Three Months Ended June 30,

2017

2016

(unaudited)

Comparable Sales Growth⁽¹⁾

TH

(0.8)%

2.7%

BK

3.9%

0.6%

PLK⁽²⁾

(2.7)%

0.7%

Net Restaurant Growth⁽³⁾

TH

4.3%

3.3%

BK

6.0%

3.9%

PLK⁽²⁾

5.3%

6.5%

System Restaurant Count at Period End

TH

4,655

4,464

BK

16,000

15,100

PLK⁽²⁾

2,768

2,628

System-wide Sales Growth⁽¹⁾

TH

2.6%

4.8%

BK

10.6%

5.9%

PLK⁽²⁾

3.3%

6.5%

System-wide sales⁽⁴⁾ (in US$ millions)

TH

$

1,645.9

$

1,667.9

BK

$

4,961.1

$

4,544.1

PLK⁽²⁾                                       

$

890.4

$

756.9

(1)

Comparable sales growth and system-wide sales growth are calculated on a constant currency basis and include sales at franchise restaurants and company-owned restaurants.

(2)

For 2017, PLK comparable sales growth, system-wide sales growth and system-wide sales are for the period from March 28, 2017 through June 30, 2017. Comparable sales growth and system-wide sales growth are calculated using the same period in the prior year (March 28, 2016 through June 30, 2016). For 2017, net restaurant growth is for the period from July 11, 2016 through June 30, 2017. Restaurant count is as of June 30, 2017 for the current period, and as of July 10, 2016 for the comparative period, inclusive of temporary closures. For 2016, PLK figures are shown for informational purposes only and are consistent with PLK's former fiscal calendar. Consequently, PLK results for 2017 may not be comparable to those of 2016.

(3)

Commencing in 2017, we are presenting net restaurant growth on a percentage basis, reflecting the net increase in restaurant count (openings, net of closures) over a trailing twelve month period, divided by the restaurant count at the beginning of the trailing twelve month period. This presentation has been applied retrospectively to the earliest period presented to provide period-to-period comparability. Previously, we presented net restaurant growth as the number of new restaurants opened, net of closures, during a stated period. We have disclosed restaurant count at period end which can be used to determine net restaurant growth as previously presented.

(4)

System-wide sales are driven by sales at franchised restaurants, as approximately 100% of current restaurants are franchised. We do not record franchise sales as revenues; however, our franchise revenues include royalties based on a percentage of franchise sales.

Three Months Ended June 30,

(in US$ millions, except per share data)

2017

2016

(unaudited)

Total Revenues

$

1,132.7

$

1,040.2

Net Income Attributable to Common Shareholders

$

89.5

$

90.9

Net Income Attributable to Common Shareholders

and Noncontrolling Interests⁽⁵⁾

$

175.6

$

179.2

Diluted Earnings per Share

$

0.37

$

0.38

TH Adjusted EBITDA⁽⁶⁾

$

281.1

$

279.0

BK Adjusted EBITDA⁽⁶⁾

$

216.8

$

200.1

PLK Adjusted EBITDA⁽⁶⁾

$

33.2

N/A

Adjusted EBITDA⁽⁷⁾

$

531.1

$

479.1

Adjusted Net Income⁽⁷⁾

$

241.7

$

192.4

Adjusted Diluted Earnings per Share⁽⁷⁾

$

0.51

$

0.41

(5)

Includes net income available to common shareholders and net income attributable to noncontrolling interests related to the Class B exchangeable limited partnership units of Restaurant Brands International Limited Partnership.

(6)

TH Adjusted EBITDA, BK Adjusted EBITDA and PLK Adjusted EBITDA are our measures of segment profitability.

(7)

Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings per Share are non-GAAP financial measures. Please refer to "Non-GAAP Financial Measures" for further detail.

