Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis (“MD&A”), should be read in conjunction with the Consolidated Financial Statements (“Financial Statements”) included in Part II, Item 8 “Financial Statements and Supplementary Data,” the Special Note Regarding Forward-Looking Statements later in this Item 7, and the Risk Factors set forth in Item 1A. All Note references herein refer to the Notes to the Financial Statements. Tabular amounts are displayed in millions of U.S. dollars except per share and unit count amounts, or as otherwise specifically identified. All references to “Canadian dollars” or “C$” are to the currency of Canada unless otherwise indicated. Percentages may not recompute due to rounding.
This MD&A includes a comparison of our results of operations for 2025 to 2024. For a similar comparison of our results of operations for 2024 to 2023, refer to the Management's Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of our Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 21, 2025.
Overview
We are one of the world’s largest quick service restaurant (“QSR”) companies with nearly $47 billion in annual system-wide sales and over 33,000 restaurants, over 95% of which are franchised, in more than 120 countries and territories as of the date of this Annual Report on Form 10-K. We own and franchise four iconic brands, Tim Hortons ®, Burger King® , Popeyes®, and Firehouse Subs®. Our brands have complementary daypart mixes and product platforms that benefit from global scale and the sharing of best practices while preserving the independence and rich heritage of each brand.
We have six operating and reportable segments, including four franchisor segments for our Tim Hortons, Burger King, Popeyes, and Firehouse Subs brands in the U.S. and Canada (“TH”, “BK”, “PLK”, and “FHS”, respectively) and a fifth franchisor segment for all of our brands in the rest of the world (“INTL”). Additionally, following the acquisitions of Carrols Restaurant Group Inc. (“Carrols”) and Popeyes China (“PLK China”) (“PLK China Acquisition”) on May 16, 2024 and June 28, 2024, respectively, we established a new operating and reportable segment, Restaurant Holdings (“RH”). This segment includes results from the Carrols Burger King restaurants and the PLK China restaurants from their acquisition dates and includes results from Firehouse Subs Brazil (“FHS Brazil”) beginning in 2025.
RBI maintains the franchisor dynamics in its TH, BK, PLK, FHS, and INTL segments ( “ five franchisor segments ” ) to report results consistent with how the business will be managed long-term. This approach reflects RBI’s intent to refranchise the vast majority of the Carrols Burger King restaurants and to find new partners for PLK China and FHS Brazil in the future. RH results include Company restaurant sales and expenses, including expenses associated with royalties, rent, and advertising. These expenses are recognized, as applicable, as revenues in the respective franchisor segments (BK for the Carrols Burger King restaurants and INTL for PLK China and FHS Brazil) and eliminated upon consolidation.
Adjusted Operating Income represents our measure of segment income for each of our reportable segments and is used by management to measure operating performance. See Note 4, “Segment Reporting and Geographical Information,” of the Financial Statements for additional information about our operating and reportable segments and our measure of segment income.
On February 14, 2025, we acquired substantially all the remaining equity interests in Pangaea Foods (China) Holdings Ltd. (“BK China”) from our former joint venture partners (“BK China Acquisition”). BK China met the criteria to be classified as held for sale and was reported as discontinued operations. On November 8, 2025, we agreed to enter into a joint venture with CPE Alder Investment Limited, a fund managed by CPE (“CPE”), with respect to the operations of Burger King China (such joint venture, the “Burger King China JV”). The transaction closed on January 30, 2026. CPE now owns approximately 83% of Burger King China JV, while we own approximately 17% of the Burger King China JV and have a seat on its board of directors. As a result of this transaction, we recognized a non-cash charge of $114 million during 2025 related to our Burger King China holdings, which is included within Net loss from discontinued operations in the consolidated statements of operations. Following the closing of the transaction, we began accounting for our interest in Burger King China JV under the equity method of accounting and recognize franchise revenue from the Burger King China JV in our INTL segment. See Note 7, " BK China, " of the Financial Statements for additional information regarding this transaction.
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We generate revenues from the following sources:
• supply chain sales, consisting primarily of Tim Hortons supply chain sales, which represent the sourcing of products, supplies, and restaurant equipment and their subsequent resale to franchisees, as well as the sourcing and subsequent sale of consumer packaged goods (“CPG”). All Tim Hortons global supply chain sales, including coffee to International franchisees, are included in the TH segment;
• Company restaurant sales;
• franchise revenues, consisting primarily of royalties based on a percentage of sales reported by franchised restaurants, franchise fees paid by franchisees, and convention revenue (which can have an impact period over period due to timing, however, together with convention expense, have an immaterial net impact to Adjusted Operating Income);
• property revenues from properties we lease or sublease to franchisees; and
• advertising revenues and other services, consisting primarily of (1) advertising fund contributions based on a percentage of sales reported by franchised restaurants to fund advertising expenses and (2) tech fees that vary by market and partially offset expenses related to technology initiatives.
