Good morning and welcome to the Restaurant Brands International Fourth Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note today’s event is being recorded. I would now like to turn the conference over to Andrea John. Please go ahead.

Thank you, operator. Good morning everyone and welcome to Restaurant Brands International’s earnings call for the fourth quarter and full year ended December 31, 2015. A live broadcast of this call may be accessed through the Investor Relations page on our website at investor.rbi.com and a recording will be available for replay. Joining me on the call today are Restaurant Brands International CEO, Daniel Schwartz; and CFO, Josh Kobza. The team will be available to answer questions during the Q&A portion of today’s call. Today’s earnings call and presentation contains forward-looking statements, which are subject to various risks set forth in the press release issued this morning. In addition, this earnings call and presentation include non-GAAP financial measures. Reconciliations of non-GAAP financial measures are included in the earnings presentation and press release available on our website. Let’s begin with the agenda for today’s call on Slide 2. Daniel will discuss highlights at Restaurant Brands International for the year. He will then review brand-specific performance at Tim Hortons and Burger King. Josh will provide an update on development, including certain adjustments that we’ve taken to align restaurant definitions across brands, and will review consolidated financial results for the year. Daniel will share some concluding remarks before opening the call up for Q&A. I'll now turn the call over to Daniel.

Thanks, Andrea, and good morning everyone and thanks for joining us on the call. It’s been a great year for RBI and for both of our iconic brands: Tim Hortons and Burger King. And I am happy to report we finished the year off on a really strong note. Our main priorities at RBI are delivering a great guest experience and growing franchisees’ profitability. Ensuring that we excel in both of those fronts is what drives our continued success, and it’s through the hard work of our employees and our franchisees that we've achieved strong comparable sales growth and net restaurant growth as well as meaningful growth in franchisee and corporate profitability. Starting on Slide 4, we’ve had one of the best years for both the brands in comparable sales growth and international expansion. Tim Hortons and Burger King increased global comparable sales by 5.6% and 5.4% respectively in 2015. Despite the macroeconomic headwinds in some of our key growth markets, we achieved unit growth of 4.2%, adding 786 net new restaurants and ending the year with more than 19,000 restaurants around the world. As we look out into 2016, we continue to build a very strong restaurant pipeline and are excited to bring great restaurants to our guests all around the world. For the year, positive comparable sales growth and net restaurant growth contributed to constant currency system-wide sales growth of 9.3% and 10.3% at Tim Hortons and Burger King respectively. We recorded full-year adjusted EBITDA of $1.666 billion, which was up 21% organically versus last year's pro forma results. Moving on to Slide 6. We had a truly historic year at Tim Hortons with a number of successful product launches, accelerated restaurant development and strong financial results. In Canada, we recorded our 24th consecutive year of positive comparable…

Thank you, Daniel. I’ll start on Slide 17 with the highlights of a very strong development year for us at RBI. For Tim Hortons, we continued to execute on our US expansion strategy and signed two important development agreements in Cincinnati and Columbus. Internationally, we accelerated growth in the Middle East, more than doubling our restaurant count from the prior year. For Burger King, we reached several important milestones with over 600 restaurants in Turkey, 500 in Brazil, 450 in China, 300 in Russia and in the aggregate, we ended the year crossing the 15,000 restaurant mark at Burger King. We are excited about our growth opportunities all around the world, and as Daniel mentioned, we made particularly large strides this year on the development front in EMEA. We recently signed new MFJV agreements in both Germany and Spain, our second and third largest markets at Burger King respectively by restaurant count. And with the acquisition of Quick, Burger King France became the second-largest QSR in France and we’ll look to increase the number of Burger King restaurants in the country through the conversion of Quick units and the development of new BK restaurants. Turning to Slide 18. We made great progress in the US for Tim’s in 2015. As part of our franchisee-led development strategy, we focused on building unit density in key markets with great partners. We signed two development agreements in our priority DMAs in Midwest and look forward to sharing more news on our US expansion this year. As Daniel mentioned earlier, we look at the performance of existing restaurants on a regular basis in line with our vision to deliver a great guest experience and profitable franchisee base across the system. After reviewing the TH US system in 2015 we decided to close 27 underperforming…