Three Months Ended June 30,

(in US$ millions)

2017

2016

(unaudited)

Comparable Sales Growth⁽¹⁾

(0.8)%

2.7%

System-wide Sales Growth⁽¹⁾

2.6%

4.8%

System-wide Sales⁽⁴⁾

$

1,645.9

$

1,667.9

Net Restaurant Growth⁽³⁾

4.3%

3.3%

System Restaurant Count at Period End

4,655

4,464

Sales

$

553.9

$

535.5

Franchise and Property Revenues

$

218.4

$

224.3

Total Revenues

$

772.3

$

759.8

Cost of Sales

$

417.1

$

417.7

Franchise and Property Expenses

$

79.8

$

77.4

Segment SG&A⁽⁸⁾

$

22.2

$

15.1

Segment Depreciation and Amortization⁽⁹⁾

$

24.7

$

26.1

Adjusted EBITDA^(6)(10)

$

281.1

$

279.0

(8)

Segment selling, general and administrative expenses ("Segment SG&A") includes segment selling expenses and segment management general and administrative expenses.

(9)

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

(10)

TH Adjusted EBITDA includes $3.2 million and $3.3 million of cash distributions received from equity method investments for the three months ended June 30, 2017 and 2016, respectively.

Three Months Ended June 30,

(in US$ millions)

2017

2016

(unaudited)

Comparable Sales Growth⁽¹⁾

3.9%

0.6%

System-wide Sales Growth⁽¹⁾

10.6%

5.9%

System-wide Sales⁽⁴⁾

$

4,961.1

$

4,544.1

Net Restaurant Growth⁽³⁾

6.0%

3.9%

System Restaurant Count at Period End

16,000

15,100

Sales

$

25.2

$

23.1

Franchise and Property Revenues

$

268.5

$

257.3

Total Revenues

$

293.7

$

280.4

Cost of Sales

$

23.9

$

20.3

Franchise and Property Expenses

$

31.6

$

34.5

Segment SG&A⁽⁸⁾

$

34.1

$

37.4

Segment Depreciation and Amortization⁽⁹⁾

$

12.7

$

11.9

Adjusted EBITDA⁽⁶⁾

$

216.8

$

200.1

Three Months Ended June 30,

(in US$ millions)

2017

2016

(unaudited)

Comparable Sales Growth⁽¹⁾⁽²⁾

(2.7)%

0.7%

System-wide Sales Growth⁽¹⁾⁽²⁾

3.3%

6.5%

System-wide Sales⁽²⁾⁽⁴⁾

$

890.4

$

756.9

Net Restaurant Growth⁽²⁾⁽³⁾

5.3%

6.5%

System Restaurant Count at Period End⁽²⁾

2,768

2,628

Sales

$

23.0

N/A

Franchise and Property Revenues

$

43.7

Total Revenues

$

66.7

N/A

Cost of Sales

$

19.2

N/A

Franchise and Property Expenses

$

2.3

N/A

Segment SG&A⁽⁸⁾

$

14.4

N/A

Segment Depreciation and Amortization⁽⁹⁾

$

2.4

N/A

Adjusted EBITDA⁽⁶⁾

$

33.2

N/A

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

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

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2017

2016

2017

2016

Revenues:

Sales

$

602.1

$

558.6

$

1,152.5

$

1,049.1

Franchise and property revenues

530.6

481.6

980.8

909.6

Total revenues

1,132.7

1,040.2

2,133.3

1,958.7

Operating costs and expenses:

Cost of sales

460.2

438.0

883.6

828.6

Franchise and property expenses

113.7

111.9

224.7

213.7

Selling, general and administrative expenses

96.7

73.1

218.6

146.3

(Income) loss from equity method investments

0.9

4.5

(4.8)

(14.0)

Other operating expenses (income), net

46.8

(11.3)

