You should read the following discussion together with our unaudited condensed consolidated financial statements and the related notes thereto included in Part I, Item 1 "Financial Statements" of this report.

The following discussion includes information regarding future financial performance and plans, targets, aspirations, expectations, and objectives of management, which constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of Canadian securities laws as described in further detail under "Special Note Regarding Forward-Looking Statements" set forth below. Actual results may differ materially from the results discussed in the forward-looking statements. Please refer to the risks and further discussion in the "Special Note Regarding Forward-Looking Statements" below.

We prepare our financial statements in accordance with accounting principles generally accepted in the United States ("U.S. GAAP" or "GAAP"). However, this Management's Discussion and Analysis of Financial Condition and Results of Operations also contains certain non-GAAP financial measures to assist readers in understanding our performance. Non-GAAP financial measures either exclude or include amounts that are not reflected in the most directly comparable measure calculated and presented in accordance with GAAP. Where non-GAAP financial measures are used, we have provided the most directly comparable measures calculated and presented in accordance with U.S. GAAP, a reconciliation to GAAP measures and a discussion of the reasons why management believes this information is useful to it and may be useful to investors.

Operating results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for the fiscal year and our key business measures, as discussed below, may decrease for any future period. Unless the context otherwise requires, all references in this section to "Partnership", "we", "us" or "our" are to Restaurant Brands International Limited Partnership and its subsidiaries, collectively.

Overview

We are one of the world's largest quick service restaurant ("QSR") companies with over $35 billion in annual system-wide sales and over 29,000 restaurants in more than 100 countries as of June 30, 2022. Our Tim Hortons®, Burger King®, Popeyes®, and Firehouse Subs® brands have similar franchised business models with complementary daypart mixes and product platforms. Our four iconic brands are managed independently while benefiting from global scale and sharing of best practices.

Tim Hortons restaurants are quick service restaurants with a menu that includes premium blend coffee, tea, espresso-based hot and cold specialty drinks, fresh baked goods, including donuts, Timbits®, bagels, muffins, cookies and pastries, grilled paninis, classic sandwiches, wraps, soups, and more. Burger King restaurants are quick service restaurants that feature flame-grilled hamburgers, chicken, and other specialty sandwiches, french fries, soft drinks, and other affordably-priced food items. Popeyes restaurants are quick service restaurants featuring a unique "Louisiana" style menu that includes fried chicken, fried shrimp and other seafood, red beans and rice, and other regional items. Firehouse Subs restaurants are quick service restaurants featuring hot and hearty subs piled high with quality meats and cheese as well as chopped salads, chili and soups, signature and other sides, soft drinks and local specialties.

Commencing upon the acquisition of Firehouse Subs in December 2021, we have four operating and reportable segments: (1) Tim Hortons ("TH"); (2) Burger King ("BK"); (3) Popeyes Louisiana Kitchen ("PLK"); and (4) Firehouse Subs ("FHS"). Our business generates revenue from the following sources: (i) franchise and advertising revenues and other services, consisting primarily of royalties and advertising fund contributions based on a percentage of sales reported by franchise restaurants and franchise fees paid by franchisees; (ii) property revenues from properties we lease or sublease to franchisees; and (iii) sales at restaurants owned by us ("Company restaurants"). In addition, our TH business generates revenue from sales to franchisees related to our supply chain operations, including manufacturing, procurement, warehousing, and distribution, as well as sales to retailers.

In September 2021, we announced targets to reduce greenhouse gas emissions by 50% by 2030, as approved by the Science Based Targets initiative, as well as a commitment to achieving net-zero emissions by 2050. While most of the impact is from scope 3 emissions that are not under our direct control, reaching these targets will require us to devote resources to support changes by suppliers and franchisees.





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Operating Metrics

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 franchise restaurants and Company restaurants (referred to as system-wide sales) in one period from the same period in the prior year.

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

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

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

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

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


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                                               Three Months Ended             Six Months Ended
                                                    June 30,                      June 30,
    Key Business Metrics                       2022           2021          2022           2021
    System-wide sales growth
      TH                                        16.3  %       33.0  %        14.7  %        12.5  %
      BK                                        14.6  %       37.9  %        15.5  %        18.2  %
      PLK                                        9.9  %       10.5  %         7.1  %         8.8  %
      Consolidated (a)                          14.2  %       31.9  %        14.0  %        15.5  %
      FHS (b)                                    2.2  %       37.9  %         4.7  %        32.6  %
    System-wide sales (in US$ millions)
      TH                                   $   1,838       $ 1,637       $  3,394       $  3,016
      BK                                   $   6,444       $ 5,883       $ 12,262       $ 11,056
      PLK                                  $   1,503       $ 1,386       $  2,886       $  2,730
      FHS                                  $     292       $     -       $    564       $      -
      Consolidated (a)                     $  10,077       $ 8,906       $ 19,106       $ 16,802
      FHS (b)                              $       -       $   286       $      -       $    540
    Comparable sales
      TH                                        12.2  %       27.6  %        10.4  %        11.8  %
      BK                                        10.0  %       18.2  %        10.1  %         8.9  %
      PLK                                        1.4  %       (0.3) %        (0.8) %         0.6  %
      Consolidated (a)                           9.0  %       16.5  %         8.4  %         8.0  %
      FHS (b)                                   (1.4) %       31.2  %         1.3  %        27.8  %

