10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2019

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

For the transition period from                      to                     

Commission file number: 001-36786

 RESTAURANT BRANDS INTERNATIONAL INC.

(Exact Name of Registrant as Specified in its Charter)

Canada		98-1202754
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)
130 King Street West, Suite 300		M5X 1E1
Toronto,	Ontario
(Address of Principal Executive Offices)		(Zip Code)

(905) 845-6511

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbols	Name of each exchange on which registered
Common Shares, without par value	QSR	New York Stock Exchange
		Toronto Stock Exchange

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

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

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

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

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

As of July 26, 2019, there were 255,752,583 common shares of the Registrant outstanding.

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
PART I – Financial Information
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
PART II – Other Information
Item 1.	Legal Proceedings	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
	Signatures	47

2

PART I — Financial Information

Item 1. Financial Statements

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

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

(Unaudited)

	As of
	June 30, 2019			December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	1,028		$	913
Accounts and notes receivable, net of allowance of $16 and $14, respectively	476			452
Inventories, net	81			75
Prepaids and other current assets	69			60
Total current assets	1,654			1,500
Property and equipment, net of accumulated depreciation and amortization of $680 and $704, respectively	2,007			1,996
Operating lease assets, net	1,154			—
Intangible assets, net	10,543			10,463
Goodwill	5,625			5,486
Net investment in property leased to franchisees	47			54
Other assets, net	695			642
Total assets	$	21,725		$	20,141
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts and drafts payable	$	486		$	513
Other accrued liabilities	699			637
Gift card liability	106			167
Current portion of long term debt and finance leases	92			91
Total current liabilities	1,383			1,408
Term debt, net of current portion	11,737			11,823
Finance leases, net of current portion	284			226
Operating lease liabilities, net of current portion	1,056			—
Other liabilities, net	1,730			1,547
Deferred income taxes, net	1,575			1,519
Total liabilities	17,765			16,523
Shareholders’ equity:
Common shares, no par value; unlimited shares authorized at June 30, 2019 and December 31, 2018; 255,630,895 shares issued and outstanding at June 30, 2019; 251,532,493 shares issued and outstanding at December 31, 2018	1,870			1,737
Retained earnings	704			674
Accumulated other comprehensive income (loss)	(717		)	(800		)
Total Restaurant Brands International Inc. shareholders’ equity	1,857			1,611
Noncontrolling interests	2,103			2,007
Total shareholders’ equity	3,960			3,618
Total liabilities and shareholders’ equity	$	21,725		$	20,141

See accompanying notes to condensed consolidated financial statements.

3

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

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

(Unaudited)

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Revenues:
Sales	$	589	$	586		$	1,111		$	1,134
Franchise and property revenues	811		757			1,555			1,463
Total revenues	1,400		1,343			2,666			2,597
Operating costs and expenses:
Cost of sales	453		449			859			878
Franchise and property expenses	135		103			268			207
Selling, general and administrative expenses	316		318			628			619
(Income) loss from equity method investments	2		1			—			(13		)
Other operating expenses (income), net	3		(30		)	(14		)	(17		)
Total operating costs and expenses	909		841			1,741			1,674
Income from operations	491		502			925			923
Interest expense, net	137		130			269			270
Income before income taxes	354		372			656			653
Income tax expense	97		58			153			60
Net income	257		314			503			593
Net income attributable to noncontrolling interests (Note 12)	115		147			226			278
Net income attributable to common shareholders	$	142	$	167		$	277		$	315
Earnings per common share
Basic	$	0.56	$	0.67		$	1.09		$	1.27
Diluted	$	0.55	$	0.66		$	1.07		$	1.25
Weighted average shares outstanding
Basic	255		249			254			248
Diluted	469		474			468			474

See accompanying notes to condensed consolidated financial statements.

4

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In millions of U.S. dollars)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net income	$	257		$	314		$	503		$	593
Foreign currency translation adjustment	199			(255		)	358			(472		)
Net change in fair value of net investment hedges, net of tax of $13, $(29), $39 and $(38)	(40		)	113			(116		)	116
Net change in fair value of cash flow hedges, net of tax of $22, $(1), $34 and $(10)	(57		)	(1		)	(91		)	28
Amounts reclassified to earnings of cash flow hedges, net of tax of $(1), $0, $(1) and $(2)	3			4			2			6
Other comprehensive income (loss)	105			(139		)	153			(322		)
Comprehensive income (loss)	362			175			656			271
Comprehensive income (loss) attributable to noncontrolling interests	162			82			295			127
Comprehensive income (loss) attributable to common shareholders	$	200		$	93		$	361		$	144

See accompanying notes to condensed consolidated financial statements.

5

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(In millions of U.S. dollars, except shares and per share data)

(Unaudited)

	Issued Common Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest			Total
	Shares	Amount
Balances at December 31, 2018	251,532,493	$	1,737	$	674		$	(800	)	$	2,007		$	3,618
Cumulative effect adjustment	—	—		12			—			9			21
Stock option exercises	2,019,620	42		—			—			—			42
Share-based compensation	—	22		—			—			—			22
Issuance of shares	134,809	7		—			—			—			7
Dividends declared ($0.50 per share)	—	—		(127		)	—			—			(127		)
Dividend equivalents declared on restricted stock units	—	2		(2		)	—			—			—
Distributions declared by Partnership on Partnership exchangeable units ($0.50 per unit)	—	—		—			—			(104		)	(104		)
Exchange of Partnership exchangeable units for RBI common shares	141,190	2		—			(1		)	(1		)	—
Net income	—	—		135			—			111			246
Other comprehensive income (loss)	—	—		—			26			22			48
Balances at March 31, 2019	253,828,112	$	1,812	$	692		$	(775	)	$	2,044		$	3,773
Stock option exercises	1,697,488	38		—			—			—			38
Share-based compensation	—	17		—			—			—			17
Issuance of shares	59,970	—		—			—			—			—
Dividends declared ($0.50 per share)	—	—		(128		)	—			—			(128		)
Dividend equivalents declared on restricted stock units	—	2		(2		)	—			—			—
Distributions declared by Partnership on Partnership exchangeable units ($0.50 per unit)	—	—		—			—			(103		)	(103		)
Exchange of Partnership exchangeable units for RBI common shares	45,325	1		—			—			(1		)	—
Restaurant VIE contributions (distributions)	—	—		—			—			1			1
Net income	—	—		142			—			115			257
Other comprehensive income (loss)	—	—		—			58			47			105
Balances at June 30, 2019	255,630,895	$	1,870	$	704		$	(717	)	$	2,103		$	3,960

See accompanying notes to condensed consolidated financial statements.

6

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(In millions of U.S. dollars, except shares and per share data)

(Unaudited)

	Issued Common Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest			Total
	Shares	Amount
Balances at December 31, 2017	243,899,476	$	2,052	$	651		$	(476	)	$	2,334		$	4,561
Cumulative effect adjustment	—	—		(132		)	—			(118		)	(250		)
Stock option exercises	5,058,992	25		—			—			—			25
Share-based compensation	—	14		—			—			—			14
Issuance of shares	113,733	5		—			—			—			5
Dividends declared ($0.45 per share)	—	—		(112		)	—			—			(112		)
Distributions declared by Partnership on Partnership exchangeable units ($0.45 per unit)	—	—		—			—			(98		)	(98		)
Exchange of Partnership exchangeable units for RBI common shares	29,432	—		—			—			—			—
Restaurant VIE contributions (distributions)	—	—		—			—			1			1
Net income	—	—		148			—			131			279
Other comprehensive income (loss)	—	—		—			(97		)	(86		)	(183		)
Balances at March 31, 2018	249,101,633	$	2,096	$	555		$	(573	)	$	2,164		$	4,242
Stock option exercises	410,383	4		—			—			—			4
Share-based compensation	—	13		—			—			—			13
Issuance of shares	12,332	1		—			—			—			1
Dividends declared ($0.45 per share)	—	—		(112		)	—			—			(112		)
Dividend equivalents declared on restricted stock units	—	2		(2		)	—			—			—
Distributions declared by Partnership on Partnership exchangeable units ($0.45 per unit)	—	—		—			—			(98		)	(98		)
Exchange of Partnership exchangeable units for RBI common shares	42,923	—		—			—			—			—
Restaurant VIE contributions (distributions)	—	—		—			—			—			—
Net income	—	—		167			—			147			314
Other comprehensive income (loss)	—	—		—			(74		)	(65		)	(139		)
Balances at June 30, 2018	249,567,271	$	2,116	$	608		$	(647	)	$	2,148		$	4,225

See accompanying notes to condensed consolidated financial statements.

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RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In millions of U.S. dollars)

(Unaudited)

	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net income	$	503		$	593
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization	92			93
Amortization of deferred financing costs and debt issuance discount	15			14
(Income) loss from equity method investments	—			(13		)
(Gain) loss on remeasurement of foreign denominated transactions	(3		)	(16		)
Net (gains) losses on derivatives	(34		)	(15		)
Share-based compensation expense	39			27
Deferred income taxes	23			(58		)
Other	(3		)	4
Changes in current assets and liabilities, excluding acquisitions and dispositions:
Accounts and notes receivable	(16		)	36
Inventories and prepaids and other current assets	(10		)	(16		)
Accounts and drafts payable	(40		)	(11		)
Other accrued liabilities and gift card liability	(166		)	(347		)
Tenant inducements paid to franchisees	(8		)	(13		)
Other long-term assets and liabilities	83			9
Net cash provided by (used for) operating activities	475			287
Cash flows from investing activities:
Payments for property and equipment	(14		)	(22		)
Net proceeds from disposal of assets, restaurant closures, and refranchisings	22			3
Settlement/sale of derivatives, net	15			11
Other investing activities, net	—			9
Net cash provided by (used for) investing activities	23			1
Cash flows from financing activities:
Repayments of long-term debt and finance leases	(48		)	(43		)
Payment of dividends on common shares and distributions on Partnership exchangeable units	(437		)	(307		)
Payments in connection with redemption of preferred shares	—			(60		)
Proceeds from stock option exercises	80			29
Other financing activities, net	10			(2		)
Net cash (used for) provided by financing activities	(395		)	(383		)
Effect of exchange rates on cash and cash equivalents	12			(15		)
Increase (decrease) in cash and cash equivalents	115			(110		)
Cash and cash equivalents at beginning of period	913			1,097
Cash and cash equivalents at end of period	$	1,028		$	987
Supplemental cash flow disclosures:
Interest paid	$	292		$	274
Income taxes paid	$	127		$	374

See accompanying notes to condensed consolidated financial statements.

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RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Description of Business and Organization

Restaurant Brands International Inc. (the “Company”, “RBI”, “we”, “us” or “our”) was formed on August 25, 2014 and continued under the laws of Canada. The Company serves as the sole general partner of Restaurant Brands International Limited Partnership (“Partnership”). We franchise and operate quick service restaurants serving premium coffee and other beverage and food products under the Tim Hortons® brand (“Tim Hortons” or “TH”), fast food hamburgers principally under the Burger King® brand (“Burger King” or “BK”), 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 June 30, 2019, we franchised or owned 4,872 Tim Hortons restaurants, 18,008 Burger King restaurants, and 3,156 Popeyes restaurants, for a total of 26,036 restaurants, and operate in more than 100 countries and U.S. territories. Approximately 100% of current system-wide restaurants are franchised.

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

Note 2. Basis of Presentation and Consolidation

We have prepared the accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. Therefore, the Financial Statements should be read in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC and Canadian securities regulatory authorities on February 22, 2019.

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 are the sole general partner of Partnership and, as such we have 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, subject to the terms of the amended and restated limited partnership agreement of Partnership (the “partnership agreement”) and applicable laws. As a result, we consolidate the results of Partnership and record a noncontrolling interest in our consolidated balance sheets and statements of operations with respect to the remaining economic interest in Partnership we do not hold.

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 June 30, 2019 and December 31, 2018, we determined that we are the primary beneficiary of 30 and 17 Restaurant VIEs, respectively, and accordingly, have consolidated the results of operations, assets and

9

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 consist of the reclassification of $13 million from changes in Other long-term assets and liabilities in the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2018 to Tenant inducements paid to franchisees. These reclassifications had no effect on previously reported net income.

Note 3. New Accounting Pronouncements

Lease Accounting – In February 2016, the Financial Accounting Standard Board (the “FASB”) issued new guidance on leases. We adopted this new guidance on January 1, 2019. See Note 4, Leases, for further information about our transition to this new lease accounting standard.

Goodwill Impairment – In January 2017, the FASB issued guidance to simplify how an entity measures goodwill impairment by removing the second step of the two-step quantitative goodwill impairment test. An entity will no longer be required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured at the amount by which the carrying value exceeds the fair value of a reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment requires prospective adoption and is effective commencing in 2020 with early adoption permitted. The adoption of this new guidance will not have a material impact on our Financial Statements.

Reclassification of Certain Tax Effects – In February 2018, the FASB issued guidance which allows a reclassification from accumulated other comprehensive income (loss) to retained earnings for the tax effects of certain items within accumulated other comprehensive income (loss). The amendment is effective commencing in 2019 with early adoption permitted. The adoption of this new guidance did not have a material impact on our Financial Statements.

Share-based payment arrangements with nonemployees – In June 2018, the FASB issued guidance which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendment is effective commencing in 2019 with early adoption permitted. The adoption of this new guidance did not have a material impact on our Financial Statements.

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Note 4. Leases

As of June 30, 2019, we leased or subleased 5,331 restaurant properties to franchisees and 168 non-restaurant properties to third parties under operating leases and direct financing leases where we are the lessor. Initial lease terms generally range from 10 to 20 years. Most leases to franchisees provide for fixed monthly payments and many provide for future rent escalations and renewal options. Certain leases also include provisions for variable rent, determined as a percentage of sales, generally when annual sales exceed specified levels. Lessees typically bear the cost of maintenance, insurance and property taxes.

We lease land, buildings, equipment, office space and warehouse space. Land and building leases generally have an initial term of 10 to 30 years, while land-only lease terms can extend longer, and most leases provide for fixed monthly payments. Many of these leases provide for future rent escalations and renewal options. Certain leases also include provisions for variable rent payments, determined as a percentage of sales, generally when annual sales exceed specified levels. Most leases also obligate us to pay, as lessee, the cost of maintenance, insurance and property taxes.

We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”), from ASC Topic 840, Leases (the “Previous Standard”) on January 1, 2019 on a modified retrospective basis using the effective date transition method. Our Financial Statements reflect the application of ASC 842 guidance beginning in 2019, while our consolidated financial statements for prior periods were prepared under the guidance of the Previous Standard. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. Our transition to ASC 842 resulted in the gross presentation of property tax and maintenance expenses and related lessee reimbursements as franchise and property expenses and franchise and property revenues, respectively. These expenses and reimbursements were presented on a net basis under the Previous Standard.

In connection with our transition to ASC 842, we elected the package of practical expedients under which we did not reassess the classification of our existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. We also elected lessee and lessor practical expedients to not separate non-lease components comprised of maintenance from lease components for real estate leases that commenced prior to our transition to ASC 842, as well as for leases that commence or that are modified subsequent to our transition to ASC 842. We did not elect the practical expedient that permitted a reassessment of lease terms for existing leases.

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Financial Statement Impact of Transition to ASC 842

Transition Impact on January 1, 2019 Condensed Consolidated Balance Sheet

Our transition to ASC 842 represents a change in accounting principle. The $21 million cumulative effect of our transition to ASC 842 is reflected as an adjustment to January 1, 2019 Shareholders' equity.

Our transition to ASC 842 resulted in the following adjustments to our condensed consolidated balance sheet as of January 1, 2019 (in millions):

	As Reported			Total				Adjusted
	December 31, 2018			Adjustments				January 1, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	913		$	—			$	913
Accounts and notes receivable, net	452			—				452
Inventories, net	75			—				75
Prepaids and other current assets	60			—				60
Total current assets	1,500			—				1,500
Property and equipment, net	1,996			26			(a)	2,022
Operating lease assets, net	—			1,143			(b)	1,143
Intangible assets, net	10,463			(133		)	(c)	10,330
Goodwill	5,486			—				5,486
Net investment in property leased to franchisees	54			—				54
Other assets, net	642			—				642
Total assets	$	20,141		$	1,036			$	21,177
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts and drafts payable	$	513		$	—			$	513
Other accrued liabilities	637			114			(d)	751
Gift card liability	167			—				167
Current portion of long term debt and finance leases	91			—				91
Total current liabilities	1,408			114				1,522
Term debt, net of current portion	11,823			(65		)	(e)	11,758
Finance leases, net of current portion	226			62			(e)	288
Operating lease liabilities, net of current portion	—			1,028			(f)	1,028
Other liabilities, net	1,547			(132		)	(g)	1,415
Deferred income taxes, net	1,519			8			(h)	1,527
Total liabilities	16,523			1,015				17,538
Shareholders’ equity:
Common shares	1,737			—				1,737
Retained earnings	674			12			(i)	686
Accumulated other comprehensive income (loss)	(800		)	—				(800		)
Total RBI shareholders’ equity	1,611			12				1,623
Noncontrolling interests	2,007			9			(i)	2,016
Total shareholders’ equity	3,618			21				3,639
Total liabilities and shareholders’ equity	$	20,141		$	1,036			$	21,177

(a) Represents the net change in assets recorded in connection with build-to-suit leases.

(b) Represents the capitalization of operating lease right-of-use (“ROU”) assets equal to the amount of recognized operating lease liability, adjusted by the net carrying amounts of related favorable lease assets and unfavorable lease liabilities in which we are the lessee and straight-line rent accruals, which were reclassified to operating lease ROU assets.

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(c) Represents the net carrying amount of favorable lease assets associated with leases in which we are the lessee, which have been reclassified to operating lease ROU assets.

(d) Represents the current portion of operating lease liabilities.

(e) Represents the net change in liabilities recorded in connection with build-to-suit leases.

(f) Represents the recognition of operating lease liabilities, net of current portion.

(g) Represents the net carrying amount of unfavorable lease liabilities associated with leases in which we are the lessee and $64 million of straight-line rent accruals which have been reclassified to operating lease ROU assets.

(h) Represents the net tax effects of the adjustments noted above, with a corresponding adjustment to shareholders’ equity.

(i) Represents net change in assets and liabilities recorded in connection with built-to-suit leases and the tax effects of adjustments noted above.

Changes to Lease Accounting Significant Accounting Policies Under ASC 842

In all leases, whether we are the lessor or lessee, we define lease term as the noncancellable term of the lease plus any renewals covered by renewal options that are reasonably certain of exercise based on our assessment of the economic factors relevant to the lessee. The noncancellable term of the lease commences on the date the lessor makes the underlying property in the lease available to the lessee, irrespective of when lease payments begin under the contract.

Lessor Accounting

We recognize lease payments for operating leases as property revenue on a straight-line basis over the lease term and property revenue is presented net of any related sales tax. Lease incentive payments we make to lessees are amortized as a reduction in property revenue over the lease term. We account for reimbursements of maintenance and property tax costs paid to us by lessees as variable lease payment property revenue.

We also have net investments in properties leased to franchisees, which met the criteria of direct financing leases under the Previous Standard. Investments in direct financing leases are recorded on a net basis, consisting of the gross investment and estimated residual value in the lease, less unearned income. Unearned income on direct financing leases is recognized over the lease term yielding a constant periodic rate of return on the net investment in the lease. We do not remeasure the net investment in a direct financing lease unless the lease is modified and that modification is not accounted for as a separate contract.

We recognize variable lease payment income for operating and direct financing leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

Lessee Accounting

In leases where we are the lessee, we recognize an ROU asset and lease liability at lease commencement, which is measured by discounting lease payments using our incremental borrowing rate applicable to the lease term and currency of the lease as the discount rate. Subsequent amortization of the ROU asset and accretion of the lease liability for an operating lease is recognized as a single lease cost, on a straight-line basis, over the lease term. Amortization of the ROU asset and the change in the lease liability is included in changes in Other long-term assets and liabilities in the Condensed Consolidated Statement of Cash Flows. A finance lease ROU asset is depreciated on a straight-line basis over the lesser of the useful life of the leased asset or lease term. Interest on each finance lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. ROU assets are assessed for impairment in accordance with our long-lived asset impairment policy. We reassess lease classification and remeasure ROU assets and lease liabilities when a lease is modified and that modification is not accounted for as a separate contract or upon certain other events that require reassessment in accordance with ASC 842. Maintenance and property tax expenses are accounted for on an accrual basis as variable lease cost.

We recognize variable lease cost for operating and finance leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

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Company as Lessor

Assets leased to franchisees and others under operating leases where we are the lessor and which are included within our property and equipment, net are as follows (in millions):

	As of
	June 30, 2019
Land	$	920
Buildings and improvements	1,139
Restaurant equipment	21
	2,080
Accumulated depreciation and amortization	(441		)
Property and equipment leased, net	$	1,639

Our net investment in direct financing leases is as follows (in millions):

	As of
	June 30, 2019
Future rents to be received:
Future minimum lease receipts	$	53
Contingent rents (a)	23
Estimated unguaranteed residual value	15
Unearned income	(30		)
	61
Current portion included within accounts receivables	(14		)
Net investment in property leased to franchisees	$	47

(a) Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting.

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 June 30, 2019		Six months ended June 30, 2019
Lease income - operating leases
Minimum lease payments	$	112	$	223
Variable lease payments	97		181
Amortization of favorable and unfavorable income lease contracts, net	2		4
Subtotal - lease income from operating leases	211		408
Earned income on direct financing leases	3		5
Total property revenues	$	214	$	413

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Company as Lessee

Lease cost and other information associated with these lease commitments is as follows (in millions):

Lease Cost (Income)

	Three months ended June 30, 2019			Six months ended June 30, 2019
Operating lease cost	$	53		$	106
Operating lease variable lease cost	50			100
Finance lease cost:
Amortization of right-of-use assets	6			13
Interest on lease liabilities	6			11
Sublease income	(164		)	(319		)
Total lease cost (income)	$	(49	)	$	(89	)

Lease Term and Discount Rate as of June 30, 2019

Weighted-average remaining lease term (in years):
Operating leases	11.1 years
Finance leases	11.2 years
Weighted-average discount rate:
Operating leases	6.5	%
Finance leases	7.6	%

Other Information for the six months ended June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	96
Operating cash flows from finance leases	$	11
Financing cash flows from finance leases	$	13
Right-of-use assets obtained in exchange for new finance lease obligations	$	1
Right-of-use assets obtained in exchange for new operating lease obligations	$	65

Maturity Analysis

As of June 30, 2019, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
Remainder of 2019	$	7	$	213	$	24		$	97
2020	10		406		46			187
2021	7		382		44			175
2022	5		357		43			163
2023	5		335		39			149
Thereafter	19		1,876		268			941
Total minimum receipts / payments	$	53	$	3,569	464			1,712
Less amount representing interest (b)					(153		)	(535		)
Present value of minimum lease payments					311			1,177
Current portion of lease obligations					(27		)	(121		)
Long-term portion of lease obligations					$	284		$	1,056

(a) Minimum lease commitments have not been reduced by minimum sublease rentals of $2,351 million due in the future under non-cancelable subleases.

(b) Calculated using the interest rate for each lease.

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As of December 31, 2018, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
2019	$	14	$	416	$	38		$	183
2020	10		388		36			172
2021	7		360		34			158
2022	5		331		33			145
2023	5		306		30			130
Thereafter	19		1,704		201			831
Total minimum receipts / payments	$	60	$	3,505	372			$	1,619
Less amount representing interest					(125		)
Present value of minimum finance lease payments					247
Current portion of finance lease obligation					(21		)
Long-term portion of finance lease obligation					$	226

(a) Minimum lease commitments have not been reduced by minimum sublease rentals of $2,290 million due in the future under non-cancelable subleases.

Note 5. Revenue Recognition

Contract Liabilities

Contract liabilities consist of deferred revenue resulting from initial and renewal franchise fees paid by franchisees, as well as upfront fees paid by master franchisees, which are generally recognized on a straight-line basis over the term of the underlying agreement. We 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, 2018 and June 30, 2019 (in millions):

Contract Liabilities	TH			BK			PLK			Consolidated
Balance at December 31, 2018	$	62		$	405		$	19		$	486
Revenue recognized that was included in the contract liability balance at the beginning of the year	(4		)	(21		)	(1		)	(26		)
Increase, excluding amounts recognized as revenue during the period	4			42			4			50
Impact of foreign currency translation	1			(1		)	—			—
Balance at June 30, 2019	$	63		$	425		$	22		$	510

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 June 30, 2019 (in millions):

Contract liabilities expected to be recognized in	TH		BK		PLK		Consolidated
Remainder of 2019	$	4	$	16	$	1	$	21
2020	8		32		2		42
2021	7		31		1		39
2022	7		31		1		39
2023	6		30		1		37
Thereafter	31		285		16		332
Total	$	63	$	425	$	22	$	510

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Disaggregation of Total Revenues

Total revenues consist of the following (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Sales	$	589	$	586	$	1,111	$	1,134
Royalties	576		544		1,104		1,054
Property revenues	214		190		413		368
Franchise fees and other revenue	21		23		38		41
Total revenues	$	1,400	$	1,343	$	2,666	$	2,597

Note 6. Earnings per Share

An economic interest in Partnership common equity is held by the holders of Class B exchangeable limited partnership units (the “Partnership exchangeable units”), which is reflected as a noncontrolling interest in our equity. See Note 12, Shareholders’ Equity.

Basic and diluted earnings per share is computed using the weighted average number of shares outstanding for the period. We apply the treasury stock method to determine the dilutive weighted average common shares represented by Partnership exchangeable units and outstanding equity awards, unless the effect of their inclusion is anti-dilutive. The diluted earnings per share calculation assumes conversion of 100% of the Partnership exchangeable units under the “if converted” method. Accordingly, the numerator is also adjusted to include the earnings allocated to the holders of noncontrolling interests.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Numerator:
Net income attributable to common shareholders - basic	$	142	$	167	$	277	$	315
Add: Net income attributable to noncontrolling interests	115		146		226		277
Net income available to common shareholders and noncontrolling interests - diluted	$	257	$	313	$	503	$	592
Denominator:
Weighted average common shares - basic	255		249		254		248
Exchange of noncontrolling interests for common shares (Note 12)	207		218		207		218
Effect of other dilutive securities	7		7		7		8
Weighted average common shares - diluted	469		474		468		474
Basic earnings per share (a)	$	0.56	$	0.67	$	1.09	$	1.27
Diluted earnings per share (a)	$	0.55	$	0.66	$	1.07	$	1.25
Anti-dilutive securities outstanding	3		6		3		6

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

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Note 7. Intangible Assets, net and Goodwill

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

	As of
	June 30, 2019							December 31, 2018
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Identifiable assets subject to amortization:
Franchise agreements	$	715	$	(209	)	$	506	$	705	$	(194	)	$	511
Favorable leases (a)	134		(65		)	69		407		(200		)	207
Subtotal	849		(274		)	575		1,112		(394		)	718
Indefinite lived intangible assets:
Tim Hortons brand	$	6,487	$	—		$	6,487	$	6,259	$	—		$	6,259
Burger King brand	2,126		—			2,126		2,131		—			2,131
Popeyes brand	1,355		—			1,355		1,355		—			1,355
Subtotal	9,968		—			9,968		9,745		—			9,745
Intangible assets, net						$	10,543						$	10,463
Goodwill
Tim Hortons segment	$	4,178						$	4,038
Burger King segment	601							602
Popeyes segment	846							846
Total	$	5,625						$	5,486

(a) The decrease in favorable leases reflects the reclassification of favorable leases where we are the lessee to operating lease right-of-use assets in connection with our transition to ASC 842. See Note 4, Leases.

Amortization expense on intangible assets totaled $10 million for the three months ended June 30, 2019 and $18 million for the same period in the prior year. Amortization expense on intangible assets totaled $21 million for the six months ended June 30, 2019 and $36 million for the same period in the prior year. The change in the brands and goodwill balances during the six months ended June 30, 2019 was due to the impact of foreign currency translation.

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Note 8. Equity Method Investments

The aggregate carrying amount of our equity method investments was $272 million and $259 million as of June 30, 2019 and December 31, 2018, 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 $5 million and $3 million during the three months ended June 30, 2019 and 2018, respectively. Distributions received from this joint venture were $7 million and $6 million during the six months ended June 30, 2019 and 2018, respectively.

The aggregate market value of our 20.3% equity interest in Carrols Restaurant Group, Inc. (“Carrols”) based on the quoted market price on June 30, 2019 was approximately $85 million. The aggregate market value of our 9.9% equity interest in BK Brasil Operação e Assessoria a Restaurantes S.A. based on the quoted market price on June 30, 2019 was approximately $130 million. No quoted market prices are available for our other equity method investments.

We have equity interests in entities that own or franchise Tim Hortons or Burger King restaurants. Franchise and property 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 June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues from affiliates:
Royalties	$	87	$	74	$	165	$	142
Property revenues	9		9		17		18
Franchise fees and other revenue	3		2		6		4
Total	$	99	$	85	$	188	$	164

We recognized $5 million of rent expense associated with the TIMWEN Partnership during the three months ended June 30, 2019 and 2018. We recognized $9 million and $10 million of rent expense associated with the TIMWEN Partnership during the six months ended June 30, 2019 and 2018, respectively.

At June 30, 2019 and December 31, 2018, we had $43 million and $41 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.

(Income) loss from equity method investments reflects our share of investee net income or loss, non-cash dilution gains or losses from changes in our ownership interests in equity method investees and basis difference amortization. During the six months ended June 30, 2019 we did not record a non-cash dilution gain. During the six months ended June 30, 2018, we recorded an increase to the carrying value of our equity method investment balance and a non-cash dilution gain of $20 million on the initial public offering by one of our equity method investees.

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Note 9. Other Accrued Liabilities and Other Liabilities, net

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

	As of
	June 30, 2019		December 31, 2018
Current:
Dividend payable	$	232	$	207
Interest payable	88		87
Accrued compensation and benefits	48		69
Taxes payable	73		113
Deferred income	36		27
Accrued advertising expenses	20		30
Restructuring and other provisions	7		11
Current portion of operating lease liabilities (a)	121		—
Other	74		93
Other accrued liabilities	$	699	$	637
Noncurrent:
Taxes payable	$	570	$	493
Contract liabilities, net	510		486
Unfavorable leases (b)	113		192
Derivatives liabilities	397		179
Accrued pension	63		64
Accrued lease straight-lining liability (b)	—		69
Deferred income	31		22
Other	46		42
Other liabilities, net	$	1,730	$	1,547

(a) Represents the current portion of operating lease liabilities recognized in connection with our transition to ASC 842. See Note 4, Leases.

(b) The decreases in unfavorable leases and accrued lease straight-lining liability reflect the reclassification of unfavorable leases and lease straight-lining liability where we are the lessee in the underlying operating lease to the right-of-use assets recorded for the underlying lease in connection with our transition to ASC 842. See Note 4, Leases.

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Note 10. Long-Term Debt

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

	As of
	June 30, 2019			December 31, 2018
Term Loan Facility (due February 17, 2024)	$	6,305		$	6,338
2017 4.25% Senior Notes (due May 15, 2024)	1,500			1,500
2015 4.625% Senior Notes (due January 15, 2022)	1,250			1,250
2017 5.00% Senior Notes (due October 15, 2025)	2,800			2,800
Other (a)	80			150
Less: unamortized deferred financing costs and deferred issue discount	(133		)	(145		)
Total debt, net	11,802			11,893
Less: current maturities of debt	(65		)	(70		)
Total long-term debt	$	11,737		$	11,823

(a) The decrease in Other reflects the de-recognition of obligations associated with build-to-suit leases recorded under the Previous Standard. Liabilities associated with build-to-suit leases were remeasured and recorded as finance lease liabilities in conjunction with our transition to ASC 842.

Revolving Credit Facility

As of June 30, 2019, we had no amounts outstanding under our senior secured revolving credit facility (the "Revolving Credit Facility"). Funds available under the Revolving Credit Facility may be used to repay other debt, finance debt or 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. As of June 30, 2019, we had $2 million of letters of credit issued against the Revolving Credit Facility, and our borrowing availability was $498 million.

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 (increased from C$100 million during the three months ended June 30, 2019) 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. As of June 30, 2019, we had outstanding C$100 million under the TH Facility with a weighted average interest rate of 3.36%.

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 billions):

	As of
	June 30, 2019		December 31, 2018
Fair value of our variable term debt and senior notes	$	12	$	11
Principal carrying amount of our variable term debt and senior notes	12		12

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Interest Expense, net

Interest expense, net consists of the following (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Debt (a)	$	128		$	120		$	252		$	250
Finance lease obligations	6			6			11			12
Amortization of deferred financing costs and debt issuance discount	8			7			15			14
Interest income	(5		)	(3		)	(9		)	(6		)
Interest expense, net	$	137		$	130		$	269		$	270

(a) Amount includes $19 million and $20 million benefit during the three months ended June 30, 2019 and 2018, respectively, and $37 million and $24 million benefit during the six months ended June 30, 2019 and 2018, respectively, from our adoption of a new hedge accounting standard in 2018.

Note 11. Income Taxes

Our effective tax rate was 27.4% and 23.4% for the three and six months ended June 30, 2019. The effective tax rate during these periods reflects a $37 million increase in the provision for unrecognized tax benefits related to a prior restructuring transaction that is not applicable to ongoing operations which increased the effective tax rate by 10.4% and 5.6% during the three and six months ended June 30, 2019, respectively. The effective tax rate during these periods also reflects the mix of income from multiple tax jurisdictions, the impact of internal financing arrangements and stock option exercises. Benefits from stock option exercises reduced the effective tax rate by 4.0% and 4.1% for the three and six months ended June 30, 2019, respectively.

Our effective tax rate was 15.7% and 9.2% for the three and six months ended June 30, 2018. The effective tax rate during these periods was primarily a result of the mix of income from multiple tax jurisdictions, the benefit from reserve releases due to audit settlements and the realignment of various internal financing arrangements. In addition, benefits from stock option exercises reduced the effective tax rate by 0.6% and 10.1% for the three and six months ended June 30, 2018, respectively.

Note 12. Shareholders’ Equity

Noncontrolling Interests

The holders of Partnership exchangeable units held an economic interest of approximately 44.8% and 45.2% in Partnership common equity through the ownership of 207,337,076 and 207,523,591 Partnership exchangeable units as of June 30, 2019 and December 31, 2018, respectively.

During the six months ended June 30, 2019, Partnership exchanged 186,515 Partnership exchangeable units, pursuant to exchange notices received. In accordance with the terms of the partnership agreement, Partnership satisfied the exchange notices by exchanging these Partnership exchangeable units for the same number of newly issued RBI common shares. The exchanges represented increases in our ownership interest in Partnership and were accounted for as equity transactions, with no gain or loss recorded in the accompanying condensed consolidated statement of operations. 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.

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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, 2018	$	253		$	(15	)	$	(1,038	)	$	(800	)
Foreign currency translation adjustment	—			—			358			358
Net change in fair value of derivatives, net of tax	(207		)	—			—			(207		)
Amounts reclassified to earnings of cash flow hedges, net of tax	2			—			—			2
Amounts attributable to noncontrolling interests	93			—			(163		)	(70		)
Balance at June 30, 2019	$	141		$	(15	)	$	(843	)	$	(717	)

Note 13. Derivative Instruments

Disclosures about Derivative Instruments and Hedging Activities

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

Interest Rate Swaps

During 2018, we entered into a series of receive-variable, pay-fixed interest rate swaps with a notional value of $3,500 million to hedge the variability in the interest payments on a portion of our senior secured term loan facility (the "Term Loan Facility") beginning March 29, 2018 through the expiration of the final swap on February 17, 2024, resetting each March. At inception, these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value are recorded in AOCI and reclassified into earnings during the period in which the hedged forecasted transaction affects earnings.

During 2015, we entered into a series of receive-variable, pay-fixed interest rate swaps with a notional value of $2,500 million to hedge the variability in the interest payments on a portion of our Term Loan Facility beginning May 28, 2015. All of these interest rate swaps were settled on April 26, 2018 for an insignificant cash receipt. At inception, these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value were recorded in AOCI and reclassified into earnings during the period in which the hedged forecasted transaction affects earnings.

During 2015, we settled certain interest rate swaps and recognized a net unrealized loss of $85 million in AOCI at the date of settlement. This amount gets reclassified into Interest expense, net as the original hedged forecasted transaction affects earnings. The amount of pre-tax losses in AOCI as of June 30, 2019 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 June 30, 2019, we had outstanding cross-currency rate swap contracts between the Canadian dollar and U.S. dollar and the Euro and U.S. dollar that have been designated as net investment hedges of a portion of our equity in foreign operations in those currencies. The component of the gains and losses on our net investment in these designated foreign operations driven by changes in foreign exchange rates are economically offset by movements in the fair value of our cross-currency swap contracts. The fair value of the swaps is calculated each period with changes in fair value reported in AOCI, net of tax. Such amounts will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying foreign operations.

At June 30, 2019, 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.

