Good morning and welcome to the Restaurant Brands International Third Quarter 2015 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 Andrea John. Please go ahead..

Thank you, operator. Good morning everyone and welcome to Restaurant Brands International’s Earnings Call for the third quarter ended September 30, 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 that we 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 start on slide 3 with the agenda for today’s call. Daniel will discuss highlights at Restaurant Brands International for the third quarter.

He will then cover business strategy and performance at Tim Hortons and Burger King. Josh will then review financial results for the quarter and Daniel will share some concluding remarks before opening the call up for Q&A. And with that, I'll now turn the call over to Daniel..

first, it speaks our commitment to expand Tim’s presence in the U.S.; and second, it highlights the franchisee led expansion model intent to use in the U.S. to increase our pace of development. Let’s continue to slide 11 which shows our global restaurant footprint.

To grow our presence globally with Tim’s, we’ll continue to work with our existing partners as well as new partners to expand all around the world similar to how we’ve scaled our Burger King brand over the last few years. We look forward to sharing more news with you on this front in the coming quarters.

Turning to slide 12, we review the Tim Hortons KPIs by geographic market. We are very pleased to have achieved comparable sales growth in Canada of 5.4% and 4.3% in the U.S. this quarter particularly given the lapping of last year’s Dark Roast coffee launch.

Successful product introductions including the grilled breakfast and lunch wraps and the Creamy Chocolate Chill along with continued strength in Dark Roast contributed to favorable results this quarter. Net restaurant growth at Tim’s for the third quarter was 69.

Development was primarily driven by restaurant openings in Canada and we continue to identify priority markets with strong and local operators to grow our presence in the U.S. and internationally. On slide 14 we discuss our third quarter results at Burger King. We saw notable strength across all four of our geographic markets.

Comparable sales growth of 6.2% and 5.1% unit growth on a trailing 12 month basis led the system wide sales growth of 11.2% this quarter. Let’s spend some time discussing our strategic initiatives at Burger King.

Moving to slide 15, our four pillar strategy demonstrates our balance approach to menu, marketing, image and operations in the United States and Canada. We were again pleased with our balanced approach to menu and marketing.

Our 2 for $5 platform including our Extra Long Jalapeño Cheeseburger and Chicken Fries all contributed to our positive same-store sales. Our launch of Fiery Chicken Fries, a limited time offering this quarter, was consistent with our approach of introducing impactful yet operationally simple products as we strive to deliver great guest service.

Positive same-store sales enabled us to continue to grow our franchisee’s restaurant profitability.

Turning to slide 16, scaling our Burger King product globally continues to be a key focus for our international strategy and we’ve accelerated the pace of development over the last several years via the Master Franchise Joint Venture and development agreement model.

As of September 30, there were over 14,600 Burger King restaurants in approximately a 100 countries and territories and since the beginning of 2011, we’ve added over 2,000 restaurants creating tens of thousands of jobs along the way.

Although we recognize it will take time, we get really excited when comparing this math to the math back on slide 11 when we think about the potential for Tim Hortons around the world.

At Burger King, we accelerated net restaurant growth in key strategic markets where we operate and since the beginning of 2011, we’ve increased our restaurant count by more than 325 restaurants in China, 300 restaurants in Russia, 275 restaurants in Turkey, and over 350 restaurants in Brazil.

In addition to growing in the emerging markets, we remain excited about restaurant expansion in developed markets as well. A great example of our expansion in the developed markets is Burger King France’s proposed acquisition of Quick Group which was announced last month.

Under the proposed terms in the agreement, our Master Franchise Joint Venture would purchase Quick and convert restaurants in France to Burger King restaurants overtime. Josh will provide more details in this transformational deal later on the call.

Moving to slide 17, Burger King same-store sales growth was strong across all markets with US&C, EMEA, APAC and LAC reporting comparable sales growth of more than 5%. We are particularly pleased with the strong results in the U.S. With a slight lapping last year’s relaunch of Chicken Fries, we achieved same-store sales growth of 5.1%.

Comparable sales were also up by 7.3% in EMEA this quarter largely attributable to strength in Turkey, Russia and Spain. In APAC, our performance in the market was primarily driven by top line strength in China. And finally, our LAC comparable sales growth increased by 11.4% with good results in both Brazil and Mexico.