Operating costs and expenses for our segments include:
• supply chain cost of sales, comprised of costs associated with the management of our Tim Hortons supply chain, including cost of goods, direct labor, depreciation, and cost of CPG products sold to retailers;
• Company restaurant expenses include food, beverage, and packaging costs, restaurant wages and related expenses, and restaurant occupancy and other expenses;
• segment franchise and property expenses (“Segment F&P expenses”), comprised primarily of depreciation of properties leased to franchisees, rental expense associated with properties subleased to franchisees, bad debt expense (recoveries), and convention expenses, and exclude amortization of franchise agreements and reacquired franchise rights. Convention expenses can have an impact period over period due to timing, however, together with convention revenue, have an immaterial net impact to Adjusted Operating Income;
• advertising expenses and other services, comprised primarily of expenses relating to marketing, advertising, promotion, and technology initiatives for the respective brands. Our advertising expenses and other services are primarily funded by contributions from franchisees and Company restaurants, and, from time to time, incremental corporate funding of marketing programs. Tim Hortons advertising expenses also include costs related to the sale of CPG products, which are funded by us; and
• segment general and administrative expenses (“Segment G&A”), comprised primarily of salary and employee-related costs for non-restaurant employees, professional fees, information technology systems, general overhead for our corporate offices, share-based compensation and non-cash incentive compensation expense, and depreciation and amortization.
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Key Operating Metrics
Key performance indicators (“KPIs”) are shown for RBI's five franchisor segments. The KPIs for the Carrols Burger King restaurants are included in the BK segment, and the KPIs for the PLK China, BK China, and FHS Brazil restaurants are included in the INTL segment.
We evaluate our restaurants and assess our business based on the following operating metrics:
• System-wide sales growth refers to the percentage change in sales at all franchised restaurants and Company restaurants (referred to as system-wide sales) in one period from the same period in the prior year on a constant currency basis, which means the results exclude the effect of foreign currency translation (“FX Impact”). We calculate the FX Impact by translating prior year results at current year monthly average exchange rates. System-wide sales is reported on a nominal basis.
• Comparable sales refers to the percentage change in restaurant sales in one period from the same prior year period on a constant currency basis for restaurants that have been open for an initial consecutive period, typically at least 13 months. Additionally, if a restaurant is closed for a significant portion of a month, the restaurant is excluded from the monthly comparable sales calculation.
• Unless otherwise stated, system-wide sales growth, system-wide sales, and comparable sales are presented on a system-wide basis, which means they include franchised restaurants and Company restaurants. System-wide results are driven by our franchised restaurants, as over 95% of system-wide restaurants are franchised. Franchise sales represent sales at all franchised 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 change 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. In determining whether a restaurant meets our definition of a restaurant that will be included in our net restaurant growth, we consider factors such as scope of operations, format and image, separate franchise agreement, and minimum sales thresholds. We refer to restaurants that do not meet our definition as “alternative formats” and we believe these are helpful to build brand awareness, test new concepts and provide convenience in certain markets.
These metrics are important indicators of the overall direction of our business, including trends in sales and the effectiveness of marketing, operations, and growth initiatives.
The following tables present our consolidated key 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.
Consolidated Key Business Metrics
System-wide Sales Growth (a)
System-wide Sales ($ in millions) (a)
Comparable Sales
Net Restaurant Growth
System Restaurant Count at Period End (b)
(a) System-wide sales growth is calculated on a constant currency basis and therefore will not recalculate to the percentage change in system-wide sales, which is reported on a nominal basis.
(b) As of December 31, 2025, we had 313 alternative format units open, which primarily includes Tim Hortons self-serves and Tims Express outlets in China, which are not included in restaurant count.
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Consolidated Results of Operations
Tabular amounts in millions of U.S. dollars unless noted otherwise. Totals, variances, and percentage changes may not calculate exactly due to rounding.
