RESTAURANT BRANDS INTERNATIONAL INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-K)

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You should read the following discussion together with our audited Consolidated
Financial Statements and the related notes thereto included in Part II, Item 8
"Financial Statements and Supplementary Data" of this Annual Report for the year
ended December 31, 2021 (our "Annual 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 the Canadian securities laws as described in
further detail under "Special Note Regarding Forward-Looking Statements" that is
set forth below. Actual results may differ materially from the results discussed
in the forward-looking statements because of a number of risks and
uncertainties, including the matters discussed in the "Special Note Regarding
Forward-Looking Statements" below. In addition, please refer to the risks set
forth under the caption "Risk Factors" included in this Annual Report for a
further description of risks and uncertainties affecting our business and
financial results. Historical trends should not be taken as indicative of future
operations and financial results. Other than as required under the U.S. Federal
securities laws or the Canadian 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.

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.

Unless the context otherwise requires, all references in this section to the
"Company," "we," "us," or "our" are to Restaurant Brands International Inc. and
its subsidiaries, collectively.

All references to "$" or "dollars" in this report are to the currency of the
United States unless otherwise indicated. All references to "Canadian dollars"
or "C$" are to the currency of Canada unless otherwise indicated.

Overview


We are a Canadian corporation that serves as the indirect holding company for
Tim Hortons, Burger King, Popeyes and Firehouse Subs, which we acquired on
December 15, 2021, and their consolidated subsidiaries. We are one of the
world's largest quick service restaurant ("QSR") companies with over $35 billion
in annual system-wide sales and over 29,000 restaurants in more than 100
countries as of December 31, 2021. Our Tim Hortons®, Burger King®, Popeyes® and
Firehouse Subs® brands have similar franchise business models with complementary
daypart mixes and product platforms. Our four iconic brands are managed
independently while benefiting from global scale and sharing of best practices.

Tim Hortons restaurants are quick service restaurants with a menu that includes
premium blend coffee, tea, espresso-based 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, fried
shrimp, and other seafood, red beans and rice, and other regional items.
Firehouse Subs restaurants are quick service restaurants featuring hot and
hearty subs piled high with quality meats and cheese as well as chopped salads,
chili and soups, signature and other sides, soft drinks and local specialties.

Commencing upon the acquisition of Firehouse Subs, we have four operating and
reportable segments: (1) Tim Hortons ("TH"); (2) Burger King ("BK"); (3) Popeyes
Louisiana Kitchen ("PLK"); and (4) Firehouse Subs ("FHS"). Our business
generates revenue from the following sources: (i) franchise and advertising
revenues, consisting primarily of royalties and advertising fund contributions
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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Acquisition of a fire station


As described in Note 3 to the accompanying consolidated financial statements, on
December 15, 2021, we completed the acquisition of Firehouse Subs for total
consideration of approximately $1,033 million (the "Firehouse Acquisition"),
subject to post-closing adjustments. FHS revenues, expenses and segment income
for the period from the acquisition date of December 15, 2021 through December
26, 2021, the fiscal year end for FHS, are included in our consolidated
statement of operations for 2021.

COVID-19[female[feminine


The global crisis resulting from the spread of coronavirus ("COVID-19") impacted
our global restaurant operations for the twelve months ended December 31, 2021
and 2020.

While the impact of COVID-19 on system-wide sales growth, system-wide sales,
comparable sales and net restaurant growth was significant for the twelve months
ended December 31, 2020, in the 2021 period these metrics were affected to a
lesser extent, with variations among brands and regions. During 2020 and 2021,
substantially all TH, BK and PLK restaurants remained open, some with limited
operations, such as drive-thru, takeout and delivery (where applicable),
reduced, if any, dine-in capacity, and/or restrictions on hours of operation.
Certain markets periodically required temporary closures while implementing
government mandated lockdown orders. While most regions have eased restrictions
since the initial lockdowns, increases in cases and new variants have caused
certain markets to re-impose temporary restrictions as a result of government
mandates. We expect local conditions to continue to dictate limitations on
restaurant operations, capacity, and hours of operation.

In the twelve months ended December 31, 2021COVID-19 has contributed to labor issues, which in some areas has resulted in reduced hours and service patterns at some restaurants as well as supply chain pressures .


With the pandemic affecting consumer behavior, the importance of digital sales,
including delivery, has grown. We expect to continue to support enhancements of
our digital and marketing capabilities. While we do not know the full future
impact COVID-19 will have on our business, we expect to see a continued impact
from COVID-19 on our results in 2022.

Operating Metrics

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

• System-wide sales growth refers to the percentage change in sales of all franchise restaurants and corporate restaurants (referred to as system-wide sales) during a period compared to the same period of the previous year.


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

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

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

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

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

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  Table of Contents
Results of Operations

Tabular amounts in millions of we dollars unless otherwise specified. Segment revenue may not be calculated exactly due to rounding.

                                                                                                   2021 vs. 2020                                             2020 vs. 2019
                                                                                                                         Variance                                                Variance
                                                                                                        FX               Excluding                                FX             Excluding
Consolidated                    2021             2020             2019            Variance          Impact (a)           FX Impact           Variance           Impact           FX Impact
                                                                                                                         Favorable / (Unfavorable)
Revenues:
Sales                        $ 2,378          $ 2,013          $ 2,362          $     365          $      108          $      257          $    (349)         $   (20)         $     (329)
Franchise and property
revenues                       2,452            2,121            2,381                331                  55                 276               (260)             (26)               (234)
Advertising revenues             909              834              860                 75                  13                  62                (26)              (3)                (23)
Total revenues                 5,739            4,968            5,603                771                 176                 595               (635)             (49)               (586)
Operating costs and
expenses:
Cost of sales                  1,890            1,610            1,813               (280)                (86)               (194)               203               15                 188
Franchise and property
expenses                         489              515              533                 26                 (22)                 48                 18                3                  15
Advertising expenses             962              870              865                (92)                (14)                (78)                (5)               3                  (8)
General and administrative
expenses                         508              407              406               (101)                 (9)                (92)                (1)               -                  (1)
(Income) loss from equity
method investments                 4               39              (11)                35                   -                  35                (50)               -                 (50)
Other operating expenses
(income), net                      7              105              (10)                98                   1                  97               (115)              (1)               (114)
Total operating costs and
expenses                       3,860            3,546            3,596               (314)               (130)               (184)                50               20                  30
Income from operations         1,879            1,422            2,007                457                  46                 411               (585)             (29)               (556)
Interest expense, net            505              508              532                  3                  (1)                  4                 24                -                  24
Loss on early extinguishment
of debt                           11               98               23                 87                   -                  87                (75)               -                 (75)
Income before income taxes     1,363              816            1,452                547                  45                 502               (636)             (29)               (607)
Income tax expense               110               66              341                (44)                  1                 (45)               275               (3)                278
Net income                   $ 1,253          $   750          $ 1,111          $     503          $       46          $      457          $    (361)         $   (32)         $     (329)


(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.

                                                                                                      2021 vs. 2020                                             2020 vs. 2019
                                                                                                                            Variance                                                Variance
                                                                                                           FX               Excluding                                FX             Excluding
TH Segment                         2021             2020             2019            Variance          Impact (a)           FX Impact          
Variance           Impact           FX Impact
                                                                                                                            Favorable / (Unfavorable)
Revenues:
Sales                           $ 2,249          $ 1,876          $ 2,204  

$373 $108 $265 ($328) $ (20) (308) $
Franchise and Real Estate Revenue 864

              745              908                119                  44                  75               (163)              (8)               (155)
Advertising revenues                229              189              232                 40                  11                  29                (43)              (2)                (41)
Total revenues                    3,342            2,810            3,344                532                 163                 369               (534)             (30)               (504)
Cost of sales                     1,765            1,484            1,677               (281)                (86)               (195)               193               15                 178
Franchise and property expenses     337              328              351                 (9)                (20)                 11                 23                3                  20
Advertising expenses                277              204              232                (73)                (12)                (61)                28                2                  26
Segment G&A                         110               93               84                (17)                 (4)                (13)                (9)               1                 (10)
Segment depreciation and
amortization (b)                    126              113              106                (13)                 (6)                 (7)                (7)               1                  (8)
Segment income (c)                  997              823            1,122                174                  47                 127               (299)             (10)               (289)


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(b) Segment amortization includes amortization included in cost of sales and franchise and property costs.