Thanks, Josh. In our first year as RBI we set the foundation for long-term growth at Tim Hortons while building on the momentum at Burger King. We continue to be focused on driving topline growth and finding the right partners to bring great restaurants to our guests all around the world. We believe that we have the right combination to ensure strong opportunities and continued success for our franchisees, our employees and our shareholders for many many years to come. Thanks to everybody for joining us this morning on the call and we will now open up the call for Q&A. Operator?

[Operator Instructions] Our first question comes from Nicole Miller of Piper Jaffray.

Thank you so much and congratulations on a great quarter and a great year. Would you talk a little bit about the big picture QSR environment, and how do you think about promoting and competing in the current environment?

Hey Nicole, it’s Daniel. As you say, we’re really pleased with the results across both of the brands, we couldn’t have asked for a better first-year for Restaurant Brands International and for both of the brands under the Restaurant Brands International ownership. As you saw both brands had same-store sales north of 5% for the year. As you know quick service restaurant industry is – it’s a competitive industry, it always has been. And when we look at, what we’re focused on is really running great restaurants and delivering great product at an affordable price with great service for our guests. On the Burger King front, we’re really pleased with the growth. When we look at the results for the year, as we said were north of 5% same store sales, and when you look at what happened in the fourth quarter, it was really a big milestone for us, because we crossed the $1.3 million ARS mark for our franchisees’ restaurants. Our franchisees had profit growth of north of 30% for the year. We crossed the 50% mark with respect to reimaging, so a lot of good milestones in the fourth quarter of 2015. Having said that, we still feel like we have a long long ways to go. The restaurant sales can still be much greater and 2016 is already off to a good start and we’re about to launch Grilled Dogs which I'm sure you've seen, which we’re all pretty excited about. On the Tim Hortons front, like I said, we’re just focused on really – on running great restaurants. We had a successful product launch in the fourth quarter with our grilled wraps – the AM PM grilled wraps, and it was nice to see us even further solidify our strength in the launch daypart on the Tim Hortons front. And as Josh mentioned, even with the really high sales per restaurant that we have at Tim Hortons, we still think there’s quite a long ways to go there. So stepping back, we really couldn’t have asked for a better first-year for Restaurant Brands International, for Tim Hortons brand, for the Burger King brand and all around the world a strong same-store sales, a strong franchise profitability, a continued reinvestment in our restaurants and delivering that great guest experience. So we're really excited.

And our next question comes from Andrew Charles of Cowen and Company.

Can you talk about the CapEx priorities in 2016 and as we look at the $115 million of total CapEx in 2015, is there any reason to believe CapEx in 2016 would exceed this amount?

Andrew, it’s Josh. Thank you for the question. As we look out to 2016, I think the CapEx priorities will be to continue to reinvest in the business and supporting our franchisees in remodelling. As Dan mentioned, we passed a big milestone this year with 50% of our Burger King US business on a modern image, and also we continue to reinvest in remodels in the Tim's business in Canada. So I think that will really be the priority, is reinvesting and dedicating our capital resources to remodels across brands and across our markets.

And then for the 115 million a good proxy for next year as well?

We don't have guidance for CapEx going forward at this point.

And our next question comes from John Glass of Morgan Stanley.

Thanks very much. Appreciate all the detail on development and kind of maybe ‘15 was a little slower than prior years and the way it’s going to accelerate globally and maybe I am thinking mostly of Burger King but you could address both brands. Do you think you can get back to 5% globally in 2015? Can you give us at least some appreciation of kind of how these new developments will phase in at both Tim's and Burger King so we can maybe model it more accurately?