I’ll now turn it over to Josh to walk us through RBI’s financial results for the quarter..

Thanks, Daniel. Before getting into our financials this quarter, I wanted to take a moment to discuss Burger King’s history in France and the recently announced offer to acquire Quick Group by our Master Franchise Joint Venture, Burger King France.

After exiting the market in the 90s, Burger King re-entered France in 2013 through a massive franchise joint venture agreement forming Burger King France. As of September 30, 2015, we had 30 restaurants in France and by year-end we expect to have approximately 50 restaurants.

Our restaurant openings have been met by tremendous enthusiasm from our guests and have achieved AUVs of approximately 5 million euros, some of the highest in the world. The proposed transaction is a natural extension of our Master Franchise Joint Venture model.

In that we’re partnering with Groupe Bertrand who brings extensive local operating and financial resources to further accelerate the expansion of our brand and an exciting market where we feel there are significant growth opportunities for years to come.

Over time, BKF plans to convert restaurants in France to the Burger King brand under a similar economic model used in other markets around the world. Turning to slide 19 of the presentation, we continue to build on momentum from the first half of the year.

Third quarter RBI adjusted EBITDA of $441 million was up 23%, excluding the impact of FX versus the prior-year pro forma third quarter results, driven by strong organic adjusted EBITDA growth across both brands.

As Daniel mentioned earlier, the increase in adjusted EBITDA was driven by positive same-store sales growth and net restaurant growth combined with cost discipline at both brands. The ownership mindset we have brought to cost management has enabled us to concentrate on the most impactful initiatives that will create the most value over the long-term.

Adjusted net income for the third quarter was $163 million, which translates to adjusted diluted EPS of $0.34 per share. Moving to slide 20, we show major movements in our cash balance year-to-date. Our September year-to-date free cash flow of $831 million reflects growth in adjusted EBITDA and the change in CapEx.

We ended the quarter with $976 million in cash on our balance sheet. On slide 21, we lay out our capital structure. As of September 30, 2015 and on a pro forma LTM adjusted EBITDA basis, our net leverage of 4.9 times was down 0.6 turns year-to-date.

The reduction in net leverage over the first nine months of the year highlights our commitment to reduce our debt load over time. Year-to-date, we have produced strong financial results despite significant FX headwinds relative to the U.S. dollar.

Same-store sales growth has been consistently positive across both brands as a result of consistent and effective marketing strategies.

With the announcement of our first area development agreement at Tim Hortons since the creation of RBI and the proposed acquisition of Quick by BK France, we continue to build our restaurant pipeline for years to come, while demonstrating our commitment to a global franchisee-led expansion model.

Strong sales performance across our core markets and successful new store openings is driving significant growth in our franchisees’ profitability and is also impacting our bottom line allowing RBI to de-lever and pursue a balanced strategy of returning capital to shareholders.

As part of that strategy, on October 27, the RBI Board of Directors declared a dividend of $0.13 per share. I’ll now hand the call back over to Daniel for a summary of the quarter before taking questions..

Thanks, Josh. As you mentioned, our growth and profitability this year has set a strong foundation for our first year as Restaurant Brands International.

The strong results we have achieved are a result of our continued focus on the two most important drivers of this business, guest satisfaction and franchisee profitability and that’s what we plan to focus on for the long term.

I personally believe that we have the best employees and the best franchisees all around the world to enable us to generate sustainable value for all of our stakeholders. Thanks to everyone for joining us this morning and we’ll now open up the call for Q&A.

Operator?.

Thank you. We will now begin the question and answer session. [Operator Instructions] And our first question comes from Nicole Miller of Piper Jaffray. Please go ahead..

Good morning, thank you. Two quick ones, could you please discuss Burger King, North America and Tim Hortons, Canada comp in terms of price, mixed traffic, anything you can share, and then also how comp looked by day part or region? Thank you..

Hi Nicole, it’s Daniel. Thanks for the question. On the Burger King North America comp you’ve been following our business here for some time, obviously we’re pleased with the result.

They saw strength across multiple day parts and Burger King, and really as you know it’s really been driven by the four pillars the plan that we put in place that we’ve been discussing now for almost five years focused around menu, marketing, image, operations; the number of restaurants that have been remodeled has increased from around 10% in the system few years ago to close to 40% at the end of last year.

