net 2,133 — 2,133 Intangible assets, net 11,062 — 11,062 Goodwill 5,782 — 5,782 Net investment in property leased to franchisees 71 — 71 Other assets, net 426 107 533 Total assets $ 21,224 $ 84 $ 21,308 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 496 $ — $ 496 Other accrued liabilities 866 9 875 Gift card liability 215 (43 ) 172 Current portion of long term debt and capital leases 78 — 78 Total current liabilities 1,655 (34 ) 1,621 Term debt, net of current portion 11,801 — 11,801 Capital leases, net of current portion 244 — 244 Other liabilities, net 1,455 426 1,881 Deferred income taxes, net 1,508 (58 ) 1,450 Total liabilities 16,663 334 16,997 Partners' capital Class A common units 4,168 (132 ) 4,036 Partnership exchangeable units 1,276 (118 ) 1,158 Accumulated other comprehensive income (loss) (884 ) — (884 ) Total Partners' capital 4,560 (250 ) 4,310 Noncontrolling interests 1 — 1 Total equity 4,561 (250 ) 4,311 Total liabilities and equity $ 21,224 $ 84 $ 21,308 Franchise Fees The cumulative adjustment for franchise fees consists of the following: • A $321 million increase in Other liabilities, net for the cumulative reversal and deferral of previously recognized franchise fees related to franchise agreements in effect at January 1, 2018 that were entered into subsequent to the acquisitions of BK in 2010, TH in 2014 and PLK in 2017 (net of the cumulative revenue attributable for the period through January 1, 2018), with a corresponding decrease to Partners’ capital. • A $107 million increase in Other assets, net for the previously unrecognized value of equity interests received in connection with MFDA arrangements. This increase resulted in a corresponding increase in Other liabilities, net of $105 million and an increase to Partners’ capital of $2 million for the cumulative effect of revenue attributable for the period between the inception of each such arrangement and January 1, 2018. • A $67 million decrease to Deferred income taxes, net for the tax effects of the two adjustments noted above, with a corresponding increase to Partners’ capital. Advertising Funds The cumulative adjustment for advertising funds reflects the recognition of cumulative advertising expenditures temporarily in excess of cumulative advertising fund contributions as of January 1, 2018, which is reflected as a $23 million decrease in Prepaids and other current assets and a $23 million decrease to Partners’ capital. Gift Card Breakage The adjustment for gift card breakage reflects the impact of the change to recognize gift card breakage proportionately as gift card balances are used rather than when it is deemed remote that the unused gift card balance would be redeemed, as done under the Previous Standards. The cumulative effect of applying ASC 606 accounting to gift card balances outstanding at January 1, 2018 is reflected as a $43 million decrease in Gift card liability, a $9 million increase in Other accrued liabilities, a $9 million increase in Deferred income taxes, net and a $25 million increase in January 1, 2018 Partners’ capital. Comparison to Amounts if Previous Standards Had Been in Effect The following tables reflect the impact of adoption of ASC 606 on our consolidated statements of operations for 2018 and cash flows from operating activities for 2018 and our consolidated balance sheet as of December 31, 2018 and the amounts as if the Previous Standards were in effect (“Amounts Under Previous Standards”) (in millions): Consolidated Statement of Operations for 2018 As Reported Total Adjustments Amounts Under Previous Standards Revenues: Sales $ 2,355 $ — $ 2,355 Franchise and property revenues 3,002 (750 ) 2,252 Total revenues 5,357 (750 ) 4,607 Operating costs and expenses: Cost of sales 1,818 — 1,818 Franchise and property expenses 422 — 422 Selling, general and administrative expenses 1,214 (785 ) 429 (Income) loss from equity method investments (22 ) (6 ) (28 ) Other operating expenses (income), net 8 (1 ) 7 Total operating costs and expenses 3,440 (792 ) 2,648 Income from operations 1,917 42 1,959 Interest expense, net 535 1 536 Income before income taxes 1,382 41 1,423 Income tax expense 238 9 247 Net income 1,144 32 1,176 Net income attributable to noncontrolling interests 1 — 1 Net income attributable to common unitholders $ 1,143 $ 32 $ 1,175 Earnings per unit - basic and diluted: Class A common units $ 3.03 $ 3.12 Partnership exchangeable units $ 2.46 $ 2.53 The following summarizes the adjustments to our condensed consolidated statement of operations for 2018 to reflect our consolidated statement of operations as if we had continued to recognize revenue under the Previous Standards: • As described above, our transition to ASC 606 resulted in the deferral of franchise fees, recognition of franchise fees in connection with MFDAs where we received an equity interest in the equity method investee, and a change in the timing of recognizing gift card breakage income. The adjustments for 2018 to reflect the recognition of this revenue as if the Previous Standards were in effect consists of a $43 million increase in Franchise and property revenue and a $11 million increase in Income tax expense. • The adjustments to (income) loss from equity method investments for 2018 reflect the amount of losses from equity method investments we would not have recognized if the Previous Standards were in effect. There is no tax impact related to these adjustments. • As described above, under the Previous Standards our statement of operations did not reflect gross presentations of advertising fund contributions and expenses. Our transition to ASC 606 requires the presentation of advertising fund contributions and advertising fund expenses on a gross basis. The adjustments for 2018 reflect advertising fund contributions and expenses as if the Previous Standards were in effect consist of a $793 million decrease in Franchise and property revenues, a $785 million decrease in Selling, general and administrative expenses, a $1 million decrease in Other operating expenses (income), net, a $1 million increase in Interest expense, net, and a $2 million decrease in Income tax expense. Consolidated Statement of Cash Flows for 2018 The transition to ASC 606 had no net impact on our cash provided by operating activities and no impact on our cash used for investing activities or cash used for financing activities during 2018 . Total Amounts Under As Reported Adjustments Previous Standards Cash flows from operating activities: Net income $ 1,144 $ 32 $ 1,176 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 180 — 180 Amortization of deferred financing costs and debt issuance discount 29 — 29 (Income) loss from equity method investments (22 ) (6 ) (28 ) Loss (gain) on remeasurement of foreign denominated transactions (33 ) — (33 ) Net (gains) losses on derivatives (40 ) — (40 ) Share-based compensation expense 48 — 48 Deferred income taxes 29 9 38 Other 5 — 5 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable 19 — 19 Inventories and prepaids and other current assets (7 ) 6 (1 ) Accounts and drafts payable 41 7 48 Other accrued liabilities and gift card liability (219 ) (6 ) (225 ) Tenant inducements paid to franchisees (52 ) — (52 ) Other long-term assets and liabilities 43 (42 ) 1 Net cash provided by operating activities $ 1,165 $ — $ 1,165 Consolidated Balance Sheet as of December 31, 2018 As Reported Total Amounts Under December 31, 2018 Adjustments Previous Standards ASSETS Current assets: Cash and cash equivalents $ 913 $ — $ 913 Accounts and notes receivable, net 452 — 452 Inventories, net 75 — 75 Prepaids and other current assets 60 17 77 Total current assets 1,500 17 1,517 Property and equipment, net 1,996 — 1,996 Intangible assets, net 10,463 — 10,463 Goodwill 5,486 — 5,486 Net investment in property leased to franchisees 54 — 54 Other assets, net 642 (101 ) 541 Total assets $ 20,141 $ (84 ) $ 20,057 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 513 $ 7 $ 520 Other accrued liabilities 637 (15 ) 622 Gift card liability 167 42 209 Current portion of long term debt and capital leases 91 — 91 Total current liabilities 1,408 34 1,442 Term debt, net of current portion 11,823 — 11,823 Capital leases, net of current portion 226 — 226 Other liabilities, net 1,547 (468 ) 1,079 Deferred income taxes, net 1,519 67 1,586 Total liabilities 16,523 (367 ) 16,156 Partners' capital Class A common units 4,323 155 4,478 Partnership exchangeable units 730 128 858 Accumulated other comprehensive income (loss) (1,437 ) — (1,437 ) Total Partners' capital 3,616 283 3,899 Noncontrolling interests 2 — 2 Total equity 3,618 283 3,901 Total liabilities and equity $ 20,141 $ (84 ) $ 20,057 |
Other Operating Expenses (Incom
Other Operating Expenses (Income), net | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Other Operating Expenses (Income), net | Other Operating Expenses (Income), net Other operating expenses (income), net, consist of the following (in millions): 2018 2017 2016 Net losses on disposal of assets, restaurant closures and refranchisings $ 19 $ 29 $ 18 Litigation settlements and reserves, net 11 2 1 Net losses (gains) on foreign exchange (33 ) 77 (20 ) Other, net 11 1 — Other operating expenses (income), net $ 8 $ 109 $ (1 ) 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. Litigation settlements and reserves, net primarily reflects accruals and payments made and proceeds received in connection with litigation matters. Net losses (gains) on foreign exchange is primarily related to revaluation of foreign denominated assets and liabilities. Other, net during 2018 is comprised primarily of a payment in connection with the settlement of certain provisions associated with the 2017 redemption of our preferred shares as a result of recently proposed Treasury regulations. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Letters of Credit As of December 31, 2018 , we had $20 million in irrevocable standby letters of credit outstanding, which were issued primarily to certain insurance carriers to guarantee payments of deductibles for various insurance programs, such as health and commercial liability insurance. These letters of credit outstanding are secured by the collateral under our Revolving Credit Facility. As of December 31, 2018 , no amounts had been drawn on any of these irrevocable standby letters of credit. Purchase Commitments We have arrangements for information technology and telecommunication services with an aggregate contractual obligation of $41 million over the next three years , some of which have early termination fees. We also enter into commitments to purchase advertising. As of December 31, 2018 , these commitments totaled $380 million and run through 2024 . 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 June 19, 2017, a claim was filed in the Ontario Superior Court of Justice against The TDL Group Corp, a subsidiary of RBI, RBI, the Tim Hortons Ad Fund and certain individual defendants. The plaintiff, a franchisee of two Tim Hortons restaurants, seeks to certify a class of all persons who have carried on business as a Tim Hortons franchisee in Canada at any time after December 15, 2014. The claim alleges various causes of action against the defendants in relation to the purported misuse of amounts paid by members of the proposed class to the Tim Hortons Canada advertising fund (the “Ad Fund”). The plaintiff seeks to have the Ad Fund franchisee contributions held in trust for the benefit of members of the proposed class, an accounting of the Ad Fund, as well as damages for breach of contract, breach of trust, breach of the statutory duty of fair dealing, and breach of fiduciary duties. On October 6, 2017, a claim was filed in the Ontario Superior Court of Justice against the same defendants as named above. The plaintiffs, two franchisees of Tim Hortons restaurants, seek to certify a class of all persons who have carried on business as a Tim Hortons franchisee at any time after March 8, 2017. The claim alleges various causes of action against the defendants in relation to the purported adverse treatment of member and potential member franchisees of the Great White North Franchisee Association. The plaintiffs seek damages for, among other things, breach of contract, breach of the statutory duty of fair dealing, and breach of the franchisees’ statutory right of association. In connection with these two lawsuits, the court granted our motion to strike the individuals named in the lawsuits, RBI and the Tim Hortons Ad Fund on October 22, 2018. The only defendant that remains in the lawsuits is The TDL Group Corp. On July 24, 2018, a complaint for declaratory relief was filed against Tim Hortons USA, Inc. (“THUSA”) and Restaurant Brands International Limited Partnership in the Circuit Court of the 11th Judicial Circuit in Miami-Dade County, Florida by Great White North Franchisee Association - USA, Inc., on behalf of its members. The complaint alleges certain breaches of the franchise agreements between THUSA and its franchisees and the implied covenant of good faith and fair dealing, as well as violations of the U.S. franchise rules and the Florida Deceptive and Unfair Trade Practices Act. On October 5, 2018, a class action complaint was filed against Burger King Worldwide, Inc. (“BKW”) and Burger King Corporation (“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, individually and on behalf of all others similarly situated. These complaints 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. While we believe the claims are without merit, we are unable to predict the ultimate outcome of these cases or estimate the range of possible loss, if any. |
Segment Reporting and Geographi
Segment Reporting and Geographical Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting and Geographical Information | Segment Reporting and Geographical Information As stated in Note 1, Description of Business and Organization , we manage three 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. Our business generates revenue from the following sources: (i) franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchise restaurants and franchise fees paid by franchisees; (ii) property revenues from properties we lease or sublease to franchisees; and (iii) sales at restaurants owned 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. Each brand is managed by a brand president that reports directly to our Chief Executive Officer, who is our Chief Operating Decision Maker. Therefore, we have three operating segments: (1) TH, which includes all operations of our Tim Hortons brand, (2) BK, which includes all operations of our Burger King brand, and (3) PLK, which includes all operations of our Popeyes brand. Our three operating segments represent our reportable segments. As stated in Note 16, Revenue Recognition , we transitioned to ASC 606 on January 1, 2018 using the modified retrospective transition method. Our Financial Statements reflect the application of ASC 606 guidance beginning in 2018, while our Financial Statements for prior periods were prepared under the guidance of the Previous Standards. For comparability purposes, we have disclosed 2018 total revenues by operating segment under the Previous Standards as well as segment income with a reconciliation to net income under the Previous Standards. See Note 16, Revenue Recognition , for further details of the effects of this change in accounting principle on total revenues and net income. PLK revenues and segment income from the acquisition date of March 27, 2017 through December 31, 2017 are included in our consolidated statement of operations for 2017. The following tables present revenues, by segment and by country, depreciation and amortization, (income) loss from equity method investments, and capital expenditures by segment (in millions): 2018 As Reported 2018 Amounts Under Previous Standards 2017 2016 Revenues by operating segment: TH $ 3,292 $ 3,077 $ 3,155 $ 3,001 BK 1,651 1,251 1,219 1,145 PLK 414 279 202 — Total $ 5,357 $ 4,607 $ 4,576 $ 4,146 Revenues by country (a): Canada $ 2,984 $ 2,832 $ 2,672 United States 1,785 1,190 1,004 Other 588 554 470 Total $ 5,357 $ 4,576 $ 4,146 Depreciation and amortization: TH $ 108 $ 110 $ 108 BK 61 62 64 PLK 11 10 — Total $ 180 $ 182 $ 172 (Income) loss from equity method investments: TH $ (6 ) $ (8 ) $ (8 ) BK (16 ) (4 ) (12 ) Total $ (22 ) $ (12 ) $ (20 ) Capital expenditures: TH $ 59 $ 13 $ 12 BK 25 23 22 PLK 2 1 — Total $ 86 $ 37 $ 34 (a) Only Canada and the United States represented 10% or more of our total revenues in each period presented. Total assets by segment, and long-lived assets by segment and country are as follows (in millions): Assets Long-Lived Assets As of December 31, As of December 31, 2018 2017 2018 2017 By operating segment: TH $ 12,666 $ 13,733 $ 1,226 $ 1,351 BK 4,514 4,633 729 751 PLK 2,420 2,440 95 102 Unallocated 541 418 — — Total $ 20,141 $ 21,224 $ 2,050 $ 2,204 By country: Canada $ 945 $ 1,059 United States 1,098 1,138 Other 7 7 Total $ 2,050 $ 2,204 Long-lived assets include property and equipment, net, and net investment in property leased to franchisees. Only Canada and the United States represented 10% or more of our total long-lived assets as of December 31, 2018 and December 31, 2017 . 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 expense (benefit), and depreciation and amortization, adjusted to exclude the non-cash impact of share-based compensation and non-cash incentive compensation expense and (income) loss from equity method investments, net of cash distributions received from equity method investments, as well as other operating expenses (income), net. Other specifically identified costs associated with non-recurring projects are also excluded from Adjusted EBITDA, including fees and expenses associated with the Popeyes Acquisition (“PLK Transaction costs”), Corporate restructuring and tax advisory fees related to the interpretation and implementation of the Tax Act, including Treasury regulations proposed in late 2018, non-operational Office centralization and relocation costs in connection with the centralization and relocation of our Canadian and U.S. restaurant support centers to new offices in Toronto, Ontario, and Miami, Florida, respectively, and integration costs associated with the acquisition of Tim Hortons. Adjusted EBITDA is used by management to measure operating performance of the business, excluding these non-cash and other specifically identified items that management believes are not relevant to management’s assessment of operating performance or the performance of an acquired business. A reconciliation of segment income to net income (loss) consists of the following (in millions): 2018 As Reported 2018 Amounts Under Previous Standards 2017 2016 Segment income: TH $ 1,127 $ 1,128 $ 1,136 $ 1,072 BK 928 950 903 816 PLK 157 169 107 — Adjusted EBITDA 2,212 2,247 2,146 1,888 Share-based compensation and non-cash incentive compensation expense 55 55 55 42 PLK Transaction costs 10 10 62 — Corporate restructuring and tax advisory fees 25 25 2 — Office centralization and relocation costs 20 20 — — Integration costs — — — 16 Impact of equity method investments (a) (3 ) (9 ) 1 (8 ) Other operating expenses (income), net 8 7 109 (1 ) EBITDA 2,097 2,139 1,917 1,839 Depreciation and amortization 180 180 182 172 Income from operations 1,917 1,959 1,735 1,667 Interest expense, net 535 536 512 467 Loss on early extinguishment of debt — — 122 — Income tax expense (benefit) 238 247 (134 ) 244 Net income (loss) $ 1,144 $ 1,176 $ 1,235 $ 956 (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. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) Our Financial Statements reflect the application of ASC 606 guidance beginning in 2018, while our consolidated financial statements for prior periods were prepared under the guidance of the Previous Standards. As such, 2018 results are not comparable to 2017 results. Summarized unaudited quarterly financial data (in millions, except per share data) was as follows: Quarters Ended March 31, June 30, September 30, December 31, 2018 2017 2018 2017 2018 2017 2018 2017 Total revenues $ 1,254 $ 1,001 $ 1,343 $ 1,132 $ 1,375 $ 1,209 $ 1,385 $ 1,234 Income from operations $ 421 $ 336 $ 503 $ 415 $ 477 $ 479 $ 516 $ 505 Net income $ 279 $ 167 $ 314 $ 243 $ 250 $ 247 $ 301 $ 578 Basic and diluted earnings per unit Class A common units $ 0.73 $ 0.25 $ 0.83 $ 0.44 $ 0.66 $ 0.45 $ 0.81 $ 1.96 Partnership exchangeable units $ 0.60 $ 0.21 $ 0.67 $ 0.38 $ 0.53 $ 0.39 $ 0.65 $ 1.64 |
Supplemental Financial Informat
Supplemental Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information On May 22, 2015, 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 that provides for obligations under the Credit Facilities. On May 22, 2015 the Issuers entered into the 2015 Senior Notes Indenture with respect to the 2015 Senior Notes. On October 8, 2014 the Issuers entered into the 2014 Senior Notes Indenture with respect to the 2014 Senior Notes. The agreement governing our Credit Facilities, the 2015 Senior Notes Indenture and the 2014 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. RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions) As of December 31, 2018 Consolidated RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 913 $ — $ — $ 913 Accounts and notes receivable, net 452 — — 452 Inventories, net 75 — — 75 Prepaids and other current assets 60 — — 60 Total current assets 1,500 — — 1,500 Property and equipment, net 1,996 — — 1,996 Intangible assets, net 10,463 — — 10,463 Goodwill 5,486 — — 5,486 Net investment in property leased to franchisees 54 — — 54 Intercompany receivable — 207 (207 ) — Investment in subsidiaries — 3,618 (3,618 ) — Other assets, net 642 — — 642 Total assets $ 20,141 $ 3,825 $ (3,825 ) $ 20,141 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 513 $ — $ — $ 513 Other accrued liabilities 430 207 — 637 Gift card liability 167 — — 167 Current portion of long term debt and capital leases 91 — — 91 Total current liabilities 1,201 207 — 1,408 Term debt, net of current portion 11,823 — — 11,823 Capital leases, net of current portion 226 — — 226 Other liabilities, net 1,547 — — 1,547 Payables to affiliates 207 — (207 ) — Deferred income taxes, net 1,519 — — 1,519 Total liabilities 16,523 207 (207 ) 16,523 Partners’ capital: Class A common units — 4,323 — 4,323 Partnership exchangeable units — 730 — 730 Common shares 3,071 — (3,071 ) — Retained earnings 1,982 — (1,982 ) — Accumulated other comprehensive income (loss) (1,437 ) (1,437 ) 1,437 (1,437 ) Total Partners’ capital/shareholders’ equity 3,616 3,616 (3,616 ) 3,616 Noncontrolling interests 2 2 (2 ) 2 Total equity 3,618 3,618 (3,618 ) 3,618 Total liabilities and equity $ 20,141 $ 3,825 $ (3,825 ) $ 20,141 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions) As of December 31, 2017 Consolidated RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,097 $ — $ — $ 1,097 Accounts and notes receivable, net 489 — — 489 Inventories, net 78 — — 78 Prepaids and other current assets 86 — — 86 Total current assets 1,750 — — 1,750 Property and equipment, net 2,133 — — 2,133 Intangible assets, net 11,062 — — 11,062 Goodwill 5,782 — — 5,782 Net investment in property leased to franchisees 71 — — 71 Intercompany receivable — 97 (97 ) — Investment in subsidiaries — 4,561 (4,561 ) — Other assets, net 426 — — 426 Total assets $ 21,224 $ 4,658 $ (4,658 ) $ 21,224 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 496 $ — $ — $ 496 Other accrued liabilities 769 97 — 866 Gift card liability 215 — — 215 Current portion of long term debt and capital leases 78 — — 78 Total current liabilities 1,558 97 — 1,655 Term debt, net of current portion 11,801 — — 11,801 Capital leases, net of current portion 244 — — 244 Other liabilities, net 1,455 — — 1,455 Payables to affiliates 97 — (97 ) — Deferred income taxes, net 1,508 — — 1,508 Total liabilities 16,663 97 (97 ) 16,663 Partners’ capital: Class A common units — 4,168 — 4,168 Partnership exchangeable units — 1,276 — 1,276 Common shares 3,516 — (3,516 ) — Retained earnings 1,928 — (1,928 ) — Accumulated other comprehensive income (loss) (884 ) (884 ) 884 (884 ) Total Partners’ capital/shareholders’ equity 4,560 4,560 (4,560 ) 4,560 Noncontrolling interests 1 1 (1 ) 1 Total equity 4,561 4,561 (4,561 ) 4,561 Total liabilities and equity $ 21,224 $ 4,658 $ (4,658 ) $ 21,224 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions) 2018 Consolidated RBILP Eliminations Consolidated Revenues: Sales $ 2,355 $ — $ — $ 2,355 Franchise and property revenues 3,002 — — 3,002 Total revenues 5,357 — — 5,357 Operating costs and expenses: Cost of sales 1,818 — — 1,818 Franchise and property expenses 422 — — 422 Selling, general and administrative expenses 1,214 — — 1,214 (Income) loss from equity method investments (22 ) — — (22 ) Other operating expenses (income), net 8 — — 8 Total operating costs and expenses 3,440 — — 3,440 Income from operations 1,917 — — 1,917 Interest expense, net 535 — — 535 Income before income taxes 1,382 — — 1,382 Income tax (benefit) expense 238 — — 238 Net income 1,144 — — 1,144 Equity in earnings of consolidated subsidiaries — 1,144 (1,144 ) — Net income (loss) 1,144 1,144 (1,144 ) 1,144 Net income (loss) attributable to noncontrolling interests 1 1 (1 ) 1 Net income (loss) attributable to common unitholders / shareholders $ 1,143 $ 1,143 $ (1,143 ) $ 1,143 Total comprehensive income (loss) $ 591 $ 591 $ (591 ) $ 591 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions) 2017 Consolidated RBILP Eliminations Consolidated Revenues: Sales $ 2,390 $ — $ — $ 2,390 Franchise and property revenues 2,186 — — 2,186 Total revenues 4,576 — — 4,576 Operating costs and expenses: Cost of sales 1,850 — — 1,850 Franchise and property expenses 478 — — 478 Selling, general and administrative expenses 416 — — 416 (Income) loss from equity method investments (12 ) — — (12 ) Other operating expenses (income), net 109 — — 109 Total operating costs and expenses 2,841 — — 2,841 Income from operations 1,735 — — 1,735 Interest expense, net 512 — — 512 Loss on early extinguishment of debt 122 — — 122 Income before income taxes 1,101 — — 1,101 Income tax expense (134 ) — — (134 ) Net income 1,235 — — 1,235 Equity in earnings of consolidated subsidiaries — 1,235 (1,235 ) — Net income (loss) 1,235 1,235 (1,235 ) 1,235 Net income (loss) attributable to noncontrolling interests 2 2 (2 ) 2 Partnership preferred unit distributions — 256 — 256 Gain on redemption of Partnership preferred units — (234 ) — (234 ) Net income (loss) attributable to common unitholders / shareholders $ 1,233 $ 1,211 $ (1,233 ) $ 1,211 Total comprehensive income (loss) $ 1,706 $ 1,706 $ (1,706 ) $ 1,706 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions) 2016 Consolidated RBILP Eliminations Consolidated Revenues: Sales $ 2,205 $ — $ — $ 2,205 Franchise and property revenues 1,941 — — 1,941 Total revenues 4,146 — — 4,146 Operating costs and expenses: Cost of sales 1,727 — — 1,727 Franchise and property expenses 454 — — 454 Selling, general and administrative expenses 319 — — 319 (Income) loss from equity method investments (20 ) — — (20 ) Other operating expenses (income), net (1 ) — — (1 ) Total operating costs and expenses 2,479 — — 2,479 Income from operations 1,667 — — 1,667 Interest expense, net 467 — — 467 Income before income taxes 1,200 — — 1,200 Income tax expense 244 — — 244 Net income 956 — — 956 Equity in earnings of consolidated subsidiaries — 956 (956 ) — Net income (loss) 956 956 (956 ) 956 Net income (loss) attributable to noncontrolling interests 3 3 (3 ) 3 Partnership preferred unit distributions — 