Consolidated
Variance
Impact (a)
Variance
Excluding
FX Impact
Favorable / (Unfavorable)
Revenues:
Supply chain sales
Company restaurant sales
Franchise and property revenues
Advertising revenues and other services
Total revenues
Operating costs and expenses:
Supply chain cost of sales
Company restaurant expenses
Franchise and property expenses
Advertising expenses and other services
General and administrative expenses
(Income) loss from equity method investments
Other operating expenses (income), net
Total operating costs and expenses
Income from operations
Interest expense, net
Loss on early extinguishment of debt
Income from continuing operations before income taxes
Income tax expense (benefit) from continuing operations
Net income from continuing operations
Net loss from discontinued operations
Net income
(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.
Our operating results are impacted by a number of external factors, including consumer spending levels and general economic conditions.
The increase in Total revenues was primarily driven by the net impact of restaurants acquired from franchisees, mainly related to the Carrols Acquisition, and increases in Supply chain sales, partially offset by an unfavorable FX Impact.
The decrease in Income from operations was primarily driven by an increase in net losses on foreign exchange arising from remeasurement of foreign denominated assets and liabilities, primarily related to intercompany financing, and the non-recurrence of a $79 million gain recognized during 2024 in connection with the Carrols Acquisition. These factors were partially offset by increases in segment income in each of our five franchisor segments.
The decrease in Net income from continuing operations was primarily driven by a decrease in Income from operations and an increase in Income tax expense from continuing operations, partially offset by a decrease in Interest expense, net and a decrease in Loss on early extinguishment of debt.
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General and Administrative Expenses
Our general and administrative expenses were comprised of the following:
Favorable / (Unfavorable)
Segment G&A (b):
PLK
FHS
INTL
RH and BK China Transaction costs
Corporate restructuring and advisory fees
General and administrative expenses
(b) Segment G&A excludes income/expenses from non-recurring projects and non-operating activities, such as RH and BK China Transaction costs, and Corporate restructuring and advisory fees (as defined below).
In connection with the Carrols Acquisition, the PLK China Acquisition, and the BK China Acquisition, we incurred certain non-recurring fees and expenses (“RH and BK China Transaction costs”) consisting primarily of professional fees, compensation-related expenses, and integration costs, all of which are classified as general and administrative expenses in the consolidated statements of operations. We expect to incur additional RH and BK China Transaction costs in 2026.
In connection with certain transformational corporate restructuring initiatives that rationalize our structure and optimize cash movement within our structure, as well as services related to significant tax reform legislation and regulations, we incurred non-operating expenses primarily from professional advisory and consulting services (“Corporate restructuring and advisory fees”).
The increase in general and administrative expenses was primarily driven by increases in RH Segment G&A, reflecting a full twelve months of operations of Carrols in 2025, and increases in RH and BK China Transaction costs, partially offset by decreases in Segment G&A in our TH, BK, PLK, and INTL segments.
(Income) Loss from Equity Method Investments
(Income) loss from equity method investments reflects our share of investee net income or loss, as well as gains or losses from changes in our ownership interests in equity investees.
During 2025, the change in (income) loss from equity method investments reflects the non-recurrence of a $79 million gain recognized during 2024 in connection with the Carrols Acquisition that resulted from an increase in the value of our existing 15% equity interest in Carrols. In addition, the change in (income) loss from equity method investments during 2025 also reflects the changes in earnings of our equity method investments, including the impact of discontinuing equity method accounting for BK China beginning in February 2025. As described in the Overview section, we began accounting for our interest in the Burger King China JV as an equity method investment commencing in February 2026.
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Other Operating Expenses (Income), net
Our other operating expenses (income), net were comprised of the following:
Net losses (gains) on disposal of assets, restaurant closures and refranchisings
Litigation settlements and reserves, net
Net losses (gains) on foreign exchange
Other, net
Other operating expenses (income), net
Net losses (gains) on disposal of assets, restaurant closures, and refranchisings represent long-lived asset impairments, losses (gains) from asset write-offs and sales of properties, and costs related to restaurant closures and refranchisings. Gains and losses recognized in the current period may reflect certain costs related to closures and refranchisings that occurred in previous periods.
Litigation settlements and reserves, net, primarily reflect accruals and payments made and proceeds received in connection with litigation and arbitration matters and other business disputes.
Net losses (gains) on foreign exchange consist of remeasurement of foreign denominated assets and liabilities, primarily related to intercompany financing. A substantial portion of this net foreign currency gain or loss relates to the measurement of U.S. dollar intercompany balances in foreign subsidiaries. This gain or loss primarily results from fluctuations in the exchange rate between the Euro and U.S. dollar.