60.6

29.5

Total operating costs and expenses

718.3

616.2

1,382.7

1,204.1

Income from operations

414.4

424.0

750.6

754.6

Interest expense, net

128.0

117.2

239.4

232.3

Loss on early extinguishment of debt

—

—

20.4

—

Income before income taxes

286.4

306.8

490.8

522.3

Income tax expense

42.9

59.2

80.7

106.4

Net income

243.5

247.6

410.1

415.9

Net income attributable to noncontrolling interests

86.5

89.2

135.4

140.0

Preferred share dividends

67.5

67.5

135.0

135.0

Net income attributable to common shareholders

$

89.5

$

90.9

$

139.7

$

140.9

Earnings per common share

Basic

$

0.38

$

0.39

$

0.59

$

0.61

Diluted

$

0.37

$

0.38

$

0.57

$

0.59

Weighted average shares outstanding

Basic

235.8

233.5

235.2

231.8

Diluted

478.0

470.1

477.3

469.2

Cash dividends declared per common share

$

0.19

$

0.15

$

0.37

$

0.29

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

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

(Unaudited)

As of

June 30, 2017

December 31, 2016

ASSETS

Current assets:

Cash and cash equivalents

$

3,435.5

$

1,460.4

Accounts and notes receivable, net of allowance of $15.9 million and

$14.3 million, respectively

388.8

403.5

Inventories, net

89.5

71.8

Advertising fund restricted assets

92.8

57.7

Prepaids and other current assets

106.9

103.6

Total current assets

4,113.5

2,097.0

Property and equipment, net of accumulated depreciation and amortization

of $545.0 million and $474.5 million, respectively

2,153.5

2,054.7

Intangible assets, net

10,841.6

9,228.0

Goodwill

5,683.7

4,675.1

Net investment in property leased to franchisees

81.5

91.9

Derivative assets

—

717.9

Other assets, net

363.1

260.3

Total assets

$

23,236.9

$

19,124.9

LIABILITIES, REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts and drafts payable

$

376.1

$

369.8

Other accrued liabilities

492.1

469.3

Gift card liability

139.5

194.4

Advertising fund liabilities

120.7

83.3

Current portion of long term debt and capital leases

76.3

93.9

Total current liabilities

1,204.7

1,210.7

Term debt, net of current portion

11,252.9

8,410.2

Capital leases, net of current portion

231.2

218.4

Other liabilities, net

1,178.9

784.9

Deferred income taxes, net

2,198.0

1,715.1

Total liabilities

16,065.7

12,339.3

Redeemable preferred shares; no par value; 68,530,939 shares authorized,

issued and outstanding at June 30, 2017 and December 31, 2016

3,297.0

3,297.0

Shareholders' equity:

Common shares, no par value; unlimited shares authorized at June 30, 2017

and December 31, 2016; 236,247,377 shares issued and outstanding at

June 30, 2017; 234,236,678 shares issued and outstanding at

December 31, 2016

2,003.0

1,955.1

Retained earnings

497.6

445.7

Accumulated other comprehensive income (loss)

(578.1)

(698.3)

Total Restaurant Brands International Inc. shareholders' equity

1,922.5

1,702.5

Noncontrolling interests

1,951.7

1,786.1

Total shareholders' equity

3,874.2

3,488.6

Total liabilities, redeemable preferred shares and shareholders' equity

$

23,236.9

$

19,124.9

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In millions of U.S. dollars)

(Unaudited)

Six Months Ended June 30,

2017

2016

Cash flows from operating activities:

Net income

$

410.1

$

415.9

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

88.7

85.7

Non-cash loss on early extinguishment of debt

17.9

—

Amortization of deferred financing costs and debt issuance discount

16.7

19.3

(Income) loss from equity method investments

(4.8)

(14.0)

Loss (gain) on remeasurement of foreign denominated transactions

47.1

19.0

Net losses on derivatives

14.9

9.4

Share-based compensation expense

27.2

16.1

Deferred income taxes

22.4

10.5

Other

9.8

7.1

Changes in current assets and liabilities, excluding acquisitions and dispositions:

Accounts and notes receivable

27.4

21.4

Inventories and prepaids and other current assets

(11.1)

(69.4)

Accounts and drafts payable

(9.5)

7.4

Advertising fund restricted assets and fund liabilities

1.3

(15.8)

Other accrued liabilities and gift card liability

(164.2)