Yes, John, it’s Josh. Thanks for the question. I think as you think about kind of what have been 2014 to 2015, I’d highlight two main drivers for you. When we talked about them a little bit in our prepared remarks, first of all, starting in EMEA, we talked a little bit about the macro volatility in Russia and we saw a bit of a slowdown in Russian in terms of development. We reduced the amount of openings by about 60 in Russia in 2015 and really as we look at the environment in the country, we really decided to focus on the underlying business, focusing on sales and profitability and our teams work together with our local franchisee there. And I'm really pleased to say that we had a great year actually both on the sales and on the profitability front. Our team at BK Russia had a really great year. So even if we slowed down a bit on development the underlying profitability was great and that's what gives us a lot of confidence, that we’re going to re-accelerate the pace of development in Russia in 2016. The other big driver there was in Latin America, where as Dan mentioned, we closed about 33 restaurants in Costa Rica and again there I think we’ve made a lot of progress in that we've already found a new partner to re-enter the market there in 2016. I think we’ll move back in the right direction in Latin America. One of the other things that I highlighted on the call was, kind of as we look at EMEA and some of the big steps that we've made with new partnerships, I think that's what gives me a lot of confidence about the direction that we’re going in terms of development. So…

Appreciate that. Dan, just one follow-up. You’ve commented a couple times about your enthusiasm for the Burger King US business, you are lapping tougher comparisons. Wasn’t sure if that was a forward-looking comment because the hotdog launch was going to be successful in your view or that was current state of business, if you could just kind of clarify how you look at the US business in the first half of this year given competitive dynamics and comparisons?

Sure, John. The comment referred was backward looking, not forward-looking. It was referring to the Q4 period. But as I said we’re pleased with the growth that we’ve experienced in the US. You saw for the year, the Burger King US business had north of 5% same store sales growth, we crossed the $1.3 million ARS mark .You remember just a few years ago, we were at 1.1 million, franchisees are making a lot more money in reinvesting – we’re all reinvesting in the business as well, having reached the 50% mark and 2016 is already off to a good start and we haven’t launched the Grilled Dogs yet which we’re all excited about. It was probably the largest market test that we’ve done since we’ve been here, had really exciting results. I personally visited the test market to confirm that the Grilled Dogs could be an operationally simple but pretty impactful product. And we’re all excited about it.

And our next question comes from Perry Caicco of CIBC World Markets.

Thank you. Your major competitors have been five months now with all-day breakfast. I wondered if you have seen any impact on your launch business from that program and how do you feel about something like all-day breakfast in your system?

Hi Perry, it’s Daniel. As a breakfast, we don't comment on specific competitors but across both brands, we think we’re doing the right things. Burger King, Tim Hortons, both brands enjoyed same store sales growth of 5% -- north of 5% in 2015. I think what’s important is we have a strategy at each brand and irrespective of the competitive environment we’ve stuck that strategy. So on the Tim’s front, we’re focused on further solidifying our strength in the lunch daypart, continuing to grow our breakfast business, growing our coffee business. We continue to see strength in the dark roast blend that we had launched over a year ago continuing to ensure that our guests are getting a great experience all day at Tim’s. On the Burger King front, the strategy has been the same since we acquired the business back in 2011, focused on running great restaurants, operations, investing in the restaurants, remodelling, marketing -- new and innovative marketing really connecting with our guests and launching fewer impactful products, and really none of that changes regardless of the competitive environment, we still feel like we have quite a long ways to go on both the Burger King front and the Tim Hortons front with respect to sale per restaurant and the number of restaurants in all of our markets around the world.

And do you have a sense of the impact of low gas prices on your same store sales? I mean, how much impact if it’s had in the business, are there any franchise regions where it’s had more or less impact?

That’s something that’s tough for us to quantify. Lower prices is obviously something that’s helpful but it’s tough for us to quantify. And I’d say we need to grow our topline and our franchisees’ profitability regardless of gas prices.