270 — 270 Net income (loss) attributable to common unitholders / shareholders $ 953 $ 683 $ (953 ) $ 683 Total comprehensive income (loss) $ 1,068 $ 1,068 $ (1,068 ) $ 1,068 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions) 2018 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 1,144 $ 1,144 $ (1,144 ) $ 1,144 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (1,144 ) 1,144 — Depreciation and amortization 180 — — 180 Amortization of deferred financing costs and debt issuance discount 29 — — 29 (Income) loss from equity method investments (22 ) — — (22 ) Loss (gain) on remeasurement of foreign denominated transactions (33 ) — — (33 ) Net (gains) losses on derivatives (40 ) — — (40 ) Share-based compensation expense 48 — — 48 Deferred income taxes 29 — — 29 Other 5 — — 5 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable 19 — — 19 Inventories and prepaids and other current assets (7 ) — — (7 ) Accounts and drafts payable 41 — — 41 Other accrued liabilities and gift card liability (219 ) — — (219 ) Tenant inducements paid to franchisees (52 ) — — (52 ) Other long-term assets and liabilities 43 — — 43 Net cash provided by operating activities 1,165 — — 1,165 Cash flows from investing activities: Payments for property and equipment (86 ) — — (86 ) Proceeds from disposal of assets, restaurant closures and refranchisings 8 — — 8 Return of investment on direct financing leases 16 — — 16 Settlement/sale of derivatives, net 17 — — 17 Other investing activities, net 1 — — 1 Net cash provided by (used for) investing activities (44 ) — — (44 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 75 — — 75 Repayments of long-term debt and capital leases (74 ) — — (74 ) Distributions to RBI for payments in connection with redemption of Preferred Shares — (60 ) — (60 ) Payment of financing costs (3 ) — — (3 ) Distributions paid on common, preferred and Partnership exchangeable units — (728 ) — (728 ) Repurchase of Partnership exchangeable units — (561 ) — (561 ) Capital contribution from RBI Inc. 61 — — 61 Distributions from subsidiaries (1,349 ) 1,349 — — Other financing activities, net 5 — — 5 Net cash provided by (used for) financing activities (1,285 ) — — (1,285 ) Effect of exchange rates on cash and cash equivalents (20 ) — — (20 ) Increase (decrease) in cash and cash equivalents (184 ) — — (184 ) Cash and cash equivalents at beginning of period 1,097 — — 1,097 Cash and cash equivalents at end of period $ 913 $ — $ — $ 913 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions) 2017 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 1,235 $ 1,235 $ (1,235 ) $ 1,235 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (1,235 ) 1,235 — Depreciation and amortization 182 — — 182 Premiums paid and non-cash loss on early extinguishment of debt 119 — — 119 Amortization of deferred financing costs and debt issuance discount 33 — — 33 (Income) loss from equity method investments (12 ) — — (12 ) Loss (gain) on remeasurement of foreign denominated transactions 77 — — 77 Net losses on derivatives 31 — — 31 Share-based compensation expense 48 — — 48 Deferred income taxes (742 ) — — (742 ) Other 18 — — 18 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (30 ) — — (30 ) Inventories and prepaids and other current assets 19 — — 19 Accounts and drafts payable 14 — — 14 Other accrued liabilities and gift card liability 360 — — 360 Tenant inducements paid to franchisees (20 ) — — (20 ) Other long-term assets and liabilities 99 — — 99 Net cash provided by operating activities 1,431 — — 1,431 Cash flows from investing activities: Payments for property and equipment (37 ) — — (37 ) Proceeds from disposal of assets, restaurant closures and refranchisings 26 — — 26 Net payment for purchase of Popeyes, net of cash acquired (1,636 ) — — (1,636 ) Return of investment on direct financing leases 16 — — 16 Settlement/sale of derivatives, net 772 — — 772 Other investing activities, net 1 — — 1 Net cash provided by (used for) investing activities (858 ) — — (858 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 5,850 — — 5,850 Repayments of long-term debt and capital leases (2,742 ) — — (2,742 ) Distributions to RBI for payments in connection with redemption of Preferred Shares — (3,006 ) — (3,006 ) Payment of financing costs (63 ) — — (63 ) Distributions paid on common, preferred and Partnership exchangeable units — (664 ) — (664 ) Repurchase of Partnership exchangeable units — (330 ) — (330 ) Capital contribution from RBI Inc. 29 — — 29 Distributions from subsidiaries (4,000 ) 4,000 — — Other financing activities, net (10 ) — — (10 ) Net cash provided by (used for) financing activities (936 ) — — (936 ) Effect of exchange rates on cash and cash equivalents 24 — — 24 Increase (decrease) in cash and cash equivalents (339 ) — — (339 ) Cash and cash equivalents at beginning of period 1,436 — — 1,436 Cash and cash equivalents at end of period $ 1,097 $ — $ — $ 1,097 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions) 2016 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 956 $ 956 $ (956 ) $ 956 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (956 ) 956 — Depreciation and amortization 172 — — 172 Amortization of deferred financing costs and debt issuance discount 39 — — 39 (Income) loss from equity method investments (20 ) — — (20 ) Loss (gain) on remeasurement of foreign denominated transactions (20 ) — — (20 ) Net losses on derivatives 21 — — 21 Share-based compensation expense 35 — — 35 Deferred income taxes 80 — — 80 Other 4 — — 4 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (16 ) — — (16 ) Inventories and prepaids and other current assets (10 ) — — (10 ) Accounts and drafts payable 16 — — 16 Other accrued liabilities and gift card liability (1 ) — — (1 ) Tenant inducements paid to franchisees (19 ) — — (19 ) Other long-term assets and liabilities (23 ) — — (23 ) Net cash provided by operating activities 1,214 — — 1,214 Cash flows from investing activities: Payments for property and equipment (34 ) — — (34 ) Proceeds from disposal of assets, restaurant closures and refranchisings 30 — — 30 Return of investment on direct financing leases 17 — — 17 Settlement/sale of derivatives, net 11 — — 11 Other investing activities, net 3 — — 3 Net cash provided by (used for) investing activities 27 — — 27 Cash flows from financing activities: Repayments of long-term debt and capital leases (70 ) — — (70 ) Distributions paid on common, preferred and Partnership exchangeable units — (538 ) — (538 ) Capital contribution from RBI Inc. 14 — — 14 Excess tax benefits from share-based compensation 8 — — 8 Distributions from subsidiaries (538 ) 538 — — Other financing activities, net (5 ) — — (5 ) Net cash provided by (used for) financing activities (591 ) — — (591 ) Effect of exchange rates on cash and cash equivalents (2 ) — — (2 ) Increase (decrease) in cash and cash equivalents 648 — — 648 Cash and cash equivalents at beginning of period 788 — — 788 Cash and cash equivalents at end of period $ 1,436 $ — $ — $ 1,436 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Dividends On January 4, 2019 , RBI paid a cash dividend of $0.45 per RBI common share to common shareholders of record on December 15, 2018 . 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 $0.45 per exchangeable unit to holders of record on December 15, 2018 . On January 22, 2019 , the RBI board of directors declared a cash dividend of $0.50 per RBI common share for the first quarter of 2019. The dividend will be paid on April 3, 2019 to RBI common shareholders of record on March 15, 2019 . 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 $0.50 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. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) and related rules and regulations of the U.S. Securities and Exchange Commission 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. |
Principles of Consolidation | Principles of Consolidation The consolidated 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. All material intercompany balances and transactions have been eliminated in consolidation. Investments in other affiliates that are owned 50% or less where we have significant influence are accounted for by the equity method. 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. In these arrangements, Tim Hortons has the ability to determine which operators manage the restaurants and for what duration. 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 December 31, 2018 and 2017 , we determined that we are the primary beneficiary of 17 and 31 Restaurant VIEs, respectively, and accordingly, have consolidated the results of operations, assets and liabilities, and cash flows of these Restaurant VIEs in our consolidated financial statements. Material intercompany accounts and transactions have been eliminated in consolidation. Assets and liabilities related to consolidated VIEs are not significant to our total consolidated assets and liabilities. Liabilities recognized as a result of consolidating these VIEs do not necessarily represent additional claims on our general assets; rather, they represent claims against the specific assets of the consolidated VIEs. Conversely, assets recognized as a result of consolidating these VIEs do not represent additional assets that could be used to satisfy claims by our creditors as they are not legally included within our general assets. |
Reclassifications | Reclassifications Certain prior year amounts in the accompanying consolidated financial statements and notes to the consolidated financial statements have been reclassified in order to be comparable with the current year classifications. |
Foreign Currency Translation and Transaction Gains and Losses | Foreign Currency Translation and Transaction Gains and Losses Our functional currency is the U.S. dollar, since our term loan and senior secured notes are denominated in U.S. dollars. The functional currency of each of our operating subsidiaries is generally the currency of the economic environment in which the subsidiary primarily does business. Our foreign subsidiaries’ financial statements are translated into U.S. dollars using the foreign exchange rates applicable to the dates of the financial statements. Assets and liabilities are translated using the end-of-period spot foreign exchange rates. Income, expenses and cash flows are translated at the average foreign exchange rates for each period. Equity accounts are translated at historical foreign exchange rates. The effects of these translation adjustments are reported as a component of accumulated other comprehensive income (loss) (“AOCI”) in the consolidated statements of equity. For any transaction that is denominated in a currency different from the entity’s functional currency, we record a gain or loss based on the difference between the foreign exchange rate at the transaction date and the foreign exchange rate at the transaction settlement date (or rate at period end, if unsettled) which is included within other operating expenses (income), net in the consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents All highly liquid investments with original maturities of three months or less and credit card receivables are considered cash equivalents. |
Inventories | Inventories Inventories are carried at the lower of cost or net realizable value and consist primarily of raw materials such as green coffee beans and finished goods such as new equipment, parts, paper supplies and restaurant food items. The moving average method is used to determine the cost of raw material and finished goods inventories held for sale to Tim Hortons franchisees. |
Property and Equipment, net | Property and Equipment, net We record property and equipment at historical cost less accumulated depreciation and amortization, which is recognized using the straight-line method over the following estimated useful lives: (i) buildings and improvements – up to 40 years ; (ii) restaurant equipment – up to 17 years ; (iii) furniture, fixtures and other – up to 10 years ; (iv) manufacturing equipment – up to 25 years ; and (v) capital leases – up to 40 years or lease term. Leasehold improvements to properties where we are the lessee are amortized over the lesser of the remaining term of the lease or the estimated useful life of the improvement. We are considered to be the owner of certain restaurants leased from unrelated lessors because Tim Hortons constructed some of the structural elements of those restaurants. Accordingly, lessors’ contributions to the construction costs of these restaurants was recognized as other debt and was $71 million and $83 million at December 31, 2018 and 2017 , respectively. Major improvements are capitalized, while maintenance and repairs are expensed when incurred. |
Leases | Leases We define lease term as the initial term of a lease plus any renewals covered by bargain renewal options or that are reasonably assured of exercise because non-renewal would create an economic penalty, plus any periods that the lessee has use of the property but is not charged rent by a landlord (rent holiday). We record rental income and rental expense for operating leases on a straight-line basis over the lease term, net of any applicable lease incentive amortization. Contingent rental income is recognized on an accrual basis as earned. Assets we acquire as lessee under capital leases are stated at the lower of the present value of future minimum lease payments or fair market value at the date of inception of the lease. Capital lease assets are depreciated using the straight-line method over the shorter of the useful life of the asset or the underlying lease term. We also have net investments in properties leased to franchisees, which meet the criteria of direct financing leases. Investments in direct financing leases are recorded on a net basis, consisting of the gross investment and residual value in the lease, less unearned income. Earned income on direct financing leases is recognized when earned and collectability is reasonably assured. Unearned income is recognized over the lease term yielding a constant periodic rate of return on the net investment in the lease. Direct financing leases are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable based on the payment history under the lease. We have recorded favorable and unfavorable operating leases in connection with the acquisition method of accounting. We amortize favorable and unfavorable leases on a straight-line basis over the remaining term of the leases, as determined at the acquisition date. |
Leases | Leases We define lease term as the initial term of a lease plus any renewals covered by bargain renewal options or that are reasonably assured of exercise because non-renewal would create an economic penalty, plus any periods that the lessee has use of the property but is not charged rent by a landlord (rent holiday). We record rental income and rental expense for operating leases on a straight-line basis over the lease term, net of any applicable lease incentive amortization. Contingent rental income is recognized on an accrual basis as earned. Assets we acquire as lessee under capital leases are stated at the lower of the present value of future minimum lease payments or fair market value at the date of inception of the lease. Capital lease assets are depreciated using the straight-line method over the shorter of the useful life of the asset or the underlying lease term. We also have net investments in properties leased to franchisees, which meet the criteria of direct financing leases. Investments in direct financing leases are recorded on a net basis, consisting of the gross investment and residual value in the lease, less unearned income. Earned income on direct financing leases is recognized when earned and collectability is reasonably assured. Unearned income is recognized over the lease term yielding a constant periodic rate of return on the net investment in the lease. Direct financing leases are reviewed for impairment whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable based on the payment history under the lease. We have recorded favorable and unfavorable operating leases in connection with the acquisition method of accounting. We amortize favorable and unfavorable leases on a straight-line basis over the remaining term of the leases, as determined at the acquisition date. |
Goodwill and Intangible Assets Not Subject to Amortization | Goodwill and Intangible Assets Not Subject to Amortization Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed in connection with the acquisition of Popeyes in 2017, the acquisition of Tim Hortons in 2014 and the acquisition of Burger King Holdings, Inc. by 3G Capital Partners Ltd. Our indefinite-lived intangible assets consist of the Tim Hortons brand, the Burger King brand, and the Popeyes brand (each a “Brand” and together, the “Brands”). Goodwill and the Brands are tested for impairment at least annually as of October 1 of each year and more often if an event occurs or circumstances change which indicate impairment might exist. Our annual impairment tests of goodwill and the Brands may be completed through qualitative assessments. We may elect to bypass the qualitative assessment and proceed directly to a quantitative impairment test for any reporting unit or Brand in any period. We can resume the qualitative assessment for any reporting unit or Brand in any subsequent period. Under a qualitative approach, our impairment review for goodwill consists of an assessment of whether it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount. If we elect to bypass the qualitative assessment for any reporting unit, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a two-step quantitative goodwill impairment test. The first step requires us to estimate the fair value of the reporting unit. If the fair value of the reporting unit is less than its carrying amount, the estimated fair value of the reporting unit is allocated to all its underlying assets and liabilities, including both recognized and unrecognized tangible and intangible assets, based on their fair value. If necessary, goodwill is then written down to its implied fair value. Under a qualitative approach, our impairment review for the Brands consists of an assessment of whether it is more-likely-than-not that a Brand’s fair value is less than its carrying amount. If we elect to bypass the qualitative assessment for a Brand, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a Brand exceeds its fair value, we estimate the fair value of the Brand and compare it to its carrying amount. If the carrying amount exceeds fair value, an impairment loss is recognized in an amount equal to that excess. |
Long-Lived Assets | Long-Lived Assets Long-lived assets, such as property and equipment and intangible assets subject to amortization, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset or asset group may not be recoverable. Some of the events or changes in circumstances that would trigger an impairment review include, but are not limited to, bankruptcy proceedings or other significant financial distress of a lessee; significant negative industry or economic trends; knowledge of transactions involving the sale of similar property at amounts below the carrying value; or our expectation to dispose of long-lived assets before the end of their estimated useful lives. The impairment test for long-lived assets requires us to assess the recoverability of long-lived assets by comparing their net carrying value to the sum of undiscounted estimated future cash flows directly associated with and arising from use and eventual disposition of the assets or asset group. Long-lived assets are grouped for recognition and measurement of impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. If the net carrying value of a group of long-lived assets exceeds the sum of related undiscounted estimated future cash flows, we record an impairment charge equal to the excess, if any, of the net carrying value over fair value. |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Other comprehensive income (loss) (“OCI”) refers to revenues, expenses, gains and losses that are included in comprehensive income (loss), but are excluded from net income (loss) as these amounts are recorded directly as an adjustment to equity, net of tax. Our other comprehensive income (loss) is primarily comprised of unrealized gains and losses on foreign currency translation adjustments and unrealized gains and losses on hedging activity, net of tax. |
Derivative Financial Instruments | Derivative Financial Instruments We recognize and measure all derivative instruments as either assets or liabilities at fair value in the consolidated balance sheets. We may enter into derivatives that are not initially designated as hedging instruments for accounting purposes, but which largely offset the economic impact of certain transactions. Gains or losses resulting from changes in the fair value of derivatives are recognized in earnings or recorded in other comprehensive income (loss) and recognized in the consolidated statements of operations when the hedged item affects earnings, depending on the purpose of the derivatives and whether they qualify for, and we have applied, hedge accounting treatment. When applying hedge accounting, we designate at a derivative’s inception, the specific assets, liabilities or future commitments being hedged, and assess the hedge’s effectiveness at inception and on an ongoing basis. We discontinue hedge accounting when: (i) we determine that the cash flow derivative is no longer effective in offsetting changes in the cash flows of a hedged item; (ii) the derivative expires or is sold, terminated or exercised; (iii) it is no longer probable that the forecasted transaction will occur; or (iv) management determines that designation of the derivatives as a hedge instrument is no longer appropriate. We do not enter into or hold derivatives for speculative purposes. |
Disclosures about Fair Value | Disclosures about Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market, or if none exists, the most advantageous market, for the specific asset or liability at the measurement date (the exit price). The fair value is based on assumptions that market participants would use when pricing the asset or liability. The fair values are assigned a level within the fair value hierarchy, depending on the source of the inputs into the calculation, as follows: Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. Level 3 Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability. The carrying amounts for cash and equivalents, accounts and notes receivable and accounts and drafts payable approximate fair value based on the short-term nature of these amounts. We carry all of our derivatives at fair value and value them using various pricing models or discounted cash flow analysis that incorporate observable market parameters, such as interest rate yield curves and currency rates, which are Level 2 inputs. Derivative valuations incorporate credit risk adjustments that are necessary to reflect the probability of default by the counterparty or us. |
Revenue Recognition | Revenue Recognition We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue From Contracts with Customers (“ASC 606”), from ASC Topic 605, Revenue Recognition and ASC Subtopic 952-605, Franchisors - Revenue Recognition (together, the “Previous Standards”) on January 1, 2018 using the modified retrospective transition method. Our Financial Statements reflect the application of ASC 606 guidance beginning in 2018, while our consolidated financial statements for prior periods were prepared under the guidance of the Previous Standards. See Note 16, Revenue Recognition , for further information about our transition to this new revenue recognition model using the modified retrospective transition method. Sales Sales consist primarily of supply chain sales, which represent sales of products, supplies and restaurant equipment to franchisees, as well as sales to retailers and are presented net of any related sales tax. Orders placed by customers specify the goods to be delivered and transaction prices for supply chain sales. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the customer, which is when the customer obtains physical possession of the goods, legal title is transferred, the customer has all risks and rewards of ownership and an obligation to pay for the goods is created. Shipping and handling costs associated with outbound freight for supply chain sales are accounted for as fulfillment costs and classified as cost of sales. Commencing on January 1, 2018, we classify all sales of restaurant equipment to franchisees as Sales and related cost of equipment sold as Cost of sales. In periods prior to January 1, 2018, we classified sales of restaurant equipment at establishment of a restaurant and in connection with renewal or renovation as Franchise and property revenues and related costs as Franchise and property expense. To a much lesser extent, sales also include Company restaurant sales (including Restaurant VIEs), which consist of sales to restaurant guests. Revenue from Company restaurant sales is recognized at the point of sale. Taxes assessed by a governmental authority that we collect are excluded from revenue. Franchise revenues Franchise revenues consist primarily of royalties, advertising fund contributions, initial and renewal franchise fees and upfront fees from development agreements and master franchise and development agreements (“MFDAs”). Under franchise agreements, we provide franchisees with (i) a franchise license, which includes a license to use our intellectual property and, in those markets where our subsidiaries manage an advertising fund, advertising and promotion management, (ii) pre-opening services, such as training and inspections, and (iii) ongoing services, such as development of training materials and menu items and restaurant monitoring and inspections. The services we provide under franchise agreements are highly interrelated and dependent upon the franchise license and we concluded the services do not represent individually distinct performance obligations. Consequently, we bundle the franchise license performance obligation and promises to provide services into a single performance obligation under ASC 606, which we satisfy by providing a right to use our intellectual property over the term of each franchise agreement. Royalties, including franchisee contributions to advertising funds managed by our subsidiaries, are calculated as a percentage of franchise restaurant sales over the term of the franchise agreement. Under our franchise agreements, advertising contributions paid by franchisees must be spent on advertising, product development, marketing and related activities. Initial and renewal franchise fees are payable by the franchisee upon a new restaurant opening or renewal of an existing franchise agreement. Our franchise agreement royalties, inclusive of advertising fund contributions, represent sales-based royalties that are related entirely to our performance obligation under the franchise agreement and are recognized as franchise sales occur. Additionally, under ASC 606, initial and renewal franchise fees are recognized as revenue on a straight-line basis over the term of the respective agreement. Under the Previous Standards, initial franchise fees were recognized as revenue when the related restaurant commenced operations and our completion of all material services and conditions. Renewal franchise fees were recognized as revenue upon execution of a new franchise agreement. Our performance obligation under development agreements other than MFDAs generally consists of an obligation to grant exclusive development rights over a stated term. These development rights are not distinct from franchise agreements, so upfront fees paid by franchisees for exclusive development rights are deferred and apportioned to each franchise restaurant opened by the franchisee. The pro rata amount apportioned to each restaurant is accounted for as an initial franchise fee. We have a distinct performance obligation under our MFDAs to grant subfranchising rights over a stated term. Under the terms of MFDAs, we typically either receive an upfront fee paid in cash and/or receive noncash consideration in the form of an equity interest in the master franchisee or an affiliate of the master franchisee. Under the Previous Standards, we accounted for noncash consideration as a nonmonetary exchange and did not record revenue or a basis in the equity interest received in arrangements where we received noncash consideration. These transactions now fall within the scope of ASC 606, which requires us to record investments in the applicable equity method investee and recognize revenue in an amount equal to the fair value of the equity interest received. In accordance with ASC 606, upfront fees from master franchisees, including the fair value of noncash consideration, are deferred and amortized over the MFDA term on a straight-line basis. We may recognize unamortized upfront fees when a contract with a franchisee or master franchisee is modified and is accounted for as a termination of the existing contract. The portion of gift cards sold to customers which are never redeemed is commonly referred to as gift card breakage. Under ASC 606, we recognize gift card breakage income proportionately as each gift card is redeemed using an estimated breakage rate based on our historical experience. Under the Previous Standards, we recognized gift card breakage income for each gift card's remaining balance when redemption of that balance was deemed remote. |