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At June 30, 2019, we also 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, during 2018 we entered into cross-currency rate swaps in which we receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $400 million through the maturity date of February 17, 2024. At inception, these cross-currency rate swaps were designated as a hedge 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 dedesignated and subsequently redesignated 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 June 30, 2019, 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 $130 million with maturities to August 2020. We have designated these instruments as cash flow hedges, and as such, the unrealized changes in market value of effective hedges are recorded in AOCI and are reclassified into earnings during the period in which the hedged forecasted transaction affects earnings.

Credit Risk

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

Credit-Risk Related Contingent Features

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

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Quantitative Disclosures about Derivative Instruments and Fair Value Measurements

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

	Gain or (Loss) Recognized in Other Comprehensive Income (Loss)
	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Derivatives designated as cash flow hedges(1)
Interest rate swaps	$	(77	)	$	(5	)	$	(121	)	$	24
Forward-currency contracts	$	(2	)	$	3		$	(4	)	$	13
Derivatives designated as net investment hedges
Cross-currency rate swaps	$	(53	)	$	143		$	(155	)	$	154

(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 June 30,						Six Months Ended June 30,
		2019			2018			2019			2018
Derivatives designated as cash flow hedges
Interest rate swaps	Interest expense, net	$	(6	)	$	(5	)	$	(7	)	$	(11	)
Forward-currency contracts	Cost of sales	$	2		$	—		$	4		$	3
	Location of Gain or (Loss) Recognized in Earnings	Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing)
		Three Months Ended June 30,						Six Months Ended June 30,
		2019			2018			2019			2018
Derivatives designated as net investment hedges
Cross-currency rate swaps	Interest expense, net	$	19		$	20		$	37		$	24

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	Fair Value as of
	June 30, 2019		December 31, 2018		Balance Sheet Location
Assets:
Derivatives designated as cash flow hedges
Foreign currency	$	—	$	7	Prepaids and other current assets
Derivatives designated as net investment hedges
Foreign currency	15		58		Other assets, net
Total assets at fair value	$	15	$	65
Liabilities:
Derivatives designated as cash flow hedges
Interest rate	$	193	$	72	Other liabilities, net
Foreign currency	1		—		Other accrued liabilities
Derivatives designated as net investment hedges
Foreign currency	204		107		Other liabilities, net
Total liabilities at fair value	$	398	$	179

Note 14. Other Operating Expenses (Income), net

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings	$	(10	)	$	3		$	(7	)	$	10
Litigation settlements (gains) and reserves, net	—			—			—			(6		)
Net losses (gains) on foreign exchange	12			(33		)	(3		)	(16		)
Other, net	1			—			(4		)	(5		)
Other operating expenses (income), net	$	3		$	(30	)	$	(14	)	$	(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.

Litigation settlements (gains) and reserves, net primarily reflects accruals and proceeds received in connection with litigation matters.

Net losses (gains) on foreign exchange is primarily related to revaluation of foreign denominated assets and liabilities.

Note 15. Commitments and Contingencies

Litigation

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

In March 2019, the Company settled the two class action lawsuits filed in the Ontario Superior Court of Justice against The TDL Group Corp., a subsidiary of the Company (“TDL”), and certain other defendants, as described in the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2019. The court approved the settlement on April 29, 2019.

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Under the terms of the settlement, TDL is contributing C$6 million to the Tim Hortons Advertising Fund in Canada over two years, such amount to be spent on marketing activities. In addition, TDL has paid C$6 million for legal, administrative and other third-party expenses. These amounts were accrued by TDL during 2018.

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 the Company, 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 the Company, 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.

In July 2019, a class action complaint was filed against 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.

Note 16. 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):

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	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues by operating segment:
TH	$	842	$	823	$	1,591	$	1,586
BK	447		418		858		808
PLK	111		102		217		203
Total revenues	$	1,400	$	1,343	$	2,666	$	2,597

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues by country (a):
Canada	$	764	$	746	$	1,440	$	1,438
United States	479		450		923		871
Other	157		147		303		288
Total revenues	$	1,400	$	1,343	$	2,666	$	2,597

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

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Our measure of segment income is Adjusted EBITDA. Adjusted EBITDA represents earnings (net income or loss) before interest expense, net, (gain) 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 fees and expenses associated with the Popeyes Acquisition (“PLK Transaction costs”), 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 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 (loss) consists of the following (in millions):

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Segment income:
TH	$	287	$	286		$	524		$	531
BK	252		236			474			450
PLK	41		40			82			79
Adjusted EBITDA	580		562			1,080			1,060
Share-based compensation and non-cash incentive compensation expense	19		16			44			31
PLK Transaction costs	—		5			—			10
Corporate restructuring and tax advisory fees	11		7			17			14
Office centralization and relocation costs	2		12			6			12
Impact of equity method investments (a)	9		4			10			(6		)
Other operating expenses (income), net	3		(30		)	(14		)	(17		)
EBITDA	536		548			1,017			1,016
Depreciation and amortization	45		46			92			93
Income from operations	491		502			925			923
Interest expense, net	137		130			269			270
Income tax expense	97		58			153			60
Net income	$	257	$	314		$	503		$	593

(a) Represents (i) (income) loss from equity method investments and (ii) cash distributions received from our equity method investments. Cash distributions received from our equity method investments are included in segment income.

Note 17. Subsequent Events

Dividends

On July 3, 2019, we paid a cash dividend of $0.50 per common share to common shareholders of record on June 17, 2019. On such date, Partnership also made a distribution in respect of each Partnership exchangeable unit in the amount of $0.50 per exchangeable unit to holders of record on June 17, 2019.

Our board of directors has declared a cash dividend of $0.50 per common share, which will be paid on October 3, 2019 to common shareholders of record on September 17, 2019. Partnership will also make a distribution in respect of each Partnership exchangeable unit in the amount of $0.50 per Partnership exchangeable unit, and the record date and payment date for distributions on Partnership exchangeable units are the same as the record date and payment date set forth above.

*****

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

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

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

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

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

Overview

We are one of the world’s largest quick service restaurant (“QSR”) companies with more than $32 billion in system-wide sales and over 26,000 restaurants in more than 100 countries and U.S. territories as of June 30, 2019. Our Tim Hortons®, Burger King®, and Popeyes® brands have similar franchised business models with complementary daypart mixes and product platforms. Our three iconic brands are managed independently while benefiting from global scale and sharing of best practices.

Tim Hortons restaurants are quick service restaurants with a menu that includes premium blend coffee, tea, espresso-based hot and cold specialty drinks, fresh baked goods, including donuts, Timbits®, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and more. Burger King restaurants are quick service restaurants that feature flame-grilled hamburgers, chicken and other specialty sandwiches, french fries, soft drinks, and other affordably-priced food items. Popeyes restaurants are quick service restaurants featuring a unique “Louisiana” style menu that includes fried chicken, chicken tenders, fried shrimp and other seafood, red beans and rice, and other regional items.

We have three operating and reportable segments: (1) Tim Hortons (“TH”); (2) Burger King (“BK”); and (3) Popeyes Louisiana Kitchen (“PLK”). 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.

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Operating Metrics

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

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

• Comparable sales refers to the percentage change in restaurant sales in one period from the same prior year period for restaurants that have been open for 13 months or longer for TH and BK and 17 months or longer for PLK.

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

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

• Net restaurant growth reflects the percentage change in restaurant count (openings, net of closures) over a trailing twelve-month period, divided by the restaurant count at the beginning of the trailing twelve month period.

Recent Events and Factors Affecting Comparability

Transition to New Lease Accounting Standard

We transitioned to Accounting Standards Codification Topic 842, Leases (“ASC 842”), effective January 1, 2019 on a modified retrospective basis using the effective date transition method. Our consolidated financial statements reflect the application of ASC 842 guidance beginning in 2019, while our consolidated financial statements for prior periods were prepared under the guidance of a previously applicable accounting standard.

The most significant effects of this transition that affect comparability of our results of operations between 2019 and 2018 include the following:

• Beginning on January 1, 2019, we record lease income and lease cost on a gross basis for lessee reimbursements of costs such as property taxes and maintenance when we are the lessor in the lease. Although there was no net impact to our consolidated statement of operations from this change, the presentation resulted in total increases to both franchise and property revenues and franchise and property expenses of $33 million ($22 million related to our TH segment, $10 million related to our BK segment and $1 million related to our PLK segment) during the three months ended June 30, 2019 and $67 million ($43 million related to our TH segment, $23 million related to our BK segment and $1 million related to our PLK segment) during the six months ended June 30, 2019, compared to the three and six months ended June 30, 2018, respectively, when such amounts were recorded on a net basis.

• As described in Note 4, Leases, to the accompanying unaudited condensed consolidated financial statements, the transition provisions of ASC 842 required the reclassification of favorable lease assets and unfavorable lease liabilities where we are the lessee in the underlying lease to the right-of-use (“ROU”) asset recorded for the underlying lease. As a result of this reclassification, the amortization period for certain favorable lease assets and unfavorable lease liabilities was reduced, resulting in $2 million and $4 million net increases in non-cash amortization expense during the three and six months ended June 30, 2019, respectively, compared to the three and six months ended June 30, 2018, respectively. Favorable lease assets and unfavorable lease liabilities associated with leases where we are the lessor were not impacted by our transition to ASC 842.

Please refer to Note 4, Leases, to the accompanying unaudited condensed consolidated financial statements for further details of the effects of this change in accounting principle.

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PLK Transaction Costs

On March 27, 2017, we completed the acquisition of Popeyes Louisiana Kitchen, Inc. (the "Popeyes Acquisition"). In connection with the Popeyes Acquisition, we incurred certain non-recurring fees and expenses (“PLK Transaction costs”) totaling $5 million and $10 million during the three and six months ended June 30, 2018, respectively, consisting primarily of professional fees and compensation related expenses, all of which are classified as selling, general and administrative expenses in our condensed consolidated statements of operations. We did not incur any PLK Transaction costs during the three and six months ended June 30, 2019.

Tax Reform

In December 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”) that significantly revised the U.S. tax code generally effective January 1, 2018 by, among other changes, lowering the federal corporate income tax rate from 35% to 21%, limiting deductibility of interest expense and performance based incentive compensation and implementing a modified territorial tax system. As a Canadian entity, we generally would be classified as a foreign entity (and, therefore, a non-U.S. tax resident) under general rules of U.S. federal income taxation. However, we have subsidiaries subject to U.S. federal income taxation and therefore the Tax Act impacted our consolidated results of operations in 2018 and the current period, and is expected to continue to impact our consolidated results of operations in future periods.

We recorded $11 million and $7 million of costs during the three months ended June 30, 2019 and 2018, respectively, and $17 million and $14 million of costs during the six months ended June 30, 2019 and 2018, respectively, which are classified as selling, general and administrative expenses in our condensed consolidated statements of operations, arising primarily from professional advisory and consulting services associated with corporate restructuring initiatives related to the interpretation and implementation of the Tax Act (“Corporate restructuring and tax advisory fees”). We expect to continue to incur additional Corporate restructuring and tax advisory fees related to the Tax Act in 2019.

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, we incurred certain non-operational expenses ("Office centralization and relocation costs") totaling $2 million and $12 million during the three months ended June 30, 2019 and 2018, respectively, and $6 million and $12 million during the six months ended June 30, 2019 and 2018, respectively, consisting primarily of moving costs and relocation-driven compensation expenses, which are classified as selling, general and administrative expenses in our condensed consolidated statements of operations. We do not expect to incur additional Office centralization and relocation costs.

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Results of Operations for the Three and Six Months Ended June 30, 2019 and 2018

Tabular amounts in millions of U.S. dollars unless noted otherwise. Segment income may not calculate exactly due to rounding.

Consolidated	Three Months Ended June 30,					Variance			FX Impact (a)			Variance Excluding FX Impact			Six Months Ended June 30,						Variance			FX Impact (a)			Variance Excluding FX Impact
	2019		2018			Favorable / (Unfavorable)									2019			2018			Favorable / (Unfavorable)
Revenues:
Sales	$	589	$	586		$	3		$	(17	)	$	20		$	1,111		$	1,134		$	(23	)	$	(39	)	$	16
Franchise and property revenues	811		757			54			(18		)	72			1,555			1,463			92			(41		)	133
Total revenues	1,400		1,343			57			(35		)	92			2,666			2,597			69			(80		)	149
Operating costs and expenses:
Cost of sales	453		449			(4		)	13			(17		)	859			878			19			30			(11		)
Franchise and property expenses	135		103			(32		)	3			(35		)	268			207			(61		)	6			(67		)
Selling, general and administrative expenses	316		318			2			4			(2		)	628			619			(9		)	9			(18		)
(Income) loss from equity method investments	2		1			(1		)	—			(1		)	—			(13		)	(13		)	(3		)	(10		)
Other operating expenses (income), net	3		(30		)	(33		)	(3		)	(30		)	(14		)	(17		)	(3		)	(2		)	(1		)
Total operating costs and expenses	909		841			(68		)	17			(85		)	1,741			1,674			(67		)	40			(107		)
Income from operations	491		502			(11		)	(18		)	7			925			923			2			(40		)	42
Interest expense, net	137		130			(7		)	—			(7		)	269			270			1			—			1
Income before income taxes	354		372			(18		)	(18		)	—			656			653			3			(40		)	43
Income tax expense	97		58			(39		)	1			(40		)	153			60			(93		)	2			(95		)
Net income	$	257	$	314		$	(57	)	$	(17	)	$	(40	)	$	503		$	593		$	(90	)	$	(38	)	$	(52	)

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

TH Segment	Three Months Ended June 30,				Variance			FX Impact (a)			Variance Excluding FX Impact			Six Months Ended June 30,				Variance			FX Impact (a)			Variance Excluding FX Impact
	2019		2018		Favorable / (Unfavorable)									2019		2018		Favorable / (Unfavorable)
Revenues:
Sales	$	551	$	548	$	3		$	(17	)	$	20		$	1,034	$	1,056	$	(22	)	$	(39	)	$	17
Franchise and property revenues	291		275		16			(8		)	24			557		530		27			(19		)	46
Total revenues	842		823		19			(25		)	44			1,591		1,586		5			(58		)	63
Cost of sales	420		417		(3		)	13			(16		)	792		813		21			30			(9		)
Franchise and property expenses	90		68		(22		)	2			(24		)	177		138		(39		)	5			(44		)
Segment SG&A	77		80		3			3			—			159		162		3			6			(3		)
Segment depreciation and amortization (b)	26		26		—			1			(1		)	52		52		—			2			(2		)
Segment income (c)	287		286		1			(9		)	10			524		531		(7		)	(20		)	13

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

(c) TH segment income includes $5 million and $3 million of cash distributions received from equity method investments for the three months ended June 30, 2019 and 2018, respectively. TH segment income includes $8 million and $6 million of cash distributions received from equity method investments for the six months ended June 30, 2019 and 2018, respectively.

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BK Segment	Three Months Ended June 30,				Variance			FX Impact (a)			Variance Excluding FX Impact			Six Months Ended June 30,				Variance			FX Impact (a)			Variance Excluding FX Impact
	2019		2018		Favorable / (Unfavorable)									2019		2018		Favorable / (Unfavorable)
Revenues:
Sales	$	19	$	19	$	—		$	—		$	—		$	38	$	38	$	—		$	—		$	—
Franchise and property revenues	428		399		29			(9		)	38			820		770		50			(21		)	71
Total revenues	447		418		29			(9		)	38			858		808		50			(21		)	71
Cost of sales	17		17		—			—			—			35		33		(2		)	—			(2		)
Franchise and property expenses	42		32		(10		)	1			(11		)	85		64		(21		)	1			(22		)
Segment SG&A	149		146		(3		)	1			(4		)	290		286		(4		)	2			(6		)
Segment depreciation and amortization (b)	12		12		—			—			—			25		24		(1		)	—			(1		)
Segment income (d)	252		236		16			(8		)	24			474		450		24			(19		)	43

(d) BK segment income includes $1 million of cash distributions received from equity method investments for the three months ended June 30, 2019. No cash distributions were received from equity method investments for the three months ended June 30, 2018. BK segment income includes $2 million and $1 million of cash distributions received from equity method investments for the six months ended June 30, 2019 and 2018, respectively.

PLK Segment	Three Months Ended June 30,				Variance			FX Impact (a)			Variance Excluding FX Impact			Six Months Ended June 30,				Variance			FX Impact (a)			Variance Excluding FX Impact
	2019		2018		Favorable / (Unfavorable)									2019		2018		Favorable / (Unfavorable)
Revenues:
Sales	$	19	$	19	$	—		$	—		$	—		$	39	$	40	$	(1	)	$	—		$	(1	)
Franchise and property revenues	92		83		9			(1		)	10			178		163		15			(1		)	16
Total revenues	111		102		9			(1		)	10			217		203		14			(1		)	15
Cost of sales	16		15		(1		)	—			(1		)	32		32		—			—			—
Franchise and property expenses	3		3		—			—			—			6		5		(1		)	—			(1		)
Segment SG&A	54		47		(7		)	—			(7		)	103		93		(10		)	—			(10		)
Segment depreciation and amortization (b)	3		2		(1		)	—			(1		)	6		5		(1		)	—			(1		)
Segment income	41		40		1			(1		)	2			82		79		3			(1		)	4

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	Three Months Ended June 30,						Six Months Ended June 30,
Key Business Metrics	2019			2018			2019			2018
System-wide sales growth
TH	1.6		%	2.2		%	1.1		%	2.1		%
BK	9.8		%	8.4		%	9.0		%	9.8		%
PLK	8.8		%	10.7		%	7.8		%	10.8		%
Consolidated	7.9		%	7.3		%	7.2		%	8.2		%
System-wide sales
TH	$	1,716		$	1,742		$	3,263		$	3,350
BK	$	5,717		$	5,403		$	11,006		$	10,552
PLK	$	1,012		$	938		$	1,967		$	1,841
Consolidated	$	8,445		$	8,083		$	16,236		$	15,743
Comparable sales
TH	0.5		%	—		%	—		%	(0.1		)%
BK	3.6		%	1.8		%	2.9		%	2.8		%
PLK	3.0		%	2.9		%	1.8		%	3.1		%
							As of June 30,
							2019			2018
Net restaurant growth
TH							1.6		%	3.0		%
BK							5.8		%	6.4		%
PLK							6.1		%	7.5		%
Consolidated							5.0		%	5.8		%
Restaurant count
TH							4,872			4,794
BK							18,008			17,022
PLK							3,156			2,975
Consolidated							26,036			24,791

Comparable Sales

TH comparable sales were 0.5% during the three months ended June 30, 2019, including Canada comparable sales of 0.7%. TH comparable sales were flat during the six months ended June 30, 2019, including Canada comparable sales of 0.2%.

BK comparable sales were 3.6% during the three months ended June 30, 2019, including U.S. comparable sales of 0.5%. BK comparable sales were 2.9% during the six months ended June 30, 2019, including U.S. comparable sales of 0.5%.

PLK comparable sales were 3.0% during the three months ended June 30, 2019, including U.S. comparable sales of 2.9%. PLK comparable sales were 1.8% during the six months ended June 30, 2019, including U.S. comparable sales of 1.7%.

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Sales and Cost of Sales

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

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

During the three months ended June 30, 2019, the increase in sales was driven by an increase of $20 million in our TH segment, mostly offset by an unfavorable FX Impact of $17 million. The increase in our TH segment was driven by an increase in supply chain sales.

During the six months ended June 30, 2019, the decrease in sales was driven by an unfavorable FX Impact of $39 million, partially offset by an increase of $17 million in our TH segment. The increase in our TH segment was driven by a $24 million increase in supply chain sales, partially offset by a decrease of $7 million in our TH Company restaurant revenue, primarily from Company restaurant refranchisings and the conversion of Restaurant VIEs to franchise restaurants in prior periods.

During the three months ended June 30, 2019, the increase in cost of sales was driven primarily by an increase of $16 million in our TH segment, mostly offset by a $13 million favorable FX Impact. The increase in our TH segment was driven by an increase of $18 million in supply chain cost of sales due to the increase in supply chain sales discussed above.

During the six months ended June 30, 2019, the decrease in cost of sales was driven primarily by a $30 million favorable FX Impact, partially offset by an increase of $9 million in our TH segment and an increase of $2 million in our BK segment. The increase in our TH segment was driven by an increase of $16 million in supply chain cost of sales due to the increase in supply chain sales discussed above, partially offset by a decrease of $7 million in Company restaurant cost of sales, primarily from Company restaurant refranchisings and the conversion of Restaurant VIEs to franchise restaurants in prior periods.

Franchise and Property

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

During the three months ended June 30, 2019, the increase in franchise and property revenues was driven by an increase of $38 million in our BK segment, an increase of $24 million in our TH segment, and an increase of $10 million in our PLK segment, partially offset by an $18 million unfavorable FX Impact. The increases in our BK and PLK segments were primarily driven by increases in royalties as a result of system-wide sales growth.

During the six months ended June 30, 2019, the increase in franchise and property revenues was driven by an increase of $71 million in our BK segment, an increase of $46 million in our TH segment, and an increase of $16 million in our PLK segment, partially offset by a $41 million unfavorable FX Impact. The increases in our BK and PLK segments were primarily driven by increases in royalties as a result of system-wide sales growth.

Additionally, the increase in franchise and property revenues in all of our segments during the three and six months ended June 30, 2019 reflected the gross recognition of property income from lessee reimbursements of costs such as property taxes and maintenance when we are the lessor in the lease as a result of the application of ASC 842 beginning January 1, 2019.

During the three months ended June 30, 2019, the increase in franchise and property expenses was driven by an increase of $24 million in our TH segment and an increase of $11 million in our BK segment, partially offset by a $3 million favorable FX Impact. During the six months ended June 30, 2019, the increase in franchise and property expenses was driven by an increase of $44 million in our TH segment, an increase of $22 million in our BK segment, and an increase of $1 million in our PLK segment, partially offset by a $6 million favorable FX Impact. The increase in all of our segments during the three and six months ended June 30, 2019 was driven by the gross recognition of property expense for costs such as property taxes and maintenance paid by us and reimbursed by lessees when we are the lessor in the lease as a result of the application of ASC 842 beginning January 1, 2019.

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Selling, General and Administrative Expenses

Our selling, general and administrative expenses were comprised of the following:

	Three Months Ended June 30,				Variance					Six Months Ended June 30,				Variance
					$			%						$			%
	2019		2018		Favorable / (Unfavorable)					2019		2018		Favorable / (Unfavorable)
Segment SG&A:
TH	$	77	$	80	$	3		3.8	%	$	159	$	162	$	3		1.9	%
BK	149		146		(3		)	(2.1	)%	290		286		(4		)	(1.4	)%
PLK	54		47		(7		)	(14.9	)%	103		93		(10		)	(10.8	)%
Share-based compensation and non-cash incentive compensation expense	19		16		(3		)	(18.8	)%	44		31		(13		)	(41.9	)%
Depreciation and amortization	4		5		1			20.0	%	9		11		2			18.2	%
PLK Transaction costs	—		5		5			NM		—		10		10			NM
Corporate restructuring and tax advisory fees	11		7		(4		)	(57.1	)%	17		14		(3		)	(21.4	)%
Office centralization and relocation costs	2		12		10			83.3	%	6		12		6			50.0	%
Selling, general and administrative expenses	$	316	$	318	$	2		0.6	%	$	628	$	619	$	(9	)	(1.5	)%

Segment selling, general and administrative expenses (“Segment SG&A”) include segment selling expenses, which consist primarily of advertising fund expenses, and segment general and administrative expenses, which are comprised primarily of salary and employee-related costs for non-restaurant employees, professional fees, information technology systems, and general overhead for our corporate offices. Segment SG&A excludes share-based compensation and non-cash incentive compensation expense, depreciation and amortization, PLK Transaction costs, Corporate restructuring and tax advisory fees and Office centralization and relocation costs.

During the three and six months ended June 30, 2019, the increase in share-based compensation and non-cash incentive compensation expense was primarily due to an increase in the number of equity awards granted during 2019 and an increase associated with equity award modifications in the six months ended June 30, 2019.

(Income) Loss from Equity Method Investments

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

The change in (income) loss from equity method investments during the six months ended June 30, 2019 was primarily driven by the recognition of a $20 million non-cash dilution gain during 2018 on the initial public offering by one of our equity method investees and a decrease in equity method investment net losses that we recognized during the current year.

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Other Operating Expenses (Income), net

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings	$	(10	)	$	3		$	(7	)	$	10
Litigation settlements (gains) and reserves, net	—			—			—			(6		)
Net losses (gains) on foreign exchange	12			(33		)	(3		)	(16		)
Other, net	1			—			(4		)	(5		)
Other operating expenses (income), net	$	3		$	(30	)	$	(14	)	$	(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.

Litigation settlements (gains) and reserves, net primarily reflects payments made and proceeds received in connection with litigation matters.

Net losses (gains) on foreign exchange is primarily related to revaluation of foreign denominated assets and liabilities.

Interest Expense, net

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Interest expense, net	$	137		$	130		$	269		$	270
Weighted average interest rate on long-term debt	5.2		%	4.9		%	5.1		%	4.8		%

During the three months ended June 30, 2019, interest expense, net increased primarily due to an increase in the weighted average interest rate in the current year.

During the six months ended June 30, 2019, interest expense, net decreased primarily due to a $37 million benefit during the six months ended June 30, 2019 compared to a $24 million benefit during the period from March 15, 2018 to June 30, 2018 from our adoption of a new hedge accounting standard in 2018, partially offset by an increase in the weighted average interest rate in the current year.

Income Tax Expense

Our effective tax rate was 27.4% and 15.7% for the three months ended June 30, 2019 and 2018, respectively. The effective tax rate for the three months ended June 30, 2019 reflects a $37 million increase in the provision for unrecognized tax benefits related to a prior restructuring transaction that is not applicable to ongoing operations which increased the effective tax rate by 10.4%. The increase in our effective tax rate also reflects a benefit from reserve releases in 2018 due to audit settlements, partially offset by the benefits in 2019 of internal financing arrangements and a higher tax benefit from stock option exercises. The effective tax rate was reduced by 4.0% and 0.6% for the three months ended June 30, 2019 and 2018, respectively, as a result of benefits from stock option exercises. We expect quarter-to-quarter volatility in the impact of stock option exercises on our effective tax rate based on fluctuations in stock option exercises.

Our effective tax rate was 23.4% and 9.2% for the six months ended June 30, 2019 and 2018, respectively. The effective tax rate for the six months ended June 30, 2019 reflects a $37 million increase in the provision discussed above which increased our effective tax rate by 5.6% for the period. The increase in our effective tax rate also reflects a lower tax benefit from stock option exercises and the benefit from reserve releases in 2018 due to audit settlements, partially offset by the benefits of internal financing arrangements in 2019. The effective tax rate was reduced by 4.1% and 10.1% for the six months

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ended June 30, 2019 and 2018, respectively, as a result of benefits from stock option exercises.

Net Income

We reported net income of $257 million for the three months ended June 30, 2019, compared to net income of $314 million for the three months ended June 30, 2018. The decrease in net income is primarily due to a $39 million increase in income tax expense, a $33 million unfavorable change in the results from other operating expenses (income), net, a $7 million increase in interest expense, net, a $5 million unfavorable change from the impact of equity method investments, a $4 million increase in Corporate restructuring and tax advisory fees and a $3 million increase in share-based compensation and non-cash incentive compensation expense. These factors were partially offset by an $18 million increase in segment income in all of our segments, a $10 million decrease in Office centralization and relocation costs and the non-recurrence of $5 million of PLK Transaction costs incurred in the prior period.

We reported net income of $503 million for the six months ended June 30, 2019, compared to net income of $593 million for the six months ended June 30, 2018. The decrease in net income is primarily due to a $93 million increase in income tax expense, a $16 million unfavorable change from the impact of equity method investments, a $13 million increase in share-based compensation and non-cash incentive compensation expense, a $7 million decrease in TH segment income, a $3 million increase in Corporate restructuring and tax advisory fees and a $3 million unfavorable change in the results from other operating expenses (income), net. These factors were partially offset by a $24 million increase in BK segment income, the non-recurrence of $10 million of PLK Transaction costs incurred in the prior period, a $6 million decrease in Office centralization and relocation costs, and a $3 million increase in PLK segment income.

Non-GAAP Reconciliations

The table below contains information regarding EBITDA and Adjusted EBITDA, which are non-GAAP measures. These non-GAAP measures do not have a standardized meaning under U.S. GAAP and may differ from similar captioned measures of other companies in our industry. We believe that these non-GAAP measures are useful to investors in assessing our operating performance, as they provide them with the same tools that management uses to evaluate our performance and is responsive to questions we receive from both investors and analysts. By disclosing these non-GAAP measures, we intend to provide investors with a consistent comparison of our operating results and trends for the periods presented. EBITDA is defined as earnings (net income or loss) before interest expense, net, loss on early extinguishment of debt, income tax expense, and depreciation and amortization and is used by management to measure operating performance of the business. Adjusted EBITDA is defined as EBITDA excluding the non-cash impact of share-based compensation and non-cash incentive compensation expense and (income) loss from equity method investments, net of cash distributions received from equity method investments, as well as other operating expenses (income), net. Other specifically identified costs associated with non-recurring projects are also excluded from Adjusted EBITDA, including PLK Transaction costs associated with the Popeyes Acquisition, Corporate restructuring and tax advisory fees related to the interpretation and implementation of the Tax Act, including Treasury regulations proposed in late 2018, 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. Adjusted EBITDA, as defined above, also represents our measure of segment income for each of our three operating segments.

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	Three Months Ended June 30,					Variance					Six Months Ended June 30,						Variance
						$			%								$			%
	2019		2018			Favorable / (Unfavorable)					2019			2018			Favorable / (Unfavorable)
Segment income:
TH	$	287	$	286		$	1		0.3	%	$	524		$	531		$	(7	)	(1.3	)%
BK	252		236			16			6.5	%	474			450			24			5.3	%
PLK	41		40			1			3.9	%	82			79			3			3.8	%
Adjusted EBITDA	580		562			18			3.2	%	1,080			1,060			20			1.9	%
Share-based compensation and non-cash incentive compensation expense	19		16			(3		)	(18.8	)%	44			31			(13		)	(41.9	)%
PLK Transaction costs	—		5			5			NM		—			10			10			NM
Corporate restructuring and tax advisory fees	11		7			(4		)	(57.1	)%	17			14			(3		)	(21.4	)%
Office centralization and relocation costs	2		12			10			83.3	%	6			12			6			50.0	%
Impact of equity method investments (a)	9		4			(5		)	NM		10			(6		)	(16		)	NM
Other operating expenses (income), net	3		(30		)	(33		)	110.0	%	(14		)	(17		)	(3		)	17.6	%
EBITDA	536		548			(12		)	(2.2	)%	1,017			1,016			1			0.1	%
Depreciation and amortization	45		46			1			2.2	%	92			93			1			1.1	%
Income from operations	491		502			(11		)	(2.2	)%	925			923			2			0.2	%
Interest expense, net	137		130			(7		)	(5.4	)%	269			270			1			0.4	%
Income tax expense	97		58			(39		)	(67.2	)%	153			60			(93		)	(155.0	)%
Net income	$	257	$	314		$	(57	)	(18.2	)%	$	503		$	593		$	(90	)	(15.2	)%

NM - not meaningful

(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.

The increase in Adjusted EBITDA for the three months ended June 30, 2019 reflects the increases in segment income in all of our segments. The increase in Adjusted EBITDA for the six months ended June 30, 2019 reflects the increases in segment income in our BK and PLK segments, partially offset by a decrease in our TH segment.

The decrease in EBITDA for the three months ended June 30, 2019 is primarily due to unfavorable results from other operating expenses (income), net in the current period, unfavorable results from the impact of equity method investments, an increase in Corporate restructuring and tax advisory fees, and an increase in share-based compensation and non-cash incentive compensation expense, partially offset by increases in segment income in all our segments, a decrease in Office centralization and relocation costs, and the non-recurrence of PLK Transaction costs.

The increase in EBITDA for the six months ended June 30, 2019 is primarily due to an increase in segment income in our BK and PLK segments, the non-recurrence of PLK Transaction costs and a decrease in Office centralization and relocation cost, partially offset by unfavorable results from the impact of equity method investments, an increase in share-based compensation and non-cash incentive compensation expense, a decrease in segment income in our TH segment, an increase in Corporate restructuring and tax advisory fees and unfavorable results from other operating expenses (income), net.

Liquidity and Capital Resources

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

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As of June 30, 2019, we had cash and cash equivalents of $1,028 million, working capital of $271 million and borrowing availability of $498 million under our Revolving Credit Facility. Based on our current level of operations and available cash, we believe our cash flow from operations, combined with availability under our Revolving Credit Facility, will provide sufficient liquidity to fund our current obligations, debt service requirements and capital spending over the next twelve months.

On August 2, 2016, our board of directors approved a share repurchase authorization that allows us to purchase up to $300 million of our common shares through July 2021. Repurchases under the Company’s authorization will be made in the open market or through privately negotiated transactions. On August 2, 2019, we announced that the Toronto Stock Exchange (the “TSX”) had accepted the notice of our intention to renew the normal course issuer bid. Under this normal course issuer bid, we are permitted to repurchase up to 24,853,565 common shares for the one-year period commencing on August 8, 2019 and ending on August 7, 2020, or earlier if we complete the repurchases prior to such date. Under our prior normal course issuer bid that commenced on August 8, 2018, we sought and received approval from the TSX to purchase up to 24,087,172 common shares and did not repurchase any common shares for cancellation in the past 12 months. Share repurchases under the normal course issuer bid will be made through the facilities of the TSX, the New York Stock Exchange (the “NYSE”) and/or other exchanges and alternative Canadian or foreign trading systems, if eligible, or by such other means as may be permitted by the TSX and/or the NYSE under applicable law. Shareholders may obtain a copy of the prior notice, free of charge, by contacting us.

Prior to the Tax Act, we provided deferred taxes on certain undistributed foreign earnings. Under our transition to a modified territorial tax system whereby all previously untaxed undistributed foreign earnings are subject to a transition tax charge at reduced rates and future repatriations of foreign earnings will generally be exempt from U.S. tax, we wrote off the existing deferred tax liability on undistributed foreign earnings and recorded the impact of the new transition tax charge on foreign earnings during the fourth quarter of 2017. We will continue to monitor available evidence and our plans for foreign earnings and expect to continue to provide any applicable deferred taxes based on the tax liability or withholding taxes that would be due upon repatriation of amounts not considered permanently reinvested.

Debt Instruments and Debt Service Requirements

As of June 30, 2019, our long-term debt consists primarily of borrowings under our Credit Facilities, amounts outstanding under our 2017 4.25% Senior Notes, 2015 4.625% Senior Notes, 2017 5.00% Senior Notes and TH Facility (each as defined below), and obligations under finance leases. For further information about our long-term debt, see Note 10 to the accompanying unaudited condensed consolidated financial statements included in this report.

Credit Facilities

As of June 30, 2019, there was $6,305 million outstanding principal amount under our senior secured term loan facility (the "Term Loan Facility") with an interest rate of 4.65%. Based on the amounts outstanding under the Term Loan Facility and LIBOR as of June 30, 2019, subject to a floor of 1.00%, required debt service for the next twelve months is estimated to be approximately $297 million in interest payments and $65 million in principal payments. In addition, based on LIBOR as of June 30, 2019, net cash settlements that we expect to pay on our $3,500 million interest rate swap are estimated to be approximately $9 million for the next twelve months.

As of June 30, 2019, we had no amounts outstanding under our senior secured revolving credit facility (the "Revolving Credit Facility" and together with the Term Loan Facility, the "Credit Facilities"), had $2 million of letters of credit issued against the Revolving Credit Facility, and our borrowing availability was $498 million. Funds available under the Revolving Credit Facility may be used to repay other debt, finance debt or 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.

The interest rate applicable to borrowings under our Credit Facilities is, at our option, either (i) a base rate plus an applicable margin equal to 1.25% for the Term Loan Facility and ranging from 0.25% to 1.00%, depending on our leverage ratio, for the Revolving Credit Facility, or (ii) a Eurocurrency rate plus an applicable margin of 2.25% for the Term Loan Facility and ranging from 1.25% to 2.00%, depending on our leverage ratio, for the Revolving Credit Facility. Borrowings are subject to a floor of 2.00% for base rate borrowings and 1.00% for Eurocurrency rate borrowings.

Senior Notes

The Borrowers are party to (i) an indenture (the “2017 4.25% Senior Notes Indenture”) in connection with the issuance of $1,500 million of 4.25% first lien senior secured notes due May 15, 2024 (the “2017 4.25% Senior Notes”), (ii) an indenture (the “2015 4.625% Senior Notes Indenture”) in connection with the issuance of $1,250 million of 4.625% first lien senior notes due January 15, 2022 (the “2015 4.625% Senior Notes”) and (iii) an indenture (the “2017 5.00% Senior Notes Indenture”) in

41

connection with the issuance of $2,800 million of 5.00% second lien senior secured notes due October 15, 2025 (the “2017 5.00% Senior Notes”). No principal payments are due on the 2017 4.25% Senior Notes, 2015 4.625% Senior Notes and 2017 5.00% Senior Notes until maturity and interest is paid semi-annually.