(17.5)

Other long-term assets and liabilities

(12.9)

10.2

Net cash provided by operating activities

481.0

505.3

Cash flows from investing activities:

Payments for property and equipment

(11.7)

(12.8)

Proceeds from disposal of assets, restaurant closures, and refranchisings

9.6

13.2

Net payment for purchase of Popeyes, net of cash acquired

(1,635.9)

—

Return of investment on direct financing leases

7.8

8.1

Settlement/sale of derivatives, net

772.0

1.5

Other investing activities, net

0.3

1.8

Net cash provided by (used for) investing activities

(857.9)

11.8

Cash flows from financing activities:

Proceeds from issuance of long-term debt

3,050.0

—

Repayments of long-term debt and capital leases

(377.7)

(34.6)

Payment of financing costs

(47.0)

—

Payment of dividends on common and preferred shares and distributions

on Partnership exchangeable units

(296.6)

(260.2)

Proceeds from stock option exercises

12.3

10.7

Other financing activities, net

(2.3)

1.1

Net cash provided by (used for) financing activities

2,338.7

(283.0)

Effect of exchange rates on cash and cash equivalents

13.3

6.2

Increase (decrease) in cash and cash equivalents

1,975.1

240.3

Cash and cash equivalents at beginning of period

1,460.4

757.8

Cash and cash equivalents at end of period

$

3,435.5

$

998.1

Supplemental cashflow disclosures:

Interest paid

$

205.6

$

199.7

Income taxes paid

$

116.9

$

76.6

Non-cash investing and financing activities:

Acquisition of property with capital lease obligations

$

17.7

$

8.3

Three Months Ended June 30,

Comparable Sales Growth by Largest Market

2017

2016

TH - Canada

(0.6)%

2.3%

BK - US

3.0%

(0.9)%

PLK - US⁽¹⁾

(3.3)%

0.1%

(1)

PLK figures for 2016 are shown for informational purposes only. Comparable sales growth is for the period from March 28, 2017 through June 30, 2017 for the three months ended June 30, 2017, and from April 18, 2016 through July 10, 2016 for the three months ended June 30, 2016.

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Supplemental Disclosure

(Unaudited)

Selling, General and Administrative Expenses

Three Months Ended June 30,

Six Months Ended June 30,

(in US$ millions)

2017

2016

2017

2016

Segment SG&A TH

$

22.2

$

15.1

$

47.3

$

31.3

Segment SG&A BK

34.1

37.4

72.3

79.4

Segment SG&A PLK

14.4

—

14.4

—

Share-based compensation and non-cash

incentive compensation expense

11.9

11.3

30.4

19.2

Depreciation and amortization

5.6

5.5

11.3

10.4

PLK Transaction costs

8.5

—

42.9

—

Integration costs

—

3.8

—

6.0

Selling, general and administrative expenses

$

96.7

$

73.1

$

218.6

$

146.3

Other Operating Expenses (Income), net

Three Months Ended June 30,

Six Months Ended June 30,

(in US$ millions)

2017

2016

2017

2016

Net losses (gains) on disposal of assets,

restaurant closures, and refranchisings⁽¹⁾

$

8.6

$

1.0

$

11.5

$

16.3

Litigation settlements and reserves, net

1.1

0.9

1.1

1.6

Net losses (gains) on foreign exchange⁽²⁾

36.8

(12.1)

47.2

12.0

Other, net

0.3

(1.1)

0.8

(0.4)

Other operating expenses (income), net

$

46.8

$

(11.3)

$

60.6

$

29.5

(1)

Net losses (gains) on disposal of assets, restaurant closures, and refranchisings represent sales of properties and other costs related to restaurant closures and refranchisings. Gains and losses recognized in the current period may reflect certain costs related to closures and refranchisings that occurred in previous periods. Net losses (gains) on disposals of assets, restaurant closures, and refranchisings for the three and six months ended June 30, 2017 and the six months ended June 30, 2016 primarily reflects losses in connection with refranchisings in our TH business.