We’re running better restaurants, launching few or more impactful products, and having great new marketing innovative initiatives every quarter, and the combination all of those are enabling us to run better restaurants, deliver great guest experience, helping our owners earn stronger profits; and all those contributing to strong same store sales that we’re seeing on a Burger King brand across multiple day parts.

Then on the Tim’s front it’s actually, it’s quite similar, we’re running great restaurants, had a few big product launches this quarter, great execution of the AMPM grill lunch wraps. So this is a good example of launching a free impactful product that works across multiple day parts, really helping us build the already strong lunch business.

And we saw continued strength in our beverage business as well. Year ago, we launched the dark roast and that’s obviously continuing to perform quite.

Also the creamy chocolate chill did really well over the summer, and all these things together across both brands are enabling us to generate the strong same store sales, but at the end of the day it’s having great teams running great restaurants, which is encouraging our guests to come back more and more..

And this is kind of along the same lines, but meant to be kind of a different question, but with the results are phenomenal and so you are not seeding share to any legacy QSR player, where do you think you’re taking share from, is it smaller chains, independents or where people previously eating at-home are? Thank you..

Hi Nicole, it’s hard to say exactly.

We see the industry growing, we see ourselves growing and we’re growing a little bit faster and we’re just focused on delivering greater results for our guest, our franchisees and we don’t comment on our competition and our strategy doesn’t change regardless of how the industry is or isn’t performing, each and every quarter for the past five years we’ve talked about the four pillars at Burger King and at Tim’s.

We’re just focused on running great restaurants, delivering great guest experience, it’s hard to say where share comes from, but we’re just focused on running great restaurants every quarter..

Thank you. Congratulations..

Thanks a lot Nicole, appreciate it..

And our next question comes from Brian Bittner of Oppenheimer and Company. Please go ahead..

Good morning, thanks very much. I also have a question on the Burger King domestic side.

Your same-store sales have been great, trending much better than the industry for a while now, and as we kind of look forward over the next several quarters your comps do get a lot tougher and at the same time your largest competitor said their performance versus the industry has gotten much better, so how shall we think about the strategy going forward, I know you had a strategy in place, but how do we think about it going forward as you start to lap these comps with the competitor that’s maybe getting a little smarter, and how should we think about, how to think about the expectations for the same store sales as we go to the next three, four quarters?.

Hi, Brian, it is Josh. Thanks for the question. As Dan said, we’ve been really pleased with the execution of the Burger King business in the U.S.

and Canada throughout the course of this year and really it’s been execution across the same four pillars plan that we’ve been executing on over the last five years and it has produced really strong results throughout the year and in the quarter.

And I would tell you that based on what we’re seeing in the business we continue to be confident in the outlook for the remainder of the year and will plan to execute on the exact same strategy.

The same strategy of the four pillars plan across all of those different aspects of the business with few impactful products and you should just expect to see more of the same from us..

Okay.

And one more on the balance sheet, the $1 billion in cash, what is the cash balance that you feel most comfortable having on the balance sheet? Going forward on a sustainable basis and why not maybe pay down debt a little faster with all of that cash you have sitting there?.

Brian, it’s Josh again. So I would say we don’t have a target cash balance. As you’ve seen, we’ve allocated cash in a pretty balanced manner overtime. You saw us pay down some debt earlier in the year in connection with our refinancing in May and we’ve also allocated cash to a dividend and we saw – we just raised our dividend a little bit further.

So I think you should expect to see us continue to allocate cash in a balanced manner that will determine going forward..

All right, great. Congrats on a great quarter..

Thank you..

Thanks..

And our next question comes from Andrew Charles of Cowen and Company, please go ahead..

Great, thanks. I wanted to ask about Tim Hortons international Master Franchise agreement. As we think back to Burger King, Master Franchise JV was reached in Brazil less than a year if your 3G acquired the brand.

Is there already Burger King in operation in Brazil under several different franchisees but I’m curious what are the factors led to a faster undertaking Master Franchise agreements for the Burger King brand as we way in the international agreement for Tim Hortons? And then I have a follow-up question..

Hi, Andrew, thanks for the question. Yeah, I think actually for the quarter, we were really pleased to announce our first accelerated development agreement for Tim’s in Cincinnati where we are going to build over 150 restaurants over the next 10 years.