(c)TH segment income includes $17 million, $9 million and $16 million of cash
distributions received from equity method investments for 2021, 2020 and 2019,
respectively.

                                                                                                       2021 vs. 2020                                              2020 vs. 2019
                                                                                                                               Variance                                               Variance
                                                                                                              FX              Excluding                                FX             Excluding
BK Segment                        2021             2020             2019             Variance             Impact (a)          FX Impact           Variance           Impact           FX Impact
                                                                                                                             Favorable / (Unfavorable)
Revenues:
Sales                          $    64          $    64          $    76          $       -             $         -          $       -          $     (12)         $     -          $      (12)
Franchise and property
revenues                         1,301            1,113            1,249                188                      11                177               (136)             (17)               (119)
Advertising revenues               448              425              452                 23                       2                 21                (27)              (1)                (26)
Total revenues                   1,813            1,602            1,777                211                      13                198               (175)             (18)               (157)
Cost of sales                       66               65               71                 (1)                      -                 (1)                 6                -                   6
Franchise and property
expenses                           142              176              168                 34                      (2)                36                 (8)               -                  (8)
Advertising expenses               450              442              454                 (8)                     (2)                (6)                12                1                  11
Segment G&A                        185              146              146                (39)                     (1)               (38)                 -                -                   -
Segment depreciation and
amortization (b)                    48               49               49                  1                       -                  1                  -                -                   -
Segment income (d)               1,021              823              994                198                       8                190               (171)             (17)               (154)


(d)BK segment income includes $4 million and $6 million of cash distributions
received from equity method investments for 2021 and 2019, respectively. No
significant cash distributions were received from equity method investments in
2020.

                                                                                             2021 vs. 2020                                            2020 vs. 2019
                                                                                                                   Variance                                               Variance
                                                                                                  FX               Excluding                               FX             Excluding
PLK Segment                   2021           2020           2019           Variance           Impact (a)           FX Impact           Variance          Impact           FX Impact
                                                                                                                  Favorable / (Unfavorable)
Revenues:
Sales                       $  64          $  73          $  82          $      (9)         $         -          $       (9)         $      (9)         $    -          $       (9)
Franchise and property
revenues                      283            263            224                 20                    -                  20                 39              (1)                 40
Advertising revenues          232            220            176                 12                    -                  12                 44               -                  44
Total revenues                579            556            482                 23                    -                  23                 74              (1)                 75
Cost of sales                  58             61             65                  3                    -                   3                  4               -                   4
Franchise and property
expenses                        9             11             14                  2                    -                   2                  3               -                   3
Advertising expenses          235            224            179                (11)                   -                 (11)               (45)              -                 (45)
Segment G&A                    56             49             46                 (7)                   -                  (7)                (3)              -                  (3)
Segment depreciation and
amortization (b)                7              8             11                  1                    -                   1                  3               -                   3
Segment income                228            218            188                 10                    -                  10                 30              (1)                 31




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The following table presents our operating metrics for each of the periods
indicated, which have been derived from our internal records. We evaluate our
restaurants and assess our business based on these operating metrics. These
metrics may differ from those used by other companies in our industry who may
define these metrics differently.

                                       2021           2020           2019
System-wide sales growth
Tim Hortons                             12.5  %       (17.5) %        (0.3) %
Burger King                             15.9  %       (11.1) %         9.3  %
Popeyes                                  7.3  %        17.7  %        18.5  %
Consolidated (a)                        13.8  %        (8.6) %         8.3  %
Firehouse Subs (b)                      25.1  %         1.8  %         6.0  %
System-wide sales ($ in millions)
Tim Hortons                         $  6,526       $  5,488       $  6,716
Burger King                         $ 23,450       $ 20,038       $ 22,921
Popeyes                             $  5,519       $  5,143       $  4,397
Consolidated (a)                    $ 35,495       $ 30,669       $ 34,034
Firehouse Subs (b)                  $  1,091       $    872       $    856
Comparable sales
Tim Hortons                             10.6  %       (15.7) %        (1.5) %
Burger King                              9.3  %        (7.9) %         3.4  %
Popeyes                                 (0.4) %        13.8  %        12.1  %
Firehouse Subs (b)                      20.9  %        (0.2) %         1.0  %
Net restaurant growth
Tim Hortons                              6.9  %         0.3  %         1.8  %
Burger King                              3.3  %        (1.1) %         5.9  %
Popeyes                                  7.4  %         4.1  %         6.9  %
Consolidated (a)                         4.5  %        (0.2) %         5.2  %
Firehouse Subs (b)                       1.6  %         0.7  %         2.7  %
System Restaurant count
Tim Hortons                            5,291          4,949          4,932
Burger King                           19,247         18,625         18,838
Popeyes                                3,705          3,451          3,316
Firehouse Subs                         1,213              -              -
Consolidated                          29,456         27,025         27,086
Firehouse Subs (b)                         -          1,194          1,186


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

(b) Firehouse Subs figures are presented for informational purposes only, in accordance with its fiscal calendar.


Comparable Sales

For TH and BK, restaurant operations were less impacted by COVID-19 during 2021
than in 2020, resulting in significant increases in system-wide sales growth and
comparable sales during 2021. PLK was not significantly impacted by COVID-19
during 2021 and 2020.

TH comparable sales were 10.6% in 2021, including Canada comparable sales of 10.8%.

BK comparable sales were 9.3% in 2021, including ROW comparable sales of 13.6% and we comparable sales of 4.7%.

PLK comparable sales were (0.4)% in 2021, including we comparable sales of (2.0)%.

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Sales and cost of sales

Sales include TH supply chain sales and company restaurant sales. TH supply chain sales represent sales of catering products, supplies and equipment, as well as sales to retailers. Company restaurant sales, including sales from our consolidated TH Restaurant VIE, represent restaurant-level sales to our customers.


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

During 2021, the increase in sales was driven by an increase of $265 million in
our TH segment, a favorable FX Impact of $108 million, and $1 million from the
FHS acquisition, partially offset by a decrease of $9 million in our PLK
segment. The increase in our TH segment was driven by an increase in supply
chain sales due to an increase in system-wide sales and an increase in sales to
retailers.

During 2020, the decrease in sales was driven primarily by a decrease of $308
million in our TH segment, a decrease of $12 million in our BK segment, a
decrease of $9 million in our PLK segment, and an unfavorable FX impact of $20
million. The decrease in our TH segment was driven by a $312 million decrease in
supply chain sales due to the decrease in system-wide sales, net of an increase
in sales to retailers. The decrease in supply chain sales was partially offset
by an increase of $4 million in Company restaurant revenue due to an increase in
the number of Company restaurants.

During 2021, the increase in cost of sales was primarily driven by an increase
of $195 million in our TH segment, an unfavorable FX Impact of $86 million, and
$1 million from the FHS acquisition, partially offset by a decrease of $3
million in our PLK segment. The increase in our TH segment was driven by an
increase in supply chain sales and an increase in sales to retailers, partially
offset by a decrease in bad debt expense.