Revenue Recognition - Property Revenues | Property revenues Property revenues consists of rental income from properties we lease or sublease to franchisees. Property revenues are accounted for in accordance with applicable accounting guidance for leases and are excluded from the scope of ASC 606. |
Advertising and Promotional Costs | Advertising and Promotional Costs Company restaurants and franchise restaurants contribute to advertising funds that our subsidiaries manage in the United States and Canada and certain other international markets. The advertising funds expense the production costs of advertising when the advertisements are first aired or displayed. All other advertising and promotional costs are expensed in the period incurred. Under our franchise agreements, advertising contributions received from franchisees must be spent on advertising, product development, marketing and related activities. As a result of our transition to ASC 606, advertising contributions received from franchisees are included in franchise and property revenues and advertising expenses are included as selling, general and administrative expenses commencing on January 1, 2018. Advertising expenses included in selling, general and administrative expenses totaled $793 million for 2018. Prior to January 1, 2018, since we were deemed to be acting as an agent for these specifically designated contributions in accordance with the Previous Standards, the revenues and expenses of the advertising funds were generally netted in our consolidated statements of operations. Prior to our transition to ASC 606, advertising expenses, which primarily consisted of advertising contributions by Company restaurants (including Restaurant VIEs) based on a percentage of gross sales, totaled $7 million for 2017 and $6 million for 2016 and were included in selling, general and administrative expenses in the accompanying consolidated statements of operations. As a result of our transition to ASC 606, the advertising contributions by Company restaurants (including Restaurant VIEs) are eliminated in consolidation in 2018. |
Deferred Financing Costs | Deferred Financing Costs Deferred financing costs are amortized over the term of the related debt agreement into interest expense using the effective interest method. |
Income Taxes | Income Taxes Amounts in the financial statements related to income taxes are calculated using the principles of ASC Topic 740, Income Taxes . Under these principles, deferred tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes, as well as tax credit carry-forwards and loss carry-forwards. These deferred taxes are measured by applying currently enacted tax rates. A deferred tax asset is recognized when it is considered more-likely-than-not to be realized. The effects of changes in tax rates on deferred tax assets and liabilities are recognized in income in the year in which the law is enacted. A valuation allowance reduces deferred tax assets when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. We recognize positions taken or expected to be taken in a tax return in the financial statements when it is more-likely-than-not (i.e., a likelihood of more than 50%) that the position would be sustained upon examination by tax authorities. A recognized tax position is then measured at the largest amount of benefit with greater than 50% likelihood of being realized upon ultimate settlement. Translation gains and losses resulting from the remeasurement of foreign deferred tax assets or liabilities denominated in a currency other than the functional currency are classified as other operating expenses (income), net in the consolidated statements of operations. |
Share-based Compensation | Share-based Compensation Compensation expense related to the issuance of share-based awards to our employees is measured at fair value on the grant date. We use the Black-Scholes option pricing model to value stock options. The compensation expense for awards that vest over a future service period is recognized over the requisite service period on a straight-line basis, adjusted for estimated forfeitures of awards that are not expected to vest. The compensation expense for awards that do not require future service is recognized immediately. Upon the end of the service period, compensation expense is adjusted to account for the actual forfeiture rate. Cash settled share-based awards are classified as liabilities and are re-measured at the end of each reporting period. The compensation expense for awards that contain performance conditions is recognized when it is probable that the performance conditions will be achieved. |
Restructuring | Restructuring The determination of when we accrue for employee involuntary termination benefits depends on whether the termination benefits are provided under an on-going benefit arrangement or under a one-time benefit arrangement. We record charges for ongoing benefit arrangements in accordance with ASC Topic 712, Nonretirement Postemployment Benefits . We record charges for one-time benefit arrangements in accordance with ASC Topic 420, Exit or Disposal Cost Obligations . |
New Accounting Pronouncements | New Accounting Pronouncements Revenue Recognition – In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a new single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. We adopted this new guidance on January 1, 2018. See Note 16, Revenue Recognition , for further information about our transition to this new revenue recognition model using the modified retrospective transition method. Lease Accounting – In February 2016, the FASB issued new guidance on leases. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. The new guidance is effective commencing in 2019 and requires a modified retrospective transition approach with application in all comparative periods presented (the “comparative method”), or alternatively, as of the effective date as the date of initial application without restating comparative period financial statements (the “effective date method”). The new guidance also provides several practical expedients and policies that companies may elect under either transition method. We have elected to apply the effective date method and the package of practical expedients under which we will not reassess the classification of our existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. Additionally, we have elected lessee and lessor practical expedients to not separate non-lease components from lease components. We did not elect the practical expedient that permits a reassessment of lease terms for existing leases. We performed an analysis of the impact of the new lease guidance and are in the process of completing the final phase of a comprehensive plan for our implementation of the new guidance, including implementation of a new lease accounting system. The project plan includes analyzing the impact of the new guidance on our current lease contracts, reviewing the completeness of our existing lease portfolio, comparing our accounting policies under current accounting guidance to the new accounting guidance and identifying potential differences from applying the requirements of the new guidance to our lease contracts. Upon our transition to the new guidance, we currently expect to recognize approximately $1.1 billion of operating lease liabilities. Additionally, we expect to record right-of-use assets in a corresponding amount, net of amounts reclassified from other assets and liabilities, as specified by the new lease guidance. We also expect this guidance will result in the gross presentation of property tax and maintenance expenses and related lessee reimbursements as franchise and property expenses and franchise and property revenues, respectively. These expenses and reimbursements are presented on a net basis under current accounting guidance. Otherwise, we do not expect the adoption of this guidance will have a material impact on our consolidated statements of operations. We do not expect an impact to the amount or timing of our cash flows or liquidity. Goodwill Impairment – In January 2017, the FASB issued guidance to simplify how an entity measures goodwill impairment by removing the second step of the two-step quantitative goodwill impairment test. An entity will no longer be required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured at the amount by which the carrying value exceeds the fair value of a reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment requires prospective adoption and is effective commencing in 2020 with early adoption permitted. The adoption of this new guidance will not have a material impact on our Financial Statements. Hedge Accounting – In August 2017, the FASB issued guidance to improve the transparency and understandability of information conveyed to financial statement users about an entity's risk management activities and to simplify the application of hedge accounting by preparers. We adopted this guidance on January 1, 2018 (the “Adoption Date”). The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness for cash flow and net investment hedges that are deemed effective. Most notably, for our cross-currency swaps designated as net investment hedges, the new guidance permits the exclusion of the interest component (the “Excluded Component”) from the accounting hedge without affecting net investment hedge designation. The initial value of the Excluded Component may be recognized in earnings on a systematic and rational basis over the life of the derivative instrument. Subsequent to the Adoption Date, we changed the method of assessing effectiveness for net investment hedges using derivatives from the forward method to the spot method. We de-designated the cross-currency swaps and re-designated them as of March 15, 2018 (the “Re-designation Date”). As a result of adopting the new guidance and the re-designation of our cross-currency swaps, we will recognize a benefit from the amortization of the initial value of the Excluded Component as a component of Interest expense, net in our consolidated statements of operations rather than as a component of other comprehensive income. All changes in fair value of the instruments related to currency fluctuations will continue to be recognized within other comprehensive income. The impact of adoption did not have a material effect on our Financial Statements as of the Adoption Date. We recorded a $60 million net benefit to Interest expense, net from the Re-designation Date through December 31, 2018 in our consolidated statements of operations for the amortization of the initial value of the Excluded Component, as described above. We believe the new guidance better portrays the economic results of our risk management activities and net investment hedges in our Financial Statements. Reclassification of Certain Tax Effects – In February 2018, the FASB issued guidance which allows a reclassification from accumulated other comprehensive income to retained earnings for the tax effects of certain items within accumulated other comprehensive income. The amendment is effective commencing in 2019 with early adoption permitted. The adoption of this new guidance will not have a material impact on our Financial Statements. Share-based payment arrangements with nonemployees – In June 2018, the FASB issued guidance which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendment is effective commencing in 2019 with early adoption permitted. The adoption of this new guidance will not have a material impact on our Financial Statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Reclassification of assets | These consist of the reclassification of $20 million and $19 million for the years ended December 31, 2017 and 2016 , respectively, from changes in Other long-term assets and liabilities to Tenant inducements paid to franchisees in the Consolidated Statement of Cash Flows and the December 31, 2017 reclassification of Advertising fund restricted assets to Cash and cash equivalents, Accounts and notes receivable, net and Prepaids and other current assets and the reclassification of Advertising fund liabilities to Accounts and drafts payable and Other accrued liabilities as detailed below (in millions). These reclassifications had no effect on previously reported net income. December 31, 2017 December 31, 2017 As Reported Reclassification As Adjusted Current assets: Cash and cash equivalents $ 1,073 $ 24 $ 1,097 Accounts and notes receivable, net 456 33 489 Inventories, net 78 — 78 Advertising fund restricted assets 83 (83 ) — Prepaids and other current assets 60 26 86 Total current assets $ 1,750 $ — $ 1,750 Current liabilities: Accounts and drafts payable $ 413 $ 83 $ 496 Other accrued liabilities 838 28 866 Gift card liability 215 — 215 Advertising fund liabilities 111 (111 ) — Current portion of long term debt and capital leases 78 — 78 Total current liabilities $ 1,655 $ — $ 1,655 |
Schedule of fair value measurements | 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 billions): As of December 31, 2018 2017 Fair value of our variable term debt and senior notes $ 11 $ 12 Principal carrying amount of our variable term debt and senior notes 12 12 |
Popeyes Acquisition (Tables)
Popeyes Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Allocation of Consideration to Net Tangible and Intangible Assets Acquired | The final allocation of consideration to the net tangible and intangible assets acquired is presented in the table below (in millions): March 27, 2017 Total current assets $ 64 Property and equipment 114 Intangible assets 1,405 Other assets 1 Total current liabilities (73 ) Total debt and capital lease obligations (159 ) Deferred income taxes (523 ) Other liabilities (20 ) Total identifiable net assets 809 Goodwill 846 Total consideration $ 1,655 |
Earnings Per Unit (Tables)
Earnings Per Unit (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings Per Unit | The following table summarizes the basic and diluted earnings per unit calculations (in millions, except per unit amounts): 2018 2017 2016 Allocation of net income among partner interests: Net income allocated to Class A common unitholders $ 612 $ 626 $ 346 Net income allocated to Partnership exchangeable unitholders 531 585 337 Net income attributable to common unitholders $ 1,143 $ 1,211 $ 683 Denominator - basic and diluted partnership units: Weighted average Class A common units 202 202 202 Weighted average Partnership exchangeable units 216 226 228 Earnings per unit - basic and diluted: Class A common units (a) $ 3.03 $ 3.10 $ 1.71 Partnership exchangeable units (a) $ 2.46 $ 2.59 $ 1.48 (a) Earnings per unit may not recalculate exactly as it is calculated based on unrounded numbers. |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net, consist of the following (in millions): As of December 31, 2018 2017 Land $ 998 $ 1,020 Buildings and improvements 1,145 1,172 Restaurant equipment 99 122 Furniture, fixtures, and other 182 171 Capital leases 257 256 Construction in progress 19 15 2,700 2,756 Accumulated depreciation and amortization (704 ) (623 ) Property and equipment, net $ 1,996 $ 2,133 |
Intangible Assets, net and Go_2
Intangible Assets, net and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net and Goodwill | Intangible assets, net and goodwill consist of the following (in millions): As of December 31, 2018 2017 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Identifiable assets subject to amortization: Franchise agreements $ 705 $ (194 ) $ 511 $ 725 $ (168 ) $ 557 Favorable leases 407 (200 ) 207 456 (194 ) 262 Subtotal 1,112 (394 ) 718 1,181 (362 ) 819 Indefinite lived intangible assets: Tim Hortons brand $ 6,259 $ — $ 6,259 $ 6,727 $ — $ 6,727 Burger King brand 2,131 — 2,131 2,161 — 2,161 Popeyes brand 1,355 — 1,355 1,355 — 1,355 Subtotal 9,745 — 9,745 10,243 — 10,243 Intangible assets, net $ 10,463 $ 11,062 Goodwill Tim Hortons segment $ 4,038 $ 4,326 Burger King segment 602 610 Popeyes segment 846 846 Total $ 5,486 $ 5,782 |
Schedule of Estimated Future Amortization Expenses on Intangible Assets | As of December 31, 2018 , the estimated future amortization expense on identifiable assets subject to amortization is as follows (in millions): Twelve-months ended December 31, Amount 2019 $ 64 2020 59 2021 55 2022 51 2023 48 Thereafter 441 Total $ 718 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Franchise and Property Revenue | Franchise and property revenue recognized from franchisees that are owned or franchised by entities in which we have an equity interest consist of the following (in millions): 2018 2017 2016 Revenues from affiliates: Royalties $ 310 $ 175 $ 132 Property revenues 36 27 28 Franchise fees and other revenue 11 26 19 Total $ 357 $ 228 $ 179 |
Other Accrued Liabilities and_2
Other Accrued Liabilities and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Accrued Liabilities (Current) and Other Liabilities (Non-Current), Net | Other accrued liabilities (current) and other liabilities, net (non-current) consist of the following (in millions): As of December 31, 2018 2017 Current: Dividend payable $ 207 $ 97 Interest payable 87 89 Accrued compensation and benefits 69 67 Taxes payable 113 401 Deferred income 27 43 Accrued advertising expenses 30 27 Closed property reserve 9 11 Restructuring and other provisions 11 12 Other 84 119 Other accrued liabilities $ 637 $ 866 Non-current: Derivatives liabilities $ 179 $ 499 Taxes payable 493 496 Contract liabilities, net 486 10 Unfavorable leases 192 252 Accrued pension 64 72 Accrued lease straight-lining liability 69 46 Deferred income 22 27 Other 42 53 Other liabilities, net $ 1,547 $ 1,455 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | Long-term debt consist of the following (in millions): As of December 31, 2018 2017 Term Loan Facility (due February 17, 2024) $ 6,338 $ 6,389 2017 4.25% Senior Notes (due May 15, 2024) 1,500 1,500 2015 4.625% Senior Notes (due January 15, 2022) 1,250 1,250 2017 5.00% Senior Notes (due October 15, 2025) 2,800 2,800 Other 150 89 Less: unamortized deferred financing costs and deferred issuance discount (145 ) (170 ) Total debt, net 11,893 11,858 Less: current maturities of debt (70 ) (57 ) Total long-term debt $ 11,823 $ 11,801 |
Summary of Aggregate Maturities of Long-Term Debt | The aggregate maturities of our long-term debt as of December 31, 2018 are as follows (in millions): Year Ended December 31, Principal Amount 2019 $ 70 2020 74 2021 72 2022 1,324 2023 78 Thereafter 10,420 Total $ 12,038 |
Schedule of Interest Expense, Net | Interest expense, net consists of the following (in millions): 2018 2017 2016 Debt (a) $ 498 $ 484 $ 412 Capital lease obligations 23 21 20 Amortization of deferred financing costs and debt issuance discount 29 33 39 Interest income (15 ) (26 ) (4 ) Interest expense, net $ 535 $ 512 $ 467 (a) Amount includes $60 million benefit during 2018 from our adoption of a new hedge accounting standard. See Note 2, Significant Accounting Policies – New Accounting Pronouncements , for further details of the effects of this change in accounting principle on Interest expense, net. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Summary of Assets Lease, Property and Equipment, Net | Assets leased to franchisees and others under operating leases where we are the lessor and which are included within our property and equipment, net are as follows (in millions): As of December 31, 2018 2017 Land $ 906 $ 931 Buildings and improvements 1,175 1,215 Restaurant equipment 17 17 2,098 2,163 Accumulated depreciation and amortization (475 ) (407 ) Property and equipment leased, net $ 1,623 $ 1,756 |
Summary of Net Investment, Direct Financing Leases | Our net investment in direct financing leases is as follows (in millions): As of December 31, 2018 2017 Future rents to be received: Future minimum lease receipts $ 60 $ 77 Contingent rents (a) 29 39 Estimated unguaranteed residual value 16 17 Unearned income (35 ) (45 ) 70 88 Current portion included within accounts receivables (16 ) (17 ) Net investment in property leased to franchisees $ 54 $ 71 (a) Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting. |
Summary of Property Revenue | Property revenues are comprised primarily of rental income from operating leases and earned income on direct financing leases with franchisees as follows (in millions): 2018 2017 2016 Rental income: Minimum $ 454 $ 464 $ 451 Contingent 273 284 282 Amortization of favorable and unfavorable income lease contracts, net 8 8 9 Total rental income 735 756 742 Earned income on direct financing leases 9 9 11 Total property revenues $ 744 $ 765 $ 753 |
Summary of Rent Expense Associated with Lease Commitments | Rent expense associated with these lease commitments is as follows (in millions): 2018 2017 2016 Rental expense: Minimum $ 201 $ 198 $ 193 Contingent 71 71 71 Amortization of favorable and unfavorable payable lease contracts, net 9 10 9 Total rental expense (a) $ 281 $ 279 $ 273 (a) Amounts include rental expense related to properties subleased to franchisees of $263 million for 2018 , $263 million for 2017 , and $254 million for 2016 . |
Summary of Future Minimum Lease Receipts and Commitments | As of December 31, 2018 , future minimum lease receipts and commitments are as follows (in millions): Lease Receipts Lease Commitments (a) Direct Operating Capital Operating 2019 $ 14 $ 416 $ 38 $ 183 2020 10 388 36 172 2021 7 360 34 158 2022 5 331 33 145 2023 5 306 30 130 Thereafter 19 1,704 201 831 Total minimum receipts / payments $ 60 $ 3,505 372 $ 1,619 Less amount representing interest (125 ) Present value of minimum capital lease payments 247 Current portion of capital lease obligation (21 ) Long-term portion of capital lease obligation $ 226 (a) Minimum lease payments have not been reduced by minimum sublease rentals of $2,290 million due in the future under non-cancelable subleases. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Before Income Taxes | Income (loss) before income taxes, classified by source of income (loss), is as follows (in millions): 2018 2017 2016 Canadian $ 1,111 $ 1,223 $ 1,050 Foreign 271 (122 ) 150 Income before income taxes $ 1,382 $ 1,101 $ 1,200 |
Income Tax Expense (Benefit) Attributable to Income from Continuing Operations | Income tax (benefit) expense attributable to income from continuing operations consists of the following (in millions): 2018 2017 2016 Current: Canadian $ 25 $ 438 $ 79 U.S. Federal 95 113 45 U.S. state, net of federal income tax benefit 17 3 2 Other Foreign 72 54 38 $ 209 $ 608 $ 164 Deferred: Canadian $ 78 $ (302 ) $ 49 U.S. Federal (65 ) (473 ) 37 U.S. state, net of federal income tax benefit 13 34 (7 ) Other Foreign 3 (1 ) 1 $ 29 $ (742 ) $ 80 Income tax (benefit) expense $ 238 $ (134 ) $ 244 |
Schedule of Statutory Rate Reconciles to Effective Income Tax Rate | The statutory rate reconciles to the effective income tax rate as follows: 2018 2017 2016 Statutory rate 26.5 % 26.5 % 26.5 % Costs and taxes related to foreign operations 4.2 8.9 9.6 Foreign exchange gain (loss) (0.1 ) (7.7 ) 0.1 Foreign tax rate differential (6.1 ) (1.9 ) (1.0 ) Change in valuation allowance 3.2 12.0 0.2 Change in accrual for tax uncertainties 0.1 (0.4 ) 1.0 Intercompany financing (4.4 ) (19.5 ) (16.0 ) Impact of Tax Act (1.9 ) (27.4 ) — Benefit from stock option exercises (5.0 ) (4.9 ) — Other 0.7 2.3 (0.1 ) Effective income tax rate 17.2 % (12.1 )% 20.3 % |
Schedule of Income Tax Expense Benefit Allocated to Continuing Operations and Amounts Separately Allocated to Other Items | Income tax (benefit) expense allocated to continuing operations and amounts separately allocated to other items was (in millions): 2018 2017 2016 Income tax (benefit) expense from continuing operations $ 238 $ (134 ) $ 244 Cash flow hedge in accumulated other comprehensive income (loss) (2 ) 5 (2 ) Net investment hedge in accumulated other comprehensive income (loss) 101 (13 ) 12 Pension liability in accumulated other comprehensive income (loss) — (2 ) (2 ) Stock option tax benefit in common shares — — (9 ) Total $ 337 $ (144 ) $ 243 |
Schedule of Deferred Income Tax Expense (Benefit) Attributable to Income from Continuing Operations | The significant components of deferred income tax (benefit) expense attributable to income from continuing operations are as follows (in millions): 2018 2017 2016 Deferred income tax (benefit) expense $ (14 ) $ (449 ) $ 78 Change in valuation allowance 43 133 2 Change in effective Canadian income tax rate (3 ) — — Change in effective U.S. federal income tax rate (8 ) (433 ) — Change in effective U.S. state income tax rate 15 4 (3 ) Change in effective foreign income tax rate (4 ) 3 3 Total $ 29 $ (742 ) $ 80 |
Schedule of the Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below (in millions): As of December 31, 2018 2017 Deferred tax assets: Accounts and notes receivable $ 5 $ 5 Accrued employee benefits 49 49 Unfavorable leases 123 146 Liabilities not currently deductible for tax 176 74 Tax loss and credit carryforwards 509 550 Derivatives 25 136 Other 8 — Total gross deferred tax assets 895 960 Valuation allowance (325 ) (282 ) Net deferred tax assets 570 678 Less deferred tax liabilities: Property and equipment, principally due to differences in depreciation 43 33 Intangible assets 1,734 1,791 Leases 105 129 Statutory impairment 31 26 Outside basis difference 35 68 Total gross deferred tax liabilities 1,948 2,047 Net deferred tax liability $ 1,378 $ 1,369 |