Interest Expense, net
Interest expense, net
Weighted average interest rate on long-term debt
The decrease in Interest expense, net was primarily driven by the 2024 restructuring of the Canadian cross-currency rate swap, a decrease in the Term Loan B spread driven by a 2024 repricing, and decreases in interest rates which impacts our variable rate debt.
Income Tax Expense
Our effective tax rate was 28.7% in 2025 and 20.1% in 2024. The effective tax rate for 2025 reflects a decrease in net deferred tax assets related to certain intangibles in connection with intra-group reorganizations (which we expect to have a favorable impact to the rate in 2026), unfavorable impacts of OECD Pillar II guidance issued during 2025, the mix of income from multiple jurisdictions, and internal financing arrangements. The effective tax rate for 2024 reflects our mix of income from multiple jurisdictions including the Carrols Acquisition, the impact of internal financing arrangements, and the overall impact of the statute of limitations expirations on both our uncertain tax positions and deferred tax assets.
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Segment Results of Operations
TH Segment
System-wide Sales Growth (a)
System-wide Sales (a)
Comparable Sales
Comparable Sales - Canada
Net Restaurant Growth
System Restaurant Count
(a) System-wide sales growth is calculated on a constant currency basis and therefore will not recalculate to the percentage change in system-wide sales, which is reported on a nominal basis.
TH Segment
Variance
Impact (a)
Variance
Excluding
FX Impact
Favorable / (Unfavorable)
Revenues:
Supply chain sales
Company restaurant sales
Franchise and property revenues
Advertising revenues and other services
Total revenues
Supply chain cost of sales
Company restaurant expenses
Segment F&P expenses
Advertising expenses and other services
Segment G&A
Adjustments:
Cash distributions received from equity method investments
Adjusted Operating Income
The increase in Total revenues was primarily driven by higher Supply chain sales due to increases in commodity prices, CPG net sales, and equipment sales to franchisees. Results were also impacted by unfavorable FX Impacts.
The increase in Adjusted Operating Income was primarily driven by revenue growth and a decrease in Segment G&A due primarily to lower compensation-related expenses, partially offset by higher Supply chain cost of sales due primarily to increases in commodity prices. Results were also impacted by unfavorable FX Impacts.
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BK Segment
System-wide Sales Growth
System-wide Sales
Comparable Sales
Comparable Sales - US
Net Restaurant Growth
System Restaurant Count
BK Segment
Variance
Impact (a)
Variance
Excluding
FX Impact
Favorable / (Unfavorable)
Revenues:
Company restaurant sales
Franchise and property revenues (a)
Advertising revenues and other services (b)
Total revenues
Company restaurant expenses
Segment F&P expenses
Advertising expenses and other services
Segment G&A
Adjusted Operating Income
(a) Franchise and property revenues include intersegment revenues with RH consisting of royalties and rent of $112 million and $71 million for 2025 and 2024, respectively, which are eliminated in consolidation.
(b) Advertising revenues and other services include intersegment revenues with RH consisting of advertising contributions and tech fees of $85 million and $47 million for 2025 and 2024, respectively, which are eliminated in consolidation.
The increase in Total revenues was primarily driven by increases in Advertising revenues and other services due primarily to an increase in advertising fund contributions from franchisees, reflecting an increase in the contribution rate.
The increase in Adjusted Operating Income was primarily driven by the non-recurrence of $61 million of advertising expenses incurred in the prior year in connection with our support behind the marketing program. Additionally, the increase in Adjusted Operating Income also reflects a decrease in Segment G&A due primarily to lower compensation-related expenses, which was partially offset by an increase in Segment F&P expenses driven by net bad debt expenses in the current year compared to net bad debt recoveries in the prior year.
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PLK Segment
System-wide Sales Growth
System-wide Sales
Comparable Sales
Comparable Sales - US
Net Restaurant Growth
System Restaurant Count
PLK Segment
Variance
Impact (a)
Variance
Excluding
FX Impact
Favorable / (Unfavorable)
Revenues:
Company restaurant sales
Franchise and property revenues
Advertising revenues and other services
Total revenues
Company restaurant expenses
Segment F&P expenses
Advertising expenses and other services
Segment G&A
Adjusted Operating Income
The increase in Total revenues was primarily driven by the inclusion of results from Popeyes restaurants acquired in the Carrols Acquisition for the full twelve month period in 2025 compared to a partial period in 2024.
