Good morning and welcome to the Restaurant Brands International First Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Chris Brigleb, RBI’s Head of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone and welcome to Restaurant Brands International’s earnings call for the first quarter ended March 31, 2020. As a reminder, a live broadcast of this call maybe accessed through the Investor Relations webpage at investor.rbi.com and a recording will be available for replay. Joining me on the call today are Restaurant Brands International’s CEO, José Cil; COO, Josh Kobza; and CFO, Matt Dunnigan.Today’s earnings call contains forward-looking statements, which are subject to various risks set forth in the press release issued this morning and in our SEC filings. In addition, this earnings call includes non-GAAP financial measures. Reconciliations of non-GAAP financial measures are included in the press release available on our website.Let’s quickly review the agenda for today’s call. José will start with some opening remarks on our company’s response to the ongoing COVID-19 pandemic. He will then discuss our results for the first quarter and provide detail around our performance at Tim Hortons, Burger King and Popeyes. Josh will then provide an update on technology at RBI. And to conclude, Matt will review our financial results before opening the call up for Q&A.I would now like to turn the call over to José. José Cil: Thanks, Chris and good morning everyone. Thank you for joining us on today’s call. I hope you and your families are doing well and staying safe. I would like to start today’s call by thanking the hundreds of thousands of people that have been working behind the scenes and on the frontline to ensure that we are continuing to serve our guests and communities in every way that we can during this time of need. Our business partners, our franchisees, our team members, our employees, our suppliers, everyone has been working together around the clock and has been doing…

Thanks, José. And good morning everyone. In many ways the COVID crisis has accelerated some of the behaviour change that we have had already seen building. Social distancing has forced consumers to quickly change their behaviour and adopt solutions with a new threshold for our convenience. For us, this has been a critical movement to leverage the infrastructure we have building for years to move quickly to adapt our platforms in response to our guests rapidly evolving needs and we have seen some pretty remarkable progress in just a short period of time. Especially in three key areas. The first is delivery. From a base of just a couple of hundred restaurants in North America on delivery two years ago, we now have well over 9,000 active restaurants across our three brands with most offering delivery via our own digital platforms as well as multiple aggregators.At Tim’s in Canada, we have brought nearly 800 additional restaurants online with delivery in just two months. And have seen overall delivery sales grow by more than 6x versus their pre crisis levels. And our Burger Kind and Popeyes, our delivery sales are up more than 3x versus the same time last year. As we expand locations and average sales per restaurant. Much of this is driven by delivery through our own mobile apps, which now represent around 20% of our total delivery sales for Burger King and Popeyes. The second area focused for us is our mobile app guest experience across all three of our mobile apps in the home markets. Where we have made significant strides to incorporate guest feedback and enhance our user experience. This has led to improvements in our app store ratings, industry leading download growth during the quarter and has also resulted in very significant improvement in terms…

Thanks, Josh. My comments today, I will take you through an overview of our results for the first quarter as well as some important steps we have taken to further enhance the strength of our balance sheet in light of the uncertainty surrounding COVID-19.In the first quarter, system-wide sales performance across each of our brands led to consolidated adjusted EBITDA of $444 million, down 9.6% organically year-over-year reflecting the impact of COVID on our results throughout the quarter, first in Asia then later in other regions around the world. Our performance this quarter also reflected ad fund expenses exceeding revenues by nearly $20 million more than they did in the first quarter of last year, resulting in an impact of approximately negative 4% to our consolidated organic adjusted EBITDA growth rate.We have mentioned in the past that in some quarters, there maybe a mismatch in the timing of revenues and expenses, but that in the long run we have managed these ad funds so that total revenues equal expenses. In this quarter, the sudden decline in sales that resulted from the spread of COVID-19 led to an especially pronounced mismatch, which we expect should normalize over time. As José mentioned earlier, we also suspended base rent for several thousand properties in Canada and the U.S. and realized the one-time expense related to the write-off of coffee cups that were intended for us in our Roll Up the Rim program. Taking together, these two items reduced our adjusted EBITDA growth rate by about 2%.Now, moving on to segment level performance, at Tim Hortons, our first quarter adjusted EBITDA was $189 million, which represents a decrease of about 19% on an organic basis. This decrease was driven primarily by a 9.9% decrease in system-wide sales, which included a 10.3% decrease in global…

Thank you. [Operator Instructions] Today’s first question comes from Dennis Geiger with UBS. Please go ahead.