During 2020, the decrease in cost of sales was driven primarily by a decrease of
$178 million in our TH segment, a decrease of $6 million in our BK segment, a
decrease of $4 million in our PLK segment and a $15 million favorable FX Impact.
The decrease in our TH segment was driven primarily by a decrease of $185
million in supply chain cost of sales due to the decrease in system-wide sales,
net of an increase in sales to retailers. The decrease in supply chain cost of
sales was partially offset by a $7 million increase in Company restaurant cost
of sales due to an increase in the number of Company restaurants.

Franchise and ownership


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 2021, the increase in franchise and property revenues was driven by an
increase of $177 million in our BK segment, an increase of $75 million in our TH
segment, an increase of $20 million in our PLK segment, $4 million from the FHS
acquisition, and a favorable FX Impact of $55 million. The increases were
primarily driven by increases in royalties in our BK, TH and PLK segments, and
increases in rent in our TH segment, as a result of increases in system-wide
sales and decreases in rent relief provided to eligible franchisees.

During 2020, the decrease in franchise and property revenues was driven by a
decrease of $155 million in our TH segment, a decrease of $119 million in our BK
segment, and a $26 million unfavorable FX Impact, partially offset by an
increase of $40 million in our PLK segment. The decrease in our TH segment was
primarily driven by decreases in royalties and rent from decreases in
system-wide sales and rent relief provided to eligible franchisees during the
period. The decrease in our BK segment was primarily driven by a decrease in
royalties as a result of a decrease in system-wide sales. The increase in our
PLK segment was primarily driven by an increase in royalties as a result of an
increase in system-wide sales.

During 2021, the decrease in franchise and property expenses was driven by a
decrease of $36 million in our BK segment, a decrease of $11 million in our TH
segment, and a decrease of $2 million in our PLK segment, partially offset by an
unfavorable FX Impact of $22 million and $1 million from the FHS acquisition.
The decrease in our BK segment was primarily related to bad debt recoveries in
the current year compared to bad debt expense in the prior year.
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During 2020, the decrease in franchise and property expenses was driven by a
decrease of $20 million in our TH segment, a decrease of $3 million in our PLK
segment and a $3 million favorable FX Impact, partially offset by an increase of
$8 million in our BK segment. Overall, the decrease was driven by a decrease in
property expenses partially offset by an increase in bad debt expense.

Advertising


Advertising revenues consist primarily of advertising contributions earned on
franchise sales and are based on a percentage of system-wide sales and intended
to fund advertising expenses. Advertising expenses consist primarily of expenses
relating to marketing, advertising and promotion, including market research,
production, advertising costs, sales promotions, social media campaigns,
technology initiatives, depreciation and amortization and other related support
functions for the respective brands. We generally manage advertising expenses to
equal advertising revenues in the long term, however in some periods there may
be a mismatch in the timing of revenues and expense.

During 2021, the increase in advertising revenues was driven by an increase of
$29 million in our TH segment, an increase of $21 million in our BK segment, an
increase of $12 million in our PLK segment and a favorable FX Impact of $13
million. The increases in all of our segments were primarily driven by increases
in system-wide sales.

During 2020, the decrease in advertising revenues was driven by a decrease of
$41 million in our TH segment, a decrease of $26 million in our BK segment, and
an unfavorable FX Impact of $3 million, partially offset by an increase of $44
million in our PLK segment. The decreases in our TH and BK segments were
primarily driven by decreases in system-wide sales. The increase in our PLK
segment was primarily driven by an increase in system-wide sales.

During 2021, the increase in advertising expenses was driven by an increase of
$61 million in our TH segment, an increase of $11 million in our PLK segment, an
increase of $6 million in our BK segment, and an unfavorable FX Impact of $14
million. The increase in all of our segments was primarily driven by an increase
in advertising revenues, and for our TH segment, also driven by our support
behind the marketing program in Canada.

During 2020, the increase in advertising expenses was driven by an increase of
$45 million in our PLK segment, partially offset by a decrease of $26 million in
our TH segment, a decrease of $11 million in our BK segment, and a favorable FX
Impact of $3 million. The increase in our PLK segment was driven by the increase
in advertising revenues. The decrease in our TH and BK segments was primarily
driven by a decrease in advertising revenues.

General and administrative expenses

Our general and administrative expenses consisted of the following:


                                                                                               2021 vs. 2020                          2020 vs. 2019
                                       2021            2020            2019                 $                   %                  $                   %
                                                                                                            Favorable / (Unfavorable)
TH Segment G&A                       $  110          $   93          $   84          $        (17)            (18.3) %       $        (9)            (10.7) %
BK Segment G&A                          185             146             146                   (39)            (26.7) %                 -                 -  %
PLK Segment G&A                          56              49              46                    (7)            (14.3) %                (3)             (6.5) %
FHS Segment G&A                           1               -               -                    (1)                  NM                 -                 -  %
Share-based compensation and
non-cash incentive compensation
expense                                 102              84              74                   (18)            (21.4) %               (10)            (13.5) %
Depreciation and amortization            20              19              19                    (1)             (5.3) %                 -                 -  %
FHS Transaction costs                    18               -               -                   (18)                  NM                 -                 -  %
Corporate restructuring and tax
advisory fees                            16              16              31                     -                 -  %                15              48.4  %
Office centralization and relocation
costs                                     -               -               6                     -                 -  %                 6             100.0  %
General and administrative expenses  $  508          $  407          $  406          $       (101)            (24.8) %       $        (1)             (0.2) %


NM - Not meaningful
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Segment general and administrative expenses ("Segment G&A") consist primarily of
salary and employee-related costs for non-restaurant employees, professional
fees, information technology systems, digital initiatives including consumer and
restaurant technology, and general overhead for our corporate offices. Segment
G&A excludes share-based compensation and non-cash incentive compensation
expense, depreciation and amortization, FHS Transaction costs, Corporate
restructuring and tax advisory fees and Office centralization and relocation
costs.

During 2021, the increase in Segment G&A for all segments was primarily driven
by higher salary and employee-related costs for non-restaurant employees,
largely a result of hiring across a number of key areas, and ongoing investments
in digital and technology. In addition, the year over year change in Segment G&A
at TH and BK was impacted by unfavorable FX movements.

In 2020, the increase in segment general and administrative expenses for our TH and PLK segments was primarily due to higher salaries and personnel costs for non-restaurant employees.

During 2021 and 2020, the increases in stock-based compensation and non-cash incentive compensation expense were primarily due to an increase in stock awards granted.

In 2021, in connection with the acquisition of Firehouse, we incurred certain one-time costs and expenses (“FHS transaction costs”) consisting of professional fees and compensation-related expenses. We expect to incur additional FHS transaction costs in 2022.


In connection with certain transformational corporate restructuring initiatives
that rationalize our structure and optimize cash movement within our structure,
including services related to significant tax reform legislation, regulations
and related restructuring initiatives, we incurred expenses primarily from
professional advisory and consulting services ("Corporate restructuring and tax
advisory fees"). We expect to incur additional Corporate restructuring and tax
advisory fees in 2022.

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 $6 million during 2019 consisting
primarily of moving costs and relocation-driven compensation expenses which are
classified as selling, general and administrative expenses in the consolidated
statement of operations. We did not incur any Office centralization and
relocation costs during 2021 and 2020.

(Revenue) Loss of investments under the equity method


(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 on equity-accounted investments in 2021 is mainly explained by a decrease in net losses on equity-accounted investments we recognized during the year. ‘current year.


The change in (income) loss from equity method investments during 2020 was
primarily driven by an increase in equity method investment net losses that we
recognized during the current year, driven by the negative impact of the
COVID-19 pandemic, and the non-recurrence of an $11 million non-cash dilution
gain during 2019 from the issuance of additional shares in connection with a
merger by one of our equity method investees.

