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Restaurant Brands International 8-K Report, Financial Results (Feb 13, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 13, 2024
Period End
February 13, 2024
Security
QSR
In the record · 2016–202610-K1110-Q338-K143

QSR filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 143 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Oct ’17Oct ’17
  2. Leadership change8-K · Dec ’19Dec ’19
  3. Leadership change8-K · Dec ’21Dec ’21
  4. Material agreement8-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 8-K filed February 13, 2024. Cited figures are marked; the original filing is the authoritative source.

Restaurant Brands International Inc. reported full-year and fourth-quarter 2023 results on February 13, 2024, furnished as Exhibit 99.

For 2023, system-wide sales grew 12.2% to about $42.89 billiona, net restaurant growth was 3.9%, and income from operations rose to $2,051 million from $1,898 million. Net income increased to $1,718 million from $1,482 million, and diluted EPS was $3.76 versus $3.25. Adjusted Operating Income was $2,200 million, up 7.5% organically, and Adjusted Diluted EPS was $3.24 versus $3.14.

Fourth-quarter consolidated comparable sales rose 5.8%, and Q4 system-wide sales grew 9.6%. Cash generation and leverage were also highlighted. Net cash provided by operating activities was $1,323 millionb and free cash flow was $1,203 million for 2023.

Net debt was $12.25 billionc, with Adjusted EBITDA net leverage of 4.8x, down from 5.1x. The company returned nearly $1.5 billion to shareholders in 2023 and declared a $0.58 quarterly dividend for Q1 2024, with a targeted 2024 total of $2.32 per share. The company also changed its segments to five reportable segments and changed its segment profit measure from Adjusted EBITDA to Adjusted Operating Income.

Subsequent events include an agreement announced January 16, 2024 to acquire the outstanding Carrols Restaurant Group shares not already held, at $9.55d per share in cash, for an aggregate enterprise value of about $1.0 billion, with closing expected in the second quarter of 2024. Q4 Income from operations and net income were boosted by a $367 million increase in net deferred tax assets, which reduced the Q4 effective tax rate by 115.8%.

02—Key points

Key Highlights

  1. System-wide sales grew 12.2% in 2023 to $42,886 million, with consolidated comparable sales up 8.1% for the year and 5.8% in Q4.
  2. Net income rose to $1,718 million in 2023 from $1,482 million, and diluted EPS increased to $3.76 from $3.25.
  3. Adjusted Operating Income was $2,200 million for 2023, up 7.5% organically, and Adjusted Diluted EPS was $3.24 versus $3.14.
  4. Free cash flow was $1,203 million in 2023, and net leverage improved to 4.8x Adjusted EBITDA from 5.1x.
  5. RBI returned nearly $1.5 billion to shareholders in 2023 and declared a $0.58 Q1 2024 dividend, targeting $2.32 per share for 2024.
  6. RBI agreed on January 16, 2024 to acquire Carrols Restaurant Group's outstanding shares not already held, for $9.55 per share in cash (about $1.0 billion enterprise value).
  7. Q4 2023 net income was boosted by a $367 million increase in net deferred tax assets, which reduced the Q4 effective tax rate by 115.8%.

03—Questions

Frequently Asked Questions

  1. How did Restaurant Brands International perform in 2023?

    System-wide sales grew 12.2% to $42.89 billion, income from operations increased to $2,051 million from $1,898 million, and net income rose to $1,718 million from $1,482 million. Diluted EPS was $3.76 versus $3.25 in the prior year.

  2. What were the key drivers of segment performance?

    Full-year Adjusted Operating Income growth was primarily driven by INTL, TH, PLK and FHS segment income increases, partially offset by a decrease in BK segment income. BK Adjusted Operating Income fell to $386 million from $396 million, reflecting higher advertising expenses relative to advertising revenues and higher Segment G&A.

  3. How much cash did the company generate and return to shareholders?

    Net cash provided by operating activities was $1,323 million and free cash flow was $1,203 million in 2023. Dividends and distributions totaled $990 million, and share repurchases totaled $500 million.

  4. What is the Carrols acquisition and when is it expected to close?

    RBI agreed to acquire all Carrols shares it does not already own at $9.55 per share in cash, for an aggregate enterprise value of about $1.0 billion. The transaction is expected to close in the second quarter of 2024, subject to customary conditions, regulatory approvals and approval by a majority of Carrols common stock excluding shares held by RBI and its affiliates and officers of Carrols.

  5. What changed in how the company reports segment results?

    Starting with Q4 2023, RBI reports five operating and reportable segments: TH, BK, PLK, FHS and INTL. It also replaced Adjusted EBITDA with Adjusted Operating Income as its segment profit measure. The company states these changes affect only segment allocation and do not restate its consolidated financial statements.

04—Continue

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