The increase in Adjusted Operating Income was primarily driven by a decrease in Segment G&A due primarily to lower compensation-related expenses.
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FHS Segment
System-wide Sales Growth
System-wide Sales
Comparable Sales
Comparable Sales - US
Net Restaurant Growth
System Restaurant Count
FHS Segment
Variance
Impact (a)
Variance
Excluding
FX Impact
Favorable / (Unfavorable)
Revenues:
Company restaurant sales
Franchise and property revenues
Advertising revenues and other services
Total revenues
Company restaurant expenses
Segment F&P expenses
Advertising expenses and other services
Segment G&A
Adjusted Operating Income
The increases in Total revenues and Adjusted Operating Income were primarily driven by the increase in system-wide sales.
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INTL Segment
System-wide Sales Growth (a)
System-wide Sales (a)
Comparable Sales
Comparable Sales - INTL - Burger King
Net Restaurant Growth
System Restaurant Count
(a) System-wide sales growth is calculated on a constant currency basis and therefore will not recalculate to the percentage change in system-wide sales, which is reported on a nominal basis.
INTL Segment
Variance
Impact (a)
Variance
Excluding
FX Impact
Favorable / (Unfavorable)
Revenues:
Franchise and property revenues
Advertising revenues and other services
Total revenues
Segment F&P expenses
Advertising expenses and other services
Segment G&A
Adjusted Operating Income
The increase in Total revenues was primarily driven by higher royalties from Burger King and Popeyes restaurants resulting from increased system-wide sales, partially offset by the absence of $37 million of revenues from BK China, due to the acquisition, which were recognized during 2024. Results were also impacted by a favorable FX Impact. As described in the Overview section, the INTL segment began recognizing royalties from the Burger King China JV commencing in February 2026, initially at a lower rate with a step to the business' full historical royalty rate over time.
The increase in Adjusted Operating Income was primarily driven by revenue growth and lower Segment F&P expenses primarily attributable to a decrease in net bad debt expenses. Results were also impacted by a favorable FX Impact.
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RH Results
The RH segment revenues, expenses and segment income reflect the Burger King restaurants acquired from Carrols and the PLK China restaurants beginning on their acquisition dates of May 16, 2024 and June 28, 2024, respectively, and FHS Brazil beginning in 2025. As such, RH segment revenues, expenses, and segment income reflect the full twelve month period during 2025 compared to a partial period during 2024.
RH Segment
Comparable Sales
Comparable Sales - BK US
System Restaurant Count
Revenues:
Company restaurant sales
Total revenues
Food, beverage and packaging costs
Restaurant wages and related expenses
Restaurant occupancy and other expenses (a)
Company restaurant expenses
Advertising expenses and other services (b)
Segment G&A
Adjusted Operating Income
(a) Restaurant occupancy and other expenses include intersegment royalties and property expenses of $112 million and $71 million during 2025 and 2024, respectively, which are eliminated in consolidation.
(b) Advertising expenses and other services include intersegment advertising expenses and tech fees of $85 million and $47 million during 2025 and 2024, respectively, which are eliminated in consolidation.
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Non-GAAP Reconciliations
The table below contains information regarding Adjusted Operating Income, which is a non-GAAP measure. This non-GAAP measure does not have a standardized meaning under U.S. GAAP and may differ from a similarly captioned measure of other companies in our industry. We believe this non-GAAP measure is useful to investors in assessing our operating performance, as it provides 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 this non-GAAP measure, we intend to provide investors with a consistent comparison of our operating results and trends for the periods presented. Adjusted Operating Income is defined as income from operations excluding (i) franchise agreement and reacquired franchise rights intangible asset amortization as a result of acquisition accounting, (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, income/expenses from non-recurring projects and non-operating activities included (i) non-recurring fees and expenses incurred in connection with the Carrols Acquisition, the PLK China Acquisition, and the BK China Acquisition consisting primarily of professional fees, compensation related expenses and integration costs; and (ii) non-operating costs from professional advisory and consulting services associated with certain transformational corporate initiatives that our structure and optimize cash movements as well as services related to significant tax reform legislation and regulations. Management believes that these types of expenses are either not related to our underlying drivers or not likely to reoccur in the foreseeable future, and the varied timing, size, and nature of these projects may cause in our results unrelated to the performance of our core business that does not reflect trends of our core operations.