And our next question comes from Keith Siegner of UBS.

Just two quick questions from me. The first one, it’s been 15 months since acquisition and if we think back to, to that time I think we talked about – Josh, you had mentioned something in the neighborhood of 18 months to completely integrate or to get the business close to potential. Just wondering does that still stand -- easy integration for the most part done, is there really much left to go, how do we stand against that original kind of 18 month outlook?

Keith, it’s Daniel. I think when you think about potential in integration, the biggest driver of this merger acquisition from the get-go was growth. And we don't feel like we’re anywhere near the potential of unlocking that growth, as Josh mentioned, we’re just starting to sign up a handful of these Tim Hortons US development agreements which we’re really excited about because we’re going to accelerate the pace of Tim’s and the largest quick service restaurant market in the world where the brand is already doing well but obviously has a small presence. We’ve made some good progress on the Tim’s international front but we still have to move, moving faster there and we’d already doubled the pace and the number of restaurants on Tim’s international and we look forward to announcing more good things at the international front in the months and years to come. But when you think about the potential and integration, at the end of the day, what’s going to drive for the long term for our franchisees, for our guests, our shareholders is growth. It’s growth in the restaurant count, growth in the sale per restaurant and we’re nowhere near the potential, I don’t know, of 18 months, we’re in this for the long run. So we have quite a ways to go on the growth front.

I meant less on the growth than the other stuff, but we can move on to the other question which was -- we've seen mobile order and payment solutions finding tremendous success for some of the coffee players. Some other coffee players have been a little bit, say, slow to the introduction, but when you think about the Tim Hortons business, particularly as it relates to Canada but also now with this expansion in the US accelerating, where do we stand on kind of that digital integration for Tim Hortons? And maybe what's the opportunity? What might we see in the next 12 months?

Keith, we share your view on the potential of digital and it’s becoming an increasingly large priority here. I am not sure if you saw in the fourth quarter or maybe end of the third quarter of last year, we hired a startup in New York and we brought on a team of top talented engineers that are going to help us to develop our digital platform across both brands. And Tim’s Canada is a major priority and we do think that we could help drive that ultimate guest experienced by improving the ability to get great service via mobile, via digital, via prepay. So lots of good things to come, definitely a top priority and major focus of ours and we’ve made a significant investment to bring in top talented engineers to help build this out and we look forward to updating you in the months to come.

And our next question comes from David Hartley of Credit Suisse.

Hi, I was just wondering if you could talk to me a little bit about property equipment franchise costs, a line item you saw significant cost savings there, and if you can itemize anything for us?

Are you referring to the Burger King or to the Tim Hortons business?

Both, but probably more on Tim Horton’s please.

On the franchisee property margins? There is some amount of improvement in the reduction in capital intensity that you will see. And there's also some changes -- if you're looking year on year in the quarter just due to the timing of renovations. So the amount of renovations that you see in the quarter will impact the amount of equipment revenue and that adds a little bit different margin, so you can see some amount of variation, if you’re looking at the percentage margin, but I am happy to follow up and we can help you understand that a little better as a follow-up if you like.

Sure, that will be great. And just thinking about Tim Hortons in Canada, and the market-share in lunch you guys have been thinking on the door of overtaking the market leader previously. Just wanted to know if you can update us there and in terms of where you are with market share in lunch now in Canada, if you’ve kind of topped your competitor.

David, this is Dan. I am not sure if we disclosed that, I can check. We’re definitely pleased with the pace of growth in Tim Hortons Canada breakfast, lunch, snack, beverage across day-parts of our products. The Grilled Wraps launch obviously helped us a lot, it’s something that our guests told us they really enjoyed the Grilled Wraps and further helps us – kind of solidified our strengths at lunch which as you know is and will continue to be a priority for us.