Based on the amounts outstanding at June 30, 2019, required debt service for the next twelve months on all of the Senior Notes outstanding is approximately $262 million in interest payments.

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 (increased from C$100 million during the three months ended June 30, 2019) 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. As of June 30, 2019, we had outstanding C$100 million under the TH Facility with a weighted average interest rate of 3.36%.

Restrictions and Covenants

As of June 30, 2019, we were in compliance with all debt covenants under the Credit Facilities, the TH Facility, 2017 4.25% Senior Notes Indenture, 2017 5.00% Senior Notes Indenture and 2015 4.625% Senior Notes Indenture, and there were no limitations on our ability to draw on the remaining availability under our Revolving Credit Facility and TH Facility.

Cash Dividends

On July 3, 2019, we paid a dividend of $0.50 per common share and Partnership made a distribution in respect of each Partnership exchangeable unit in the amount of $0.50 per Partnership exchangeable unit.

Our board of directors has declared a cash dividend of $0.50 per common share, which will be paid on October 3, 2019 to common shareholders of record on September 17, 2019. Partnership will also make a distribution in respect of each Partnership exchangeable unit in the amount of $0.50 per Partnership exchangeable unit, and the record date and payment date for distributions on Partnership exchangeable units are the same as the record date and payment date set forth above.

In addition, because we are a holding company, our ability to pay cash dividends on our common shares may be limited by restrictions under our debt agreements. Although we do not have a formal dividend policy, our board of directors may, subject to compliance with the covenants contained in our debt agreements and other considerations, determine to pay dividends in the future. We expect to pay all dividends from cash generated from our operations.

Outstanding Security Data

As of July 26, 2019, we had outstanding 255,752,583 common shares and one special voting share. The special voting share is held by a trustee, entitling the trustee to that number of votes on matters on which holders of common shares are entitled to vote equal to the number of Partnership exchangeable units outstanding. The trustee is required to cast such votes in accordance with voting instructions provided by holders of Partnership exchangeable units. At any shareholder meeting of the Company, holders of our common shares vote together as a single class with the special voting share except as otherwise provided by law. For information on our share-based compensation and our outstanding equity awards, see Note 15 to the audited consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC and Canadian securities regulatory authorities on February 22, 2019.

There were 207,285,803 Partnership exchangeable units outstanding as of July 26, 2019. Since December 12, 2015, the holders of Partnership exchangeable units have had the right to require Partnership to exchange all or any portion of such holder’s Partnership exchangeable units for our common shares at a ratio of one share for each Partnership exchangeable unit, subject to our right as the general partner of Partnership to determine to settle any such exchange for a cash payment in lieu of our common shares.

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Comparative Cash Flows

Operating Activities

Cash provided by operating activities was $475 million during the six months ended June 30, 2019, compared to $287 million during the same period in the prior year. The increase in cash provided by operating activities was driven by a decrease in income tax payments, primarily due to the 2018 payment of accrued income taxes related to the December 2017 redemption of preferred shares, an increase in BK segment income and an increase in PLK segment income. These factors were partially offset by an increase in cash used for working capital, an increase in interest payments and a decrease in TH segment income.

Investing Activities

Cash provided by investing activities was $23 million for the six months ended June 30, 2019, compared to $1 million during the same period in the prior year. The change in investing activities was driven by an increase in net proceeds from disposal of assets, restaurant closures and refranchisings and a decrease in capital expenditures.

Financing Activities

Cash used for financing activities was $395 million for the six months ended June 30, 2019, compared to $383 million during the same period in the prior year. The change in financing activities was driven primarily by an increase in RBI common share dividends and distributions on Partnership exchangeable units, partially offset by an increase in proceeds from stock option exercises and the non-recurrence of the 2018 payments in connection with the December 2017 redemption of preferred shares.

New Accounting Pronouncements

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There were no material changes during the six months ended June 30, 2019 to the disclosures made in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC and Canadian securities regulatory authorities on February 22, 2019.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was conducted under the supervision and with the participation of management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and Exchange Act Rules 15d-15(e)) as of June 30, 2019. Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of such date.

Internal Control Over Financial Reporting

The Company’s management, including the CEO and CFO, confirm there were no changes in the Company’s internal control over financial reporting during the three months ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. During the six months ended June 30, 2019, the Company modified existing controls and processes to support the adoption of the new lease accounting standard that the Company adopted as of January 1, 2019 which included the implementation of a new lease accounting system. There were no significant changes to the Company's internal control over financial reporting due to the adoption of the new standard.

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Special Note Regarding Forward-Looking Statements

Certain information contained in this report, including information regarding future financial performance and plans, targets, aspirations, expectations, and objectives of management, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of Canadian securities laws. We refer to all of these as forward-looking statements. Forward-looking statements are forward-looking in nature and, accordingly, are subject to risks and uncertainties. These forward-looking statements can generally be identified by the use of words such as “believe”, “anticipate”, “expect”, “intend”, “estimate”, “plan”, “continue”, “will”, “may”, “could”, “would”, “target”, “potential” and other similar expressions and include, without limitation, statements regarding our expectations or beliefs regarding (i) our future financial obligations, including annual debt service requirements, capital expenditures and dividend payments, our ability to meet such obligations and the source of funds used to satisfy such obligations; (ii) the amount and timing of additional Corporate restructuring and tax advisory fees related to the Tax Act; (iii) certain tax matters, including the impact of the Tax Act on future periods; (iv) the amount of net cash settlements we expect to pay on our derivative instruments; and (v) certain accounting matters, including the impact of changes in accounting and our transition to ASC 842.

Our forward-looking statements, included in this report and elsewhere, represent management’s expectations as of the date that they are made. Our forward-looking statements are based on assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, these forward-looking statements are subject to a number of risks and uncertainties and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results, level of activity, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, among other things, risks related to: (1) our substantial indebtedness, which could adversely affect our financial condition and prevent us from fulfilling our obligations; (2) global economic or other business conditions that may affect the desire or ability of our customers to purchase our products such as inflationary pressures, high unemployment levels, declines in median income growth, consumer confidence and consumer discretionary spending and changes in consumer perceptions of dietary health and food safety; (3) our relationship with, and the success of, our franchisees and risks related to our fully franchised business model; (4) the effectiveness of our marketing and advertising programs and franchisee support of these programs; (5) significant and rapid fluctuations in interest rates and in the currency exchange markets and the effectiveness of our hedging activity; (6) our ability to successfully implement our domestic and international growth strategy for our brands and risks related to our international operations; (7) our reliance on master franchisees and subfranchisees to accelerate restaurant growth; (8) the ability of the counterparties to our credit facilities and derivatives to fulfill their commitments and/or obligations; and (9) changes in applicable tax laws or interpretations thereof; and risks related to the complexity of the Tax Act and our ability to accurately interpret and predict its impact on our financial condition and results.

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

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Finally, our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC and Canadian securities regulatory authorities on February 22, 2019, as well as other materials that we from time to time file with, or furnish to, the SEC or file with Canadian securities regulatory authorities. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements in this section and elsewhere in this report. Other than as required under securities laws, we do not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, changes in expectations or otherwise.

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Part II – Other Information

Item 1. Legal Proceedings

In March 2019, the Company settled the two class action lawsuits filed in the Ontario Superior Court of Justice against The TDL Group Corp., a subsidiary of the Company (“TDL”), and certain other defendants, as described in the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2019. The court approved the settlement on April 29, 2019. Under the terms of the settlement, TDL is contributing C$6 million to the Tim Hortons Advertising Fund in Canada over two years, such amount to be spent on marketing activities. In addition, TDL has paid C$6 million for legal, administrative and other third party expenses.

In July 2019, a class action complaint was filed against 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 this case.

Item 5. Other Information

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

(e)

On May 17, 2019, the Board of Directors of RBI approved the conversion of the unvested restricted stock units and performance based restricted stock units previously granted to Daniel S. Schwartz, our former Chief Executive Officer and Executive Chairman through June 30, 2019, to an equal number of restricted shares. As a result of this change, RBI entered into amended and restated award agreements with Mr. Schwartz. The Amended and Restated Performance Award Agreement and the forms of Amended and Restated Base Matching Restricted Stock Unit Award Agreement and Amended and Restated Additional Matching Restricted Stock Unit Award Agreement are filed with this quarterly report on Form 10-Q as Exhibits 10.63, 10.64 and 10.65, respectively.

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Item 6. Exhibits

Exhibit Number	Description
10.63*	Amended and Restated Performance Award Agreement dated as of May 17, 2019 by and between Restaurant Brands International Inc. and Daniel Schwartz.
10.64*	Form of Amended and Restated Base Matching Restricted Stock Unit Award Agreement dated as of May 17, 2019 by and between Restaurant Brands International Inc. and Daniel Schwartz.
10.65*	Form of Amended and Restated Additional Matching Restricted Stock Unit Award Agreement dated as of May 17, 2019 by and between Restaurant Brands International Inc. and Daniel Schwartz.
31.1	Certification of Chief Executive Officer of Restaurant Brands International Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer of Restaurant Brands International Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer of Restaurant Brands International Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer of Restaurant Brands International Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive File (formatted as Inline XBRL and contained in Exhibit 101)

 * Management contract or compensatory plan or arrangement.

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SIGNATURES

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

	RESTAURANT BRANDS INTERNATIONAL INC. (Registrant)
Date: August 2, 2019	By:	/s/ Matthew Dunnigan
		Name:	Matthew Dunnigan
		Title:	Chief Financial Officer (principal financial officer) (duly authorized officer)

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EX-10.63

EXHIBIT 10.63

RESTAURANT BRANDS INTERNATIONAL INC.

AMENDED AND RESTATED 2014 OMNIBUS INCENTIVE PLAN

PERFORMANCE AWARD AGREEMENT

(As Amended and Restated effective as of May 17, 2019)

You were granted a Performance Award (the “Award”) pursuant to the terms and conditions of a Performance Award Agreement (the “Original Award Agreement”) and Sections 8 and 10 of the Restaurant Brands International Inc. Amended and Restated 2014 Omnibus Incentive Plan (as may be amended from time to time, the “Plan”), which is incorporated herein by reference.

We have mutually agreed that effective as of the Restatement Date specified below, the Original Award Agreement is hereby amended and restated in its entirety (and shall be referred to as the “Amended Award Agreement”) to read as follows, so as to provide for the settlement of the RSUs on the Settlement Date in Shares equal to the total number of Earned Performance Units granted pursuant to the Original Award Agreement, which Shares shall vest and be subject to forfeiture subject to the terms of this Amended Award Agreement. The Shares delivered pursuant to this Amended Award Agreement are sometimes hereinafter referred to as the “Restricted Shares”.

Unless defined in this Amended Award Agreement, capitalized terms will have the same meanings ascribed to them in the Plan. In the event of a conflict between the provisions of the provisions of the Plan and this Amended Award Agreement, the provisions of the Plan will govern.

Grant Date:February 23, 2018

Earned Performance Award: You and the Company agree that a total of 250,000 Performance Units are Earned Performance Units based upon achievement of the Performance Targets for the Performance Period ended December 31, 2018.

Performance Award: Restricted Stock Units (the “Performance Units”) with respect to a maximum of 150,000 Shares if 80% of the Performance Target is achieved, a maximum of 250,000 Shares if the Performance Target is achieved (the “Target Number of Performance Units”), and a maximum of 300,000 Shares if 120% of the Performance Target is achieved for the Performance Period.

Restatement Date: May 17, 2019

Settlement Date: May 17, 2019

By accepting this Award of Performance Units and agreeing to this Amended Award Agreement, you and the Company agree that this Award of Performance Units (and the Restricted Shares issued in settlement thereof) are granted under and governed by the terms and conditions of the Plan and the terms and conditions set forth in the attached Exhibit A which constitutes part of this Amended Award Agreement.

PARTICIPANT	RESTAURANT BRANDS INTERNATIONAL INC.
/s/ Daniel S. Schwartz	By: /s/ Jill Granat
Name: Daniel S. Schwartz	Name: Jill Granat       Title: General Counsel
Dated: May 17, 2019

EXHIBIT A

TERMS AND CONDITIONS OF THE

PERFORMANCE AWARD

(As Amended and Restated effective as of May 17, 2019)

Definitions

For purposes of this Amended Award Agreement, the following terms shall have the following meanings:

“Achievement Percentage” has the meaning set forth in the section below entitled “Number of Earned Performance Units”.

“Adjusted EBITDA” means EBITDA excluding the impact of share-based compensation and non-cash incentive compensation expense, (income) loss from equity method investments, net of cash distributions received from equity method investments, other operating (income) expenses, net, and all other specifically identified costs associated with non-recurring projects.

“Cause”means (i) a material breach by you of any of your obligations under any written employment agreement with the Company or any of its Affiliates, (ii) a material violation by you of any of the policies, procedures, rules and regulations of the Company or any of its Affiliates applicable to employees or other service providers generally or to employees or other service providers at your grade level; (iii) the failure by you to reasonably and substantially perform your duties to the Company or its Affiliates (other than as a result of physical or mental illness or injury); (iv) your willful misconduct or gross negligence that has caused or is reasonably expected to result in material injury to the business, reputation or prospects of the Company or any of its Affiliates; (v) your fraud or misappropriation of funds; or (vi) the commission by you of a felony or other serious crime involving moral turpitude; provided that if you are a party to an employment agreement at the time of termination of your Service and such employment agreement contains a different definition of “cause” (or any derivation thereof), the definition in such employment agreement will control for purposes of this Amended Award Agreement.

If you are terminated Without Cause and, within the twelve (12) month period subsequent to such termination of your Service, the Company determines that your Service could have been terminated for Cause, subject to anything to the contrary that may be contained in your employment agreement at the time of termination of your Service, your Service will, at the election of the Company, be deemed to have been terminated for Cause, effective as of the date the events giving rise to Cause occurred.

“Disability” means (i) a physical or mental condition entitling you to benefits under the long-term disability policy of the company covering you or (ii) in the absence of any such policy, a physical or mental condition rendering you unable to perform your duties for the Company or any Affiliate for a period of six (6) consecutive months or longer; provided that if you are a party to an employment agreement at the time of termination of your Service and such employment agreement contains a different definition of “disability” (or any derivation thereof), the definition in such employment agreement will control for purposes of this Amended Award Agreement.

“Earned Performance Units” has the meaning set forth in the Section below entitled “Number of Earned Performance Units”.

“Exchangeable Units” means the Class B Exchangeable Limited Partnership Units of Restaurant Brands International Limited Partnership.

“Minimum Ownership” means a total of 750,000 Common Shares and Exchangeable Units (and any combination thereof).

“Organic Adjusted EBITDA” means Adjusted EBITDA, excluding the impact of foreign currency exchange rates and excluding the impact of acquisitions and divestitures.

“Performance Achieved” means the actual Performance Measure achieved by the Company, as determined at the end of the Performance Period.

“Performance Measure” means the Company’s compounded Organic Adjusted EBITDA annual growth rate over the Performance Period (the “3-year EBITDA CAGR”).

“Performance Period” means the period included in the 3-year EBITDA CAGR beginning on January 1, 2015 and ending on December 31, 2018 (i.e., the 2016 calendar year over the 2015 calendar year, the 2017 calendar year over the 2016 calendar year; and the 2018 calendar year over the 2017 calendar year).

“Performance Target” means a 3-year EBITDA CAGR equal to 10%.

“Performance Units” means the restricted stock units granted pursuant to this Award.

“Restricted Shares” means any Shares that are delivered pursuant to the Section below entitled “Settlement of RSUs” in settlement of the RSUs.

“Retirement” means a termination of Service by you on or after the later of (i) your 55^th birthday and (ii) your completion of five years of Service with the Company.

“Service” means, for purposes of this Award Agreement, the active performance of services for the Company as an employee or director of the Company. The definition of “Service” herein shall supersede and replace the definition of “Service” as set forth in the Plan.

“Settlement Date” means May 17, 2019.

“Target Number of Performance Units” means the number of Performance Units with respect to the number of Shares reflected in this Agreement that you could receive if 100% of the Performance Target is achieved for the Performance Period. The Target Number of Performance Units is set forth on the cover page of this Amended Award Agreement.

“Vesting Date” means February 23, 2023 or such earlier vesting date as may be provided in this Amended Award Agreement.

“Without Cause” means a termination of your Service by your employer (the “Employer”) other than any such termination by your Employer for Cause or due to your death or disability; provided that if you are a party to an employment agreement at the time of termination of your Service and such employment agreement contains a different definition of “without cause” (or any derivation thereof), the definition in such employment agreement will control for purposes of this Amended Award Agreement.

Vesting.

The Earned Performance Units, and the Restricted Shares issued in settlement thereof, will vest on the Vesting Date, subject to satisfaction of the Performance Target required to be met in order for the Earned Performance Units to be earned under the Plan and subject to your continued Service through the Vesting Date and to the Sections below entitled “Determination of Number of Earned Performance Units” and “Termination” below.

No Payment for Shares.

No payment is required for Performance Units or Shares that you receive under this Award.

Nature of Award.

This Award represents the opportunity to receive the number of Restricted Shares equal to the Earned Performance Units earned as provided for below under “Number of Earned Performance Units,” subject to the section above entitled “Vesting” and to the sections below entitled “Settlement of Performance Units” and “Termination”.

Number of Earned Performance Units.

The number of Performance Units earned at the end of the Performance Period (the “Earned Performance Units”), if any, will be based on the percentage achievement (the “Achievement Percentage”) of the Performance Target, as follows:

Performance Level	3-year EBITDA CAGR	Achievement Percentage	Percentage of Earned Performance Units
Below Threshold	<8%	< 80%	0%
Threshold	8%	80%	60%
Target	10%	100%	100%
Maximum	12%	120%	120%

The Achievement Percentage shall be calculated by dividing the Performance Achieved by the Performance Target, rounded down to the nearest whole percentage. For example, if the Performance Achieved is 11%, then the Achievement Percentage shall be 110%, or 11% divided by the Performance Target of 10%.

If the Achievement Percentage is between 100% and 120%, the Percentage of Earned Performance Units shall be equal to the Achievement Percentage. For example, if your Achievement Percentage is 110%, then the Percentage of Earned Performance Units is equal to 110%, and the number of Earned Performance Units at the end of the Performance Period shall be equal to the Target Number of Performance Units multiplied by 110%.

If the Achievement Percentage of the Performance Target is between 80% and 100%, then for every one percentage point below 100%, the Percentage of Earned Performance Units shall be reduced by two percentage points. Therefore, the Percentage of Earned Performance Units shall be calculated as the difference between 100% and the Achievement Percentage, multiplied by two, and then by subtracting this amount from 100%. For example, if the Achievement Percentage is 90%, then the Percentage of Earned Performance Units shall equal 80%, or (100% minus 90%) multiplied by 2, and then subtracting this amount from 100%.

All Earned Performance Units will vest on the Vesting Date and will settle in accordance with the section below entitled, “Settlement of Earned Performance Units”.

Settlement of Earned Performance Units.

The Company shall deliver to you that number of Restricted Shares equal to the aggregate number of Earned Performance Units for the Performance Period, if any, as determined in accordance with the section entitled “Number of Earned Performance Units” above, on, or as soon as practicable after the Settlement Date. You will have no rights of a shareholder with respect to the Earned Performance Units until such Restricted Shares have been delivered to you. For the avoidance of doubt, all accrued Dividend Equivalents shall settle in Restricted Shares on, or as soon as practicable after, the Settlement Date in the same manner as the Earned Performance Units.

Issuance of Stock Certificates and Legends.

One or more stock certificates evidencing the Restricted Shares shall be issued in your name but shall be held and retained by the records administrator of the Company until the Vesting Date. All such stock certificates shall bear the following legends, along with such other legends that the Board or the Committee shall deem necessary and appropriate or which are otherwise required or indicated pursuant to any applicable stockholders agreement:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO SUBSTANTIAL VESTING AND OTHER RESTRICTIONS AS SET FORTH IN THE PERFORMANCE AWARD AGREEMENT, AS AMENDED AND RESTATED, BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES, AND INCLUDE VESTING CONDITIONS WHICH MAY RESULT IN THE COMPLETE FORFEITURE OF THE SHARES.

Stock Powers. You shall deposit with the Company stock powers or other instruments of transfer or assignment, duly endorsed in blank with signature(s) guaranteed, corresponding to each certificate representing Restricted Shares until such shares become vested in accordance with this Amended Award Agreement. If you shall fail to provide the Company with any such stock power or other instrument of transfer or assignment, you hereby irrevocably appoint the Secretary of the Company as your attorney-in-fact, with full power of appointment and substitution, to execute and deliver any such power or other instrument which may be necessary to effectuate the transfer of the Restricted Shares (or assignment of distributions thereon) on the books and records of the Company.

Delivery of Stock Certificates. On the Vesting Date, the Company shall promptly cause a new certificate or certificates to be issued for and with respect to all Restricted Shares that become vested on the Vesting Date.

Issuance Without Certificates. If the Company is authorized to issue Shares without certificates, then the Company may, in the discretion of the Committee, issue Shares pursuant to this Amended Award Agreement without certificates, in which case any references in this Amended Award Agreement to certificates shall instead refer to whatever evidence may be issued to reflect your ownership of the Shares subject to the terms and conditions of this Amended Award Agreement.

Rights with Respect to Restricted Shares.

General. Except as otherwise provided in this Amended Award Agreement, you shall have, with respect to all of the Restricted Shares, whether or not vested, all of the rights of a holder of Shares, including without limitation (i) the right to vote such Restricted Shares, (ii) the right to receive dividends, if any, as may be declared on the Restricted Shares from time to time (subject to the provisions and repayment obligations set forth in the Section below entitled “Dividend Equivalents”), and (iii) the rights available to all holders of Shares upon any merger, consolidation, reorganization, liquidation or dissolution, stock split‑up, stock dividend or recapitalization undertaken by the Company; provided, however, that all of such rights shall be subject to the terms, provisions, conditions and restrictions set forth in this Amended Award Agreement (including without limitation conditions under which all such rights shall be forfeited). Any Shares issued to you as a stock dividend with respect to Restricted Shares shall have the same status and bear the same legend as the Restricted Shares to which they relate and shall be held by the Company, if the Additional Restricted Shares that such dividend is attributed to is being so held, unless otherwise determined by the Committee.

Adjustments to Shares. If at any time while this Agreement is in effect (or Restricted Shares granted hereunder shall be or remain unvested while your Service continues and has not yet terminated or ceased for any reason), there shall be any increase or decrease in the number of issued and outstanding Shares of the Company through the declaration of a stock dividend or through any recapitalization resulting in a stock split-up, combination or exchange of such Shares, then and in that event, the Board or the Committee shall make any adjustments it deems fair and appropriate, in view of such change, in the number of Restricted Shares then subject to this Amended Award Agreement. If any such adjustment shall result in a fractional Share, such fraction shall be disregarded.

No Restrictions on Certain Transactions. Notwithstanding any term or provision of this Amended Award Agreement to the contrary, the existence of this Amended Award Agreement, or of any outstanding Restricted Shares awarded hereunder, shall not affect in any manner the right, power or authority of the Company to make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer, issue or sale by the Company of any capital stock of the Company, including any equity or debt securities, or preferred or preference stock that would rank prior to or on parity with the Restricted Shares and/or that would include, have or possess other rights, benefits and/or preferences superior to those that the Restricted Shares includes, has or possesses, or any warrants, options or rights with respect to any of the foregoing; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part of the stock, assets or business of the Company; (vi) the declaration or payment of any dividend or other distribution by the Company to its shareholders; or (vii) any other corporate transaction, act or proceeding (whether of a similar character or otherwise).

Adjustment for Certain Events.

If and to the extent that it would not cause a violation of Section 409A of the Code or other applicable law, if any Corporate Event described in Section 5(d)(ii) of the Plan shall occur, the Committee shall make an adjustment as described in such Section 5(d)(ii) in such manner as the Committee may, in its sole discretion, deem appropriate and equitable to prevent substantial dilution or enlargement of the rights provided under this Award.

Termination.

Upon termination of your Service (other than as set forth below) prior to the Vesting Date, you will forfeit all of your Restricted Shares without any consideration due to you.

If your Service terminates on or after February 23, 2021 Without Cause or by reason of your Retirement (as defined above), you shall be vested in the number of Restricted Shares, as determined in accordance with the section entitled “Number of Earned Performance Units” above, as if the Restricted Shares subject to this Award vested 50% on February 23, 2021 and 100% on February 23, 2023. For example, if your Service terminates on March 31, 2021, you would be vested in a number of Restricted Shares equal to 50% of the Target Number of Performance Units. For the avoidance of doubt, if your Service terminates prior to February 23, 2021 Without Cause or by reason of your Retirement, you will forfeit all of your Performance Units and the Restricted Shares issued in settlement thereof.

If your Service terminates prior to the Vesting Date by reason of Disability (as defined above), you shall be vested in the number of Restricted Shares, as determined in accordance with the section entitled “Number of Earned Performance Units” above, as if the Restricted Shares subject to this Award vested 20% on each of February 23, 2019, February 23, 2020, February 23, 2021, February 23, 2022 and February 23, 2023.

If your Service terminates prior to the Vesting Date by reason of your death, your Beneficiary shall be vested in the number of Restricted Shares, as determined in accordance with the section entitled “Number of Earned Performance Units” above, as if the Restricted Shares issued pursuant to this Award vested 20% on February 23, 2019, 40% on February 23, 2020 and 100% on February 23, 2021.

The date of termination of your Service will not be extended by any period of notice of termination of employment, payment in lieu of notice or severance mandated under local law, whether statutory, contractual or at common law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law) regardless of the reason for such termination and whether or not later found to be invalid or in breach of laws in the jurisdiction where you are rendering Service or the terms of your Employment Agreement, if any. The Committee shall have the exclusive discretion to determine the date of termination of your Service for purposes of this Award.

In the event that there is a conflict between the terms of this Amended Award Agreement regarding the effect of a termination of your Service on this Award and the terms of any Employment Agreement, the terms of your Employment Agreement will govern.

Subject to any terms and conditions that the Committee may impose in accordance with Section 13 of the Plan, in the event that a Change in Control occurs and, within twelve (12) months following the date of such Change in Control, your Service is terminated by the Company Without Cause (as defined herein), your Restricted Shares shall vest in full upon such termination. In the event that there is a conflict between the terms of this Amended Award Agreement regarding the effect of a Change in Control on this Award and the terms of any Employment Agreement, the terms of this Amended Award Agreement will govern.

Forfeiture

If you fail to maintain ownership of Common Shares and/or Exchangeable Units equal to or greater than the Minimum Ownership at all times on or prior to the Vesting Date, you will forfeit 100% of the Restricted Shares.

Taxes.

Regardless of any action the Company or your Employer takes with respect to any or all income tax, social security or insurance, government sponsored pension plan, unemployment insurance, fringe benefits tax, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant, vesting or settlement of Performance Units or the Restricted Shares, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends or Dividend Equivalents; and (2) do not commit to structure the terms of the grant or any aspect of this Award to reduce or eliminate your liability for Tax-Related Items.

Prior to the relevant taxable or tax withholding event, as applicable, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or the Employer. In this regard, you authorize the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or the Employer. Alternatively, or in addition, if permissible under local law, the Company may in its sole and absolute discretion (1) sell or arrange for the sale of Shares that you acquire to meet the withholding obligation for Tax-Related Items (on your behalf pursuant to this authorization without further consent), and/or (2) withhold the amount of Shares necessary to satisfy the Tax-Related Items; provided, however, that if you are a Section 16 officer of the Company under the U.S. Securities and Exchange Act of 1934, as amended, the Company will satisfy any withholding obligation only by withholding Shares pursuant to (2) above, unless the use of such withholding method is problematic under applicable tax or securities law or has materially adverse accounting consequences, in which case the obligation for Tax Related Items may be satisfied by another method or a combination of other methods.

Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding rates or other applicable withholding rates, including maximum applicable rates, in which case you may receive a refund of any over-withheld amount in cash and will have no entitlement to the Shares equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested Performance Unit, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items.

Section 83(b) Election.If you properly elect, within thirty (30) days of the Settlement Date, to include in gross income for federal income tax purposes an amount equal to the fair market value (as of the Settlement Date) of the Restricted Shares pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), you shall make arrangements satisfactory to the Company or your Employer to pay to the Company or your Employer any Tax Related Items required to be withheld with respect to the Restricted Shares. If you fail to make such tax payments as are required, the Company or your Employer shall, to the extent permitted by law, have the right to deduct from any payment of any kind (including without limitation, the withholding of any Shares that otherwise would be issued to you under this Agreement) otherwise due to you any Tax-Related Items required by law to be withheld with respect to the Restricted Shares.

Finally, you will pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to deliver the Shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.

Dividend Equivalents and Dividends.

During the Performance Period, you shall be credited with additional Performance Units (based on the Target Number of Performance Units) with respect to the number of Shares having a Fair Market Value as of the applicable dividend payment date equal to the value of any dividends or other distributions that would have been distributed to you if each of the Shares to be delivered to you upon settlement of the Performance Units instead was an issued and outstanding Share owned by you (“Dividend Equivalents”). After the expiration of the Performance Period, the Target Number of Performance Units and the relevant accrued number of Dividend Equivalents shall be collectively adjusted based on the Achievement Percentage and rounded to six decimal places. Thereafter, until the Settlement Date, you shall be credited with Dividend Equivalents based on the number of Earned Performance Units. The additional Performance Units credited to you as Dividend Equivalents shall be subject to the same terms and conditions under this Amended Award Agreement as the Performance Units to which they relate, and shall vest and be earned and settled (rounded down to the nearest whole number) in the same manner and at the same times as Performance Units to which they relate. Each Dividend Equivalent shall be treated as a separate payment for purposes of Section 409A of the Code.

After the Settlement Date, you shall be entitled to receive payment of any dividends paid in the form of cash or property other than Shares with respect to your Restricted Shares, at the same time and in the same form, as dividends are paid with respect to Shares owned by other shareholders; provided, however, that in the event that any Restricted Shares are forfeited pursuant to this Amended Award Agreement, you shall be required to immediately repay to the Company the value as of the date on which the dividend was paid of any dividends you received with respect to those forfeited Restricted Shares, reduced by any federal, state or local taxes you paid with respect to those repaid dividends. Any dividends paid with respect to Restricted Shares in the form of Shares shall be treated as Restricted Shares, subject to the same terms and conditions that apply pursuant to this Amended Award Agreement with respect to the underlying Restricted Shares to which they relate.

No Guarantee of Continued Service.

You acknowledge and agree that the vesting of this Award on the Vesting Date is earned only by performing continuing Service (not through the act of being hired or being granted this Award). You further acknowledge and agree that this Amended Award Agreement, the transactions contemplated hereunder and the Vesting Date shall not be construed as giving you the right to be retained in the employ of, or to continue to provide services to, the Company or any Affiliate. Further, the Company or the applicable Affiliate may at any time dismiss you, free from any liability, or any claim under the Plan, unless otherwise expressly provided in any other agreement binding you, the Company or the applicable Affiliate. The receipt of this Award is not intended to confer any rights on you except as set forth in this Amended Award Agreement.

Termination for Cause; Restrictive Covenants.

In consideration for the grant of this Award and for other good and valuable consideration, the sufficiency of which is acknowledged by you, you agree as follows:

Upon (i) a termination of your Service for Cause, (ii) a retroactive termination of your Service for Cause as permitted herein or under your employment agreement, or (iii) a violation of any post-termination restrictive covenant (including, without limitation, non-disclosure, non-competition and/or non-solicitation) contained in your employment agreement, or any separation or termination or similar agreement you may enter into with the Company or one of its Affiliates in connection with termination of your Service, any Award you hold shall be immediately forfeited and the Company may require that you repay (with interest

or appreciation (if any), as applicable, determined up to the date payment is made), and you shall promptly repay to the Company, the Fair Market Value (in cash or in Shares) of any Restricted Shares received upon the settlement of Performance Units during the period beginning on the date that is one year before the date of your termination and ending on the first anniversary of the date of your termination, plus the value as of the date on which the dividend was paid of any dividends you received with respect to the Restricted Shares for which repayment is due hereunder, reduced by any federal, state or local taxes you paid with respect to such repaid dividends. The Fair Market Value of any such Shares shall be determined as of the Vesting Date for the Restricted Shares.

Company’s Right of Offset.

If you become entitled to a distribution of benefits under this Award, and if at such time you have any outstanding debt, obligation, or other liability representing an amount owing to the Company or any of its Affiliates, then the Company or its Affiliates, upon a determination by the Committee, and to the extent permitted by applicable law and not causing a violation of Section 409A of the Code, may offset such amount so owing against the amount of benefits otherwise distributable. Such determination shall be made by the Committee.

Acknowledgment of Nature of Award.

In accepting the grant of this Award, you acknowledge that:

(a)the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan;

(b)the grant of this Award is voluntary, occasional and discretionary and does not create any contractual or other right to receive future awards of Performance Units or Restricted Shares, or benefits in lieu of Performance Units or Restricted Shares even if Performance Units or Restricted Shares have been awarded in the past, if repeatedly;

(c)all decisions with respect to future awards, if any, will be at the sole discretion of the Company;

(d)your participation in the Plan is voluntary;

(e)this Award and any Shares acquired under the Plan, and the income from and value of same, are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

(f)the future value of the underlying Shares is unknown and cannot be predicted with certainty;

(g)if you receive Shares, the value of such Shares acquired upon settlement may increase or decrease in value; and

(h)no claim or entitlement to compensation or damages arises from termination of this Award, and no claim or entitlement to compensation or damages shall arise from any diminution in value of the Performance Units or Restricted Shares received upon settlement of Performance Units or Restricted Shares resulting from termination of your Service and you irrevocably release the Company and the Employer from any such claim that may arise.

Securities Laws.

By accepting this Award, you acknowledge that Canadian or other applicable securities laws, including, without limitation, U.S. securities laws, and/or the Company’s policies regarding trading in its securities may limit or restrict your right to buy or sell Shares, including, without limitation, sales of Shares acquired about this Award. You agree to comply with all Canadian and any other applicable securities law requirements, including, without limitation, any U.S. securities law requirements, and Company policies, as such laws and policies are amended from time to time.

Data Privacy Notice and Consent.

You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Amended Award Agreement by and among, as applicable, the Employer, the Company and its other Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that the Company, the Employer and/or other Affiliates may hold certain personal information about you, including, but not limited to, your name, home address, email address and telephone number, date of birth, social insurance or social security number, passport or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all RSUs or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in your favor (“Data”), for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that Data may be transferred to Solium Capital or such other third party assisting in the implementation, administration and management of the Plan, that these recipients may be in Canada, the United States or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that, if you reside in the European Economic Area, you may request a list with the names and addresses of any potential recipients of Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan. You understand that Data will be held only if is necessary to implement, administer and manage your participation in the Plan. You understand that, if you reside in the European Economic Area, you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to participate in the Plan. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or Service with the Employer will not be affected; the only consequence of refusing or withdrawing your consent is that the Company would not be able to grant you RSUs or other awards or administer or maintain such awards. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

Upon request of the Company or the Employer, you agree to provide a separate executed data privacy consent form (or any other agreements or consents that may be required by the Company and/or the Employer) that the Company and/or the Employer may deem necessary to obtain from you for administering your participation in the Plan in compliance with the data privacy laws in your country, either now or in the future. You understand and agree that you will not be able to participate in the Plan if you fail to provide any such consent or agreement requested by the Company and/or the Employer.

Limits on Transferability; Beneficiaries.

Neither this Award nor the Restricted Shares issued in settlement thereof, shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability to any party, or Transferred, otherwise than by your will or the laws of descent and distribution or to a Beneficiary upon your death, except that this Award and/or the Restricted Shares may be Transferred to one or more Beneficiaries or other Transferees during your lifetime with the consent of the Committee. A Beneficiary, Transferee, or other person claiming any rights under this Amended Award Agreement shall be subject to all terms and conditions of the Plan and this Amended Award Agreement, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

No Transfer to any executor or administrator of your estate or to any Beneficiary by will or the laws of descent and distribution of any rights in respect of this Award shall be effective to bind the Company unless the Committee shall have been furnished with (i) written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the Transfer and (ii) the written agreement of the Transferee to comply with all the terms and conditions applicable to this Award and any Shares received upon settlement of Performance Units that are or would have been applicable to you.

Section 409A Compliance.

Neither the Plan, nor this Amended Award Agreement is intended to provide for a deferral of compensation that would subject the Performance Units or Restricted Shares to taxation prior to the issuance of Shares because of Section 409A of the Code. Notwithstanding anything to the contrary in the Plan, or this Amended Award Agreement, the Company reserves the right to revise this Amended Award Agreement as it deems necessary or advisable, in its sole discretion and without your consent, to comply with Section 409A of the Code or to otherwise avoid imposition of any additional tax or income recognition under Section 409A of the Code prior to the actual payment of Shares pursuant to this Award. If you are subject to U.S. taxes, all Restricted Shares to which you are entitled will be issued to you on the applicable Settlement Date of the Earned Performance Units, as described above in the section “Settlement of Earned Performance Units”.