Adjusted Operating Income 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 Operating Income, as defined above, also represents our measure of segment income for each of our operating segments.
Favorable / (Unfavorable)
Income from operations
Franchise agreement and reacquired franchise rights amortization
RH and BK China Transaction costs
Corporate restructuring and advisory fees
Impact of equity method investments (a)
Other operating expenses (income), net
Adjusted Operating Income
Segment income:
PLK
FHS
INTL
Adjusted Operating Income
(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 Adjusted Operating Income.
The increase in Adjusted Operating Income for 2025 reflects increases in segment income in each of our five franchisor segments, partially offset by an unfavorable FX Impact of $14 million.
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Liquidity and Capital Resources
Our primary sources of liquidity are cash on hand, cash generated by operations, and borrowings available under our Revolving Credit Facility (as defined below). We have used, and may in the future use, our liquidity to make required interest and/or principal payments, to repurchase our common shares, to repurchase Class B exchangeable limited partnership units of Partnership (“Partnership exchangeable units”), to voluntarily prepay and repurchase our or any of our affiliates’ outstanding debt, to fund acquisitions 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. Our liquidity requirements are significant, due primarily to debt service requirements.
At December 31, 2025, we had cash and cash equivalents of $1,163 million and borrowing availability of $1,248 million under our senior secured revolving credit facility (the “Revolving Credit Facility”). 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.
On February 14, 2025, we acquired substantially all of the remaining equity interests in Burger King China from our former joint venture partners for approximately $151 million in an all-cash transaction and assumed approximately $178 million of outstanding debt. During 2025, we provided $147 million of funding to BK China. As of December 31, 2025, cash and cash equivalents for BK China were $72 million, reflected in assets held for sale – discontinued operations, and outstanding debt was $208 million, reflected in liabilities held for sale – discontinued operations. On November 8, 2025, we agreed to enter into a joint venture with CPE Alder Investment Limited, a fund managed by CPE (“CPE”), with respect to the operations of Burger King China (such joint venture, “Burger King China JV”). Upon closing of the transaction on January 30, 2026, CPE invested $350 million of new primary capital into Burger King China JV, which resulted in CPE owning approximately 83% of Burger King China JV, while we retained approximately 17% and a seat on the Board of Directors of Burger King China JV. We did not receive any cash proceeds from the transaction, as the new primary capital invested by CPE remained in Burger King China JV and its subsidiaries to support future growth.
Burger King is executing its multi-year "Reclaim the Flame" plan to accelerate sales growth and drive franchisee profitability. This plan includes investing up to $700 million through year-end 2028, comprised of advertising and digital investments ("Fuel the Flame") and high-quality remodels and relocations, restaurant technology, kitchen equipment, and building enhancements ("Royal Reset"). The Fuel the Flame investments were completed in the fourth quarter ended December 31, 2024. As of December 31, 2025, we have funded $176 million out of up to $550 million planned toward the Royal Reset investments. These amounts are not inclusive of funds applied to remodels of Burger King restaurants acquired in the Carrols Acquisition.
We expect consolidated capital expenditures, including the change in accruals for additions of property and equipment since December 31, 2025, tenant inducements, and franchisee incentives to total around $400 million in 2026.
As of December 31, 2025, we had outstanding cross-currency rate swap contracts between the Canadian dollar and U.S. dollar, in which we receive quarterly fixed-rate interest payments on the U.S. dollar aggregate amount of $5,700 million and between the Euro and U.S. dollar, in which we receive quarterly fixed-rate interest payments on the U.S. dollar aggregate amount of $2,750 million. We expect to receive $53 million in quarterly fixed-rate interest payments in the next twelve months in connection with these outstanding cross-currency swaps.
On August 6, 2025, our board of directors approved a share repurchase authorization of up to $1,000 million of our common shares from September 15, 2025 until September 30, 2027. This share repurchase authorization replaced RBI's prior two-year authorization to repurchase up to $1,000 million of our common shares until September 30, 2025, which had an authorization of $500 million remaining at the time of its replacement. On September 12, 2025, in furtherance of the new share repurchase authorization, we announced that the Toronto Stock Exchange had accepted and approved the notice of our intention to renew our normal course issuer bid, permitting the repurchase of up to 32,326,078 common shares for the 12-month period commencing September 16, 2025 and ending on September 15, 2026. As of December 31, 2025, we had $1,000 million remaining under the new authorization. Repurchases under the authorization may be made in the open market, either on the Toronto Stock Exchange or the New York Stock Exchange, 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.