And finally, just on the dividends. We've had four consecutive quarters, I believe, of increases. Is that how you're kind of going to structure dividend increases over time on a sequential quarterly basis or would you look to back-end that at the end of the year, if you're looking to make a change in your dividend policy?

David, it’s Josh. As you’ve seen over time we try to have a very balanced capital allocation strategy and I think the base that we laid out for 2015 really evidences that where we allocate capital across debt repayments and returns of capital to our shareholders. And we will look to continue to do that going forward, and that’s something that we will review every quarter and our board will evaluate it on an ongoing basis.

And our next question comes from Will Slabaugh of Stephens.

Thanks Josh, wanted to ask about Burger King strategy in the US in particular. It seems like, over a multi-year period, that story has gone from very focused 18 to 35 year old male before you guys came in. Post the acquisition, a much broader approach, as you tried to broaden that guest base. And now it seems like with the value focus that you're becoming a little bit more targeted with your offerings and message? I wanted to see if you would agree with that statement, and then maybe offer a little more color there?

Hi, it’s Daniel. I’d say the marketing approach and overall strategy in Burger King US has been consistent over the past two years. Our guest base is everyone, it’s folks who are young, folks who are older. It’s not targeted at any particular demographic or age group, it’s broad. We operate over 7000 restaurants and convenience is one of the most important factors for our guests. We really try to have a balanced approach, so you look at things like Chicken Fries this quarter, A1 Halloween Whopper that we had launched as well on the premium side, we have the 2 for $5 which is good value. We have a value menu. So we really -- there's no silver bullet, it’s providing value and providing great food for all of our guests at a variety of price points, innovating and bringing fun interesting food for our guests and delivering that great guest experience. There is no silver bullet. When you look at really what’s driven the success of the Burger King business in the US, going from the kind of low 1 million to 1.3 million and driving significant increases in our franchisees’ profitability, it’s been all four pillars – reimaging our restaurants, running better restaurants, focusing on operations, good innovation, operationally simple but impactful product. So there’s really – there is no silver bullet and there's no specific group we’re targeting where we try to deliver a great guest experience for all of our guests.

If I could ask one quick follow-up on the restructuring costs that we saw at Tim's this quarter. Josh, can you give us a little color on what those were? And now that we're a year into the acquisition, or a little more than that, I'm just curious what these are exactly and how long we should expect these to continue?

Thanks, Will. They’re primarily composed of severance costs and professional fees and I expect them to come down quite materially as we come forward.

Your next question comes from David Palmer of RBC Capital.

Hi, everyone. This is Eric Gonzalez in for Dave Palmer. Just real quick on re-imaging. Now that you've crossed the 50% mark at Burger King US, can you share with us some performance metrics, such as average cost and sales uplift on the program, and then maybe comment on what the pace of re-imaging looks like going forward?

Hey Eric, it’s Daniel. The average cost and sales uplift for the BK US re-imaging, they haven't changed materially from what we've reported in the past -- and nor do we think that 50% is the end state where obviously this is an ever evolving focus and we’re always focused on improving our restaurants. And we made great progress having gone from about one in 10 restaurants to being reimaged to now one in two restaurants, and now it's our job together with our franchisees to further reinvest in the brand and the business and continue growing that percentage of restaurants that are on the modern image. I think anytime you see restaurants that are getting renovated, enable us to deliver a better guest experience and keeps our guests coming back more often which is our ultimate goal here, which is driving the best guest experience and – so that’s going to continue being a priority into the foreseeable future for us.

And our next question comes from Karen Holthouse of Goldman Sachs.

You called out that there's been some macro concerns in Russia, maybe a little bit slower unit growth there. Are there any other parts of the world that are just sort of on your radar screen, where you are also concerned about any growing macro risks and/or franchisees just having access to capital, if you're ending it, if franchisees are starting to run into just liquidity funding problems?