Other operating expenses (income), net

Our other operating expenses (income), net, included the following:


                                                              2021              2020              2019

Net losses (gains) on asset disposals, restaurant closures and refranchisings

                               $       2          $      6          $      7
Litigation settlements and reserves, net                         81                 7                 2
Net losses (gains) on foreign exchange                          (76)              100               (15)
Other, net                                                        -                (8)               (4)
Other operating expenses (income), net                    $       7         

$105 $ (10)

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Net losses (gains) on asset disposals, restaurant closures and refranchisings represent property sales and other costs related to restaurant closures and refranchisings. Gains and losses recognized in the current period may reflect certain closing and refranchising costs that occurred in prior periods.

Litigation settlements and provisions, net, primarily reflect accrued liabilities and payments made and proceeds received in connection with litigation and arbitration and other commercial disputes.


In early 2022, we entered into negotiations to resolve business disputes that
arose during 2021 with counterparties to the master franchise agreements for
Burger King and Popeyes in China. Based on these discussions, we expect to agree
to pay approximately $100 million in 2022, including $72 million that is
included in Litigation settlements and reserves, net for 2021. Remaining amounts
primarily will be recorded as an equity method investment when made.

Net foreign exchange losses (gains) are mainly related to the revaluation of assets and liabilities denominated in foreign currencies.

Interest Expense, net

                                                     2021        2020        2019
Interest expense, net                              $ 505       $ 508       $ 532
Weighted average interest rate on long-term debt     4.2  %      4.4  %     

5.0%

In 2021, interest expense, net, was consistent year-over-year.


During 2020, interest expense, net decreased primarily due to a decrease in the
weighted average interest rate driven by the decrease in interest rates, the
2019 refinancing of our senior secured debt and the 2020 refinancing of a
portion of our senior notes, partially offset by an increase in long-term debt.

Loss on early extinguishment of debt


During 2021, we recorded a loss on early extinguishment of debt of $11 million
that primarily reflects the payment of redemption premiums and the write-off of
unamortized debt issuance costs in connection with the redemption of the
remaining $775 million principal amount outstanding of 4.25% first lien notes
due May 15, 2024.

During 2020, we recorded a $98 million loss on early extinguishment of debt that
primarily reflects the payment of premiums and the write-off of unamortized debt
issuance costs in connection with the redemption of the entire outstanding
principal balance of $2,800 million of 5.00% second lien secured notes due
October 15, 2025 and the redemption of $725 million of the original outstanding
principal balance of $1,500 million of 4.25% first lien notes due May 15, 2024.

During 2019, we recorded a $23 million loss on early extinguishment of debt that
primarily reflects the write-off of unamortized debt issuance costs and
discounts and fees incurred with the redemption of the entire outstanding
principal balance of the $1,250 million of 4.625% first lien secured notes due
January 15, 2022, the partial principal amount prepayments of our existing
senior secured term loan and the refinancing of our existing senior secured term
loan.

Income Tax Expense

Our effective tax rate was 8.1% in 2021 and 8.0% in 2020. The effective tax rate
for 2021 includes a net decrease in tax reserves of $101 million related
primarily to expiring statutes of limitations for certain prior tax years which
decreased the effective tax rate by 7.4%. The effective tax rate for 2020
reflects a $105 million increase in deferred tax assets, consisting of $64
million related to the analysis of final guidance regarding a tax attribute
carryfoward affected by the Tax Cuts and Jobs Act (the "Tax Act") received
during 2020 and $41 million related to Swiss tax reform. This increase in
deferred tax assets reduced the effective tax rate by 12.9% during 2020. The
effective tax rate for 2021 and 2020 also reflects the impact of increased
taxable income in 2021 compared to 2020 as well as changes in our relative mix
of income from multiple tax jurisdictions.

Our effective tax rate was 8.0% in 2020 and 23.5% in 2019. The effective tax
rate for 2020 reflects a $105 million increase in deferred tax assets,
consisting of $64 million related to the analysis of final guidance regarding a
tax attribute carryfoward affected by the Tax Act received during 2020 and $41
million related to Swiss tax reform. This increase in deferred tax assets
reduced the effective tax rate by 12.9% during 2020. The effective tax rate for
2019 reflects a $37 million income tax expense provision adjustment related to a
prior restructuring transaction not applicable to ongoing operations which
increased the effective tax rate by 2.5%.
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Net revenue


We reported net income of $1,253 million for 2021 compared to net income of $750
million for 2020. The increase in net income is primarily due to a $198 million
increase in BK segment income, a $174 million increase in TH segment income, a
$98 million decrease in other operating expenses (income), net, an $87 million
decrease in loss on early extinguishment of debt, a $23 million favorable change
from the impact of equity method investments, and a $10 million increase in PLK
segment income. These factors were partially offset by a $44 million increase in
income tax expense, an $18 million increase in share-based compensation and
non-cash incentive compensation expense, $18 million of FHS Transaction costs,
and a $12 million increase in depreciation and amortization. Amounts above
include a total favorable FX Impact to net income of $46 million.

We reported net income of $750 million for 2020 compared to net income of $1,111
million for 2019. The decrease in net income is primarily due to a $299 million
decrease in TH segment income, a $171 million decrease in BK segment income, a
$115 million unfavorable change in the results from other operating expenses
(income), net, a $75 million increase in the loss on early extinguishment of
debt, a $37 million unfavorable change from the impact of equity method
investments, a $10 million increase in share-based compensation and non-cash
incentive compensation expense, and a $4 million increase in depreciation and
amortization. These factors were partially offset by a $275 million decrease in
income tax expense, a $30 million increase in PLK segment income, a $24 million
decrease in interest expense, net, a $15 million decrease in Corporate
restructuring and tax advisory fees, and the non-recurrence of $6 million of
Office centralization and relocation costs. Amounts above include a total
unfavorable FX Impact to net income of $32 million.

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 (benefit) expense, and depreciation and
amortization and is used by management to measure operating performance of the
business. Adjusted EBITDA is defined as EBITDA excluding (i) the non-cash impact
of share-based compensation and non-cash incentive compensation expense, (ii)
(income) loss from equity method investments, net of cash distributions received
from equity method investments, (iii) other operating expenses (income), net
and, (iv) income/expenses from non-recurring projects and non-operating
activities. For the periods referenced, this included (i) non-recurring fees and
expense incurred in connection with the Firehouse Subs acquisition consisting of
professional fees and compensation related expenses; (ii) costs from
professional advisory and consulting services associated with certain
transformational corporate restructuring initiatives that rationalize our
structure and optimize cash movements, including services related to significant
tax reform legislation, regulations and related restructuring initiatives; and
(iii) costs incurred 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. Management believes that these types of
expenses are either not related to our underlying profitability drivers or not
likely to re-occur in the foreseeable future and the varied timing, size and
nature of these projects may cause volatility in our results unrelated to the
performance of our core business that does not reflect trends of our core
operations.
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Adjusted EBITDA is used by management to measure operating performance of the
business, excluding these non-cash and other specifically identified items that
management believes are not relevant to management's assessment of our operating
performance. Adjusted EBITDA, as defined above, also represents our measure of
segment income for each of our four operating segments.

                                               2021               2020              2019             2021 vs. 2020           2020 vs. 2019
                                                                                                           Favorable / (Unfavorable)
Segment income:
TH                                          $    997          $     823          $  1,122          $          174          $         (299)
BK                                             1,021                823               994                     198                    (171)
PLK                                              228                218               188                      10                      30
FHS                                                2                  -                 -                       2                       -
Adjusted EBITDA                                2,248              1,864             2,304                     384                    (440)
Share-based compensation and non-cash
incentive compensation expense                   102                 84                74                     (18)                    (10)
FHS Transaction costs                             18                  -                 -                     (18)                      -
Corporate restructuring and tax advisory
fees                                              16                 16                31                       -                      15
Office centralization and relocation costs         -                  -                 6                       -                       6
Impact of equity method investments (a)           25                 48                11                      23                     (37)
Other operating expenses (income), net             7                105               (10)                     98                    (115)
EBITDA                                         2,080              1,611             2,192                     469                    (581)
Depreciation and amortization                    201                189               185                     (12)                     (4)
Income from operations                         1,879              1,422             2,007                     457                    (585)
Interest expense, net                            505                508               532                       3                      24
Loss on early extinguishment of debt              11                 98                23                      87                     (75)
Income tax expense                               110                 66               341                     (44)                    275
Net income                                  $  1,253          $     750          $  1,111          $          503          $         (361)


(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 2021 reflects the increases in segment
income in our TH, BK and PLK segments and the acquisition of FHS and includes a
favorable FX Impact of $55 million. Segment income in our TH and BK segments for
2021 includes a decrease of $11 million related to the net impact of corporate
marketing support in TH Canada, in addition to the timing of advertising
revenues and expenses.