Summary of Changes in Valuation Allowance | Changes in the valuation allowance are as follows (in millions): 2018 2017 2016 Beginning balance $ 282 $ 133 $ 125 Additions due to acquisition — 9 — Change in estimates recorded to deferred income tax expense 43 133 2 Changes from foreign currency exchange rates — 6 (1 ) True-ups from changes in losses and credits — 1 7 Ending balance $ 325 $ 282 $ 133 |
Summary of Amount and Expiration Dates of Operating Loss and Tax Credit Carry-forwards | The gross amount and expiration dates of operating loss and tax credit carry-forwards as of December 31, 2018 are as follows (in millions): Amount Expiration Date Canadian net operating loss carryforwards $ 735 2036-2038 Canadian capital loss carryforwards 1,139 Indefinite U.S. state net operating loss carryforwards 595 2019-2038 U.S. foreign tax credits 81 2019-2028 Other foreign net operating loss carryforwards 192 Indefinite Other foreign net operating loss carryforwards 57 2020-2037 Other foreign capital loss carryforward 30 Indefinite Foreign credits 2 2019-2036 Total $ 2,831 |
A Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in millions): 2018 2017 2016 Beginning balance $ 461 $ 241 $ 239 Additions on tax position related to the current year 1 186 2 Additions for tax positions of prior years 18 41 6 Additions for tax positions taken in conjunction with acquisition of Tim Hortons — 2 — Reductions for tax positions of prior year (18 ) — (1 ) Reductions for settlement (18 ) (2 ) (5 ) Reductions due to statute expiration (3 ) (7 ) — Ending balance $ 441 $ 461 $ 241 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Quantitative Disclosures of Derivative Instruments Including Estimated Fair Values | 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 consolidated balance sheets (in millions): Gain (Loss) Recognized in 2018 2017 2016 Derivatives designated as cash flow hedges (1) Interest rate swaps $ (37 ) $ (6 ) $ (23 ) Forward-currency contracts $ 11 $ (9 ) $ (5 ) Derivatives designated as net investment hedges Cross-currency rate swaps $ 383 $ (384 ) $ (87 ) (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 2018 2017 2016 Derivatives designated as cash flow hedges Interest rate swaps Interest expense, net $ (19 ) $ (31 ) $ (21 ) Forward-currency contracts Cost of sales $ (1 ) $ (3 ) $ — Location of Gain or (Loss) Recognized in Earnings Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) 2018 2017 2016 Derivatives designated as net investment hedges Cross-currency rate swaps Interest expense, net $ 60 $ — $ — |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Fair Value as of 2018 2017 Balance Sheet Location Assets: Derivatives designated as cash flow hedges Foreign currency $ 7 $ 1 Prepaids and other current assets Derivatives designated as net investment hedges Foreign currency 58 — Other assets, net Total assets at fair value $ 65 $ 1 Liabilities: Derivatives designated as cash flow hedges Interest rate $ 72 $ 42 Other liabilities, net Foreign currency — 5 Other accrued liabilities Derivatives designated as net investment hedges Foreign currency 107 456 Other liabilities, net Total liabilities at fair value $ 179 $ 503 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Summary of Change in the Components of Accumulated Other Comprehensive Income (Loss) | The following table displays the change in the components of AOCI (in millions): Derivatives Pensions Foreign Accumulated Balances at December 31, 2015 $ 637 $ (24 ) $ (2,080 ) $ (1,467 ) Foreign currency translation adjustment — — 223 223 Net change in fair value of derivatives, net of tax (119 ) — — (119 ) Amounts reclassified to earnings of cash flow hedges, net of tax 16 — — 16 Pension and post-retirement benefit plans, net of tax — (8 ) — (8 ) Balances at December 31, 2016 $ 534 $ (32 ) $ (1,857 ) $ (1,355 ) Foreign currency translation adjustment — — 824 824 Net change in fair value of derivatives, net of tax (382 ) — — (382 ) Amounts reclassified to earnings of cash flow hedges, net of tax 25 — — 25 Pension and post-retirement benefit plans, net of tax — 4 — 4 Balances at December 31, 2017 $ 177 $ (28 ) $ (1,033 ) $ (884 ) Foreign currency translation adjustment — — (831 ) (831 ) Net change in fair value of derivatives, net of tax 263 — — 263 Amounts reclassified to earnings of cash flow hedges, net of tax 14 — — 14 Pension and post-retirement benefit plans, net of tax — 1 — 1 Balances at December 31, 2018 $ 454 $ (27 ) $ (1,864 ) $ (1,437 ) |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Share-based Compensation Expense | Share-based compensation expense consists of the following for the periods presented (in millions): 2018 2017 2016 Stock options, stock options with tandem SARs and RSUs (a) $ 48 $ 48 $ 35 Accelerated vesting of Popeyes stock options (b) — 12 — Total share-based compensation expense (c) $ 48 $ 60 $ 35 (a) Includes $2 million , $5 million , and $1 million due to modification of awards in 2018 , 2017 and 2016 , respectively. (b) Represents expense attributed to the post-combination service associated with the accelerated vesting of stock options in connection with the Popeyes Acquisition. (c) Generally classified as selling, general and administrative expenses in the consolidated statements of operations. |
Summary of the Significant Assumptions Used During the Year to Estimate the Fair Value of Stock Options | The following assumptions were used in the Black-Scholes option-pricing model to determine the fair value of stock option awards at the grant date: 2018 2017 2016 Risk-free interest rate 2.13% 1.23% - 1.25% 0.85% Expected term (in years) 6.39 6.74 6.74 Expected volatility 25.2% 24.5% 26.6% Expected dividend yield 3.08% 1.37% 1.81% |
Summary of Option Activity under the Various Plan | The following is a summary of stock option activity under our plans for the year ended December 31, 2018 : Total Number of Weighted Aggregate Weighted Outstanding at January 1, 2018 20,071 $ 25.15 Granted 1,548 $ 58.19 Exercised (7,268 ) $ 8.37 Forfeited (748 ) $ 48.26 Outstanding at December 31, 2018 13,603 $ 36.41 $ 231,988 6.2 Exercisable at December 31, 2018 3,118 $ 16.32 $ 112,215 3.8 Vested or expected to vest at December 31, 2018 12,479 $ 35.75 $ 220,320 6.1 |
Summary of Time-vested RSUs and Performance-based RSUs Activity | The following is a summary of time-vested RSUs and performance-based RSUs activity for the year ended December 31, 2018 : Time-vested RSUs Performance-based RSUs Total Number of Weighted Average Total Number of Weighted Average Outstanding at January 1, 2018 1,293 $ 38.64 1,590 $ 36.31 Granted 329 $ 57.68 920 $ 58.49 Vested and settled (43 ) $ 41.62 (81 ) $ 34.68 Dividend equivalents granted 31 $ — 58 $ — Forfeited (110 ) $ 51.05 (80 ) $ 34.65 Outstanding at December 31, 2018 1,500 $ 41.88 2,407 $ 45.25 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Change in contract liabilities | The following table reflects the change in contract liabilities by segment and on a consolidated basis between the date of adoption (January 1, 2018) and December 31, 2018 (in millions): Contract Liabilities TH BK PLK Consolidated Balance at January 1, 2018 $ 47 $ 402 $ 6 $ 455 Revenue recognized that was included in the contract liability balance at the beginning of the year (6 ) (43 ) — (49 ) Increase, excluding amounts recognized as revenue during the period 24 58 13 95 Impact of foreign currency translation (3 ) (12 ) — (15 ) Balance at December 31, 2018 $ 62 $ 405 $ 19 $ 486 |
Schedule of estimated revenues expected to be recognized | The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) by segment and on a consolidated basis as of December 31, 2018 (in millions): Contract liabilities expected to be recognized in TH BK PLK Consolidated 2019 $ 7 $ 30 $ 1 $ 38 2020 7 29 1 37 2021 7 28 1 36 2022 6 28 1 35 2023 6 27 1 34 Thereafter 29 263 14 306 Total $ 62 $ 405 $ 19 $ 486 |
Disaggregation of total revenues | Total revenues consist of the following (in millions): 2018 2017 2016 Sales $ 2,355 $ 2,390 $ 2,205 Royalties 2,165 1,215 993 Property revenues 744 765 753 Franchise fees and other revenue 93 206 195 Total revenues $ 5,357 $ 4,576 $ 4,146 |
Schedule of new accounting pronouncements and adjustments | Consolidated Statement of Cash Flows for 2018 The transition to ASC 606 had no net impact on our cash provided by operating activities and no impact on our cash used for investing activities or cash used for financing activities during 2018 . Total Amounts Under As Reported Adjustments Previous Standards Cash flows from operating activities: Net income $ 1,144 $ 32 $ 1,176 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 180 — 180 Amortization of deferred financing costs and debt issuance discount 29 — 29 (Income) loss from equity method investments (22 ) (6 ) (28 ) Loss (gain) on remeasurement of foreign denominated transactions (33 ) — (33 ) Net (gains) losses on derivatives (40 ) — (40 ) Share-based compensation expense 48 — 48 Deferred income taxes 29 9 38 Other 5 — 5 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable 19 — 19 Inventories and prepaids and other current assets (7 ) 6 (1 ) Accounts and drafts payable 41 7 48 Other accrued liabilities and gift card liability (219 ) (6 ) (225 ) Tenant inducements paid to franchisees (52 ) — (52 ) Other long-term assets and liabilities 43 (42 ) 1 Net cash provided by operating activities $ 1,165 $ — $ 1,165 As a result of applying the modified retrospective method to transition to ASC 606, the following adjustments were made to the consolidated balance sheet as of January 1, 2018 (in millions): As Reported Total Adjusted December 31, 2017 Adjustments January 1, 2018 ASSETS Current assets: Cash and cash equivalents $ 1,097 $ — $ 1,097 Accounts and notes receivable, net 489 — 489 Inventories, net 78 — 78 Prepaids and other current assets 86 (23 ) 63 Total current assets 1,750 (23 ) 1,727 Property and equipment, net 2,133 — 2,133 Intangible assets, net 11,062 — 11,062 Goodwill 5,782 — 5,782 Net investment in property leased to franchisees 71 — 71 Other assets, net 426 107 533 Total assets $ 21,224 $ 84 $ 21,308 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 496 $ — $ 496 Other accrued liabilities 866 9 875 Gift card liability 215 (43 ) 172 Current portion of long term debt and capital leases 78 — 78 Total current liabilities 1,655 (34 ) 1,621 Term debt, net of current portion 11,801 — 11,801 Capital leases, net of current portion 244 — 244 Other liabilities, net 1,455 426 1,881 Deferred income taxes, net 1,508 (58 ) 1,450 Total liabilities 16,663 334 16,997 Partners' capital Class A common units 4,168 (132 ) 4,036 Partnership exchangeable units 1,276 (118 ) 1,158 Accumulated other comprehensive income (loss) (884 ) — (884 ) Total Partners' capital 4,560 (250 ) 4,310 Noncontrolling interests 1 — 1 Total equity 4,561 (250 ) 4,311 Total liabilities and equity $ 21,224 $ 84 $ 21,308 The following tables reflect the impact of adoption of ASC 606 on our consolidated statements of operations for 2018 and cash flows from operating activities for 2018 and our consolidated balance sheet as of December 31, 2018 and the amounts as if the Previous Standards were in effect (“Amounts Under Previous Standards”) (in millions): Consolidated Statement of Operations for 2018 As Reported Total Adjustments Amounts Under Previous Standards Revenues: Sales $ 2,355 $ — $ 2,355 Franchise and property revenues 3,002 (750 ) 2,252 Total revenues 5,357 (750 ) 4,607 Operating costs and expenses: Cost of sales 1,818 — 1,818 Franchise and property expenses 422 — 422 Selling, general and administrative expenses 1,214 (785 ) 429 (Income) loss from equity method investments (22 ) (6 ) (28 ) Other operating expenses (income), net 8 (1 ) 7 Total operating costs and expenses 3,440 (792 ) 2,648 Income from operations 1,917 42 1,959 Interest expense, net 535 1 536 Income before income taxes 1,382 41 1,423 Income tax expense 238 9 247 Net income 1,144 32 1,176 Net income attributable to noncontrolling interests 1 — 1 Net income attributable to common unitholders $ 1,143 $ 32 $ 1,175 Earnings per unit - basic and diluted: Class A common units $ 3.03 $ 3.12 Partnership exchangeable units $ 2.46 $ 2.53 Consolidated Balance Sheet as of December 31, 2018 As Reported Total Amounts Under December 31, 2018 Adjustments Previous Standards ASSETS Current assets: Cash and cash equivalents $ 913 $ — $ 913 Accounts and notes receivable, net 452 — 452 Inventories, net 75 — 75 Prepaids and other current assets 60 17 77 Total current assets 1,500 17 1,517 Property and equipment, net 1,996 — 1,996 Intangible assets, net 10,463 — 10,463 Goodwill 5,486 — 5,486 Net investment in property leased to franchisees 54 — 54 Other assets, net 642 (101 ) 541 Total assets $ 20,141 $ (84 ) $ 20,057 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 513 $ 7 $ 520 Other accrued liabilities 637 (15 ) 622 Gift card liability 167 42 209 Current portion of long term debt and capital leases 91 — 91 Total current liabilities 1,408 34 1,442 Term debt, net of current portion 11,823 — 11,823 Capital leases, net of current portion 226 — 226 Other liabilities, net 1,547 (468 ) 1,079 Deferred income taxes, net 1,519 67 1,586 Total liabilities 16,523 (367 ) 16,156 Partners' capital Class A common units 4,323 155 4,478 Partnership exchangeable units 730 128 858 Accumulated other comprehensive income (loss) (1,437 ) — (1,437 ) Total Partners' capital 3,616 283 3,899 Noncontrolling interests 2 — 2 Total equity 3,618 283 3,901 Total liabilities and equity $ 20,141 $ (84 ) $ 20,057 |
Other Operating Expenses (Inc_2
Other Operating Expenses (Income), net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Other Income and Expenses [Abstract] | |
Other Operating Expenses (Income), Net | Other operating expenses (income), net, consist of the following (in millions): 2018 2017 2016 Net losses on disposal of assets, restaurant closures and refranchisings $ 19 $ 29 $ 18 Litigation settlements and reserves, net 11 2 1 Net losses (gains) on foreign exchange (33 ) 77 (20 ) Other, net 11 1 — Other operating expenses (income), net $ 8 $ 109 $ (1 ) |
Segment Reporting and Geograp_2
Segment Reporting and Geographical Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of revenue by segment and country | The following tables present revenues, by segment and by country, depreciation and amortization, (income) loss from equity method investments, and capital expenditures by segment (in millions): 2018 As Reported 2018 Amounts Under Previous Standards 2017 2016 Revenues by operating segment: TH $ 3,292 $ 3,077 $ 3,155 $ 3,001 BK 1,651 1,251 1,219 1,145 PLK 414 279 202 — Total $ 5,357 $ 4,607 $ 4,576 $ 4,146 Revenues by country (a): Canada $ 2,984 $ 2,832 $ 2,672 United States 1,785 1,190 1,004 Other 588 554 470 Total $ 5,357 $ 4,576 $ 4,146 |
Schedule of segment related depreciation and amortization expense | Depreciation and amortization: TH $ 108 $ 110 $ 108 BK 61 62 64 PLK 11 10 — Total $ 180 $ 182 $ 172 |
Schedule of segment related income (loss) from equity method investments | (Income) loss from equity method investments: TH $ (6 ) $ (8 ) $ (8 ) BK (16 ) (4 ) (12 ) Total $ (22 ) $ (12 ) $ (20 ) |
Schedule of segment related capital expenditure | Capital expenditures: TH $ 59 $ 13 $ 12 BK 25 23 22 PLK 2 1 — Total $ 86 $ 37 $ 34 |
Schedule of segment related assets and long lived assets | Total assets by segment, and long-lived assets by segment and country are as follows (in millions): Assets Long-Lived Assets As of December 31, As of December 31, 2018 2017 2018 2017 By operating segment: TH $ 12,666 $ 13,733 $ 1,226 $ 1,351 BK 4,514 4,633 729 751 PLK 2,420 2,440 95 102 Unallocated 541 418 — — Total $ 20,141 $ 21,224 $ 2,050 $ 2,204 By country: Canada $ 945 $ 1,059 United States 1,098 1,138 Other 7 7 Total $ 2,050 $ 2,204 |
Reconciliation of segment income to net income (loss) | 2018 As Reported 2018 Amounts Under Previous Standards 2017 2016 Segment income: TH $ 1,127 $ 1,128 $ 1,136 $ 1,072 BK 928 950 903 816 PLK 157 169 107 — Adjusted EBITDA 2,212 2,247 2,146 1,888 Share-based compensation and non-cash incentive compensation expense 55 55 55 42 PLK Transaction costs 10 10 62 — Corporate restructuring and tax advisory fees 25 25 2 — Office centralization and relocation costs 20 20 — — Integration costs — — — 16 Impact of equity method investments (a) (3 ) (9 ) 1 (8 ) Other operating expenses (income), net 8 7 109 (1 ) EBITDA 2,097 2,139 1,917 1,839 Depreciation and amortization 180 180 182 172 Income from operations 1,917 1,959 1,735 1,667 Interest expense, net 535 536 512 467 Loss on early extinguishment of debt — — 122 — Income tax expense (benefit) 238 247 (134 ) 244 Net income (loss) $ 1,144 $ 1,176 $ 1,235 $ 956 (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. |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summarized Unaudited Quarterly Financial Data | Summarized unaudited quarterly financial data (in millions, except per share data) was as follows: Quarters Ended March 31, June 30, September 30, December 31, 2018 2017 2018 2017 2018 2017 2018 2017 Total revenues $ 1,254 $ 1,001 $ 1,343 $ 1,132 $ 1,375 $ 1,209 $ 1,385 $ 1,234 Income from operations $ 421 $ 336 $ 503 $ 415 $ 477 $ 479 $ 516 $ 505 Net income $ 279 $ 167 $ 314 $ 243 $ 250 $ 247 $ 301 $ 578 Basic and diluted earnings per unit Class A common units $ 0.73 $ 0.25 $ 0.83 $ 0.44 $ 0.66 $ 0.45 $ 0.81 $ 1.96 Partnership exchangeable units $ 0.60 $ 0.21 $ 0.67 $ 0.38 $ 0.53 $ 0.39 $ 0.65 $ 1.64 |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Condensed Consolidating Financial Statements | 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. RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions) As of December 31, 2018 Consolidated RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 913 $ — $ — $ 913 Accounts and notes receivable, net 452 — — 452 Inventories, net 75 — — 75 Prepaids and other current assets 60 — — 60 Total current assets 1,500 — — 1,500 Property and equipment, net 1,996 — — 1,996 Intangible assets, net 10,463 — — 10,463 Goodwill 5,486 — — 5,486 Net investment in property leased to franchisees 54 — — 54 Intercompany receivable — 207 (207 ) — Investment in subsidiaries — 3,618 (3,618 ) — Other assets, net 642 — — 642 Total assets $ 20,141 $ 3,825 $ (3,825 ) $ 20,141 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 513 $ — $ — $ 513 Other accrued liabilities 430 207 — 637 Gift card liability 167 — — 167 Current portion of long term debt and capital leases 91 — — 91 Total current liabilities 1,201 207 — 1,408 Term debt, net of current portion 11,823 — — 11,823 Capital leases, net of current portion 226 — — 226 Other liabilities, net 1,547 — — 1,547 Payables to affiliates 207 — (207 ) — Deferred income taxes, net 1,519 — — 1,519 Total liabilities 16,523 207 (207 ) 16,523 Partners’ capital: Class A common units — 4,323 — 4,323 Partnership exchangeable units — 730 — 730 Common shares 3,071 — (3,071 ) — Retained earnings 1,982 — (1,982 ) — Accumulated other comprehensive income (loss) (1,437 ) (1,437 ) 1,437 (1,437 ) Total Partners’ capital/shareholders’ equity 3,616 3,616 (3,616 ) 3,616 Noncontrolling interests 2 2 (2 ) 2 Total equity 3,618 3,618 (3,618 ) 3,618 Total liabilities and equity $ 20,141 $ 3,825 $ (3,825 ) $ 20,141 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions) As of December 31, 2017 Consolidated RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,097 $ — $ — $ 1,097 Accounts and notes receivable, net 489 — — 489 Inventories, net 78 — — 78 Prepaids and other current assets 86 — — 86 Total current assets 1,750 — — 1,750 Property and equipment, net 2,133 — — 2,133 Intangible assets, net 11,062 — — 11,062 Goodwill 5,782 — — 5,782 Net investment in property leased to franchisees 71 — — 71 Intercompany receivable — 97 (97 ) — Investment in subsidiaries — 4,561 (4,561 ) — Other assets, net 426 — — 426 Total assets $ 21,224 $ 4,658 $ (4,658 ) $ 21,224 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 496 $ — $ — $ 496 Other accrued liabilities 769 97 — 866 Gift card liability 215 — — 215 Current portion of long term debt and capital leases 78 — — 78 Total current liabilities 1,558 97 — 1,655 Term debt, net of current portion 11,801 — — 11,801 Capital leases, net of current portion 244 — — 244 Other liabilities, net 1,455 — — 1,455 Payables to affiliates 97 — (97 ) — Deferred income taxes, net 1,508 — — 1,508 Total liabilities 16,663 97 (97 ) 16,663 Partners’ capital: Class A common units — 4,168 — 4,168 Partnership exchangeable units — 1,276 — 1,276 Common shares 3,516 — (3,516 ) — Retained earnings 1,928 — (1,928 ) — Accumulated other comprehensive income (loss) (884 ) (884 ) 884 (884 ) Total Partners’ capital/shareholders’ equity 4,560 4,560 (4,560 ) 4,560 Noncontrolling interests 1 1 (1 ) 1 Total equity 4,561 4,561 (4,561 ) 4,561 Total liabilities and equity $ 21,224 $ 4,658 $ (4,658 ) $ 21,224 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions) 2018 Consolidated RBILP Eliminations Consolidated Revenues: Sales $ 2,355 $ — $ — $ 2,355 Franchise and property revenues 3,002 — — 3,002 Total revenues 5,357 — — 5,357 Operating costs and expenses: Cost of sales 1,818 — — 1,818 Franchise and property expenses 422 — — 422 Selling, general and administrative expenses 1,214 — — 1,214 (Income) loss from equity method investments (22 ) — — (22 ) Other operating expenses (income), net 8 — — 8 Total operating costs and expenses 3,440 — — 3,440 Income from operations 1,917 — — 1,917 Interest expense, net 535 — — 535 Income before income taxes 1,382 — — 1,382 Income tax (benefit) expense 238 — — 238 Net income 1,144 — — 1,144 Equity in earnings of consolidated subsidiaries — 1,144 (1,144 ) — Net income (loss) 1,144 1,144 (1,144 ) 1,144 Net income (loss) attributable to noncontrolling interests 1 1 (1 ) 1 Net income (loss) attributable to common unitholders / shareholders $ 1,143 $ 1,143 $ (1,143 ) $ 1,143 Total comprehensive income (loss) $ 591 $ 591 $ (591 ) $ 591 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions) 2017 Consolidated RBILP Eliminations Consolidated Revenues: Sales $ 2,390 $ — $ — $ 2,390 Franchise and property revenues 2,186 — — 2,186 Total revenues 4,576 — — 4,576 Operating costs and expenses: Cost of sales 1,850 — — 1,850 Franchise and property expenses 478 — — 478 Selling, general and administrative expenses 416 — — 416 (Income) loss from equity method investments (12 ) — — (12 ) Other operating expenses (income), net 109 — — 109 Total operating costs and expenses 2,841 — — 2,841 Income from operations 1,735 — — 1,735 Interest expense, net 512 — — 512 Loss on early extinguishment of debt 122 — — 122 Income before income taxes 1,101 — — 1,101 Income tax expense (134 ) — — (134 ) Net income 1,235 — — 1,235 Equity in earnings of consolidated subsidiaries — 1,235 (1,235 ) — Net income (loss) 1,235 1,235 (1,235 ) 1,235 Net income (loss) attributable to noncontrolling interests 2 2 (2 ) 2 Partnership preferred unit distributions — 256 — 256 Gain on redemption of Partnership preferred units — (234 ) — (234 ) Net income (loss) attributable to common unitholders / shareholders $ 1,233 $ 1,211 $ (1,233 ) $ 1,211 Total comprehensive income (loss) $ 1,706 $ 1,706 $ (1,706 ) $ 1,706 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions) 2016 Consolidated RBILP Eliminations Consolidated Revenues: Sales $ 2,205 $ — $ — $ 2,205 Franchise and property revenues 1,941 — — 1,941 Total revenues 4,146 — — 4,146 Operating costs and expenses: Cost of sales 1,727 — — 1,727 Franchise and property expenses 454 — — 454 Selling, general and administrative expenses 319 — — 319 (Income) loss from equity method investments (20 ) — — (20 ) Other operating expenses (income), net (1 ) — — (1 ) Total operating costs and expenses 2,479 — — 2,479 Income from operations 1,667 — — 1,667 Interest expense, net 467 — — 467 Income before income taxes 1,200 — — 1,200 Income tax expense 244 — — 244 Net income 956 — — 956 Equity in earnings of consolidated subsidiaries — 956 (956 ) — Net income (loss) 956 956 (956 ) 956 Net income (loss) attributable to noncontrolling interests 3 3 (3 ) 3 Partnership preferred unit distributions — 270 — 270 Net income (loss) attributable to common unitholders / shareholders $ 953 $ 683 $ (953 ) $ 683 Total comprehensive income (loss) $ 1,068 $ 1,068 $ (1,068 ) $ 1,068 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions) 2018 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 1,144 $ 1,144 $ (1,144 ) $ 1,144 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (1,144 ) 1,144 — Depreciation and amortization 180 — — 180 Amortization of deferred financing costs and debt issuance discount 29 — — 29 (Income) loss from equity method investments (22 ) — — (22 ) Loss (gain) on remeasurement of foreign denominated transactions (33 ) — — (33 ) Net (gains) losses on derivatives (40 ) — — (40 ) Share-based compensation expense 48 — — 48 Deferred income taxes 29 — — 29 Other 5 — — 5 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable 19 — — 19 Inventories and prepaids and other current assets (7 ) — — (7 ) Accounts and drafts payable 41 — — 41 Other accrued liabilities and gift card liability (219 ) — — (219 ) Tenant inducements paid to franchisees (52 ) — — (52 ) Other long-term assets and liabilities 43 — — 43 Net cash provided by operating activities 1,165 — — 1,165 Cash flows from investing activities: Payments for property and equipment (86 ) — — (86 ) Proceeds from disposal of assets, restaurant closures and refranchisings 8 — — 8 Return of investment on direct financing leases 16 — — 16 Settlement/sale of derivatives, net 17 — — 17 Other investing activities, net 1 — — 1 Net cash provided by (used for) investing activities (44 ) — — (44 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 75 — — 75 Repayments of long-term debt and capital leases (74 ) — — (74 ) Distributions to RBI for payments in connection with redemption of Preferred Shares — (60 ) — (60 ) Payment of financing costs (3 ) — — (3 ) Distributions paid on common, preferred and Partnership exchangeable units — (728 ) — (728 ) Repurchase of Partnership exchangeable units — (561 ) — (561 ) Capital contribution from RBI Inc. 61 — — 61 Distributions from subsidiaries (1,349 ) 1,349 — — Other financing activities, net 5 — — 5 Net cash provided by (used for) financing activities (1,285 ) — — (1,285 ) Effect of exchange rates on cash and cash equivalents (20 ) — — (20 ) Increase (decrease) in cash and cash equivalents (184 ) — — (184 ) Cash and cash equivalents at beginning of period 1,097 — — 1,097 Cash and cash equivalents at end of period $ 913 $ — $ — $ 913 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions) 2017 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 1,235 $ 1,235 $ (1,235 ) $ 1,235 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (1,235 ) 1,235 — Depreciation and amortization 182 — — 182 Premiums paid and non-cash loss on early extinguishment of debt 119 — — 119 Amortization of deferred financing costs and debt issuance discount 33 — — 33 (Income) loss from equity method investments (12 ) — — (12 ) Loss (gain) on remeasurement of foreign denominated transactions 77 — — 77 Net losses on derivatives 31 — — 31 Share-based compensation expense 48 — — 48 Deferred income taxes (742 ) — — (742 ) Other 18 — — 18 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (30 ) — — (30 ) Inventories and prepaids and other current assets 19 — — 19 Accounts and drafts payable 14 — — 14 Other accrued liabilities and gift card liability 360 — — 360 Tenant inducements paid to franchisees (20 ) — — (20 ) Other long-term assets and liabilities 99 — — 99 Net cash provided by operating activities 1,431 — — 1,431 Cash flows from investing activities: Payments for property and equipment (37 ) — — (37 ) Proceeds from disposal of assets, restaurant closures and refranchisings 26 — — 26 Net payment for purchase of Popeyes, net of cash acquired (1,636 ) — — (1,636 ) Return of investment on direct financing leases 16 — — 16 Settlement/sale of derivatives, net 772 — — 772 Other investing activities, net 1 — — 1 Net cash provided by (used for) investing activities (858 ) — — (858 ) Cash flows from financing activities: Proceeds from issuance of long-term debt 5,850 — — 5,850 Repayments of long-term debt and capital leases (2,742 ) — — (2,742 ) Distributions to RBI for payments in connection with redemption of Preferred Shares — (3,006 ) — (3,006 ) Payment of financing costs (63 ) — — (63 ) Distributions paid on common, preferred and Partnership exchangeable units — (664 ) — (664 ) Repurchase of Partnership exchangeable units — (330 ) — (330 ) Capital contribution from RBI Inc. 29 — — 29 Distributions from subsidiaries (4,000 ) 4,000 — — Other financing activities, net (10 ) — — (10 ) Net cash provided by (used for) financing activities (936 ) — — (936 ) Effect of exchange rates on cash and cash equivalents 24 — — 24 Increase (decrease) in cash and cash equivalents (339 ) — — (339 ) Cash and cash equivalents at beginning of period 1,436 — — 1,436 Cash and cash equivalents at end of period $ 1,097 $ — $ — $ 1,097 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions) 2016 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 956 $ 956 $ (956 ) $ 956 Adjustments to reconcile net income to net cash provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (956 ) 956 — Depreciation and amortization 172 — — 172 Amortization of deferred financing costs and debt issuance discount 39 — — 39 (Income) loss from equity method investments (20 ) — — (20 ) Loss (gain) on remeasurement of foreign denominated transactions (20 ) — — (20 ) Net losses on derivatives 21 — — 21 Share-based compensation expense 35 — — 35 Deferred income taxes 80 — — 80 Other 4 — — 4 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable (16 ) — — (16 ) Inventories and prepaids and other current assets (10 ) — — (10 ) Accounts and drafts payable 16 — — 16 Other accrued liabilities and gift card liability (1 ) — — (1 ) Tenant inducements paid to franchisees (19 ) — — (19 ) Other long-term assets and liabilities (23 ) — — (23 ) Net cash provided by operating activities 1,214 — — 1,214 Cash flows from investing activities: Payments for property and equipment (34 ) — — (34 ) Proceeds from disposal of assets, restaurant closures and refranchisings 30 — — 30 Return of investment on direct financing leases 17 — — 17 Settlement/sale of derivatives, net 11 — — 11 Other investing activities, net 3 — — 3 Net cash provided by (used for) investing activities 27 — — 27 Cash flows from financing activities: Repayments of long-term debt and capital leases (70 ) — — (70 ) Distributions paid on common, preferred and Partnership exchangeable units — (538 ) — (538 ) Capital contribution from RBI Inc. 14 — — 14 Excess tax benefits from share-based compensation 8 — — 8 Distributions from subsidiaries (538 ) 538 — — Other financing activities, net (5 ) — — (5 ) Net cash provided by (used for) financing activities (591 ) — — (591 ) Effect of exchange rates on cash and cash equivalents (2 ) — — (2 ) Increase (decrease) in cash and cash equivalents 648 — — 648 Cash and cash equivalents at beginning of period 788 — — 788 Cash and cash equivalents at end of period $ 1,436 $ — $ — $ 1,436 |