On June 20, 2024, Canada enacted tax legislation to restrict the deduction of excessive interest and financing expenses (“EIFEL”) which is effective for taxation years beginning on or after October 1, 2023. As a result, we expect to have restricted interest and financing tax deductions for the current and next few fiscal years, which will continue to increase our cash taxes.
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Debt Instruments and Debt Service Requirements
As of December 31, 2025, our total debt consists primarily of borrowings under our Credit Facilities, amounts outstanding under our 3.875% First Lien Senior Notes due 2028, 3.50% First Lien Senior Notes due 2029, 6.125% First Lien Senior Notes due 2029, 5.625% First Lien Senior Notes due 2029, 4.375% Second Lien Senior Notes due 2028, 4.00% Second Lien Senior Notes due 2030 (together, the “Senior Notes”), and obligations under finance leases.
Credit Facilities
As of December 31, 2025, two of our subsidiaries (the "Borrowers") have a credit agreement governing our senior secured term loan facilities (the "Term Loan Facilities"), under which $5,722 million was outstanding with a weighted average interest rate of 5.30%. 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) Term SOFR (Secured Overnight Financing Rate), 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 rate, subject to a floor of 1.00%, plus an applicable margin of 0.75%, or (ii) Term SOFR, subject to a floor of 0.00%, plus an applicable margin of 1.75%.
Based on the amounts outstanding under the Term Loan Facilities and SOFR as of December 31, 2025, subject to a floor of 0.00%, required debt service for the next twelve months is estimated to be approximately $307 million in interest payments and $32 million in principal payments. The required debt service payment for the next twelve months represents a year-over-year decrease due to RBI's $200 million voluntary Term Loan B partial prepayment during the year ended December 31, 2025. In addition, based on SOFR as of December 31, 2025, net cash settlements that we expect to receive on our $4,000 million interest rate swaps are estimated to be approximately $48 million for the next twelve months. 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, 2025, 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 $1,248 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 range from 0.75% to 1.50%, depending on our net first lien leverage ratio.
Obligations under the Credit Facilities are guaranteed on a senior secured basis, jointly and severally, by Partnership and substantially all of its Canadian and U.S. subsidiaries, including The TDL Group Corp., Burger King Company LLC, 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
The Borrowers have entered into indentures in connection with the issuance of the following senior notes (collectively the “Senior Notes Indentures”):
Amount (in millions)
Interest Rate
Lien Priority
Due Date
First lien
January 15, 2028
First lien
February 15, 2029
First lien
June 15, 2029
First lien
September 15, 2029
Second lien
January 15, 2028
Second lien
October 15, 2030
No principal payments are due until maturity and interest is paid semi-annually.
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The Borrowers may redeem a series of senior notes, in whole or in part, at any time at the redemption prices set forth in the applicable Senior Notes Indenture; provided that if the redemption is prior to June 15, 2026 for the 6.125% First Lien Senior Notes, or September 15, 2026 for the 5.625% First Lien Senior Notes, it will instead be 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. 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, 2025, required debt service for the next twelve months on all of the senior notes outstanding is approximately $337 million in interest payments. For further information about our long-term debt, see Note 12, “Long Term Debt,” of the Financial Statements.
Restrictions and Covenants
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. Under the Credit Facilities, 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.
The restrictions under the Credit Facilities and the Senior Notes Indentures have resulted in substantially all of our consolidated assets being restricted.
As of December 31, 2025, we were in compliance with all applicable financial debt covenants under the Credit Facilities 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
On January 6, 2026, we paid a dividend of $0.62 per common share and Partnership made a distribution in respect of each Partnership exchangeable unit in the amount of $0.62 per Partnership exchangeable unit.
On February 12, 2026, we announced that the board of directors had declared a quarterly cash dividend of $0.65 per common share for the first quarter of 2026, payable on April 2, 2026 to common shareholders of record on March 19, 2026. Partnership will also make a distribution in respect of each Partnership exchangeable unit in the amount of $0.65 per Partnership exchangeable unit with the same record date and payment date as the common shares dividend.
We are targeting a total of $2.60 in declared dividends per common share and distributions in respect of each Partnership exchangeable unit for 2026.
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.
Outstanding Security Data
As of February 13, 2026, we had outstanding 346,504,193 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 RBI, holders of our common shares vote together as a single class with the special voting share except as otherwise provided by law. For information on our share-based compensation and our outstanding equity awards, see Note 15, "Share-based Compensation," of the Financial Statements.