Notwithstanding the foregoing, the Company does not make any representation to you that the Performance Units awarded pursuant to this Agreement are exempt from, or satisfy, the requirements of Section 409A, and the Company shall have no liability or other obligation to indemnify or hold harmless you or any Beneficiary for any tax, additional tax, interest or penalties that you or any Beneficiary may incur in the event that any provision of this Agreement, or any amendment or modification thereof or any other action taken with respect thereto, is deemed to violate any of the requirements of Section 409A.

Entire Agreement; Governing Law; Jurisdiction; Waiver of Jury Trial.

The Plan, this Amended Award Agreement and, to the extent applicable, your employment agreement or any separation agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings, representations and agreements (whether oral or written) of the Company and you with respect to the subject matter hereof. This Amended Award Agreement may not be modified in a manner that adversely affects your rights heretofore granted under the Plan, except with your consent or to comply with applicable law or to the extent permitted under other provisions of the Plan. This Amended Award Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein, without regard to its principles of conflict of laws.

ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AWARD OR THE AMENDED AWARD AGREEMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE PROVINCE OF ONTARIO, AND YOU IRREVOCABLY SUBMIT TO THE JURISDICTION OF SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. ANY ACTIONS OR PROCEEDINGS TO ENFORCE A JUDGMENT ISSUED BY ONE OF THE FOREGOING COURTS MAY BE ENFORCED IN ANY JURISDICTION.

TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, YOU HEREBY WAIVE, AND COVENANT THAT YOU WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AMENDED AWARD AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE.

By signing this Amended Award Agreement, you acknowledge receipt of a copy of the Plan and represent that you understand the terms and conditions of the Plan, and hereby accept this Award subject to all provisions in this Amended Award Agreement and in the Plan. You hereby agree to accept as final, conclusive and binding all decisions or interpretations of the Committee upon any questions arising under the Plan or this Amended Award Agreement.

Electronic Delivery and Acceptance.

The Company may, in its sole discretion, decide to deliver any documents related to this Award or future awards that may be awarded under the Plan by electronic means or request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

Agreement Severable.

If any provision in this Amended Award Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Amended Award Agreement.

Language.

You acknowledge that you are proficient in the English language and understand the content of this Amended Award Agreement and other Plan-related materials. If you have received this Amended Award Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

Waiver.

You acknowledge that a waiver by the Company of breach of any provision of this Amended Award Agreement shall not operate or be construed as a waiver of any other provision of this Amended Award Agreement, or of any subsequent breach by you or any other Participant.

EX-10.64

EXHIBIT 10.64

RESTAURANT BRANDS INTERNATIONAL INC.

2014 OMNIBUS INCENTIVE PLAN

BASE MATCHING RESTRICTED STOCK UNIT AMENDED AWARD AGREEMENT

(As Amended and Restated effective as of May 17, 2019)

You were granted Restricted Stock Units (the “Base RSUs”) pursuant to the terms and conditions of an Base Matching Restricted Stock Unit Award Agreement (the “Original Award Agreement”) and Section 8 of the Restaurant Brands International Inc. 2014 Omnibus Incentive Plan (as may be amended from time to time, the “Plan”), which is incorporated herein by reference. You also were granted RSUs (the “Additional RSUs”) pursuant to an Additional Matching Restricted Stock Unit Award Agreement which is being amended and restated by separate agreement effective as of the Restatement Date (the “Additional RSU Award Agreement”). The Base RSUs and Additional RSUs were granted in connection with your purchase of Shares in the Company’s 2015 Bonus Swap Program (the “Related Shares”).

We have mutually agreed that effective as of the Restatement Date specified below, the Original Award Agreement is hereby amended and restated in its entirety (and shall be referred to as the “Amended Award Agreement”) to read as follows, so as to provide for the settlement of the RSUs on the Settlement Date in Shares equal to the total number of Base RSUs granted pursuant to the Original Award Agreement, which Shares shall vest and be subject to forfeiture subject to the terms of this Amended Award Agreement. The Shares delivered pursuant to this Amended Award Agreement are sometimes hereinafter referred to as the “Base Restricted Shares”.

Unless defined in this Amended Award Agreement, capitalized terms will have the same meanings ascribed to them in the Plan.

In the event of a conflict between the provisions of the Plan and this Amended Award Agreement, the provisions of the Plan will govern.

Total Number of RSUs:

Grant Date:

Restatement Date:May 17, 2019

Vesting Date: 100% of the Base Restricted Shares will vest on December 31, 2020, subject to your continued Service through the Vesting Date and further subject to the Section entitled “Termination” in Exhibit A.

Settlement Date: May 17, 2019

By accepting this Award of Base RSUs and agreeing to this Amended Award Agreement, you and the Company agree that this Award of Base RSUs (and the Base Restricted Shares issued in settlement thereof) are granted under and governed by the terms and conditions of the Plan, and the terms and conditions set forth in the attached Exhibit A which still constitute part of this Amended Award Agreement.

PARTICIPANT	RESTAURANT BRANDS INTERNATIONAL INC.
____________________________	By: ______________________________
Name: Daniel S. Schwartz	Name: Jill Granat       Title: General Counsel
Dated: May 17, 2019

EXHIBIT A

TERMS AND CONDITIONS OF THE

BASE MATCHING RESTRICTED STOCK UNIT AMENDED AWARD AGREEMENT

No Payment for Shares.

No payment is required for Shares that you receive under this Award.

Restricted Stock Units.

Each Base RSU represents a right to receive one Base Restricted Share subject to the terms and conditions of the Plan and this Amended Award Agreement.

Vesting.

The Base Restricted Shares will vest on the Vesting Date as set forth in this Amended Award Agreement, subject to your continued Service through the Vesting Date and the section below entitled “Termination”.

Adjustment for Certain Events.

If and to the extent that it would not cause a violation of Section 409A of the Code or other applicable law, if any Corporate Event described in Section 5(d) of the Plan shall occur, the Committee shall make an adjustment as described in such Section 5(d) in such manner as the Committee may, in its sole discretion, deem appropriate and equitable to prevent substantial dilution or enlargement of the rights provided under this Award.

Termination.

Upon termination of your Service (other than as set forth below) prior to the Vesting Date, you will forfeit all of your Base Restricted Shares that are unvested at the time of termination without any consideration due to you. For the purposes of the Plan and this Amended Award Agreement, your Service will not be deemed to be terminated in the event that you transfer employment from the Company to any Affiliate or from an Affiliate to the Company or another Affiliate, as the case may be.

If your Service terminates on or after December 31, 2017 (but prior to the Vesting Date) Without Cause or by reason of your Retirement (as defined below), you shall be vested in the number of Base Restricted Shares as if the Base Restricted Shares subject to this Award vested 40% on December 31, 2017, 60% on December 31, 2018, 80% on December 31, 2019 and 100% on December 31, 2020.

If your Service terminates prior to the Vesting Date by reason of Disability (as defined below), you shall be vested in the number of Base Restricted Shares as if the Base Restricted Shares subject to this Award vested 20% on each of December 31, 2016, December 31, 2017, December 31, 2018, December 31, 2019 and December 31, 2020, respectively.

If your Service terminates prior to the Vesting Date by reason of your death, your Beneficiary shall be vested in the number of Base Restricted Shares as if the Base Restricted Shares subject to this Award vested 20% on December 31, 2016, 40% on December 31, 2017 and 100% on December 31, 2018.

The date of termination of your Service will not be extended by any period of notice of termination of employment, payment in lieu of notice or severance mandated under local law, whether statutory, contractual or at common law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law) regardless of the reason for such termination and whether or not later found to be invalid or in breach of laws in the jurisdiction where you are rendering Service or the terms of your employment agreement, if any. The Committee shall have the exclusive discretion to determine the date of termination of your Service for purposes of this Award (including whether you may still be considered to be providing services while on a leave of absence).

In the event that there is a conflict between the terms of this Amended Award Agreement regarding the effect of a termination of your Service on this Award and the terms of any employment agreement, the terms of your employment agreement will govern.

Subject to any terms and conditions that the Committee may impose in accordance with Section 13 of the Plan, in the event that a Change in Control occurs and, within twelve (12) months following the date of such Change in Control, your Service is terminated by your employer (the “Employer”) Without Cause (as defined herein), this Award shall vest in full upon such termination. In the event that there is a conflict between the terms of this Amended Award Agreement regarding the effect of a Change in Control on this Award and the terms of any employment agreement, the terms of this Amended Award Agreement will govern.

For purposes of this Amended Award Agreement, the following terms shall have the following meanings:

“BaseRestricted Shares” means any Shares that are delivered to you on the Settlement Date pursuant to the Section below entitled “Settlement of RSUs” in settlement of the Base RSUs.

“Cause”means (i) a material breach by you of any of your obligations under any written employment agreement with the Company or any of its Affiliates, (ii) a material violation by you of any of the policies, procedures, rules and regulations of the Company or any of its Affiliates applicable to employees or other service providers generally or to employees or other service providers at your payband; (iii) the failure by you to reasonably and substantially perform your duties to the Company or its Affiliates (other than as a result of physical or mental illness or injury); (iv) your willful misconduct or gross negligence that has caused or is reasonably expected to result in material injury to the business, reputation or prospects of the Company or any of its Affiliates; (v) your fraud or misappropriation of funds; or (vi) the commission by you of a felony or other serious crime involving moral turpitude; provided that if you are a party to an employment agreement at the time of termination of your Service and such employment agreement contains a different definition of “cause” (or any derivation thereof), the definition in such employment agreement will control for purposes of this Amended Award Agreement.

If you are terminated Without Cause and, within the twelve (12) month period subsequent to such termination of your Service, the Company determines that your Service could have been terminated for Cause, subject to anything to the contrary that may be contained in your employment agreement at the time of termination of your Service, your Service will, at the election of the Company, be deemed to have been terminated for Cause, effective as of the date the events giving rise to Cause occurred.

“Disability” means (i) a physical or mental condition entitling you to benefits under the long-term disability policy of the company covering you or (ii) in the absence of any such policy, a physical or mental condition rendering you unable to perform your duties for the Company or any Affiliate for a period of six (6) consecutive months or longer; provided that if you are a party to an employment agreement at the time of termination of your Service and such employment agreement contains a different definition of

“disability” (or any derivation thereof), the definition in such employment agreement will control for purposes of this Amended Award Agreement.

“Retirement” means a termination of Service by you on or after the later of (i) your 55^th birthday and (ii) your completion of five years of Service with the Company and/or one of its Affiliates.

“Settlement Date” means May 17, 2019.

“Vesting Date” means December 31, 2020 or such earlier vesting date as may be provided in this Amended Award Agreement.

“Without Cause” means a termination of your Service by you for “Good Reason,” if you have an employment agreement that defines the term “Good Reason,” or by the Employer other than any such termination by the Employer for Cause or due to your death or Disability; provided that if you are a party to an employment agreement at the time of termination of your Service and such employment agreement contains a different definition of “without cause” (or any derivation thereof), the definition in such employment agreement will control for purposes of this Amended Award Agreement. Notwithstanding the foregoing, if you are a party to an employment agreement at the time of termination of your Service and such employment agreement provides that a termination of your Service by you for “Good Reason” constitutes termination of your Service “Without Cause”, such termination for Good Reason shall not constitute termination Without Cause for purposes of the acceleration of the vesting of your Restricted Shares following a Change in Control.

Forfeiture of Unvested Restricted Sharesupon the Transfer of Related Shares.

If you Transfer (other than pursuant to the laws of descent and distribution) any of the Related Shares before the Vesting Date, you will immediately forfeit the number of unvested Restricted Shares equal to the product of (i) the total number of unvested Restricted Shares and (ii) a fraction, (A) the numerator of which is the aggregate number of Related Shares Transferred and (B) the denominator of which is the aggregate number of Related Shares originally purchased.

Settlement of RSUs.

Settlement. The Company shall deliver to you (or your Beneficiary, if applicable) a number of Base Restricted Shares equal to the number of RSUs granted pursuant to this Amended Award Agreement on, or as soon as practicable after, the Settlement Date. You will have no rights of a shareholder with respect to the RSUs until such Base Restricted Shares have been delivered to you. For the avoidance of doubt, all accrued Dividend Equivalents shall settle in Restricted Shares on, or as soon as practicable after, the Settlement Date in the same manner as the RSUs.

Issuance of Stock Certificates and Legends. One or more stock certificates evidencing the Base Restricted Shares shall be issued in your name but shall be held and retained by the records administrator of the Company until the Vesting Date. All such stock certificates shall bear the following legends, along with such other legends that the Board or the Committee shall deem necessary and appropriate or which are otherwise required or indicated pursuant to any applicable stockholders agreement:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO SUBSTANTIAL VESTING AND OTHER RESTRICTIONS AS SET FORTH IN THE BASE MATCHING RESTRICTED STOCK UNIT AWARD AGREEMENT, AS AMENDED AND RESTATED, BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THE SHARES, A COPY OF WHICH MAY BE

OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES, AND INCLUDE VESTING CONDITIONS WHICH MAY RESULT IN THE COMPLETE FORFEITURE OF THE SHARES.

Stock Powers. You shall deposit with the Company stock powers or other instruments of transfer or assignment, duly endorsed in blank with signature(s) guaranteed, corresponding to each certificate representing Base Restricted Shares until such shares become vested in accordance with this Amended Award Agreement. If you shall fail to provide the Company with any such stock power or other instrument of transfer or assignment, you hereby irrevocably appoint the Secretary of the Company as your attorney-in-fact, with full power of appointment and substitution, to execute and deliver any such power or other instrument which may be necessary to effectuate the transfer of the Base Restricted Shares (or assignment of distributions thereon) on the books and records of the Company.

Delivery of Stock Certificates. On the Vesting Date, the Company shall promptly cause a new certificate or certificates to be issued for and with respect to all Base Restricted Shares that become vested on the Vesting Date.

Issuance Without Certificates. If the Company is authorized to issue Shares without certificates, then the Company may, in the discretion of the Committee, issue Shares pursuant to this Amended Award Agreement without certificates, in which case any references in this Amended Award Agreement to certificates shall instead refer to whatever evidence may be issued to reflect your ownership of the Shares subject to the terms and conditions of this Amended Award Agreement.

Rights with Respect to Base Restricted Shares.

General. Except as otherwise provided in this Amended Award Agreement, you shall have, with respect to all of the Base Restricted Shares, whether or not vested, all of the rights of a holder of Shares, including without limitation (i) the right to vote such Base Restricted Shares, (ii) the right to receive dividends, if any, as may be declared on the Base Restricted Shares from time to time (subject to the provisions and repayment obligations set forth in the Section below entitled “Dividend Equivalents and Dividends”), and (iii) the rights available to all holders of Shares upon any merger, consolidation, reorganization, liquidation or dissolution, stock split‑up, stock dividend or recapitalization undertaken by the Company; provided, however, that all of such rights shall be subject to the terms, provisions, conditions and restrictions set forth in this Amended Award Agreement (including without limitation conditions under which all such rights shall be forfeited). Any Shares issued to you as a [stock] dividend with respect to Base Restricted Shares shall have the same status and bear the same legend as the Base Restricted Shares to which they relate and shall be held by the Company, if the Base Restricted Shares that such dividend is attributed to is being so held, unless otherwise determined by the Committee.

Adjustments to Shares. If at any time while this Agreement is in effect (or Base Restricted Shares granted hereunder shall be or remain unvested while your Service continues and has not yet terminated or ceased for any reason), there shall be any increase or decrease in the number of issued and outstanding Shares of the Company through the declaration of a stock dividend or through any recapitalization resulting in a stock split-up, combination or exchange of such Shares, then and in that event, the Board or the Committee shall make any adjustments it deems fair and appropriate, in view of such change, in the number of Base Restricted Shares then subject to this Amended Award Agreement. If any such adjustment shall result in a fractional Share, such fraction shall be disregarded.

No Restrictions on Certain Transactions. Notwithstanding any term or provision of this Amended Award Agreement to the contrary, the existence of this Amended Award Agreement, or of any outstanding Base Restricted Shares awarded hereunder, shall not affect in any manner the right, power or authority of the Company to make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer, issue or sale by the Company of any capital stock of the Company, including any equity or debt securities, or preferred or preference stock that would rank prior to or on parity with the Base Restricted Shares and/or that would include, have or possess other rights, benefits and/or preferences superior to those that the Base Restricted Shares includes, has or possesses, or any warrants, options or rights with respect to any of the foregoing; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part of the stock, assets or business of the Company; (vi) the declaration or payment of any dividend or other distribution by the Company to its shareholders; or (vii) any other corporate transaction, act or proceeding (whether of a similar character or otherwise).

Dividend Equivalents and Dividends.

During the term of this Amended Award Agreement and prior to the Settlement Date, you shall be automatically granted additional RSUs with respect to a number of Shares (rounded to six decimal places) having a Fair Market Value as of the applicable dividend payment date equal to the value of any dividends or other distributions that would have been distributed to you if each of the Shares to be delivered to you upon settlement of the RSUs instead was an issued and outstanding Share owned by you (“Dividend Equivalents”). The additional RSUs granted to you as Dividend Equivalents shall be subject to the same terms and conditions under this Amended Award Agreement as the RSUs to which they relate, and shall vest and be settled (rounded down to the nearest whole number) in the same manner and at the same times as the RSUs to which they relate. Each Dividend Equivalent shall be treated as a separate payment for purposes of Section 409A of the Code.

After the Settlement Date, you shall be entitled to receive payment of any dividends paid in the form of cash or property other than Shares with respect to your Base Restricted Shares, at the same time and in the same form, as dividends are paid with respect to Shares owned by other shareholders; provided, however, that in the event that any Base Restricted Shares are forfeited pursuant to this Amended Award Agreement, you shall be required to immediately repay to the Company the value as of the date on which the dividend was paid of any dividends you received with respect to those forfeited Base Restricted Shares, reduced by any federal, state or local taxes you paid with respect to those repaid dividends. Any dividends paid with respect to Base Restricted Shares in the form of Shares shall be treated as Base Restricted Shares, subject to the same terms and conditions that apply pursuant to this Amended Award Agreement with respect to the underlying Base Restricted Shares to which they relate.

Taxes.

Regardless of any action the Company or your Employer takes with respect to any or all income tax, social security or insurance, fringe benefits tax, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant, vesting or settlement of RSUs or Base Restricted Shares, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends or Dividend Equivalents; and (ii) do not commit to structure the terms of the grant or any aspect of this Award to reduce or eliminate your liability for Tax-Related Items.

If you are or become eligible for Retirement prior to Vesting Date, the value of your Award will be subject to FICA and Medicare taxes on the later of (1) the respective dates on which the Base Restricted Shares would vest under the accelerated vesting schedule that would apply if you actually retired (whether or not you actually retire on those dates), and (2) the date on which you first become eligible for Retirement, rather than the Vesting Date. The Company may elect, however, pursuant to a rule of administrative convenience, to delay the date on which the FICA and Medicare taxes for Participants eligible for Retirement are determined and withheld until any later date that is within the same calendar year.

Prior to the relevant taxable or tax withholding event, as applicable, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or the Employer. In this regard, you authorize the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or the Employer. Alternatively, or in addition, if permissible under local law, the Company may in its sole and absolute discretion (1) sell or arrange for the sale of Shares that you acquire to meet the withholding obligation for Tax-Related Items (on your behalf pursuant to this authorization without further consent), and/or (2) withhold the amount of Shares necessary to satisfy the Tax-Related Items, provided, however, that if you are a Section 16 officer of the Company under the U.S. Securities and Exchange Act of 1934, as amended, then the Company will satisfy any withholding obligation only by withholding Shares pursuant to (2) above, unless the use of such withholding method is problematic under applicable tax or securities law or has materially adverse accounting consequences, in which case the obligation for Tax-Related Items may be satisfied by another method or a combination of other methods.

The Company may withhold or account for Tax-Related Items by considering statutory withholding rates or other withholding rates, including maximum rates applicable in your jurisdiction, in which case you may receive a refund of any over-withheld amount in cash and will have no entitlement to the Shares equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested RSU, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items.

Section 83(b) Election.If you properly elect, within thirty (30) days of the Settlement Date, to include in gross income for federal income tax purposes an amount equal to the fair market value (as of the Settlement Date) of the Base Restricted Shares pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), you shall make arrangements satisfactory to the Company or your Employer to pay to the Company or your Employer any Tax Related Items required to be withheld with respect to the Base Restricted Shares. If you fail to make such tax payments as are required, the Company or your Employer shall, to the extent permitted by law, have the right to deduct from any payment of any kind (including without limitation, the withholding of any Shares that otherwise would be issued to you under this Agreement) otherwise due to you any Tax-Related Items required by law to be withheld with respect to the Base Restricted Shares.

Finally, you will pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to deliver the Shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.

No Guarantee of Continued Service.

You acknowledge and agree that the vesting of this Award on the Vesting Date is earned only by performing continuing Service (not through the act of being hired or being granted this Award). You further

acknowledge and agree that this Amended Award Agreement, the transactions contemplated hereunder and the Vesting Date shall not be construed as giving you the right to be retained in the employ of, or to continue to provide services to, the Company or any Affiliate. Further, the Company or the applicable Affiliate may at any time dismiss you, free from any liability or any claim under the Plan, unless otherwise expressly provided in any other agreement binding you, the Company or the applicable Affiliate. The receipt of this Award is not intended to confer any rights on you except as set forth in this Amended Award Agreement.

Termination for Cause; Restrictive Covenants.

In consideration for the grant of this Award and for other good and valuable consideration, the sufficiency of which is acknowledged by you, you agree as follows:

Upon (i) a termination of your Service for Cause, (ii) a retroactive termination of your Service for Cause as permitted herein or under your employment agreement, or (iii) a violation of any post-termination restrictive covenant (including, without limitation, non-disclosure, non-competition and/or non-solicitation) contained in your employment agreement, or any separation or termination or similar agreement you may enter into with the Company or one of its Affiliates in connection with termination of your Service, any Award you hold shall be immediately forfeited and the Company may require that you repay (with interest or appreciation (if any), as applicable, determined up to the date payment is made), and you shall promptly repay to the Company the Fair Market Value (in cash or in Shares) of any Base Restricted Shares received upon the settlement of RSUs during the period beginning on the date that is one year before the date of your termination and ending on the first anniversary of the date of your termination, plus the value as of the date on which the dividend was paid of any dividends you received with respect to the Base Restricted Shares for which repayment is due hereunder, reduced by any federal, state or local taxes you paid with respect to such repaid dividends. The Fair Market Value of any such Shares shall be determined as of the Vesting Date for the Base Restricted Shares.

Company’s Right of Offset.

If you become entitled to a distribution of benefits under this Award, and if at such time you have any outstanding debt, obligation, or other liability representing an amount owing to the Company or any of its Affiliates, then the Company or its Affiliates, upon a determination by the Committee, and to the extent permitted by applicable law and not causing a violation of Section 409A of the Code, may offset such amount so owing against the amount of benefits otherwise distributable. Such determination shall be made by the Committee.

Acknowledgment of Nature of Award.

In accepting the grant of this Award, you acknowledge that:

(a)the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan;

(b)the grant of this Award is voluntary, occasional and discretionary and does not create any contractual or other right to receive future awards of RSUs or Base Restricted Shares, or benefits in lieu of RSUs or Base Restricted Shares even if RSUs or Base Restricted Shares have been awarded in the past;

(c)all decisions with respect to future awards, if any, will be at the sole discretion of the Company;

(d)your participation in the Plan is voluntary;

(e)this Award and any Shares acquired under the Plan, and the income from and value of same, are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

(f)the future value of the underlying Shares is unknown and cannot be predicted with certainty;

(g)if you receive Shares, the value of such Shares acquired upon settlement may increase or decrease in value; and

(h)no claim or entitlement to compensation or damages arises from termination of this Award, and no claim or entitlement to compensation or damages shall arise from any diminution in value of the RSUs or Base Restricted Shares received upon settlement of the Base Restricted Shares resulting from termination of your Service, and you irrevocably release the Company and the Employer from any such claim that may arise.

Securities Laws.

By accepting this Award, you acknowledge that Canadian or other applicable securities laws, including, without limitation, U.S. securities laws and/or the Company’s policies regarding trading in its securities, may limit or restrict your right to buy or sell Shares, including, without limitation, sales of Shares acquired in connection with this Award. You agree to comply with all Canadian and any other applicable securities law requirements, including, without limitation, any U.S. securities law requirements and Company policies, as such laws and policies are amended from time to time.

Data Privacy Notice and Consent.

You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Amended Award Agreement by and among, as applicable, the Employer, the Company and its other Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that the Company, the Employer and/or other Affiliates hold certain personal information about you, including, but not limited to, your name, home address, email address and telephone number, date of birth, social insurance or social security number, passport or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all RSUs or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in your favor (“Data”), for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that Data will be transferred to Solium Capital or such other third party assisting in the implementation, administration and management of the Plan, that these recipients may be located in Canada, the United States or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that, if you reside in the European Economic Area, you may request a list with the names and addresses of any potential recipients of Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that, if you reside in the European Economic Area, you may, at any time, view Data, request additional information about

the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to participate in the Plan. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or Service with the Employer will not be affected; the only consequence of refusing or withdrawing your consent is that the Company would not be able to grant you RSUs or other awards or administer or maintain such awards. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

Upon request of the Company or the Employer, you agree to provide a separate executed data privacy consent form (or any other agreements or consents that may be required by the Company and/or the Employer) that the Company and/or the Employer may deem necessary to obtain from you for the purpose of administering your participation in the Plan in compliance with the data privacy laws in your country, either now or in the future. You understand and agree that you will not be able to participate in the Plan if you fail to provide any such consent or agreement requested by the Company and/or Employer.

Limits on Transferability; Beneficiaries.

Neither this Award nor the Base Restricted Shares issued in settlement thereof, shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability to any party, or Transferred, otherwise than by your will or the laws of descent and distribution or to a Beneficiary upon your death, except that this Award and/or the Base Restricted Shares may be Transferred to one or more Beneficiaries or other Transferees during your lifetime with the consent of the Committee. A Beneficiary, Transferee, or other person claiming any rights under this Amended Award Agreement shall be subject to all terms and conditions of the Plan and this Amended Award Agreement, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

No Transfer to any executor or administrator of your estate or to any Beneficiary by will or the laws of descent and distribution of any rights in respect of this Award shall be effective to bind the Company unless the Committee shall have been furnished with (i) written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the Transfer and (ii) the written agreement of the Transferee to comply with all the terms and conditions applicable to this Award and any Shares received upon settlement of the Base RSUs that are or would have been applicable to you.

Section 409A Compliance.

Neither the Plan, nor this Amended Award Agreement is intended to provide for a deferral of compensation that would subject the RSUs or Base Restricted Shares to taxation prior to the issuance of Shares as a result of Section 409A of the Code. Notwithstanding anything to the contrary in the Plan, or this Amended Award Agreement, the Company reserves the right to revise this Amended Award Agreement as it deems necessary or advisable, in its sole discretion and without your consent, to comply with Section 409A of the Code or to otherwise avoid imposition of any additional tax or income recognition under Section 409A of the Code prior to the actual payment of Shares pursuant to this Award. If you are subject to U.S. taxes, all Base Restricted Shares to which you are entitled will be issued to you on the applicable Settlement Date of the RSUs, as described above in the section entitled “Settlement of RSUs.”

Notwithstanding the foregoing, the Company does not make any representation to you that this Award is exempt from, or satisfies, the requirements of Section 409A, and the Company shall have no liability or other obligation to indemnify or hold harmless you or any Beneficiary for any tax, additional tax, interest or

penalties that you or any Beneficiary may incur in the event that any provision of this Agreement, or any amendment or modification thereof or any other action taken with respect thereto, is deemed to violate any of the requirements of Section 409A.

Entire Agreement; Governing Law; Jurisdiction; Waiver of Jury Trial.

The Plan, this Amended Award Agreement and, to the extent applicable, your employment agreement or any separation agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings, representations and agreements (whether oral or written) of the Company and you with respect to the subject matter hereof. This Amended Award Agreement may not be modified in a manner that adversely affects your rights heretofore granted under the Plan, except with your consent or to comply with applicable law or to the extent permitted under other provisions of the Plan. This Amended Award Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein, without regard to its principles of conflict of laws.

ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AWARD OR THE AMENDED AWARD AGREEMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE PROVINCE OF ONTARIO, AND YOU IRREVOCABLY SUBMIT TO THE JURISDICTION OF SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. ANY ACTIONS OR PROCEEDINGS TO ENFORCE A JUDGMENT ISSUED BY ONE OF THE FOREGOING COURTS MAY BE ENFORCED IN ANY JURISDICTION.

TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, YOU HEREBY WAIVE, AND COVENANT THAT YOU WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AMENDED AWARD AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE.

By signing this Amended Award Agreement, you acknowledge the receipt of a copy of the Plan and represent that you understand the terms and conditions of the Plan, and hereby accept this Award subject to all provisions in this Amended Award Agreement and in the Plan. You hereby agree to accept as final, conclusive and binding all decisions or interpretations of the Committee upon any questions arising under the Plan or this Amended Award Agreement.

Electronic Delivery and Acceptance.

The Company may, in its sole discretion, decide to deliver any documents related to this Award or future awards that may be awarded under the Plan by electronic means or request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

Agreement Severable.

In the event that any provision in this Amended Award Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Amended Award Agreement.

Language.

You acknowledge that you are proficient in the English language and understand the content of this Amended Award Agreement and other Plan-related materials. If you have received this Amended Award Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

Waiver.

You acknowledge that a waiver by the Company of breach of any provision of this Amended Award Agreement shall not operate or be construed as a waiver of any other provision of this Amended Award Agreement, or of any subsequent breach by you or any other Participant.

EX-10.65

EXHIBIT 10.65

RESTAURANT BRANDS INTERNATIONAL INC.

AMENDED AND RESTATED 2014 OMNIBUS INCENTIVE PLAN

ADDITIONAL MATCHING RESTRICTED STOCK UNIT AMENDED AWARD AGREEMENT

(As Amended and Restated effective as of May 17, 2019)

You were granted Restricted Stock Units (the “Additional RSUs”) pursuant to the terms and conditions of an Additional Matching Restricted Stock Unit Award Agreement (the “Original Award Agreement”) and Section 8 of the Restaurant Brands International Inc. Amended and Restated 2014 Omnibus Incentive Plan (as may be amended from time to time, the “Plan”), which is incorporated herein by reference. You also were granted RSUs (the “Base RSUs”) pursuant to a Base Matching Restricted Stock Unit Award Agreement which is being amended and restated by separate agreement effective as of the Restatement Date (the “Base RSU Award Agreement”). The Base RSUs and Additional RSUs were granted in connection with your purchase of Shares in the Company’s 2018 Bonus Swap Program (the “Related Shares”).

We have mutually agreed that effective as of the Restatement Date specified below, the Original Award Agreement is hereby amended and restated in its entirety (and shall be referred to as the “Amended Award Agreement”) to read as follows, so as to provide for the settlement of the RSUs on the Settlement Date in Shares equal to the total number of Additional RSUs granted pursuant to the Original Award Agreement, which Shares shall vest and be subject to forfeiture subject to the terms of this Amended Award Agreement. The Shares delivered pursuant to this Amended Award Agreement are sometimes hereinafter referred to as the “Additional Restricted Shares”.

Unless defined in this Amended Award Agreement, capitalized terms will have the same meanings ascribed to them in the Plan.

In the event of a conflict between the provisions of the Plan and this Amended Award Agreement, the provisions of the Plan will govern.

Total Number of RSUs:

Grant Date:

Restatement Date:May 17, 2019

Vesting Date: 100% of the Additional Restricted Shares will vest on December 31, 2023, subject to your continued Service through the Vesting Date and further subject to the Section entitled “Termination” in Exhibit A.

Settlement Date: May 17, 2019

By accepting this Award of Additional RSUs and agreeing to this Amended Award Agreement, you and the Company agree that this Award of Additional RSUs (and the Additional Restricted Shares issued in settlement thereof) are granted under and governed by the terms and conditions of the Plan, and the terms and conditions set forth in the attached Exhibit A which still constitute part of this Amended Award Agreement.

PARTICIPANT	RESTAURANT BRANDS INTERNATIONAL INC.
____________________________	By: ______________________________
Name: Daniel Schwartz	Name: Jill Granat      Title: General Counsel
Dated: May 17, 2019

EXHIBIT A

TERMS AND CONDITIONS OF THE

ADDITIONAL MATCHING RESTRICTED STOCK UNIT AMENDED AWARD AGREEMENT

No Payment for Shares.

No payment is required for Shares that you receive under this Award.

Restricted Stock Units.

Each RSU represents a right to receive one Additional Restricted Share subject to the terms and conditions of the Plan and this Amended Award Agreement.

Vesting.

The Additional Restricted Shares will vest on the Vesting Date as set forth in this Amended Award Agreement, subject to your continued Service through the Vesting Date and the section below entitled “Termination”.

Adjustment for Certain Events.

If and to the extent that it would not cause a violation of Section 409A of the Code or other applicable law, if any Corporate Event described in Section 5(d) of the Plan shall occur, the Committee shall make an adjustment as described in such Section 5(d) in such manner as the Committee may, in its sole discretion, deem appropriate and equitable to prevent substantial dilution or enlargement of the rights provided under this Award.

Termination.

Upon termination of your Service (other than as set forth below) prior to the Vesting Date, you will forfeit all of your Additional Restricted Shares that are unvested at the time of termination without any consideration due to you. For the purposes of the Plan and this Amended Award Agreement, your Service will not be deemed to be terminated in the event that you transfer employment from the Company to any Affiliate or from an Affiliate to the Company or another Affiliate, as the case may be.

If your Service terminates on or after December 31, 2020 (but prior to the Vesting Date) Without Cause or by reason of your Retirement (as defined below), you shall be vested in the number of Additional Restricted Shares as if the Additional Restricted Shares subject to this Award vested 40% on December 31, 2020, 60% on December 31, 2021, 80% on December 31, 2022 and 100% on December 31, 2023. For the avoidance of doubt, if your Service terminates prior to December 31, 2020 Without Cause or by reason of your Retirement, you will forfeit all of your Additional Restricted Shares.

If your Service terminates prior to the Vesting Date by reason of Disability (as defined below), you shall be vested in the number of Additional Restricted Shares as if the Additional Restricted Shares subject to this Award vested 20% on each of December 31, 2019, December 31, 2020, December 31, 2021, December 31, 2022 and December 31, 2023, respectively.

If your Service terminates prior to the Vesting Date by reason of your death, your Beneficiary shall be vested in the number of Additional Restricted Shares as if the Additional Restricted Shares subject to this Award vested 20% on December 31, 2019, 40% on December 31, 2020 and 100% on December 31, 2021.

The date of termination of your Service will not be extended by any period of notice of termination of employment, payment in lieu of notice or severance mandated under local law, whether statutory, contractual or at common law (e.g., active employment would not include a period of “garden leave” or similar period pursuant to local law) regardless of the reason for such termination and whether or not later found to be invalid or in breach of laws in the jurisdiction where you are rendering Service or the terms of your employment agreement, if any. The Committee shall have the exclusive discretion to determine the date of termination of your Service for purposes of this Award (including whether you may still be considered to be providing services while on a leave of absence).

In the event that there is a conflict between the terms of this Amended Award Agreement regarding the effect of a termination of your Service on this Award and the terms of any employment agreement, the terms of your employment agreement will govern.

Subject to any terms and conditions that the Committee may impose in accordance with Section 13 of the Plan, in the event that a Change in Control occurs and, within twelve (12) months following the date of such Change in Control, your Service is terminated by your employer (the “Employer”) Without Cause (as defined herein), this Award shall vest in full upon such termination. In the event that there is a conflict between the terms of this Amended Award Agreement regarding the effect of a Change in Control on this Award and the terms of any employment agreement, the terms of this Amended Award Agreement will govern.

For purposes of this Amended Award Agreement, the following terms shall have the following meanings:

“AdditionalRestricted Shares” means any Shares that are delivered to you on the Settlement Date pursuant to the Section below entitled “Settlement of RSUs” in settlement of the Additional RSUs.

“Cause”means (i) a material breach by you of any of your obligations under any written employment agreement with the Company or any of its Affiliates, (ii) a material violation by you of any of the policies, procedures, rules and regulations of the Company or any of its Affiliates applicable to employees or other service providers generally or to employees or other service providers at your payband; (iii) the failure by you to reasonably and substantially perform your duties to the Company or its Affiliates (other than as a result of physical or mental illness or injury); (iv) your willful misconduct or gross negligence that has caused or is reasonably expected to result in material injury to the business, reputation or prospects of the Company or any of its Affiliates; (v) your fraud or misappropriation of funds; or (vi) the commission by you of a felony or other serious crime involving moral turpitude; provided that if you are a party to an employment agreement at the time of termination of your Service and such employment agreement contains a different definition of “cause” (or any derivation thereof), the definition in such employment agreement will control for purposes of this Amended Award Agreement.

If you are terminated Without Cause and, within the twelve (12) month period subsequent to such termination of your Service, the Company determines that your Service could have been terminated for Cause, subject to anything to the contrary that may be contained in your employment agreement at the time of termination of your Service, your Service will, at the election of the Company, be deemed to have been terminated for Cause, effective as of the date the events giving rise to Cause occurred.