Description of Business and O_2
Description of Business and Organization - Additional Information (Details) | Dec. 31, 2018RestaurantCountry |
Basis of Presentation [Line Items] | |
Number of franchised or owned restaurants | 25,744 |
Number of countries in which company and franchise restaurants operated (more than) | Country | 100 |
Percentage of franchised restaurants | 100.00% |
Tim Hortons | |
Basis of Presentation [Line Items] | |
Number of franchised or owned restaurants | 4,846 |
Burger King | |
Basis of Presentation [Line Items] | |
Number of franchised or owned restaurants | 17,796 |
Popeyes | |
Basis of Presentation [Line Items] | |
Number of franchised or owned restaurants | 3,102 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)Restaurant | Dec. 31, 2017USD ($)Restaurant | Dec. 31, 2016USD ($) | Jan. 01, 2019USD ($) | |
Summary Of Accounting Policies [Line Items] | ||||
Investment in other affiliates | 50.00% | |||
Other debt recognized | $ 150,000,000 | $ 89,000,000 | ||
Goodwill and Brand impairment | 0 | 0 | $ 0 | |
Advertising expense, net of franchisee contributions | 793,000,000 | 7,000,000 | 6,000,000 | |
Construction loans | ||||
Summary Of Accounting Policies [Line Items] | ||||
Other debt recognized | $ 71,000,000 | $ 83,000,000 | ||
Buildings and improvements | ||||
Summary Of Accounting Policies [Line Items] | ||||
Estimated useful life of assets (up to) | 40 years | |||
Restaurant equipment | ||||
Summary Of Accounting Policies [Line Items] | ||||
Estimated useful life of assets (up to) | 17 years | |||
Furniture, fixtures, and other | ||||
Summary Of Accounting Policies [Line Items] | ||||
Estimated useful life of assets (up to) | 10 years | |||
Manufacturing equipment | ||||
Summary Of Accounting Policies [Line Items] | ||||
Estimated useful life of assets (up to) | 25 years | |||
Capital leases | ||||
Summary Of Accounting Policies [Line Items] | ||||
Estimated useful life of assets (up to) | 40 years | |||
Restaurant VIEs | ||||
Summary Of Accounting Policies [Line Items] | ||||
Number of consolidated restaurants | Restaurant | 17 | 31 | ||
Cross-currency rate swaps | Interest expense, net | Derivatives designated as net investment hedges | ||||
Summary Of Accounting Policies [Line Items] | ||||
Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) | $ 60,000,000 | $ 0 | $ 0 | |
Accounting Standards Update 2016-02 | Pro Forma | ||||
Summary Of Accounting Policies [Line Items] | ||||
Lease liabilities | $ 1,100,000,000 |
Significant Accounting Polici_5
Significant Accounting Policies - Reclassification of Certain Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Dec. 31, 2015 | |
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Tenant inducements paid to franchisees | $ (52) | $ (20) | $ (19) | ||
Current assets: | |||||
Cash and cash equivalents | 913 | 1,097 | 1,436 | $ 1,097 | $ 788 |
Accounts and notes receivable, net | 452 | 489 | 489 | ||
Inventories, net | 75 | 78 | 78 | ||
Advertising fund restricted assets | 0 | ||||
Prepaids and other current assets | 60 | 86 | 63 | ||
Total current assets | 1,500 | 1,750 | 1,727 | ||
Current liabilities: | |||||
Accounts and drafts payable | 513 | 496 | 496 | ||
Other accrued liabilities | 637 | 866 | 875 | ||
Gift card liability | 167 | 215 | 172 | ||
Advertising fund liabilities | 0 | ||||
Current portion of long term debt and capital leases | 91 | 78 | 78 | ||
Total current liabilities | $ 1,408 | 1,655 | $ 1,621 | ||
As Reported | |||||
Current assets: | |||||
Cash and cash equivalents | 1,073 | ||||
Accounts and notes receivable, net | 456 | ||||
Inventories, net | 78 | ||||
Advertising fund restricted assets | 83 | ||||
Prepaids and other current assets | 60 | ||||
Total current assets | 1,750 | ||||
Current liabilities: | |||||
Accounts and drafts payable | 413 | ||||
Other accrued liabilities | 838 | ||||
Gift card liability | 215 | ||||
Advertising fund liabilities | 111 | ||||
Current portion of long term debt and capital leases | 78 | ||||
Total current liabilities | 1,655 | ||||
Reclassification | |||||
Condensed Balance Sheet Statements, Captions [Line Items] | |||||
Tenant inducements paid to franchisees | 20 | $ 19 | |||
Current assets: | |||||
Cash and cash equivalents | 24 | ||||
Accounts and notes receivable, net | 33 | ||||
Inventories, net | 0 | ||||
Advertising fund restricted assets | (83) | ||||
Prepaids and other current assets | 26 | ||||
Total current assets | 0 | ||||
Current liabilities: | |||||
Accounts and drafts payable | 83 | ||||
Other accrued liabilities | 28 | ||||
Gift card liability | 0 | ||||
Advertising fund liabilities | (111) | ||||
Current portion of long term debt and capital leases | 0 | ||||
Total current liabilities | $ 0 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Fair Value Measurements (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Fair value of our variable term debt and senior notes | $ 11,000 | $ 12,000 |
Principal carrying amount of our variable term debt and senior notes | $ 11,893 | $ 11,858 |
Popeyes Acquisition - Additiona
Popeyes Acquisition - Additional Information (Details) - USD ($) $ in Millions | Mar. 27, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 |
Business Acquisition [Line Items] | |||||
Intangible assets, net | $ 10,463 | $ 11,062 | $ 11,062 | ||
Franchise agreements | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 41 | ||||
Weighted average useful life of intangible assets | 17 years | ||||
Off-market favorable lease | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | $ 9 | ||||
Weighted average useful life of intangible assets | 14 years | ||||
Popeyes Acquisition | |||||
Business Acquisition [Line Items] | |||||
Total consideration | $ 1,655 | ||||
Value of equity awards transferred | 33 | ||||
Business acquisition funded by cash | 355 | ||||
PLK Transaction costs | $ 10 | $ 62 | $ 0 | ||
Intangible assets, net | 1,355 | ||||
Intangible assets | 1,405 | ||||
Popeyes Acquisition | Selling, general and administrative expenses | |||||
Business Acquisition [Line Items] | |||||
PLK Transaction costs | 34 | ||||
Long-term debt | Popeyes Acquisition | |||||
Business Acquisition [Line Items] | |||||
Incremental borrowings funded by business acquisition | $ 1,300 |
Popeyes Acquisition - Schedule
Popeyes Acquisition - Schedule of Preliminary Allocation of Consideration to Net Tangible and Intangible Assets Acquired (Details) - Popeyes Acquisition $ in Millions | Mar. 27, 2017USD ($) |
Business Acquisition [Line Items] | |
Total current assets | $ 64 |
Property and equipment | 114 |
Intangible assets | 1,405 |
Other assets | 1 |
Total current liabilities | (73) |
Total debt and capital lease obligations | (159) |
Deferred income taxes | (523) |
Other liabilities | (20) |
Total identifiable net assets | 809 |
Goodwill | 846 |
Total consideration | $ 1,655 |
Earnings Per Unit - Basic and D
Earnings Per Unit - Basic and Diluted Earnings Per Unit (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allocation of net income among partner interests: | |||||||||||
Net income attributable to common unitholders | $ 1,143 | $ 1,211 | $ 683 | ||||||||
Class A common units | |||||||||||
Allocation of net income among partner interests: | |||||||||||
Net income attributable to common unitholders | $ 612 | $ 626 | $ 346 | ||||||||
Denominator - basic and diluted partnership units: | |||||||||||
Total weighted average basic and diluted units outstanding (in shares) | 202 | 202 | 202 | ||||||||
Earnings per unit - basic and diluted: | |||||||||||
Earnings per unit - basic and diluted (in dollars per share) | $ 0.81 | $ 0.66 | $ 0.83 | $ 0.73 | $ 1.96 | $ 0.45 | $ 0.44 | $ 0.25 | $ 3.03 | $ 3.10 | $ 1.71 |
Partnership exchangeable units | |||||||||||
Allocation of net income among partner interests: | |||||||||||
Net income attributable to common unitholders | $ 531 | $ 585 | $ 337 | ||||||||
Denominator - basic and diluted partnership units: | |||||||||||
Total weighted average basic and diluted units outstanding (in shares) | 216.1 | 225.5 | 227.8 | ||||||||
Earnings per unit - basic and diluted: | |||||||||||
Earnings per unit - basic and diluted (in dollars per share) | $ 0.65 | $ 0.53 | $ 0.67 | $ 0.60 | $ 1.64 | $ 0.39 | $ 0.38 | $ 0.21 | $ 2.46 | $ 2.59 | $ 1.48 |
Property and Equipment, net - S
Property and Equipment, net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 2,700 | $ 2,756 | |
Accumulated depreciation and amortization | (704) | (623) | |
Property and equipment, net | 1,996 | $ 2,133 | 2,133 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 998 | 1,020 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 1,145 | 1,172 | |
Restaurant equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 99 | 122 | |
Furniture, fixtures, and other | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 182 | 171 | |
Capital leases | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 257 | 256 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 19 | $ 15 |
Property and Equipment, net - A
Property and Equipment, net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense on property and equipment | $ 148 | $ 150 | $ 144 |
Assets leased under capital leases, net | 180 | 193 | |
Accumulated depreciation | $ 77 | $ 63 |
Intangible Assets, net and Go_3
Intangible Assets, net and Goodwill - Schedule of Intangible Assets, Net and Goodwill (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Identifiable assets, Gross | $ 1,112 | $ 1,181 | |
Identifiable assets, accumulated amortization | (394) | (362) | |
Identifiable assets, net | 718 | 819 | |
Indefinite lived intangible assets, Net | 9,745 | 10,243 | |
Intangible assets, net | 10,463 | $ 11,062 | 11,062 |
Goodwill | 5,486 | $ 5,782 | 5,782 |
Tim Hortons | |||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Goodwill | 4,038 | 4,326 | |
Tim Hortons | Trade Names | |||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Indefinite lived intangible assets, Net | 6,259 | 6,727 | |
Burger King | |||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Goodwill | 602 | 610 | |
Burger King | Trade Names | |||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Indefinite lived intangible assets, Net | 2,131 | 2,161 | |
Popeyes | |||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Goodwill | 846 | 846 | |
Popeyes | Trade Names | |||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Indefinite lived intangible assets, Net | 1,355 | 1,355 | |
Franchise agreements | |||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Identifiable assets, Gross | 705 | 725 | |
Identifiable assets, accumulated amortization | (194) | (168) | |
Identifiable assets, net | 511 | 557 | |
Favorable leases | |||
Finite And Indefinite Lived Intangible Assets [Line Items] | |||
Identifiable assets, Gross | 407 | 456 | |
Identifiable assets, accumulated amortization | (200) | (194) | |
Identifiable assets, net | $ 207 | $ 262 |
Intangible Assets, net and Go_4
Intangible Assets, net and Goodwill - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense on intangible assets | $ 70 | $ 72 | $ 72 |
Intangible Assets, net and Go_5
Intangible Assets, net and Goodwill - Schedule of the Estimated Future Amortization Expenses on Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,019 | $ 64 | |
2,020 | 59 | |
2,021 | 55 | |
2,022 | 51 | |
2,023 | 48 | |
Thereafter | 441 | |
Identifiable assets, net | $ 718 | $ 819 |
Equity Method Investments - Add
Equity Method Investments - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | |||
Investment in subsidiaries | $ 0 | $ 0 | |
Joint-venture interest | 50.00% | ||
Contingent rent expense | $ 71,000,000 | 71,000,000 | $ 71,000,000 |
Increase to carrying value of equity method investment | 20,000,000 | 0 | 12,000,000 |
Carrols Restaurant Group, Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Quoted market price | 93,000,000 | ||
BK Brasil | |||
Schedule of Equity Method Investments [Line Items] | |||
Quoted market price | 120,000,000 | ||
Equity method investee | |||
Schedule of Equity Method Investments [Line Items] | |||
Accounts receivable from equity method investments | 41,000,000 | 32,000,000 | |
Tim Hortons | Wendy's Company TIMWEN Partnership | |||
Schedule of Equity Method Investments [Line Items] | |||
Cash distributions | 13,000,000 | 12,000,000 | 11,000,000 |
Contingent rent expense | $ 20,000,000 | 20,000,000 | $ 20,000,000 |
Canada | TIMWEN Partnership | |||
Schedule of Equity Method Investments [Line Items] | |||
Joint-venture interest | 50.00% | ||
United States | Carrols Restaurant Group, Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Joint-venture interest | 20.50% | ||
China | Pangaea Foods (China) Holdings, Ltd. | |||
Schedule of Equity Method Investments [Line Items] | |||
Joint-venture interest | 10.10% | ||
Prepaids and other current assets | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in subsidiaries | $ 259,000,000 | $ 155,000,000 |
Equity Method Investments - Sum
Equity Method Investments - Summary of Franchise and Property Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from affiliates: | |||||||||||
Property revenues | $ 744 | $ 765 | $ 753 | ||||||||
Total revenues | $ 1,385 | $ 1,375 | $ 1,343 | $ 1,254 | $ 1,234 | $ 1,209 | $ 1,132 | $ 1,001 | 5,357 | 4,576 | 4,146 |
Affiliates | |||||||||||
Revenues from affiliates: | |||||||||||
Property revenues | 36 | 27 | 28 | ||||||||
Total revenues | 357 | 228 | 179 | ||||||||
Royalties | |||||||||||
Revenues from affiliates: | |||||||||||
Revenues | 2,165 | 1,215 | 993 | ||||||||
Royalties | Affiliates | |||||||||||
Revenues from affiliates: | |||||||||||
Revenues | 310 | 175 | 132 | ||||||||
Franchise fees and other revenue | |||||||||||
Revenues from affiliates: | |||||||||||
Revenues | 93 | 206 | 195 | ||||||||
Franchise fees and other revenue | Affiliates | |||||||||||
Revenues from affiliates: | |||||||||||
Revenues | $ 11 | $ 26 | $ 19 |
Other Accrued Liabilities and_3
Other Accrued Liabilities and Other Liabilities - Schedule of Other Accrued Liabilities (Current) and Other Liabilities (Non-Current), Net (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Current: | |||
Dividend payable | $ 207 | $ 97 | |
Interest payable | 87 | 89 | |
Accrued compensation and benefits | 69 | 67 | |
Taxes payable | 113 | 401 | |
Deferred income | 27 | 43 | |
Accrued advertising expenses | 30 | 27 | |
Closed property reserve | 9 | 11 | |
Restructuring and other provisions | 11 | 12 | |
Other | 84 | 119 | |
Other accrued liabilities | 637 | $ 875 | 866 |
Non-current: | |||
Derivatives liabilities | 179 | 499 | |
Taxes payable | 493 | 496 | |
Contract liabilities, net | 486 | 10 | |
Unfavorable leases | 192 | 252 | |
Accrued pension | 64 | 72 | |
Accrued lease straight-lining liability | 69 | 46 | |
Deferred income | 22 | 27 | |
Other | 42 | 53 | |
Other liabilities, net | $ 1,547 | $ 1,881 | $ 1,455 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||||
Other | $ 150 | $ 89 | ||
Less: unamortized deferred financing costs and deferred issuance discount | (145) | (170) | ||
Total debt, net | 11,893 | 11,858 | ||
Less: current maturities of debt | (70) | (57) | ||
Total long-term debt | 11,823 | $ 11,801 | 11,801 | |
Term Loan Facility (due February 17, 2024) | ||||
Debt Instrument [Line Items] | ||||
Term Loan Facility (due February 17, 2024) | 6,338 | 6,389 | ||
2017 4.25% Senior Notes (due May 15, 2024) | ||||
Debt Instrument [Line Items] | ||||
Senior notes | 1,500 | 1,500 | ||
Stated interest rate (as a percent) | 4.25% | |||
2015 4.625% Senior Notes (due January 15, 2022) | ||||
Debt Instrument [Line Items] | ||||
Senior notes | 1,250 | 1,250 | ||
Stated interest rate (as a percent) | 4.625% | |||
2017 5.00% Senior Notes (due October 15, 2025) | ||||
Debt Instrument [Line Items] | ||||
Senior notes | $ 2,800 | $ 2,800 | ||
Stated interest rate (as a percent) | 5.00% |
Long-Term Debt - Credit Facilit
Long-Term Debt - Credit Facilities (Details) | Feb. 17, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018 |
Line of Credit Facility [Line Items] | |||||||
Capitalized debt issuance costs | $ 63,000,000 | $ 0 | $ 0 | ||||
Loss on early extinguishment of debt | $ 0 | 122,000,000 | $ 0 | ||||
Eurocurrency rate loans | |||||||
Line of Credit Facility [Line Items] | |||||||
Fluctuating interest rate points | 1.00% | ||||||
Term loan facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Senior secured revolving credit facility | $ 4,900,000,000 | ||||||
Repayment of outstanding term loan facility | $ 146,000,000 | ||||||
Interest rate | 1.25% | 1.25% | 1.25% | ||||
Margin percentage for fluctuating interest rate | 2.25% | 2.25% | |||||
Capitalized debt issuance costs | 11,000,000 | ||||||
Loss on early extinguishment of debt | 20,000,000 | ||||||
Effective interest rate | 4.77% | 4.77% | |||||
Amortization of principal amount of Term Loan Facility | $ 16,000,000 | ||||||
2015 Senior Notes | |||||||
Line of Credit Facility [Line Items] | |||||||
Stated interest rate (as a percent) | 4.625% | 4.625% | |||||
Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Margin percentage for fluctuating interest rate alternative | 1.25% | ||||||
Minimum | Base rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument floor rate | 1.00% | ||||||
Minimum | LIBOR | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument floor rate | 1.25% | ||||||
Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Margin percentage for fluctuating interest rate alternative | 2.00% | ||||||
Maximum | Base rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument floor rate | 0.25% | ||||||
Maximum | LIBOR | |||||||
Line of Credit Facility [Line Items] | |||||||
Debt instrument floor rate | 2.00% | ||||||
Revolving credit facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Senior secured revolving credit facility | $ 500,000,000 | ||||||
Amount of letter of credit outstanding | $ 0 | ||||||
Letter of credit sublimit as part of revolving credit facility | 125,000,000 | ||||||
Amount withdrawn from revolving credit facility | 20,000,000 | ||||||
Remaining borrowing capacity | $ 480,000,000 | ||||||
Fluctuating interest rates | 2.00% | 2.00% | |||||
Revolving credit facility | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Revolving credit facility interest rate on unused portion, minimum | 0.25% | ||||||
Senior notes | 2017 4.25% Senior Notes (due May 15, 2024) | |||||||
Line of Credit Facility [Line Items] | |||||||
Aggregate principal amount of debt issued | 1,500,000,000 | ||||||
Stated interest rate (as a percent) | 4.25% | 4.25% | |||||
Senior notes | 2015 4.625% Senior Notes (due January 15, 2022) | |||||||
Line of Credit Facility [Line Items] | |||||||
Stated interest rate (as a percent) | 4.625% | 4.625% | |||||
2015 4.625% Senior Notes (due January 15, 2022) | |||||||
Line of Credit Facility [Line Items] | |||||||
Stated interest rate (as a percent) | 4.625% | ||||||
2015 4.625% Senior Notes (due January 15, 2022) | Revolving credit facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Senior secured revolving credit facility | 150,000,000 | ||||||
Capitalized debt issuance costs | $ 1,000,000 | ||||||
Popeyes | Term loan facility | Incremental term loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Capitalized debt issuance costs | $ 23,000,000 | ||||||
Aggregate principal amount of debt issued | 1,300,000,000 | ||||||
Popeyes | Term loan facility | Incremental term loan two | |||||||
Line of Credit Facility [Line Items] | |||||||
Aggregate principal amount of debt issued | $ 250,000,000 |
Long-Term Debt - 2017 4.25% Sen
Long-Term Debt - 2017 4.25% Senior Notes (Details) - USD ($) | Dec. 12, 2014 | Dec. 31, 2018 | Dec. 31, 2017 |
Senior notes | 2017 4.25% Senior Notes (due May 15, 2024) | |||
Debt Instrument [Line Items] | |||
Stated interest rate (as a percent) | 4.25% | ||
Aggregate principal amount of debt issued | $ 1,500,000,000 | ||
Debt issuance costs, net | $ 13,000,000 | ||
Preferred Share | |||
Debt Instrument [Line Items] | |||
Preferred stock dividend rate percentage | 9.00% | 9.00% |
Long-Term Debt - 2017 5.00% Sen
Long-Term Debt - 2017 5.00% Senior Notes (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 28, 2017 | |
Debt Instrument [Line Items] | ||||
Loss on early extinguishment of debt | $ 0 | $ 122,000,000 | $ 0 | |
Senior notes | 5% Senior Notes Indenture 2017 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate (as a percent) | 5.00% | 5.00% | ||
Aggregate principal amount of debt issued | 2,800,000,000 | |||
Debt issuance costs, net | 15,000,000 | |||
Senior notes | 6% Senior Notes Indenture 2014 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate (as a percent) | 6.00% | |||
Redemption of 2014 senior notes | 2,250,000,000 | |||
Loss on early extinguishment of debt | $ 102,000,000 |
Long-Term Debt - 2015 4.625% Se
Long-Term Debt - 2015 4.625% Senior Notes (Details) - 2015 Senior Notes | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |
Issuance of senior notes | $ 1,250,000,000 |
Stated interest rate (as a percent) | 4.625% |
Principal payments due | $ 0 |
Long-Term Debt - Restrictions a
Long-Term Debt - Restrictions and Covenants (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Aug. 28, 2017 |
2015 Senior Notes | ||
Line of Credit Facility [Line Items] | ||
Stated interest rate (as a percent) | 4.625% | |
2011 Amended Credit Agreement | ||
Line of Credit Facility [Line Items] | ||
First lien senior secured leverage ratio limit | 6.50 | |
Amount of letter of credit outstanding | $ 50 | |
Swingline loans outstanding percentage | 30.00% | |
Senior notes | 2017 4.25% Senior Notes (due May 15, 2024) | ||
Line of Credit Facility [Line Items] | ||
Stated interest rate (as a percent) | 4.25% | |
Senior notes | 5% Senior Notes Indenture 2017 | ||
Line of Credit Facility [Line Items] | ||
Stated interest rate (as a percent) | 5.00% | 5.00% |
Senior notes | Four Point Two Five Percent Senior Notes Indenture 2017 [Member] | ||
Line of Credit Facility [Line Items] | ||
Stated interest rate (as a percent) | 4.25% |
Long-Term Debt - Other (Details
Long-Term Debt - Other (Details) $ in Millions | Oct. 11, 2018CAD ($) | Mar. 27, 2017USD ($) | Dec. 31, 2018CAD ($) | Jun. 01, 2017USD ($) |
New Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 100,000,000 | |||
Amount drawn | $ 100,000,000 | |||
Effective interest rate | 3.64% | |||
Canadian Bankers' Acceptance rate | New Facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 1.40% | |||
Prime rate | New Facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate | 0.40% | |||
Popeyes Acquisition | ||||
Line of Credit Facility [Line Items] | ||||
Repayments of debt | $ 156 | |||
Senior notes | Series 1 | ||||
Line of Credit Facility [Line Items] | ||||
Aggregate principal amount of debt issued | $ 36 |
Long-Term Debt - Debt Issuance
Long-Term Debt - Debt Issuance Costs and Loss on Early Extinguishment of Debt (Details) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018CAD ($) | |
Debt Instrument [Line Items] | ||||
Capitalized debt issuance costs | $ 63 | $ 0 | $ 0 | |
Loss on early extinguishment of debt | $ 0 | 122 | $ 0 | |
6% Senior Notes Indenture 2014 | Senior notes | ||||
Debt Instrument [Line Items] | ||||
Loss on early extinguishment of debt | $ 102 | |||
Stated interest rate (as a percent) | 6.00% |
Long-Term Debt - Summary of Agg
Long-Term Debt - Summary of Aggregate Maturities of Long-Term Debt (Details) $ in Millions | Dec. 31, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,019 | $ 70 |
2,020 | 74 |
2,021 | 72 |
2,022 | 1,324 |
2,023 | 78 |
Thereafter | 10,420 |
Total | $ 12,038 |
Long-Term Debt - Schedule of In
Long-Term Debt - Schedule of Interest Expense, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Debt (a) | $ 498 | $ 484 | $ 412 |
Capital lease obligations | 23 | 21 | 20 |
Amortization of deferred financing costs and debt issuance discount | 29 | 33 | 39 |
Interest income | (15) | (26) | (4) |
Interest expense, net | 535 | 512 | 467 |
Derivatives designated as net investment hedges | Interest expense, net | Cross-currency rate swaps | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) | $ 60 | $ 0 | $ 0 |
Leases - Additional Information
Leases - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2018RestaurantPropertyBuilding | |
