Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 24, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36787 | |
Entity Registrant Name | RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP | |
Entity Incorporation, State or Country Code | Z4 | |
Entity Tax Identification Number | 98-1206431 | |
Entity Address, Address Line One | 130 King Street West, Suite 300 | |
Entity Address, City or Town | Toronto, | |
Entity Address, State or Province | ON | |
Entity Address, Postal Zip Code | M5X 1E1 | |
City Area Code | 905 | |
Local Phone Number | 845-6511 | |
Title of 12(g) Security | Class B exchangeable limited partnership units | |
Trading Symbol | QSP | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001618755 | |
Current Fiscal Year End Date | --12-31 | |
Partnership Exchangeable Units | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 164,935,193 | |
Class A common units | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding (in shares) | 202,006,067 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||||
Cash and cash equivalents | $ 2,498 | $ 1,533 | $ 902 | $ 913 |
Accounts and notes receivable, net of allowance of $16 and $13, respectively | 414 | 527 | ||
Inventories, net | 85 | 84 | ||
Prepaids and other current assets | 62 | 52 | ||
Total current assets | 3,059 | 2,196 | ||
Property and equipment, net of accumulated depreciation and amortization of $751 and $746, respectively | 1,939 | 2,007 | ||
Operating lease assets, net | 1,115 | 1,176 | ||
Intangible assets, net | 10,085 | 10,563 | ||
Goodwill | 5,376 | 5,651 | ||
Net investment in property leased to franchisees | 49 | 48 | ||
Other assets, net | 1,006 | 719 | ||
Total assets | 22,629 | 22,360 | ||
Current liabilities: | ||||
Accounts and drafts payable | 484 | 644 | ||
Other accrued liabilities | 779 | 790 | ||
Gift card liability | 106 | 168 | ||
Current portion of long term debt and finance leases | 103 | 101 | ||
Total current liabilities | 1,472 | 1,703 | ||
Long-term debt, net of current portion | 12,822 | 11,759 | ||
Finance leases, net of current portion | 283 | 288 | ||
Operating lease liabilities, net of current portion | 1,039 | 1,089 | ||
Other liabilities, net | 1,774 | 1,698 | ||
Deferred income taxes, net | 1,487 | 1,564 | ||
Total liabilities | 18,877 | 18,101 | ||
Partners’ capital: | ||||
Accumulated other comprehensive income (loss) | (1,721) | (1,178) | ||
Total Partners’ capital | 3,749 | 4,255 | ||
Noncontrolling interests | 3 | 4 | ||
Total equity | 3,752 | 4,259 | 3,773 | 3,618 |
Total liabilities and equity | 22,629 | 22,360 | ||
Class A common units | ||||
Partners’ capital: | ||||
Class A common units; 202,006,067 issued and outstanding at March 31, 2020 and December 31, 2019 | 7,840 | 7,786 | ||
Total equity | 7,840 | 7,786 | 4,423 | 4,323 |
Partnership Exchangeable Units | ||||
Partners’ capital: | ||||
Partnership exchangeable units; 165,329,153 issued and outstanding at March 31, 2020; 165,507,199 issued and outstanding at December 31, 2019 | (2,370) | (2,353) | ||
Total equity | $ (2,370) | $ (2,353) | $ 737 | $ 730 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Allowance for accounts and notes receivable | $ 16 | $ 13 |
Property and equipment, accumulated depreciation and amortization | $ 751 | $ 746 |
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) | 165,329,153 | 165,507,199 |
Partnership exchangeable units, outstanding (in shares) | 165,329,153 | 165,507,199 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Total revenues | $ 1,225 | $ 1,266 |
Operating costs and expenses: | ||
Cost of sales | 399 | 406 |
Franchise and property expenses | 126 | 133 |
Selling, general and administrative expenses | 325 | 312 |
(Income) loss from equity method investments | 2 | (2) |
Other operating expenses (income), net | (16) | (17) |
Total operating costs and expenses | 836 | 832 |
Income from operations | 389 | 434 |
Interest expense, net | 119 | 132 |
Income before income taxes | 270 | 302 |
Income tax expense | 46 | 56 |
Net income | 224 | 246 |
Net income attributable to noncontrolling interests | 0 | 0 |
Net income attributable to common unitholders | 224 | 246 |
Class A common units | ||
Operating costs and expenses: | ||
Net income | 144 | 135 |
Net income attributable to common unitholders | $ 144 | $ 135 |
Earnings per unit - basic and diluted | ||
Earnings per unit - basic and diluted (in usd per share) | $ 0.71 | $ 0.67 |
Weighted average units outstanding - basic and diluted | ||
Weighted average units outstanding - basic and diluted (in shares) | 202 | 202 |
Partnership Exchangeable Units | ||
Operating costs and expenses: | ||
Net income | $ 80 | $ 111 |
Net income attributable to common unitholders | $ 80 | $ 111 |
Earnings per unit - basic and diluted | ||
Earnings per unit - basic and diluted (in usd per share) | $ 0.48 | $ 0.53 |
Weighted average units outstanding - basic and diluted | ||
Weighted average units outstanding - basic and diluted (in shares) | 165 | 208 |
Sales | ||
Revenues: | ||
Sales | $ 503 | $ 522 |
Franchise and property revenues | ||
Revenues: | ||
Total revenues | $ 722 | $ 744 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 224 | $ 246 |
Foreign currency translation adjustment | (751) | 159 |
Net change in fair value of net investment hedges, net of tax of $(106) and $26 | 411 | (76) |
Net change in fair value of cash flow hedges, net of tax of $79 and $12 | (214) | (34) |
Amounts reclassified to earnings of cash flow hedges, net of tax of $(4) and $0 | 11 | (1) |
Other comprehensive income (loss) | (543) | 48 |
Comprehensive income (loss) | (319) | 294 |
Comprehensive income (loss) attributable to noncontrolling interests | 0 | 0 |
Comprehensive income (loss) attributable to common unitholders | $ (319) | $ 294 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Tax effect on change in fair value of investment hedges | $ (106) | $ 26 |
Tax effect of changes in fair value of cash flow hedges | 79 | 12 |
Tax effect on amounts reclassified to earnings of cash flow hedges | $ (4) | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Total | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Class A common units | Partnership Exchangeable Units |
Beginning Balance Class A (in shares) at Dec. 31, 2018 | 202,006,067 | ||||
Beginning balances at Dec. 31, 2018 | $ 3,618 | $ (1,437) | $ 2 | $ 4,323 | $ 730 |
Beginning Balance Partnership exchangeable unit (in shares) at Dec. 31, 2018 | 207,523,591 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Distributions declared on Class A common units ($0.77 per unit) | (127) | (127) | |||
Distributions declared on partnership exchangeable units ($0.52 per unit) | (104) | $ (104) | |||
Exchange of Partnership exchangeable units for RBI common shares | 0 | 9 | $ (9) | ||
Exchange of Partnership exchangeable units for RBI common shares, shares | (141,190) | ||||
Capital contribution from RBI Inc. | 71 | 71 | |||
Net income | 246 | 0 | $ 135 | $ 111 | |
Other comprehensive income (loss) | 48 | 48 | |||
Ending Balance Class A (in shares) at Mar. 31, 2019 | 202,006,067 | ||||
Ending balances at Mar. 31, 2019 | 3,773 | (1,389) | 2 | $ 4,423 | $ 737 |
Ending Balance Partnership exchangeable units (in shares) at Mar. 31, 2019 | 207,382,401 | ||||
Beginning Balance Class A (in shares) at Dec. 31, 2019 | 202,006,067 | ||||
Beginning balances at Dec. 31, 2019 | 4,259 | (1,178) | 4 | $ 7,786 | $ (2,353) |
Beginning Balance Partnership exchangeable unit (in shares) at Dec. 31, 2019 | 165,507,199 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Distributions declared on Class A common units ($0.77 per unit) | (156) | (156) | |||
Distributions declared on partnership exchangeable units ($0.52 per unit) | (86) | $ (86) | |||
Exchange of Partnership exchangeable units for RBI common shares | 0 | 11 | $ (11) | ||
Exchange of Partnership exchangeable units for RBI common shares, shares | (178,046) | ||||
Capital contribution from RBI Inc. | 55 | 55 | |||
Restaurant VIE contributions (distributions) | (1) | 1 | |||
Net income | 224 | 0 | $ 144 | $ 80 | |
Other comprehensive income (loss) | (543) | (543) | |||
Ending Balance Class A (in shares) at Mar. 31, 2020 | 202,006,067 | ||||
Ending balances at Mar. 31, 2020 | $ 3,752 | $ (1,721) | $ 3 | $ 7,840 | $ (2,370) |
Ending Balance Partnership exchangeable units (in shares) at Mar. 31, 2020 | 165,329,153 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends per common share (in dollars per share) | $ 0.77 | $ 0.63 |
Distributions declared on Partnership exchangeable units (in dollars per share) | $ 0.52 | $ 0.5 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 224 | $ 246 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 45 | 47 |
Amortization of deferred financing costs and debt issuance discount | 6 | 7 |
(Income) loss from equity method investments | 2 | (2) |
(Gain) loss on remeasurement of foreign denominated transactions | (8) | (15) |
Net (gains) losses on derivatives | (6) | (20) |
Share-based compensation expense | 19 | 22 |
Deferred income taxes | (31) | 38 |
Other | (4) | 3 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||
Accounts and notes receivable | 94 | 14 |
Inventories and prepaids and other current assets | (13) | (13) |
Accounts and drafts payable | (136) | (69) |
Other accrued liabilities and gift card liability | (67) | (126) |
Tenant inducements paid to franchisees | (3) | 0 |
Other long-term assets and liabilities | 14 | 22 |
Net cash provided by operating activities | 136 | 154 |
Cash flows from investing activities: | ||
Payments for property and equipment | (19) | (5) |
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 4 | 4 |
Settlement/sale of derivatives, net | 12 | 11 |
Other investing activities, net | 0 | 1 |
Net cash (used for) provided by investing activities | (3) | 11 |
Cash flows from financing activities: | ||
Proceeds from Issuance of Long-term Debt | 1,085 | 0 |
Repayments of long-term debt and finance leases | (25) | (23) |
Distributions on Class A common and Partnership exchangeable units | (232) | (207) |
Capital contribution from RBI Inc. | 30 | 42 |
(Payments) proceeds from derivatives | (2) | 5 |
Other financing activities, net | (1) | 1 |
Net cash provided by (used for) financing activities | 855 | (182) |
Effect of exchange rates on cash and cash equivalents | (23) | 6 |
Increase (decrease) in cash and cash equivalents | 965 | (11) |
Cash and cash equivalents at beginning of period | 1,533 | 913 |
Cash and cash equivalents at end of period | 2,498 | 902 |
Supplemental cash flow disclosures: | ||
Interest paid | 104 | 140 |
Income taxes paid | $ 48 | $ 45 |
Description of Business and Org
Description of Business and Organization | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Organization | Description of Business and Organization 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. 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 March 31, 2020 , we franchised or owned 4,925 Tim Hortons restaurants, 18,848 Burger King restaurants, and 3,336 Popeyes restaurants, for a total of 27,109 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. COVID-19 The global crisis resulting from the spread of coronavirus (COVID-19) has had a substantial impact on our global restaurant operations for the three months ended March 31, 2020, which is expected to continue with the timing of recovery uncertain. During the three months ended March 31, 2020, many TH, BK and PLK restaurants were temporarily closed in certain countries and many of the restaurants that remained open had limited operations, such as Drive-thru, Takeout and Delivery (where applicable). This has continued into the second quarter of 2020. Our operating results substantially depend upon our franchisees’ sales volumes, restaurant profitability, and financial stability. The financial impact of COVID-19 has had, and is expected to continue to have, an adverse effect on our franchisees’ liquidity and we are working closely with our franchisees to monitor and assist them with access to appropriate sources of liquidity in order to sustain their businesses throughout this crisis, such as the initiation of rent relief programs for eligible franchisees who lease property from us. See Note 4, Leases , for further information about the rent relief programs. Additionally, beginning in the second quarter of 2020, we are providing cash flow support by extending loans to eligible BK franchisees in the U.S. and advancing certain cash payments to eligible TH franchisees in Canada. |
Basis of Presentation and Conso
Basis of Presentation and Consolidation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation We have prepared the accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. Therefore, the Financial Statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC and Canadian securities regulatory authorities on February 21, 2020. The Financial Statements include our accounts and the accounts of entities in which we have a controlling financial interest, the usual condition of which is ownership of a majority voting interest. 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. We perform an analysis to determine if the legal entity in which operations are conducted is a VIE and consolidate a VIE entity if we also determine Tim Hortons is the entity’s primary beneficiary (“Restaurant VIEs”). As of March 31, 2020 and December 31, 2019 , we determined that we are the primary beneficiary of 31 and 35 Restaurant VIEs, respectively, and accordingly, have consolidated the results of operations, assets and liabilities, and cash flows of these Restaurant VIEs in our Financial Statements. Material intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included in the Financial Statements. The results for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The preparation of consolidated financial statements in conformity with U.S. GAAP and related rules and regulations of the SEC requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Certain prior year amounts in the accompanying Financial Statements and notes to the Financial Statements have been reclassified in order to be comparable with the current year classifications. These reclassifications had no effect on previously reported net income. |
New Accounting Pronouncements
New Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Credit Losses – In June 2016, the Financial Accounting Standards Board ("FASB") issued guidance that requires companies to measure and recognize lifetime expected credit losses for certain financial instruments, including trade accounts receivable and net investments in direct financing and sales-type leases. Expected credit losses are estimated using relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This amendment was effective commencing in 2020, using a modified retrospective approach. The adoption of this new guidance did not have a material impact on our Financial Statements. Simplifying the Accounting for Income Taxes – In December 2019, the FASB issued guidance which simplifies the accounting for income taxes by removing certain exceptions and by clarifying and amending existing guidance applicable to accounting for income taxes . The amendment is effective commencing in 2021 with early adoption permitted. We are currently evaluating the impact that the adoption of this new guidance will have on our Financial Statements. Accounting Relief for the Transition Away from LIBOR and Certain other Reference Rates |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases During the three months ended March 31, 2020, we initiated a rent relief program for eligible TH franchisees in Canada who lease property from us (the “TH rent relief program”) and also initiated a rent relief program effective April 1, 2020 for eligible BK franchisees in the U.S. and Canada who lease property from us (the "BK rent relief program" and together with the TH rent relief program, the “rent relief programs”). Under the rent relief programs, we temporarily converted the rent structure from a combination of fixed plus variable rent to 100% variable rent. While in effect, these programs will result in a reduction in our property revenues. In April 2020, the FASB staff issued interpretive guidance that indicated it would be acceptable for entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Accounting Standards Codification Topic 842, Leases ("ASC 842"), as though enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contract). Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance in ASC 842 to those contracts. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We have elected to apply this interpretive guidance to the rent relief programs, and have assumed that enforceable rights and obligations for those concessions exist in the lease contract. As such, starting on the effective dates indicated above, we began recognizing reductions in rents arising from the rent relief programs as reductions in variable lease payments. This election will continue while our rent relief program is in effect. Property revenues are comprised primarily of lease income from operating leases and earned income on direct financing leases with franchisees as follows (in millions): Three months ended March 31, 2020 Three months ended March 31, 2019 Lease income - operating leases Minimum lease payments $ 112 $ 111 Variable lease payments 63 84 Amortization of favorable and unfavorable income lease contracts, net 2 2 Subtotal - lease income from operating leases 177 197 Earned income on direct financing leases 1 2 Total property revenues $ 178 $ 199 |