The decrease in Adjusted EBITDA for 2020 reflects the decreases in segment
income in our TH and BK segments, partially offset by an increase in segment
income in our PLK segment, and includes an unfavorable FX Impact of $28 million.
Segment income in our TH and BK segments for 2020 includes a decrease of $24
million related to the timing of advertising revenues and expenses.

The increase in EBITDA for 2021 is primarily due to increases in segment income
in our TH, BK and PLK segments and the acquisition of FHS, a decrease in other
operating expenses (income), net, and a favorable change from the impact of
equity method investments, partially offset by FHS Transaction costs and an
increase in share-based compensation and non-cash incentive compensation
expense. The increase in EBITDA includes a favorable FX Impact of $53 million.

The decrease in EBITDA for 2020 is primarily due to decreases in segment income
in our TH and BK segments and unfavorable results from other operating expenses
(income), net, the impact of equity method investments, and an increase in
share-based compensation and non-cash incentive compensation expense, partially
offset by an increase in segment income in our PLK segment, a decrease in
Corporate restructuring and tax advisory fees, and the non-recurrence of Office
centralization and relocation costs.
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Cash 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 acquisitions such as the Firehouse
Acquisition and other investing activities, such as capital expenditures and
joint ventures, 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.

At December 31, 2021, we had cash and cash equivalents of $1,087 million. In
addition, at December 31, 2021, we had borrowing availability of $998 million
under our Revolving Credit Facility (defined below).

On July 6, 2021, two of our subsidiaries (the "Borrowers") issued $800 million
of 3.875% first lien senior secured notes due January 15, 2028 (the "Additional
Notes"). No principal payments are due until maturity and interest is paid
semi-annually. The Additional Notes were issued as additional notes under the
indenture, dated as of September 24, 2019, (the "3.875% Senior Notes Indenture")
pursuant to which the Borrowers previously issued $750 million in aggregate
principal amount of 3.875% first lien senior secured notes due January 15, 2028
during 2019 (the "2019 3.875% First Lien Senior Notes" and together with the
Additional Notes, the "3.875% First Lien Senior Notes due 2028"). The Additional
Notes are treated as a single series with the 2019 3.875% First Lien Senior
Notes and have the same terms for all purposes under the 3.875% Senior Notes
Indenture, including waivers, amendments, redemptions and offers to purchase.
The Additional Notes were priced at 100.250% of their face value. The net
proceeds from the offering of the Additional Notes were used to redeem the
remaining $775 million principal amount outstanding of the 4.25% first lien
senior notes on July 15, 2021, plus any accrued and unpaid interest thereon, and
pay related redemption premiums, fees and expenses.

On December 13, 2021, the Borrowers entered into a fifth incremental facility
amendment and a sixth amendment (the "2021 Amendment") to the credit agreement
governing our senior secured term loan A facility (the "Term Loan A"), our
senior secured term loan B facility (the "Term Loan B" and together with the
Term Loan A the "Term Loan Facilities") and our $1,000 million senior secured
revolving credit facility (including revolving loans, swingline loans and
letters of credit) (the "Revolving Credit Facility" and together with the Term
Loan Facilities, the "Credit Facilities"). The 2021 Amendment increased the
existing Term Loan A to $1,250 million and extended the maturity date of the
Term Loan A and Revolving Credit Facility from October 7, 2024 to December 13,
2026 (subject to earlier maturity in specified circumstances). The security and
guarantees under the Revolving Credit Facility and Term Loan A will be the same
as those under the existing facilities. The proceeds from the increase in the
Term Loan A were used with cash on hand to complete the Firehouse Acquisition.

Based on our current level of operations and available cash, we believe our cash
flow from operations, combined with our availability under our Revolving Credit
Facility, will provide sufficient liquidity to fund our current obligations,
debt service requirements and capital spending over the next twelve months.

In 2021, we spent 80 million Canadian dollars to support the increase in advertising and digital advancements of the TH business and supplement the amounts of advertising funds paid by franchisees.


In early 2022, we entered into negotiations to resolve business disputes that
arose during 2021 with counterparties to the master franchise agreements for
Burger King and Popeyes in China. Based on these discussions, we expect to agree
to pay approximately $100 million in 2022, $72 million of which was recorded as
Litigation settlements and reserves, net for 2021. The majority of this amount
relates to Popeyes and is expected to resolve our disputes and allow us to move
forward in the market with a new master franchisee. Additionally, this agreement
will provide for us and our partner to make equity contributions to the Burger
King business in China. We believe the agreement will position both the Popeyes
and Burger King brands to accelerate growth in China in the upcoming years.

On July 28, 2021, our board of directors approved a share repurchase
authorization that allows us to purchase up to $1,000 million of our common
shares until August 10, 2023. On August 6, 2021, 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 30,382,519 common shares for the 12-month period commencing
on August 10, 2021 and ending on August 9, 2022, or earlier if we complete the
repurchases prior to such date. 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/
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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. During 2021, we repurchased and cancelled 9,247,648
RBI common shares on the open market for $551 million and as of December 31,
2021 had $449 million remaining under the authorization. Repurchases under the
Company's authorization will be made in the open market or through privately
negotiated transactions.

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

Debt securities and debt service requirements


As of December 31, 2021, our long-term debt consists primarily of borrowings
under our Credit Facilities (defined above), amounts outstanding under our
3.875% First Lien Senior Notes due 2028 (as defined above), 5.75% First Lien
Senior Notes due 2025, 3.50% First Lien Senior Notes due 2029, 4.375% Second
Lien Senior Notes due 2028, 4.00% Second Lien Senior Notes due 2030 and TH
Facility (each as defined below), and obligations under finance leases. For
further information about our long-term debt, see Note 9 to the accompanying
consolidated financial statements included in Part II, Item 8 "Financial
Statements and Supplementary Data" of our Annual Report.

Credit facilities


As of December 31, 2021, there was $6,493 million outstanding principal amount
under our Term Loan Facilities with a weighted average interest rate of 1.77%.
Based on the amounts outstanding under the Term Loan Facilities and LIBOR/SOFR
(Secured Overnight Financing Rate) as of December 31, 2021, subject to a floor
of 0.00%, required debt service for the next twelve months is estimated to be
approximately $119 million in interest payments and $54 million in principal
payments. In addition, based on LIBOR as of December 31, 2021, net cash
settlements that we expect to pay on our $4,000 million interest rate swaps are
estimated to be approximately $55 million for the next twelve months. The Term
Loan A matures on December 13, 2026 and the Term Loan B matures on November 19,
2026, and we may prepay the Term Loan Facilities in whole or in part at any
time. Additionally, subject to certain exceptions, the Term Loan Facilities may
be subject to mandatory prepayments using (i) proceeds from non-ordinary course
asset dispositions, (ii) proceeds from certain incurrences of debt or (iii) a
portion of our annual excess cash flows based upon certain leverage ratios.