And I think that transaction should serve us a model that we hope to replicate in a lot of additional markets and allow us to really ramp up the pace of growth for Tim’s in the U.S. We are also obviously working on potential partnerships in many exciting markets outside of the U.S.

and Canada for Tim’s and we look forward to be able to update you on those potential partnerships in the coming quarters..

Okay. And it looks like six Tim Hortons stores opened in the GCC this quarter which year-to-date implies opening fewer stores for the first three quarters of 2014.

What are the factors just leading to the lack of a ramp in unit openings in 2015 in the GCC?.

I think we continue to be really happy with the GCC business. I think it’s been performing well and we’ve been working very closely with our partners there and we remain very confident in the full year outlook for growth and really in the long term outlook for growth in that business in the GCC..

Thanks..

And our next question comes from Will Slabaugh of Stephens Inc, please go ahead..

Thanks guys. I wonder if you could talk a little bit about the environment in some of your international emerging markets where much of your development is taking place.

It looks like both the comps and the unit growth are strong there but just given some of the volatility and GDP and then what some of your competitors have noted, I was curious if you see any change there in franchisee’s ability to either build their unit pipelines with an acceptable site or any other challenges that may have popped up you recently? Thanks..

Hey, Will, it’s Daniel. As you know, we put in place what we view as a quite strong Master Franchise Joint Venture model in some of the fastest growing emerging markets around the world and we’ve been really pleased with the success that this model has enabled us to achieve over the past few years.

Places like Brazil where we have a great local team, great local partner growing restaurants, growing same-store sales; China where we are really improving the business and is becoming one of the fastest growing markets for us in the world; and at Russia again despite some of the macro issues going on there, the business continues to achieve strong momentum to continue to develop restaurants and that’s really a function of having great partners on the ground in these places and capitalizing on what we view as a huge opportunity to increase the number of Burger King restaurants in these fast and important growing markets around the world.

In addition to this, I think one other comment to make that, one of our Master Franchise Joint Venture has actually made a quite a big move this quarter that Josh could talk a little bit to in France. So it’s a good example that Burger King is growing in these obviously fast growing emerging markets but also mature markets.

I don’t know if you want to share some of these in France this quarter..

Yes. I think it’s a good illustration of a broader point which is that we work very closely together with our partners in all of these markets and we’ve worked closely together with our partners in Brazil, Russia and China.

And I think that’s been a large component of why we continue to perform well despite some of the macro volatility that you’ve seen in those markets. But also we are performing well in some of the more developed markets in places like France, where we see a huge opportunity to grow the brand overtime.

France is an interesting example of a really attractive and very large quick service restaurant market where we had no presence as of a couple of years ago and we just re-entered the market very recently.

There was about 30 restaurants there in a market where some of our competitors have over 1,000 restaurants and it’s also been one of the markets where we’ve had some of the most successful restaurant openings that we’ve seen in the world where our average restaurant sales are around EUR5 million are the highest levels that we’ve seen.

So the quick transaction marks an opportunity for us to fully accelerate the plans that we had for growth there and we think to add even more units in that market.

And we also think it’s a really interesting example of partnering with our local joint venture partner and working on a transaction that we think can add a lot of value for our partners and for the Burger King brand.

So we are very excited about it and look forward to working together with them and with the Quick team towards the successful conclusion of that transaction..

Got it and just a quick follow-up if I could, I know you’re still busy with the Tim’s acquisition but the debt on your balance sheet is slowly coming down. I am just curious on any sort of time line you may have as far as being opened and looking at other acquisitions..

Yes. Thanks, Will. I think what’s really exciting about our business is that, we have two really fantastic brands and huge opportunities in front of us. I think even though we’ve been working with Burger King for about five years now, the size of the opportunity around the world is really enormous.

I think France is an interesting example of that where only such a tiny fraction of the potential in that market and I think that example repeats itself in so many markets around the world. And in Tim’s obviously we are just getting started. We just announced our first accelerated development agreement this quarter.

We see a lot of work ahead and a lot of opportunity. And so I think we are very happy with the two brands we have. We see years of growth and years of value creation ahead of us, and have no interest at this point in thinking about any other M&A..

Thanks, Josh..