Leases [Abstract] | |
Restaurant properties to franchisees leased or subleased | Restaurant | 5,284 |
Non restaurant properties to third parties under capital and operating leases | Property | 129 |
Minimum lease term for assets given on lease | 10 years |
Maximum lease term for assets given on lease | 20 years |
Number of restaurant buildings taken on lease | Building | 675 |
Minimum lease term for assets taken on lease | 10 years |
Maximum lease term for assets taken on lease | 30 years |
Leases - Summary of Assets Leas
Leases - Summary of Assets Lease, Property and Equipment, Net (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Property Subject to or Available for Operating Lease [Line Items] | ||
Total lease, property and equipment | $ 2,098 | $ 2,163 |
Accumulated depreciation and amortization | (475) | (407) |
Property and equipment leased, net | 1,623 | 1,756 |
Land | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Total lease, property and equipment | 906 | 931 |
Buildings and improvements | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Total lease, property and equipment | 1,175 | 1,215 |
Restaurant equipment | ||
Property Subject to or Available for Operating Lease [Line Items] | ||
Total lease, property and equipment | $ 17 | $ 17 |
Leases - Summary of Net Investm
Leases - Summary of Net Investment, Direct Financing Leases (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Leases [Abstract] | |||
Future minimum lease receipts | $ 60 | $ 77 | |
Contingent rents | 29 | 39 | |
Estimated unguaranteed residual value | 16 | 17 | |
Unearned income | (35) | (45) | |
Net investment, direct financing leases | 70 | 88 | |
Current portion included within accounts receivables | (16) | (17) | |
Net investment in property leased to franchisees | $ 54 | $ 71 | $ 71 |
Leases - Summary of Property Re
Leases - Summary of Property Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Lease Disclosure [Line Items] | |||
Total rental income | $ 744 | $ 765 | $ 753 |
Franchise and property revenue | |||
Lease Disclosure [Line Items] | |||
Minimum | 454 | 464 | 451 |
Contingent | 273 | 284 | 282 |
Amortization of favorable and unfavorable income lease contracts, net | 8 | 8 | 9 |
Total rental income | 735 | 756 | 742 |
Earned income on direct financing leases | 9 | 9 | 11 |
Total property revenues | $ 744 | $ 765 | $ 753 |
Leases - Summary of Rent Expens
Leases - Summary of Rent Expense Associated with Lease Commitments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Leases [Abstract] | |||
Minimum | $ 201 | $ 198 | $ 193 |
Contingent | 71 | 71 | 71 |
Amortization of favorable and unfavorable payable lease contracts, net | 9 | 10 | 9 |
Total rental expense | 281 | 279 | 273 |
Rental expense from properties subleased to franchisees | $ 263 | $ 263 | $ 254 |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Receipts and Commitments (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Leases [Abstract] | |||
Future minimum lease receipts, direct financing leases, 2019 | $ 14 | ||
Future minimum lease receipts, direct financing leases, 2020 | 10 | ||
Future minimum lease receipts, direct financing leases, 2021 | 7 | ||
Future minimum lease receipts, direct financing leases, 2022 | 5 | ||
Future minimum lease receipts, direct financing leases, 2023 | 5 | ||
Future minimum lease receipts, direct financing leases, thereafter | 19 | ||
Future minimum lease receipts, direct financing leases, total | 60 | $ 77 | |
Future minimum lease receipts, operating leases, 2019 | 416 | ||
Future minimum lease receipts, operating leases, 2020 | 388 | ||
Future minimum lease receipts, operating leases, 2021 | 360 | ||
Future minimum lease receipts, operating leases, 2022 | 331 | ||
Future minimum lease receipts, operating leases, 2023 | 306 | ||
Future minimum lease receipts, operating leases, thereafter | 1,704 | ||
Future minimum lease receipts, operating leases, total | 3,505 | ||
Future minimum lease commitments, capital leases, 2019 | 38 | ||
Future minimum lease commitments, capital leases, 2020 | 36 | ||
Future minimum lease commitments, capital leases, 2021 | 34 | ||
Future minimum lease commitments, capital leases, 2022 | 33 | ||
Future minimum lease commitments, capital leases, 2023 | 30 | ||
Future minimum lease commitments, capital leases, thereafter | 201 | ||
Future minimum lease commitments, capital leases, Total | 372 | ||
Less amount representing interest | (125) | ||
Present value of minimum capital lease payments | 247 | ||
Current portion of capital lease obligation | (21) | ||
Long-term portion of capital lease obligation | 226 | $ 244 | $ 244 |
Future minimum lease commitments, operating leases, 2019 | 183 | ||
Future minimum lease commitments, operating leases, 2020 | 172 | ||
Future minimum lease commitments, operating leases, 2021 | 158 | ||
Future minimum lease commitments, operating leases, 2022 | 145 | ||
Future minimum lease commitments, operating leases, 2023 | 130 | ||
Future minimum lease commitments, operating leases, thereafter | 831 | ||
Future minimum lease commitments, operating leases, total | 1,619 | ||
Minimum sublease rentals under non-cancelable subleases | $ 2,290 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax [Line Items] | ||||
Provisional income tax expense (benefit) due to TCJA | $ 420 | |||
Favorable adjustment as a result of remeasurement of net deferred tax liabilities | $ 9 | |||
Provisional charges carryforward related to TCJA | 103 | |||
Favorable adjustment related to certain deductions allowed to be carried forward | 3 | |||
Provisional estimate for transition tax related to TCJA | 119 | |||
Favorable adjustment related to utilization of foreign tax credits | 15 | |||
Increase in valuation allowance | 43 | |||
Unrecognized tax benefits | 441 | 461 | $ 241 | $ 239 |
Possible reduction in unrecognized tax benefits in the next twelve months | 6 | |||
Total amount of accrued interest and penalties | 51 | 37 | ||
Potential interest and penalties associated with uncertain tax positions | $ 14 | $ 10 | $ 11 | |
Minimum | ||||
Income Tax [Line Items] | ||||
Income tax returns period subject to examination | 3 years | |||
Maximum | ||||
Income Tax [Line Items] | ||||
Income tax returns period subject to examination | 5 years |
Income Taxes - Income Before In
Income Taxes - Income Before Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax [Line Items] | |||
Foreign | $ 271 | $ (122) | $ 150 |
Income before income taxes | 1,382 | 1,101 | 1,200 |
Canada | |||
Income Tax [Line Items] | |||
Foreign | $ 1,111 | $ 1,223 | $ 1,050 |
Income Taxes - Income Tax (Bene
Income Taxes - Income Tax (Benefit) Expense Attributable to Income from Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | |||
Current Income Tax Expense (Benefit) | $ 209 | $ 608 | $ 164 |
Deferred: | |||
Total | 29 | (742) | 80 |
Income tax (benefit) expense | 238 | (134) | 244 |
Canada | |||
Current: | |||
Canadian | 25 | 438 | 79 |
Deferred: | |||
Canadian | 78 | (302) | 49 |
United States | |||
Current: | |||
U.S. Federal | 95 | 113 | 45 |
U.S. state, net of federal income tax benefit | 17 | 3 | 2 |
Deferred: | |||
U.S. Federal | (65) | (473) | 37 |
U.S. state, net of federal income tax benefit | 13 | 34 | (7) |
Other Foreign | |||
Current: | |||
Canadian | 72 | 54 | 38 |
Deferred: | |||
Canadian | $ 3 | $ (1) | $ 1 |
Income Taxes - Schedule of US F
Income Taxes - Schedule of US Federal Tax Statutory Rate Reconciles to Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Statutory rate | 26.50% | 26.50% | 26.50% |
Costs and taxes related to foreign operations | 4.20% | 8.90% | 9.60% |
Foreign exchange gain (loss) | (0.10%) | (7.70%) | 0.10% |
Foreign tax rate differential | (6.10%) | (1.90%) | (1.00%) |
Change in valuation allowance | 3.20% | 12.00% | 0.20% |
Change in accrual for tax uncertainties | 0.10% | (0.40%) | 1.00% |
Intercompany financing | (4.40%) | (19.50%) | (16.00%) |
Impact of Tax Act | (1.90%) | (27.40%) | 0.00% |
Benefit from stock option exercises | (5.00%) | (4.90%) | 0.00% |
Other | 0.70% | 2.30% | (0.10%) |
Effective income tax rate | 17.20% | (12.10%) | 20.30% |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax (Benefit) Expense Allocated to Continuing Operations and Amounts Separately Allocated to Other Items (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income tax (benefit) expense | $ 238 | $ (134) | $ 244 |
Cash flow hedge in accumulated other comprehensive income (loss) | (2) | 5 | (2) |
Net investment hedge in accumulated other comprehensive income (loss) | 101 | (13) | 12 |
Pension liability in accumulated other comprehensive income (loss) | 0 | (2) | (2) |
Stock option tax benefit in common shares | 0 | 0 | (9) |
Total | $ 337 | $ (144) | $ 243 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax (Benefit) Expense Attributable to Income from Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Deferred income tax (benefit) expense | $ (14) | $ (449) | $ 78 |
Change in valuation allowance | 43 | 133 | 2 |
Change in effective Canadian income tax rate | (3) | 0 | 0 |
Change in effective foreign income tax rate | (4) | 3 | 3 |
Change in effective U.S. federal income tax rate | (8) | (433) | 0 |
Change in effective U.S. state income tax rate | 15 | 4 | (3) |
Total | $ 29 | $ (742) | $ 80 |
Income Taxes - Schedule of the
Income Taxes - Schedule of the Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||||
Accounts and notes receivable | $ 5 | $ 5 | ||
Accrued employee benefits | 49 | 49 | ||
Unfavorable leases | 123 | 146 | ||
Liabilities not currently deductible for tax | 176 | 74 | ||
Tax loss and credit carryforwards | 509 | 550 | ||
Derivatives | 25 | 136 | ||
Other | 8 | 0 | ||
Total gross deferred tax assets | 895 | 960 | ||
Valuation allowance | (325) | (282) | $ (133) | $ (125) |
Net deferred tax assets | 570 | 678 | ||
Less deferred tax liabilities: | ||||
Property and equipment, principally due to differences in depreciation | 43 | 33 | ||
Intangible assets | 1,734 | 1,791 | ||
Leases | 105 | 129 | ||
Statutory impairment | 31 | 26 | ||
Outside basis difference | 35 | 68 | ||
Total gross deferred tax liabilities | 1,948 | 2,047 | ||
Net deferred tax liability | $ 1,378 | $ 1,369 |
Income Taxes - Summary of Chang
Income Taxes - Summary of Changes in Valuation Allowance (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Valuation Allowance, beginning balance | $ 282 | $ 133 | $ 125 |
Additions due to acquisition | 0 | 9 | 0 |
Change in estimates recorded to deferred income tax expense | 43 | 133 | 2 |
Changes from foreign currency exchange rates | 0 | 6 | (1) |
True-ups from changes in losses and credits | 0 | 1 | 7 |
Valuation Allowance, ending balance | $ 325 | $ 282 | $ 133 |
Income Taxes - Summary of Amoun
Income Taxes - Summary of Amount and Expiration Dates of Operating Loss and Tax Credit Carry-forwards (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Operating Loss And Tax Credit Carryforwards [Line Items] | |
Total | $ 2,831 |
Canadian net operating loss carryforwards | |
Operating Loss And Tax Credit Carryforwards [Line Items] | |
Operating loss carryforwards | 735 |
Canadian capital loss carryforwards | |
Operating Loss And Tax Credit Carryforwards [Line Items] | |
Capital loss carryforwards | 1,139 |
U.S. state net operating loss carryforwards | |
Operating Loss And Tax Credit Carryforwards [Line Items] | |
Operating loss carryforwards | 595 |
U.S. foreign tax credits | |
Operating Loss And Tax Credit Carryforwards [Line Items] | |
U.S. foreign tax credits | 81 |
Foreign tax | |
Operating Loss And Tax Credit Carryforwards [Line Items] | |
Operating loss carryforwards | 192 |
Capital loss carryforwards | 30 |
Foreign credits | 2 |
Other foreign net operating loss carryforwards | |
Operating Loss And Tax Credit Carryforwards [Line Items] | |
Operating loss carryforwards | $ 57 |
Income Taxes - A Reconciliation
Income Taxes - A Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 461 | $ 241 | $ 239 |
Additions on tax position related to the current year | 1 | 186 | 2 |
Additions for tax positions of prior years | 18 | 41 | 6 |
Additions for tax positions taken in conjunction with Transactions | 0 | 2 | 0 |
Reductions for tax positions of prior year | (18) | 0 | (1) |
Reductions for settlement | (18) | (2) | (5) |
Reductions due to statute expiration | (3) | (7) | 0 |
Ending balance | $ 441 | $ 461 | $ 241 |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) € in Millions, $ in Millions, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2017CAD ($) | Dec. 31, 2017USD ($) | |
Maximum | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Foreign currency forward contract notional amount | $ 124 | |||||
Interest expense, net | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Amount of pre-tax losses in AOCI expect to be reclassified into interest expense | (12) | |||||
Interest rate | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Foreign currency forward contract notional amount | 3,500 | $ 2,500 | ||||
Interest rate | Interest expense, net | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Net unrealized loss remaining in AOCI | $ 85 | |||||
Cross currency interest rate contract | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Cash received | $ 764 | |||||
Unrealized gain, net of tax | $ 533 | |||||
Cross currency interest rate contract | Fixed income interest rate | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Foreign currency forward contract notional amount | 400 | $ 6,754 | $ 5,000 | |||
Hedge Funds [Member] | Cross currency interest rate contract | Fixed income interest rate | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Foreign currency forward contract notional amount | $ 1,200 | € 1,108 |
Derivative Instruments - Quanti
Derivative Instruments - Quantitative Disclosures of Derivative Instruments Including Estimated Fair Values (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivatives designated as cash flow hedges | Interest rate swaps | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $ (37) | $ (6) | $ (23) |
Derivatives designated as cash flow hedges | Interest rate swaps | Interest expense, net | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain or (Loss) Reclassified from AOCI into Earnings | (19) | (31) | (21) |
Derivatives designated as cash flow hedges | Forward-currency contracts | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain (Loss) Recognized in Other Comprehensive Income (Loss) | 11 | (9) | (5) |
Derivatives designated as cash flow hedges | Forward-currency contracts | Cost of sales | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain or (Loss) Reclassified from AOCI into Earnings | (1) | (3) | 0 |
Derivatives designated as net investment hedges | Cross-currency rate swaps | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain (Loss) Recognized in Other Comprehensive Income (Loss) | 383 | (384) | (87) |
Derivatives designated as net investment hedges | Cross-currency rate swaps | Interest expense, net | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) | $ 60 | $ 0 | $ 0 |
Derivative Instruments - Summar
Derivative Instruments - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets designated as cash flow hedges and net investment hedges | $ 65 | $ 1 |
Derivative liabilities designated as cash flow hedges and net investment hedges | 179 | 503 |
Derivatives designated as cash flow hedges | Foreign currency | Other liabilities, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities designated as cash flow hedges and net investment hedges | 72 | 42 |
Derivatives designated as cash flow hedges | Foreign currency | Prepaids and other current assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets designated as cash flow hedges and net investment hedges | 7 | 1 |
Derivatives designated as cash flow hedges | Foreign currency | Other accrued liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities designated as cash flow hedges and net investment hedges | 0 | 5 |
Derivatives designated as net investment hedges | Foreign currency | Prepaids and other current assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative assets designated as cash flow hedges and net investment hedges | 58 | 0 |
Derivatives designated as net investment hedges | Foreign currency | Other liabilities, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities designated as cash flow hedges and net investment hedges | $ 107 | $ 456 |
Partnership Preferred Units - A
Partnership Preferred Units - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 12, 2017 | Dec. 12, 2014 | Dec. 31, 2018 | Dec. 31, 2014 |
Class of Stock [Line Items] | ||||
Preferred Shares redemption price per share (in dollars per share) | $ 48.109657 | |||
Preferred Share | ||||
Class of Stock [Line Items] | ||||
Partnership preferred units, shares issued | 68,530,939 | |||
Preferred stock dividend rate percentage | 9.00% | 9.00% | ||
Nominal dividend per year (in dollars per share) | $ 100 | |||
Aggregate consideration for sale of preferred shares | $ 3,116 | |||
Accrued and unpaid Preferred Share dividends | 54 | |||
Increase in net income attributable to common shareholders | $ 234 |
Equity - Additional Information
Equity - Additional Information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)dayshares | Dec. 31, 2017USD ($)shares | Dec. 31, 2016shares | |
Stockholders Equity [Line Items] | |||
Number of consecutive trading days | day | 20 | ||
Exchange of Partnership exchange units for RBI common shares (in shares) | 10,185,333 | 9,286,480 | 6,744,244 |
Partners capital account exchanges and conversions (in shares) | 10,000,000 | 5,000,000 | |
Partners capital account converted units (in shares) | $ | $ 561 | $ 330 | |
Partnership exchangeable units | |||
Stockholders Equity [Line Items] | |||
Exchange of Partnership exchange units for RBI common shares (in shares) | 185,333 | 4,286,480 | (6,744,244) |
Equity - Summary of Change in t
Equity - Summary of Change in the Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Foreign currency translation adjustment | $ (831) | $ 824 | $ 223 |
Amounts reclassified to earnings of cash flow hedges, net of tax of $(5), $(9), and $(6) | 14 | 25 | 16 |
Pension and post-retirement benefit plans, net of tax | 1 | 4 | (8) |
Ending balances | 3,616 | ||
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balances | (884) | (1,355) | (1,467) |
Foreign currency translation adjustment | (831) | 824 | 223 |
Net change in fair value of derivatives, net of tax | 263 | (382) | (119) |
Amounts reclassified to earnings of cash flow hedges, net of tax of $(5), $(9), and $(6) | 14 | 25 | 16 |
Pension and post-retirement benefit plans, net of tax | 1 | 4 | (8) |
Ending balances | (1,437) | (884) | (1,355) |
Derivatives | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balances | 177 | 534 | 637 |
Net change in fair value of derivatives, net of tax | 263 | (382) | (119) |
Amounts reclassified to earnings of cash flow hedges, net of tax of $(5), $(9), and $(6) | 14 | 25 | 16 |
Pension and post-retirement benefit plans, net of tax | 0 | ||
Ending balances | 454 | 177 | 534 |
Pensions | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balances | (28) | (32) | (24) |
Pension and post-retirement benefit plans, net of tax | 1 | 4 | (8) |
Ending balances | (27) | (28) | (32) |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balances | (1,033) | (1,857) | (2,080) |
Foreign currency translation adjustment | (831) | 824 | 223 |
Ending balances | $ (1,864) | $ (1,033) | $ (1,857) |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
New awards granted (in shares) | 1,548,000 | ||
Expected term of grant options | 6 years 4 months 20 days | 6 years 8 months 27 days | 6 years 8 months 27 days |
Stock options, expiration period | 10 years | ||
Portion of options vesting on each anniversary date, vesting percentage | 20.00% | ||
Weighted average contractual term | 6 years 2 months 13 days | ||
Fair value of options granted | $ 10.82 | $ 12.57 | $ 7.53 |
Total intrinsic value of stock options exercised | $ 371 | $ 288 | $ 47 |
Legacy Burger King Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
New awards granted (in shares) | 0 | ||
Legacy Tim Hortons Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
New awards granted (in shares) | 0 | ||
Minimum | United States Treasury yield | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term of grant options | 3 years | ||
Maximum | United States Treasury yield | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected term of grant options | 5 years | ||
First anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Portion of options vesting on each anniversary date, vesting percentage | 20.00% | ||
Second anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Portion of options vesting on each anniversary date, vesting percentage | 40.00% | ||
Third anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Portion of options vesting on each anniversary date, vesting percentage | 100.00% | ||
2016 Omnibus Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for issuance under the Plan (in shares) | 16,945,969 | ||
Stock Compensation Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 126 | ||
Weighted average contractual term | 3 years 3 months 18 days | ||
Limited performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Portion of options vesting on each anniversary date, vesting percentage | 100.00% | ||
Employee service period | 3 years | ||
Performance-based RSUs | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee service period | 3 years | ||
Performance-based RSUs | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee service period | 5 years | ||
Performance-based RSUs | Fourth anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Portion of options vesting on each anniversary date, vesting percentage | 50.00% | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Portion of options vesting on each anniversary date, vesting percentage | 20.00% | ||
Vesting period | 5 years | ||
Total intrinsic value of vested RSU's | $ 7 | $ 6 | $ 3 |
Time-vested RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 5 years | ||
Employee service period | 2 years | ||
Percentage of RSU forfeited | 100.00% |
Share-based Compensation - Summ
Share-based Compensation - Summary of Share-based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Stock options, stock options with tandem SARs and RSUs | $ 48 | $ 48 | $ 35 |
Accelerated vesting of Tim Hortons RSUs and performance stock units | 0 | 12 | 0 |
Total share-based compensation expense | 48 | 60 | 35 |
Modification of awards | $ 2 | $ 5 | $ 1 |
Share-based Compensation - Su_2
Share-based Compensation - Summary of the Significant Assumptions Used During the Year to Estimate the Fair Value of Stock Options (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.13% | 0.85% | |
Expected term (in years) | 6 years 4 months 20 days | 6 years 8 months 27 days | 6 years 8 months 27 days |
Expected volatility | 25.20% | 24.50% | 26.60% |
Expected dividend yield | 3.08% | 1.37% | 1.81% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.23% | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 1.25% |
Share-based Compensation - Su_3
Share-based Compensation - Summary of Option Activity under the Various Plan (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Total Number of Options | |
Outstanding Beginning Balance (in shares) | shares | 20,071 |
Granted (in shares) | shares | 1,548 |
Exercised (in shares) | shares | (7,268) |
Forfeited (in shares) | shares | (748) |
Outstanding Ending Balance (in shares) | shares | 13,603 |
Weighted Average Exercise Price | |
Outstanding Beginning Balance (in dollars per share) | $ / shares | $ 25.15 |
Granted (in dollars per share) | $ / shares | 58.19 |
Exercised (in dollars per share) | $ / shares | 8.37 |
Forfeited (in dollars per share) | $ / shares | 48.26 |
Outstanding Ending Balance (in dollars per share) | $ / shares | $ 36.41 |
Stock Option Activity, Additional Disclosures | |
Aggregate Intrinsic Value, Outstanding | $ | $ 231,988 |
Weighted average contractual term | 6 years 2 months 13 days |
Total Number of Options, Exercisable (in shares) | shares | 3,118 |
Weighted Average Exercise Price, Exercisable (in dollars per share) | $ / shares | $ 16.32 |
Aggregate Intrinsic Value, Exercisable | $ | $ 112,215 |
Average Remaining Contractual Term, Exercisable | 3 years 9 months 17 days |
Total Number of Options, Vested or expected to vest (in shares) | shares | 12,479 |
Weighted Average Exercise Price, Vested or expected to vest (in dollars per share) | $ / shares | $ 35.75 |
Aggregate Intrinsic Value, Vested or expected to vest | $ | $ 220,320 |
Average Remaining Contractual Term, Vested or expected to vest | 6 years 1 month 6 days |
Share-based Compensation - Su_4
Share-based Compensation - Summary of Time-vested RSUs and Performance-based RSUs Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Time-vested RSUs | |
Total Number of Shares | |
Outstanding, beginning balance | shares | 1,293 |
Granted (in shares) | shares | 329 |
Vested and Settled (in shares) | shares | (43) |
Dividend equivalents granted (in shares) | shares | 31 |
Forfeited (in shares) | shares | (110) |
Outstanding, ending balance | shares | 1,500 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 38.64 |
Granted (in dollars per share) | $ / shares | 57.68 |
Vested and Settled (in dollars per share) | $ / shares | 41.62 |
Dividend equivalents granted (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 51.05 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 41.88 |
Performance-based RSUs | |
Total Number of Shares | |
Outstanding, beginning balance | shares | 1,590 |
Granted (in shares) | shares | 920 |
Vested and Settled (in shares) | shares | (81) |
Dividend equivalents granted (in shares) | shares | 58 |
Forfeited (in shares) | shares | (80) |
Outstanding, ending balance | shares | 2,407 |
Weighted Average Grant Date Fair Value | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 36.31 |
Granted (in dollars per share) | $ / shares | 58.49 |
Vested and Settled (in dollars per share) | $ / shares | 34.68 |
Dividend equivalents granted (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 34.65 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 45.25 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | Dec. 31, 2015 | |
Deferred Revenue Arrangement [Line Items] | |||||||||||||
Other liabilities, net | $ 1,547 | $ 1,455 | $ 1,547 | $ 1,455 | $ 1,881 | ||||||||
Other assets, net | 642 | 426 | 642 | 426 | 533 | ||||||||
Partners' capital | 3,618 | 4,561 | 3,618 | 4,561 | $ 3,489 | 4,311 | $ 2,914 | ||||||
Deferred income taxes, net | 1,519 | 1,508 | 1,519 | 1,508 | 1,450 | ||||||||
Prepaids and other current assets | 60 | 86 | 60 | 86 | 63 | ||||||||
Gift card liability | 167 | 215 | 167 | 215 | 172 | ||||||||
Other accrued liabilities | 637 | 866 | 637 | 866 | |||||||||
Total revenues | 1,385 | $ 1,375 | $ 1,343 | $ 1,254 | 1,234 | $ 1,209 | $ 1,132 | $ 1,001 | 5,357 | 4,576 | 4,146 | ||
Income tax (benefit) expense | 238 | (134) | 244 | ||||||||||
Selling, general and administrative expenses | 1,214 | 416 | 319 | ||||||||||
Other operating expenses (income), net | (8) | (109) | 1 | ||||||||||
Interest expense, net | (535) | (512) | (467) | ||||||||||
Accounting Standards Update 2014-09 | |||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||
Cumulative effect adjustment (Note 16) | (250) | (250) | |||||||||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||
Cumulative effect adjustment (Note 16) | 250 | ||||||||||||
Other liabilities, net | (468) | 426 | (468) | 426 | |||||||||