Leases | Leases During the three months ended March 31, 2020, we initiated a rent relief program for eligible TH franchisees in Canada who lease property from us (the “TH rent relief program”) and also initiated a rent relief program effective April 1, 2020 for eligible BK franchisees in the U.S. and Canada who lease property from us (the "BK rent relief program" and together with the TH rent relief program, the “rent relief programs”). Under the rent relief programs, we temporarily converted the rent structure from a combination of fixed plus variable rent to 100% variable rent. While in effect, these programs will result in a reduction in our property revenues. In April 2020, the FASB staff issued interpretive guidance that indicated it would be acceptable for entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Accounting Standards Codification Topic 842, Leases ("ASC 842"), as though enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contract). Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance in ASC 842 to those contracts. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We have elected to apply this interpretive guidance to the rent relief programs, and have assumed that enforceable rights and obligations for those concessions exist in the lease contract. As such, starting on the effective dates indicated above, we began recognizing reductions in rents arising from the rent relief programs as reductions in variable lease payments. This election will continue while our rent relief program is in effect. Property revenues are comprised primarily of lease income from operating leases and earned income on direct financing leases with franchisees as follows (in millions): Three months ended March 31, 2020 Three months ended March 31, 2019 Lease income - operating leases Minimum lease payments $ 112 $ 111 Variable lease payments 63 84 Amortization of favorable and unfavorable income lease contracts, net 2 2 Subtotal - lease income from operating leases 177 197 Earned income on direct financing leases 1 2 Total property revenues $ 178 $ 199 |
Leases | Leases During the three months ended March 31, 2020, we initiated a rent relief program for eligible TH franchisees in Canada who lease property from us (the “TH rent relief program”) and also initiated a rent relief program effective April 1, 2020 for eligible BK franchisees in the U.S. and Canada who lease property from us (the "BK rent relief program" and together with the TH rent relief program, the “rent relief programs”). Under the rent relief programs, we temporarily converted the rent structure from a combination of fixed plus variable rent to 100% variable rent. While in effect, these programs will result in a reduction in our property revenues. In April 2020, the FASB staff issued interpretive guidance that indicated it would be acceptable for entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Accounting Standards Codification Topic 842, Leases ("ASC 842"), as though enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contract). Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance in ASC 842 to those contracts. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We have elected to apply this interpretive guidance to the rent relief programs, and have assumed that enforceable rights and obligations for those concessions exist in the lease contract. As such, starting on the effective dates indicated above, we began recognizing reductions in rents arising from the rent relief programs as reductions in variable lease payments. This election will continue while our rent relief program is in effect. Property revenues are comprised primarily of lease income from operating leases and earned income on direct financing leases with franchisees as follows (in millions): Three months ended March 31, 2020 Three months ended March 31, 2019 Lease income - operating leases Minimum lease payments $ 112 $ 111 Variable lease payments 63 84 Amortization of favorable and unfavorable income lease contracts, net 2 2 Subtotal - lease income from operating leases 177 197 Earned income on direct financing leases 1 2 Total property revenues $ 178 $ 199 |
Leases | Leases During the three months ended March 31, 2020, we initiated a rent relief program for eligible TH franchisees in Canada who lease property from us (the “TH rent relief program”) and also initiated a rent relief program effective April 1, 2020 for eligible BK franchisees in the U.S. and Canada who lease property from us (the "BK rent relief program" and together with the TH rent relief program, the “rent relief programs”). Under the rent relief programs, we temporarily converted the rent structure from a combination of fixed plus variable rent to 100% variable rent. While in effect, these programs will result in a reduction in our property revenues. In April 2020, the FASB staff issued interpretive guidance that indicated it would be acceptable for entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how those concessions would be accounted for under Accounting Standards Codification Topic 842, Leases ("ASC 842"), as though enforceable rights and obligations for those concessions existed (regardless of whether those enforceable rights and obligations for the concessions explicitly exist in the contract). Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance in ASC 842 to those contracts. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We have elected to apply this interpretive guidance to the rent relief programs, and have assumed that enforceable rights and obligations for those concessions exist in the lease contract. As such, starting on the effective dates indicated above, we began recognizing reductions in rents arising from the rent relief programs as reductions in variable lease payments. This election will continue while our rent relief program is in effect. Property revenues are comprised primarily of lease income from operating leases and earned income on direct financing leases with franchisees as follows (in millions): Three months ended March 31, 2020 Three months ended March 31, 2019 Lease income - operating leases Minimum lease payments $ 112 $ 111 Variable lease payments 63 84 Amortization of favorable and unfavorable income lease contracts, net 2 2 Subtotal - lease income from operating leases 177 197 Earned income on direct financing leases 1 2 Total property revenues $ 178 $ 199 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Contract Liabilities Contract liabilities consist of deferred revenue resulting from initial and renewal franchise fees paid by franchisees, as well as upfront fees paid by master franchisees, which are generally recognized on a straight-line basis over the term of the underlying agreement. We may recognize unamortized upfront fees when a contract with a franchisee or master franchisee is modified and is accounted for as a termination of the existing contract. We classify these contract liabilities as Other liabilities, net in our condensed consolidated balance sheets. The following table reflects the change in contract liabilities between December 31, 2019 and March 31, 2020 (in millions): Contract Liabilities TH BK PLK Consolidated Balance at December 31, 2019 $ 64 $ 449 $ 28 $ 541 Recognized during period and included in the contract liability balance at the beginning of the year (2 ) (30 ) (1 ) (33 ) Increase, excluding amounts recognized as revenue during the period 2 6 3 11 Impact of foreign currency translation (3 ) (4 ) — (7 ) Balance at March 31, 2020 $ 61 $ 421 $ 30 $ 512 The following table illustrates estimated revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2020 (in millions): Contract liabilities expected to be recognized in TH BK PLK Consolidated Remainder of 2020 $ 6 $ 26 $ 2 $ 34 2021 8 33 2 43 2022 7 32 2 41 2023 7 31 2 40 2024 6 30 2 38 Thereafter 27 269 20 316 Total $ 61 $ 421 $ 30 $ 512 Disaggregation of Total Revenues Total revenues consist of the following (in millions): Three Months Ended 2020 2019 Sales $ 503 $ 522 Royalties 526 528 Property revenues 178 199 Franchise fees and other revenue 18 17 Total revenues $ 1,225 $ 1,266 |
Earnings per Unit
Earnings per Unit | 3 Months Ended |
Mar. 31, 2020 | |
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 and Partnership preferred unit distributions. Basic and diluted earnings per Class A common unit is determined by dividing net income allocated to Class A common unit holders by the weighted average number of Class A common units outstanding for the period. Basic and diluted earnings per Partnership exchangeable unit is determined by dividing net income allocated to the Partnership exchangeable units by the weighted average number of Partnership exchangeable units outstanding during the period. There are no dilutive securities for Partnership as RBI equity awards will not affect the number of Class A common units or Partnership exchangeable units outstanding. However, the issuance of 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): Three Months Ended March 31, 2020 2019 Allocation of net income among partner interests: Net income allocated to Class A common unitholders $ 144 $ 135 Net income allocated to Partnership exchangeable unitholders 80 111 Net income attributable to common unitholders $ 224 $ 246 Denominator - basic and diluted partnership units: Weighted average Class A common units 202 202 Weighted average Partnership exchangeable units 165 208 Earnings per unit - basic and diluted: Class A common units (a) $ 0.71 $ 0.67 Partnership exchangeable units (a) $ 0.48 $ 0.53 (a) Earnings per unit may not recalculate exactly as it is calculated based on unrounded numbers. |
Intangible Assets, net and Good
Intangible Assets, net and Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 December 31, 2019 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Identifiable assets subject to amortization: Franchise agreements $ 706 $ (230 ) $ 476 $ 720 $ (225 ) $ 495 Favorable leases 119 (62 ) 57 127 (65 ) 62 Subtotal 825 (292 ) 533 847 (290 ) 557 Indefinite lived intangible assets: Tim Hortons brand $ 6,090 $ — $ 6,090 $ 6,534 $ — $ 6,534 Burger King brand 2,107 — 2,107 2,117 — 2,117 Popeyes brand 1,355 — 1,355 1,355 — 1,355 Subtotal 9,552 — 9,552 10,006 — 10,006 Intangible assets, net $ 10,085 $ 10,563 Goodwill Tim Hortons segment $ 3,935 $ 4,207 Burger King segment 595 598 Popeyes segment 846 846 Total $ 5,376 $ 5,651 Amortization expense on intangible assets totaled $11 million for the three months ended March 31, 2020 and 2019 . The change in the brands and goodwill balances during the three months ended March 31, 2020 was due to the impact of foreign currency translation. |
Equity Method Investments
Equity Method Investments | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments The aggregate carrying amount of our equity method investments was $234 million and $266 million as of March 31, 2020 and December 31, 2019 , respectively, and is included as a component of Other assets, net in our accompanying condensed consolidated balance sheets. 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% joint venture interest with The Wendy’s Company (the “TIMWEN Partnership”), which jointly holds real estate underlying Canadian combination restaurants. Distributions received from this joint venture were $2 million during the three months ended March 31, 2020 and 2019 . The aggregate market value of our 15.4% equity interest in Carrols Restaurant Group, Inc. (“Carrols”) based on the quoted market price on March 31, 2020 was approximately $17 million . The aggregate market value of our 9.8% equity interest in BK Brasil Operação e Assessoria a Restaurantes S.A. based on the quoted market price on March 31, 2020 was approximately $39 million . We have evaluated recent declines in the market value of these equity method investments as a result of COVID-19 and we concluded these declines are not other than temporary and as such no impairments have been recognized at March 31, 2020 . 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 revenues recognized from franchisees that are owned or franchised by entities in which we have an equity interest consist of the following (in millions): Three Months Ended March 31, 2020 2019 Revenues from affiliates: Royalties $ 73 $ 78 Property revenues 8 8 Franchise fees and other revenue 3 3 Total $ 84 $ 89 We recognized $4 million of rent expense associated with the TIMWEN Partnership during the three months ended March 31, 2020 and 2019 . At March 31, 2020 and December 31, 2019 , we had $42 million and $47 million , respectively, of accounts receivable, net from our equity method investments which were recorded in Accounts and notes receivable, net in our condensed consolidated balance sheets. |
Other Accrued Liabilities and O