                                                                               As of June 30,
                                                                            2022           2021
    Net restaurant growth
      TH                                                                      5.7  %         2.7  %
      BK                                                                      2.8  %         0.1  %
      PLK                                                                     8.1  %         5.7  %
      Consolidated (a)                                                        4.1  %         1.3  %
      FHS (b)                                                                 2.5  %         2.5  %
    Restaurant count
      TH                                                                    5,352          5,065
      BK                                                                   19,311         18,776
      PLK                                                                   3,851          3,562
      FHS                                                                   1,233              -
      Consolidated                                                         29,747         27,403
      FHS (b)                                                                   -          1,203

(a) Consolidated system-wide sales growth, consolidated net restaurant growth and consolidated comparable sales do not include the results of Firehouse Subs for all of the periods presented. Consolidated system-wide sales do not include the results of Firehouse Subs for 2021.

(b) 2021 Firehouse Subs figures are shown for informational purposes only, consistent with its fiscal calendar.





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War in Ukraine

During the first quarter of 2022, we shared a number of actions that we have taken to date as a result of the events related to Russia's military invasion of Ukraine. As a reminder, Burger King is our only brand with restaurants in Russia, all of which are operated under a master franchise arrangement. We suspended all corporate support for the Russian market, including operations, marketing, and supply chain support in addition to refusing approvals for new investment and expansion. While we currently include results from our franchised restaurants in Russia within reported key business metrics, we do not expect to generate any profits from restaurants in Russia in 2022.

Below are the RBI consolidated and BK segment operational highlights excluding the results from Russia for the three and six months ended June 30, 2022 and 2021.



                                                Three Months Ended             Six Months Ended
                                                     June 30,                      June 30,
  Key Business Metrics (excluding Russia)       2022           2021          2022           2021
  System-wide sales growth
    BK                                           13.2  %       35.8  %        14.7  %        17.3  %
    Consolidated (a)                             13.3  %       30.5  %        13.4  %        14.9  %
  System-wide sales (in US$ millions)
    BK                                      $   6,134       $ 5,701       $ 11,781       $ 10,713
    Consolidated (a)                        $   9,767       $ 8,724       $ 18,625       $ 16,459
  Comparable sales
    BK                                            8.7  %       16.8  %         9.3  %         8.3  %
    Consolidated (a)                              7.9  %       15.6  %         7.6  %         7.6  %

                                                                                As of June 30,
                                                                             2022           2021
  Net restaurant growth
    BK                                                                         2.7  %         0.1  %
    Consolidated (a)                                                           4.0  %         1.3  %
  Restaurant count
    BK                                                                      18,491         17,999
    Consolidated                                                            28,927         26,626

(a)Consolidated system-wide sales growth, consolidated net restaurant growth and consolidated comparable sales do not include the results of Firehouse Subs for all of the periods presented. Consolidated system-wide sales do not include the results of Firehouse Subs for 2021.

COVID-19 and Macro Economic Environment

The global crisis resulting from the spread of coronavirus ("COVID-19") impacted our global restaurant operations for the three and six months ended June 30, 2022 and 2021, though in 2022 the impact was more modest than in the prior year. During the three and six months ended June 30, 2022 and 2021, substantially all restaurants remained open, some with limited operations, such as drive-thru, takeout and delivery (where applicable), reduced, if any, dine-in capacity, and/or restrictions on hours of operation. Certain markets periodically required temporary closures while implementing government mandated lockdown orders. For example, while most regions have eased restrictions, increases in cases and new variants caused certain markets, including China, to re-impose temporary restrictions as a result of government mandates. We expect local conditions to continue to dictate limitations on restaurant operations, capacity, and hours of operation. COVID-19 has also contributed to labor challenges, which in some regions resulted in reduced operating hours and service modes at select restaurants as well as supply chain pressures.




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In addition, during 2022, there have been increases in commodity, labor and energy costs partially due to the macroeconomic impact of both COVID-19 and the War in Ukraine. Further significant increases in inflation could affect the global, Canadian and U.S. economies, which could have an adverse impact on our business and results of operations if we and our franchisees are not able to adjust prices sufficiently to offset the effect of cost increases without negatively impacting consumer demand.

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