Other assets, net | (101) | 107 | (101) | 107 | 107 | ||||||||
Partners' capital | 283 | (250) | 283 | (250) | |||||||||
Deferred income taxes, net | 67 | (58) | 67 | (58) | |||||||||
Prepaids and other current assets | 17 | (23) | 17 | (23) | |||||||||
Gift card liability | $ 42 | $ (43) | 42 | (43) | |||||||||
Total revenues | (750) | ||||||||||||
Income tax (benefit) expense | 9 | ||||||||||||
Selling, general and administrative expenses | (785) | ||||||||||||
Other operating expenses (income), net | 1 | ||||||||||||
Interest expense, net | (1) | ||||||||||||
MFDA arrangements | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||
Other liabilities, net | 105 | ||||||||||||
Partners' capital | 2 | ||||||||||||
Gift Cards | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||
Partners' capital | 25 | ||||||||||||
Deferred income taxes, net | 9 | ||||||||||||
Gift card liability | (43) | ||||||||||||
Other accrued liabilities | 9 | ||||||||||||
Franchise and property revenues | |||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||
Total revenues | 3,002 | $ 2,186 | $ 1,941 | ||||||||||
Franchise and property revenues | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||
Total revenues | 43 | ||||||||||||
Income tax (benefit) expense | 11 | ||||||||||||
Franchise and property revenues | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||
Other liabilities, net | 321 | ||||||||||||
Deferred income taxes, net | (67) | ||||||||||||
Total revenues | (750) | ||||||||||||
Advertising Funds | Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||||||
Deferred Revenue Arrangement [Line Items] | |||||||||||||
Partners' capital | (23) | ||||||||||||
Prepaids and other current assets | $ (23) | ||||||||||||
Total revenues | (793) | ||||||||||||
Income tax (benefit) expense | (2) | ||||||||||||
Selling, general and administrative expenses | (785) | ||||||||||||
Other operating expenses (income), net | 1 | ||||||||||||
Interest expense, net | $ (1) |
Revenue Recognition - Change in
Revenue Recognition - Change in contract liabilities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | |
Contract liabilities expected to be recognized in | $ 486 |
Change In Contract With Customer Liability [Roll Forward] | |
Beginning balance | 455 |
Revenue recognized that was included in the contract liability balance at the beginning of the year | (49) |
Increase, excluding amounts recognized as revenue during the period | 95 |
Impact of foreign currency translation | (15) |
Ending balance | 486 |
Tim Hortons | |
Segment Reporting Information [Line Items] | |
Contract liabilities expected to be recognized in | 62 |
Change In Contract With Customer Liability [Roll Forward] | |
Beginning balance | 47 |
Revenue recognized that was included in the contract liability balance at the beginning of the year | (6) |
Increase, excluding amounts recognized as revenue during the period | 24 |
Impact of foreign currency translation | (3) |
Ending balance | 62 |
Burger King | |
Segment Reporting Information [Line Items] | |
Contract liabilities expected to be recognized in | 405 |
Change In Contract With Customer Liability [Roll Forward] | |
Beginning balance | 402 |
Revenue recognized that was included in the contract liability balance at the beginning of the year | (43) |
Increase, excluding amounts recognized as revenue during the period | 58 |
Impact of foreign currency translation | (12) |
Ending balance | 405 |
Popeyes | |
Segment Reporting Information [Line Items] | |
Contract liabilities expected to be recognized in | 19 |
Change In Contract With Customer Liability [Roll Forward] | |
Beginning balance | 6 |
Revenue recognized that was included in the contract liability balance at the beginning of the year | 0 |
Increase, excluding amounts recognized as revenue during the period | 13 |
Impact of foreign currency translation | 0 |
Ending balance | $ 19 |
Revenue Recognition - Estimated
Revenue Recognition - Estimated revenue recognition (Details) $ in Millions | Dec. 31, 2018USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 486 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 38 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 37 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 36 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 35 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 34 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 306 |
Tim Hortons | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 62 |
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 7 |
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 7 |
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 7 |
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 6 |
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 6 |
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 29 |
Burger King | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 405 |
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 30 |
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 29 |
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 28 |
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 28 |
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 27 |
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 263 |
Popeyes | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 19 |
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 1 |
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 1 |
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 1 |
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 1 |
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 1 |
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 14 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of total revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||||||
Property revenues | $ 744 | $ 765 | $ 753 | ||||||||
Total revenues | $ 1,385 | $ 1,375 | $ 1,343 | $ 1,254 | $ 1,234 | $ 1,209 | $ 1,132 | $ 1,001 | 5,357 | 4,576 | 4,146 |
Sales | |||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||||||
Revenues | 2,355 | 2,390 | 2,205 | ||||||||
Royalties | |||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||||||
Revenues | 2,165 | 1,215 | 993 | ||||||||
Franchise fees and other revenue | |||||||||||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||||||||||
Revenues | $ 93 | $ 206 | $ 195 |
Revenue Recognition - Adjustmen
Revenue Recognition - Adjustments to balance sheet due to Topic 606 and Pro Forma adjustments (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | |||||
Cash and cash equivalents | $ 913 | $ 1,097 | $ 1,097 | $ 1,436 | $ 788 |
Accounts and notes receivable, net of allowance of $14 and $16, respectively | 452 | 489 | 489 | ||
Inventories, net | 75 | 78 | 78 | ||
Prepaids and other current assets | 60 | 63 | 86 | ||
Total current assets | 1,500 | 1,727 | 1,750 | ||
Property and equipment, net | 1,996 | 2,133 | 2,133 | ||
Intangible assets, net | 10,463 | 11,062 | 11,062 | ||
Goodwill | 5,486 | 5,782 | 5,782 | ||
Net investment in property leased to franchisees | 54 | 71 | 71 | ||
Other assets, net | 642 | 533 | 426 | ||
Total assets | 20,141 | 21,308 | 21,224 | ||
Current liabilities: | |||||
Accounts and drafts payable | 513 | 496 | 496 | ||
Other accrued liabilities | 637 | 875 | 866 | ||
Gift card liability | 167 | 172 | 215 | ||
Current portion of long term debt and capital leases | 91 | 78 | 78 | ||
Total current liabilities | 1,408 | 1,621 | 1,655 | ||
Term debt, net of current portion | 11,823 | 11,801 | 11,801 | ||
Capital leases, net of current portion | 226 | 244 | 244 | ||
Other liabilities, net | 1,547 | 1,881 | 1,455 | ||
Deferred income taxes, net | 1,519 | 1,450 | 1,508 | ||
Total liabilities | 16,523 | 16,997 | 16,663 | ||
Partners' capital | |||||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 4,323 | 4,036 | |||
Partnership exchangeable units | 730 | 1,158 | |||
Accumulated other comprehensive income (loss) | (1,437) | (884) | (884) | ||
Total Partners' capital | 3,616 | 4,310 | |||
Noncontrolling interests | 2 | 1 | 1 | ||
Total equity | 3,618 | 4,311 | 4,561 | 3,489 | 2,914 |
Total liabilities and equity | 20,141 | 21,308 | 21,224 | ||
Class A common units | |||||
Partners' capital | |||||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 4,323 | 4,168 | |||
Total equity | 4,323 | 4,168 | 3,364 | 2,878 | |
Partnership exchangeable units | |||||
Partners' capital | |||||
Partnership exchangeable units | 730 | 1,276 | |||
Total equity | 730 | 1,276 | $ 1,477 | $ 1,503 | |
Total Adjustments | Accounting Standards Update 2014-09 | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Accounts and notes receivable, net of allowance of $14 and $16, respectively | 0 | 0 | |||
Inventories, net | 0 | 0 | |||
Prepaids and other current assets | 17 | (23) | |||
Total current assets | 17 | (23) | |||
Property and equipment, net | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Net investment in property leased to franchisees | 0 | 0 | |||
Other assets, net | (101) | $ 107 | 107 | ||
Total assets | (84) | 84 | |||
Current liabilities: | |||||
Accounts and drafts payable | 7 | 0 | |||
Other accrued liabilities | (15) | 9 | |||
Gift card liability | 42 | (43) | |||
Current portion of long term debt and capital leases | 0 | 0 | |||
Total current liabilities | 34 | (34) | |||
Term debt, net of current portion | 0 | 0 | |||
Capital leases, net of current portion | 0 | 0 | |||
Other liabilities, net | (468) | 426 | |||
Deferred income taxes, net | 67 | (58) | |||
Total liabilities | (367) | 334 | |||
Partners' capital | |||||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 155 | (132) | |||
Partnership exchangeable units | 128 | (118) | |||
Accumulated other comprehensive income (loss) | 0 | 0 | |||
Total Partners' capital | 283 | (250) | |||
Noncontrolling interests | 0 | 0 | |||
Total equity | 283 | (250) | |||
Total liabilities and equity | (84) | 84 | |||
Amounts Under Previous Standards | |||||
Current assets: | |||||
Cash and cash equivalents | 913 | 1,097 | |||
Accounts and notes receivable, net of allowance of $14 and $16, respectively | 452 | 489 | |||
Inventories, net | 75 | 78 | |||
Prepaids and other current assets | 77 | 86 | |||
Total current assets | 1,517 | 1,750 | |||
Property and equipment, net | 1,996 | 2,133 | |||
Intangible assets, net | 10,463 | 11,062 | |||
Goodwill | 5,486 | 5,782 | |||
Net investment in property leased to franchisees | 54 | 71 | |||
Other assets, net | 541 | 426 | |||
Total assets | 20,057 | 21,224 | |||
Current liabilities: | |||||
Accounts and drafts payable | 520 | 496 | |||
Other accrued liabilities | 622 | 866 | |||
Gift card liability | 209 | 215 | |||
Current portion of long term debt and capital leases | 91 | 78 | |||
Total current liabilities | 1,442 | 1,655 | |||
Term debt, net of current portion | 11,823 | 11,801 | |||
Capital leases, net of current portion | 226 | 244 | |||
Other liabilities, net | 1,079 | 1,455 | |||
Deferred income taxes, net | 1,586 | 1,508 | |||
Total liabilities | 16,156 | 16,663 | |||
Partners' capital | |||||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 4,478 | 4,168 | |||
Partnership exchangeable units | 858 | 1,276 | |||
Accumulated other comprehensive income (loss) | (1,437) | (884) | |||
Total Partners' capital | 3,899 | 4,560 | |||
Noncontrolling interests | 2 | 1 | |||
Total equity | 3,901 | 4,561 | |||
Total liabilities and equity | $ 20,057 | $ 21,224 |
Revenue Recognition - Pro Forma
Revenue Recognition - Pro Forma adjustments to income statement (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||||||||||
Total revenues | $ 1,385 | $ 1,375 | $ 1,343 | $ 1,254 | $ 1,234 | $ 1,209 | $ 1,132 | $ 1,001 | $ 5,357 | $ 4,576 | $ 4,146 |
Operating costs and expenses: | |||||||||||
Cost of sales | 1,818 | 1,850 | 1,727 | ||||||||
Franchise and property expenses | 422 | 478 | 454 | ||||||||
Selling, general and administrative expenses | 1,214 | 416 | 319 | ||||||||
(Income) loss from equity method investments | (22) | (12) | (20) | ||||||||
Other operating expenses (income), net | 8 | 109 | (1) | ||||||||
Total operating costs and expenses | 3,440 | 2,841 | 2,479 | ||||||||
Income from operations | $ 516 | $ 477 | $ 503 | $ 421 | $ 505 | $ 479 | $ 415 | $ 336 | 1,917 | 1,735 | 1,667 |
Interest expense, net | 535 | 512 | 467 | ||||||||
Income before income taxes | 1,382 | 1,101 | 1,200 | ||||||||
Income tax (benefit) expense | 238 | (134) | 244 | ||||||||
Net income | 1,144 | 1,235 | 956 | ||||||||
Net income attributable to noncontrolling interests | 1 | 2 | 3 | ||||||||
Net income attributable to common unitholders | 1,143 | 1,211 | 683 | ||||||||
Total Adjustments | Accounting Standards Update 2014-09 | |||||||||||
Revenues: | |||||||||||
Total revenues | (750) | ||||||||||
Operating costs and expenses: | |||||||||||
Cost of sales | 0 | ||||||||||
Franchise and property expenses | 0 | ||||||||||
Selling, general and administrative expenses | (785) | ||||||||||
(Income) loss from equity method investments | (6) | ||||||||||
Other operating expenses (income), net | (1) | ||||||||||
Total operating costs and expenses | (792) | ||||||||||
Income from operations | 42 | ||||||||||
Interest expense, net | 1 | ||||||||||
Income before income taxes | 41 | ||||||||||
Income tax (benefit) expense | 9 | ||||||||||
Net income | 32 | ||||||||||
Net income attributable to noncontrolling interests | 0 | ||||||||||
Net income attributable to common unitholders | 32 | ||||||||||
Amounts Under Previous Standards | |||||||||||
Revenues: | |||||||||||
Total revenues | 4,607 | ||||||||||
Operating costs and expenses: | |||||||||||
Cost of sales | 1,818 | ||||||||||
Franchise and property expenses | 422 | ||||||||||
Selling, general and administrative expenses | 429 | ||||||||||
(Income) loss from equity method investments | (28) | ||||||||||
Other operating expenses (income), net | 7 | ||||||||||
Total operating costs and expenses | 2,648 | ||||||||||
Income from operations | 1,959 | ||||||||||
Interest expense, net | 536 | ||||||||||
Income before income taxes | 1,423 | ||||||||||
Income tax (benefit) expense | 247 | ||||||||||
Net income | 1,176 | ||||||||||
Net income attributable to noncontrolling interests | 1 | ||||||||||
Net income attributable to common unitholders | 1,175 | ||||||||||
Sales | |||||||||||
Revenues: | |||||||||||
Sales | 2,355 | 2,390 | 2,205 | ||||||||
Sales | Total Adjustments | Accounting Standards Update 2014-09 | |||||||||||
Revenues: | |||||||||||
Sales | 0 | ||||||||||
Sales | Amounts Under Previous Standards | |||||||||||
Revenues: | |||||||||||
Sales | 2,355 | ||||||||||
Franchise and property revenues | |||||||||||
Revenues: | |||||||||||
Total revenues | 3,002 | 2,186 | 1,941 | ||||||||
Franchise and property revenues | Total Adjustments | |||||||||||
Revenues: | |||||||||||
Total revenues | 43 | ||||||||||
Operating costs and expenses: | |||||||||||
Income tax (benefit) expense | 11 | ||||||||||
Franchise and property revenues | Total Adjustments | Accounting Standards Update 2014-09 | |||||||||||
Revenues: | |||||||||||
Total revenues | (750) | ||||||||||
Franchise and property revenues | Amounts Under Previous Standards | |||||||||||
Revenues: | |||||||||||
Total revenues | 2,252 | ||||||||||
Class A common units | |||||||||||
Operating costs and expenses: | |||||||||||
Net income | 612 | 636 | 482 | ||||||||
Net income attributable to common unitholders | $ 612 | $ 626 | $ 346 | ||||||||
Earnings per unit - basic and diluted: | |||||||||||
Earnings per unit - basic and diluted (in usd per share) | $ 0.81 | $ 0.66 | $ 0.83 | $ 0.73 | $ 1.96 | $ 0.45 | $ 0.44 | $ 0.25 | $ 3.03 | $ 3.10 | $ 1.71 |
Class A common units | Amounts Under Previous Standards | |||||||||||
Earnings per unit - basic and diluted: | |||||||||||
Earnings per unit - basic and diluted (in usd per share) | $ 3.12 | ||||||||||
Partnership exchangeable units | |||||||||||
Operating costs and expenses: | |||||||||||
Net income | $ 531 | $ 597 | $ 471 | ||||||||
Net income attributable to common unitholders | $ 531 | $ 585 | $ 337 | ||||||||
Earnings per unit - basic and diluted: | |||||||||||
Earnings per unit - basic and diluted (in usd per share) | $ 0.65 | $ 0.53 | $ 0.67 | $ 0.60 | $ 1.64 | $ 0.39 | $ 0.38 | $ 0.21 | $ 2.46 | $ 2.59 | $ 1.48 |
Partnership exchangeable units | Amounts Under Previous Standards | |||||||||||
Earnings per unit - basic and diluted: | |||||||||||
Earnings per unit - basic and diluted (in usd per share) | $ 2.53 |
Revenue Recognition - Pro For_2
Revenue Recognition - Pro Forma adjustments to cash flow statement (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 1,144 | $ 1,235 | $ 956 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 180 | 182 | 172 |
Amortization of deferred financing costs and debt issuance discount | 29 | 33 | 39 |
(Income) loss from equity method investments | (22) | (12) | (20) |
Loss (gain) on remeasurement of foreign denominated transactions | (33) | 77 | (20) |
Net (gains) losses on derivatives | (40) | 31 | 21 |
Share-based compensation expense | 48 | 48 | 35 |
Deferred income taxes | 29 | (742) | 80 |
Other | 5 | 18 | 4 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | |||
Accounts and notes receivable | 19 | (30) | (16) |
Inventories and prepaids and other current assets | (7) | ||
Accounts and drafts payable | 41 | 14 | 16 |
Other accrued liabilities and gift card liability | (219) | 360 | (1) |
Tenant inducements paid to franchisees | (52) | (20) | (19) |
Other long-term assets and liabilities | 43 | 99 | (23) |
Net cash provided by operating activities | 1,165 | $ 1,431 | $ 1,214 |
Total Adjustments | Accounting Standards Update 2014-09 | |||
Cash flows from operating activities: | |||
Net income | 32 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 0 | ||
Amortization of deferred financing costs and debt issuance discount | 0 | ||
(Income) loss from equity method investments | (6) | ||
Loss (gain) on remeasurement of foreign denominated transactions | 0 | ||
Net (gains) losses on derivatives | 0 | ||
Share-based compensation expense | 0 | ||
Deferred income taxes | 9 | ||
Other | 0 | ||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | |||
Accounts and notes receivable | 0 | ||
Inventories and prepaids and other current assets | 6 | ||
Accounts and drafts payable | 7 | ||
Other accrued liabilities and gift card liability | (6) | ||
Tenant inducements paid to franchisees | 0 | ||
Other long-term assets and liabilities | (42) | ||
Net cash provided by operating activities | 0 | ||
Amounts Under Previous Standards | |||
Cash flows from operating activities: | |||
Net income | 1,176 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 180 | ||
Amortization of deferred financing costs and debt issuance discount | 29 | ||
(Income) loss from equity method investments | (28) | ||
Loss (gain) on remeasurement of foreign denominated transactions | (33) | ||
Net (gains) losses on derivatives | (40) | ||
Share-based compensation expense | 48 | ||
Deferred income taxes | 38 | ||
Other | 5 | ||
Changes in current assets and liabilities, excluding acquisitions and dispositions: | |||
Accounts and notes receivable | 19 | ||
Inventories and prepaids and other current assets | (1) | ||
Accounts and drafts payable | 48 | ||
Other accrued liabilities and gift card liability | (225) | ||
Tenant inducements paid to franchisees | (52) | ||
Other long-term assets and liabilities | 1 | ||
Net cash provided by operating activities | $ 1,165 |
Other Operating Expenses (Inc_3
Other Operating Expenses (Income), net - Other Operating Expenses (Income), Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Other Income and Expenses [Abstract] | |||
Net losses on disposal of assets, restaurant closures and refranchisings | $ 19 | $ 29 | $ 18 |
Litigation settlements and reserves, net | 11 | 2 | 1 |
Net losses (gains) on foreign exchange | (33) | 77 | (20) |
Other, net | 11 | 1 | 0 |
Other operating expenses (income), net | $ 8 | $ 109 | $ (1) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Oct. 06, 2017plaintiff | Jun. 19, 2017plaintiff | Dec. 31, 2018USD ($) | Oct. 22, 2018claim |
Commitments Contingencies And Litigation [Line Items] | ||||
Number of lawsuits | claim | 2 | |||
Standby letters of credit | ||||
Commitments Contingencies And Litigation [Line Items] | ||||
Amount withdrawn from standby letter of credit | $ 20 | |||
Telecommunication services | ||||
Commitments Contingencies And Litigation [Line Items] | ||||
Litigation settlement, Gross | 41 | |||
Information technology | ||||
Commitments Contingencies And Litigation [Line Items] | ||||
Litigation settlement, Gross | $ 41 | |||
Purchase commitment | ||||
Commitments Contingencies And Litigation [Line Items] | ||||
Contractual obligation related with telecommunication | 3 years | |||
Purchase of advertising | $ 380 | |||
Pending litigation | ||||
Commitments Contingencies And Litigation [Line Items] | ||||
Number of plaintiffs | plaintiff | 2 | 2 |
Segment Reporting and Geograp_3
Segment Reporting and Geographical Information - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2018SegmentBrand | Dec. 31, 2017 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Number of brands | Brand | 3 | |
Tim Hortons, Burger King, and Popeyes brand | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Number of operating segments | 3 | |
Number of reportable segments | 3 | |
United States | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Percentage of long lived assets by segment | 10.00% | |
Canada | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Percentage of long lived assets by segment | 10.00% | 10.00% |
Segment Reporting and Geograp_4
Segment Reporting and Geographical Information - Revenues by Geographic Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | $ 1,385 | $ 1,375 | $ 1,343 | $ 1,254 | $ 1,234 | $ 1,209 | $ 1,132 | $ 1,001 | $ 5,357 | $ 4,576 | $ 4,146 |
Canada | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | 2,984 | 2,832 | 2,672 | ||||||||
United States | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | 1,785 | 1,190 | 1,004 | ||||||||
Other | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | 588 | 554 | 470 | ||||||||
Tim Hortons | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | 3,292 | 3,155 | 3,001 | ||||||||
Burger King | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | 1,651 | 1,219 | 1,145 | ||||||||
Popeyes | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | 414 | $ 202 | $ 0 | ||||||||
Amounts Under Previous Standards | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | 4,607 | ||||||||||
Amounts Under Previous Standards | Tim Hortons | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | 3,077 | ||||||||||
Amounts Under Previous Standards | Burger King | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | 1,251 | ||||||||||
Amounts Under Previous Standards | Popeyes | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Total revenues | $ 279 | ||||||||||
Sales revenue | Geographic concentration risk | Canada and United States | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Revenues percentage | 10.00% | ||||||||||
Sales revenue | Geographic concentration risk | Canada | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Revenues percentage | 10.00% |
Segment Reporting and Geograp_5
Segment Reporting and Geographical Information - Depreciation and Amortization Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation and Amortization: | |||
Depreciation and amortization | $ 180 | $ 182 | $ 172 |
Tim Hortons | |||
Depreciation and Amortization: | |||
Depreciation and amortization | 108 | 110 | 108 |
Burger King | |||
Depreciation and Amortization: | |||
Depreciation and amortization | 61 | 62 | 64 |
Popeyes | |||
Depreciation and Amortization: | |||
Depreciation and amortization | $ 11 | $ 10 | $ 0 |
Segment Reporting and Geograp_6
Segment Reporting and Geographical Information - (Income) Loss from Equity Method Investments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
(Income) Loss from Equity Method Investments: | |||
(Income) loss from equity method investments | $ (22) | $ (12) | $ (20) |
Tim Hortons | |||
(Income) Loss from Equity Method Investments: | |||
(Income) loss from equity method investments | (6) | (8) | (8) |
Burger King | |||
(Income) Loss from Equity Method Investments: | |||
(Income) loss from equity method investments | $ (16) | $ (4) | $ (12) |
Segment Reporting and Geograp_7
Segment Reporting and Geographical Information - Capital Expenditure (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Capital Expenditures: | |||
Capital expenditures | $ 86 | $ 37 | $ 34 |
Tim Hortons | |||
Capital Expenditures: | |||
Capital expenditures | 59 | 13 | 12 |
Burger King | |||
Capital Expenditures: | |||
Capital expenditures | 25 | 23 | 22 |
Popeyes | |||
Capital Expenditures: | |||
Capital expenditures | $ 2 | $ 1 | $ 0 |
Segment Reporting and Geograp_8
Segment Reporting and Geographical Information - Schedule of Segment Related Assets and Long Lived Assets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Long Lived Assets Held-for-sale [Line Items] | |||
Total assets | $ 20,141 | $ 21,308 | $ 21,224 |
Long-lived assets | 2,050 | 2,204 | |
Operating segments | Tim Hortons | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Total assets | 12,666 | 13,733 | |
Long-lived assets | 1,226 | 1,351 | |
Operating segments | Burger King | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Total assets | 4,514 | 4,633 | |
Long-lived assets | 729 | 751 | |
Operating segments | Popeyes | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Total assets | 2,420 | 2,440 | |
Long-lived assets | 95 | 102 | |
Unallocated | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Total assets | 541 | 418 | |
Long-lived assets | 0 | 0 | |
Canada | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Long-lived assets | 945 | 1,059 | |
United States | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Long-lived assets | 1,098 | 1,138 | |
Other | |||
Long Lived Assets Held-for-sale [Line Items] | |||
Long-lived assets | $ 7 | $ 7 |
Segment Reporting and Geograp_9
Segment Reporting and Geographical Information - Reconciliation of Segment Income to Net Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Adjusted EBITDA | $ 2,212 | $ 2,146 | $ 1,888 | ||||||||
(Income) loss from equity method investments | (22) | (12) | (20) | ||||||||
Other operating expenses (income), net | 8 | 109 | (1) | ||||||||
EBITDA | 2,097 | 1,917 | 1,839 | ||||||||
Depreciation and amortization | 180 | 182 | 172 | ||||||||
Income from operations | $ 516 | $ 477 | $ 503 | $ 421 | $ 505 | $ 479 | $ 415 | $ 336 | 1,917 | 1,735 | 1,667 |
Interest expense, net | 535 | 512 | 467 | ||||||||
Loss on early extinguishment of debt | 0 | 122 | 0 | ||||||||
Income tax (benefit) expense | 238 | (134) | 244 | ||||||||
Net income | 1,144 | 1,235 | 956 | ||||||||
Tim Hortons | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
(Income) loss from equity method investments | (6) | (8) | (8) | ||||||||
Burger King | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
(Income) loss from equity method investments | (16) | (4) | (12) | ||||||||
Operating segments | Tim Hortons | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Adjusted EBITDA | 1,127 | 1,136 | 1,072 | ||||||||
Operating segments | Burger King | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Adjusted EBITDA | 928 | 903 | 816 | ||||||||
Operating segments | Popeyes | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Adjusted EBITDA | 157 | 107 | 0 | ||||||||
Unallocated management G&A | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Share-based compensation and non-cash incentive compensation expense | 55 | 55 | 42 | ||||||||