Hi Karen, it’s Josh. Thanks for the question. I think as we look around the world, we did want to call out Russia as it was an important part of bridge from NRG in 2014 to 2015. What I would say is that as we look around the rest of the world, obviously there was a lot of macro volatility in 2015. But I'm really pleased that, despite that if you look at our other big markets or our other big growth markets, look at places like China, as Dan mentioned on the call, we actually had a very positive performance in China in 2015. We continue to grow our restaurant base quite rapidly, hit a big milestone in terms of the number of restaurants we have there, grew our same store sales and grew our level of profitability at the restaurants. We made a lot of progress in India as we got started there. I think we’re really happy with the start-up of India and despite some of the macro volatility in Brazil we had a really good year in Brazil, continued to grow over 100 restaurants and also the sales and profitability of our venture in Brazil were very positive in 2015. So I would say, as we look back at the year, despite a lot of macro volatility we were quite pleased with the performance of a lot of our large markets.

And our next question comes from Joseph Buckley of Bank of America.

A couple of questions. Could you put the Quick acquisition in perspective for us? How many restaurants did you end up acquiring, and are those company operated or franchised today, and how fast you'll convert them?

Joe, it’s Josh. So Quick has about 500 restaurants and of those, 400 are in France. There is a mix of franchised and company operated restaurants. And what we said is we expect to, to convert the majority of the restaurants over time. We don’t have a specific timeline that we’ve outlined. But we do have a plan to convert the majority of those and we’re working very hard to do so as quickly as possible.

Josh, it’s Dan, just to chime in, we have been incredibly strong partner in France who in addition to converting Quick restaurants for many years, is also abruptly building Burger King restaurants -- continue to build Greenfield Burger King restaurants and we just continue to be impressed at the sales per restaurant that we’ve seen in France as Josh mentioned, having $5 million per sales restaurants which is a really testament to the quality and strength of the local partner who we have running our business there.

Some of the new master franchise agreements you mentioned, like Tim Hortons in Columbus, and for Burger King, Germany and Spain. These are kind of established markets where you had existing franchisees. How does that work? Do you roll them up with this master franchise agreement, or is the master franchise agreement for new restaurants with the existing ones operating the way they always have?

Yes, Joe, let me address Spain and Germany separately from the Tim Hortons US agreements. So in the case of Spain and Germany the new master franchise joint venture agreements are with existing established franchisees in each of those markets. And the agreements are to take those existing markets and to accelerate the pace of growth in those markets, necessarily to roll up the markets but to establish new entities that would go out and develop those new restaurants in the market at a more rapid pace. So the idea is to be able to grow faster in what we view as solid market but markets where we think the brand can be much larger than it is today. And so that’s the goal of the new agreements in Spain and Germany. It’s a little bit different from what we’re doing in places like Cincinnati and Indianapolis with Tim’s where those are markets that while they’re adjacent to existing markets where we have Tim Hortons restaurants, we don't really have a material presence in either of those DMAs. So we're signing up new area development agreements with the partners that we’ve set up these agreements with and they're going to go in and execute on accelerated development agreements in those markets to build out a presence at scale so that we can develop the brand in those markets really from a base of more or less no present today.

And in Columbus? Because that was one of the older, more established Tim's US markets?

Yes, Columbus is one where we already had a presence and the new partner is going to go in and build that out further or two even more efficient scale.

And in effect for these master franchise joint venture agreements, does it increase the capital that RBI would be putting into these markets?

No, we’re not putting capital into any of these agreements. End of Q&A

This concludes the question and answer session. I’d like to turn the conference back over to Daniel Schwartz for any closing remarks.

Thanks, Rocco and just want to thank everybody for taking the time to join us today. As we said earlier, we couldn’t have asked for a better first year for Restaurant Brands International and for the performance at both of our Tim Hortons and Burger King brands and we look forward to updating you on progress next quarter. Bye bye.

Thank you sir. Today’s conference has now concluded. And we thank you all for attending today’s presentation. You may now disconnect your lines, and have a wonderful day.