“Disability” means (i) a physical or mental condition entitling you to benefits under the long-term disability policy of the company covering you or (ii) in the absence of any such policy, a physical or mental condition rendering you unable to perform your duties for the Company or any Affiliate for a period of six (6) consecutive months or longer; provided that if you are a party to an employment agreement at the time of termination of your Service and such employment agreement contains a different definition of “disability” (or any derivation thereof), the definition in such employment agreement will control for purposes of this Amended Award Agreement.

“Retirement” means a termination of Service by you on or after the later of (i) your 55^th birthday and (ii) your completion of five years of Service with the Company and/or one of its Affiliates.

“Settlement Date” means May 17, 2019.

“Vesting Date” means December 31, 2023 or such earlier vesting date as may be provided in this Amended Award Agreement.

“Without Cause” means a termination of your Service by you for “Good Reason,” if you have an employment agreement that defines the term “Good Reason,” or by the Employer other than any such termination by the Employer for Cause or due to your death or Disability; provided that if you are a party to an employment agreement at the time of termination of your Service and such employment agreement contains a different definition of “without cause” (or any derivation thereof), the definition in such employment agreement will control for purposes of this Amended Award Agreement. Notwithstanding the foregoing, if you are a party to an employment agreement at the time of termination of your Service and such employment agreement provides that a termination of your Service by you for “Good Reason” constitutes termination of your Service “Without Cause”, such termination for Good Reason shall not constitute termination Without Cause for purposes of the acceleration of the vesting of your Restricted Shares following a Change in Control.

Forfeiture of Unvested Restricted Sharesupon the Transfer of Related Shares.

If you Transfer (other than pursuant to the laws of descent and distribution) 50% or less of the Related Shares before the Vesting Date, you will immediately forfeit (i) a number of unvested Restricted Shares determined in accordance with the Base RSU Award Agreement, as amended and restated of even date herewith (the “Base Restricted Shares”), and (ii) 100% of the Additional Restricted Shares. If you Transfer (other than pursuant to the laws of descent and distribution) more than 50% of the Related Shares before the Vesting Date, you will immediately forfeit 100% of the Base Restricted Shares and 100% of the Additional Restricted Shares.

Settlement of RSUs.

Settlement. The Company shall deliver to you (or your Beneficiary, if applicable) a number of Additional Restricted Shares equal to the number of RSUs granted pursuant to this Amended Award Agreement on, or as soon as practicable after, the Settlement Date. You will have no rights of a shareholder with respect to the RSUs until such Additional Restricted Shares have been delivered to you. For the avoidance of doubt, all accrued Dividend Equivalents shall settle in Restricted Shares on, or as soon as practicable after, the Settlement Date in the same manner as the RSUs.

Issuance of Stock Certificates and Legends.

One or more stock certificates evidencing the Additional Restricted Shares shall be issued in your name but shall be held and retained by the records administrator of the Company until the Vesting Date. All such stock

certificates shall bear the following legends, along with such other legends that the Board or the Committee shall deem necessary and appropriate or which are otherwise required or indicated pursuant to any applicable stockholders agreement:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO SUBSTANTIAL VESTING AND OTHER RESTRICTIONS AS SET FORTH IN THE ADDITIONAL MATCHING RESTRICTED STOCK UNIT AWARD AGREEMENT, AS AMENDED AND RESTATED, BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES, AND INCLUDE VESTING CONDITIONS WHICH MAY RESULT IN THE COMPLETE FORFEITURE OF THE SHARES.

Stock Powers. You shall deposit with the Company stock powers or other instruments of transfer or assignment, duly endorsed in blank with signature(s) guaranteed, corresponding to each certificate representing Additional Restricted Shares until such shares become vested in accordance with this Amended Award Agreement. If you shall fail to provide the Company with any such stock power or other instrument of transfer or assignment, you hereby irrevocably appoint the Secretary of the Company as your attorney-in-fact, with full power of appointment and substitution, to execute and deliver any such power or other instrument which may be necessary to effectuate the transfer of the Additional Restricted Shares (or assignment of distributions thereon) on the books and records of the Company.

Delivery of Stock Certificates. On the Vesting Date, the Company shall promptly cause a new certificate or certificates to be issued for and with respect to all Additional Restricted Shares that become vested on the Vesting Date.

Issuance Without Certificates. If the Company is authorized to issue Shares without certificates, then the Company may, in the discretion of the Committee, issue Shares pursuant to this Amended Award Agreement without certificates, in which case any references in this Amended Award Agreement to certificates shall instead refer to whatever evidence may be issued to reflect your ownership of the Shares subject to the terms and conditions of this Amended Award Agreement.

Rights with Respect to Additional Restricted Shares.

General. Except as otherwise provided in this Amended Award Agreement, you shall have, with respect to all of the Additional Restricted Shares, whether or not vested, all of the rights of a holder of Shares, including without limitation (i) the right to vote such Additional Restricted Shares, (ii) the right to receive dividends, if any, as may be declared on the Additional Restricted Shares from time to time (subject to the provisions and repayment obligations set forth in the Section below entitled “Dividend Equivalents and Dividends”), and (iii) the rights available to all holders of Shares upon any merger, consolidation, reorganization, liquidation or dissolution, stock split‑up, stock dividend or recapitalization undertaken by the Company; provided, however, that all of such rights shall be subject to the terms, provisions, conditions and restrictions set forth in this Amended Award Agreement (including without limitation conditions under which all such rights shall be forfeited). Any Shares issued to you as a [stock] dividend with respect to Additional Restricted Shares shall have the same status and bear the same legend as the Additional Restricted Shares to which they relate and shall be held by the Company, if the Additional Restricted Shares that such dividend is attributed to is being so held, unless otherwise determined by the Committee.

Adjustments to Shares. If at any time while this Agreement is in effect (or Additional Restricted Shares granted hereunder shall be or remain unvested while your Service continues and has not yet terminated or ceased for any reason), there shall be any increase or decrease in the number of issued and outstanding Shares of the Company through the declaration of a stock dividend or through any recapitalization resulting in a stock split-up, combination or exchange of such Shares, then and in that event, the Board or the Committee shall make any adjustments it deems fair and appropriate, in view of such change, in the number of Additional Restricted Shares then subject to this Amended Award Agreement. If any such adjustment shall result in a fractional Share, such fraction shall be disregarded.

No Restrictions on Certain Transactions. Notwithstanding any term or provision of this Amended Award Agreement to the contrary, the existence of this Amended Award Agreement, or of any outstanding Additional Restricted Shares awarded hereunder, shall not affect in any manner the right, power or authority of the Company to make, authorize or consummate: (i) any or all adjustments, recapitalizations, reorganizations or other changes in the Company's capital structure or its business; (ii) any merger, consolidation or similar transaction by or of the Company; (iii) any offer, issue or sale by the Company of any capital stock of the Company, including any equity or debt securities, or preferred or preference stock that would rank prior to or on parity with the Additional Restricted Shares and/or that would include, have or possess other rights, benefits and/or preferences superior to those that the Additional Restricted Shares includes, has or possesses, or any warrants, options or rights with respect to any of the foregoing; (iv) the dissolution or liquidation of the Company; (v) any sale, transfer or assignment of all or any part of the stock, assets or business of the Company; (vi) the declaration or payment of any dividend or other distribution by the Company to its shareholders; or (vii) any other corporate transaction, act or proceeding (whether of a similar character or otherwise).

Dividend Equivalents and Dividends.

During the term of this Amended Award Agreement and prior to the Settlement Date, you shall be automatically granted additional RSUs with respect to a number of Shares (rounded to six decimal places) having a Fair Market Value as of the applicable dividend payment date equal to the value of any dividends or other distributions that would have been distributed to you if each of the Shares to be delivered to you upon settlement of the RSUs instead was an issued and outstanding Share owned by you (“Dividend Equivalents”). The additional RSUs granted to you as Dividend Equivalents shall be subject to the same terms and conditions under this Amended Award Agreement as the RSUs to which they relate, and shall vest and be settled (rounded down to the nearest whole number) in the same manner and at the same times as the RSUs to which they relate. Each Dividend Equivalent shall be treated as a separate payment for purposes of Section 409A of the Code.

After the Settlement Date, you shall be entitled to receive payment of any dividends paid in the form of cash or property other than Shares with respect to your Additional Restricted Shares, at the same time and in the same form, as dividends are paid with respect to Shares owned by other shareholders; provided, however, that in the event that any Additional Restricted Shares are forfeited pursuant to this Amended Award Agreement, you shall be required to immediately repay to the Company the value as of the date on which the dividend was paid of any dividends you received with respect to those forfeited Additional Restricted Shares, reduced by any federal, state or local taxes you paid with respect to those repaid dividends. Any dividends paid with respect to Additional Restricted Shares in the form of Shares shall be treated as Additional Restricted Shares, subject to the same terms and conditions that apply pursuant to this Amended Award Agreement with respect to the underlying Additional Restricted Shares to which they relate.

Taxes.

Regardless of any action the Company or your Employer takes with respect to any or all income tax, social security or insurance, fringe benefits tax, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Award, including the grant, vesting or settlement of RSUs or Additional Restricted Shares, the subsequent sale of Shares acquired pursuant to such settlement and the receipt of any dividends or Dividend Equivalents; and (ii) do not commit to structure the terms of the grant or any aspect of this Award to reduce or eliminate your liability for Tax-Related Items.

If you are or become eligible for Retirement prior to Vesting Date, the value of your Award will be subject to FICA and Medicare taxes on the later of (1) the respective dates on which the Additional Restricted Shares would vest under the accelerated vesting schedule that would apply if you actually retired (whether or not you actually retire on those dates), and (2) the date on which you first become eligible for Retirement, rather than the Vesting Date. The Company may elect, however, pursuant to a rule of administrative convenience, to delay the date on which the FICA and Medicare taxes for Participants eligible for Retirement are determined and withheld until any later date that is within the same calendar year.

Prior to the relevant taxable or tax withholding event, as applicable, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding and payment on account obligations of the Company and/or the Employer. In this regard, you authorize the Company and/or the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Company and/or the Employer. Alternatively, or in addition, if permissible under local law, the Company may in its sole and absolute discretion (1) sell or arrange for the sale of Shares that you acquire to meet the withholding obligation for Tax-Related Items (on your behalf pursuant to this authorization without further consent), and/or (2) withhold the amount of Shares necessary to satisfy the Tax-Related Items, provided, however, that if you are a Section 16 officer of the Company under the U.S. Securities and Exchange Act of 1934, as amended, then the Company will satisfy any withholding obligation only by withholding Shares pursuant to (2) above, unless the use of such withholding method is problematic under applicable tax or securities law or has materially adverse accounting consequences, in which case the obligation for Tax-Related Items may be satisfied by another method or a combination of other methods.

The Company may withhold or account for Tax-Related Items by considering statutory withholding rates or other withholding rates, including maximum rates applicable in your jurisdiction, in which case you may receive a refund of any over-withheld amount in cash and will have no entitlement to the Shares equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, you are deemed to have been issued the full number of Shares subject to the vested RSU, notwithstanding that a number of the Shares are held back solely for the purpose of paying the Tax-Related Items.

Section 83(b) Election.If you properly elect, within thirty (30) days of the Settlement Date, to include in gross income for federal income tax purposes an amount equal to the fair market value (as of the Settlement Date) of the Additional Restricted Shares pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), you shall make arrangements satisfactory to the Company or your Employer to pay to the Company or your Employer any Tax Related Items required to be withheld with respect to the Additional Restricted Shares. If you fail to make such tax payments as are required, the Company or your Employer shall, to the extent permitted by law, have the right to deduct from any payment of any kind (including without limitation, the withholding of any Shares that otherwise would be issued to you under

this Agreement) otherwise due to you any Tax-Related Items required by law to be withheld with respect to the Additional Restricted Shares.

Finally, you will pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to deliver the Shares if you fail to comply with your obligations in connection with the Tax-Related Items as described in this section.

No Guarantee of Continued Service.

You acknowledge and agree that the vesting of this Award on the Vesting Date is earned only by performing continuing Service (not through the act of being hired or being granted this Award). You further acknowledge and agree that this Amended Award Agreement, the transactions contemplated hereunder and the Vesting Date shall not be construed as giving you the right to be retained in the employ of, or to continue to provide services to, the Company or any Affiliate. Further, the Company or the applicable Affiliate may at any time dismiss you, free from any liability or any claim under the Plan, unless otherwise expressly provided in any other agreement binding you, the Company or the applicable Affiliate. The receipt of this Award is not intended to confer any rights on you except as set forth in this Amended Award Agreement.

Termination for Cause; Restrictive Covenants.

In consideration for the grant of this Award and for other good and valuable consideration, the sufficiency of which is acknowledged by you, you agree as follows:

Upon (i) a termination of your Service for Cause, (ii) a retroactive termination of your Service for Cause as permitted herein or under your employment agreement, or (iii) a violation of any post-termination restrictive covenant (including, without limitation, non-disclosure, non-competition and/or non-solicitation) contained in your employment agreement, or any separation or termination or similar agreement you may enter into with the Company or one of its Affiliates in connection with termination of your Service, any Award you hold shall be immediately forfeited and the Company may require that you repay (with interest or appreciation (if any), as applicable, determined up to the date payment is made), and you shall promptly repay to the Company the Fair Market Value (in cash or in Shares) of any Additional Restricted Shares received upon the settlement of RSUs during the period beginning on the date that is one year before the date of your termination and ending on the first anniversary of the date of your termination, plus the value as of the date on which the dividend was paid of any dividends you received with respect to the Additional Restricted Shares for which repayment is due hereunder, reduced by any federal, state or local taxes you paid with respect to such repaid dividends. The Fair Market Value of any such Shares shall be determined as of the Vesting Date for the Additional Restricted Shares.

Company’s Right of Offset.

If you become entitled to a distribution of benefits under this Award, and if at such time you have any outstanding debt, obligation, or other liability representing an amount owing to the Company or any of its Affiliates, then the Company or its Affiliates, upon a determination by the Committee, and to the extent permitted by applicable law and not causing a violation of Section 409A of the Code, may offset such amount so owing against the amount of benefits otherwise distributable. Such determination shall be made by the Committee.

Acknowledgment of Nature of Award.

In accepting the grant of this Award, you acknowledge that:

(a)the Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan;

(b)the grant of this Award is voluntary, occasional and discretionary and does not create any contractual or other right to receive future awards of RSUs or Additional Restricted Shares, or benefits in lieu of RSUs or Additional Restricted Shares even if RSUs or Additional Restricted Shares have been awarded in the past;

(c)all decisions with respect to future awards, if any, will be at the sole discretion of the Company;

(d)your participation in the Plan is voluntary;

(e)this Award and any Shares acquired under the Plan, and the income from and value of same, are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;

(f)the future value of the underlying Shares is unknown and cannot be predicted with certainty;

(g)if you receive Shares, the value of such Shares acquired upon settlement may increase or decrease in value; and

(h)no claim or entitlement to compensation or damages arises from termination of this Award, and no claim or entitlement to compensation or damages shall arise from any diminution in value of the RSUs or Additional Restricted Shares received upon settlement of the Additional Restricted Shares resulting from termination of your Service, and you irrevocably release the Company and the Employer from any such claim that may arise.

Securities Laws.

By accepting this Award, you acknowledge that Canadian or other applicable securities laws, including, without limitation, U.S. securities laws and/or the Company’s policies regarding trading in its securities, may limit or restrict your right to buy or sell Shares, including, without limitation, sales of Shares acquired in connection with this Award. You agree to comply with all Canadian and any other applicable securities law requirements, including, without limitation, any U.S. securities law requirements and Company policies, as such laws and policies are amended from time to time.

Data Privacy Notice and Consent.

You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Amended Award Agreement by and among, as applicable, the Employer, the Company and its other Affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that the Company, the Employer and/or other Affiliates hold certain personal information about you, including, but not limited to, your name, home address, email address and telephone number, date of birth, social insurance or social security number, passport or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all RSUs or any other entitlement to Shares awarded, canceled, vested, unvested or outstanding in your favor (“Data”), for the exclusive purpose of implementing, administering and managing your participation in the Plan.

You understand that Data will be transferred to Solium Capital or such other third party assisting in the implementation, administration and management of the Plan, that these recipients may be located in Canada, the United States or elsewhere, and that the recipient’s country may have different data privacy laws and protections than your country. You understand that, if you reside in the European Economic Area, you may request a list with the names and addresses of any potential recipients of Data by contacting your local human resources representative. You authorize the recipients to receive, possess, use, retain and transfer Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan. You understand that Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that, if you reside in the European Economic Area, you may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. You understand that refusal or withdrawal of consent may affect your ability to participate in the Plan. Further, you understand that you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or Service with the Employer will not be affected; the only consequence of refusing or withdrawing your consent is that the Company would not be able to grant you RSUs or other awards or administer or maintain such awards. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative.

Upon request of the Company or the Employer, you agree to provide a separate executed data privacy consent form (or any other agreements or consents that may be required by the Company and/or the Employer) that the Company and/or the Employer may deem necessary to obtain from you for the purpose of administering your participation in the Plan in compliance with the data privacy laws in your country, either now or in the future. You understand and agree that you will not be able to participate in the Plan if you fail to provide any such consent or agreement requested by the Company and/or Employer.

Limits on Transferability; Beneficiaries.

Neither this Award nor the Additional Restricted Shares issued in settlement thereof, shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability to any party, or Transferred, otherwise than by your will or the laws of descent and distribution or to a Beneficiary upon your death, except that this Award and/or the Additional Restricted Shares may be Transferred to one or more Beneficiaries or other Transferees during your lifetime with the consent of the Committee. A Beneficiary, Transferee, or other person claiming any rights under this Amended Award Agreement shall be subject to all terms and conditions of the Plan and this Amended Award Agreement, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.

No Transfer to any executor or administrator of your estate or to any Beneficiary by will or the laws of descent and distribution of any rights in respect of this Award shall be effective to bind the Company unless the Committee shall have been furnished with (i) written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the Transfer and (ii) the written agreement of the Transferee to comply with all the terms and conditions applicable to this Award and any Shares received upon settlement of the Additional RSUs that are or would have been applicable to you.

Section 409A Compliance.

Neither the Plan, nor this Amended Award Agreement is intended to provide for a deferral of compensation that would subject the RSUs or Additional Restricted Shares to taxation prior to the issuance

of Shares as a result of Section 409A of the Code. Notwithstanding anything to the contrary in the Plan, or this Amended Award Agreement, the Company reserves the right to revise this Amended Award Agreement as it deems necessary or advisable, in its sole discretion and without your consent, to comply with Section 409A of the Code or to otherwise avoid imposition of any additional tax or income recognition under Section 409A of the Code prior to the actual payment of Shares pursuant to this Award. If you are subject to U.S. taxes, all Additional Restricted Shares to which you are entitled will be issued to you on the applicable Settlement Date of the RSUs, as described above in the section entitled “Settlement of RSUs.”

Notwithstanding the foregoing, the Company does not make any representation to you that this Award is exempt from, or satisfies, the requirements of Section 409A, and the Company shall have no liability or other obligation to indemnify or hold harmless you or any Beneficiary for any tax, additional tax, interest or penalties that you or any Beneficiary may incur in the event that any provision of this Agreement, or any amendment or modification thereof or any other action taken with respect thereto, is deemed to violate any of the requirements of Section 409A.

Entire Agreement; Governing Law; Jurisdiction; Waiver of Jury Trial.

The Plan, this Amended Award Agreement and, to the extent applicable, your employment agreement or any separation agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings, representations and agreements (whether oral or written) of the Company and you with respect to the subject matter hereof. This Amended Award Agreement may not be modified in a manner that adversely affects your rights heretofore granted under the Plan, except with your consent or to comply with applicable law or to the extent permitted under other provisions of the Plan. This Amended Award Agreement is governed by the laws of the Province of Ontario and the federal laws of Canada applicable therein, without regard to its principles of conflict of laws.

ANY ACTION OR PROCEEDING AGAINST THE PARTIES RELATING IN ANY WAY TO THIS AWARD OR THE AMENDED AWARD AGREEMENT MAY BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE PROVINCE OF ONTARIO, AND YOU IRREVOCABLY SUBMIT TO THE JURISDICTION OF SUCH COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. ANY ACTIONS OR PROCEEDINGS TO ENFORCE A JUDGMENT ISSUED BY ONE OF THE FOREGOING COURTS MAY BE ENFORCED IN ANY JURISDICTION.

TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, YOU HEREBY WAIVE, AND COVENANT THAT YOU WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AMENDED AWARD AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE.

By signing this Amended Award Agreement, you acknowledge the receipt of a copy of the Plan and represent that you understand the terms and conditions of the Plan, and hereby accept this Award subject to all provisions in this Amended Award Agreement and in the Plan. You hereby agree to accept as final, conclusive and binding all decisions or interpretations of the Committee upon any questions arising under the Plan or this Amended Award Agreement.

Electronic Delivery and Acceptance.

The Company may, in its sole discretion, decide to deliver any documents related to this Award or future awards that may be awarded under the Plan by electronic means or request your consent to participate

in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

Agreement Severable.

In the event that any provision in this Amended Award Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Amended Award Agreement.

Language.

You acknowledge that you are proficient in the English language and understand the content of this Amended Award Agreement and other Plan-related materials. If you have received this Amended Award Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

Waiver.

You acknowledge that a waiver by the Company of breach of any provision of this Amended Award Agreement shall not operate or be construed as a waiver of any other provision of this Amended Award Agreement, or of any subsequent breach by you or any other Participant.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, José E. Cil, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Restaurant Brands International Inc.:

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:  

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ José E. Cil

José E. Cil

Chief Executive Officer

Dated: August 2, 2019

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Matthew Dunnigan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Restaurant Brands International Inc.:

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Matthew Dunnigan

Matthew Dunnigan

Chief Financial Officer

Dated: August 2, 2019

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Restaurant Brands International Inc. (the “Company”) for the quarter ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, José E. Cil, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ José E. Cil

José E. Cil

Chief Executive Officer

Dated: August 2, 2019

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Restaurant Brands International Inc. (the “Company”) for the quarter ended June 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Matthew Dunnigan, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Matthew Dunnigan

Matthew Dunnigan

Chief Financial Officer

Date: August 2, 2019

XML

Cover - shares	6 Months Ended
	Jun. 30, 2019	Jul. 26, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2019
Entity File Number	001-36786
Entity Registrant Name	RESTAURANT BRANDS INTERNATIONAL INC.
Entity Incorporation, State or Country Code	Z4
Entity Tax Identification Number	98-1202754
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(b) Security	Common Shares, without par value
Trading Symbol	QSR
Security Exchange Name	NYSE
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
Entity Common Stock, Shares Outstanding		255,752,583
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001618756
Current Fiscal Year End Date	--12-31

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2019	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 1,028		$ 913	$ 913
Accounts and notes receivable, net of allowance of $16 and $14, respectively	476		452	452
Inventories, net	81		75	75
Prepaids and other current assets	69		60	60
Total current assets	1,654		1,500	1,500
Property and equipment, net of accumulated depreciation and amortization of $680 and $704, respectively	2,007		2,022	1,996
Operating lease assets, net	1,154		1,143
Intangible assets, net	10,543		10,330	10,463
Goodwill	5,625		5,486	5,486
Net investment in property leased to franchisees	47		54	54
Other assets, net	695		642	642
Total assets	21,725		21,177	20,141
Current liabilities:
Accounts and drafts payable	486		513	513
Other accrued liabilities	699		751	637
Gift card liability	106		167	167
Current portion of long term debt and finance leases	92		91	91
Total current liabilities	1,383		1,522	1,408
Term debt, net of current portion	11,737		11,758	11,823
Finance leases, net of current portion	284		288
Finance leases, net of current portion				226
Operating lease liabilities, net of current portion	1,056		1,028
Other liabilities, net	1,730		1,415	1,547
Deferred income taxes, net	1,575		1,527	1,519
Total liabilities	17,765		17,538	16,523
Shareholders’ equity:
Common shares, no par value; unlimited shares authorized at June 30, 2019 and December 31, 2018; 255,630,895 shares issued and outstanding at June 30, 2019; 251,532,493 shares issued and outstanding at December 31, 2018	1,870		1,737	1,737
Retained earnings	704		686	674
Accumulated other comprehensive income (loss)	(717)		(800)	(800)
Total Restaurant Brands International Inc. shareholders’ equity	1,857		1,623	1,611
Noncontrolling interests	2,103		2,016	2,007
Total shareholders’ equity	3,960	$ 3,773	3,639	3,618	$ 4,225	$ 4,242	$ 4,561
Total liabilities and shareholders’ equity	$ 21,725		$ 21,177	$ 20,141

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Allowances for accounts and notes receivable	$ 16	$ 14
Property and equipment, accumulated depreciation and amortization	$ 680	$ 704
Common stock, par value (in usd per share)
Common stock, shares authorized	Unlimited	Unlimited
Common stock, shares issued	255,630,895	251,532,493
Common stock, shares outstanding	255,630,895	251,532,493

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Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues:
Revenues	$ 1,400	$ 1,343	$ 2,666	$ 2,597
Operating costs and expenses:
Cost of sales	453	449	859	878
Franchise and property expenses	135	103	268	207
Selling, general and administrative expenses	316	318	628	619
(Income) loss from equity method investments	2	1	0	(13)
Other operating expenses (income), net	3	(30)	(14)	(17)
Total operating costs and expenses	909	841	1,741	1,674
Income from operations	491	502	925	923
Interest expense, net	137	130	269	270
Income before income taxes	354	372	656	653
Income tax expense	97	58	153	60
Net income	257	314	503	593
Net income attributable to noncontrolling interests	115	147	226	278
Net income attributable to common shareholders	$ 142	$ 167	$ 277	$ 315
Earnings per common share
Basic (in usd per share)	$ 0.56	$ 0.67	$ 1.09	$ 1.27
Diluted (in usd per share)	$ 0.55	$ 0.66	$ 1.07	$ 1.25
Weighted average shares outstanding
Basic (shares)	255	249	254	248
Diluted (shares)	469	474	468	474
Sales
Revenues:
Revenues	$ 589	$ 586	$ 1,111	$ 1,134
Franchise and property revenues
Revenues:
Revenues	$ 811	$ 757	$ 1,555	$ 1,463

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Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 257	$ 314	$ 503	$ 593
Foreign currency translation adjustment	199	(255)	358	(472)
Net change in fair value of net investment hedges, net of tax of $13, $(29), $39 and $(38)	(40)	113	(116)	116
Net change in fair value of cash flow hedges, net of tax of $22, $(1), $34 and $(10)	(57)	(1)	(91)	28
Amounts reclassified to earnings of cash flow hedges, net of tax of $(1), $0, $(1) and $(2)	3	4	2	6
Other comprehensive income (loss)	105	(139)	153	(322)
Comprehensive income (loss)	362	175	656	271
Comprehensive income (loss) attributable to noncontrolling interests	162	82	295	127
Comprehensive income (loss) attributable to common shareholders	$ 200	$ 93	$ 361	$ 144

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Statement of Comprehensive Income [Abstract]
Tax effect on change in fair value of investment hedges	$ 13	$ (29)	$ 39	$ (38)
Tax effect of changes in fair value of cash flow hedges	22	(1)	34	(10)
Tax effect on amounts reclassified to earnings of cash flow hedges	$ (1)	$ 0	$ (1)	$ (2)

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Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions	Total	Issued Common Shares	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interest
Beginning balances, shares at Dec. 31, 2017		243,899,476
Beginning balances at Dec. 31, 2017	$ 4,561	$ 2,052	$ 651	$ (476)	$ 2,334
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises, shares		5,058,992
Stock option exercises	25	$ 25
Share-based compensation	14	$ 14
Issuance of shares, shares		113,733
Issuance of shares	5	$ 5
Dividends declared	(112)		(112)
Distributions declared by Partnership on Partnership exchangeable units	(98)				(98)
Exchange of partnership exchangeable units for RBI common shares, shares		29,432
Exchange of Partnership exchangeable units for RBI common shares	0
Restaurant VIE contributions (distributions)	1				1
Net income	279		148		131
Other comprehensive income (loss)	(183)			(97)	(86)
Ending balances, shares at Mar. 31, 2018		249,101,633
Ending balances at Mar. 31, 2018	4,242	$ 2,096	555	(573)	2,164
Beginning balances, shares at Dec. 31, 2017		243,899,476
Beginning balances at Dec. 31, 2017	4,561	$ 2,052	651	(476)	2,334
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	593
Other comprehensive income (loss)	(322)
Ending balances, shares at Jun. 30, 2018		249,567,271
Ending balances at Jun. 30, 2018	4,225	$ 2,116	608	(647)	2,148
Beginning balances, shares at Mar. 31, 2018		249,101,633
Beginning balances at Mar. 31, 2018	4,242	$ 2,096	555	(573)	2,164
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises, shares		410,383
Stock option exercises	4	$ 4
Share-based compensation	13	$ 13
Issuance of shares, shares		12,332
Issuance of shares	1	$ 1
Dividends declared	(112)		(112)
Dividend equivalents declared on restricted stock units	0	$ 2	(2)
Distributions declared by Partnership on Partnership exchangeable units	(98)				(98)
Exchange of partnership exchangeable units for RBI common shares, shares		42,923
Exchange of Partnership exchangeable units for RBI common shares	0
Restaurant VIE contributions (distributions)	0				0
Net income	314		167		147
Other comprehensive income (loss)	(139)			(74)	(65)
Ending balances, shares at Jun. 30, 2018		249,567,271
Ending balances at Jun. 30, 2018	$ 4,225	$ 2,116	608	(647)	2,148
Beginning balances, shares at Dec. 31, 2018	251,532,493	251,532,493
Beginning balances at Dec. 31, 2018	$ 3,618	$ 1,737	674	(800)	2,007
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises, shares		2,019,620
Stock option exercises	42	$ 42
Share-based compensation	22	$ 22
Issuance of shares, shares		134,809
Issuance of shares	7	$ 7
Dividends declared	(127)		(127)
Dividend equivalents declared on restricted stock units	0	$ 2	(2)
Distributions declared by Partnership on Partnership exchangeable units	(104)				(104)
Exchange of partnership exchangeable units for RBI common shares, shares		141,190
Exchange of Partnership exchangeable units for RBI common shares	0	$ 2		(1)	(1)
Net income	246		135		111
Other comprehensive income (loss)	48			26	22
Ending balances, shares at Mar. 31, 2019		253,828,112
Ending balances at Mar. 31, 2019	$ 3,773	$ 1,812	692	(775)	2,044
Beginning balances, shares at Dec. 31, 2018	251,532,493	251,532,493
Beginning balances at Dec. 31, 2018	$ 3,618	$ 1,737	674	(800)	2,007
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	503
Other comprehensive income (loss)	$ 153
Ending balances, shares at Jun. 30, 2019	255,630,895	255,630,895
Ending balances at Jun. 30, 2019	$ 3,960	$ 1,870	704	(717)	2,103
Beginning balances, shares at Mar. 31, 2019		253,828,112
Beginning balances at Mar. 31, 2019	3,773	$ 1,812	692	(775)	2,044
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock option exercises, shares		1,697,488
Stock option exercises	38	$ 38
Share-based compensation	17	$ 17
Issuance of shares, shares		59,970
Issuance of shares	0	$ 0
Dividends declared	(128)		(128)
Dividend equivalents declared on restricted stock units	0	$ 2	(2)
Distributions declared by Partnership on Partnership exchangeable units	(103)				(103)
Exchange of partnership exchangeable units for RBI common shares, shares		45,325
Exchange of Partnership exchangeable units for RBI common shares	0	$ 1			(1)
Restaurant VIE contributions (distributions)	1				1
Net income	257		142		115
Other comprehensive income (loss)	$ 105			58	47
Ending balances, shares at Jun. 30, 2019	255,630,895	255,630,895
Ending balances at Jun. 30, 2019	$ 3,960	$ 1,870	$ 704	$ (717)	$ 2,103

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Condensed Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018
Statement of Stockholders' Equity [Abstract]
Dividends per common share (in dollars per share)	$ 0.50	$ 0.50	$ 0.45	$ 0.45
Distributions declared on Partnership exchangeable units (in dollars per share)	$ 0.50	$ 0.50	$ 0.45	$ 0.45

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net income	$ 503	$ 593
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
Depreciation and amortization	92	93
Amortization of deferred financing costs and debt issuance discount	15	14
(Income) loss from equity method investments	0	(13)
(Gain) loss on remeasurement of foreign denominated transactions	(3)	(16)
Net (gains) losses on derivatives	(34)	(15)
Share-based compensation expense	39	27
Deferred income taxes	23	(58)
Other	(3)	4
Changes in current assets and liabilities, excluding acquisitions and dispositions:
Accounts and notes receivable	(16)	36
Inventories and prepaids and other current assets	(10)	(16)
Accounts and drafts payable	(40)	(11)
Other accrued liabilities and gift card liability	(166)	(347)
Tenant inducements paid to franchisees	(8)	(13)
Other long-term assets and liabilities	83	9
Net cash provided by (used for) operating activities	475	287
Cash flows from investing activities:
Payments for property and equipment	(14)	(22)
Net proceeds from disposal of assets, restaurant closures, and refranchisings	22	3
Settlement/sale of derivatives, net	15	11
Other investing activities, net	0	9
Net cash provided by (used for) investing activities	23	1
Cash flows from financing activities:
Repayments of long-term debt and finance leases	(48)	(43)
Payment of dividends on common shares and distributions on Partnership exchangeable units	(437)	(307)
Payments in connection with redemption of preferred shares	0	(60)
Proceeds from stock option exercises	80	29
Other financing activities, net	10	(2)
Net cash (used for) provided by financing activities	(395)	(383)
Effect of exchange rates on cash and cash equivalents	12	(15)
Increase (decrease) in cash and cash equivalents	115	(110)
Cash and cash equivalents at beginning of period	913	1,097
Cash and cash equivalents at end of period	1,028	987
Supplemental cash flow disclosures:
Interest paid	292	274
Income taxes paid	$ 127	$ 374

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Description of Business and Organization

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Organization

Description of Business and Organization

Restaurant Brands International Inc. (the “Company”, “RBI”, “we”, “us” or “our”) was formed on August 25, 2014 and continued under the laws of Canada. The Company serves as the sole general partner of Restaurant Brands International Limited Partnership (“Partnership”). We franchise and operate quick service restaurants serving premium coffee and other beverage and food products under the Tim Hortons® brand (“Tim Hortons” or “TH”), fast food hamburgers principally under the Burger King® brand (“Burger King” or “BK”), 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 June 30, 2019, we franchised or owned 4,872 Tim Hortons restaurants, 18,008 Burger King restaurants, and 3,156 Popeyes restaurants, for a total of 26,036 restaurants, and operate in more than 100 countries and U.S. territories. Approximately 100% of current system-wide restaurants are franchised.

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.

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Basis of Presentation and Consolidation

6 Months Ended

Jun. 30, 2019

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 22, 2019.

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 are the sole general partner of Partnership and, as such we have 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, subject to the terms of the amended and restated limited partnership agreement of Partnership (the “partnership agreement”) and applicable laws. As a result, we consolidate the results of Partnership and record a noncontrolling interest in our consolidated balance sheets and statements of operations with respect to the remaining economic interest in Partnership we do not hold.

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 June 30, 2019 and December 31, 2018, we determined that we are the primary beneficiary of 30 and 17 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 consist of the reclassification of $13 million from changes in Other long-term assets and liabilities in the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2018 to Tenant inducements paid to franchisees. These reclassifications had no effect on previously reported net income.

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New Accounting Pronouncements

6 Months Ended

Jun. 30, 2019

Accounting Changes and Error Corrections [Abstract]

New Accounting Pronouncements

New Accounting Pronouncements

Lease Accounting – In February 2016, the Financial Accounting Standard Board (the “FASB”) issued new guidance on leases. We adopted this new guidance on January 1, 2019. See Note 4, Leases, for further information about our transition to this new lease accounting standard.

Goodwill Impairment – In January 2017, the FASB issued guidance to simplify how an entity measures goodwill impairment by removing the second step of the two-step quantitative goodwill impairment test. An entity will no longer be required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured at the amount by which the carrying value exceeds the fair value of a reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment requires prospective adoption and is effective commencing in 2020 with early adoption permitted. The adoption of this new guidance will not have a material impact on our Financial Statements.

Reclassification of Certain Tax Effects – In February 2018, the FASB issued guidance which allows a reclassification from accumulated other comprehensive income (loss) to retained earnings for the tax effects of certain items within accumulated other comprehensive income (loss). The amendment is effective commencing in 2019 with early adoption permitted. The adoption of this new guidance did not have a material impact on our Financial Statements.

Share-based payment arrangements with nonemployees – In June 2018, the FASB issued guidance which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendment is effective commencing in 2019 with early adoption permitted. The adoption of this new guidance did not have a material impact on our Financial Statements.

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Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Leases

As of June 30, 2019, we leased or subleased 5,331 restaurant properties to franchisees and 168 non-restaurant properties to third parties under operating leases and direct financing leases where we are the lessor. Initial lease terms generally range from 10 to 20 years. Most leases to franchisees provide for fixed monthly payments and many provide for future rent escalations and renewal options. Certain leases also include provisions for variable rent, determined as a percentage of sales, generally when annual sales exceed specified levels. Lessees typically bear the cost of maintenance, insurance and property taxes.