(2)

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

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Non-GAAP Financial Measures

Organic Growth in Revenue and Adjusted EBITDA

Three Months Ended June 30, 2017

(Unaudited)

Impact of FX

Actual

Q2 '17 vs. Q2 '16

Movements

Organic Growth

(in US$ millions)

Q2 '17

Q2 '16

$

%

$

$

%

A

B

C

B-C=D

D/A

Revenue

TH

$

772.3

$

759.8

$

12.5

1.6%

$

(29.4)

$

41.9

5.5%

BK

$

293.7

$

280.4

$

13.3

4.7%

$

(2.9)

$

16.2

5.8%

PLK^(a)

$

66.7

$

61.7

$

5.0

8.1%

$

(0.2)

$

5.2

8.4%

Combined

Total Revenues

$

1,132.7

$

1,101.9

$

30.8

2.8%

$

(32.5)

$

63.3

5.7%

Adjusted EBITDA

TH

$

281.1

$

279.0

$

2.1

0.8%

$

(10.9)

$

13.0

4.7%

BK

$

216.8

$

200.1

$

16.7

8.3%

$

(2.8)

$

19.5

9.7%

PLK^(a)

$

33.2

$

21.7

$

11.5

53.0%

$

(0.2)

$

11.7

53.9%

Combined

Adjusted EBITDA

$

531.1

$

500.8

$

30.3

6.1%

$

(13.9)

$

44.2

8.8%

(a) RBI acquired Popeyes Louisiana Kitchen, Inc. ("Popeyes") on March 27, 2017. Prior to its acquisition by RBI, Popeyes operated on a fiscal period basis consisting of a 16-week first fiscal quarter and 12-week second through fourth fiscal quarters. Subsequent to its acquisition by RBI, Popeyes commenced reporting on a calendar quarter basis consistent with RBI. Q2'17 for PLK represents the period from March 28, 2017 through June 30, 2017, while Q2'16 PLK represents the 12 weeks ended July 10, 2016. Consequently, PLK results for the prior year period may not be comparable.

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Non-GAAP Financial Measures

Reconciliation of Adjusted EBITDA to Net Income

(Unaudited)

Historical Popeyes Adjusted EBITDA

Q1 '16

Q2 '16

Q3 '16

Q1 '17

(in US$ millions)

16 Weeks
Ended
4/17/16^(a)

12 Weeks
Ended
7/10/16^(b)

12 Weeks
Ended
10/2/16^(c)

12 weeks
Ended
12/25/16^(d)

12/26/16
through
3/27/17^(e)

Fiscal Year
Ended
12/25/16^(d)

Revenues

$

82.2

$

61.7

$

64.0

$

61.0

$

64.2

$

268.9

Reconciliation of Adjusted EBITDA to Net Income

Net income (loss)

$

12.9

$

10.3

$

10.4

$

9.2

$

(1.2)

$

42.8

Interest expense, net

1.3

1.0

1.1

1.2

1.3

4.6

Income tax expense (benefit)

7.9

6.2

6.2

6.8

(15.0)

27.1

Depreciation and amortization

3.0

2.3

2.4

2.4

2.4

10.1

Share-based compensation

2.0

1.9

2.0

0.9

1.4

6.8

Popeyes transaction costs

—

—

—

—

Other operating expenses (income), net

(0.1)

—

0.5

4.1

Adjusted EBITDA

$

27.0

$

21.7

$

25.8

$

21.0

$

22.6

$

95.5

^(a) Derived from Form 8-K filed with the Securities and Exchange Commission ("SEC") by Popeyes Louisiana Kitchen, Inc. ("Popeyes") on May 25, 2016.

^(b) Derived from Form 8-K filed with the SEC by Popeyes on August 16, 2016.

^(c) Derived from Form 8-K filed with the SEC by Popeyes on November 9, 2016.

^(d) Derived from Form 8-K filed with the SEC by Popeyes on February 22, 2017.

^(e) Derived from Popeyes internal records.

