Business Context and Reporting Period
Company: Restaurant Brands International Inc. (RBI)
Filing Type: Form 8-K (Current Report)
Date of Report: January 8, 2024
Subject: Regulation FD Disclosure regarding changes to reportable segments and segment income measures effective for the fourth quarter and year ended December 31, 2023.
Key Financial Metrics
This filing does not contain specific financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity figures. The document focuses exclusively on the methodology for reporting segment results.
Material Changes Versus Prior Period
- Segment Restructuring: RBI revised its reportable segments to align with the Chief Operating Decision Maker's management structure. The new segments are:
- Tim Hortons (TH)
- Burger King (BK)
- Popeyes Louisiana Kitchen (PLK)
- Firehouse Subs (FHS)
- International (INTL)
The TH, BK, PLK, and FHS segments now include operations in the United States and Canada. The INTL segment includes consolidated results from operations outside the U.S. and Canada.
- Segment Income Measure: RBI transitioned from reporting Adjusted EBITDA to Adjusted Operating Income (AOI) as the primary measure of segment income.
- AOI Definition: Income from operations adjusted to exclude franchise agreement amortization (FAA), equity method investment income/loss (net of distributions), other operating expenses/income, and non-recurring/non-operating items.
- Key Difference: Unlike Adjusted EBITDA, AOI includes depreciation and amortization (excluding FAA), share-based compensation, and non-cash incentive compensation expense.
- Consolidated Impact: These changes affect only the segment allocation of results. They do not revise or restate previously reported consolidated financial statements or consolidated non-GAAP adjustments.
Guidance, Outlook, and Management Commentary
Management provided supplemental unaudited historical information in Exhibits 99.1 and 99.2 to assist investors in understanding the new segment structure and AOI measure. RBI will continue to report Adjusted EBITDA on a consolidated and segment level basis for supplemental purposes. No specific forward-looking guidance or risk factors were detailed in this specific filing text.
Investor Verification Checklist
- Review Exhibit 99.2 for the unaudited historical financial information reconciled to the new segment structure and AOI measure.
- Verify the impact of the new segment definitions on the geographic allocation of results (U.S./Canada vs. International).
- Confirm the reconciliation between the new Adjusted Operating Income (AOI) and the previously reported Adjusted EBITDA to understand the impact of including depreciation and share-based compensation.
- Note that consolidated financial statements remain unchanged by this filing.