Supplemental Financial Information

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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

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

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

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

(In millions of U.S. dollars)

As of March 31, 2023


	Consolidated Borrowers		RBILP		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	1,033	$	—	$	—	$	1,033
Accounts and notes receivable, net	612		—		—		612
Inventories, net	145		—		—		145
Prepaids and other current assets	103		—		—		103
Total current assets	1,893		—		—		1,893
Property and equipment, net	1,943		—		—		1,943
Operating lease assets, net	1,075		—		—		1,075
Intangible assets, net	11,005		—		—		11,005
Goodwill	5,700		—		—		5,700
Net investment in property leased to franchisees	83		—		—		83
Intercompany receivable	—		249		(249)		—
Investment in subsidiaries	—		4,311		(4,311)		—
Other assets, net	827		—		—		827
Total assets	$	22,526	$	4,560	$	(4,560)	$	22,526
LIABILITIES AND EQUITY
Current liabilities:
Accounts and drafts payable	$	679	$	—	$	—	$	679
Other accrued liabilities	652		249		—		901
Gift card liability	174		—		—		174
Current portion of long-term debt and finance leases	128		—		—		128
Total current liabilities	1,633		249		—		1,882
Long-term debt, net of current portion	12,821		—		—		12,821
Finance leases, net of current portion	310		—		—		310
Operating lease liabilities, net of current portion	1,019		—		—		1,019
Other liabilities, net	895		—		—		895
Payables to affiliates	249		—		(249)		—
Deferred income taxes, net	1,288		—		—		1,288
Total liabilities	18,215		249		(249)		18,215
Partners’ capital:
Class A common units	—		8,951		—		8,951
Partnership exchangeable units	—		(3,622)		—		(3,622)
Common shares	2,556		—		(2,556)		—
Retained earnings	2,773		—		(2,773)		—
Accumulated other comprehensive income (loss)	(1,020)		(1,020)		1,020		(1,020)
Total Partners' capital/shareholders' equity	4,309		4,309		(4,309)		4,309
Noncontrolling interests	2		2		(2)		2
Total equity	4,311		4,311		(4,311)		4,311
Total liabilities and equity	$	22,526	$	4,560	$	(4,560)	$	22,526

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Balance Sheets

(In millions of U.S. dollars)

As of December 31, 2022


	Consolidated Borrowers		RBILP		Eliminations		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	1,178	$	—	$	—	$	1,178
Accounts and notes receivable, net	614		—		—		614
Inventories, net	133		—		—		133
Prepaids and other current assets	123		—		—		123
Total current assets	2,048		—		—		2,048
Property and equipment, net	1,950		—		—		1,950
Operating lease assets. net	1,082		—		—		1,082
Intangible assets, net	10,991		—		—		10,991
Goodwill	5,688		—		—		5,688
Net investment in property leased to franchisees	82		—		—		82
Intercompany receivable	—		243		(243)		—
Investment in subsidiaries	—		4,268		(4,268)		—
Other assets, net	905		—		—		905
Total assets	$	22,746	$	4,511	$	(4,511)	$	22,746
LIABILITIES AND EQUITY
Current liabilities:
Accounts and drafts payable	$	758	$	—	$	—	$	758
Other accrued liabilities	758		243		—		1,001
Gift card liability	230		—		—		230
Current portion of long-term debt and finance leases	127		—		—		127
Total current liabilities	1,873		243		—		2,116
Long-term debt, net of current portion	12,839		—		—		12,839
Finance leases, net of current portion	311		—		—		311
Operating lease liabilities, net of current portion	1,027		—		—		1,027
Other liabilities, net	872		—		—		872
Payables to affiliates	243		—		(243)		—
Deferred income taxes, net	1,313		—		—		1,313
Total liabilities	18,478		243		(243)		18,478
Partners’ capital:
Class A common units	—		8,735		—		8,735
Partnership exchangeable units	—		(3,496)		—		(3,496)
Common shares	2,494		—		(2,494)		—
Retained earnings	2,745		—		(2,745)		—
Accumulated other comprehensive income (loss)	(973)		(973)		973		(973)
Total Partners' capital/shareholders' equity	4,266		4,266		(4,266)		4,266
Noncontrolling interests	2		2		(2)		2
Total equity	4,268		4,268		(4,268)		4,268
Total liabilities and equity	$	22,746	$	4,511	$	(4,511)	$	22,746

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Statements of Operations

(In millions of U.S. dollars)

Three Months Ended March 31, 2023


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

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

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Statements of Operations

(In millions of U.S. dollars)

Three Months Ended March 31, 2022


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

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

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Statements of Cash Flows

(In millions of U.S. dollars)

Three months ended March 31, 2023


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

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

Settlement/sale of derivatives, net	14		—		—		14

Net cash (used for) provided by investing activities	—		—		—		—
Cash flows from financing activities:

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

Distributions on Class A common and Partnership exchangeable units	—		(243)		—		(243)

Capital contribution from RBI	6		—		—		6
Distributions from subsidiaries	(243)		243		—		—
(Payments) proceeds from derivatives	29		—		—		29

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

RESTAURANT BRANDS INTERNATIONAL LIMITED PARTNERSHIP AND SUBSIDIARIES

Condensed Consolidating Statements of Cash Flows

(In millions of U.S. dollars)

Three Months Ended March 31, 2022


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

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

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

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