We lease land, buildings, equipment, office space and warehouse space. Land and building leases generally have an initial term of 10 to 30 years, while land-only lease terms can extend longer, and most leases provide for fixed monthly payments. Many of these leases provide for future rent escalations and renewal options. Certain leases also include provisions for variable rent payments, determined as a percentage of sales, generally when annual sales exceed specified levels. Most leases also obligate us to pay, as lessee, the cost of maintenance, insurance and property taxes.

We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”), from ASC Topic 840, Leases (the “Previous Standard”) on January 1, 2019 on a modified retrospective basis using the effective date transition method. Our Financial Statements reflect the application of ASC 842 guidance beginning in 2019, while our consolidated financial statements for prior periods were prepared under the guidance of the Previous Standard. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. Our transition to ASC 842 resulted in the gross presentation of property tax and maintenance expenses and related lessee reimbursements as franchise and property expenses and franchise and property revenues, respectively. These expenses and reimbursements were presented on a net basis under the Previous Standard.

In connection with our transition to ASC 842, we elected the package of practical expedients under which we did not reassess the classification of our existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. We also elected lessee and lessor practical expedients to not separate non-lease components comprised of maintenance from lease components for real estate leases that commenced prior to our transition to ASC 842, as well as for leases that commence or that are modified subsequent to our transition to ASC 842. We did not elect the practical expedient that permitted a reassessment of lease terms for existing leases.

Financial Statement Impact of Transition to ASC 842

Transition Impact on January 1, 2019 Condensed Consolidated Balance Sheet

Our transition to ASC 842 represents a change in accounting principle. The $21 million cumulative effect of our transition to ASC 842 is reflected as an adjustment to January 1, 2019 Shareholders' equity.

Our transition to ASC 842 resulted in the following adjustments to our condensed consolidated balance sheet as of January 1, 2019 (in millions):

	As Reported			Total				Adjusted
	December 31, 2018			Adjustments				January 1, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	913		$	—			$	913
Accounts and notes receivable, net	452			—				452
Inventories, net	75			—				75
Prepaids and other current assets	60			—				60
Total current assets	1,500			—				1,500
Property and equipment, net	1,996			26			(a)	2,022
Operating lease assets, net	—			1,143			(b)	1,143
Intangible assets, net	10,463			(133		)	(c)	10,330
Goodwill	5,486			—				5,486
Net investment in property leased to franchisees	54			—				54
Other assets, net	642			—				642
Total assets	$	20,141		$	1,036			$	21,177
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts and drafts payable	$	513		$	—			$	513
Other accrued liabilities	637			114			(d)	751
Gift card liability	167			—				167
Current portion of long term debt and finance leases	91			—				91
Total current liabilities	1,408			114				1,522
Term debt, net of current portion	11,823			(65		)	(e)	11,758
Finance leases, net of current portion	226			62			(e)	288
Operating lease liabilities, net of current portion	—			1,028			(f)	1,028
Other liabilities, net	1,547			(132		)	(g)	1,415
Deferred income taxes, net	1,519			8			(h)	1,527
Total liabilities	16,523			1,015				17,538
Shareholders’ equity:
Common shares	1,737			—				1,737
Retained earnings	674			12			(i)	686
Accumulated other comprehensive income (loss)	(800		)	—				(800		)
Total RBI shareholders’ equity	1,611			12				1,623
Noncontrolling interests	2,007			9			(i)	2,016
Total shareholders’ equity	3,618			21				3,639
Total liabilities and shareholders’ equity	$	20,141		$	1,036			$	21,177

(a) Represents the net change in assets recorded in connection with build-to-suit leases.

(b) Represents the capitalization of operating lease right-of-use (“ROU”) assets equal to the amount of recognized operating lease liability, adjusted by the net carrying amounts of related favorable lease assets and unfavorable lease liabilities in which we are the lessee and straight-line rent accruals, which were reclassified to operating lease ROU assets.

(c) Represents the net carrying amount of favorable lease assets associated with leases in which we are the lessee, which have been reclassified to operating lease ROU assets.

(d) Represents the current portion of operating lease liabilities.

(e) Represents the net change in liabilities recorded in connection with build-to-suit leases.

(f) Represents the recognition of operating lease liabilities, net of current portion.

(g) Represents the net carrying amount of unfavorable lease liabilities associated with leases in which we are the lessee and $64 million of straight-line rent accruals which have been reclassified to operating lease ROU assets.

(h) Represents the net tax effects of the adjustments noted above, with a corresponding adjustment to shareholders’ equity.

(i) Represents net change in assets and liabilities recorded in connection with built-to-suit leases and the tax effects of adjustments noted above.

Changes to Lease Accounting Significant Accounting Policies Under ASC 842

In all leases, whether we are the lessor or lessee, we define lease term as the noncancellable term of the lease plus any renewals covered by renewal options that are reasonably certain of exercise based on our assessment of the economic factors relevant to the lessee. The noncancellable term of the lease commences on the date the lessor makes the underlying property in the lease available to the lessee, irrespective of when lease payments begin under the contract.

Lessor Accounting

We recognize lease payments for operating leases as property revenue on a straight-line basis over the lease term and property revenue is presented net of any related sales tax. Lease incentive payments we make to lessees are amortized as a reduction in property revenue over the lease term. We account for reimbursements of maintenance and property tax costs paid to us by lessees as variable lease payment property revenue.

We also have net investments in properties leased to franchisees, which met the criteria of direct financing leases under the Previous Standard. Investments in direct financing leases are recorded on a net basis, consisting of the gross investment and estimated residual value in the lease, less unearned income. Unearned income on direct financing leases is recognized over the lease term yielding a constant periodic rate of return on the net investment in the lease. We do not remeasure the net investment in a direct financing lease unless the lease is modified and that modification is not accounted for as a separate contract.

We recognize variable lease payment income for operating and direct financing leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

Lessee Accounting

In leases where we are the lessee, we recognize an ROU asset and lease liability at lease commencement, which is measured by discounting lease payments using our incremental borrowing rate applicable to the lease term and currency of the lease as the discount rate. Subsequent amortization of the ROU asset and accretion of the lease liability for an operating lease is recognized as a single lease cost, on a straight-line basis, over the lease term. Amortization of the ROU asset and the change in the lease liability is included in changes in Other long-term assets and liabilities in the Condensed Consolidated Statement of Cash Flows. A finance lease ROU asset is depreciated on a straight-line basis over the lesser of the useful life of the leased asset or lease term. Interest on each finance lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. ROU assets are assessed for impairment in accordance with our long-lived asset impairment policy. We reassess lease classification and remeasure ROU assets and lease liabilities when a lease is modified and that modification is not accounted for as a separate contract or upon certain other events that require reassessment in accordance with ASC 842. Maintenance and property tax expenses are accounted for on an accrual basis as variable lease cost.

We recognize variable lease cost for operating and finance leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

Company as Lessor

Assets leased to franchisees and others under operating leases where we are the lessor and which are included within our property and equipment, net are as follows (in millions):

	As of
	June 30, 2019
Land	$	920
Buildings and improvements	1,139
Restaurant equipment	21
	2,080
Accumulated depreciation and amortization	(441		)
Property and equipment leased, net	$	1,639

Our net investment in direct financing leases is as follows (in millions):

	As of
	June 30, 2019
Future rents to be received:
Future minimum lease receipts	$	53
Contingent rents (a)	23
Estimated unguaranteed residual value	15
Unearned income	(30		)
	61
Current portion included within accounts receivables	(14		)
Net investment in property leased to franchisees	$	47

(a) Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting.

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 June 30, 2019		Six months ended June 30, 2019
Lease income - operating leases
Minimum lease payments	$	112	$	223
Variable lease payments	97		181
Amortization of favorable and unfavorable income lease contracts, net	2		4
Subtotal - lease income from operating leases	211		408
Earned income on direct financing leases	3		5
Total property revenues	$	214	$	413

Company as Lessee

Lease cost and other information associated with these lease commitments is as follows (in millions):

Lease Cost (Income)

	Three months ended June 30, 2019			Six months ended June 30, 2019
Operating lease cost	$	53		$	106
Operating lease variable lease cost	50			100
Finance lease cost:
Amortization of right-of-use assets	6			13
Interest on lease liabilities	6			11
Sublease income	(164		)	(319		)
Total lease cost (income)	$	(49	)	$	(89	)

Lease Term and Discount Rate as of June 30, 2019

Weighted-average remaining lease term (in years):
Operating leases	11.1 years
Finance leases	11.2 years
Weighted-average discount rate:
Operating leases	6.5	%
Finance leases	7.6	%

Other Information for the six months ended June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	96
Operating cash flows from finance leases	$	11
Financing cash flows from finance leases	$	13
Right-of-use assets obtained in exchange for new finance lease obligations	$	1
Right-of-use assets obtained in exchange for new operating lease obligations	$	65

Maturity Analysis

As of June 30, 2019, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
Remainder of 2019	$	7	$	213	$	24		$	97
2020	10		406		46			187
2021	7		382		44			175
2022	5		357		43			163
2023	5		335		39			149
Thereafter	19		1,876		268			941
Total minimum receipts / payments	$	53	$	3,569	464			1,712
Less amount representing interest (b)					(153		)	(535		)
Present value of minimum lease payments					311			1,177
Current portion of lease obligations					(27		)	(121		)
Long-term portion of lease obligations					$	284		$	1,056

(a) Minimum lease commitments have not been reduced by minimum sublease rentals of $2,351 million due in the future under non-cancelable subleases.

(b) Calculated using the interest rate for each lease.

As of December 31, 2018, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
2019	$	14	$	416	$	38		$	183
2020	10		388		36			172
2021	7		360		34			158
2022	5		331		33			145
2023	5		306		30			130
Thereafter	19		1,704		201			831
Total minimum receipts / payments	$	60	$	3,505	372			$	1,619
Less amount representing interest					(125		)
Present value of minimum finance lease payments					247
Current portion of finance lease obligation					(21		)
Long-term portion of finance lease obligation					$	226

(a)

Minimum lease commitments have not been reduced by minimum sublease rentals of $2,290 million due in the future under non-cancelable subleases.

Leases

Leases

As of June 30, 2019, we leased or subleased 5,331 restaurant properties to franchisees and 168 non-restaurant properties to third parties under operating leases and direct financing leases where we are the lessor. Initial lease terms generally range from 10 to 20 years. Most leases to franchisees provide for fixed monthly payments and many provide for future rent escalations and renewal options. Certain leases also include provisions for variable rent, determined as a percentage of sales, generally when annual sales exceed specified levels. Lessees typically bear the cost of maintenance, insurance and property taxes.

We lease land, buildings, equipment, office space and warehouse space. Land and building leases generally have an initial term of 10 to 30 years, while land-only lease terms can extend longer, and most leases provide for fixed monthly payments. Many of these leases provide for future rent escalations and renewal options. Certain leases also include provisions for variable rent payments, determined as a percentage of sales, generally when annual sales exceed specified levels. Most leases also obligate us to pay, as lessee, the cost of maintenance, insurance and property taxes.

We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”), from ASC Topic 840, Leases (the “Previous Standard”) on January 1, 2019 on a modified retrospective basis using the effective date transition method. Our Financial Statements reflect the application of ASC 842 guidance beginning in 2019, while our consolidated financial statements for prior periods were prepared under the guidance of the Previous Standard. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. Our transition to ASC 842 resulted in the gross presentation of property tax and maintenance expenses and related lessee reimbursements as franchise and property expenses and franchise and property revenues, respectively. These expenses and reimbursements were presented on a net basis under the Previous Standard.

In connection with our transition to ASC 842, we elected the package of practical expedients under which we did not reassess the classification of our existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. We also elected lessee and lessor practical expedients to not separate non-lease components comprised of maintenance from lease components for real estate leases that commenced prior to our transition to ASC 842, as well as for leases that commence or that are modified subsequent to our transition to ASC 842. We did not elect the practical expedient that permitted a reassessment of lease terms for existing leases.

Financial Statement Impact of Transition to ASC 842

Transition Impact on January 1, 2019 Condensed Consolidated Balance Sheet

Our transition to ASC 842 represents a change in accounting principle. The $21 million cumulative effect of our transition to ASC 842 is reflected as an adjustment to January 1, 2019 Shareholders' equity.

Our transition to ASC 842 resulted in the following adjustments to our condensed consolidated balance sheet as of January 1, 2019 (in millions):

	As Reported			Total				Adjusted
	December 31, 2018			Adjustments				January 1, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	913		$	—			$	913
Accounts and notes receivable, net	452			—				452
Inventories, net	75			—				75
Prepaids and other current assets	60			—				60
Total current assets	1,500			—				1,500
Property and equipment, net	1,996			26			(a)	2,022
Operating lease assets, net	—			1,143			(b)	1,143
Intangible assets, net	10,463			(133		)	(c)	10,330
Goodwill	5,486			—				5,486
Net investment in property leased to franchisees	54			—				54
Other assets, net	642			—				642
Total assets	$	20,141		$	1,036			$	21,177
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts and drafts payable	$	513		$	—			$	513
Other accrued liabilities	637			114			(d)	751
Gift card liability	167			—				167
Current portion of long term debt and finance leases	91			—				91
Total current liabilities	1,408			114				1,522
Term debt, net of current portion	11,823			(65		)	(e)	11,758
Finance leases, net of current portion	226			62			(e)	288
Operating lease liabilities, net of current portion	—			1,028			(f)	1,028
Other liabilities, net	1,547			(132		)	(g)	1,415
Deferred income taxes, net	1,519			8			(h)	1,527
Total liabilities	16,523			1,015				17,538
Shareholders’ equity:
Common shares	1,737			—				1,737
Retained earnings	674			12			(i)	686
Accumulated other comprehensive income (loss)	(800		)	—				(800		)
Total RBI shareholders’ equity	1,611			12				1,623
Noncontrolling interests	2,007			9			(i)	2,016
Total shareholders’ equity	3,618			21				3,639
Total liabilities and shareholders’ equity	$	20,141		$	1,036			$	21,177

(a) Represents the net change in assets recorded in connection with build-to-suit leases.

(b) Represents the capitalization of operating lease right-of-use (“ROU”) assets equal to the amount of recognized operating lease liability, adjusted by the net carrying amounts of related favorable lease assets and unfavorable lease liabilities in which we are the lessee and straight-line rent accruals, which were reclassified to operating lease ROU assets.

(c) Represents the net carrying amount of favorable lease assets associated with leases in which we are the lessee, which have been reclassified to operating lease ROU assets.

(d) Represents the current portion of operating lease liabilities.

(e) Represents the net change in liabilities recorded in connection with build-to-suit leases.

(f) Represents the recognition of operating lease liabilities, net of current portion.

(g) Represents the net carrying amount of unfavorable lease liabilities associated with leases in which we are the lessee and $64 million of straight-line rent accruals which have been reclassified to operating lease ROU assets.

(h) Represents the net tax effects of the adjustments noted above, with a corresponding adjustment to shareholders’ equity.

(i) Represents net change in assets and liabilities recorded in connection with built-to-suit leases and the tax effects of adjustments noted above.

Changes to Lease Accounting Significant Accounting Policies Under ASC 842

In all leases, whether we are the lessor or lessee, we define lease term as the noncancellable term of the lease plus any renewals covered by renewal options that are reasonably certain of exercise based on our assessment of the economic factors relevant to the lessee. The noncancellable term of the lease commences on the date the lessor makes the underlying property in the lease available to the lessee, irrespective of when lease payments begin under the contract.

Lessor Accounting

We recognize lease payments for operating leases as property revenue on a straight-line basis over the lease term and property revenue is presented net of any related sales tax. Lease incentive payments we make to lessees are amortized as a reduction in property revenue over the lease term. We account for reimbursements of maintenance and property tax costs paid to us by lessees as variable lease payment property revenue.

We also have net investments in properties leased to franchisees, which met the criteria of direct financing leases under the Previous Standard. Investments in direct financing leases are recorded on a net basis, consisting of the gross investment and estimated residual value in the lease, less unearned income. Unearned income on direct financing leases is recognized over the lease term yielding a constant periodic rate of return on the net investment in the lease. We do not remeasure the net investment in a direct financing lease unless the lease is modified and that modification is not accounted for as a separate contract.

We recognize variable lease payment income for operating and direct financing leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

Lessee Accounting

In leases where we are the lessee, we recognize an ROU asset and lease liability at lease commencement, which is measured by discounting lease payments using our incremental borrowing rate applicable to the lease term and currency of the lease as the discount rate. Subsequent amortization of the ROU asset and accretion of the lease liability for an operating lease is recognized as a single lease cost, on a straight-line basis, over the lease term. Amortization of the ROU asset and the change in the lease liability is included in changes in Other long-term assets and liabilities in the Condensed Consolidated Statement of Cash Flows. A finance lease ROU asset is depreciated on a straight-line basis over the lesser of the useful life of the leased asset or lease term. Interest on each finance lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. ROU assets are assessed for impairment in accordance with our long-lived asset impairment policy. We reassess lease classification and remeasure ROU assets and lease liabilities when a lease is modified and that modification is not accounted for as a separate contract or upon certain other events that require reassessment in accordance with ASC 842. Maintenance and property tax expenses are accounted for on an accrual basis as variable lease cost.

We recognize variable lease cost for operating and finance leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

Company as Lessor

Assets leased to franchisees and others under operating leases where we are the lessor and which are included within our property and equipment, net are as follows (in millions):

	As of
	June 30, 2019
Land	$	920
Buildings and improvements	1,139
Restaurant equipment	21
	2,080
Accumulated depreciation and amortization	(441		)
Property and equipment leased, net	$	1,639

Our net investment in direct financing leases is as follows (in millions):

	As of
	June 30, 2019
Future rents to be received:
Future minimum lease receipts	$	53
Contingent rents (a)	23
Estimated unguaranteed residual value	15
Unearned income	(30		)
	61
Current portion included within accounts receivables	(14		)
Net investment in property leased to franchisees	$	47

(a) Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting.

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 June 30, 2019		Six months ended June 30, 2019
Lease income - operating leases
Minimum lease payments	$	112	$	223
Variable lease payments	97		181
Amortization of favorable and unfavorable income lease contracts, net	2		4
Subtotal - lease income from operating leases	211		408
Earned income on direct financing leases	3		5
Total property revenues	$	214	$	413

Company as Lessee

Lease cost and other information associated with these lease commitments is as follows (in millions):

Lease Cost (Income)

	Three months ended June 30, 2019			Six months ended June 30, 2019
Operating lease cost	$	53		$	106
Operating lease variable lease cost	50			100
Finance lease cost:
Amortization of right-of-use assets	6			13
Interest on lease liabilities	6			11
Sublease income	(164		)	(319		)
Total lease cost (income)	$	(49	)	$	(89	)

Lease Term and Discount Rate as of June 30, 2019

Weighted-average remaining lease term (in years):
Operating leases	11.1 years
Finance leases	11.2 years
Weighted-average discount rate:
Operating leases	6.5	%
Finance leases	7.6	%

Other Information for the six months ended June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	96
Operating cash flows from finance leases	$	11
Financing cash flows from finance leases	$	13
Right-of-use assets obtained in exchange for new finance lease obligations	$	1
Right-of-use assets obtained in exchange for new operating lease obligations	$	65

Maturity Analysis

As of June 30, 2019, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
Remainder of 2019	$	7	$	213	$	24		$	97
2020	10		406		46			187
2021	7		382		44			175
2022	5		357		43			163
2023	5		335		39			149
Thereafter	19		1,876		268			941
Total minimum receipts / payments	$	53	$	3,569	464			1,712
Less amount representing interest (b)					(153		)	(535		)
Present value of minimum lease payments					311			1,177
Current portion of lease obligations					(27		)	(121		)
Long-term portion of lease obligations					$	284		$	1,056

(a) Minimum lease commitments have not been reduced by minimum sublease rentals of $2,351 million due in the future under non-cancelable subleases.

(b) Calculated using the interest rate for each lease.

As of December 31, 2018, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
2019	$	14	$	416	$	38		$	183
2020	10		388		36			172
2021	7		360		34			158
2022	5		331		33			145
2023	5		306		30			130
Thereafter	19		1,704		201			831
Total minimum receipts / payments	$	60	$	3,505	372			$	1,619
Less amount representing interest					(125		)
Present value of minimum finance lease payments					247
Current portion of finance lease obligation					(21		)
Long-term portion of finance lease obligation					$	226

(a)

Minimum lease commitments have not been reduced by minimum sublease rentals of $2,290 million due in the future under non-cancelable subleases.

Leases

Leases

As of June 30, 2019, we leased or subleased 5,331 restaurant properties to franchisees and 168 non-restaurant properties to third parties under operating leases and direct financing leases where we are the lessor. Initial lease terms generally range from 10 to 20 years. Most leases to franchisees provide for fixed monthly payments and many provide for future rent escalations and renewal options. Certain leases also include provisions for variable rent, determined as a percentage of sales, generally when annual sales exceed specified levels. Lessees typically bear the cost of maintenance, insurance and property taxes.

We lease land, buildings, equipment, office space and warehouse space. Land and building leases generally have an initial term of 10 to 30 years, while land-only lease terms can extend longer, and most leases provide for fixed monthly payments. Many of these leases provide for future rent escalations and renewal options. Certain leases also include provisions for variable rent payments, determined as a percentage of sales, generally when annual sales exceed specified levels. Most leases also obligate us to pay, as lessee, the cost of maintenance, insurance and property taxes.

We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”), from ASC Topic 840, Leases (the “Previous Standard”) on January 1, 2019 on a modified retrospective basis using the effective date transition method. Our Financial Statements reflect the application of ASC 842 guidance beginning in 2019, while our consolidated financial statements for prior periods were prepared under the guidance of the Previous Standard. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. Our transition to ASC 842 resulted in the gross presentation of property tax and maintenance expenses and related lessee reimbursements as franchise and property expenses and franchise and property revenues, respectively. These expenses and reimbursements were presented on a net basis under the Previous Standard.

In connection with our transition to ASC 842, we elected the package of practical expedients under which we did not reassess the classification of our existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. We also elected lessee and lessor practical expedients to not separate non-lease components comprised of maintenance from lease components for real estate leases that commenced prior to our transition to ASC 842, as well as for leases that commence or that are modified subsequent to our transition to ASC 842. We did not elect the practical expedient that permitted a reassessment of lease terms for existing leases.

Financial Statement Impact of Transition to ASC 842

Transition Impact on January 1, 2019 Condensed Consolidated Balance Sheet

Our transition to ASC 842 represents a change in accounting principle. The $21 million cumulative effect of our transition to ASC 842 is reflected as an adjustment to January 1, 2019 Shareholders' equity.

Our transition to ASC 842 resulted in the following adjustments to our condensed consolidated balance sheet as of January 1, 2019 (in millions):

	As Reported			Total				Adjusted
	December 31, 2018			Adjustments				January 1, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	913		$	—			$	913
Accounts and notes receivable, net	452			—				452
Inventories, net	75			—				75
Prepaids and other current assets	60			—				60
Total current assets	1,500			—				1,500
Property and equipment, net	1,996			26			(a)	2,022
Operating lease assets, net	—			1,143			(b)	1,143
Intangible assets, net	10,463			(133		)	(c)	10,330
Goodwill	5,486			—				5,486
Net investment in property leased to franchisees	54			—				54
Other assets, net	642			—				642
Total assets	$	20,141		$	1,036			$	21,177
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts and drafts payable	$	513		$	—			$	513
Other accrued liabilities	637			114			(d)	751
Gift card liability	167			—				167
Current portion of long term debt and finance leases	91			—				91
Total current liabilities	1,408			114				1,522
Term debt, net of current portion	11,823			(65		)	(e)	11,758
Finance leases, net of current portion	226			62			(e)	288
Operating lease liabilities, net of current portion	—			1,028			(f)	1,028
Other liabilities, net	1,547			(132		)	(g)	1,415
Deferred income taxes, net	1,519			8			(h)	1,527
Total liabilities	16,523			1,015				17,538
Shareholders’ equity:
Common shares	1,737			—				1,737
Retained earnings	674			12			(i)	686
Accumulated other comprehensive income (loss)	(800		)	—				(800		)
Total RBI shareholders’ equity	1,611			12				1,623
Noncontrolling interests	2,007			9			(i)	2,016
Total shareholders’ equity	3,618			21				3,639
Total liabilities and shareholders’ equity	$	20,141		$	1,036			$	21,177

(a) Represents the net change in assets recorded in connection with build-to-suit leases.

(b) Represents the capitalization of operating lease right-of-use (“ROU”) assets equal to the amount of recognized operating lease liability, adjusted by the net carrying amounts of related favorable lease assets and unfavorable lease liabilities in which we are the lessee and straight-line rent accruals, which were reclassified to operating lease ROU assets.

(c) Represents the net carrying amount of favorable lease assets associated with leases in which we are the lessee, which have been reclassified to operating lease ROU assets.

(d) Represents the current portion of operating lease liabilities.

(e) Represents the net change in liabilities recorded in connection with build-to-suit leases.

(f) Represents the recognition of operating lease liabilities, net of current portion.

(g) Represents the net carrying amount of unfavorable lease liabilities associated with leases in which we are the lessee and $64 million of straight-line rent accruals which have been reclassified to operating lease ROU assets.

(h) Represents the net tax effects of the adjustments noted above, with a corresponding adjustment to shareholders’ equity.

(i) Represents net change in assets and liabilities recorded in connection with built-to-suit leases and the tax effects of adjustments noted above.

Changes to Lease Accounting Significant Accounting Policies Under ASC 842

In all leases, whether we are the lessor or lessee, we define lease term as the noncancellable term of the lease plus any renewals covered by renewal options that are reasonably certain of exercise based on our assessment of the economic factors relevant to the lessee. The noncancellable term of the lease commences on the date the lessor makes the underlying property in the lease available to the lessee, irrespective of when lease payments begin under the contract.

Lessor Accounting

We recognize lease payments for operating leases as property revenue on a straight-line basis over the lease term and property revenue is presented net of any related sales tax. Lease incentive payments we make to lessees are amortized as a reduction in property revenue over the lease term. We account for reimbursements of maintenance and property tax costs paid to us by lessees as variable lease payment property revenue.

We also have net investments in properties leased to franchisees, which met the criteria of direct financing leases under the Previous Standard. Investments in direct financing leases are recorded on a net basis, consisting of the gross investment and estimated residual value in the lease, less unearned income. Unearned income on direct financing leases is recognized over the lease term yielding a constant periodic rate of return on the net investment in the lease. We do not remeasure the net investment in a direct financing lease unless the lease is modified and that modification is not accounted for as a separate contract.

We recognize variable lease payment income for operating and direct financing leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

Lessee Accounting

In leases where we are the lessee, we recognize an ROU asset and lease liability at lease commencement, which is measured by discounting lease payments using our incremental borrowing rate applicable to the lease term and currency of the lease as the discount rate. Subsequent amortization of the ROU asset and accretion of the lease liability for an operating lease is recognized as a single lease cost, on a straight-line basis, over the lease term. Amortization of the ROU asset and the change in the lease liability is included in changes in Other long-term assets and liabilities in the Condensed Consolidated Statement of Cash Flows. A finance lease ROU asset is depreciated on a straight-line basis over the lesser of the useful life of the leased asset or lease term. Interest on each finance lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. ROU assets are assessed for impairment in accordance with our long-lived asset impairment policy. We reassess lease classification and remeasure ROU assets and lease liabilities when a lease is modified and that modification is not accounted for as a separate contract or upon certain other events that require reassessment in accordance with ASC 842. Maintenance and property tax expenses are accounted for on an accrual basis as variable lease cost.

We recognize variable lease cost for operating and finance leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

Company as Lessor

Assets leased to franchisees and others under operating leases where we are the lessor and which are included within our property and equipment, net are as follows (in millions):

	As of
	June 30, 2019
Land	$	920
Buildings and improvements	1,139
Restaurant equipment	21
	2,080
Accumulated depreciation and amortization	(441		)
Property and equipment leased, net	$	1,639

Our net investment in direct financing leases is as follows (in millions):

	As of
	June 30, 2019
Future rents to be received:
Future minimum lease receipts	$	53
Contingent rents (a)	23
Estimated unguaranteed residual value	15
Unearned income	(30		)
	61
Current portion included within accounts receivables	(14		)
Net investment in property leased to franchisees	$	47

(a) Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting.

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 June 30, 2019		Six months ended June 30, 2019
Lease income - operating leases
Minimum lease payments	$	112	$	223
Variable lease payments	97		181
Amortization of favorable and unfavorable income lease contracts, net	2		4
Subtotal - lease income from operating leases	211		408
Earned income on direct financing leases	3		5
Total property revenues	$	214	$	413

Company as Lessee

Lease cost and other information associated with these lease commitments is as follows (in millions):

Lease Cost (Income)

	Three months ended June 30, 2019			Six months ended June 30, 2019
Operating lease cost	$	53		$	106
Operating lease variable lease cost	50			100
Finance lease cost:
Amortization of right-of-use assets	6			13
Interest on lease liabilities	6			11
Sublease income	(164		)	(319		)
Total lease cost (income)	$	(49	)	$	(89	)

Lease Term and Discount Rate as of June 30, 2019

Weighted-average remaining lease term (in years):
Operating leases	11.1 years
Finance leases	11.2 years
Weighted-average discount rate:
Operating leases	6.5	%
Finance leases	7.6	%

Other Information for the six months ended June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	96
Operating cash flows from finance leases	$	11
Financing cash flows from finance leases	$	13
Right-of-use assets obtained in exchange for new finance lease obligations	$	1
Right-of-use assets obtained in exchange for new operating lease obligations	$	65

Maturity Analysis

As of June 30, 2019, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
Remainder of 2019	$	7	$	213	$	24		$	97
2020	10		406		46			187
2021	7		382		44			175
2022	5		357		43			163
2023	5		335		39			149
Thereafter	19		1,876		268			941
Total minimum receipts / payments	$	53	$	3,569	464			1,712
Less amount representing interest (b)					(153		)	(535		)
Present value of minimum lease payments					311			1,177
Current portion of lease obligations					(27		)	(121		)
Long-term portion of lease obligations					$	284		$	1,056

(a) Minimum lease commitments have not been reduced by minimum sublease rentals of $2,351 million due in the future under non-cancelable subleases.

(b) Calculated using the interest rate for each lease.

As of December 31, 2018, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
2019	$	14	$	416	$	38		$	183
2020	10		388		36			172
2021	7		360		34			158
2022	5		331		33			145
2023	5		306		30			130
Thereafter	19		1,704		201			831
Total minimum receipts / payments	$	60	$	3,505	372			$	1,619
Less amount representing interest					(125		)
Present value of minimum finance lease payments					247
Current portion of finance lease obligation					(21		)
Long-term portion of finance lease obligation					$	226

(a)

Minimum lease commitments have not been reduced by minimum sublease rentals of $2,290 million due in the future under non-cancelable subleases.

Leases

Leases

As of June 30, 2019, we leased or subleased 5,331 restaurant properties to franchisees and 168 non-restaurant properties to third parties under operating leases and direct financing leases where we are the lessor. Initial lease terms generally range from 10 to 20 years. Most leases to franchisees provide for fixed monthly payments and many provide for future rent escalations and renewal options. Certain leases also include provisions for variable rent, determined as a percentage of sales, generally when annual sales exceed specified levels. Lessees typically bear the cost of maintenance, insurance and property taxes.

We lease land, buildings, equipment, office space and warehouse space. Land and building leases generally have an initial term of 10 to 30 years, while land-only lease terms can extend longer, and most leases provide for fixed monthly payments. Many of these leases provide for future rent escalations and renewal options. Certain leases also include provisions for variable rent payments, determined as a percentage of sales, generally when annual sales exceed specified levels. Most leases also obligate us to pay, as lessee, the cost of maintenance, insurance and property taxes.

We transitioned to FASB Accounting Standards Codification (“ASC”) Topic 842, Leases (“ASC 842”), from ASC Topic 840, Leases (the “Previous Standard”) on January 1, 2019 on a modified retrospective basis using the effective date transition method. Our Financial Statements reflect the application of ASC 842 guidance beginning in 2019, while our consolidated financial statements for prior periods were prepared under the guidance of the Previous Standard. The new guidance requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by finance and operating leases with lease terms of more than 12 months, amends various other aspects of accounting for leases by lessees and lessors, and requires enhanced disclosures. Our transition to ASC 842 resulted in the gross presentation of property tax and maintenance expenses and related lessee reimbursements as franchise and property expenses and franchise and property revenues, respectively. These expenses and reimbursements were presented on a net basis under the Previous Standard.

In connection with our transition to ASC 842, we elected the package of practical expedients under which we did not reassess the classification of our existing leases, reevaluate whether any expired or existing contracts are or contain leases or reassess initial direct costs under the new guidance. We also elected lessee and lessor practical expedients to not separate non-lease components comprised of maintenance from lease components for real estate leases that commenced prior to our transition to ASC 842, as well as for leases that commence or that are modified subsequent to our transition to ASC 842. We did not elect the practical expedient that permitted a reassessment of lease terms for existing leases.

Financial Statement Impact of Transition to ASC 842

Transition Impact on January 1, 2019 Condensed Consolidated Balance Sheet

Our transition to ASC 842 represents a change in accounting principle. The $21 million cumulative effect of our transition to ASC 842 is reflected as an adjustment to January 1, 2019 Shareholders' equity.

Our transition to ASC 842 resulted in the following adjustments to our condensed consolidated balance sheet as of January 1, 2019 (in millions):

	As Reported			Total				Adjusted
	December 31, 2018			Adjustments				January 1, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	913		$	—			$	913
Accounts and notes receivable, net	452			—				452
Inventories, net	75			—				75
Prepaids and other current assets	60			—				60
Total current assets	1,500			—				1,500
Property and equipment, net	1,996			26			(a)	2,022
Operating lease assets, net	—			1,143			(b)	1,143
Intangible assets, net	10,463			(133		)	(c)	10,330
Goodwill	5,486			—				5,486
Net investment in property leased to franchisees	54			—				54
Other assets, net	642			—				642
Total assets	$	20,141		$	1,036			$	21,177
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts and drafts payable	$	513		$	—			$	513
Other accrued liabilities	637			114			(d)	751
Gift card liability	167			—				167
Current portion of long term debt and finance leases	91			—				91
Total current liabilities	1,408			114				1,522
Term debt, net of current portion	11,823			(65		)	(e)	11,758
Finance leases, net of current portion	226			62			(e)	288
Operating lease liabilities, net of current portion	—			1,028			(f)	1,028
Other liabilities, net	1,547			(132		)	(g)	1,415
Deferred income taxes, net	1,519			8			(h)	1,527
Total liabilities	16,523			1,015				17,538
Shareholders’ equity:
Common shares	1,737			—				1,737
Retained earnings	674			12			(i)	686
Accumulated other comprehensive income (loss)	(800		)	—				(800		)
Total RBI shareholders’ equity	1,611			12				1,623
Noncontrolling interests	2,007			9			(i)	2,016
Total shareholders’ equity	3,618			21				3,639
Total liabilities and shareholders’ equity	$	20,141		$	1,036			$	21,177

(a) Represents the net change in assets recorded in connection with build-to-suit leases.

(b) Represents the capitalization of operating lease right-of-use (“ROU”) assets equal to the amount of recognized operating lease liability, adjusted by the net carrying amounts of related favorable lease assets and unfavorable lease liabilities in which we are the lessee and straight-line rent accruals, which were reclassified to operating lease ROU assets.

(c) Represents the net carrying amount of favorable lease assets associated with leases in which we are the lessee, which have been reclassified to operating lease ROU assets.

(d) Represents the current portion of operating lease liabilities.

(e) Represents the net change in liabilities recorded in connection with build-to-suit leases.

(f) Represents the recognition of operating lease liabilities, net of current portion.

(g) Represents the net carrying amount of unfavorable lease liabilities associated with leases in which we are the lessee and $64 million of straight-line rent accruals which have been reclassified to operating lease ROU assets.

(h) Represents the net tax effects of the adjustments noted above, with a corresponding adjustment to shareholders’ equity.

(i) Represents net change in assets and liabilities recorded in connection with built-to-suit leases and the tax effects of adjustments noted above.

Changes to Lease Accounting Significant Accounting Policies Under ASC 842

In all leases, whether we are the lessor or lessee, we define lease term as the noncancellable term of the lease plus any renewals covered by renewal options that are reasonably certain of exercise based on our assessment of the economic factors relevant to the lessee. The noncancellable term of the lease commences on the date the lessor makes the underlying property in the lease available to the lessee, irrespective of when lease payments begin under the contract.

Lessor Accounting

We recognize lease payments for operating leases as property revenue on a straight-line basis over the lease term and property revenue is presented net of any related sales tax. Lease incentive payments we make to lessees are amortized as a reduction in property revenue over the lease term. We account for reimbursements of maintenance and property tax costs paid to us by lessees as variable lease payment property revenue.