Good morning, guys. Hope all is well. Thanks for the question. José, thanks for all the insights on the recent trends and the franchisee help. I was just wondering if you could talk a bit more about unit developments given some of the near-term choppiness across the industry, maybe kind of the way you are thinking about longer term store development, if that long-term outlook that you folks framed is still applicable? And I know you mentioned kind of confidence in getting back to where you left off with growth in the brands as well as I think the large well-capitalized international franchises that you partner with. So, maybe you could just discuss some of the puts and takes as you think about longer term store development? Thank you. José Cil: Hey, Dennis. Thanks for the question and hope you are doing well and staying safe. Yes, look, I think in the short-term, we are going to see an impact in net restaurant growth. And I think in terms of future years, it’s too early to say exactly what the path is going to look like, but we have amazing restaurant brands as we have said time and time again and has been evidenced by the growth over the last many years. We have amazing franchise partners all around the globe, master franchisees as well as smaller operators in North America, all working hard and investing well in their businesses and we have seen in different markets, I think it’s going to be varied by region and it’s going to be varied by country as markets reopen as businesses get back to normal as consumers get back to normal behaviors and we think there is an opportunity down the road just with real estate and with our well capitalized partners to be able to get back on track from a development stand point. I was in Europe with Burger King back in 2010 about 10 years ago a kind of at the height of the economic crisis and these were some of the best years we had with in Western Europe with many of our developing partners because there was a tremendous opportunities, the resilience of our business and our brands the strength of our investment model and returns on capital as well as opportunities that exist from a real estate stand point so we feel very confident long term. In the short term we will continue to manage and walk through the current situation very closely with our partners market by market but we are continuing to be very excited long term about the business. Thanks for the question.

And our next question today comes from Mark Petrie at CIBC. Please go ahead.

Hey good morning. Just wanted a follow-up on that question and specifically, with regards to the Canadian network at Tim’s we noted the net restaurant closures in Q1 and wondering if you could just give a little bit of color around that? José Cil: Thanks for the question. I think in Canada and throughout North America our business continues to whether the current situation in Q1. We tend to have closures that happen from time to time in mature markets and mature brands like we have with Tim’s and Burger King and Popeyes in North America so there was nothing specific to call out for Q1 from a closure standpoint.

And our next question today comes from Nicole Miller at Piper Sandler. Please go ahead.

Thank you so much. I know there is a lot to cover but I will just keep to one question so mine would be this, while there is a lot of near term disruption there is still lot of phenomenal brands out there and I would be very curious that perhaps some things become attractive. So as a silver lining potentially, what kind of opportunities are you seeing to expand the portfolio maybe not right now but maybe on horizon? Thank you. José Cil: Thanks Nicole. As we said in our comments our prepared remarks and we said time and time again over the last several weeks publicly we are focused right now on taking care of our guests, taking care of our restaurant teams in all of our restaurants, we have got tens of thousands of restaurants open, 75% of our restaurants are open in a very complicated situation so we are focused on safety, well-being, taking care of our guests we are working with our franchise owners to make sure that they have the proper liquidity to whether the current situation, we’re working with our communities as well giving back and making sure that we have that our brands are present in the communities that need us and we are continuing to work on the reopening plans all across the globe. We have an attractive model in long term will be exercising flexibility around what we do with our balance sheet but our focus right now is on today and the near term and making sure we get out of this in a stronger position than we entered. Thank you so much for the question.

Our next question today comes from John Glass of Morgan Stanley. Please go ahead.

Thanks and good morning. My question is on the Tim’s business model. Can you help us better understand in both the distribution business and then also the sub rent business for Tim’s, the fixed and variable costs, how much in the distribution business de-levers when you see sales decline like this and given that you are giving the franchises variable rents what proportion of the rents or other costs in that line item are fixed from your prospective so we can understand how that acts through this crisis? José Cil: Yes John. Thanks for the question. It is not here. I think as it relates to the distribution business that is generally driven by level of activity and traffic and volume in the country and as we’re vertically integrated pretty much throughout Canada so we continue to operate really at full steam across our supply chain capabilities and as volumes go down we do see a little bit of an impact on the fixed costs leverage but in general so far I have not seen a material impact to the margins in that business in the first quarter. And then as it relates to the property business, you are right, we – as part of our commitment to working with our partners and trying to create some flexibility and support on the liquidity side as we work through this situation in Canada, we temporarily suspended our base rents and we switched our rents over to fully variable so that rent expense would flex down the sales for our owners just like royalties have in this environment. And then on the expense side of that for us where we do have head leases across a number of properties in Canada, we generally have fixed contractual rents that we paid through the head lease. And so we have pointed out as part of that adjustment in the quarter. We did see an impact to our EBITDA related to that rent variable rent adjustment, which was about a point or two of the EBITDA growth impact. Thanks for the question.

And our next question today comes from David Palmer of Evercore ISI. Please go ahead.

Thanks and good morning. Question on Tim Hortons, I think coming into this year, there was a lot teed up, you had change in loyalty, coffee improvements, better marketing. And I think the concern is that the brand was trying to bend the trend and of course things are short-circuited by the crisis. So I am wondering how you are thinking about what Tim’s can do to drive improvement from here, how much has the game plan changed? And then in addition, I would imagine there is going to be an overlay of economic factors you are considering, it’s an oil market up there, how are you thinking about driving improvement beyond just the social distancing effect with the economic one? Thanks. José Cil: Hey, thanks, David. Appreciate the question. The first thing, we obviously had a clear plan that we were excited about the work we were doing coming into March with Tim Hortons in Canada, we had alignment with our restaurant owners on bringing the business back to basics focusing on coffee, on breakfast focusing on loyalty and then making improvement in our off-premise experience drive-thru in particular, but also going all-in to digital which has been a big part of our plan for the last couple of years.As we headed into the crisis in mid-March as I mentioned in response to Nicole’s question, that the real focus was safety of our teams and guests first, stability of our franchise base, second and then connecting with our communities and making sure that what Tim’s does best which is really act as a local kind of home for most of its guests all around the country so that we did that really well and that we communicated that we were there for Canadians during the most difficult of times.…

Our next question today comes from Brian Bittner with Oppenheimer & Company. Please go ahead.