Other Accrued Liabilities and Other Liabilities, net | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Accrued Liabilities and Other Liabilities, net | Other Accrued Liabilities and Other Liabilities, net Other accrued liabilities (current) and other liabilities, net (noncurrent) consist of the following (in millions): As of March 31, December 31, Current: Dividend payable $ 242 $ 232 Interest payable 93 71 Accrued compensation and benefits 36 57 Taxes payable 147 126 Deferred income 28 35 Accrued advertising expenses 47 40 Restructuring and other provisions 8 8 Current portion of operating lease liabilities 120 126 Other 58 95 Other accrued liabilities $ 779 $ 790 Noncurrent: Taxes payable $ 575 $ 579 Contract liabilities 512 541 Derivatives liabilities 461 341 Unfavorable leases 91 103 Accrued pension 64 65 Deferred income 30 25 Other 41 44 Other liabilities, net $ 1,774 $ 1,698 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt consists of the following (in millions): As of March 31, December 31, Term Loan B (due November 19, 2026) $ 5,337 $ 5,350 Term Loan A (due October 7, 2024) 745 750 Revolving Credit Facility (due October 7, 2024) 995 — 2017 4.25% Senior Notes (due May 15, 2024) 1,500 1,500 2019 3.875% Senior Notes (due January 15, 2028) 750 750 2017 5.00% Senior Notes (due October 15, 2025) 2,800 2,800 2019 4.375% Senior Notes (due January 15, 2028) 750 750 TH Facility and other 163 81 Less: unamortized deferred financing costs and deferred issue discount (142 ) (148 ) Total debt, net 12,898 11,833 Less: current maturities of debt (76 ) (74 ) Total long-term debt $ 12,822 $ 11,759 Credit Facilities During the three months ended March 31, 2020 , we drew $995 million on our senior secured revolving credit facility (the "Revolving Credit Facility") and, as of March 31, 2020 , we had $995 million outstanding under our Revolving Credit Facility with an interest rate of 2.05% , $2 million of letters of credit issued against the Revolving Credit Facility, and our borrowing availability under our Revolving Credit Facility was $3 million . Funds available under the Revolving Credit Facility may be used to repay other debt, finance debt or RBI share repurchases, 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. On April 2, 2020 , two of our subsidiaries (the "Borrowers") entered into a fifth amendment (the "Fifth Amendment") to the credit agreement (the "Credit Agreement") governing our senior secured term loan facilities (the "Term Loan Facilities") and Revolving Credit Facility. The Fifth Amendment provides the Borrowers with the option to comply with a $1,000 million minimum liquidity covenant in lieu of the 6.50 :1.00 net first lien senior secured leverage ratio financial maintenance covenant for the period after June 30, 2020 and prior to September 30, 2021. There were no other material changes to the terms of the Credit Agreement. TH Facility One of our subsidiaries entered into a non-revolving delayed drawdown term credit facility in a total aggregate principal amount of C$225 million with a maturity date of October 4, 2025 (the “TH Facility”). The interest rate applicable to the TH Facility is the Canadian Bankers’ Acceptance rate plus an applicable margin equal to 1.40% or the Prime Rate plus an applicable margin equal to 0.40% , at our option. Obligations under the TH Facility are guaranteed by three of our subsidiaries, and amounts borrowed under the TH Facility are secured by certain parcels of real estate. During the three months ended March 31, 2020 , we drew down the remaining availability of C$125 million under the TH Facility and, as of March 31, 2020 , we had outstanding C$225 million under the TH Facility with a weighted average interest rate of 3.06% . 2020 Senior Notes On April 7, 2020 , the Borrowers entered into an indenture (the "2020 5.75% Senior Notes Indenture") in connection with the issuance of $500 million of 5.75% first lien notes due April 15, 2025 (the "2020 5.75% Senior Notes"). No principal payments are due until maturity and interest is paid semi-annually. The net proceeds from the offering of the 2020 5.75% Senior Notes will be used for general corporate purposes. Obligations under the 2020 5.75% 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 2020 5.75% Senior Notes are first lien senior secured obligations and rank equal in right of payment with all of the existing and future first lien senior debt of the Borrowers and Note Guarantors, including borrowings and guarantees of the Credit Facilities. Our 2020 5.75% Senior Notes may be redeemed in whole or in part, on or after April 15, 2022 at the redemption prices set forth in the 2020 5.75% Senior Notes Indenture, plus accrued and unpaid interest, if any, at the date of redemption. The 2020 5.75% Senior Notes Indenture also contains optional redemption provisions related to tender offers, change of control and equity offerings, among others. Restrictions and Covenants As of March 31, 2020 , we were in compliance with all applicable financial debt covenants under the Credit Facilities, the TH Facility, and the indentures governing our Senior Notes. Fair Value Measurement The following table presents the fair value of our variable rate term debt and senior notes, estimated using inputs based on bid and offer prices that are Level 2 inputs, and principal carrying amount (in millions): As of March 31, December 31, Fair value of our variable term debt and senior notes $ 12,148 $ 12,075 Principal carrying amount of our variable term debt and senior notes 12,877 11,900 Interest Expense, net Interest expense, net consists of the following (in millions): Three Months Ended 2020 2019 Debt (a) $ 113 $ 124 Finance lease obligations 5 5 Amortization of deferred financing costs and debt issuance discount 6 7 Interest income (5 ) (4 ) Interest expense, net $ 119 $ 132 (a) Amount includes $21 million and $18 million benefit during the three months ended March 31, 2020 and 2019 , respectively, related to the amortization of the Excluded Component as defined in Note 13, Derivatives . |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate was 16.8% for the three months ended March 31, 2020 . The effective tax rate during this period reflects the amount and mix of income from multiple tax jurisdictions and the impact of internal financing arrangements. Our effective tax rate was 18.7% for the three months ended March 31, 2019 . The effective tax rate for this period was primarily a result of the mix of income from multiple tax jurisdictions and the impact of internal financing arrangements and stock option exercises. Benefits from stock option exercises reduced the effective tax rate by 4.1% for the three months ended March 31, 2019 . |
Equity
Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Equity | Equity During the three months ended March 31, 2020 , Partnership exchanged 178,046 Partnership exchangeable units pursuant to exchange notices received. In accordance with the terms of the partnership agreement, Partnership satisfied the exchange notices by exchanging these Partnership exchangeable units for the same number of newly issued RBI common shares. The issuances of shares were accounted for as capital contributions by RBI to Partnership. The exchanges of Partnership exchangeable units were recorded as increases to the Class A common units balance within partners’ capital in our consolidated balance sheet in an amount equal to the market value of the newly issued RBI common shares and a reduction to the Partnership exchangeable units balance within partners’ capital of our consolidated balance sheet in an amount equal to the cash paid by Partnership, if any, and the market value of the newly issued RBI common shares. Pursuant to the terms of the partnership agreement, upon the exchange of Partnership exchangeable units, each such Partnership exchangeable unit was cancelled concurrently with the exchange. Accumulated Other Comprehensive Income (Loss) The following table displays the changes in the components of accumulated other comprehensive income (loss) (“AOCI”) (in millions): Derivatives Pensions Foreign Currency Translation Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 $ 306 $ (29 ) $ (1,455 ) $ (1,178 ) Foreign currency translation adjustment — — (751 ) (751 ) Net change in fair value of derivatives, net of tax 197 — — 197 Amounts reclassified to earnings of cash flow hedges, net of tax 11 — — 11 Balance at March 31, 2020 $ 514 $ (29 ) $ (2,206 ) $ (1,721 ) |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2020 | |
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 At March 31, 2020 , we had outstanding receive-variable, pay-fixed interest rate swaps with a total notional value of $3,500 million to hedge the variability in the interest payments on a portion of our senior secured term loan facilities (the "Term Loan Facilities") beginning October 31, 2019 through the termination date of November 19, 2026 . Additionally, at March 31, 2020 , we also had outstanding receive-variable, pay-fixed interest rate swaps with a total notional value of $500 million to hedge the variability in the interest payments on a portion of our Term Loan Facilities effective September 30, 2019 through the termination date of September 30, 2026 . At inception, all of these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value are recorded in AOCI and reclassified into earnings during the period in which the hedged forecasted transaction affects earnings. During 2019, we extended the term of our previous $3,500 million receive-variable, pay-fixed interest rate swaps to align the maturity date of the new interest rate swaps with the new maturity date of our Term Loan B. The extension of the term resulted in a de-designation and re-designation of the interest rate swaps and the swaps continue to be accounted for as a cash flow hedge for hedge accounting. In connection with the de-designation, we recognized a net unrealized loss of $213 million in AOCI and this amount gets reclassified into Interest expense, net as the original forecasted transaction affects earnings. The amount of pre-tax losses in AOCI as of March 31, 2020 that we expect to be reclassified into interest expense within the next 12 months is $51 million . 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 March 31, 2020 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 March 31, 2020 , we had outstanding cross-currency rate swap contracts between the Canadian dollar and U.S. dollar and the Euro and U.S. dollar that have been designated as net investment hedges of a portion of our equity in foreign operations in those currencies. The component of the gains and losses on our net investment in these designated foreign operations driven by changes in foreign exchange rates are economically partly offset by movements in the fair value of our cross-currency swap contracts. The fair value of the swaps is calculated each period with changes in fair value reported in AOCI, net of tax. Such amounts will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying foreign operations. At March 31, 2020 , we had outstanding 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 . At March 31, 2020 , we had outstanding cross-currency rate swaps in which we pay quarterly fixed-rate interest payments on the Euro notional value of €1,108 million and receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $1,200 million . At inception, these cross-currency rate swaps were designated as a hedge and are accounted for as a net investment hedge. During 2018, we extended the term of the swaps from March 31, 2021 to the maturity date of February 17, 2024 . The extension of the term resulted in a re-designation of the hedge and the swaps continue to be accounted for as a net investment hedge. Additionally, at March 31, 2020 , we also had outstanding cross-currency rate swaps in which we receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $400 million , entered during 2018, and $500 million , entered during 2019, through the maturity date of February 17, 2024 . At inception, these cross-currency rate swaps were designated as a hedge and are accounted for as a net investment hedge. The fixed to fixed cross-currency rate swaps hedging Canadian dollar and Euro net investments utilized the forward method of effectiveness assessment prior to March 15, 2018. On March 15, 2018, we de-designated and subsequently re-designated the outstanding fixed to fixed cross-currency rate swaps to prospectively use the spot method of hedge effectiveness assessment. Additionally, as a result of adopting new hedge accounting guidance during 2018, we elected to exclude the interest component (the “Excluded Component”) from the accounting hedge without affecting net investment hedge accounting and elected to amortize the Excluded Component over the life of the derivative instrument. The amortization of the Excluded Component is recognized in Interest expense, net in the condensed consolidated statement of operations. The change in fair value that is not related to the Excluded Component is recorded in AOCI and will be reclassified to earnings when the foreign subsidiaries are sold or substantially liquidated. Foreign Currency Exchange Contracts We use foreign exchange derivative instruments to manage the impact of foreign exchange fluctuations on U.S. dollar purchases and payments, such as coffee purchases made by our Canadian Tim Hortons operations. At March 31, 2020 , 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 $83 million with maturities to April 2021 . 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 condensed consolidated balance sheets (in millions): Gain or (Loss) Recognized in Other Comprehensive Income (Loss) Three Months Ended March 31, 2020 2019 Derivatives designated as cash flow hedges (1) Interest rate swaps $ (300 ) $ (44 ) Forward-currency contracts $ 7 $ (2 ) Derivatives designated as net investment hedges Cross-currency rate swaps $ 517 $ (102 ) (1) We did not exclude any components from the cash flow hedge relationships presented in this table. Location of Gain or (Loss) Reclassified from AOCI into Earnings Gain or (Loss) Reclassified from AOCI into Earnings Three Months Ended March 31, 2020 2019 Derivatives designated as cash flow hedges Interest rate swaps Interest expense, net $ (15 ) $ (1 ) Forward-currency contracts Cost of sales $ — $ 2 Location of Gain or (Loss) Recognized in Earnings Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) Three Months Ended March 31, 2020 2019 Derivatives designated as net investment hedges Cross-currency rate swaps Interest expense, net $ 21 $ 18 Fair Value as of March 31, 2020 December 31, 2019 Balance Sheet Location Assets: Derivatives designated as cash flow hedges Interest rate $ — $ 7 Other assets, net Foreign currency $ 5 $ — Prepaids and other current assets Derivatives designated as net investment hedges Foreign currency 377 22 Other assets, net Total assets at fair value $ 382 $ 29 Liabilities: Derivatives designated as cash flow hedges Interest rate $ 461 $ 175 Other liabilities, net Foreign currency — 2 Other accrued liabilities Derivatives designated as net investment hedges Foreign currency — 166 Other liabilities, net Total liabilities at fair value $ 461 $ 343 |
Other Operating Expenses (Incom
Other Operating Expenses (Income), net | 3 Months Ended |
Mar. 31, 2020 | |
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): Three Months Ended March 31, 2020 2019 Net losses (gains) on disposal of assets, restaurant closures, and refranchisings $ (2 ) $ 3 Net losses (gains) on foreign exchange (8 ) (15 ) Other, net (6 ) (5 ) Other operating expenses (income), net $ (16 ) $ (17 ) Net losses (gains) on disposal of assets, restaurant closures, and refranchisings represent sales of properties and other costs related to restaurant closures and refranchisings. Gains and losses recognized in the current period may reflect certain costs related to closures and refranchisings that occurred in previous periods. Net losses (gains) on foreign exchange is primarily related to revaluation of foreign denominated assets and liabilities. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, we are involved in legal proceedings arising in the ordinary course of business relating to matters including, but not limited to, disputes with franchisees, suppliers, employees and customers, as well as disputes over our intellectual property. On October 5, 2018, a class action complaint was filed against Burger King Worldwide, Inc. (“BKW”) and Burger King Corporation (“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. On March 24, 2020, the Court granted BKC’s motion to dismiss for failure to state a claim and on April 20, 2020 the plaintiffs filed a motion for leave to amend their complaint. On April 27, 2020, BKC filed a motion opposing the motion for leave to amend. In July 2019, a class action complaint was filed against The TDL Group Corp. (“TDL”) in the Supreme Court of British Columbia by Samir Latifi, individually and on behalf of all others similarly situated. The complaint alleges that TDL violated the Canadian Competition Act by incorporating an employee no-solicitation and no-hiring clause in the standard form franchise agreement all Tim Hortons franchisees are required to sign. The plaintiff seeks damages and restitution, on behalf of himself and other members of the class. While we currently believe these claims are without merit, we are unable to predict the ultimate outcome of these cases or estimate the range of possible loss, if any. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting 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. We manage each of our brands as an operating segment and each operating segment represents a reportable segment. The following tables present revenues, by segment and by country (in millions): Three Months Ended 2020 2019 Revenues by operating segment: TH $ 699 $ 749 BK 388 411 PLK 138 106 Total revenues $ 1,225 $ 1,266 Three Months Ended 2020 2019 Revenues by country (a): Canada $ 632 $ 676 United States 450 444 Other 143 146 Total revenues $ 1,225 $ 1,266 (a) Only Canada and the United States represented 10% or more of our total revenues in each period presented. Our measure of segment income is Adjusted EBITDA. Adjusted EBITDA represents earnings (net income or loss) before interest expense, net, loss on early extinguishment of debt, income tax expense, 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 Corporate restructuring and tax advisory fees related to the interpretation and implementation of comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act enacted by the U.S. government on December 22, 2017, including Treasury regulations issued and proposed between 2018 and 2020, and 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. 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 consists of the following (in millions): Three Months Ended March 31, 2020 2019 Segment income: TH $ 189 $ 237 BK 200 222 PLK 55 41 Adjusted EBITDA 444 500 Share-based compensation and non-cash incentive compensation expense 21 25 Corporate restructuring and tax advisory fees 1 6 Office centralization and relocation costs — 4 Impact of equity method investments (a) 4 1 Other operating expenses (income), net (16 ) (17 ) EBITDA 434 481 Depreciation and amortization 45 47 Income from operations 389 434 Interest expense, net 119 132 Income tax expense 46 56 Net income $ 224 $ 246 (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. |