As of December 31, 2021, we had no amounts outstanding under our Revolving
Credit Facility (including revolving loans, swingline loans and letters of
credit), had $2 million of letters of credit issued against the Revolving Credit
Facility, and our borrowing availability was $998 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. We are
also required to pay (i) letters of credit fees on the aggregate face amounts of
outstanding letters of credit plus a fronting fee to the issuing bank and (ii)
administration fees. The interest rate applicable to amounts drawn under each
letter of credit ranges from 0.75% to 1.50%, depending on our net first lien
leverage ratio.

On April 2, 2020, the Borrowers entered into a fifth amendment (the "Fifth
Amendment") to the credit agreement (the "Credit Agreement") governing our Term
Loan Facilities and Revolving Credit Facility. The Fifth Amendment provided the
Borrowers with the option to comply with a $1,000 million minimum liquidity
covenant in lieu of the 6.50:1.00 net first lien senior secured leverage ratio
financial maintenance covenant for the period after June 30, 2020 and prior to
September 30, 2021. Additionally, for the periods ending September 30, 2021 and
December 31, 2021, to determine compliance with the net first lien senior
secured leverage ratio, we were permitted to annualize the Adjusted EBITDA (as
defined in the Credit Agreement) for the three months ending September 30, 2021
and six months ending December 31, 2021, respectively, in lieu of calculating
the ratio based on Adjusted EBITDA for the prior four quarters. There were no
other material changes to the terms of the Credit Agreement.

The 2021 Amendment amended the interest rate applicable to the Revolving Credit
Facility and the Term Loan A to incorporate SOFR. The interest rate applicable
to borrowings under our Term Loan A and Revolving Credit Facility is, at our
option, either (i) a base rate, subject to a floor of 1.00%, plus an applicable
margin varying from 0.00% to 0.50%, or (ii) Adjusted Term SOFR (Adjusted Term
SOFR is calculated as Term SOFR plus a 0.10% adjustment), subject to a floor of
0.00%, plus an applicable margin varying between 0.75% to 1.50%, in each case,
determined by reference to a net first lien leverage based pricing grid. The
interest rate applicable to borrowings under our Term Loan B is, at our option,
either (i) a base
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rate, subject to a floor of 1.00%, plus an applicable margin of 0.75% or (ii) a
Eurocurrency rate, subject to a floor of 0.00%, plus an applicable margin of
1.75%.

Obligations under the Credit Facilities are guaranteed on a senior secured
basis, jointly and severally, by the direct parent company of one of the
Borrowers and substantially all of its Canadian and U.S. subsidiaries, including
The TDL Group Corp., Burger King Corporation, Popeyes Louisiana Kitchen, Inc.,
FRG, LLC and substantially all of their respective Canadian and U.S.
subsidiaries (the "Credit Guarantors"). Amounts borrowed under the Credit
Facilities are secured on a first priority basis by a perfected security
interest in substantially all of the present and future property (subject to
certain exceptions) of each Borrower and Credit Guarantor.

Senior Notes


During 2019, the Borrowers entered into an indenture (the "4.375% Senior Notes
Indenture") in connection with the issuance of $750 million of 4.375% second
lien notes due January 15, 2028 (the "4.375% Second Lien Senior Notes due
2028"). No principal payments are due until maturity and interest is paid
semi-annually.

During 2020, the Borrowers entered into an indenture (the "5.75% Senior Notes
Indenture") in connection with the issuance of $500 million of 5.75% first lien
notes due April 15, 2025 (the "5.75% First Lien Senior Notes due 2025"). No
principal payments are due until maturity and interest is paid semi-annually.
The net proceeds from the offering of the 5.75% First Lien Senior Notes due 2025
were used for general corporate purposes.

During 2020, the Borrowers entered into an indenture (the "4.00% Senior Notes
Indenture") in connection with the issuance of $2,900 million of 4.00% second
lien notes due October 15, 2030 (the "4.00% Second Lien Senior Notes due 2030").
No principal payments are due until maturity and interest is paid semi-annually.
The net proceeds from the offering of the 4.00% Second Lien Senior Notes due
2030 were used to redeem all of the $2,800 million 5.00% second lien senior
notes (due October 15, 2025) and pay related redemption premiums, fees and
expenses.

During 2020, the Borrowers entered into an indenture (the "3.50% Senior Notes
Indenture" and together with the above indentures the "Senior Notes Indentures")
in connection with the issuance of $750 million in aggregate principal amount of
3.50% first lien notes due February 15, 2029 (the "3.50% First Lien Senior Notes
due 2029"). No principal payments are due until maturity and interest is paid
semi-annually. The net proceeds from the offering of the 3.50% First Lien Senior
Notes due 2029 were used to redeem $725 million of our 4.25% first lien notes
due 2024 and pay related redemption premiums, fees and expenses.

The Borrowers may redeem a series of senior notes, in whole or in part, at any
time prior to April 15, 2022 for the 5.75% First Lien Senior Notes, September
15, 2022 for the 3.875% First Lien Senior Notes, November 15, 2022 for the
4.375% Second Lien Senior Notes, February 15, 2024 for the 3.50% First Lien
Senior Notes, and October 15, 2025 for the 4.00% Second Lien Senior Notes at a
price equal to 100% of the principal amount redeemed plus a "make-whole"
premium, plus accrued and unpaid interest, if any, to, but excluding, the
redemption date. In addition, the Borrowers may redeem, in whole or in part, the
5.75% First Lien Senior Notes due 2025, 3.875% First Lien Senior Notes due 2028,
4.375% Second Lien Senior Notes due 2028, 3.50% First Lien Senior Notes due 2029
and 4.00% Second Lien Senior Notes due 2030 on or after the applicable date
noted above, at the redemption prices set forth in the applicable Senior Notes
Indenture. The Senior Notes Indentures also contain redemption provisions
related to tender offers, change of control and equity offerings, among others.

Based on the amounts outstanding at December 31, 2021, required debt service for
the next twelve months on all of the Senior Notes outstanding is approximately
$264 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 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 four of our subsidiaries, and amounts borrowed under the TH Facility are
secured by certain parcels of real estate. As of December 31, 2021, we had
outstanding C$214 million under the TH Facility with a weighted average interest
rate of 1.85%.

On the basis of the amounts due under the TH facility at December 31, 2021the debt service required for the next twelve months is estimated at approximately $3 million in interest payments and $9 million in principal repayments.

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Restrictions and clauses


Our Credit Facilities and the Senior Notes Indentures contain a number of
customary affirmative and negative covenants that, among other things, limit or
restrict our ability and the ability of certain of our subsidiaries to: incur
additional indebtedness; incur liens; engage in mergers, consolidations,
liquidations and dissolutions; sell assets; pay dividends and make other
payments in respect of capital stock; make investments, loans and advances; pay
or modify the terms of certain indebtedness; and engage in certain transactions
with affiliates. The 2021 Amendment includes amendments to certain covenants to
provide increased flexibility. In addition, under the Credit Facilities and
subject to the provisions of the Fifth Amendment described above, the Borrowers
are not permitted to exceed a net first lien senior secured leverage ratio of
6.50 to 1.00 when, as of the end of any fiscal quarter beginning with the first
quarter of 2020, any amounts are outstanding under the Term Loan A and/or
outstanding revolving loans, swingline loans and certain letters of credit
exceed 30.0% of the commitments under the Revolving Credit Facility. As
indicated above, the Fifth Amendment provided that for periods ending September
30, 2021 and December 31, 2021, to determine compliance with the net first lien
senior secured leverage ratio, we are permitted to annualize the Adjusted EBITDA
(as defined in the Credit Agreement) for the three months ending September 30,
2021 and six months ending December 31, 2021, respectively, in lieu of
calculating the ratio based on Adjusted EBITDA for the prior four quarters.

Restrictions under the Credit Facilities and Senior Note Indentures have resulted in substantially all of our consolidated assets being restricted.