There were 109,356,045 Partnership exchangeable units outstanding as of February 13, 2026. The holders of Partnership exchangeable units have 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 $1,714 million in 2025, compared to $1,503 million in 2024. The change in cash provided by operating activities was primarily driven by an increase in INTL, BK, and TH segment income, a decrease in cash used for working capital, and a decrease in interest payments, partially offset by an increase in income tax payments.
Investing Activities
Cash used for investing activities was $318 million in 2025, compared to $660 million in 2024. The change in cash used for investing activities was primarily driven by a decrease in net payments for acquisition of franchised restaurants, net of cash acquired, partially offset by an increase in payments for additions of property and equipment. Net payments for acquisition of franchised restaurants for 2025 and 2024 was comprised primarily of $151 million for the BK China Acquisition and $508 million for the Carrols Acquisition, respectively.
Financing Activities
Cash used for financing activities was $1,436 million in 2025, compared to $625 million in 2024. The change in cash used for financing activities was driven primarily by the non-recurrence of proceeds from long-term debt, partially offset by a decrease in repayments of long-term debt and finance leases.
Contractual Obligations and Commitments
Our significant contractual obligations and commitments as of December 31, 2025 include:
Debt Obligations and Interest Payments — Refer to Note 12, “Long-Term Debt,” of the Financial Statements for further information on our obligations and the timing of expected payments. Future cash interest payments on our outstanding debt as of December 31, 2025 total $2,528 million, with $646 million due within the next twelve months. We have estimated our cash interest payments through the maturity of our Credit Facilities based on SOFR as of December 31, 2025. These payments exclude cash proceeds that we expect to receive from our interest rate swaps, cross-currency rate swaps, and interest income on cash.
Operating and Finance Leases — Refer to Note 16, “Leases,” of the Financial Statements for further information on our obligations and the timing of expected payments.
Purchase Commitments — Purchase obligations primarily include commitments to purchase green coffee, certain food ingredients, beverages, advertising expenditures, and obligations related to information technology and service agreements. We have purchase obligations of approximately $746 million at December 31, 2025, with approximately $690 million due within the next 12 months.
Unrecognized Tax Benefit — Our contractual obligations and commitments include approximately $88 million of gross liabilities for unrecognized tax benefits and accrued interest and penalties 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 17, “ Income Taxes, ” of the Financial Statements.
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, 2025, no material amounts are outstanding under these guarantees.
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Critical 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 as follows based on the high degree of judgment or complexity in their application:
Business Combinations
Business acquisitions are accounted for using the acquisition method of accounting, or acquisition accounting, in accordance with ASC Topic 805, Business Combinations . The acquisition method of accounting involves 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.
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.
Goodwill 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 or quantitative 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 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, Company restaurant expenses, 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.
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We completed our impairment reviews for goodwill and the Brands as of October 1, 2025, 2024, and 2023 with no resulting impairments. In 2025, we conducted a quantitative assessment for the Firehouse Brand and the Firehouse and Carrols Burger King reporting units, while all other Brands and reporting units were assessed qualitatively. The fair values of the Firehouse Brand and reporting unit exceeded their carrying values by more than 20%. The Carrols Burger King reporting unit fair value, which was calculated utilizing an equal weighting of an income approach and market approach was not substantially in excess of its carrying value, at approximately 7.0% above its carrying value of $1,000 million. The goodwill allocated to this reporting unit was $ 362 million. Because this reporting unit includes Company restaurants, the valuation is sensitive to assumptions about sales growth, restaurant operating expenses, remodel timing and costs, and the discount rate, among other factors, all of which can be influenced by macroeconomic conditions, inflation, and the achievement of our forecasted results. Certain of these factors are not within our control, and adverse changes could reduce fair value and result in a future goodwill impairment charge.
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 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.
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.
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We are generally permanently reinvested on any potential outside basis differences except for unremitted earnings and profits and thus do not record a deferred tax liability for such outside basis differences. To the extent of unremitted earnings 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 income tax rate at each interim period based on the facts and circumstances available at that time, while the actual effective income tax rate is calculated at year-end.
See Note 17, “Income Taxes,” of the Financial Statements for additional information about accounting for income taxes.
New Accounting Pronouncements
See Note 2, “Significant Accounting Policies – New Accounting Pronouncements,” of the Financial Statements for additional information about new accounting pronouncements.