Supplemental Financial Informat
Supplemental Financial Information | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information On February 17, 2017, 1011778 B.C. Unlimited Liability Company (the “Parent Issuer”) and New Red Finance Inc. (the “Co-Issuer” and together with the Parent Issuer, the “Issuers”) entered into an amended credit agreement, as amended from time to time, that provides for obligations under the Credit Facilities. On November 19, 2019, the Issuers entered into the 2019 4.375% Senior Notes Indenture with respect to the 2019 4.375% Senior Notes. On September 24, 2019, the Issuers entered into the 2019 3.875% Senior Notes Indenture with respect to the 2019 3.875% Senior Notes. On August 28, 2017, the Issuers entered into the 2017 5.000% Senior Notes Indenture with respect to the 2017 5.000% Senior Notes. On May 17, 2017, the Issuers entered into the 2017 4.25% Senior Notes Indenture with respect to the 2017 4.250% Senior Notes. The agreement governing our Credit Facilities, the 2019 4.375% Senior Notes Indenture, the 2019 3.875% Senior Notes Indenture, the 2017 5.000% Senior Notes Indenture, and the 2017 4.25% 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 of U.S. dollars) As of March 31, 2020 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 2,498 $ — $ — $ 2,498 Accounts and notes receivable, net 414 — — 414 Inventories, net 85 — — 85 Prepaids and other current assets 62 — — 62 Total current assets 3,059 — — 3,059 Property and equipment, net 1,939 — — 1,939 Operating lease assets, net 1,115 — — 1,115 Intangible assets, net 10,085 — — 10,085 Goodwill 5,376 — — 5,376 Net investment in property leased to franchisees 49 — — 49 Intercompany receivable — 242 (242 ) — Investment in subsidiaries — 3,752 (3,752 ) — Other assets, net 1,006 — — 1,006 Total assets $ 22,629 $ 3,994 $ (3,994 ) $ 22,629 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 484 $ — $ — $ 484 Other accrued liabilities 537 242 — 779 Gift card liability 106 — — 106 Current portion of long term-debt and finance leases 103 — — 103 Total current liabilities 1,230 242 — 1,472 Long-term debt, net of current portion 12,822 — — 12,822 Finance leases, net of current portion 283 — — 283 Operating lease liabilities, net of current portion 1,039 — — 1,039 Other liabilities, net 1,774 — — 1,774 Payables to affiliates 242 — (242 ) — Deferred income taxes, net 1,487 — — 1,487 Total liabilities 18,877 242 (242 ) 18,877 Partners’ capital: Class A common units — 7,840 — 7,840 Partnership exchangeable units — (2,370 ) — (2,370 ) Common shares 3,303 — (3,303 ) — Retained Earnings 2,167 — (2,167 ) — Accumulated other comprehensive income (loss) (1,721 ) (1,721 ) 1,721 (1,721 ) Total Partners' capital/shareholders' equity 3,749 3,749 (3,749 ) 3,749 Noncontrolling interests 3 3 (3 ) 3 Total equity 3,752 3,752 (3,752 ) 3,752 Total liabilities and equity $ 22,629 $ 3,994 $ (3,994 ) $ 22,629 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions of U.S. dollars) As of December 31, 2019 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,533 $ — $ — $ 1,533 Accounts and notes receivable, net 527 — — 527 Inventories, net 84 — — 84 Prepaids and other current assets 52 — — 52 Total current assets 2,196 — — 2,196 Property and equipment, net 2,007 — — 2,007 Operating lease assets. net 1,176 — — 1,176 Intangible assets, net 10,563 — — 10,563 Goodwill 5,651 — — 5,651 Net investment in property leased to franchisees 48 — — 48 Intercompany receivable — 232 (232 ) — Investment in subsidiaries — 4,259 (4,259 ) — Other assets, net 719 — — 719 Total assets $ 22,360 $ 4,491 $ (4,491 ) $ 22,360 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 644 $ — $ — $ 644 Other accrued liabilities 558 232 — 790 Gift card liability 168 — — 168 Current portion of long-term debt and finance leases 101 — — 101 Total current liabilities 1,471 232 — 1,703 Long-term debt, net of current portion 11,759 — — 11,759 Finance leases, net of current portion 288 — — 288 Operating lease liabilities, net of current portion 1,089 — — 1,089 Other liabilities, net 1,698 — — 1,698 Payables to affiliates 232 — (232 ) — Deferred income taxes, net 1,564 — — 1,564 Total liabilities 18,101 232 (232 ) 18,101 Partners’ capital: Class A common units — 7,786 — 7,786 Partnership exchangeable units — (2,353 ) — (2,353 ) Common shares 3,248 — (3,248 ) — Retained Earnings 2,185 — (2,185 ) — Accumulated other comprehensive income (loss) (1,178 ) (1,178 ) 1,178 (1,178 ) Total Partners' capital/shareholders' equity 4,255 4,255 (4,255 ) 4,255 Noncontrolling interests 4 4 (4 ) 4 Total equity 4,259 4,259 (4,259 ) 4,259 Total liabilities and equity $ 22,360 $ 4,491 $ (4,491 ) $ 22,360 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended March 31, 2020 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 503 $ — $ — $ 503 Franchise and property revenues 722 — — 722 Total revenues 1,225 — — 1,225 Operating costs and expenses: Cost of sales 399 — — 399 Franchise and property expenses 126 — — 126 Selling, general and administrative expenses 325 — — 325 (Income) loss from equity method investments 2 — — 2 Other operating expenses (income), net (16 ) — — (16 ) Total operating costs and expenses 836 — — 836 Income from operations 389 — — 389 Interest expense, net 119 — — 119 Income before income taxes 270 — — 270 Income tax expense 46 — — 46 Net income 224 — — 224 Equity in earnings of consolidated subsidiaries — 224 (224 ) — Net income (loss) 224 224 (224 ) 224 Net income (loss) attributable to noncontrolling interests — — — — Net income (loss) attributable to common unitholders $ 224 $ 224 $ (224 ) $ 224 Comprehensive income (loss) $ (319 ) $ (319 ) $ 319 $ (319 ) RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended March 31, 2019 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 522 $ — $ — $ 522 Franchise and property revenues 744 — — 744 Total revenues 1,266 — — 1,266 Operating costs and expenses: Cost of sales 406 — — 406 Franchise and property expenses 133 — — 133 Selling, general and administrative expenses 312 — — 312 (Income) loss from equity method investments (2 ) — — (2 ) Other operating expenses (income), net (17 ) — — (17 ) Total operating costs and expenses 832 — — 832 Income from operations 434 — — 434 Interest expense, net 132 — — 132 Income before income taxes 302 — — 302 Income tax expense 56 — — 56 Net income 246 — — 246 Equity in earnings of consolidated subsidiaries — 246 (246 ) — Net income (loss) 246 246 (246 ) 246 Net income (loss) attributable to noncontrolling interests — — — — Net income (loss) attributable to common unitholders $ 246 $ 246 $ (246 ) $ 246 Comprehensive income (loss) $ 294 $ 294 $ (294 ) $ 294 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Three months ended March 31, 2020 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 224 $ 224 $ (224 ) $ 224 Adjustments to reconcile net income to net cash (used for) provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (224 ) 224 — Depreciation and amortization 45 — — 45 Amortization of deferred financing costs and debt issuance discount 6 — — 6 (Income) loss from equity method investments 2 — — 2 (Gain) loss on remeasurement of foreign denominated transactions (8 ) — — (8 ) Net (gains) losses on derivatives (6 ) — — (6 ) Share-based compensation expense 19 — — 19 Deferred income taxes (31 ) — — (31 ) Other (4 ) — — (4 ) Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable 94 — — 94 Inventories and prepaids and other current assets (13 ) — — (13 ) Accounts and drafts payable (136 ) — — (136 ) Other accrued liabilities and gift card liability (67 ) — — (67 ) Tenant inducements paid to franchisees (3 ) — — (3 ) Other long-term assets and liabilities 14 — — 14 Net cash provided by (used for) operating activities 136 — — 136 Cash flows from investing activities: Payments for property and equipment (19 ) — — (19 ) Net proceeds from disposal of assets, restaurant closures, and refranchisings 4 — — 4 Settlement/sale of derivatives, net 12 — — 12 Net cash provided by (used for) investing activities (3 ) — — (3 ) Cash flows from financing activities: Proceeds from revolving line of credit and long-term debt 1,085 — — 1,085 Repayments of long-term debt and finance leases (25 ) — — (25 ) Distributions on Class A common and Partnership exchangeable units — (232 ) — (232 ) Capital contribution from RBI Inc. 30 — — 30 Distributions from subsidiaries (232 ) 232 — — (Payments) proceeds from derivatives (2 ) — — (2 ) Other financing activities, net (1 ) — — (1 ) Net cash provided by (used for) financing activities 855 — — 855 Effect of exchange rates on cash and cash equivalents (23 ) — — (23 ) Increase (decrease) in cash and cash equivalents 965 — — 965 Cash and cash equivalents at beginning of period 1,533 — — 1,533 Cash and cash equivalents at end of period $ 2,498 $ — $ — $ 2,498 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Three Months Ended March 31, 2019 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 246 $ 246 $ (246 ) $ 246 Adjustments to reconcile net income to net cash (used for) provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (246 ) 246 — Depreciation and amortization 47 — — 47 Amortization of deferred financing costs and debt issuance discount 7 — — 7 (Income) loss from equity method investments (2 ) — — (2 ) (Gain) loss on remeasurement of foreign denominated transactions (15 ) — — (15 ) Net (gains) losses on derivatives (20 ) — — (20 ) Share-based compensation expense 22 — — 22 Deferred income taxes 38 — — 38 Other 3 — — 3 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable 14 — — 14 Inventories and prepaids and other current assets (13 ) — — (13 ) Accounts and drafts payable (69 ) — — (69 ) Other accrued liabilities and gift card liability (126 ) — — (126 ) Other long-term assets and liabilities 22 — — 22 Net cash provided by (used for) operating activities 154 — — 154 Cash flows from investing activities: Payments for property and equipment (5 ) — — (5 ) Net proceeds from disposal of assets, restaurant closures, and refranchisings 4 — — 4 Settlement/sale of derivatives, net 11 — — 11 Other investing activities, net 1 — — 1 Net cash provided by (used for) investing activities 11 — — 11 Cash flows from financing activities: Repayments of long-term debt and finance leases (23 ) — — (23 ) Distributions on Class A common and Partnership exchangeable units — (207 ) — (207 ) Capital contribution from RBI Inc. 42 — — 42 Distributions from subsidiaries (207 ) 207 — — (Payments) proceeds from derivatives 5 — — 5 Other financing activities, net 1 — — 1 Net cash (used for) provided by financing activities (182 ) — — (182 ) Effect of exchange rates on cash and cash equivalents 6 — — 6 Increase (decrease) in cash and cash equivalents (11 ) — — (11 ) Cash and cash equivalents at beginning of period 913 — — 913 Cash and cash equivalents at end of period $ 902 $ — $ — $ 902 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Cash Distributions/Dividends On April 3, 2020 , RBI paid a cash dividend of $0.52 per RBI common share to common shareholders of record on March 16, 2020 . 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 $0.52 per exchangeable unit to holders of record on March 16, 2020 . Subsequent to March 31, 2020 , the RBI board of directors declared a cash dividend of $0.52 per RBI common share, which will be paid on June 30, 2020 to RBI common shareholders of record on June 17, 2020 . 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 $0.52 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. Fifth Amendment to the Credit Agreement and Issuance of 2020 Senior Notes As discussed in Note 10, Long-Term Debt , on April 2, 2020 , the Borrowers entered into the Fifth Amendment to the Credit Agreement and on April 7, 2020 , the Borrowers entered into the 2020 5.75% Senior Notes Indenture in connection with the issuance of the 2020 5.75% Senior Notes. |
New Accounting Pronouncements (
New Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Credit Losses – In June 2016, the Financial Accounting Standards Board ("FASB") issued guidance that requires companies to measure and recognize lifetime expected credit losses for certain financial instruments, including trade accounts receivable and net investments in direct financing and sales-type leases. Expected credit losses are estimated using relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. This amendment was effective commencing in 2020, using a modified retrospective approach. The adoption of this new guidance did not have a material impact on our Financial Statements. Simplifying the Accounting for Income Taxes – In December 2019, the FASB issued guidance which simplifies the accounting for income taxes by removing certain exceptions and by clarifying and amending existing guidance applicable to accounting for income taxes . The amendment is effective commencing in 2021 with early adoption permitted. We are currently evaluating the impact that the adoption of this new guidance will have on our Financial Statements. Accounting Relief for the Transition Away from LIBOR and Certain other Reference Rates |
Contract Liabilities | Contract liabilities consist of deferred revenue resulting from initial and renewal franchise fees paid by franchisees, as well as upfront fees paid by master franchisees, which are generally recognized on a straight-line basis over the term of the underlying agreement. We may recognize unamortized upfront fees when a contract with a franchisee or master franchisee is modified and is accounted for as a termination of the existing contract. We classify these contract liabilities as Other liabilities, net in our condensed consolidated balance sheets. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of property revenues | Three months ended March 31, 2020 Three months ended March 31, 2019 Lease income - operating leases Minimum lease payments $ 112 $ 111 Variable lease payments 63 84 Amortization of favorable and unfavorable income lease contracts, net 2 2 Subtotal - lease income from operating leases 177 197 Earned income on direct financing leases 1 2 Total property revenues $ 178 $ 199 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Change in contract liabilities | The following table reflects the change in contract liabilities between December 31, 2019 and March 31, 2020 (in millions): Contract Liabilities TH BK PLK Consolidated Balance at December 31, 2019 $ 64 $ 449 $ 28 $ 541 Recognized during period and included in the contract liability balance at the beginning of the year (2 ) (30 ) (1 ) (33 ) Increase, excluding amounts recognized as revenue during the period 2 6 3 11 Impact of foreign currency translation (3 ) (4 ) — (7 ) Balance at March 31, 2020 $ 61 $ 421 $ 30 $ 512 |