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Non-GAAP Financial Measures

Reconciliation of EBITDA and Adjusted EBITDA to Net Income

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

(in US$ millions)

2017

2016

2017

2016

Segment income:

TH

$

281.1

$

279.0

$

537.3

$

506.8

BK

216.8

200.1

403.9

380.1

PLK

33.2

—

33.2

—

Adjusted EBITDA

531.1

479.1

974.4

886.9

Share-based compensation and non-cash incentive

compensation expense⁽¹⁾

11.9

11.3

30.4

19.2

PLK Transaction costs⁽²⁾

8.5

—

42.9

—

Integration costs⁽³⁾

—

3.8

—

6.0

Impact of equity method investments⁽⁴⁾

4.1

7.8

1.2

(7.9)

Other operating expenses (income), net

46.8

(11.3)

60.6

29.5

EBITDA

459.8

467.5

839.3

840.1

Depreciation and amortization

45.4

43.5

88.7

85.5

Income from operations

414.4

424.0

750.6

754.6

Interest expense, net

128.0

117.2

239.4

232.3

Loss on early extinguishment of debt

—

—

20.4

—

Income tax expense

42.9

59.2

80.7

106.4

Net income

$

243.5

$

247.6

$

410.1

$

415.9

RESTAURANT BRANDS INTERNATIONAL INC. AND SUBSIDIARIES

Non-GAAP Financial Measures

Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted EPS

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

(in US$ millions, except per share data)

2017

2016

2017

2016

Net income

$

243.5

$

247.6

$

410.1

$

415.9

Income tax expense

42.9

59.2

80.7

106.4

Income before income taxes

286.4

306.8

490.8

522.3

Adjustments:

Franchise agreement amortization

7.6

6.8

14.5

13.5

Amortization of deferred financing costs and

debt issuance discount

8.2

9.6

16.7

19.3

Interest expense and loss on extinguished debt⁽⁵⁾

3.1

3.1

26.6

6.3

PLK Transaction costs⁽²⁾

8.5

—

42.9

—

Integration costs⁽³⁾

—

3.8

—

6.0

Impact of equity method investments⁽⁴⁾

4.1

7.8

1.2

(7.9)

Other operating expenses (income), net

46.8

(11.3)

60.6

29.5

Total adjustments

19.8

162.5

66.7

Adjusted income before income taxes

364.7

326.6

653.3

589.0

Adjusted income tax expense⁽⁶⁾

55.5

66.7

106.0

119.5

Adjusted net income before preferred share dividends

309.2

259.9

547.3

469.5

Preferred share dividends

67.5

67.5

135.0

Adjusted net income

$

241.7

$

192.4

$

412.3

$

334.5

Adjusted diluted earnings per share

$

0.51

$

0.41

$

0.86

$

0.71

Weighted average diluted shares outstanding

478.0

470.1

477.3

469.2

(1)

Represents share-based compensation expense associated with equity awards for the periods indicated; also includes the portion of annual non-cash incentive compensation expense that eligible employees elected to receive or are expected to elect to receive as common equity in lieu of their 2016 and 2017 cash bonus, respectively.

(2)

In connection with the acquisition of Popeyes Louisiana Kitchen, Inc., we incurred certain non-recurring selling, general and administrative expenses during the three and six months ended June 30, 2017, respectively, primarily consisting of professional fees and compensation related expenses.

(3)

In connection with the implementation of initiatives to integrate the back-office processes of TH and BK to enhance efficiencies, we incurred certain non-recurring selling, general and administrative expenses related to these initiatives during the three and six months ended June 30, 2016, respectively, primarily consisting of professional fees.

(4)

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.

(5)

Represents loss on early extinguishment of debt and non-cash interest expense related to losses reclassified from accumulated other comprehensive income (loss) into interest expense in connection with interest rate swaps settled in May 2015.

(6)

Adjusted income tax expense includes the tax impact of the non-GAAP adjustments and is calculated using our statutory tax rate in the jurisdiction in which the costs were incurred.