Good morning. Thanks for taking the question. Again on Tim’s, another question here can you just clarify what percentage of Tim’s assets in Canada have drive troughs and just secondly when you said you expect Tim’s units on average to remain cash flow positive can you just clarify what you mean by that do you mean under the current sales trends you expect them to be cash flow positive and does that include the help from the government just additional color there would be helpful? Thank you. José Cil: Yes, Brian. Thanks for the question. We have about 60%, just under 65% of our restaurants in Canada have drive troughs it is about 2,500 out of the 4,000 and I will pass on to Matt the question on franchisee liquidity and cash flow that you asked as second question.

Yes. Hey, Brian thanks for the questions. It’s Matt here. I think as we look at this franchise profitability has decreased as expected with the sales decline but I think through a combination of both the initiatives that we have implemented as well as the government programs being made available in both Canada and the U.S. we are pretty confident that a vast majority of our franchisees have runway to manage through the crisis and on average remain cash flow positive on our side we as we mentioned we flexed trends to become more variable we also found ways to advance some additional cash into our systems including the Burger King liquidity program we talked about on the Tim’s side some advancement of retail profit sharing and then on top of that as I mentioned we have similarly thoughtful government programs in place that we think are very helpful and supporting our franchises through this situati9ons and we will offset some of the profitability and cash flow impact from the sales decline so I think through a combination of the things that we have implemented plus these programs we will continue to allow the systems in the U.S. and Canada that deal with the situation and remain in a reasonably healthy position. Thanks for the question.

Our next question comes from Sara Senatore with Bernstein. Please go ahead.

Thanks. I know obviously your focus right now is on the pandemic and recovery but I do want to ask about trends at Burger King U.S. prior to the outbreak in the U.S. which is basically the U.S. comp I think you said, was low single digits. But what we heard from other large limit service restaurants were more in the mid or even high single digit range in the sense of the whole industry seem to have really accelerated so I guess I am trying to understand why Burger King didn’t fully participate in that if you have a sense of where you might have loss share versus some of the other big competitors because they don’t think that the question is tougher compares were pretty easy so just trying to understand sort of longer term the prospects for Burger King in the U.S. just consider what we have seen in the last couple of quarters? Thanks. José Cil: Yes, hi, Sara. Thanks for the question. Coming into the crisis as I mentioned in my prepared remarks, we were kind of low single-digits with Burger King, slightly better, but roughly in line with what we saw in Q4. As I mentioned in my remarks in February, we were really confident with the long-term plans for Burger King with some of the investments we are making around Burger King of Tomorrow, some of the investments we are making on food quality and communicating that to our guests, the work we are doing on digital which has accelerated tremendously as Josh mentioned a few minutes ago has accelerated tremendously both in terms of delivery as well as in terms of the mobile app and downloads have jumped tremendously. So we are able now to connect directly with our guests and have…

Our next question comes from Peter Sklar with BMO Capital Markets. Please go ahead.

Thanks. Just with what’s – everyone sees what’s going on in the protein processing complex as a result of COVID-19 and with processing plants going down, particularly – well I guess it’s poultry, beef and pork plants have gone down. Have you seen any issues yet in terms of supply to your banners and what are your contingency plans, because obviously, there is going to be interruptions? José Cil: Yes. Peter thanks for the question. Yes, this is something we are very acutely aware of and monitoring on an hourly, daily basis, I have got updates with my team regularly on this topic. We haven’t seen any interruptions or disruptions to our supply chain in North America either on the beef, pork or poultry side. What gives – we are obviously working closely with the suppliers and our distribution partners as well to make sure we have all of our contingency plans in place. Some of that has to do with safety stock. Some of it has to do with the diversity of raw material suppliers as well as processors that we have, which gives us confidence that we can manage through any situation that’s out there. We haven’t – as I said we haven’t seen any issues in this near-term despite some of the headlines we have seen from others. Our supply chain is intact and working well, but we are monitoring closely and we will keep everyone posted if anything changes. Thanks so much for the question.

Ladies and gentlemen, this concludes the question-and-answer session. I would like to turn the conference back over to José Cil for any final remarks. José Cil: Thanks, everyone and thanks for your time today. The COVID-19 pandemic has obviously introduced a wide variety of challenges, but we feel we are well positioned and have the resources we need to come through this together with our franchisees across all three of our amazing and iconic brands. Over time, we have demonstrated our ability to grow in a wide variety of macroeconomic conditions and we believe the resilience of our business model will serve us well as we confront and ultimately emerge from the COVID-19 pandemic. Once we are safely on the other side of this crisis, we are confident we will pick right back up where we left off on our plans to grow our brands all over the world. Thanks again. Take care and stay safe.

Thank you. This concludes today’s conference call. You may now disconnect your lines and have a wonderful day.