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) as of March 31, 2020 (in millions): Contract liabilities expected to be recognized in TH BK PLK Consolidated Remainder of 2020 $ 6 $ 26 $ 2 $ 34 2021 8 33 2 43 2022 7 32 2 41 2023 7 31 2 40 2024 6 30 2 38 Thereafter 27 269 20 316 Total $ 61 $ 421 $ 30 $ 512 |
Disaggregation of total revenues | Total revenues consist of the following (in millions): Three Months Ended 2020 2019 Sales $ 503 $ 522 Royalties 526 528 Property revenues 178 199 Franchise fees and other revenue 18 17 Total revenues $ 1,225 $ 1,266 |
Earnings per Unit (Tables)
Earnings per Unit (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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): Three Months Ended March 31, 2020 2019 Allocation of net income among partner interests: Net income allocated to Class A common unitholders $ 144 $ 135 Net income allocated to Partnership exchangeable unitholders 80 111 Net income attributable to common unitholders $ 224 $ 246 Denominator - basic and diluted partnership units: Weighted average Class A common units 202 202 Weighted average Partnership exchangeable units 165 208 Earnings per unit - basic and diluted: Class A common units (a) $ 0.71 $ 0.67 Partnership exchangeable units (a) $ 0.48 $ 0.53 (a) Earnings per unit may not recalculate exactly as it is calculated based on unrounded numbers. |
Intangible Assets, net and Go_2
Intangible Assets, net and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 December 31, 2019 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Identifiable assets subject to amortization: Franchise agreements $ 706 $ (230 ) $ 476 $ 720 $ (225 ) $ 495 Favorable leases 119 (62 ) 57 127 (65 ) 62 Subtotal 825 (292 ) 533 847 (290 ) 557 Indefinite lived intangible assets: Tim Hortons brand $ 6,090 $ — $ 6,090 $ 6,534 $ — $ 6,534 Burger King brand 2,107 — 2,107 2,117 — 2,117 Popeyes brand 1,355 — 1,355 1,355 — 1,355 Subtotal 9,552 — 9,552 10,006 — 10,006 Intangible assets, net $ 10,085 $ 10,563 Goodwill Tim Hortons segment $ 3,935 $ 4,207 Burger King segment 595 598 Popeyes segment 846 846 Total $ 5,376 $ 5,651 |
Equity Method Investments (Tabl
Equity Method Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Franchise and Property Revenues | Franchise and property revenues recognized from franchisees that are owned or franchised by entities in which we have an equity interest consist of the following (in millions): Three Months Ended March 31, 2020 2019 Revenues from affiliates: Royalties $ 73 $ 78 Property revenues 8 8 Franchise fees and other revenue 3 3 Total $ 84 $ 89 |
Other Accrued Liabilities and_2
Other Accrued Liabilities and Other Liabilities, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Accrued Liabilities (Current) and Other Liabilities (NonCurrent), Net | Other accrued liabilities (current) and other liabilities, net (noncurrent) consist of the following (in millions): As of March 31, December 31, Current: Dividend payable $ 242 $ 232 Interest payable 93 71 Accrued compensation and benefits 36 57 Taxes payable 147 126 Deferred income 28 35 Accrued advertising expenses 47 40 Restructuring and other provisions 8 8 Current portion of operating lease liabilities 120 126 Other 58 95 Other accrued liabilities $ 779 $ 790 Noncurrent: Taxes payable $ 575 $ 579 Contract liabilities 512 541 Derivatives liabilities 461 341 Unfavorable leases 91 103 Accrued pension 64 65 Deferred income 30 25 Other 41 44 Other liabilities, net $ 1,774 $ 1,698 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | Long-term debt consists of the following (in millions): As of March 31, December 31, Term Loan B (due November 19, 2026) $ 5,337 $ 5,350 Term Loan A (due October 7, 2024) 745 750 Revolving Credit Facility (due October 7, 2024) 995 — 2017 4.25% Senior Notes (due May 15, 2024) 1,500 1,500 2019 3.875% Senior Notes (due January 15, 2028) 750 750 2017 5.00% Senior Notes (due October 15, 2025) 2,800 2,800 2019 4.375% Senior Notes (due January 15, 2028) 750 750 TH Facility and other 163 81 Less: unamortized deferred financing costs and deferred issue discount (142 ) (148 ) Total debt, net 12,898 11,833 Less: current maturities of debt (76 ) (74 ) Total long-term debt $ 12,822 $ 11,759 |
Summary of Fair Value Measurement | The following table presents the fair value of our variable rate term debt and senior notes, estimated using inputs based on bid and offer prices that are Level 2 inputs, and principal carrying amount (in millions): As of March 31, December 31, Fair value of our variable term debt and senior notes $ 12,148 $ 12,075 Principal carrying amount of our variable term debt and senior notes 12,877 11,900 |
Schedule of Interest Expense, Net | Interest expense, net consists of the following (in millions): Three Months Ended 2020 2019 Debt (a) $ 113 $ 124 Finance lease obligations 5 5 Amortization of deferred financing costs and debt issuance discount 6 7 Interest income (5 ) (4 ) Interest expense, net $ 119 $ 132 (a) Amount includes $21 million and $18 million benefit during the three months ended March 31, 2020 and 2019 , respectively, related to the amortization of the Excluded Component as defined in Note 13, Derivatives . |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of Changes in the Components of Accumulated Other Comprehensive Income (Loss) | The following table displays the changes in the components of accumulated other comprehensive income (loss) (“AOCI”) (in millions): Derivatives Pensions Foreign Currency Translation Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2019 $ 306 $ (29 ) $ (1,455 ) $ (1,178 ) Foreign currency translation adjustment — — (751 ) (751 ) Net change in fair value of derivatives, net of tax 197 — — 197 Amounts reclassified to earnings of cash flow hedges, net of tax 11 — — 11 Balance at March 31, 2020 $ 514 $ (29 ) $ (2,206 ) $ (1,721 ) |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 condensed consolidated balance sheets (in millions): Gain or (Loss) Recognized in Other Comprehensive Income (Loss) Three Months Ended March 31, 2020 2019 Derivatives designated as cash flow hedges (1) Interest rate swaps $ (300 ) $ (44 ) Forward-currency contracts $ 7 $ (2 ) Derivatives designated as net investment hedges Cross-currency rate swaps $ 517 $ (102 ) (1) We did not exclude any components from the cash flow hedge relationships presented in this table. Location of Gain or (Loss) Reclassified from AOCI into Earnings Gain or (Loss) Reclassified from AOCI into Earnings Three Months Ended March 31, 2020 2019 Derivatives designated as cash flow hedges Interest rate swaps Interest expense, net $ (15 ) $ (1 ) Forward-currency contracts Cost of sales $ — $ 2 Location of Gain or (Loss) Recognized in Earnings Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) Three Months Ended March 31, 2020 2019 Derivatives designated as net investment hedges Cross-currency rate swaps Interest expense, net $ 21 $ 18 |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Fair Value as of March 31, 2020 December 31, 2019 Balance Sheet Location Assets: Derivatives designated as cash flow hedges Interest rate $ — $ 7 Other assets, net Foreign currency $ 5 $ — Prepaids and other current assets Derivatives designated as net investment hedges Foreign currency 377 22 Other assets, net Total assets at fair value $ 382 $ 29 Liabilities: Derivatives designated as cash flow hedges Interest rate $ 461 $ 175 Other liabilities, net Foreign currency — 2 Other accrued liabilities Derivatives designated as net investment hedges Foreign currency — 166 Other liabilities, net Total liabilities at fair value $ 461 $ 343 |
Other Operating Expenses (Inc_2
Other Operating Expenses (Income), net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Income and Expenses [Abstract] | |
Other Operating Expenses (Income), Net | Other operating expenses (income), net consist of the following (in millions): Three Months Ended March 31, 2020 2019 Net losses (gains) on disposal of assets, restaurant closures, and refranchisings $ (2 ) $ 3 Net losses (gains) on foreign exchange (8 ) (15 ) Other, net (6 ) (5 ) Other operating expenses (income), net $ (16 ) $ (17 ) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Revenues by Geographic Segment | The following tables present revenues, by segment and by country (in millions): Three Months Ended 2020 2019 Revenues by operating segment: TH $ 699 $ 749 BK 388 411 PLK 138 106 Total revenues $ 1,225 $ 1,266 Three Months Ended 2020 2019 Revenues by country (a): Canada $ 632 $ 676 United States 450 444 Other 143 146 Total revenues $ 1,225 $ 1,266 (a) Only Canada and the United States represented 10% or more of our total revenues in each period presented. |
Reconciliation of Segment Income to Net Income (Loss) | Three Months Ended March 31, 2020 2019 Segment income: TH $ 189 $ 237 BK 200 222 PLK 55 41 Adjusted EBITDA 444 500 Share-based compensation and non-cash incentive compensation expense 21 25 Corporate restructuring and tax advisory fees 1 6 Office centralization and relocation costs — 4 Impact of equity method investments (a) 4 1 Other operating expenses (income), net (16 ) (17 ) EBITDA 434 481 Depreciation and amortization 45 47 Income from operations 389 434 Interest expense, net 119 132 Income tax expense 46 56 Net income $ 224 $ 246 (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. |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 of U.S. dollars) As of March 31, 2020 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 2,498 $ — $ — $ 2,498 Accounts and notes receivable, net 414 — — 414 Inventories, net 85 — — 85 Prepaids and other current assets 62 — — 62 Total current assets 3,059 — — 3,059 Property and equipment, net 1,939 — — 1,939 Operating lease assets, net 1,115 — — 1,115 Intangible assets, net 10,085 — — 10,085 Goodwill 5,376 — — 5,376 Net investment in property leased to franchisees 49 — — 49 Intercompany receivable — 242 (242 ) — Investment in subsidiaries — 3,752 (3,752 ) — Other assets, net 1,006 — — 1,006 Total assets $ 22,629 $ 3,994 $ (3,994 ) $ 22,629 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 484 $ — $ — $ 484 Other accrued liabilities 537 242 — 779 Gift card liability 106 — — 106 Current portion of long term-debt and finance leases 103 — — 103 Total current liabilities 1,230 242 — 1,472 Long-term debt, net of current portion 12,822 — — 12,822 Finance leases, net of current portion 283 — — 283 Operating lease liabilities, net of current portion 1,039 — — 1,039 Other liabilities, net 1,774 — — 1,774 Payables to affiliates 242 — (242 ) — Deferred income taxes, net 1,487 — — 1,487 Total liabilities 18,877 242 (242 ) 18,877 Partners’ capital: Class A common units — 7,840 — 7,840 Partnership exchangeable units — (2,370 ) — (2,370 ) Common shares 3,303 — (3,303 ) — Retained Earnings 2,167 — (2,167 ) — Accumulated other comprehensive income (loss) (1,721 ) (1,721 ) 1,721 (1,721 ) Total Partners' capital/shareholders' equity 3,749 3,749 (3,749 ) 3,749 Noncontrolling interests 3 3 (3 ) 3 Total equity 3,752 3,752 (3,752 ) 3,752 Total liabilities and equity $ 22,629 $ 3,994 $ (3,994 ) $ 22,629 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Balance Sheets (In millions of U.S. dollars) As of December 31, 2019 Consolidated Borrowers RBILP Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ 1,533 $ — $ — $ 1,533 Accounts and notes receivable, net 527 — — 527 Inventories, net 84 — — 84 Prepaids and other current assets 52 — — 52 Total current assets 2,196 — — 2,196 Property and equipment, net 2,007 — — 2,007 Operating lease assets. net 1,176 — — 1,176 Intangible assets, net 10,563 — — 10,563 Goodwill 5,651 — — 5,651 Net investment in property leased to franchisees 48 — — 48 Intercompany receivable — 232 (232 ) — Investment in subsidiaries — 4,259 (4,259 ) — Other assets, net 719 — — 719 Total assets $ 22,360 $ 4,491 $ (4,491 ) $ 22,360 LIABILITIES AND EQUITY Current liabilities: Accounts and drafts payable $ 644 $ — $ — $ 644 Other accrued liabilities 558 232 — 790 Gift card liability 168 — — 168 Current portion of long-term debt and finance leases 101 — — 101 Total current liabilities 1,471 232 — 1,703 Long-term debt, net of current portion 11,759 — — 11,759 Finance leases, net of current portion 288 — — 288 Operating lease liabilities, net of current portion 1,089 — — 1,089 Other liabilities, net 1,698 — — 1,698 Payables to affiliates 232 — (232 ) — Deferred income taxes, net 1,564 — — 1,564 Total liabilities 18,101 232 (232 ) 18,101 Partners’ capital: Class A common units — 7,786 — 7,786 Partnership exchangeable units — (2,353 ) — (2,353 ) Common shares 3,248 — (3,248 ) — Retained Earnings 2,185 — (2,185 ) — Accumulated other comprehensive income (loss) (1,178 ) (1,178 ) 1,178 (1,178 ) Total Partners' capital/shareholders' equity 4,255 4,255 (4,255 ) 4,255 Noncontrolling interests 4 4 (4 ) 4 Total equity 4,259 4,259 (4,259 ) 4,259 Total liabilities and equity $ 22,360 $ 4,491 $ (4,491 ) $ 22,360 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended March 31, 2020 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 503 $ — $ — $ 503 Franchise and property revenues 722 — — 722 Total revenues 1,225 — — 1,225 Operating costs and expenses: Cost of sales 399 — — 399 Franchise and property expenses 126 — — 126 Selling, general and administrative expenses 325 — — 325 (Income) loss from equity method investments 2 — — 2 Other operating expenses (income), net (16 ) — — (16 ) Total operating costs and expenses 836 — — 836 Income from operations 389 — — 389 Interest expense, net 119 — — 119 Income before income taxes 270 — — 270 Income tax expense 46 — — 46 Net income 224 — — 224 Equity in earnings of consolidated subsidiaries — 224 (224 ) — Net income (loss) 224 224 (224 ) 224 Net income (loss) attributable to noncontrolling interests — — — — Net income (loss) attributable to common unitholders $ 224 $ 224 $ (224 ) $ 224 Comprehensive income (loss) $ (319 ) $ (319 ) $ 319 $ (319 ) RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Operations (In millions of U.S. dollars) Three Months Ended March 31, 2019 Consolidated Borrowers RBILP Eliminations Consolidated Revenues: Sales $ 522 $ — $ — $ 522 Franchise and property revenues 744 — — 744 Total revenues 1,266 — — 1,266 Operating costs and expenses: Cost of sales 406 — — 406 Franchise and property expenses 133 — — 133 Selling, general and administrative expenses 312 — — 312 (Income) loss from equity method investments (2 ) — — (2 ) Other operating expenses (income), net (17 ) — — (17 ) Total operating costs and expenses 832 — — 832 Income from operations 434 — — 434 Interest expense, net 132 — — 132 Income before income taxes 302 — — 302 Income tax expense 56 — — 56 Net income 246 — — 246 Equity in earnings of consolidated subsidiaries — 246 (246 ) — Net income (loss) 246 246 (246 ) 246 Net income (loss) attributable to noncontrolling interests — — — — Net income (loss) attributable to common unitholders $ 246 $ 246 $ (246 ) $ 246 Comprehensive income (loss) $ 294 $ 294 $ (294 ) $ 294 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Three months ended March 31, 2020 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 224 $ 224 $ (224 ) $ 224 Adjustments to reconcile net income to net cash (used for) provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (224 ) 224 — Depreciation and amortization 45 — — 45 Amortization of deferred financing costs and debt issuance discount 6 — — 6 (Income) loss from equity method investments 2 — — 2 (Gain) loss on remeasurement of foreign denominated transactions (8 ) — — (8 ) Net (gains) losses on derivatives (6 ) — — (6 ) Share-based compensation expense 19 — — 19 Deferred income taxes (31 ) — — (31 ) Other (4 ) — — (4 ) Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable 94 — — 94 Inventories and prepaids and other current assets (13 ) — — (13 ) Accounts and drafts payable (136 ) — — (136 ) Other accrued liabilities and gift card liability (67 ) — — (67 ) Tenant inducements paid to franchisees (3 ) — — (3 ) Other long-term assets and liabilities 14 — — 14 Net cash provided by (used for) operating