Corporate restructuring and tax advisory fees | 25 | 2 | 0 | ||||||||
Office centralization and relocation costs | 20 | 0 | 0 | ||||||||
Integration costs | 0 | 0 | 16 | ||||||||
(Income) loss from equity method investments | (3) | 1 | (8) | ||||||||
Other operating expenses (income), net | 8 | 109 | (1) | ||||||||
Corporate restructuring and tax advisory fees | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
PLK Transaction costs | 10 | $ 62 | $ 0 | ||||||||
Amounts Under Previous Standards | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Adjusted EBITDA | 2,247 | ||||||||||
(Income) loss from equity method investments | (28) | ||||||||||
Other operating expenses (income), net | 7 | ||||||||||
EBITDA | 2,139 | ||||||||||
Depreciation and amortization | 180 | ||||||||||
Income from operations | 1,959 | ||||||||||
Interest expense, net | 536 | ||||||||||
Loss on early extinguishment of debt | 0 | ||||||||||
Income tax (benefit) expense | 247 | ||||||||||
Net income | 1,176 | ||||||||||
Amounts Under Previous Standards | Operating segments | Tim Hortons | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Adjusted EBITDA | 1,128 | ||||||||||
Amounts Under Previous Standards | Operating segments | Burger King | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Adjusted EBITDA | 950 | ||||||||||
Amounts Under Previous Standards | Operating segments | Popeyes | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Adjusted EBITDA | 169 | ||||||||||
Amounts Under Previous Standards | Unallocated management G&A | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Share-based compensation and non-cash incentive compensation expense | 55 | ||||||||||
Corporate restructuring and tax advisory fees | 25 | ||||||||||
Office centralization and relocation costs | 20 | ||||||||||
Integration costs | 0 | ||||||||||
(Income) loss from equity method investments | (9) | ||||||||||
Other operating expenses (income), net | 7 | ||||||||||
Amounts Under Previous Standards | Corporate restructuring and tax advisory fees | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
PLK Transaction costs | $ 10 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) - Summarized Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | |||||||||||
Total revenues | $ 1,385 | $ 1,375 | $ 1,343 | $ 1,254 | $ 1,234 | $ 1,209 | $ 1,132 | $ 1,001 | $ 5,357 | $ 4,576 | $ 4,146 |
Income from operations | 516 | 477 | 503 | 421 | 505 | 479 | 415 | 336 | $ 1,917 | $ 1,735 | $ 1,667 |
Net income | $ 301 | $ 250 | $ 314 | $ 279 | $ 578 | $ 247 | $ 243 | $ 167 | |||
Class A common units | |||||||||||
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | |||||||||||
Earnings per unit - basic and diluted (in dollars per share) | $ 0.81 | $ 0.66 | $ 0.83 | $ 0.73 | $ 1.96 | $ 0.45 | $ 0.44 | $ 0.25 | $ 3.03 | $ 3.10 | $ 1.71 |
Partnership exchangeable units | |||||||||||
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items] | |||||||||||
Earnings per unit - basic and diluted (in dollars per share) | $ 0.65 | $ 0.53 | $ 0.67 | $ 0.60 | $ 1.64 | $ 0.39 | $ 0.38 | $ 0.21 | $ 2.46 | $ 2.59 | $ 1.48 |
Supplemental Financial Inform_3
Supplemental Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | |||||
Cash and cash equivalents | $ 913 | $ 1,097 | $ 1,097 | $ 1,436 | $ 788 |
Accounts and notes receivable, net | 452 | 489 | 489 | ||
Inventories, net | 75 | 78 | 78 | ||
Prepaids and other current assets | 60 | 63 | 86 | ||
Total current assets | 1,500 | 1,727 | 1,750 | ||
Property and equipment, net | 1,996 | 2,133 | 2,133 | ||
Intangible assets, net | 10,463 | 11,062 | 11,062 | ||
Goodwill | 5,486 | 5,782 | 5,782 | ||
Net investment in property leased to franchisees | 54 | 71 | 71 | ||
Intercompany receivable | 0 | 0 | |||
Investment in subsidiaries | 0 | 0 | |||
Other assets, net | 642 | 533 | 426 | ||
Total assets | 20,141 | 21,308 | 21,224 | ||
Current liabilities: | |||||
Accounts and drafts payable | 513 | 496 | 496 | ||
Other accrued liabilities | 637 | 866 | |||
Gift card liability | 167 | 172 | 215 | ||
Current portion of long term debt and capital leases | 91 | 78 | 78 | ||
Total current liabilities | 1,408 | 1,621 | 1,655 | ||
Term debt, net of current portion | 11,823 | 11,801 | 11,801 | ||
Capital leases, net of current portion | 226 | 244 | 244 | ||
Other liabilities, net | 1,547 | 1,881 | 1,455 | ||
Payables to affiliates | 0 | 0 | |||
Deferred income taxes, net | 1,519 | 1,450 | 1,508 | ||
Total liabilities | 16,523 | 16,997 | 16,663 | ||
Partners’ capital: | |||||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 4,323 | 4,036 | |||
Partnership exchangeable units | 730 | 1,158 | |||
Common shares | 0 | 0 | |||
Retained earnings | 0 | 0 | |||
Accumulated other comprehensive income (loss) | (1,437) | (884) | (884) | ||
Total Partners’ capital | 3,616 | 4,560 | |||
Noncontrolling interests | 2 | 1 | 1 | ||
Total equity | 3,618 | 4,311 | 4,561 | 3,489 | 2,914 |
Total liabilities and equity | 20,141 | $ 21,308 | 21,224 | ||
Class A common units | |||||
Partners’ capital: | |||||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 4,323 | 4,168 | |||
Total equity | 4,323 | 4,168 | 3,364 | 2,878 | |
Partnership exchangeable units | |||||
Partners’ capital: | |||||
Partnership exchangeable units | 730 | 1,276 | |||
Total equity | 730 | 1,276 | 1,477 | 1,503 | |
Eliminations | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | 0 | 0 | |
Accounts and notes receivable, net | 0 | 0 | |||
Inventories, net | 0 | 0 | |||
Prepaids and other current assets | 0 | 0 | |||
Total current assets | 0 | 0 | |||
Property and equipment, net | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Net investment in property leased to franchisees | 0 | 0 | |||
Intercompany receivable | (207) | (97) | |||
Investment in subsidiaries | (3,618) | (4,561) | |||
Other assets, net | 0 | 0 | |||
Total assets | (3,825) | (4,658) | |||
Current liabilities: | |||||
Accounts and drafts payable | 0 | 0 | |||
Other accrued liabilities | 0 | 0 | |||
Gift card liability | 0 | 0 | |||
Current portion of long term debt and capital leases | 0 | 0 | |||
Total current liabilities | 0 | 0 | |||
Term debt, net of current portion | 0 | 0 | |||
Capital leases, net of current portion | 0 | 0 | |||
Other liabilities, net | 0 | 0 | |||
Payables to affiliates | (207) | (97) | |||
Deferred income taxes, net | 0 | 0 | |||
Total liabilities | (207) | (97) | |||
Partners’ capital: | |||||
Common shares | (3,071) | (3,516) | |||
Retained earnings | (1,982) | (1,928) | |||
Accumulated other comprehensive income (loss) | 1,437 | 884 | |||
Total Partners’ capital | (3,616) | (4,560) | |||
Noncontrolling interests | (2) | (1) | |||
Total equity | (3,618) | (4,561) | |||
Total liabilities and equity | (3,825) | (4,658) | |||
Eliminations | Class A common units | |||||
Partners’ capital: | |||||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 0 | 0 | |||
Eliminations | Partnership exchangeable units | |||||
Partners’ capital: | |||||
Partnership exchangeable units | 0 | 0 | |||
Consolidated Borrowers | Reportable Legal Entities | |||||
Current assets: | |||||
Cash and cash equivalents | 913 | 1,097 | 1,436 | 788 | |
Accounts and notes receivable, net | 452 | 489 | |||
Inventories, net | 75 | 78 | |||
Prepaids and other current assets | 60 | 86 | |||
Total current assets | 1,500 | 1,750 | |||
Property and equipment, net | 1,996 | 2,133 | |||
Intangible assets, net | 10,463 | 11,062 | |||
Goodwill | 5,486 | 5,782 | |||
Net investment in property leased to franchisees | 54 | 71 | |||
Intercompany receivable | 0 | 0 | |||
Investment in subsidiaries | 0 | 0 | |||
Other assets, net | 642 | 426 | |||
Total assets | 20,141 | 21,224 | |||
Current liabilities: | |||||
Accounts and drafts payable | 513 | 496 | |||
Other accrued liabilities | 430 | 769 | |||
Gift card liability | 167 | 215 | |||
Current portion of long term debt and capital leases | 91 | 78 | |||
Total current liabilities | 1,201 | 1,558 | |||
Term debt, net of current portion | 11,823 | 11,801 | |||
Capital leases, net of current portion | 226 | 244 | |||
Other liabilities, net | 1,547 | 1,455 | |||
Payables to affiliates | 207 | 97 | |||
Deferred income taxes, net | 1,519 | 1,508 | |||
Total liabilities | 16,523 | 16,663 | |||
Partners’ capital: | |||||
Common shares | 3,071 | 3,516 | |||
Retained earnings | 1,982 | 1,928 | |||
Accumulated other comprehensive income (loss) | (1,437) | (884) | |||
Total Partners’ capital | 3,616 | 4,560 | |||
Noncontrolling interests | 2 | 1 | |||
Total equity | 3,618 | 4,561 | |||
Total liabilities and equity | 20,141 | 21,224 | |||
Consolidated Borrowers | Reportable Legal Entities | Class A common units | |||||
Partners’ capital: | |||||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 0 | 0 | |||
Consolidated Borrowers | Reportable Legal Entities | Partnership exchangeable units | |||||
Partners’ capital: | |||||
Partnership exchangeable units | 0 | 0 | |||
RBILP | Reportable Legal Entities | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | $ 0 | $ 0 | |
Accounts and notes receivable, net | 0 | 0 | |||
Inventories, net | 0 | 0 | |||
Prepaids and other current assets | 0 | 0 | |||
Total current assets | 0 | 0 | |||
Property and equipment, net | 0 | 0 | |||
Intangible assets, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Net investment in property leased to franchisees | 0 | 0 | |||
Intercompany receivable | 207 | 97 | |||
Investment in subsidiaries | 3,618 | 4,561 | |||
Other assets, net | 0 | 0 | |||
Total assets | 3,825 | 4,658 | |||
Current liabilities: | |||||
Accounts and drafts payable | 0 | 0 | |||
Other accrued liabilities | 207 | 97 | |||
Gift card liability | 0 | 0 | |||
Current portion of long term debt and capital leases | 0 | 0 | |||
Total current liabilities | 207 | 97 | |||
Term debt, net of current portion | 0 | 0 | |||
Capital leases, net of current portion | 0 | 0 | |||
Other liabilities, net | 0 | 0 | |||
Payables to affiliates | 0 | 0 | |||
Deferred income taxes, net | 0 | 0 | |||
Total liabilities | 207 | 97 | |||
Partners’ capital: | |||||
Common shares | 0 | 0 | |||
Retained earnings | 0 | 0 | |||
Accumulated other comprehensive income (loss) | (1,437) | (884) | |||
Total Partners’ capital | 3,616 | 4,560 | |||
Noncontrolling interests | 2 | 1 | |||
Total equity | 3,618 | 4,561 | |||
Total liabilities and equity | 3,825 | 4,658 | |||
RBILP | Reportable Legal Entities | Class A common units | |||||
Partners’ capital: | |||||
Class A common units - 202,006,067 units issued and outstanding at December 31, 2018 and December 31, 2017 | 4,323 | 4,168 | |||
RBILP | Reportable Legal Entities | Partnership exchangeable units | |||||
Partners’ capital: | |||||
Partnership exchangeable units | $ 730 | $ 1,276 |
Supplemental Financial Inform_4
Supplemental Financial Information - Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||||||||||
Franchise and property revenues | $ 3,002 | $ 2,186 | $ 1,941 | ||||||||
Total revenues | $ 1,385 | $ 1,375 | $ 1,343 | $ 1,254 | $ 1,234 | $ 1,209 | $ 1,132 | $ 1,001 | 5,357 | 4,576 | 4,146 |
Operating costs and expenses: | |||||||||||
Cost of sales | 1,818 | 1,850 | 1,727 | ||||||||
Franchise and property expenses | 422 | 478 | 454 | ||||||||
Selling, general and administrative expenses | 1,214 | 416 | 319 | ||||||||
(Income) loss from equity method investments | (22) | (12) | (20) | ||||||||
Other operating expenses (income), net | 8 | 109 | (1) | ||||||||
Total operating costs and expenses | 3,440 | 2,841 | 2,479 | ||||||||
Income from operations | $ 516 | $ 477 | $ 503 | $ 421 | $ 505 | $ 479 | $ 415 | $ 336 | 1,917 | 1,735 | 1,667 |
Interest expense, net | 535 | 512 | 467 | ||||||||
Loss on early extinguishment of debt | 0 | 122 | 0 | ||||||||
Income before income taxes | 1,382 | 1,101 | 1,200 | ||||||||
Income tax (benefit) expense | 238 | (134) | 244 | ||||||||
Net income | 1,144 | 1,235 | 956 | ||||||||
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | ||||||||
Net income | 1,144 | 1,235 | 956 | ||||||||
Comprehensive income (loss) attributable to noncontrolling interests | 1 | 2 | 3 | ||||||||
Partnership preferred unit distributions | 0 | 256 | 270 | ||||||||
Gain on redemption of Partnership preferred units | 0 | (234) | 0 | ||||||||
Net income attributable to common unitholders | 1,143 | 1,211 | 683 | ||||||||
Comprehensive income (loss) | 591 | 1,706 | 1,068 | ||||||||
Eliminations | |||||||||||
Revenues: | |||||||||||
Franchise and property revenues | 0 | 0 | 0 | ||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Operating costs and expenses: | |||||||||||
Cost of sales | 0 | 0 | 0 | ||||||||
Franchise and property expenses | 0 | 0 | 0 | ||||||||
Selling, general and administrative expenses | 0 | 0 | 0 | ||||||||
(Income) loss from equity method investments | 0 | 0 | 0 | ||||||||
Other operating expenses (income), net | 0 | 0 | 0 | ||||||||
Total operating costs and expenses | 0 | 0 | 0 | ||||||||
Income from operations | 0 | 0 | 0 | ||||||||
Interest expense, net | 0 | 0 | 0 | ||||||||
Loss on early extinguishment of debt | 0 | ||||||||||
Income before income taxes | 0 | 0 | 0 | ||||||||
Income tax (benefit) expense | 0 | 0 | 0 | ||||||||
Net income | 0 | 0 | 0 | ||||||||
Equity in earnings of consolidated subsidiaries | (1,144) | (1,235) | (956) | ||||||||
Net income | (1,144) | (1,235) | (956) | ||||||||
Comprehensive income (loss) attributable to noncontrolling interests | (1) | (2) | (3) | ||||||||
Partnership preferred unit distributions | 0 | 0 | |||||||||
Gain on redemption of Partnership preferred units | 0 | ||||||||||
Net income attributable to common unitholders | (1,143) | (1,233) | (953) | ||||||||
Comprehensive income (loss) | (591) | (1,706) | (1,068) | ||||||||
Consolidated Borrowers | Reportable Legal Entities | |||||||||||
Revenues: | |||||||||||
Franchise and property revenues | 3,002 | 2,186 | 1,941 | ||||||||
Total revenues | 5,357 | 4,576 | 4,146 | ||||||||
Operating costs and expenses: | |||||||||||
Cost of sales | 1,818 | 1,850 | 1,727 | ||||||||
Franchise and property expenses | 422 | 478 | 454 | ||||||||
Selling, general and administrative expenses | 1,214 | 416 | 319 | ||||||||
(Income) loss from equity method investments | (22) | (12) | (20) | ||||||||
Other operating expenses (income), net | 8 | 109 | (1) | ||||||||
Total operating costs and expenses | 3,440 | 2,841 | 2,479 | ||||||||
Income from operations | 1,917 | 1,735 | 1,667 | ||||||||
Interest expense, net | 535 | 512 | 467 | ||||||||
Loss on early extinguishment of debt | 122 | ||||||||||
Income before income taxes | 1,382 | 1,101 | 1,200 | ||||||||
Income tax (benefit) expense | 238 | (134) | 244 | ||||||||
Net income | 1,144 | 1,235 | 956 | ||||||||
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 | ||||||||
Net income | 1,144 | 1,235 | 956 | ||||||||
Comprehensive income (loss) attributable to noncontrolling interests | 1 | 2 | 3 | ||||||||
Partnership preferred unit distributions | 0 | 0 | |||||||||
Gain on redemption of Partnership preferred units | 0 | ||||||||||
Net income attributable to common unitholders | 1,143 | 1,233 | 953 | ||||||||
Comprehensive income (loss) | 591 | 1,706 | 1,068 | ||||||||
RBILP | Reportable Legal Entities | |||||||||||
Revenues: | |||||||||||
Franchise and property revenues | 0 | 0 | 0 | ||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Operating costs and expenses: | |||||||||||
Cost of sales | 0 | 0 | 0 | ||||||||
Franchise and property expenses | 0 | 0 | 0 | ||||||||
Selling, general and administrative expenses | 0 | 0 | 0 | ||||||||
(Income) loss from equity method investments | 0 | 0 | 0 | ||||||||
Other operating expenses (income), net | 0 | 0 | 0 | ||||||||
Total operating costs and expenses | 0 | 0 | 0 | ||||||||
Income from operations | 0 | 0 | 0 | ||||||||
Interest expense, net | 0 | 0 | 0 | ||||||||
Loss on early extinguishment of debt | 0 | ||||||||||
Income before income taxes | 0 | 0 | 0 | ||||||||
Income tax (benefit) expense | 0 | 0 | 0 | ||||||||
Net income | 0 | 0 | 0 | ||||||||
Equity in earnings of consolidated subsidiaries | 1,144 | 1,235 | 956 | ||||||||
Net income | 1,144 | 1,235 | 956 | ||||||||
Comprehensive income (loss) attributable to noncontrolling interests | 1 | 2 | 3 | ||||||||
Partnership preferred unit distributions | 256 | 270 | |||||||||
Gain on redemption of Partnership preferred units | (234) | ||||||||||
Net income attributable to common unitholders | 1,143 | 1,211 | 683 | ||||||||
Comprehensive income (loss) | 591 | 1,706 | 1,068 | ||||||||
Sales | |||||||||||
Revenues: | |||||||||||
Sales | 2,355 | 2,390 | 2,205 | ||||||||
Sales | Eliminations | |||||||||||
Revenues: | |||||||||||
Sales | 0 | 0 | 0 | ||||||||
Sales | Consolidated Borrowers | Reportable Legal Entities | |||||||||||
Revenues: | |||||||||||
Sales | 2,355 | 2,390 | 2,205 | ||||||||
Sales | RBILP | Reportable Legal Entities | |||||||||||
Revenues: | |||||||||||
Sales | $ 0 | $ 0 | $ 0 |
Supplemental Financial Inform_5
Supplemental Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 1,144 | $ 1,235 | $ 956 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in loss (earnings) of consolidated subsidiaries | 0 | 0 | 0 |
Depreciation and amortization | 180 | 182 | 172 |
Premiums paid and non-cash loss on early extinguishment of debt | 0 | 119 | 0 |
Amortization of deferred financing costs and debt issuance discount | 29 | 33 | 39 |
(Income) loss from equity method investments | (22) | (12) | (20) |
Loss (gain) on remeasurement of foreign denominated transactions | (33) | 77 | (20) |
Net (gains) losses on derivatives | (40) | 31 | 21 |
Share-based compensation expense | 48 | 48 | 35 |
Deferred income taxes | 29 | (742) | 80 |
Other | 5 | 18 | 4 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | |||
Accounts and notes receivable | 19 | (30) | (16) |
Inventories and prepaids and other current assets | (7) | 19 | (10) |
Accounts and drafts payable | 41 | 14 | 16 |
Other accrued liabilities and gift card liability | (219) | 360 | (1) |
Tenant inducements paid to franchisees | (52) | (20) | (19) |
Other long-term assets and liabilities | 43 | 99 | (23) |
Net cash provided by operating activities | 1,165 | 1,431 | 1,214 |
Cash flows from investing activities: | |||
Payments for property and equipment | (86) | (37) | (34) |
Proceeds from disposal of assets, restaurant closures and refranchisings | 8 | 26 | 30 |
Net payment for purchase of Popeyes, net of cash acquired | 0 | (1,636) | 0 |
Return of investment on direct financing leases | 16 | 16 | 17 |
Settlement/sale of derivatives, net | 17 | 772 | 11 |
Other investing activities, net | 1 | 1 | 3 |
Net cash provided by (used for) investing activities | (44) | (858) | 27 |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 75 | 5,850 | 0 |
Repayments of long-term debt and capital leases | (74) | (2,742) | (70) |
Distributions to RBI for payments in connection with redemption of Preferred Shares | (60) | (3,006) | 0 |
Payment of financing costs | (3) | (63) | 0 |
Distributions paid on common, preferred and Partnership exchangeable units | (728) | (664) | (538) |
Repurchase of Partnership exchangeable units | (561) | (330) | 0 |
Capital contribution from RBI Inc. | 61 | 29 | 14 |
Excess tax benefits from share-based compensation | 0 | 0 | 8 |
Distributions from subsidiaries | 0 | 0 | 0 |
Other financing activities, net | 5 | (10) | (5) |
Net cash provided by (used for) financing activities | (1,285) | (936) | (591) |
Effect of exchange rates on cash and cash equivalents | (20) | 24 | (2) |
Increase (decrease) in cash and cash equivalents | (184) | (339) | 648 |
Cash and cash equivalents at beginning of period | 1,097 | 1,436 | 788 |
Cash and cash equivalents at end of period | 913 | 1,097 | 1,436 |
Eliminations | |||
Cash flows from operating activities: | |||
Net income | (1,144) | (1,235) | (956) |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in loss (earnings) of consolidated subsidiaries | 1,144 | 1,235 | 956 |
Depreciation and amortization | 0 | 0 | 0 |
Premiums paid and non-cash loss on early extinguishment of debt | 0 | ||
Amortization of deferred financing costs and debt issuance discount | 0 | 0 | 0 |
(Income) loss from equity method investments | 0 | 0 | 0 |
Loss (gain) on remeasurement of foreign denominated transactions | 0 | 0 | 0 |
Net (gains) losses on derivatives | 0 | 0 | 0 |
Share-based compensation expense | 0 | 0 | 0 |
Deferred income taxes | 0 | 0 | 0 |
Other | 0 | 0 | 0 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | |||
Accounts and notes receivable | 0 | 0 | 0 |
Inventories and prepaids and other current assets | 0 | 0 | 0 |
Accounts and drafts payable | 0 | 0 | 0 |
Other accrued liabilities and gift card liability | 0 | 0 | 0 |
Tenant inducements paid to franchisees | 0 | 0 | 0 |
Other long-term assets and liabilities | 0 | 0 | 0 |
Net cash provided by operating activities | 0 | 0 | 0 |
Cash flows from investing activities: | |||
Payments for property and equipment | 0 | 0 | 0 |
Proceeds from disposal of assets, restaurant closures and refranchisings | 0 | 0 | 0 |
Net payment for purchase of Popeyes, net of cash acquired | 0 | ||
Return of investment on direct financing leases | 0 | 0 | 0 |
Settlement/sale of derivatives, net | 0 | 0 | 0 |
Other investing activities, net | 0 | 0 | 0 |
Net cash provided by (used for) investing activities | 0 | 0 | 0 |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 0 | 0 | |
Repayments of long-term debt and capital leases | 0 | 0 | 0 |
Distributions to RBI for payments in connection with redemption of Preferred Shares | 0 | 0 | |
Payment of financing costs | 0 | 0 | |
Distributions paid on common, preferred and Partnership exchangeable units | 0 | 0 | 0 |
Repurchase of Partnership exchangeable units | 0 | 0 | |
Capital contribution from RBI Inc. | 0 | 0 | 0 |
Excess tax benefits from share-based compensation | 0 | ||
Distributions from subsidiaries | 0 | 0 | 0 |
Other financing activities, net | 0 | 0 | 0 |
Net cash provided by (used for) financing activities | 0 | 0 | 0 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 | 0 |
Consolidated Borrowers | Reportable Legal Entities | |||
Cash flows from operating activities: | |||
Net income | 1,144 | 1,235 | 956 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in loss (earnings) of consolidated subsidiaries | 0 | 0 | 0 |
Depreciation and amortization | 180 | 182 | 172 |
Premiums paid and non-cash loss on early extinguishment of debt | 119 | ||
Amortization of deferred financing costs and debt issuance discount | 29 | 33 | 39 |
(Income) loss from equity method investments | (22) | (12) | (20) |
Loss (gain) on remeasurement of foreign denominated transactions | (33) | 77 | (20) |
Net (gains) losses on derivatives | (40) | 31 | 21 |
Share-based compensation expense | 48 | 48 | 35 |
Deferred income taxes | 29 | (742) | 80 |
Other | 5 | 18 | 4 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | |||
Accounts and notes receivable | 19 | (30) | (16) |
Inventories and prepaids and other current assets | (7) | 19 | (10) |
Accounts and drafts payable | 41 | 14 | 16 |
Other accrued liabilities and gift card liability | (219) | 360 | (1) |
Tenant inducements paid to franchisees | (52) | (20) | (19) |
Other long-term assets and liabilities | 43 | 99 | (23) |
Net cash provided by operating activities | 1,165 | 1,431 | 1,214 |
Cash flows from investing activities: | |||
Payments for property and equipment | (86) | (37) | (34) |
Proceeds from disposal of assets, restaurant closures and refranchisings | 8 | 26 | 30 |
Net payment for purchase of Popeyes, net of cash acquired | (1,636) | ||
Return of investment on direct financing leases | 16 | 16 | 17 |
Settlement/sale of derivatives, net | 17 | 772 | 11 |
Other investing activities, net | 1 | 1 | 3 |
Net cash provided by (used for) investing activities | (44) | (858) | 27 |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 75 | 5,850 | |
Repayments of long-term debt and capital leases | (74) | (2,742) | (70) |
Distributions to RBI for payments in connection with redemption of Preferred Shares | 0 | 0 | |
Payment of financing costs | (3) | (63) | |
Distributions paid on common, preferred and Partnership exchangeable units | 0 | 0 | 0 |
Repurchase of Partnership exchangeable units | 0 | 0 | |
Capital contribution from RBI Inc. | 61 | 29 | 14 |
Excess tax benefits from share-based compensation | 8 | ||
Distributions from subsidiaries | (1,349) | (4,000) | (538) |
Other financing activities, net | 5 | (10) | (5) |
Net cash provided by (used for) financing activities | (1,285) | (936) | (591) |
Effect of exchange rates on cash and cash equivalents | (20) | 24 | (2) |
Increase (decrease) in cash and cash equivalents | (184) | (339) | 648 |
Cash and cash equivalents at beginning of period | 1,097 | 1,436 | 788 |
Cash and cash equivalents at end of period | 913 | 1,097 | 1,436 |
RBILP | Reportable Legal Entities | |||
Cash flows from operating activities: | |||
Net income | 1,144 | 1,235 | 956 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Equity in loss (earnings) of consolidated subsidiaries | (1,144) | (1,235) | (956) |
Depreciation and amortization | 0 | 0 | 0 |
Premiums paid and non-cash loss on early extinguishment of debt | 0 | ||
Amortization of deferred financing costs and debt issuance discount | 0 | 0 | 0 |
(Income) loss from equity method investments | 0 | 0 | 0 |
Loss (gain) on remeasurement of foreign denominated transactions | 0 | 0 | 0 |
Net (gains) losses on derivatives | 0 | 0 | 0 |
Share-based compensation expense | 0 | 0 | 0 |
Deferred income taxes | 0 | 0 | 0 |
Other | 0 | 0 | 0 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | |||
Accounts and notes receivable | 0 | 0 | 0 |
Inventories and prepaids and other current assets | 0 | 0 | 0 |
Accounts and drafts payable | 0 | 0 | 0 |
Other accrued liabilities and gift card liability | 0 | 0 | 0 |
Tenant inducements paid to franchisees | 0 | 0 | 0 |
Other long-term assets and liabilities | 0 | 0 | 0 |
Net cash provided by operating activities | 0 | 0 | 0 |
Cash flows from investing activities: | |||
Payments for property and equipment | 0 | 0 | 0 |
Proceeds from disposal of assets, restaurant closures and refranchisings | 0 | 0 | 0 |
Net payment for purchase of Popeyes, net of cash acquired | 0 | ||
Return of investment on direct financing leases | 0 | 0 | 0 |
Settlement/sale of derivatives, net | 0 | 0 | 0 |
Other investing activities, net | 0 | 0 | 0 |
Net cash provided by (used for) investing activities | 0 | 0 | 0 |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt | 0 | 0 | |
Repayments of long-term debt and capital leases | 0 | 0 | 0 |
Distributions to RBI for payments in connection with redemption of Preferred Shares | (60) | (3,006) | |
Payment of financing costs | 0 | 0 | |
Distributions paid on common, preferred and Partnership exchangeable units | (728) | (664) | (538) |
Repurchase of Partnership exchangeable units | (561) | (330) | |
Capital contribution from RBI Inc. | 0 | 0 | 0 |
Excess tax benefits from share-based compensation | 0 | ||
Distributions from subsidiaries | 1,349 | 4,000 | 538 |
Other financing activities, net | 0 | 0 | 0 |
Net cash provided by (used for) financing activities | 0 | 0 | 0 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 | 0 |
Cash and cash equivalents at end of period | $ 0 | $ 0 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent event - $ / shares | Jan. 22, 2019 | Jan. 04, 2019 |
Subsequent Event [Line Items] | ||
Cash dividend paid per common share (in dollars per share) | $ 0.45 | |
Cash dividend declared by board (in dollars per share) | $ 0.5 | |
Partnership exchangeable units | ||
Subsequent Event [Line Items] | ||
Partnership exchangeable unit (in dollars per share) | $ 0.5 | $ 0.45 |