We also have net investments in properties leased to franchisees, which met the criteria of direct financing leases under the Previous Standard. Investments in direct financing leases are recorded on a net basis, consisting of the gross investment and estimated residual value in the lease, less unearned income. Unearned income on direct financing leases is recognized over the lease term yielding a constant periodic rate of return on the net investment in the lease. We do not remeasure the net investment in a direct financing lease unless the lease is modified and that modification is not accounted for as a separate contract.

We recognize variable lease payment income for operating and direct financing leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

Lessee Accounting

In leases where we are the lessee, we recognize an ROU asset and lease liability at lease commencement, which is measured by discounting lease payments using our incremental borrowing rate applicable to the lease term and currency of the lease as the discount rate. Subsequent amortization of the ROU asset and accretion of the lease liability for an operating lease is recognized as a single lease cost, on a straight-line basis, over the lease term. Amortization of the ROU asset and the change in the lease liability is included in changes in Other long-term assets and liabilities in the Condensed Consolidated Statement of Cash Flows. A finance lease ROU asset is depreciated on a straight-line basis over the lesser of the useful life of the leased asset or lease term. Interest on each finance lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. ROU assets are assessed for impairment in accordance with our long-lived asset impairment policy. We reassess lease classification and remeasure ROU assets and lease liabilities when a lease is modified and that modification is not accounted for as a separate contract or upon certain other events that require reassessment in accordance with ASC 842. Maintenance and property tax expenses are accounted for on an accrual basis as variable lease cost.

We recognize variable lease cost for operating and finance leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

Company as Lessor

Assets leased to franchisees and others under operating leases where we are the lessor and which are included within our property and equipment, net are as follows (in millions):

	As of
	June 30, 2019
Land	$	920
Buildings and improvements	1,139
Restaurant equipment	21
	2,080
Accumulated depreciation and amortization	(441		)
Property and equipment leased, net	$	1,639

Our net investment in direct financing leases is as follows (in millions):

	As of
	June 30, 2019
Future rents to be received:
Future minimum lease receipts	$	53
Contingent rents (a)	23
Estimated unguaranteed residual value	15
Unearned income	(30		)
	61
Current portion included within accounts receivables	(14		)
Net investment in property leased to franchisees	$	47

(a) Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting.

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 June 30, 2019		Six months ended June 30, 2019
Lease income - operating leases
Minimum lease payments	$	112	$	223
Variable lease payments	97		181
Amortization of favorable and unfavorable income lease contracts, net	2		4
Subtotal - lease income from operating leases	211		408
Earned income on direct financing leases	3		5
Total property revenues	$	214	$	413

Company as Lessee

Lease cost and other information associated with these lease commitments is as follows (in millions):

Lease Cost (Income)

	Three months ended June 30, 2019			Six months ended June 30, 2019
Operating lease cost	$	53		$	106
Operating lease variable lease cost	50			100
Finance lease cost:
Amortization of right-of-use assets	6			13
Interest on lease liabilities	6			11
Sublease income	(164		)	(319		)
Total lease cost (income)	$	(49	)	$	(89	)

Lease Term and Discount Rate as of June 30, 2019

Weighted-average remaining lease term (in years):
Operating leases	11.1 years
Finance leases	11.2 years
Weighted-average discount rate:
Operating leases	6.5	%
Finance leases	7.6	%

Other Information for the six months ended June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	96
Operating cash flows from finance leases	$	11
Financing cash flows from finance leases	$	13
Right-of-use assets obtained in exchange for new finance lease obligations	$	1
Right-of-use assets obtained in exchange for new operating lease obligations	$	65

Maturity Analysis

As of June 30, 2019, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
Remainder of 2019	$	7	$	213	$	24		$	97
2020	10		406		46			187
2021	7		382		44			175
2022	5		357		43			163
2023	5		335		39			149
Thereafter	19		1,876		268			941
Total minimum receipts / payments	$	53	$	3,569	464			1,712
Less amount representing interest (b)					(153		)	(535		)
Present value of minimum lease payments					311			1,177
Current portion of lease obligations					(27		)	(121		)
Long-term portion of lease obligations					$	284		$	1,056

(a) Minimum lease commitments have not been reduced by minimum sublease rentals of $2,351 million due in the future under non-cancelable subleases.

(b) Calculated using the interest rate for each lease.

As of December 31, 2018, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
2019	$	14	$	416	$	38		$	183
2020	10		388		36			172
2021	7		360		34			158
2022	5		331		33			145
2023	5		306		30			130
Thereafter	19		1,704		201			831
Total minimum receipts / payments	$	60	$	3,505	372			$	1,619
Less amount representing interest					(125		)
Present value of minimum finance lease payments					247
Current portion of finance lease obligation					(21		)
Long-term portion of finance lease obligation					$	226

(a)

Minimum lease commitments have not been reduced by minimum sublease rentals of $2,290 million due in the future under non-cancelable subleases.

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Revenue Recognition

6 Months Ended

Jun. 30, 2019

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 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, 2018 and June 30, 2019 (in millions):

Contract Liabilities	TH			BK			PLK			Consolidated
Balance at December 31, 2018	$	62		$	405		$	19		$	486
Revenue recognized that was included in the contract liability balance at the beginning of the year	(4		)	(21		)	(1		)	(26		)
Increase, excluding amounts recognized as revenue during the period	4			42			4			50
Impact of foreign currency translation	1			(1		)	—			—
Balance at June 30, 2019	$	63		$	425		$	22		$	510

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 June 30, 2019 (in millions):

Contract liabilities expected to be recognized in	TH		BK		PLK		Consolidated
Remainder of 2019	$	4	$	16	$	1	$	21
2020	8		32		2		42
2021	7		31		1		39
2022	7		31		1		39
2023	6		30		1		37
Thereafter	31		285		16		332
Total	$	63	$	425	$	22	$	510

Disaggregation of Total Revenues

Total revenues consist of the following (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Sales	$	589	$	586	$	1,111	$	1,134
Royalties	576		544		1,104		1,054
Property revenues	214		190		413		368
Franchise fees and other revenue	21		23		38		41
Total revenues	$	1,400	$	1,343	$	2,666	$	2,597

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Earnings per Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Earnings per Share

Earnings per Share

An economic interest in Partnership common equity is held by the holders of Class B exchangeable limited partnership units (the “Partnership exchangeable units”), which is reflected as a noncontrolling interest in our equity. See Note 12, Shareholders’ Equity.

Basic and diluted earnings per share is computed using the weighted average number of shares outstanding for the period. We apply the treasury stock method to determine the dilutive weighted average common shares represented by Partnership exchangeable units and outstanding equity awards, unless the effect of their inclusion is anti-dilutive. The diluted earnings per share calculation assumes conversion of 100% of the Partnership exchangeable units under the “if converted” method. Accordingly, the numerator is also adjusted to include the earnings allocated to the holders of noncontrolling interests.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Numerator:
Net income attributable to common shareholders - basic	$	142	$	167	$	277	$	315
Add: Net income attributable to noncontrolling interests	115		146		226		277
Net income available to common shareholders and noncontrolling interests - diluted	$	257	$	313	$	503	$	592
Denominator:
Weighted average common shares - basic	255		249		254		248
Exchange of noncontrolling interests for common shares (Note 12)	207		218		207		218
Effect of other dilutive securities	7		7		7		8
Weighted average common shares - diluted	469		474		468		474
Basic earnings per share (a)	$	0.56	$	0.67	$	1.09	$	1.27
Diluted earnings per share (a)	$	0.55	$	0.66	$	1.07	$	1.25
Anti-dilutive securities outstanding	3		6		3		6

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

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Intangible Assets, net and Goodwill

6 Months Ended

Jun. 30, 2019

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
	June 30, 2019							December 31, 2018
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Identifiable assets subject to amortization:
Franchise agreements	$	715	$	(209	)	$	506	$	705	$	(194	)	$	511
Favorable leases (a)	134		(65		)	69		407		(200		)	207
Subtotal	849		(274		)	575		1,112		(394		)	718
Indefinite lived intangible assets:
Tim Hortons brand	$	6,487	$	—		$	6,487	$	6,259	$	—		$	6,259
Burger King brand	2,126		—			2,126		2,131		—			2,131
Popeyes brand	1,355		—			1,355		1,355		—			1,355
Subtotal	9,968		—			9,968		9,745		—			9,745
Intangible assets, net						$	10,543						$	10,463
Goodwill
Tim Hortons segment	$	4,178						$	4,038
Burger King segment	601							602
Popeyes segment	846							846
Total	$	5,625						$	5,486

(a) The decrease in favorable leases reflects the reclassification of favorable leases where we are the lessee to operating lease right-of-use assets in connection with our transition to ASC 842. See Note 4, Leases.

Amortization expense on intangible assets totaled $10 million for the three months ended June 30, 2019 and $18 million for the same period in the prior year. Amortization expense on intangible assets totaled $21 million for the six months ended June 30, 2019 and $36 million for the same period in the prior year. The change in the brands and goodwill balances during the six months ended June 30, 2019 was due to the impact of foreign currency translation.

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Equity Method Investments

6 Months Ended

Jun. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments

Equity Method Investments

The aggregate carrying amount of our equity method investments was $272 million and $259 million as of June 30, 2019 and December 31, 2018, 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 $5 million and $3 million during the three months ended June 30, 2019 and 2018, respectively. Distributions received from this joint venture were $7 million and $6 million during the six months ended June 30, 2019 and 2018, respectively.

The aggregate market value of our 20.3% equity interest in Carrols Restaurant Group, Inc. (“Carrols”) based on the quoted market price on June 30, 2019 was approximately $85 million. The aggregate market value of our 9.9% equity interest in BK Brasil Operação e Assessoria a Restaurantes S.A. based on the quoted market price on June 30, 2019 was approximately $130 million. No quoted market prices are available for our other equity method investments.

We have equity interests in entities that own or franchise Tim Hortons or Burger King restaurants. Franchise and property 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 June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues from affiliates:
Royalties	$	87	$	74	$	165	$	142
Property revenues	9		9		17		18
Franchise fees and other revenue	3		2		6		4
Total	$	99	$	85	$	188	$	164

We recognized $5 million of rent expense associated with the TIMWEN Partnership during the three months ended June 30, 2019 and 2018. We recognized $9 million and $10 million of rent expense associated with the TIMWEN Partnership during the six months ended June 30, 2019 and 2018, respectively.

At June 30, 2019 and December 31, 2018, we had $43 million and $41 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.

(Income) loss from equity method investments reflects our share of investee net income or loss, non-cash dilution gains or losses from changes in our ownership interests in equity method investees and basis difference amortization. During the six months ended June 30, 2019 we did not record a non-cash dilution gain. During the six months ended June 30, 2018, we recorded an increase to the carrying value of our equity method investment balance and a non-cash dilution gain of $20 million on the initial public offering by one of our equity method investees.

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Other Accrued Liabilities and Other Liabilities, net

6 Months Ended

Jun. 30, 2019

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
	June 30, 2019		December 31, 2018
Current:
Dividend payable	$	232	$	207
Interest payable	88		87
Accrued compensation and benefits	48		69
Taxes payable	73		113
Deferred income	36		27
Accrued advertising expenses	20		30
Restructuring and other provisions	7		11
Current portion of operating lease liabilities (a)	121		—
Other	74		93
Other accrued liabilities	$	699	$	637
Noncurrent:
Taxes payable	$	570	$	493
Contract liabilities, net	510		486
Unfavorable leases (b)	113		192
Derivatives liabilities	397		179
Accrued pension	63		64
Accrued lease straight-lining liability (b)	—		69
Deferred income	31		22
Other	46		42
Other liabilities, net	$	1,730	$	1,547

(a) Represents the current portion of operating lease liabilities recognized in connection with our transition to ASC 842. See Note 4, Leases.

(b)

The decreases in unfavorable leases and accrued lease straight-lining liability reflect the reclassification of unfavorable leases and lease straight-lining liability where we are the lessee in the underlying operating lease to the right-of-use assets recorded for the underlying lease in connection with our transition to ASC 842. See Note 4, Leases.

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Long-Term Debt

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

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

	As of
	June 30, 2019			December 31, 2018
Term Loan Facility (due February 17, 2024)	$	6,305		$	6,338
2017 4.25% Senior Notes (due May 15, 2024)	1,500			1,500
2015 4.625% Senior Notes (due January 15, 2022)	1,250			1,250
2017 5.00% Senior Notes (due October 15, 2025)	2,800			2,800
Other (a)	80			150
Less: unamortized deferred financing costs and deferred issue discount	(133		)	(145		)
Total debt, net	11,802			11,893
Less: current maturities of debt	(65		)	(70		)
Total long-term debt	$	11,737		$	11,823

(a) The decrease in Other reflects the de-recognition of obligations associated with build-to-suit leases recorded under the Previous Standard. Liabilities associated with build-to-suit leases were remeasured and recorded as finance lease liabilities in conjunction with our transition to ASC 842.

Revolving Credit Facility

As of June 30, 2019, we had no amounts outstanding under our senior secured revolving credit facility (the "Revolving Credit Facility"). Funds available under the Revolving Credit Facility may be used to repay other debt, finance debt or 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. As of June 30, 2019, we had $2 million of letters of credit issued against the Revolving Credit Facility, and our borrowing availability was $498 million.

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 (increased from C$100 million during the three months ended June 30, 2019) 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. As of June 30, 2019, we had outstanding C$100 million under the TH Facility with a weighted average interest rate of 3.36%.

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 billions):

	As of
	June 30, 2019		December 31, 2018
Fair value of our variable term debt and senior notes	$	12	$	11
Principal carrying amount of our variable term debt and senior notes	12		12

Interest Expense, net

Interest expense, net consists of the following (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Debt (a)	$	128		$	120		$	252		$	250
Finance lease obligations	6			6			11			12
Amortization of deferred financing costs and debt issuance discount	8			7			15			14
Interest income	(5		)	(3		)	(9		)	(6		)
Interest expense, net	$	137		$	130		$	269		$	270

(a)

Amount includes $19 million and $20 million benefit during the three months ended June 30, 2019 and 2018, respectively, and $37 million and $24 million benefit during the six months ended June 30, 2019 and 2018, respectively, from our adoption of a new hedge accounting standard in 2018.

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Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective tax rate was 27.4% and 23.4% for the three and six months ended June 30, 2019. The effective tax rate during these periods reflects a $37 million increase in the provision for unrecognized tax benefits related to a prior restructuring transaction that is not applicable to ongoing operations which increased the effective tax rate by 10.4% and 5.6% during the three and six months ended June 30, 2019, respectively. The effective tax rate during these periods also reflects the mix of income from multiple tax jurisdictions, the impact of internal financing arrangements and stock option exercises. Benefits from stock option exercises reduced the effective tax rate by 4.0% and 4.1% for the three and six months ended June 30, 2019, respectively.

Our effective tax rate was 15.7% and 9.2% for the three and six months ended June 30, 2018. The effective tax rate during these periods was primarily a result of the mix of income from multiple tax jurisdictions, the benefit from reserve releases due to audit settlements and the realignment of various internal financing arrangements. In addition, benefits from stock option exercises reduced the effective tax rate by 0.6% and 10.1% for the three and six months ended June 30, 2018, respectively.

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Shareholders' Equity

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Noncontrolling Interests

The holders of Partnership exchangeable units held an economic interest of approximately 44.8% and 45.2% in Partnership common equity through the ownership of 207,337,076 and 207,523,591 Partnership exchangeable units as of June 30, 2019 and December 31, 2018, respectively.

During the six months ended June 30, 2019, Partnership exchanged 186,515 Partnership exchangeable units, pursuant to exchange notices received. In accordance with the terms of the partnership agreement, Partnership satisfied the exchange notices by exchanging these Partnership exchangeable units for the same number of newly issued RBI common shares. The exchanges represented increases in our ownership interest in Partnership and were accounted for as equity transactions, with no gain or loss recorded in the accompanying condensed consolidated statement of operations. 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, 2018	$	253		$	(15	)	$	(1,038	)	$	(800	)
Foreign currency translation adjustment	—			—			358			358
Net change in fair value of derivatives, net of tax	(207		)	—			—			(207		)
Amounts reclassified to earnings of cash flow hedges, net of tax	2			—			—			2
Amounts attributable to noncontrolling interests	93			—			(163		)	(70		)
Balance at June 30, 2019	$	141		$	(15	)	$	(843	)	$	(717	)

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Derivative Instruments

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Disclosures about Derivative Instruments and Hedging Activities

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

Interest Rate Swaps

During 2018, we entered into a series of receive-variable, pay-fixed interest rate swaps with a notional value of $3,500 million to hedge the variability in the interest payments on a portion of our senior secured term loan facility (the "Term Loan Facility") beginning March 29, 2018 through the expiration of the final swap on February 17, 2024, resetting each March. At inception, these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value are recorded in AOCI and reclassified into earnings during the period in which the hedged forecasted transaction affects earnings.

During 2015, we entered into a series of receive-variable, pay-fixed interest rate swaps with a notional value of $2,500 million to hedge the variability in the interest payments on a portion of our Term Loan Facility beginning May 28, 2015. All of these interest rate swaps were settled on April 26, 2018 for an insignificant cash receipt. At inception, these interest rate swaps were designated as cash flow hedges for hedge accounting. The unrealized changes in market value were recorded in AOCI and reclassified into earnings during the period in which the hedged forecasted transaction affects earnings.

During 2015, we settled certain interest rate swaps and recognized a net unrealized loss of $85 million in AOCI at the date of settlement. This amount gets reclassified into Interest expense, net as the original hedged forecasted transaction affects earnings. The amount of pre-tax losses in AOCI as of June 30, 2019 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 June 30, 2019, we had outstanding cross-currency rate swap contracts between the Canadian dollar and U.S. dollar and the Euro and U.S. dollar that have been designated as net investment hedges of a portion of our equity in foreign operations in those currencies. The component of the gains and losses on our net investment in these designated foreign operations driven by changes in foreign exchange rates are economically offset by movements in the fair value of our cross-currency swap contracts. The fair value of the swaps is calculated each period with changes in fair value reported in AOCI, net of tax. Such amounts will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying foreign operations.

At June 30, 2019, 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 June 30, 2019, we also 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, during 2018 we entered into cross-currency rate swaps in which we receive quarterly fixed-rate interest payments on the U.S. dollar notional value of $400 million through the maturity date of February 17, 2024. At inception, these cross-currency rate swaps were designated as a hedge 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 dedesignated and subsequently redesignated 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 June 30, 2019, 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 $130 million with maturities to August 2020. We have designated these instruments as cash flow hedges, and as such, the unrealized changes in market value of effective hedges are recorded in AOCI and are reclassified into earnings during the period in which the hedged forecasted transaction affects earnings.

Credit Risk

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

Credit-Risk Related Contingent Features

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

Quantitative Disclosures about Derivative Instruments and Fair Value Measurements

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

	Gain or (Loss) Recognized in Other Comprehensive Income (Loss)
	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Derivatives designated as cash flow hedges(1)
Interest rate swaps	$	(77	)	$	(5	)	$	(121	)	$	24
Forward-currency contracts	$	(2	)	$	3		$	(4	)	$	13
Derivatives designated as net investment hedges
Cross-currency rate swaps	$	(53	)	$	143		$	(155	)	$	154

(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 June 30,						Six Months Ended June 30,
		2019			2018			2019			2018
Derivatives designated as cash flow hedges
Interest rate swaps	Interest expense, net	$	(6	)	$	(5	)	$	(7	)	$	(11	)
Forward-currency contracts	Cost of sales	$	2		$	—		$	4		$	3
	Location of Gain or (Loss) Recognized in Earnings	Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing)
		Three Months Ended June 30,						Six Months Ended June 30,
		2019			2018			2019			2018
Derivatives designated as net investment hedges
Cross-currency rate swaps	Interest expense, net	$	19		$	20		$	37		$	24

	Fair Value as of
	June 30, 2019		December 31, 2018		Balance Sheet Location
Assets:
Derivatives designated as cash flow hedges
Foreign currency	$	—	$	7	Prepaids and other current assets
Derivatives designated as net investment hedges
Foreign currency	15		58		Other assets, net
Total assets at fair value	$	15	$	65
Liabilities:
Derivatives designated as cash flow hedges
Interest rate	$	193	$	72	Other liabilities, net
Foreign currency	1		—		Other accrued liabilities
Derivatives designated as net investment hedges
Foreign currency	204		107		Other liabilities, net
Total liabilities at fair value	$	398	$	179

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Other Operating Expenses (Income), net

6 Months Ended

Jun. 30, 2019

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 June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings	$	(10	)	$	3		$	(7	)	$	10
Litigation settlements (gains) and reserves, net	—			—			—			(6		)
Net losses (gains) on foreign exchange	12			(33		)	(3		)	(16		)
Other, net	1			—			(4		)	(5		)
Other operating expenses (income), net	$	3		$	(30	)	$	(14	)	$	(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.

Litigation settlements (gains) and reserves, net primarily reflects accruals and proceeds received in connection with litigation matters.

Net losses (gains) on foreign exchange is primarily related to revaluation of foreign denominated assets and liabilities.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

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.

In March 2019, the Company settled the two class action lawsuits filed in the Ontario Superior Court of Justice against The TDL Group Corp., a subsidiary of the Company (“TDL”), and certain other defendants, as described in the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2019. The court approved the settlement on April 29, 2019.

Under the terms of the settlement, TDL is contributing C$6 million to the Tim Hortons Advertising Fund in Canada over two years, such amount to be spent on marketing activities. In addition, TDL has paid C$6 million for legal, administrative and other third-party expenses. These amounts were accrued by TDL during 2018.

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 the Company, 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 the Company, 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.

In July 2019, a class action complaint was filed against 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.

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Segment Reporting

6 Months Ended

Jun. 30, 2019

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 June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues by operating segment:
TH	$	842	$	823	$	1,591	$	1,586
BK	447		418		858		808
PLK	111		102		217		203
Total revenues	$	1,400	$	1,343	$	2,666	$	2,597

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues by country (a):
Canada	$	764	$	746	$	1,440	$	1,438
United States	479		450		923		871
Other	157		147		303		288
Total revenues	$	1,400	$	1,343	$	2,666	$	2,597

(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, (gain) 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 fees and expenses associated with the Popeyes Acquisition (“PLK Transaction costs”), 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 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 (loss) consists of the following (in millions):

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Segment income:
TH	$	287	$	286		$	524		$	531
BK	252		236			474			450
PLK	41		40			82			79
Adjusted EBITDA	580		562			1,080			1,060
Share-based compensation and non-cash incentive compensation expense	19		16			44			31
PLK Transaction costs	—		5			—			10
Corporate restructuring and tax advisory fees	11		7			17			14
Office centralization and relocation costs	2		12			6			12
Impact of equity method investments (a)	9		4			10			(6		)
Other operating expenses (income), net	3		(30		)	(14		)	(17		)
EBITDA	536		548			1,017			1,016
Depreciation and amortization	45		46			92			93
Income from operations	491		502			925			923
Interest expense, net	137		130			269			270
Income tax expense	97		58			153			60
Net income	$	257	$	314		$	503		$	593

(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.

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Subsequent Events

6 Months Ended

Jun. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Dividends

On July 3, 2019, we paid a cash dividend of $0.50 per common share to common shareholders of record on June 17, 2019. On such date, Partnership also made a distribution in respect of each Partnership exchangeable unit in the amount of $0.50 per exchangeable unit to holders of record on June 17, 2019.

Our board of directors has declared a cash dividend of $0.50 per common share, which will be paid on October 3, 2019 to common shareholders of record on September 17, 2019. Partnership will also make a distribution in respect of each Partnership exchangeable unit in the amount of $0.50 per Partnership exchangeable unit, and the record date and payment date for distributions on Partnership exchangeable units are the same as the record date and payment date set forth above.

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New Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Changes and Error Corrections [Abstract]

New Accounting Pronouncements

Lease Accounting – In February 2016, the Financial Accounting Standard Board (the “FASB”) issued new guidance on leases. We adopted this new guidance on January 1, 2019. See Note 4, Leases, for further information about our transition to this new lease accounting standard.

Goodwill Impairment – In January 2017, the FASB issued guidance to simplify how an entity measures goodwill impairment by removing the second step of the two-step quantitative goodwill impairment test. An entity will no longer be required to perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured at the amount by which the carrying value exceeds the fair value of a reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amendment requires prospective adoption and is effective commencing in 2020 with early adoption permitted. The adoption of this new guidance will not have a material impact on our Financial Statements.

Reclassification of Certain Tax Effects – In February 2018, the FASB issued guidance which allows a reclassification from accumulated other comprehensive income (loss) to retained earnings for the tax effects of certain items within accumulated other comprehensive income (loss). The amendment is effective commencing in 2019 with early adoption permitted. The adoption of this new guidance did not have a material impact on our Financial Statements.

Share-based payment arrangements with nonemployees – In June 2018, the FASB issued guidance which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The amendment is effective commencing in 2019 with early adoption permitted. The adoption of this new guidance did not have a material impact on our Financial Statements.

Lessor Accounting

Lessor Accounting

We recognize lease payments for operating leases as property revenue on a straight-line basis over the lease term and property revenue is presented net of any related sales tax. Lease incentive payments we make to lessees are amortized as a reduction in property revenue over the lease term. We account for reimbursements of maintenance and property tax costs paid to us by lessees as variable lease payment property revenue.

We also have net investments in properties leased to franchisees, which met the criteria of direct financing leases under the Previous Standard. Investments in direct financing leases are recorded on a net basis, consisting of the gross investment and estimated residual value in the lease, less unearned income. Unearned income on direct financing leases is recognized over the lease term yielding a constant periodic rate of return on the net investment in the lease. We do not remeasure the net investment in a direct financing lease unless the lease is modified and that modification is not accounted for as a separate contract.

We recognize variable lease payment income for operating and direct financing leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

Lessee Accounting

Lessee Accounting

In leases where we are the lessee, we recognize an ROU asset and lease liability at lease commencement, which is measured by discounting lease payments using our incremental borrowing rate applicable to the lease term and currency of the lease as the discount rate. Subsequent amortization of the ROU asset and accretion of the lease liability for an operating lease is recognized as a single lease cost, on a straight-line basis, over the lease term. Amortization of the ROU asset and the change in the lease liability is included in changes in Other long-term assets and liabilities in the Condensed Consolidated Statement of Cash Flows. A finance lease ROU asset is depreciated on a straight-line basis over the lesser of the useful life of the leased asset or lease term. Interest on each finance lease liability is determined as the amount that results in a constant periodic discount rate on the remaining balance of the liability. ROU assets are assessed for impairment in accordance with our long-lived asset impairment policy. We reassess lease classification and remeasure ROU assets and lease liabilities when a lease is modified and that modification is not accounted for as a separate contract or upon certain other events that require reassessment in accordance with ASC 842. Maintenance and property tax expenses are accounted for on an accrual basis as variable lease cost.

We recognize variable lease cost for operating and finance leases in the period when changes in facts and circumstances on which the variable lease payments are based occur.

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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Schedule of new accounting pronouncements and adjustments

Our transition to ASC 842 resulted in the following adjustments to our condensed consolidated balance sheet as of January 1, 2019 (in millions):

	As Reported			Total				Adjusted
	December 31, 2018			Adjustments				January 1, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	913		$	—			$	913
Accounts and notes receivable, net	452			—				452
Inventories, net	75			—				75
Prepaids and other current assets	60			—				60
Total current assets	1,500			—				1,500
Property and equipment, net	1,996			26			(a)	2,022
Operating lease assets, net	—			1,143			(b)	1,143
Intangible assets, net	10,463			(133		)	(c)	10,330
Goodwill	5,486			—				5,486
Net investment in property leased to franchisees	54			—				54
Other assets, net	642			—				642
Total assets	$	20,141		$	1,036			$	21,177
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts and drafts payable	$	513		$	—			$	513
Other accrued liabilities	637			114			(d)	751
Gift card liability	167			—				167
Current portion of long term debt and finance leases	91			—				91
Total current liabilities	1,408			114				1,522
Term debt, net of current portion	11,823			(65		)	(e)	11,758
Finance leases, net of current portion	226			62			(e)	288
Operating lease liabilities, net of current portion	—			1,028			(f)	1,028
Other liabilities, net	1,547			(132		)	(g)	1,415
Deferred income taxes, net	1,519			8			(h)	1,527
Total liabilities	16,523			1,015				17,538
Shareholders’ equity:
Common shares	1,737			—				1,737
Retained earnings	674			12			(i)	686
Accumulated other comprehensive income (loss)	(800		)	—				(800		)
Total RBI shareholders’ equity	1,611			12				1,623
Noncontrolling interests	2,007			9			(i)	2,016
Total shareholders’ equity	3,618			21				3,639
Total liabilities and shareholders’ equity	$	20,141		$	1,036			$	21,177

(a) Represents the net change in assets recorded in connection with build-to-suit leases.

(b) Represents the capitalization of operating lease right-of-use (“ROU”) assets equal to the amount of recognized operating lease liability, adjusted by the net carrying amounts of related favorable lease assets and unfavorable lease liabilities in which we are the lessee and straight-line rent accruals, which were reclassified to operating lease ROU assets.

(c) Represents the net carrying amount of favorable lease assets associated with leases in which we are the lessee, which have been reclassified to operating lease ROU assets.

(d) Represents the current portion of operating lease liabilities.

(e) Represents the net change in liabilities recorded in connection with build-to-suit leases.

(f) Represents the recognition of operating lease liabilities, net of current portion.

(g) Represents the net carrying amount of unfavorable lease liabilities associated with leases in which we are the lessee and $64 million of straight-line rent accruals which have been reclassified to operating lease ROU assets.

(h) Represents the net tax effects of the adjustments noted above, with a corresponding adjustment to shareholders’ equity.

(i)

Represents net change in assets and liabilities recorded in connection with built-to-suit leases and the tax effects of adjustments noted above.

Schedule of assets leased to franchisees

Assets leased to franchisees and others under operating leases where we are the lessor and which are included within our property and equipment, net are as follows (in millions):

	As of
	June 30, 2019
Land	$	920
Buildings and improvements	1,139
Restaurant equipment	21
	2,080
Accumulated depreciation and amortization	(441		)
Property and equipment leased, net	$	1,639

Schedule of net investment in direct financing leases

Our net investment in direct financing leases is as follows (in millions):

	As of
	June 30, 2019
Future rents to be received:
Future minimum lease receipts	$	53
Contingent rents (a)	23
Estimated unguaranteed residual value	15
Unearned income	(30		)
	61
Current portion included within accounts receivables	(14		)
Net investment in property leased to franchisees	$	47

(a)

Amounts represent estimated contingent rents recorded in connection with the acquisition method of accounting.

As of June 30, 2019, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
Remainder of 2019	$	7	$	213	$	24		$	97
2020	10		406		46			187
2021	7		382		44			175
2022	5		357		43			163
2023	5		335		39			149
Thereafter	19		1,876		268			941
Total minimum receipts / payments	$	53	$	3,569	464			1,712
Less amount representing interest (b)					(153		)	(535		)
Present value of minimum lease payments					311			1,177
Current portion of lease obligations					(27		)	(121		)
Long-term portion of lease obligations					$	284		$	1,056

(a) Minimum lease commitments have not been reduced by minimum sublease rentals of $2,351 million due in the future under non-cancelable subleases.

(b)

Calculated using the interest rate for each lease.

Schedule of property revenues

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 June 30, 2019		Six months ended June 30, 2019
Lease income - operating leases
Minimum lease payments	$	112	$	223
Variable lease payments	97		181
Amortization of favorable and unfavorable income lease contracts, net	2		4
Subtotal - lease income from operating leases	211		408
Earned income on direct financing leases	3		5
Total property revenues	$	214	$	413

Schedule of lease cost and other information

Lease cost and other information associated with these lease commitments is as follows (in millions):

Lease Cost (Income)

	Three months ended June 30, 2019			Six months ended June 30, 2019
Operating lease cost	$	53		$	106
Operating lease variable lease cost	50			100
Finance lease cost:
Amortization of right-of-use assets	6			13
Interest on lease liabilities	6			11
Sublease income	(164		)	(319		)
Total lease cost (income)	$	(49	)	$	(89	)

Lease Term and Discount Rate as of June 30, 2019

Weighted-average remaining lease term (in years):
Operating leases	11.1 years
Finance leases	11.2 years
Weighted-average discount rate:
Operating leases	6.5	%
Finance leases	7.6	%

Other Information for the six months ended June 30, 2019

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	96
Operating cash flows from finance leases	$	11
Financing cash flows from finance leases	$	13
Right-of-use assets obtained in exchange for new finance lease obligations	$	1
Right-of-use assets obtained in exchange for new operating lease obligations	$	65

Schedule of future minimum lease receipts, operating leases

As of June 30, 2019, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
Remainder of 2019	$	7	$	213	$	24		$	97
2020	10		406		46			187
2021	7		382		44			175
2022	5		357		43			163
2023	5		335		39			149
Thereafter	19		1,876		268			941
Total minimum receipts / payments	$	53	$	3,569	464			1,712
Less amount representing interest (b)					(153		)	(535		)
Present value of minimum lease payments					311			1,177
Current portion of lease obligations					(27		)	(121		)
Long-term portion of lease obligations					$	284		$	1,056

(a) Minimum lease commitments have not been reduced by minimum sublease rentals of $2,351 million due in the future under non-cancelable subleases.

(b)

Calculated using the interest rate for each lease.

Schedule of future minimum lease commitments, finance leases

As of June 30, 2019, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
Remainder of 2019	$	7	$	213	$	24		$	97
2020	10		406		46			187
2021	7		382		44			175
2022	5		357		43			163
2023	5		335		39			149
Thereafter	19		1,876		268			941
Total minimum receipts / payments	$	53	$	3,569	464			1,712
Less amount representing interest (b)					(153		)	(535		)
Present value of minimum lease payments					311			1,177
Current portion of lease obligations					(27		)	(121		)
Long-term portion of lease obligations					$	284		$	1,056

(a) Minimum lease commitments have not been reduced by minimum sublease rentals of $2,351 million due in the future under non-cancelable subleases.

(b)

Calculated using the interest rate for each lease.

Schedule of future minimum lease commitments, operating leases

As of June 30, 2019, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
Remainder of 2019	$	7	$	213	$	24		$	97
2020	10		406		46			187
2021	7		382		44			175
2022	5		357		43			163
2023	5		335		39			149
Thereafter	19		1,876		268			941
Total minimum receipts / payments	$	53	$	3,569	464			1,712
Less amount representing interest (b)					(153		)	(535		)
Present value of minimum lease payments					311			1,177
Current portion of lease obligations					(27		)	(121		)
Long-term portion of lease obligations					$	284		$	1,056

(a) Minimum lease commitments have not been reduced by minimum sublease rentals of $2,351 million due in the future under non-cancelable subleases.

(b)

Calculated using the interest rate for each lease.

Schedule of future minimum lease receipts and commitments

As of December 31, 2018, future minimum lease receipts and commitments are as follows (in millions):

	Lease Receipts				Lease Commitments (a)
	Direct Financing Leases		Operating Leases		Finance Leases			Operating Leases
2019	$	14	$	416	$	38		$	183
2020	10		388		36			172
2021	7		360		34			158
2022	5		331		33			145
2023	5		306		30			130
Thereafter	19		1,704		201			831
Total minimum receipts / payments	$	60	$	3,505	372			$	1,619
Less amount representing interest					(125		)
Present value of minimum finance lease payments					247
Current portion of finance lease obligation					(21		)
Long-term portion of finance lease obligation					$	226

(a)

Minimum lease commitments have not been reduced by minimum sublease rentals of $2,290 million due in the future under non-cancelable subleases.

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Revenue Recognition (Tables)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Change in contract liabilities

The following table reflects the change in contract liabilities between December 31, 2018 and June 30, 2019 (in millions):

Contract Liabilities	TH			BK			PLK			Consolidated
Balance at December 31, 2018	$	62		$	405		$	19		$	486
Revenue recognized that was included in the contract liability balance at the beginning of the year	(4		)	(21		)	(1		)	(26		)
Increase, excluding amounts recognized as revenue during the period	4			42			4			50
Impact of foreign currency translation	1			(1		)	—			—
Balance at June 30, 2019	$	63		$	425		$	22		$	510

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 June 30, 2019 (in millions):

Contract liabilities expected to be recognized in	TH		BK		PLK		Consolidated
Remainder of 2019	$	4	$	16	$	1	$	21
2020	8		32		2		42
2021	7		31		1		39
2022	7		31		1		39
2023	6		30		1		37
Thereafter	31		285		16		332
Total	$	63	$	425	$	22	$	510

Disaggregation of total revenues

Total revenues consist of the following (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Sales	$	589	$	586	$	1,111	$	1,134
Royalties	576		544		1,104		1,054
Property revenues	214		190		413		368
Franchise fees and other revenue	21		23		38		41
Total revenues	$	1,400	$	1,343	$	2,666	$	2,597

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Earnings per Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Basic and Diluted Earnings Per Share

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Numerator:
Net income attributable to common shareholders - basic	$	142	$	167	$	277	$	315
Add: Net income attributable to noncontrolling interests	115		146		226		277
Net income available to common shareholders and noncontrolling interests - diluted	$	257	$	313	$	503	$	592
Denominator:
Weighted average common shares - basic	255		249		254		248
Exchange of noncontrolling interests for common shares (Note 12)	207		218		207		218
Effect of other dilutive securities	7		7		7		8
Weighted average common shares - diluted	469		474		468		474
Basic earnings per share (a)	$	0.56	$	0.67	$	1.09	$	1.27
Diluted earnings per share (a)	$	0.55	$	0.66	$	1.07	$	1.25
Anti-dilutive securities outstanding	3		6		3		6

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

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Intangible Assets, net and Goodwill (Tables)

6 Months Ended

Jun. 30, 2019

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
	June 30, 2019							December 31, 2018
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Identifiable assets subject to amortization:
Franchise agreements	$	715	$	(209	)	$	506	$	705	$	(194	)	$	511
Favorable leases (a)	134		(65		)	69		407		(200		)	207
Subtotal	849		(274		)	575		1,112		(394		)	718
Indefinite lived intangible assets:
Tim Hortons brand	$	6,487	$	—		$	6,487	$	6,259	$	—		$	6,259
Burger King brand	2,126		—			2,126		2,131		—			2,131
Popeyes brand	1,355		—			1,355		1,355		—			1,355
Subtotal	9,968		—			9,968		9,745		—			9,745
Intangible assets, net						$	10,543						$	10,463
Goodwill
Tim Hortons segment	$	4,178						$	4,038
Burger King segment	601							602
Popeyes segment	846							846
Total	$	5,625						$	5,486

(a)

The decrease in favorable leases reflects the reclassification of favorable leases where we are the lessee to operating lease right-of-use assets in connection with our transition to ASC 842. See Note 4, Leases.