activities 136 — — 136 Cash flows from investing activities: Payments for property and equipment (19 ) — — (19 ) Net proceeds from disposal of assets, restaurant closures, and refranchisings 4 — — 4 Settlement/sale of derivatives, net 12 — — 12 Net cash provided by (used for) investing activities (3 ) — — (3 ) Cash flows from financing activities: Proceeds from revolving line of credit and long-term debt 1,085 — — 1,085 Repayments of long-term debt and finance leases (25 ) — — (25 ) Distributions on Class A common and Partnership exchangeable units — (232 ) — (232 ) Capital contribution from RBI Inc. 30 — — 30 Distributions from subsidiaries (232 ) 232 — — (Payments) proceeds from derivatives (2 ) — — (2 ) Other financing activities, net (1 ) — — (1 ) Net cash provided by (used for) financing activities 855 — — 855 Effect of exchange rates on cash and cash equivalents (23 ) — — (23 ) Increase (decrease) in cash and cash equivalents 965 — — 965 Cash and cash equivalents at beginning of period 1,533 — — 1,533 Cash and cash equivalents at end of period $ 2,498 $ — $ — $ 2,498 RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES Condensed Consolidating Statements of Cash Flows (In millions of U.S. dollars) Three Months Ended March 31, 2019 Consolidated Borrowers RBILP Eliminations Consolidated Cash flows from operating activities: Net income $ 246 $ 246 $ (246 ) $ 246 Adjustments to reconcile net income to net cash (used for) provided by operating activities: Equity in loss (earnings) of consolidated subsidiaries — (246 ) 246 — Depreciation and amortization 47 — — 47 Amortization of deferred financing costs and debt issuance discount 7 — — 7 (Income) loss from equity method investments (2 ) — — (2 ) (Gain) loss on remeasurement of foreign denominated transactions (15 ) — — (15 ) Net (gains) losses on derivatives (20 ) — — (20 ) Share-based compensation expense 22 — — 22 Deferred income taxes 38 — — 38 Other 3 — — 3 Changes in current assets and liabilities, excluding acquisitions and dispositions: Accounts and notes receivable 14 — — 14 Inventories and prepaids and other current assets (13 ) — — (13 ) Accounts and drafts payable (69 ) — — (69 ) Other accrued liabilities and gift card liability (126 ) — — (126 ) Other long-term assets and liabilities 22 — — 22 Net cash provided by (used for) operating activities 154 — — 154 Cash flows from investing activities: Payments for property and equipment (5 ) — — (5 ) Net proceeds from disposal of assets, restaurant closures, and refranchisings 4 — — 4 Settlement/sale of derivatives, net 11 — — 11 Other investing activities, net 1 — — 1 Net cash provided by (used for) investing activities 11 — — 11 Cash flows from financing activities: Repayments of long-term debt and finance leases (23 ) — — (23 ) Distributions on Class A common and Partnership exchangeable units — (207 ) — (207 ) Capital contribution from RBI Inc. 42 — — 42 Distributions from subsidiaries (207 ) 207 — — (Payments) proceeds from derivatives 5 — — 5 Other financing activities, net 1 — — 1 Net cash (used for) provided by financing activities (182 ) — — (182 ) Effect of exchange rates on cash and cash equivalents 6 — — 6 Increase (decrease) in cash and cash equivalents (11 ) — — (11 ) Cash and cash equivalents at beginning of period 913 — — 913 Cash and cash equivalents at end of period $ 902 $ — $ — $ 902 |
Description of Business and O_2
Description of Business and Organization - Additional Information (Details) | Mar. 31, 2020restaurantcountry |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 27,109 |
Number of countries in which company and franchise restaurants operated (more than) | country | 100 |
Percentage of franchised Tim Hortons, Burger King, and Popeyes restaurants | 100.00% |
Tim Hortons brand | |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 4,925 |
Burger King brand | |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 18,848 |
Popeyes brand | |
Basis Of Presentation [Line Items] | |
Number of franchised or owned restaurants | 3,336 |
Basis of Presentation and Con_2
Basis of Presentation and Consolidation - Additional Information (Details) - restaurant | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Restaurant VIEs | ||
Summary Of Accounting Policies [Line Items] | ||
Number of VIE consolidated restaurants | 31 | 35 |
Leases - Property revenues (Det
Leases - Property revenues (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Percent of rent structure, variable rent | 100.00% | |
Lease income - operating leases | ||
Minimum lease payments | $ 112 | $ 111 |
Variable lease payments | 63 | 84 |
Amortization of favorable and unfavorable income lease contracts, net | 2 | 2 |
Subtotal - lease income from operating leases | 177 | 197 |
Earned income on direct financing leases | 1 | 2 |
Total property revenues | $ 178 | $ 199 |
Revenue Recognition - Change in
Revenue Recognition - Change in contract liabilities (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Change In Contract With Customer Liability [Roll Forward] | |
Beginning balance | $ 541 |
Recognized during period and included in the contract liability balance at the beginning of the year | (33) |
Increase, excluding amounts recognized as revenue during the period | 11 |
Impact of foreign currency translation | (7) |
Ending balance | 512 |
Tim Hortons brand | |
Change In Contract With Customer Liability [Roll Forward] | |
Beginning balance | 64 |
Recognized during period and included in the contract liability balance at the beginning of the year | (2) |
Increase, excluding amounts recognized as revenue during the period | 2 |
Impact of foreign currency translation | (3) |
Ending balance | 61 |
Burger King brand | |
Change In Contract With Customer Liability [Roll Forward] | |
Beginning balance | 449 |
Recognized during period and included in the contract liability balance at the beginning of the year | (30) |
Increase, excluding amounts recognized as revenue during the period | 6 |
Impact of foreign currency translation | (4) |
Ending balance | 421 |
Popeyes brand | |
Change In Contract With Customer Liability [Roll Forward] | |
Beginning balance | 28 |
Recognized during period and included in the contract liability balance at the beginning of the year | (1) |
Increase, excluding amounts recognized as revenue during the period | 3 |
Impact of foreign currency translation | 0 |
Ending balance | $ 30 |
Revenue Recognition - Estimated
Revenue Recognition - Estimated revenue recognition (Details) $ in Millions | Mar. 31, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 512 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 9 months |
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]: 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 | $ 43 |
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 | $ 41 |
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 | $ 40 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
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]: 2025-01-01 | |
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 | $ 316 |
Tim Hortons brand | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 61 |
Tim Hortons brand | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 6 |
Tim Hortons brand | 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 | 8 |
Tim Hortons brand | 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 | 7 |
Tim Hortons brand | 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 | 7 |
Tim Hortons brand | 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 | 6 |
Tim Hortons brand | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 27 |
Burger King brand | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 421 |
Burger King brand | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 26 |
Burger King brand | 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 | 33 |
Burger King brand | 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 | 32 |
Burger King brand | 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 | 31 |
Burger King brand | 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 | 30 |
Burger King brand | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 269 |
Popeyes brand | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 30 |
Popeyes brand | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | 2 |
Popeyes brand | 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 | 2 |
Popeyes brand | 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 | 2 |
Popeyes brand | 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 | 2 |
Popeyes brand | 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 | 2 |
Popeyes brand | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Contract liabilities expected to be recognized in | $ 20 |
Revenue Recognition Contract Li
Revenue Recognition Contract Liabilities, Total (Details) $ in Millions | Mar. 31, 2020USD ($) |
Segment Reporting Information [Line Items] | |
Contract liabilities expected to be recognized in | $ 512 |
Tim Hortons brand | |
Segment Reporting Information [Line Items] | |
Contract liabilities expected to be recognized in | 61 |
Burger King brand | |
Segment Reporting Information [Line Items] | |
Contract liabilities expected to be recognized in | 421 |
Popeyes brand | |
Segment Reporting Information [Line Items] | |
Contract liabilities expected to be recognized in | $ 30 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of total revenues (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Property revenues | $ 178 | $ 199 |
Total revenues | 1,225 | 1,266 |
Sales | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Revenues | 503 | 522 |
Royalties | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Revenues | 526 | 528 |
Franchise fees and other revenue | ||
Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | ||
Revenues | $ 18 | $ 17 |
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 | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Allocation of net income among partner interests: | ||
Net income attributable to common unitholders | $ 224 | $ 246 |
Class A common units | ||
Allocation of net income among partner interests: | ||
Net income attributable to common unitholders | $ 144 | $ 135 |
Denominator - basic and diluted partnership units: | ||
Total weighted average basic and diluted units outstanding (in shares) | 202 | 202 |
Earnings per unit - basic and diluted: | ||
Earnings per unit - basic and diluted (in usd per share) | $ 0.71 | $ 0.67 |
Partnership Exchangeable Units | ||
Allocation of net income among partner interests: | ||
Net income attributable to common unitholders | $ 80 | $ 111 |
Denominator - basic and diluted partnership units: | ||
Total weighted average basic and diluted units outstanding (in shares) | 165 | 208 |
Earnings per unit - basic and diluted: | ||
Earnings per unit - basic and diluted (in usd per share) | $ 0.48 | $ 0.53 |
Intangible Assets, net and Go_3
Intangible Assets, net and Goodwill - Schedule of Intangible Assets, net and Goodwill (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross | $ 825 | $ 847 |
Accumulated Amortization | (292) | (290) |
Net | 533 | 557 |
Intangible assets, net | 10,085 | 10,563 |
Goodwill | 5,376 | 5,651 |
Trade names | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite lived intangible assets: | 9,552 | 10,006 |
Tim Hortons brand | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Goodwill | 3,935 | 4,207 |
Tim Hortons brand | Trade names | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite lived intangible assets: | 6,090 | 6,534 |
Burger King brand | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Goodwill | 595 | 598 |
Burger King brand | Trade names | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite lived intangible assets: | 2,107 | 2,117 |
Popeyes brand | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Goodwill | 846 | 846 |
Popeyes brand | Trade names | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Indefinite lived intangible assets: | 1,355 | 1,355 |
Franchise agreements | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross | 706 | 720 |
Accumulated Amortization | (230) | (225) |
Net | 476 | 495 |
Favorable leases | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Gross | 119 | 127 |
Accumulated Amortization | (62) | (65) |
Net | $ 57 | $ 62 |
Intangible Assets, net and Go_4
Intangible Assets, net and Goodwill - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense on intangible assets | $ 11 | $ 11 |
Equity Method Investments - Add
Equity Method Investments - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Investment in subsidiaries | $ 0 | $ 0 | |
Impairment, equity method investments | 0 | ||
Equity Method Investee | |||
Schedule of Equity Method Investments [Line Items] | |||
Accounts receivable from equity method investments | 42,000,000 | 47,000,000 | |
Wendy's Company TIMWEN Partnership | Tim Hortons brand | |||
Schedule of Equity Method Investments [Line Items] | |||
Cash distributions | 2,000,000 | $ 2,000,000 | |
Contingent rent expense | 4,000,000 | $ 4,000,000 | |
Carrols Restaurant Group, Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Quoted market price | $ 17,000,000 | ||
BK Brasil | |||
Schedule of Equity Method Investments [Line Items] | |||
Joint-venture interest | 9.80% | ||
Quoted market price | $ 39,000,000 | ||
Other assets | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in subsidiaries | $ 234,000,000 | $ 266,000,000 | |
Canada | Wendy's Company 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 | 15.40% |
Equity Method Investments - Sum
Equity Method Investments - Summary of Franchise and Property Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues from affiliates: | ||
Property revenues | $ 178 | $ 199 |
Total revenues | 1,225 | 1,266 |
Affiliates | ||
Revenues from affiliates: | ||
Property revenues | 8 | 8 |
Total revenues | 84 | 89 |
Royalties | ||
Revenues from affiliates: | ||
Revenues | 526 | 528 |
Royalties | Affiliates | ||
Revenues from affiliates: | ||
Revenues | 73 | 78 |
Franchise fees and other revenue | ||
Revenues from affiliates: | ||
Revenues | 18 | 17 |
Franchise fees and other revenue | Affiliates | ||
Revenues from affiliates: | ||
Revenues | $ 3 | $ 3 |
Other Accrued Liabilities and_3
Other Accrued Liabilities and Other Liabilities, net - Schedule of Other Accrued Liabilities (Current) and Other Liabilities (NonCurrent), Net (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current: | ||
Dividend payable | $ 242 | $ 232 |
Interest payable | 93 | 71 |
Accrued compensation and benefits | 36 | 57 |
Taxes payable | 147 | 126 |
Deferred income | 28 | 35 |
Accrued advertising expenses | 47 | 40 |
Restructuring and other provisions | 8 | 8 |
Current portion of operating lease liabilities | 120 | 126 |
Other | 58 | 95 |
Other accrued liabilities | 779 | 790 |
Noncurrent: | ||
Taxes payable | 575 | 579 |
Contract liabilities | 512 | 541 |
Derivatives liabilities | 461 | 341 |
Unfavorable leases | 91 | 103 |
Accrued pension | 64 | 65 |
Deferred income | 30 | 25 |
Other | 41 | 44 |
Other liabilities, net | $ 1,774 | $ 1,698 |
Long-Term Debt - Summary of Lon
Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Other | $ 163 | $ 81 |
Less: unamortized deferred financing costs and deferred issue discount | (142) | (148) |
Total debt, net | 12,898 | 11,833 |
Less: current maturities of debt | (76) | (74) |
Total long-term debt | 12,822 | 11,759 |
Term Loan B (due November 19, 2026) | ||
Debt Instrument [Line Items] | ||
Term loan facility | 5,337 | 5,350 |
Term Loan A (due October 7, 2024) | ||
Debt Instrument [Line Items] | ||
Term loan facility | $ 745 | 750 |
2017 4.25% Senior Notes (due May 15, 2024) | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 4.25% | |
2019 3.875% Senior Notes (due January 15, 2028) | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 3.875% | |
2017 5.00% Senior Notes (due October 15, 2025) | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 5.00% | |
2019 4.375% Senior Notes (due January 15, 2028) | ||
Debt Instrument [Line Items] | ||
Stated interest rate (as a percent) | 4.375% | |
Senior Notes | 2017 4.25% Senior Notes (due May 15, 2024) | ||