As of December 31, 2021, we were in compliance with all applicable financial
debt covenants under the Credit Facilities, the TH Facility, and the Senior
Notes Indentures, and there were no limitations on our ability to draw on the
remaining availability under our Revolving Credit Facility.

Cash dividends

At January 5, 2022we paid a dividend of $0.53 per Common Share and the Partnership has made a distribution in respect of each Exchangeable Partnership Unit in the amount of $0.53 per exchangeable limited partnership unit.


On February 15, 2022, we announced that the board of directors had declared a
quarterly cash dividend of $0.54 per common share for the first quarter of 2022,
payable on April 6, 2022 to common shareholders of record on March 23, 2022.
Partnership will also make a distribution in respect of each Partnership
exchangeable unit in the amount of $0.54 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.

We are aiming for a total of $2.16 in dividends declared per common share and in distributions on each exchangeable unit of the limited partnership for 2022.


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.

Exceptional security data


As of February 15, 2022, we had outstanding 309,632,586 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 14 to the accompanying consolidated
financial statements included in Part II, Item 8 "Financial Statements and
Supplementary Data" of our Annual Report.

There were 144,978,558 Partnership exchangeable units outstanding as of
February 15, 2022. 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 $1,726 million in 2021, compared to
$921 million in 2020. The increase in cash provided by operating activities was
driven by cash provided by working capital in the current year compared to cash
used for working capital in the prior year, an increase in segment income in our
TH, BK and PLK segments, and a decrease in interest and income tax payments.

Cash provided by operating activities was $921 million in 2020, compared to
$1,476 million in 2019. The decrease in cash provided by operating activities
was driven by a decrease in TH and BK segment income, an increase in cash used
for working capital and an increase in income tax payments. These factors were
partially offset by a decrease in interest payments, a decrease in tenant
inducements paid to franchisees and an increase in PLK segment income.

Investing activities


Cash used for investing activities was $1,103 million in 2021, compared to $79
million in 2020. The change in cash used for investing activities was primarily
driven by the Firehouse Subs acquisition in 2021 and a decrease in proceeds from
derivatives.

Cash used for investing activities was $79 million in 2020, compared to $30 million in 2019. The change in investing activities was driven by an increase in capital expenditures in 2020.

Fundraising activities


Cash used for financing activities was $1,093 million in 2021, compared to $821
million in 2020. The change in cash used for financing activities was driven
primarily by a decrease in proceeds from the issuance of debt and cash used to
repurchase RBI common shares in the current year. These factors were partially
offset by a decrease in repayments of debt and finance leases and the
non-recurrence of the repurchase of Partnership exchangeable units in the prior
year.

Cash used for financing activities was $821 million in 2020, compared to $842
million in 2019. The decrease in cash used for financing activities was driven
primarily by an increase in proceeds from issuance of long-term debt, partially
offset by an increase in repayments of long-term debt and finance leases, the
repurchase of Partnership exchangeable units in 2020, payments from derivatives
in 2020 compared to proceeds from derivatives in 2019, an increase in RBI common
share dividends and distributions on Partnership exchangeable units, and a
decrease in proceeds from stock option exercises.

Contractual obligations and commitments

Our material contractual obligations and commitments December 31, 2021
are shown in the following table.

                                                                             Payment Due by Period
                                                              Less Than                                                   More Than
Contractual Obligations                      Total             1 Year             1-3 Years           3-5 Years            5 Years
                                                                                 (In millions)
Credit Facilities, including interest (a) $  7,071          $      174      

$415 $6,482 $ – Senior Notes, including interest

             8,324                 264                 530                 979               6,551
Other long-term debt                           179                  12                  32                 135                   -
Operating lease obligations (b)              1,529                 197                 359                 298                 675
Purchase commitments (c)                       564                 509                  54                   1                   -
Finance lease obligations                      498                  52                  98                  86                 262
Total                                     $ 18,165          $    1,208          $    1,488          $    7,981          $    7,488



(a)We have estimated our interest payments through the maturity of our Credit
Facilities based on LIBOR and SOFR as of December 31, 2021.
(b)Operating lease payment obligations have not been reduced by the amount of
payments due in the future under subleases.
(c)Includes open purchase orders, as well as commitments to purchase certain
food ingredients and advertising expenditures, and obligations related to
information technology and service agreements.
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We have not included in the contractual obligations table approximately $558
million of gross liabilities for unrecognized tax benefits relating to various
tax positions we have taken. These liabilities may increase or decrease over
time primarily as a result of tax examinations, and given the status of the
examinations, we cannot reliably estimate the period of any cash settlement with
the respective taxing authorities. For additional information on unrecognized
tax benefits, see Note 11 to the accompanying consolidated financial statements
included in Part II, Item 8 "Financial Statements and Supplementary Data" of our
Annual Report.

Other commercial commitments and off-balance sheet arrangements


From time to time, we enter into agreements under which we guarantee loans made
by third parties to qualified franchisees. As of December 31, 2021, no material
amounts are outstanding under these guarantees.

Significant Accounting Policies and Estimates


This discussion and analysis of financial condition and results of operations is
based on our audited consolidated financial statements, which have been prepared
in accordance with U.S. GAAP. The preparation of these financial statements
requires our management to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues, and expenses, as well as related
disclosures of contingent assets and liabilities. We evaluate our estimates on
an ongoing basis and we base our estimates on historical experience and various
other assumptions we deem reasonable to the situation. These estimates and
assumptions form the basis for making judgments about the carrying values of
assets and liabilities that are not readily apparent from other sources. As
future events and their effects cannot be determined with precision, actual
results could differ significantly from these estimates. Changes in our
estimates could materially impact our results of operations and financial
condition in any particular period.

We consider our critical accounting policies and estimates to be the following due to the high degree of judgment or complexity involved in applying them:

Business combinations


The Firehouse Acquisition was accounted for using the acquisition method of
accounting, or acquisition accounting, in accordance with ASC Topic 805,
Business Combinations. The acquisition method of accounting involved the
allocation of the purchase price to the estimated fair values of the assets
acquired and liabilities assumed. This allocation process involves the use of
estimates and assumptions made in connection with estimating the fair value of
assets acquired and liabilities assumed including cash flows expected to be
derived from the use of the asset, the timing of such cash flows, the remaining
useful life of assets and applicable discount rates. Acquisition accounting
allows for up to one year to obtain the information necessary to finalize the
fair value of all assets acquired and liabilities assumed at December 15, 2021.
As of December 31, 2021, we have recorded a preliminary allocation of
consideration to net tangible and intangible assets acquired, which is subject
to revision as we obtain additional information necessary to complete the fair
value studies and acquisition accounting.

In the event that actual results vary from the estimates or assumptions used in
the valuation or allocation process, we may be required to record an impairment
charge or an increase in depreciation or amortization in future periods, or
both.

See Note 3 to the accompanying consolidated financial statements included in Part II, Section 8 “Financial Statements and Supplementary Data” of our Annual Report for additional information on the accounting for the acquisition of Firehouse.

Good will and intangible assets not subject to amortization


Goodwill represents the excess of the purchase price over the fair value of
assets acquired and liabilities assumed in acquisitions. Our indefinite-lived
intangible assets consist of the Tim Hortons brand, the Burger King brand, the
Popeyes brand and the Firehouse Subs brand (each a "Brand" and together, the
"Brands"). Goodwill and the Brands are tested for impairment at least annually
as of October 1 of each year and more often if an event occurs or circumstances
change, which indicate impairment might exist. Our annual impairment tests of
goodwill and the Brands may be completed through qualitative assessments. We may
elect to bypass the qualitative assessment and proceed directly to a
quantitative impairment test, for any reporting unit or Brand, in any period. We
can resume the qualitative assessment for any reporting unit or Brand in any
subsequent period.