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Equity Method Investments (Tables)

6 Months Ended

Jun. 30, 2019

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 June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues from affiliates:
Royalties	$	87	$	74	$	165	$	142
Property revenues	9		9		17		18
Franchise fees and other revenue	3		2		6		4
Total	$	99	$	85	$	188	$	164

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Other Accrued Liabilities and Other Liabilities, net (Tables)

6 Months Ended

Jun. 30, 2019

Other Liabilities Disclosure [Abstract]

Schedule of Other Accrued Liabilities (Current) and Other Liabilities (Non-Current), Net

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

	As of
	June 30, 2019		December 31, 2018
Current:
Dividend payable	$	232	$	207
Interest payable	88		87
Accrued compensation and benefits	48		69
Taxes payable	73		113
Deferred income	36		27
Accrued advertising expenses	20		30
Restructuring and other provisions	7		11
Current portion of operating lease liabilities (a)	121		—
Other	74		93
Other accrued liabilities	$	699	$	637
Noncurrent:
Taxes payable	$	570	$	493
Contract liabilities, net	510		486
Unfavorable leases (b)	113		192
Derivatives liabilities	397		179
Accrued pension	63		64
Accrued lease straight-lining liability (b)	—		69
Deferred income	31		22
Other	46		42
Other liabilities, net	$	1,730	$	1,547

(a) Represents the current portion of operating lease liabilities recognized in connection with our transition to ASC 842. See Note 4, Leases.

(b)

The decreases in unfavorable leases and accrued lease straight-lining liability reflect the reclassification of unfavorable leases and lease straight-lining liability where we are the lessee in the underlying operating lease to the right-of-use assets recorded for the underlying lease in connection with our transition to ASC 842. See Note 4, Leases.

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Summary of Long-Term Debt

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

	As of
	June 30, 2019			December 31, 2018
Term Loan Facility (due February 17, 2024)	$	6,305		$	6,338
2017 4.25% Senior Notes (due May 15, 2024)	1,500			1,500
2015 4.625% Senior Notes (due January 15, 2022)	1,250			1,250
2017 5.00% Senior Notes (due October 15, 2025)	2,800			2,800
Other (a)	80			150
Less: unamortized deferred financing costs and deferred issue discount	(133		)	(145		)
Total debt, net	11,802			11,893
Less: current maturities of debt	(65		)	(70		)
Total long-term debt	$	11,737		$	11,823

(a)

The decrease in Other reflects the de-recognition of obligations associated with build-to-suit leases recorded under the Previous Standard. Liabilities associated with build-to-suit leases were remeasured and recorded as finance lease liabilities in conjunction with our transition to ASC 842.

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 billions):

	As of
	June 30, 2019		December 31, 2018
Fair value of our variable term debt and senior notes	$	12	$	11
Principal carrying amount of our variable term debt and senior notes	12		12

Schedule of Interest Expense, Net

Interest expense, net consists of the following (in millions):

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Debt (a)	$	128		$	120		$	252		$	250
Finance lease obligations	6			6			11			12
Amortization of deferred financing costs and debt issuance discount	8			7			15			14
Interest income	(5		)	(3		)	(9		)	(6		)
Interest expense, net	$	137		$	130		$	269		$	270

(a)

Amount includes $19 million and $20 million benefit during the three months ended June 30, 2019 and 2018, respectively, and $37 million and $24 million benefit during the six months ended June 30, 2019 and 2018, respectively, from our adoption of a new hedge accounting standard in 2018.

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Shareholders' Equity (Tables)

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Summary of Change in Components of Accumulated Other Comprehensive Income (Loss) ("AOCI")

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, 2018	$	253		$	(15	)	$	(1,038	)	$	(800	)
Foreign currency translation adjustment	—			—			358			358
Net change in fair value of derivatives, net of tax	(207		)	—			—			(207		)
Amounts reclassified to earnings of cash flow hedges, net of tax	2			—			—			2
Amounts attributable to noncontrolling interests	93			—			(163		)	(70		)
Balance at June 30, 2019	$	141		$	(15	)	$	(843	)	$	(717	)

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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Quantitative disclosures of derivative instruments

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 June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Derivatives designated as cash flow hedges(1)
Interest rate swaps	$	(77	)	$	(5	)	$	(121	)	$	24
Forward-currency contracts	$	(2	)	$	3		$	(4	)	$	13
Derivatives designated as net investment hedges
Cross-currency rate swaps	$	(53	)	$	143		$	(155	)	$	154

(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 June 30,						Six Months Ended June 30,
		2019			2018			2019			2018
Derivatives designated as cash flow hedges
Interest rate swaps	Interest expense, net	$	(6	)	$	(5	)	$	(7	)	$	(11	)
Forward-currency contracts	Cost of sales	$	2		$	—		$	4		$	3
	Location of Gain or (Loss) Recognized in Earnings	Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing)
		Three Months Ended June 30,						Six Months Ended June 30,
		2019			2018			2019			2018
Derivatives designated as net investment hedges
Cross-currency rate swaps	Interest expense, net	$	19		$	20		$	37		$	24

Summary of fair value measurements

	Fair Value as of
	June 30, 2019		December 31, 2018		Balance Sheet Location
Assets:
Derivatives designated as cash flow hedges
Foreign currency	$	—	$	7	Prepaids and other current assets
Derivatives designated as net investment hedges
Foreign currency	15		58		Other assets, net
Total assets at fair value	$	15	$	65
Liabilities:
Derivatives designated as cash flow hedges
Interest rate	$	193	$	72	Other liabilities, net
Foreign currency	1		—		Other accrued liabilities
Derivatives designated as net investment hedges
Foreign currency	204		107		Other liabilities, net
Total liabilities at fair value	$	398	$	179

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Other Operating Expenses (Income), net (Tables)

6 Months Ended

Jun. 30, 2019

Other Income and Expenses [Abstract]

Other Operating Expenses (Income), net

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings	$	(10	)	$	3		$	(7	)	$	10
Litigation settlements (gains) and reserves, net	—			—			—			(6		)
Net losses (gains) on foreign exchange	12			(33		)	(3		)	(16		)
Other, net	1			—			(4		)	(5		)
Other operating expenses (income), net	$	3		$	(30	)	$	(14	)	$	(17	)

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2019

Segment Reporting [Abstract]

Revenues by Operating Segment and Country

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues by operating segment:
TH	$	842	$	823	$	1,591	$	1,586
BK	447		418		858		808
PLK	111		102		217		203
Total revenues	$	1,400	$	1,343	$	2,666	$	2,597

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues by country (a):
Canada	$	764	$	746	$	1,440	$	1,438
United States	479		450		923		871
Other	157		147		303		288
Total revenues	$	1,400	$	1,343	$	2,666	$	2,597

(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)

A reconciliation of segment income to net income (loss) consists of the following (in millions):

	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Segment income:
TH	$	287	$	286		$	524		$	531
BK	252		236			474			450
PLK	41		40			82			79
Adjusted EBITDA	580		562			1,080			1,060
Share-based compensation and non-cash incentive compensation expense	19		16			44			31
PLK Transaction costs	—		5			—			10
Corporate restructuring and tax advisory fees	11		7			17			14
Office centralization and relocation costs	2		12			6			12
Impact of equity method investments (a)	9		4			10			(6		)
Other operating expenses (income), net	3		(30		)	(14		)	(17		)
EBITDA	536		548			1,017			1,016
Depreciation and amortization	45		46			92			93
Income from operations	491		502			925			923
Interest expense, net	137		130			269			270
Income tax expense	97		58			153			60
Net income	$	257	$	314		$	503		$	593

(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.

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Description of Business and Organization - Additional Information (Details)	Jun. 30, 2019 Restaurant Country
Basis Of Presentation [Line Items]
Number of restaurants in operation	26,036
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
Basis Of Presentation [Line Items]
Number of restaurants in operation	4,872
Burger King
Basis Of Presentation [Line Items]
Number of restaurants in operation	18,008
Popeyes
Basis Of Presentation [Line Items]
Number of restaurants in operation	3,156

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Basis of Presentation and Consolidation - Additional Information (Details) $ in Millions	6 Months Ended		12 Months Ended
	Jun. 30, 2019 USD ($) Restaurant	Jun. 30, 2018 USD ($)	Dec. 31, 2018 Restaurant
Summary Of Accounting Policies [Line Items]
Tenant inducements paid to franchisees | $	$ 8	$ 13
Restaurant VIEs
Summary Of Accounting Policies [Line Items]
Number of consolidated restaurants | Restaurant	30		17

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Leases - Additional Information (Details) $ in Millions	Jun. 30, 2019 Restaurant Property	Jan. 01, 2019 USD ($)
Lessor, Lease, Description [Line Items]
Restaurant properties to franchisees leased or subleased | Restaurant	5,331
Non-restaurant properties to third parties under operating leases and direct financing leases | Property	168
Accounting Standards Update 2016-02
Lessor, Lease, Description [Line Items]
Cumulative effect adjustment | $		$ 21
Minimum
Lessor, Lease, Description [Line Items]
Lessor, operating lease, term of contract	10 years
Lessor, direct financing lease, term of contract	10 years
Lessee, finance lease, term of contract	10 years
Maximum
Lessor, Lease, Description [Line Items]
Lessor, operating lease, term of contract	20 years
Lessor, direct financing lease, term of contract	20 years
Lessee, finance lease, term of contract	30 years

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Leases - Adjustments to balance sheet due to Topic 842 (Details) - USD ($) $ in Millions	Jun. 30, 2019	Mar. 31, 2019	Jan. 01, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cash and cash equivalents	$ 1,028		$ 913	$ 913
Accounts and notes receivable, net	476		452	452
Inventories, net	81		75	75
Prepaids and other current assets	69		60	60
Total current assets	1,654		1,500	1,500
Property and equipment, net	2,007		2,022	1,996
Operating lease assets, net	1,154		1,143
Intangible assets, net	10,543		10,330	10,463
Goodwill	5,625		5,486	5,486
Net investment in property leased to franchisees	47		54	54
Other assets, net	695		642	642
Total assets	21,725		21,177	20,141
Accounts and drafts payable	486		513	513
Other accrued liabilities	699		751	637
Gift card liability	106		167	167
Current portion of long term debt and finance leases	92		91	91
Total current liabilities	1,383		1,522	1,408
Term debt, net of current portion	11,737		11,758	11,823
Finance leases, net of current portion				226
Finance leases, net of current portion	284		288
Operating lease liabilities, net of current portion	1,056		1,028
Other liabilities, net	1,730		1,415	1,547
Deferred income taxes, net	1,575		1,527	1,519
Total liabilities	17,765		17,538	16,523
Common shares	1,870		1,737	1,737
Retained earnings	704		686	674
Accumulated other comprehensive income (loss)	(717)		(800)	(800)
Total Restaurant Brands International Inc. shareholders’ equity	1,857		1,623	1,611
Noncontrolling interests	2,103		2,016	2,007
Total shareholders’ equity	3,960	$ 3,773	3,639	3,618	$ 4,225	$ 4,242	$ 4,561
Total liabilities and shareholders’ equity	$ 21,725		21,177	20,141
Accrued lease straight-lining liability				$ 69
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cash and cash equivalents			0
Accounts and notes receivable, net			0
Inventories, net			0
Prepaids and other current assets			0
Total current assets			0
Property and equipment, net			26
Operating lease assets, net			1,143
Intangible assets, net			(133)
Goodwill			0
Net investment in property leased to franchisees			0
Other assets, net			0
Total assets			1,036
Accounts and drafts payable			0
Other accrued liabilities			114
Gift card liability			0
Current portion of long term debt and finance leases			0
Total current liabilities			114
Term debt, net of current portion			(65)
Finance leases, net of current portion			62
Operating lease liabilities, net of current portion			1,028
Other liabilities, net			(132)
Deferred income taxes, net			8
Total liabilities			1,015
Common shares			0
Retained earnings			12
Accumulated other comprehensive income (loss)			0
Total Restaurant Brands International Inc. shareholders’ equity			12
Noncontrolling interests			9
Total shareholders’ equity			21
Total liabilities and shareholders’ equity			1,036
Accrued lease straight-lining liability			$ 64

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Leases - Assets leased to franchises (Details) $ in Millions	Jun. 30, 2019 USD ($)
Property, Plant and Equipment [Line Items]
Property and equipment leased, gross	$ 2,080
Accumulated depreciation and amortization	(441)
Property and equipment leased, net	1,639
Land
Property, Plant and Equipment [Line Items]
Property and equipment leased, gross	920
Buildings and improvements
Property, Plant and Equipment [Line Items]
Property and equipment leased, gross	1,139
Restaurant equipment
Property, Plant and Equipment [Line Items]
Property and equipment leased, gross	$ 21

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Leases - Net investment in direct financing leases (Details) $ in Millions	Jun. 30, 2019 USD ($)
Leases [Abstract]
Future minimum lease receipts	$ 53
Contingent rents	23
Estimated unguaranteed residual value	15
Unearned income	(30)
Net investment in property leased to franchisees	61
Current portion included within accounts receivables	(14)
Net investment in property leased to franchisees, noncurrent	$ 47

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Leases - Property revenues (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Lease income - operating leases
Minimum lease payments	$ 112	$ 223
Variable lease payments	97	181
Amortization of favorable and unfavorable income lease contracts, net	2	4
Subtotal - lease income from operating leases	211	408
Earned income on direct financing leases	3	5
Total property revenues	$ 214	$ 413

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Leases - Lease cost (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Leases [Abstract]
Operating lease cost	$ 53		$ 106
Operating lease variable lease cost	50		100
Finance lease cost:
Amortization of right-of-use assets	6		13
Interest on lease liabilities	6	$ 6	11	$ 12
Sublease income	(164)		(319)
Total lease cost (income)	$ (49)		$ (89)

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Leases - Lease term and discount rate (Details)	Jun. 30, 2019
Leases [Abstract]
Weighted-average remaining lease term (in years): Operating leases	11 years 1 month 6 days
Weighted-average remaining lease term (in years): Finance leases	11 years 2 months 12 days
Weighted-average discount rate: Operating leases	6.50%
Weighted-average discount rate: Finance leases	7.60%

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Leases - Other information associated with leases (Details) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($)
Leases [Abstract]
Operating cash flows from operating leases	$ 96
Operating cash flows from finance leases	11
Financing cash flows from finance leases	13
Right-of-use assets obtained in exchange for new finance lease obligations	1
Right-of-use assets obtained in exchange for new operating lease obligations	$ 65

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Leases - Future minimum lease receipts and commitments (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Lease Receipts, Direct Financing Leases
Remainder of 2019	$ 7
2020	10
2021	7
2022	5
2023	5
Thereafter	19
Total minimum receipts	53
Lease Receipts, Operating Leases
Remainder of 2019	213
2020	406
2021	382
2022	357
2023	335
Thereafter	1,876
Total minimum receipts	3,569
Lease Commitments, Finance Leases
Remainder of 2019	24
2020	46
2021	44
2022	43
2023	39
Thereafter	268
Total minimum payments	464
Less amount representing interest	(153)
Present value of minimum lease payments	311
Current portion of lease obligations	(27)
Long-term portion of lease obligations	284	$ 288
Lease Commitments, Operating Leases
Remainder of 2019	97
2020	187
2021	175
2022	163
2023	149
Thereafter	941
Total minimum payments	1,712
Less amount representing interest	(535)
Present value of minimum lease payments	1,177
Current portion of lease obligations	(121)
Long-term portion of lease obligations	1,056	$ 1,028
Minimum sublease rentals	$ 2,351
Lease Receipts, Direct Financing Leases
2019			$ 14
2020			10
2021			7
2022			5
2023			5
Thereafter			19
Total minimum receipts			60
Lease Receipts, Operating Leases
2019			416
2020			388
2021			360
2022			331
2023			306
Thereafter			1,704
Total minimum receipts			3,505
Lease Commitments, Finance Leases
2019			38
2020			36
2021			34
2022			33
2023			30
Thereafter			201
Total minimum payments			372
Less amount representing interest			(125)
Present value of minimum lease payments			247
Current portion of lease obligations			(21)
Long-term portion of lease obligations			226
Lease Commitments, Operating Leases
2019			183
2020			172
2021			158
2022			145
2023			130
Thereafter			831
Total minimum payments			1,619
Minimum sublease rentals			$ 2,290

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Revenue Recognition - Change in contract liabilities (Details) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($)
Segment Reporting Information [Line Items]
Contract liabilities expected to be recognized in	$ 510
Change In Contract With Customer Liability [Roll Forward]
Beginning balance	486
Revenue recognized that was included in the contract liability balance at the beginning of the year	(26)
Increase, excluding amounts recognized as revenue during the period	50
Impact of foreign currency translation	0
Ending balance	510
Tim Hortons
Segment Reporting Information [Line Items]
Contract liabilities expected to be recognized in	63
Change In Contract With Customer Liability [Roll Forward]
Beginning balance	62
Revenue recognized that was included in the contract liability balance at the beginning of the year	(4)
Increase, excluding amounts recognized as revenue during the period	4
Impact of foreign currency translation	1
Ending balance	63
Burger King
Segment Reporting Information [Line Items]
Contract liabilities expected to be recognized in	425
Change In Contract With Customer Liability [Roll Forward]
Beginning balance	405
Revenue recognized that was included in the contract liability balance at the beginning of the year	(21)
Increase, excluding amounts recognized as revenue during the period	42
Impact of foreign currency translation	(1)
Ending balance	425
Popeyes
Segment Reporting Information [Line Items]
Contract liabilities expected to be recognized in	22
Change In Contract With Customer Liability [Roll Forward]
Beginning balance	19
Revenue recognized that was included in the contract liability balance at the beginning of the year	(1)
Increase, excluding amounts recognized as revenue during the period	4
Impact of foreign currency translation	0
Ending balance	$ 22

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Revenue Recognition - Estimated revenue recognition (Details) $ in Millions	Jun. 30, 2019 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	$ 510
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Revenue from Contract with Customer [Abstract]
Revenue, remaining performance obligation, expected timing of satisfaction, period	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	$ 21
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue from Contract with Customer [Abstract]
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	$ 42
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	$ 39
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	$ 39
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	$ 37
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
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	$ 332
Tim Hortons
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	63
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	4
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	8
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	7
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	7
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	6
Tim Hortons | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	31
Burger King
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	425
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	16
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	32
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	31
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	31
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	30
Burger King | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	285
Popeyes
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	22
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	1
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	2
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	1
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	1
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	1
Popeyes | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Contract liabilities expected to be recognized in	$ 16

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Revenue Recognition - Disaggregation of total revenues (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Property revenues	$ 214	$ 190	$ 413	$ 368
Revenues	1,400	1,343	2,666	2,597
Sales
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Revenues	589	586	1,111	1,134
Royalties
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Revenues	576	544	1,104	1,054
Franchise fees and other revenue
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Revenues	$ 21	$ 23	$ 38	$ 41

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Earnings per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Numerator:
Net income attributable to common shareholders - basic	$ 142	$ 167	$ 277	$ 315
Add: Net income attributable to noncontrolling interests	115	146	226	277
Net income available to common shareholders and noncontrolling interests - diluted	$ 257	$ 313	$ 503	$ 592
Denominator:
Weighted average common shares - basic (shares)	255	249	254	248
Exchange of noncontrolling interests for common shares (shares)	207	218	207	218
Effect of other dilutive securities (shares)	7	7	7	8
Weighted average common shares - diluted (shares)	469	474	468	474
Basic earnings per share (in usd per share)	$ 0.56	$ 0.67	$ 1.09	$ 1.27
Diluted earnings per share (in usd per share)	$ 0.55	$ 0.66	$ 1.07	$ 1.25
Anti-dilutive securities outstanding (shares)	3	6	3	6

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Intangible Assets, net and Goodwill - Schedule of Intangible Assets, Net and Goodwill (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Finite And Indefinite Lived Intangible Assets [Line Items]
Identifiable assets, Gross	$ 849		$ 1,112
Identifiable assets, Accumulated Amortization	(274)		(394)
Identifiable assets, Net	575		718
Intangible assets, net	10,543	$ 10,330	10,463
Goodwill	5,625	$ 5,486	5,486
Trade Names
Finite And Indefinite Lived Intangible Assets [Line Items]
Indefinite lived intangible assets:	9,968		9,745
Tim Hortons
Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	4,178		4,038
Tim Hortons | Trade Names
Finite And Indefinite Lived Intangible Assets [Line Items]
Indefinite lived intangible assets:	6,487		6,259
Burger King
Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	601		602
Burger King | Trade Names
Finite And Indefinite Lived Intangible Assets [Line Items]
Indefinite lived intangible assets:	2,126		2,131
Popeyes
Finite And Indefinite Lived Intangible Assets [Line Items]
Goodwill	846		846
Popeyes | Trade Names
Finite And Indefinite Lived Intangible Assets [Line Items]
Indefinite lived intangible assets:	1,355		1,355
Franchise agreements
Finite And Indefinite Lived Intangible Assets [Line Items]
Identifiable assets, Gross	715		705
Identifiable assets, Accumulated Amortization	(209)		(194)
Identifiable assets, Net	506		511
Favorable leases
Finite And Indefinite Lived Intangible Assets [Line Items]
Identifiable assets, Gross	134		407
Identifiable assets, Accumulated Amortization	(65)		(200)
Identifiable assets, Net	$ 69		$ 207

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Intangible Assets, net and Goodwill - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense on intangible assets	$ 10	$ 18	$ 21	$ 36

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Equity Method Investments - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Increase to carrying value of equity method investment		$ 20		$ 20
Equity Method Investee
Schedule of Equity Method Investments [Line Items]
Accounts receivable from equity method investments	$ 43		$ 43		$ 41
Wendy's Company TIMWEN Partnership | Tim Hortons
Schedule of Equity Method Investments [Line Items]
Cash distributions	5	3	7	6
Contingent rent expense	5	$ 5	9	$ 10
Carrols Restaurant Group, Inc.
Schedule of Equity Method Investments [Line Items]
Quoted market price	$ 85		$ 85
BK Brasil
Schedule of Equity Method Investments [Line Items]
Joint-venture interest	9.90%		9.90%
Quoted market price	$ 130		$ 130
Other assets, net
Schedule of Equity Method Investments [Line Items]
Equity method investments	$ 272		$ 272		$ 259
Canada | Wendy's Company TIMWEN Partnership
Schedule of Equity Method Investments [Line Items]
Joint-venture interest	50.00%		50.00%
United States | Carrols Restaurant Group, Inc.
Schedule of Equity Method Investments [Line Items]
Joint-venture interest	20.30%		20.30%

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Equity Method Investments - Summary of Franchise and Property Revenues (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues from affiliates:
Property revenues	$ 214	$ 190	$ 413	$ 368
Revenues	1,400	1,343	2,666	2,597
Affiliates
Revenues from affiliates:
Property revenues	9	9	17	18
Revenues	99	85	188	164
Royalties
Revenues from affiliates:
Revenues	576	544	1,104	1,054
Royalties | Affiliates
Revenues from affiliates:
Revenues	87	74	165	142
Franchise fees and other revenue
Revenues from affiliates:
Revenues	21	23	38	41
Franchise fees and other revenue | Affiliates
Revenues from affiliates:
Revenues	$ 3	$ 2	$ 6	$ 4

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Other Accrued Liabilities and Other Liabilities, net - Schedule of Other Accrued Liabilities (Current) and Other Liabilities (Noncurrent), Net (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Current:
Dividend payable	$ 232		$ 207
Interest payable	88		87
Accrued compensation and benefits	48		69
Taxes payable	73		113
Deferred income	36		27
Accrued advertising expenses	20		30
Restructuring and other provisions	7		11
Current portion of operating lease liabilities	121
Other	74		93
Other accrued liabilities	699	$ 751	637
Noncurrent:
Taxes payable	570		493
Contract liabilities, net	510		486
Unfavorable leases	113		192
Derivatives liabilities	397		179
Accrued pension	63		64
Accrued lease straight-lining liability			69
Deferred income	31		22
Other	46		42
Other liabilities, net	$ 1,730	$ 1,415	$ 1,547

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Long-Term Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Other	$ 80		$ 150
Less: unamortized deferred financing costs and deferred issue discount	(133)		(145)
Total debt, net	11,802		11,893
Less: current maturities of debt	(65)		(70)
Total long-term debt	11,737	$ 11,758	11,823
Term Loan Facility (due February 17, 2024)
Debt Instrument [Line Items]
Term loan facility	6,305		6,338
2017 4.25% Senior Notes (due May 15, 2024)
Debt Instrument [Line Items]
Senior notes	$ 1,500		1,500
Stated interest rate (as a percent)	4.25%
2015 4.625% Senior Notes (due January 15, 2022)
Debt Instrument [Line Items]
Senior notes	$ 1,250		1,250
Stated interest rate (as a percent)	4.625%
2017 5.00% Senior Notes (due October 15, 2025)
Debt Instrument [Line Items]
Senior notes	$ 2,800		$ 2,800
Stated interest rate (as a percent)	5.00%

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Long-Term Debt - Revolving Credit Facility - Additional Information (Details) - Revolving credit facility	Jun. 30, 2019 USD ($)
Line of Credit Facility [Line Items]
Amount outstanding under credit facility	$ 0
Letter of credit sublimit as part of revolving credit facility	125,000,000
Letters of credit issued against credit facility	2,000,000
Remaining borrowing capacity	$ 498,000,000

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Long-Term Debt - TH Facility (Details) - TH Facility - CAD ($)	6 Months Ended
	Jun. 30, 2019	Jun. 29, 2019
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 225,000,000	$ 100,000,000
Amount drawn	$ 100,000,000
Weighted average interest rate	3.36%
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%

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Long-Term Debt - Summary of Fair Value Measurement (Details) - USD ($) $ in Billions	Jun. 30, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Fair value of our variable term debt and senior notes	$ 12	$ 11
Principal carrying amount of our variable term debt and senior notes	$ 12	$ 12

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Long-Term Debt - Schedule of Interest Expense, Net and Other (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Debt Disclosure [Abstract]
Debt	$ 128	$ 120	$ 252	$ 250
Finance lease obligations	6	6	11	12
Amortization of deferred financing costs and debt issuance discount	8	7	15	14
Interest income	(5)	(3)	(9)	(6)
Interest expense, net	137	130	269	270
Accounting Standards Update 2017-12
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Gain (loss) reclassified to earnings, net investment hedge	$ 19	$ 20	$ 37	$ 24

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Income Taxes - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate	27.40%	15.70%	23.40%	9.20%
True-up adjustment relating to prior restructuring transaction	$ 37		$ 37
Increase in effective tax rate due to true-up adjustment	10.40%		5.60%
Effective income tax rate reconciliation, stock option exercises	4.00%	0.60%	4.10%	10.10%

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Shareholders' Equity - Additional Information (Details) - shares	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Partnerships Exchangeable Units
Stockholders Equity [Line Items]
Exchange of partnership exchangeable units for RBI common shares, shares	186,515
Restaurant Brands International Limited Partnership
Stockholders Equity [Line Items]
Partnership exchangeable units economic interest	44.80%	45.20%
Partnership exchangeable units economic interest, shares	207,337,076	207,523,591

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Shareholders' Equity - Summary of Change in Components of AOCI (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balances	$ 3,773	$ 4,242	$ 3,618	$ 4,561
Foreign currency translation adjustment	199	(255)	358	(472)
Amounts reclassified to earnings of cash flow hedges, net of tax	3	4	2	6
Ending balances	3,960	4,225	3,960	4,225
Derivatives
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balances			253
Net change in fair value of derivatives, net of tax			(207)
Amounts reclassified to earnings of cash flow hedges, net of tax			2
Amounts attributable to noncontrolling interests			93
Ending balances	141		141
Pensions
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balances			(15)
Amounts attributable to noncontrolling interests			0
Ending balances	(15)		(15)
Foreign Currency Translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balances			(1,038)
Foreign currency translation adjustment			358
Amounts attributable to noncontrolling interests			(163)
Ending balances	(843)		(843)
Accumulated Other Comprehensive Income (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balances	(775)	(573)	(800)	(476)
Foreign currency translation adjustment			358
Net change in fair value of derivatives, net of tax			(207)
Amounts reclassified to earnings of cash flow hedges, net of tax			2
Amounts attributable to noncontrolling interests			(70)
Ending balances	$ (717)	$ (647)	$ (717)	$ (647)

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Derivative Instruments - Additional Information (Details) € in Millions, $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2019 USD ($)	Dec. 31, 2015 USD ($)	Jun. 30, 2019 CAD ($)	Jun. 30, 2019 EUR (€)	Dec. 31, 2018 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
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 value	130,000,000
Interest rate swaps
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value		$ 2,500,000,000			$ 3,500,000,000
Interest rate swaps | Interest expense, net
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Net unrealized loss recognized at settlement		$ 85,000,000
Cross currency interest rate contract | Fixed income interest rate
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value	5,000,000,000		$ 6,754		$ 400,000,000
Cross currency interest rate contract | Fixed income interest rate | Hedge Funds
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value	$ 1,200,000,000			€ 1,108

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Derivative Instruments - Quantitative Disclosures of Derivative Instruments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivatives designated as cash flow hedges | Interest rate swaps
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gain or (Loss) Recognized in Other Comprehensive Income (Loss)	$ (77)	$ (5)	$ (121)	$ 24
Derivatives designated as cash flow hedges | Interest rate swaps | Interest expense, net
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gain or (Loss) Reclassified from AOCI into Earnings	(6)	(5)	(7)	(11)
Derivatives designated as cash flow hedges | Forward-currency contracts
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gain or (Loss) Recognized in Other Comprehensive Income (Loss)	(2)	3	(4)	13
Derivatives designated as cash flow hedges | Forward-currency contracts | Cost of sales
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gain or (Loss) Reclassified from AOCI into Earnings	2	0	4	3
Derivatives designated as net investment hedges | Cross-currency rate swaps
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gain or (Loss) Recognized in Other Comprehensive Income (Loss)	(53)	143	(155)	154
Derivatives designated as net investment hedges | Cross-currency rate swaps | Interest expense, net
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Gain or (Loss) Recognized in Earnings (Amount Excluded from Effectiveness Testing)	$ 19	$ 20	$ 37	$ 24

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Derivative Instruments - Summary of Fair Value Measurements (Details) - USD ($) $ in Millions	Jun. 30, 2019	Dec. 31, 2018
Derivative [Line Items]
Derivatives assets	$ 15	$ 65
Derivatives liabilities	398	179
Derivatives designated as cash flow hedges | Interest rate | Other liabilities, net
Derivative [Line Items]
Derivatives liabilities	193	72
Derivatives designated as cash flow hedges | Foreign currency | Prepaids and other current assets
Derivative [Line Items]
Derivatives assets	0	7
Derivatives designated as cash flow hedges | Foreign currency | Other accrued liabilities
Derivative [Line Items]
Derivatives liabilities	1	0
Derivatives designated as net investment hedges | Foreign currency | Other assets, net
Derivative [Line Items]
Derivatives assets	15	58
Derivatives designated as net investment hedges | Foreign currency | Other liabilities, net
Derivative [Line Items]
Derivatives liabilities	$ 204	$ 107

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Other Operating Expenses (Income), net - Other Operating Expenses (Income), Net (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Other Income and Expenses [Abstract]
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings	$ (10)	$ 3	$ (7)	$ 10
Litigation settlements (gains) and reserves, net	0	0	0	(6)
Net losses (gains) on foreign exchange	12	(33)	(3)	(16)
Other, net	1	0	(4)	(5)
Other operating expenses (income), net	$ 3	$ (30)	$ (14)	$ (17)

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Commitments and Contingencies - Additional Information (Details) - TDL Group Corp - The TDL Group Corp. vs Tim Hortons Advertising Fund - Settled Litigation $ in Millions		1 Months Ended
	Apr. 29, 2019 CAD ($)	Mar. 31, 2019 claim
Loss Contingencies [Line Items]
Number of lawsuits filed | claim		2
Contribution amount	$ 6
Term of contribution	2 years
Legal and administrative expenses	$ 6

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Segment Reporting - Additional Information (Details)	6 Months Ended
	Jun. 30, 2019 Segment Brand
Segment Reporting [Abstract]
Number of brands | Brand	3
Number of operating segments	3
Number of reportable segments	3

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Segment Reporting - Revenues by Operating Segment and Country (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenue, Major Customer [Line Items]
Total revenues	$ 1,400	$ 1,343	$ 2,666	$ 2,597
Canada
Revenue, Major Customer [Line Items]
Total revenues	764	746	1,440	1,438
United States
Revenue, Major Customer [Line Items]
Total revenues	479	450	923	871
Other
Revenue, Major Customer [Line Items]
Total revenues	157	147	303	288
Tim Hortons
Revenue, Major Customer [Line Items]
Total revenues	842	823	1,591	1,586
Burger King
Revenue, Major Customer [Line Items]
Total revenues	447	418	858	808
Popeyes
Revenue, Major Customer [Line Items]
Total revenues	$ 111	$ 102	$ 217	$ 203

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Segment Reporting - Reconciliation of Segment Income to Net Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Segment Reporting, Revenue Reconciling Item [Line Items]
Adjusted EBITDA	$ 580		$ 562		$ 1,080	$ 1,060
Impact of equity method investments	2		1		0	(13)
Other operating expenses (income), net	3		(30)		(14)	(17)
EBITDA	536		548		1,017	1,016
Depreciation and amortization	45		46		92	93
Income from operations	491		502		925	923
Interest expense, net	137		130		269	270
Income tax expense	97		58		153	60
Net income	257	$ 246	314	$ 279	503	593
Popeyes Acquisition
Segment Reporting, Revenue Reconciling Item [Line Items]
PLK Transaction costs	0		5		0	10
Unallocated Management G&A
Segment Reporting, Revenue Reconciling Item [Line Items]
Share-based compensation and non-cash incentive compensation expense	19		16		44	31
Corporate restructuring and tax advisory fees	11		7		17	14
Office centralization and relocation costs	2		12		6	12
Impact of equity method investments	9		4		10	(6)
Other operating expenses (income), net	3		(30)		(14)	(17)
Tim Hortons | Operating Segments
Segment Reporting, Revenue Reconciling Item [Line Items]
Adjusted EBITDA	287		286		524	531
Burger King | Operating Segments
Segment Reporting, Revenue Reconciling Item [Line Items]
Adjusted EBITDA	252		236		474	450
Popeyes | Operating Segments
Segment Reporting, Revenue Reconciling Item [Line Items]
Adjusted EBITDA	$ 41		$ 40		$ 82	$ 79

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Subsequent Events - Additional Information (Details) - $ / shares			1 Months Ended	3 Months Ended
	Oct. 03, 2019	Jul. 03, 2019	Aug. 02, 2019	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018
Subsequent Event [Line Items]
Dividends per common share (in dollars per share)				$ 0.50	$ 0.50	$ 0.45	$ 0.45
Subsequent Event
Subsequent Event [Line Items]
Cash dividend paid per common share (in dollars per share)		$ 0.50
Dividends per common share (in dollars per share)			$ 0.50
Partnerships Exchangeable Units | Restaurant Brands International Limited Partnership | Subsequent Event
Subsequent Event [Line Items]
Partnership exchangeable unit (in usd per unit)		$ 0.50	$ 0.50
Scenario, Forecast
Subsequent Event [Line Items]
Cash dividend paid per common share (in dollars per share)	$ 0.50

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Label	Element	Value
Accounting Standards Update 2016-02 [Member] | Noncontrolling Interest [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 9,000,000
Accounting Standards Update 2016-02 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	12,000,000
Accounting Standards Update 2014-09 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(250,000,000)
Accounting Standards Update 2014-09 [Member] | Noncontrolling Interest [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(118,000,000)
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (132,000,000)