Debt Instrument [Line Items] | ||
Senior notes | $ 1,500 | 1,500 |
Senior Notes | 2019 3.875% Senior Notes (due January 15, 2028) | ||
Debt Instrument [Line Items] | ||
Senior notes | 750 | 750 |
Senior Notes | 2017 5.00% Senior Notes (due October 15, 2025) | ||
Debt Instrument [Line Items] | ||
Senior notes | 2,800 | 2,800 |
Senior Notes | 2019 4.375% Senior Notes (due January 15, 2028) | ||
Debt Instrument [Line Items] | ||
Senior notes | 750 | 750 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Revolving Credit Facility (due October 7, 2024) | $ 995 | $ 0 |
Stated interest rate (as a percent) | 2.05% |
Long-Term Debt - Revolving Cred
Long-Term Debt - Revolving Credit Facility - Additional Information (Details) | Apr. 02, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Amount outstanding under credit facility | $ 995,000,000 | $ 0 | |
Stated interest rate (as a percent) | 2.05% | ||
Letters of credit issued against credit facility | $ 2,000,000 | ||
Remaining borrowing capacity | 3,000,000 | ||
Letter of credit sublimit as part of revolving credit facility | $ 125,000,000 | ||
2019 3.875% Senior Notes (due January 15, 2028) | |||
Line of Credit Facility [Line Items] | |||
Stated interest rate (as a percent) | 3.875% | ||
Subsequent Event | Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Debt instrument, minimum liquidity covenant, amount | $ 1,000,000,000 | ||
Senior secured first lien leverage ratio | 6.50 |
Long-Term Debt - TH facility -
Long-Term Debt - TH facility - Additional Information (Details) - TH Facility | 3 Months Ended |
Mar. 31, 2020CAD ($) | |
Line of Credit Facility [Line Items] | |
Aggregate principal amount outstanding | $ 225,000,000 |
Remaining borrowing capacity | 125,000,000 |
Proceeds from lines of credit | $ 225,000,000 |
Interest rate | 3.06% |
Canadian Bankers' Acceptance Rate | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 1.40% |
Prime Rate | |
Line of Credit Facility [Line Items] | |
Basis spread on variable rate | 0.40% |
Long-Term Debt Long Term Debt -
Long-Term Debt Long Term Debt - 2020 Senior Notes (Details) - Subsequent Event - Senior Notes - 2020 5.75% Senior Notes (due April 15, 2025) | Apr. 07, 2020USD ($) |
Debt Instrument [Line Items] | |
Stated interest rate (as a percent) | 5.75% |
Period principal payments due | $ 0 |
Aggregate principal amount of debt issued | $ 500,000,000 |
Long-Term Debt - Schedule of Fa
Long-Term Debt - Schedule of Fair Value Measurement (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Fair value of our variable term debt and senior notes | $ 12,148 | $ 12,075 |
Principal carrying amount of our variable term debt and senior notes | $ 12,877 | $ 11,900 |
Long-Term Debt - Schedule of In
Long-Term Debt - Schedule of Interest Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Debt Disclosure [Abstract] | ||
Debt | $ 113 | $ 124 |
Finance lease obligations | 5 | 5 |
Amortization of deferred financing costs and debt issuance discount | 6 | 7 |
Interest income | (5) | (4) |
Interest expense, net | 119 | 132 |
Gain (loss) reclassified to earnings, net investment hedge | $ 21 | $ 18 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 16.80% | 18.70% |
Effective income tax rate reconciliation, stock option exercises | 4.10% |
Equity - Additional Information
Equity - Additional Information (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Partnership Exchangeable Units | ||
Stockholders Equity [Line Items] | ||
BKW reorganization into Partnership (in shares) | 178,046 | 141,190 |
Equity - Summary of Changes in
Equity - Summary of Changes in the Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balances | $ 4,259 | $ 3,618 |
Foreign currency translation adjustment | (751) | 159 |
Amounts reclassified to earnings of cash flow hedges, net of tax | 11 | (1) |
Ending balances | 3,752 | 3,773 |
Derivatives | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balances | 306 | |
Net change in fair value of derivatives, net of tax | 197 | |
Amounts reclassified to earnings of cash flow hedges, net of tax | 11 | |
Ending balances | 514 | |
Pensions | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balances | (29) | |
Ending balances | (29) | |
Foreign Currency Translation | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balances | (1,455) | |
Foreign currency translation adjustment | (751) | |
Ending balances | (2,206) | |
Accumulated Other Comprehensive Income (Loss) | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balances | (1,178) | (1,437) |
Foreign currency translation adjustment | (751) | |
Net change in fair value of derivatives, net of tax | 197 | |
Amounts reclassified to earnings of cash flow hedges, net of tax | 11 | |
Ending balances | $ (1,721) | $ (1,389) |
Derivative Instruments - Additi
Derivative Instruments - Additional Information (Details) € in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2015USD ($) | Mar. 31, 2020EUR (€) | Mar. 31, 2020CAD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2018USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Net unrealized loss recognized in AOCI | $ 214,000,000 | $ 34,000,000 | ||||||
Amount of pre-tax losses in AOCI expect to be reclassified into interest expense | 12,000,000 | |||||||
Maximum | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Notional amount | $ 83,000,000 | |||||||
Interest rate swaps | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Notional amount | $ 3,500,000,000 | |||||||
Interest rate swaps | Interest expense, net | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Net unrealized loss recognized in AOCI | 213,000,000 | |||||||
Gain (loss) reclassified from OACI to Income | $ 51,000,000 | |||||||
Net unrealized loss recognized at settlement | $ 85,000,000 | |||||||
Interest Rate Swaps - Period One | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Notional amount | 3,500,000,000 | |||||||
Interest Rate Swaps - Period Two | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Notional amount | 500,000,000 | |||||||
Cross Currency Interest Rate Contract | Fixed Income Interest Rate | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Notional amount | $ 6,754 | 5,000,000,000 | ||||||
Cross Currency Interest Rate Contract | Fixed Income Interest Rate | Hedge Funds | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Notional amount | € 1,108 | $ 1,200,000,000 | ||||||
Derivatives designated as net investment hedges | Cross Currency Interest Rate Contract | Fixed Income Interest Rate | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Notional amount | $ 500,000,000 | $ 400,000,000 |
Derivative Instruments - Quanti
Derivative Instruments - Quantitative Disclosures of Derivative Instruments Including Estimated Fair Values (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) | $ 21 | $ 18 |
Interest rate swaps | Derivatives designated as cash flow hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain or (Loss) Recognized in Other Comprehensive Income (Loss) | (300) | (44) |
Forward-currency contracts | Derivatives designated as cash flow hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain or (Loss) Recognized in Other Comprehensive Income (Loss) | 7 | (2) |
Cross-currency rate swaps | Derivatives designated as net investment hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain or (Loss) Recognized in Other Comprehensive Income (Loss) | 517 | (102) |
Interest expense, net | Interest rate swaps | Derivatives designated as cash flow hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain or (Loss) Reclassified from AOCI into Earnings | (15) | (1) |
Interest expense, net | Cross-currency rate swaps | Derivatives designated as net investment hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing) | 21 | 18 |
Cost of sales | Forward-currency contracts | Derivatives designated as cash flow hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Gain or (Loss) Reclassified from AOCI into Earnings | $ 0 | $ 2 |
Derivative Instruments - Summar
Derivative Instruments - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives assets | $ 382 | $ 29 |
Derivatives liabilities | 461 | 343 |
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] | ||
Derivatives assets | 5 | 0 |
Derivatives designated as cash flow hedges | Foreign currency | Other accrued liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives liabilities | 0 | 2 |
Derivatives designated as cash flow hedges | Interest rate | Other assets, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives assets | 0 | 7 |
Derivatives designated as cash flow hedges | Interest rate | Other liabilities, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives liabilities | 461 | 175 |
Derivatives designated as net investment hedges | Foreign currency | Other assets, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives assets | 377 | 22 |
Derivatives designated as net investment hedges | Foreign currency | Other liabilities, net | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives liabilities | $ 0 | $ 166 |
Other Operating Expenses (Inc_3
Other Operating Expenses (Income), net - Other Operating Expenses (Income), Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Income and Expenses [Abstract] | ||
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings | $ (2) | $ 3 |
Net losses (gains) on foreign exchange | (8) | (15) |
Other, net | (6) | (5) |
Other operating expenses (income), net | $ (16) | $ (17) |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2020segmentbrand | |
Segment Reporting [Abstract] | |
Number of brands | brand | 3 |
Number of operating segments | 3 |
Number of reportable segments | 3 |
Segment Reporting - Revenues by
Segment Reporting - Revenues by Operating Segment and Country (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue, Major Customer [Line Items] | ||
Total revenues | $ 1,225 | $ 1,266 |
Canada | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | 632 | 676 |
United States | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | 450 | 444 |
Other | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | 143 | 146 |
Tim Hortons brand | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | 699 | 749 |
Burger King brand | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | 388 | 411 |
Popeyes brand | ||
Revenue, Major Customer [Line Items] | ||
Total revenues | $ 138 | $ 106 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Income to Net Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Adjusted EBITDA | $ 444 | $ 500 |
Impact of equity method investments | 2 | (2) |
Other operating expenses (income), net | (16) | (17) |
EBITDA | 434 | 481 |
Depreciation and amortization | 45 | 47 |
Income from operations | 389 | 434 |
Interest expense, net | 119 | 132 |
Income tax expense | 46 | 56 |
Net income | 224 | 246 |
Unallocated Management G&A | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Share-based compensation and non-cash incentive compensation expense | 21 | 25 |
Corporate restructuring and tax advisory fees | 1 | 6 |
Office centralization and relocation costs | 0 | 4 |
Impact of equity method investments | 4 | 1 |
Other operating expenses (income), net | (16) | (17) |
Tim Hortons brand | Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Adjusted EBITDA | 189 | 237 |
Burger King brand | Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Adjusted EBITDA | 200 | 222 |
Popeyes brand | Operating Segments | ||
Segment Reporting, Revenue Reconciling Item [Line Items] | ||
Adjusted EBITDA | $ 55 | $ 41 |
Supplemental Financial Inform_3
Supplemental Financial Information Narrative (Details) | Sep. 24, 2019 | Aug. 28, 2017 | May 17, 2017 | May 22, 2015 |
2019 4.375% Senior Notes (due January 15, 2028) | ||||
Stated interest rate (as a percent) | 4.375% | |||
2019 3.875% Senior Notes (due January 15, 2028) | ||||
Stated interest rate (as a percent) | 3.875% | |||
2017 5.00% Senior Notes (due October 15, 2025) | ||||
Stated interest rate (as a percent) | 5.00% | |||
2017 4.25% Senior Notes (due May 15, 2024) | ||||
Stated interest rate (as a percent) | 4.25% |
Supplemental Financial Inform_4
Supplemental Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||||
Cash and cash equivalents | $ 2,498 | $ 1,533 | ||
Accounts and notes receivable, net | 414 | 527 | ||
Inventories, net | 85 | 84 | ||
Prepaids and other current assets | 62 | 52 | ||
Total current assets | 3,059 | 2,196 | ||
Property and equipment, net | 1,939 | 2,007 | ||
Operating lease assets, net | 1,115 | 1,176 | ||
Intangible assets, net | 10,085 | 10,563 | ||
Goodwill | 5,376 | 5,651 | ||
Net investment in property leased to franchisees | 49 | 48 | ||
Intercompany receivable | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Other assets, net | 1,006 | 719 | ||
Total assets | 22,629 | 22,360 | ||
Current liabilities: | ||||
Accounts and drafts payable | 484 | 644 | ||
Other accrued liabilities | 779 | 790 | ||
Gift card liability | 106 | 168 | ||
Current portion of long term debt and finance leases | 103 | 101 | ||
Total current liabilities | 1,472 | 1,703 | ||
Long-term debt, net of current portion | 12,822 | 11,759 | ||
Finance leases, net of current portion | 283 | 288 | ||
Operating lease liabilities, net of current portion | 1,039 | 1,089 | ||
Other liabilities, net | 1,774 | 1,698 | ||
Payables to affiliates | 0 | 0 | ||
Deferred income taxes, net | 1,487 | 1,564 | ||
Total liabilities | 18,877 | 18,101 | ||
Partners’ capital: | ||||
Common shares | 0 | 0 | ||
Retained Earnings | 0 | 0 | ||
Accumulated other comprehensive income (loss) | (1,721) | (1,178) | ||
Total Partners’ capital | 3,749 | 4,255 | ||
Noncontrolling interests | 3 | 4 | ||
Total equity | 3,752 | 4,259 | $ 3,773 | $ 3,618 |
Total liabilities and equity | 22,629 | 22,360 | ||
Class A common units | ||||
Partners’ capital: | ||||
Class A common units | 7,840 | 7,786 | ||
Total equity | 7,840 | 7,786 | 4,423 | 4,323 |
Partnership exchangeable units | ||||
Partners’ capital: | ||||
Partnership exchangeable units | (2,370) | (2,353) | ||
Total equity | (2,370) | (2,353) | $ 737 | $ 730 |
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 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 | ||
Operating lease assets, net | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Net investment in property leased to franchisees | 0 | 0 | ||
Intercompany receivable | (242) | (232) | ||
Investment in subsidiaries | (3,752) | (4,259) | ||
Other assets, net | 0 | 0 | ||
Total assets | (3,994) | (4,491) | ||
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 finance leases | 0 | 0 | ||
Total current liabilities | 0 | 0 | ||
Long-term debt, net of current portion | 0 | 0 | ||
Finance leases, net of current portion | 0 | 0 | ||
Operating lease liabilities, net of current portion | 0 | 0 | ||
Other liabilities, net | 0 | 0 | ||
Payables to affiliates | (242) | (232) | ||
Deferred income taxes, net | 0 | 0 | ||
Total liabilities | (242) | (232) | ||
Partners’ capital: | ||||
Common shares | (3,303) | (3,248) | ||
Retained Earnings | (2,167) | (2,185) | ||
Accumulated other comprehensive income (loss) | 1,721 | 1,178 | ||
Total Partners’ capital | (3,749) | (4,255) | ||
Noncontrolling interests | (3) | (4) | ||
Total equity | (3,752) | (4,259) | ||
Total liabilities and equity | (3,994) | (4,491) | ||
Eliminations | Class A common units | ||||
Partners’ capital: | ||||
Class A common units | 0 | 0 | ||
Eliminations | Partnership exchangeable units | ||||
Partners’ capital: | ||||
Partnership exchangeable units | 0 | 0 | ||
Consolidated Borrowers | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 2,498 | 1,533 | ||
Accounts and notes receivable, net | 414 | 527 | ||
Inventories, net | 85 | 84 | ||
Prepaids and other current assets | 62 | 52 | ||
Total current assets | 3,059 | 2,196 | ||
Property and equipment, net | 1,939 | 2,007 | ||
Operating lease assets, net | 1,115 | 1,176 | ||
Intangible assets, net | 10,085 | 10,563 | ||
Goodwill | 5,376 | 5,651 | ||
Net investment in property leased to franchisees | 49 | 48 | ||
Intercompany receivable | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Other assets, net | 1,006 | 719 | ||
Total assets | 22,629 | 22,360 | ||