Under a qualitative approach, our impairment review for goodwill consists of an
assessment of whether it is more-likely-than-not that a reporting unit's fair
value is less than its carrying amount. If we elect to bypass the qualitative
assessment for
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any reporting units, or if a qualitative assessment indicates it is
more-likely-than-not that the estimated carrying value of a reporting unit
exceeds its fair value, we perform a quantitative goodwill impairment test that
requires us to estimate the fair value of the reporting unit. If the fair value
of the reporting unit is less than its carrying amount, we will measure any
goodwill impairment loss as the amount by which the carrying amount of a
reporting unit exceeds its fair value, not to exceed the total amount of
goodwill allocated to that reporting unit. We use an income approach and a
market approach, when available, to estimate a reporting unit's fair value,
which discounts the reporting unit's projected cash flows using a discount rate
we determine from a market participant's perspective under the income approach
or utilizing similar publicly traded companies as guidelines for determining
fair value under the market approach. We make significant assumptions when
estimating a reporting unit's projected cash flows, including revenue, driven
primarily by net restaurant growth, comparable sales growth and average royalty
rates, general and administrative expenses, capital expenditures and income tax
rates.

Under a qualitative approach, our impairment review for the Brands consists of
an assessment of whether it is more-likely-than-not that a Brand's fair value is
less than its carrying amount. If we elect to bypass the qualitative assessment
for any of our Brands, or if a qualitative assessment indicates it is
more-likely-than-not that the estimated carrying value of a Brand exceeds its
fair value, we estimate the fair value of the Brand and compare it to its
carrying amount. If the carrying amount exceeds fair value, an impairment loss
is recognized in an amount equal to that excess. We use an income approach to
estimate a Brand's fair value, which discounts the projected Brand-related cash
flows using a discount rate we determine from a market participant's
perspective. We make significant assumptions when estimating Brand-related cash
flows, including system-wide sales, driven by net restaurant growth and
comparable sales growth, average royalty rates, brand maintenance costs and
income tax rates.

We completed our impairment reviews for goodwill and the Brands as of October 1,
2021, 2020 and 2019 and no impairment resulted. The estimates and assumptions we
use to estimate fair values when performing quantitative assessments are highly
subjective judgments based on our experience and knowledge of our operations.
Significant changes in the assumptions used in our analysis could result in an
impairment charge related to goodwill or the Brands. Circumstances that could
result in changes to future estimates and assumptions include, but are not
limited to, expectations of lower system-wide sales growth, which can be caused
by a variety of factors, increases in income tax rates and increases in discount
rates.

Long-lived Assets

Long-lived assets (including intangible assets subject to amortization and lease
right-of-use assets) are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Long-lived assets are grouped for recognition and measurement of
impairment at the lowest level for which identifiable cash flows are largely
independent of the cash flows of other assets.

The impairment test for long-lived assets requires us to assess the
recoverability of our long-lived assets by comparing their net carrying value to
the sum of undiscounted estimated future cash flows directly associated with and
arising from our use and eventual disposition of the assets. If the net carrying
value of a group of long-lived assets exceeds the sum of related undiscounted
estimated future cash flows, we would be required to record an impairment charge
equal to the excess, if any, of net carrying value over fair value.

When assessing the recoverability of our long-lived assets, we make assumptions
regarding estimated future cash flows and other factors. Some of these
assumptions involve a high degree of judgment and also bear a significant impact
on the assessment conclusions. Included among these assumptions are estimating
undiscounted future cash flows, including the projection of rental income,
capital requirements for maintaining property and residual values of asset
groups. We formulate estimates from historical experience and assumptions of
future performance, based on business plans and forecasts, recent economic and
business trends, and competitive conditions. In the event that our estimates or
related assumptions change in the future, we may be required to record an
impairment charge.

Accounting for income taxes


We record income tax liabilities utilizing known obligations and estimates of
potential obligations. A deferred tax asset or liability is recognized whenever
there are future tax effects from existing temporary differences and operating
loss and tax credit carry-forwards. When considered necessary, we record a
valuation allowance to reduce deferred tax assets to the balance that is
more-likely-than-not to be realized. We must make estimates and judgments on
future taxable income, considering feasible tax planning strategies and taking
into account existing facts and circumstances, to determine the proper valuation
allowance. When we determine that deferred tax assets could be realized in
greater or lesser amounts than recorded, the asset balance and income statement
reflect the change in the period such determination is made. Due to changes in
facts and
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circumstances and the estimates and judgments that are involved in determining
the proper valuation allowance, differences between actual future events and
prior estimates and judgments could result in adjustments to this valuation
allowance.

On December 28, 2021, the U.S. Treasury Department released final regulations
(T.D. 9959, published in the Federal Register on January 4, 2022) significantly
restricting the ability to credit certain foreign taxes, applicable
prospectively starting January 1, 2022. The final regulations address a wide
range of topics, including the definition, accrual, apportionment, and
allocation of foreign income taxes, and whether such foreign taxes are
creditable, or deductible, based the characteristics of such taxes under the
laws of the applicable, foreign jurisdiction (on a country-by-country basis) and
applicable tax treaties. The final regulations are exceedingly complex as is
their intersection with local country laws, tax treaties and related rules under
the Internal Revenue Code. We are analyzing the potential impact with respect to
our ability to credit, or alternatively deduct, applicable foreign taxes,
whether such foreign tax credits ("FTC") may be subject to aggregate annual
limitations and whether the projected future generation, use and limitations
related to such FTC may require us to revisit our current valuation allowance
with respect to our existing FTC carryforwards.

We file income tax returns, including returns for our subsidiaries, with
federal, provincial, state, local and foreign jurisdictions. We are subject to
routine examination by taxing authorities in these jurisdictions. We apply a
two-step approach to recognizing and measuring uncertain tax positions. The
first step is to evaluate available evidence to determine if it appears
more-likely-than-not that an uncertain tax position will be sustained on an
audit by a taxing authority, based solely on the technical merits of the tax
position. The second step is to measure the tax benefit as the largest amount
that is more than 50% likely of being realized upon settling the uncertain tax
position.

Although we believe we have adequately accounted for our uncertain tax
positions, from time to time, audits result in proposed assessments where the
ultimate resolution may result in us owing additional taxes. We adjust our
uncertain tax positions in light of changing facts and circumstances, such as
the completion of a tax audit, expiration of a statute of limitations, the
refinement of an estimate, and interest accruals associated with uncertain tax
positions until they are resolved. We believe that our tax positions comply with
applicable tax law and that we have adequately provided for these matters.
However, to the extent that the final tax outcome of these matters is different
than the amounts recorded, such differences will impact the provision for income
taxes in the period in which such determination is made.

We are generally permanently reinvested on any potential outside basis
differences except for unremitted earning and profits and thus do not record a
deferred tax liability for such outside basis differences. To the extent of
unremitted earning and profits, we generally review various factors including,
but not limited to, forecasts and budgets of financial needs of cash for working
capital, liquidity and expected cash requirements to fund our various
obligations and record deferred taxes to the extent we expect to distribute. We
will continue to monitor available evidence and our plans for foreign earnings
and expect to continue to provide any applicable deferred taxes based on the tax
liability or withholding taxes that would be due upon repatriation of amounts
not considered permanently reinvested.

We use an estimate of the annual effective tax rate at each interim period based on the facts and circumstances available at that time, while the effective effective tax rate is calculated at the end of the financial year.

See Note 11 to the accompanying consolidated financial statements included in Part II, Section 8 “Financial Statements and Supplementary Data” of our Annual Report for additional information on accounting for income taxes.

New accounting statements


See Note 2, "Significant Accounting Policies - New Accounting Pronouncements,"
to the accompanying consolidated financial statements included in Part II, Item
8 "Financial Statements and Supplementary Data" of our Annual Report for
additional information about new accounting pronouncements.

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