Current liabilities: | ||||
Accounts and drafts payable | 484 | 644 | ||
Other accrued liabilities | 537 | 558 | ||
Gift card liability | 106 | 168 | ||
Current portion of long term debt and finance leases | 103 | 101 | ||
Total current liabilities | 1,230 | 1,471 | ||
Long-term debt, net of current portion | 12,822 | 11,759 | ||
Finance leases, net of current portion | 283 | 288 | ||
Operating lease liabilities, net of current portion | 1,039 | 1,089 | ||
Other liabilities, net | 1,774 | 1,698 | ||
Payables to affiliates | 242 | 232 | ||
Deferred income taxes, net | 1,487 | 1,564 | ||
Total liabilities | 18,877 | 18,101 | ||
Partners’ capital: | ||||
Common shares | 3,303 | 3,248 | ||
Retained Earnings | 2,167 | 2,185 | ||
Accumulated other comprehensive income (loss) | (1,721) | (1,178) | ||
Total Partners’ capital | 3,749 | 4,255 | ||
Noncontrolling interests | 3 | 4 | ||
Total equity | 3,752 | 4,259 | ||
Total liabilities and equity | 22,629 | 22,360 | ||
Consolidated Borrowers | Reportable Legal Entities | Class A common units | ||||
Partners’ capital: | ||||
Class A common units | 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 | ||
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 | ||
Operating lease assets, net | 0 | 0 | ||
Intangible assets, net | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Net investment in property leased to franchisees | 0 | 0 | ||
Intercompany receivable | 242 | 232 | ||
Investment in subsidiaries | 3,752 | 4,259 | ||
Other assets, net | 0 | 0 | ||
Total assets | 3,994 | 4,491 | ||
Current liabilities: | ||||
Accounts and drafts payable | 0 | 0 | ||
Other accrued liabilities | 242 | 232 | ||
Gift card liability | 0 | 0 | ||
Current portion of long term debt and finance leases | 0 | 0 | ||
Total current liabilities | 242 | 232 | ||
Long-term debt, net of current portion | 0 | 0 | ||
Finance leases, net of current portion | 0 | 0 | ||
Operating lease liabilities, net of current portion | 0 | 0 | ||
Other liabilities, net | 0 | 0 | ||
Payables to affiliates | 0 | 0 | ||
Deferred income taxes, net | 0 | 0 | ||
Total liabilities | 242 | 232 | ||
Partners’ capital: | ||||
Common shares | 0 | 0 | ||
Retained Earnings | 0 | 0 | ||
Accumulated other comprehensive income (loss) | (1,721) | (1,178) | ||
Total Partners’ capital | 3,749 | 4,255 | ||
Noncontrolling interests | 3 | 4 | ||
Total equity | 3,752 | 4,259 | ||
Total liabilities and equity | 3,994 | 4,491 | ||
RBILP | Reportable Legal Entities | Class A common units | ||||
Partners’ capital: | ||||
Class A common units | 7,840 | 7,786 | ||
RBILP | Reportable Legal Entities | Partnership exchangeable units | ||||
Partners’ capital: | ||||
Partnership exchangeable units | $ (2,370) | $ (2,353) |
Supplemental Financial Inform_5
Supplemental Financial Information - Condensed Consolidating Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues: | ||
Franchise and property revenues | $ 722 | $ 744 |
Total revenues | 1,225 | 1,266 |
Operating costs and expenses: | ||
Cost of sales | 399 | 406 |
Franchise and property expenses | 126 | 133 |
Selling, general and administrative expenses | 325 | 312 |
(Income) loss from equity method investments | 2 | (2) |
Other operating expenses (income), net | (16) | (17) |
Total operating costs and expenses | 836 | 832 |
Income from operations | 389 | 434 |
Interest expense, net | 119 | 132 |
Income before income taxes | 270 | 302 |
Income tax expense | 46 | 56 |
Net income | 224 | 246 |
Equity in earnings of consolidated subsidiaries | 0 | 0 |
Net income | 224 | 246 |
Comprehensive income (loss) attributable to noncontrolling interests | 0 | 0 |
Net income attributable to common unitholders | 224 | 246 |
Comprehensive income (loss) | (319) | 294 |
Eliminations | ||
Revenues: | ||
Franchise and property revenues | 0 | 0 |
Total revenues | 0 | 0 |
Operating costs and expenses: | ||
Cost of sales | 0 | 0 |
Franchise and property expenses | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 |
(Income) loss from equity method investments | 0 | 0 |
Other operating expenses (income), net | 0 | 0 |
Total operating costs and expenses | 0 | 0 |
Income from operations | 0 | 0 |
Interest expense, net | 0 | 0 |
Income before income taxes | 0 | 0 |
Income tax expense | 0 | 0 |
Net income | 0 | 0 |
Equity in earnings of consolidated subsidiaries | (224) | (246) |
Net income | (224) | (246) |
Comprehensive income (loss) attributable to noncontrolling interests | 0 | 0 |
Net income attributable to common unitholders | (224) | (246) |
Comprehensive income (loss) | 319 | (294) |
Consolidated Borrowers | Reportable Legal Entities | ||
Revenues: | ||
Franchise and property revenues | 722 | 744 |
Total revenues | 1,225 | 1,266 |
Operating costs and expenses: | ||
Cost of sales | 399 | 406 |
Franchise and property expenses | 126 | 133 |
Selling, general and administrative expenses | 325 | 312 |
(Income) loss from equity method investments | 2 | (2) |
Other operating expenses (income), net | (16) | (17) |
Total operating costs and expenses | 836 | 832 |
Income from operations | 389 | 434 |
Interest expense, net | 119 | 132 |
Income before income taxes | 270 | 302 |
Income tax expense | 46 | 56 |
Net income | 224 | 246 |
Equity in earnings of consolidated subsidiaries | 0 | 0 |
Net income | 224 | 246 |
Comprehensive income (loss) attributable to noncontrolling interests | 0 | 0 |
Net income attributable to common unitholders | 224 | 246 |
Comprehensive income (loss) | (319) | 294 |
RBILP | Reportable Legal Entities | ||
Revenues: | ||
Franchise and property revenues | 0 | 0 |
Total revenues | 0 | 0 |
Operating costs and expenses: | ||
Cost of sales | 0 | 0 |
Franchise and property expenses | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 |
(Income) loss from equity method investments | 0 | 0 |
Other operating expenses (income), net | 0 | 0 |
Total operating costs and expenses | 0 | 0 |
Income from operations | 0 | 0 |
Interest expense, net | 0 | 0 |
Income before income taxes | 0 | 0 |
Income tax expense | 0 | 0 |
Net income | 0 | 0 |
Equity in earnings of consolidated subsidiaries | 224 | 246 |
Net income | 224 | 246 |
Comprehensive income (loss) attributable to noncontrolling interests | 0 | 0 |
Net income attributable to common unitholders | 224 | 246 |
Comprehensive income (loss) | (319) | 294 |
Sales | ||
Revenues: | ||
Sales | 503 | 522 |
Sales | Eliminations | ||
Revenues: | ||
Sales | 0 | 0 |
Sales | Consolidated Borrowers | Reportable Legal Entities | ||
Revenues: | ||
Sales | 503 | 522 |
Sales | RBILP | Reportable Legal Entities | ||
Revenues: | ||
Sales | $ 0 | $ 0 |
Supplemental Financial Inform_6
Supplemental Financial Information - Condensed Consolidating Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 224 | $ 246 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in loss (earnings) of consolidated subsidiaries | 0 | 0 |
Depreciation and amortization | 45 | 47 |
Amortization of deferred financing costs and debt issuance discount | 6 | 7 |
(Income) loss from equity method investments | 2 | (2) |
(Gain) loss on remeasurement of foreign denominated transactions | (8) | (15) |
Net (gains) losses on derivatives | (6) | (20) |
Share-based compensation expense | 19 | 22 |
Deferred income taxes | (31) | 38 |
Other | (4) | 3 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||
Accounts and notes receivable | 94 | 14 |
Inventories and prepaids and other current assets | (13) | (13) |
Accounts and drafts payable | (136) | (69) |
Other accrued liabilities and gift card liability | (67) | (126) |
Tenant inducements paid to franchisees | (3) | 0 |
Other long-term assets and liabilities | 14 | 22 |
Net cash provided by operating activities | 136 | 154 |
Cash flows from investing activities: | ||
Payments for property and equipment | (19) | (5) |
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 4 | 4 |
Settlement/sale of derivatives, net | 12 | 11 |
Other investing activities, net | 0 | 1 |
Net cash (used for) provided by investing activities | (3) | 11 |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit and long-term debt | 1,085 | 0 |
Repayments of long-term debt and finance leases | (25) | (23) |
Distributions on Class A common and Partnership exchangeable units | (232) | (207) |
Capital contribution from RBI Inc. | 30 | 42 |
Distributions from subsidiaries | 0 | 0 |
(Payments) proceeds from derivatives | (2) | 5 |
Other financing activities, net | (1) | 1 |
Net cash provided by (used for) financing activities | 855 | (182) |
Effect of exchange rates on cash and cash equivalents | (23) | 6 |
Increase (decrease) in cash and cash equivalents | 965 | (11) |
Cash and cash equivalents at beginning of period | 1,533 | 913 |
Cash and cash equivalents at end of period | 2,498 | 902 |
Eliminations | ||
Cash flows from operating activities: | ||
Net income | (224) | (246) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in loss (earnings) of consolidated subsidiaries | 224 | 246 |
Depreciation and amortization | 0 | 0 |
Amortization of deferred financing costs and debt issuance discount | 0 | 0 |
(Income) loss from equity method investments | 0 | 0 |
(Gain) loss on remeasurement of foreign denominated transactions | 0 | 0 |
Net (gains) losses on derivatives | 0 | 0 |
Share-based compensation expense | 0 | 0 |
Deferred income taxes | 0 | 0 |
Other | 0 | 0 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||
Accounts and notes receivable | 0 | 0 |
Inventories and prepaids and other current assets | 0 | 0 |
Accounts and drafts payable | 0 | 0 |
Other accrued liabilities and gift card liability | 0 | 0 |
Tenant inducements paid to franchisees | 0 | |
Other long-term assets and liabilities | 0 | 0 |
Net cash provided by operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Payments for property and equipment | 0 | 0 |
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 0 | 0 |
Settlement/sale of derivatives, net | 0 | 0 |
Other investing activities, net | 0 | |
Net cash (used for) provided by investing activities | 0 | 0 |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit and long-term debt | 0 | |
Repayments of long-term debt and finance leases | 0 | 0 |
Distributions on Class A common and Partnership exchangeable units | 0 | 0 |
Capital contribution from RBI Inc. | 0 | 0 |
Distributions from subsidiaries | 0 | 0 |
(Payments) proceeds from derivatives | 0 | 0 |
Other financing activities, net | 0 | 0 |
Net cash provided by (used for) financing activities | 0 | 0 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Consolidated Borrowers | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net income | 224 | 246 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in loss (earnings) of consolidated subsidiaries | 0 | 0 |
Depreciation and amortization | 45 | 47 |
Amortization of deferred financing costs and debt issuance discount | 6 | 7 |
(Income) loss from equity method investments | 2 | (2) |
(Gain) loss on remeasurement of foreign denominated transactions | (8) | (15) |
Net (gains) losses on derivatives | (6) | (20) |
Share-based compensation expense | 19 | 22 |
Deferred income taxes | (31) | 38 |
Other | (4) | 3 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||
Accounts and notes receivable | 94 | 14 |
Inventories and prepaids and other current assets | (13) | (13) |
Accounts and drafts payable | (136) | (69) |
Other accrued liabilities and gift card liability | (67) | (126) |
Tenant inducements paid to franchisees | (3) | |
Other long-term assets and liabilities | 14 | 22 |
Net cash provided by operating activities | 136 | 154 |
Cash flows from investing activities: | ||
Payments for property and equipment | (19) | (5) |
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 4 | 4 |
Settlement/sale of derivatives, net | 12 | 11 |
Other investing activities, net | 1 | |
Net cash (used for) provided by investing activities | (3) | 11 |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit and long-term debt | 1,085 | |
Repayments of long-term debt and finance leases | (25) | (23) |
Distributions on Class A common and Partnership exchangeable units | 0 | 0 |
Capital contribution from RBI Inc. | 30 | 42 |
Distributions from subsidiaries | (232) | (207) |
(Payments) proceeds from derivatives | (2) | 5 |
Other financing activities, net | (1) | 1 |
Net cash provided by (used for) financing activities | 855 | (182) |
Effect of exchange rates on cash and cash equivalents | (23) | 6 |
Increase (decrease) in cash and cash equivalents | 965 | (11) |
Cash and cash equivalents at beginning of period | 1,533 | 913 |
Cash and cash equivalents at end of period | 2,498 | 902 |
RBILP | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net income | 224 | 246 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Equity in loss (earnings) of consolidated subsidiaries | (224) | (246) |
Depreciation and amortization | 0 | 0 |
Amortization of deferred financing costs and debt issuance discount | 0 | 0 |
(Income) loss from equity method investments | 0 | 0 |
(Gain) loss on remeasurement of foreign denominated transactions | 0 | 0 |
Net (gains) losses on derivatives | 0 | 0 |
Share-based compensation expense | 0 | 0 |
Deferred income taxes | 0 | 0 |
Other | 0 | 0 |
Changes in current assets and liabilities, excluding acquisitions and dispositions: | ||
Accounts and notes receivable | 0 | 0 |
Inventories and prepaids and other current assets | 0 | 0 |
Accounts and drafts payable | 0 | 0 |
Other accrued liabilities and gift card liability | 0 | 0 |
Tenant inducements paid to franchisees | 0 | |
Other long-term assets and liabilities | 0 | 0 |
Net cash provided by operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Payments for property and equipment | 0 | 0 |
Net proceeds from disposal of assets, restaurant closures, and refranchisings | 0 | 0 |
Settlement/sale of derivatives, net | 0 | 0 |
Other investing activities, net | 0 | |
Net cash (used for) provided by investing activities | 0 | 0 |
Cash flows from financing activities: | ||
Proceeds from revolving line of credit and long-term debt | 0 | |
Repayments of long-term debt and finance leases | 0 | 0 |
Distributions on Class A common and Partnership exchangeable units | (232) | (207) |
Capital contribution from RBI Inc. | 0 | 0 |
Distributions from subsidiaries | 232 | 207 |
(Payments) proceeds from derivatives | 0 | 0 |
Other financing activities, net | 0 | 0 |
Net cash provided by (used for) financing activities | 0 | 0 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 |
Increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | $ 0 | $ 0 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - $ / shares | Jul. 02, 2020 | Apr. 03, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Apr. 07, 2020 |
Subsequent Event [Line Items] | |||||
Cash dividend declared by board (in usd per share) | $ 0.77 | $ 0.63 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Cash dividend paid per common share (in usd per share) | $ 0.52 | ||||
Partnership Exchangeable Units | Restaurant Brands International Limited Partnership | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Cash dividend paid per exchangeable unit (in usd per unit) | $ 0.52 | ||||
Revolving Credit Facility | |||||
Subsequent Event [Line Items] | |||||
Stated interest rate (as a percent) | 2.05% | ||||
Forecast | |||||
Subsequent Event [Line Items] | |||||
Cash dividend declared by board (in usd per share) | $ 0.52 | ||||
Forecast | Partnership Exchangeable Units | Restaurant Brands International Limited Partnership | |||||
Subsequent Event [Line Items] | |||||
Cash dividend paid per exchangeable unit (in usd per unit) | $ 0.52 | ||||
2020 5.75% Senior Notes (due April 15, 2025) | Senior Notes | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Stated interest rate (as a percent) | 5.75% |
Uncategorized Items - qsp202033
Label | Element | Value |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 21,000,000 |
Accounting Standards Update 2014-09 [Member] | Common Class A [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 12,000,000 |
Accounting Standards Update 2014-09 [Member] | Partnerships With Exchangeable Units [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 9,000,000 |