Thank you..

And our next question comes from John Glass of Morgan Stanley, please go ahead..

Thanks. Good morning. Could I just first follow-up on the two deals that you announced this quarter or your franchisees announced.

You say on quick similar economics versus other deals, so what is that mean exactly? Does it require capital commitment on your part since you’re a joint venture partner or is it entirely theirs? Do you get the royalties immediately when they convert or if you alter the agreement because there is such a large transaction? Can you come about that first and then I have a question about the U.S.

Tim’s deal..

Yes. Thanks, John. So with respect to the two specific questions, similar to other Master Franchise Joint Venture transactions, we are not putting in capital and as is the case with most of our franchise restaurant arrangements. We will receive royalties on Burger King restaurants once they are converted..

Okay. And then on the Tim’s transaction, can you talk a little bit about the structure of that deal? Could you sense you’re willing to – who the partner is, is it exclusive, how you plan and going about this in the future, would others maybe get territory rights if either milestones don’t get matter just in general.

And I don’t - sneaking in a third but also your CapEx this year is only $80 million year-to-date, you’ve talked about $180 million, is $180 million the right number and is back end loaded or is it going to be lower? Thanks..

Yes, John. So on the Cincinnati deal I think there are couple of characteristics that we look at in that transaction that we look to replicate across other transactions.

And the real keys there are, one, there is significant upfront capital that’s committed to ensure that we have the resources that are needed to deliver on the development agreement and that’s a characteristic that you’ve seen across our Burger King development deals and it’s one that we’ll seek to replicate in our Tim Hortons deals.

You also see a pretty aggressive development plan. We view it as one of the critical elements to success that we need to achieve at certain level of density and assume that across our Tim Hortons markets in Canada and in the U.S.

And so we’re going to seek to achieve certain level of density that will allow us to be successful, our franchise partners to be very profitable. And you will see territorial rights, so our partners who commit to developing in an aggressive manner have the right to oversee the development in that area.

So those are the really critical elements of the transactions that I think are common with the models that we’ve seen in Burger King and you should expect to see us replicate in other transactions going forward.

On your CapEx question, I think the $180 million you referenced was our estimate at the beginning of the year, that was our disclosure and we don’t have any updates we’re not going to update that at this point..

Okay. Thank you..

And our next question comes from Karen Holthouse of Goldman Sachs, please go ahead..

Hi guys, thank you for taking the question, congratulations on another strong comp quarter.

I have a question about also international development and going back to some of the original agreements that were signed, where my understanding has been that they came with some pretty significant upfront unit growth commitments, three or four years or at least three years since then, I’m curious what sort of progress has been made against those original unit commitments or how much of the pipeline, the committed pipeline is left?.

Hi, Karen, it’s Daniel. We are obviously very pleased with the model that we took in Burger King several years ago when we put these great joint ventures in place, in places like Brazil, Russia, China.

As Josh mentioned, since then we’ve actually struck new agreements in places like France, Italy, Poland; so while we’re pleased with the results from some of these existing joint ventures in the coming quarters and coming years, we’re going to see the restaurant development ramp up from these other countries.

Actually, in most of the cases, if you go back we’re outperforming what we thought we would achieve and we look at the restaurant pipelines that some of these bigger joint ventures have, the pipeline for the rest of this year, the pipeline for next year, the pipeline for years after, they remain quite robust and the relationship that we have with our partners all around the world remain strong, the returns on capital developing new Burger King units remain quite strong as well.

So, the combination of successful partnerships, well-capitalized joint ventures, great returns on their capital and just very positive momentum in performance with the brand gives us confidence that we’ll be able to come continue growing the pace of the Burger King brand around the world.

And equally exciting is the prospects of bringing the same development model to Tim Hortons and you saw that the two maps that we put in our presentation, there’s so much opportunity in the world for us to be developing at Tim Hortons.

And if you go back just a few years, if you look at the pace of growth at Burger King back in 2010 when we had acquired the brand, it was actually similar to where Tim’s was last year and obviously it takes some time and a whole lot of hard work and great partnerships, but last year we crossed 700 restaurants on Burger King.

So, if you look at that outlook for Tim Hortons, we really see a great opportunity to develop Tim’s brand all around the world..

Thank you..

Thanks, Karen..

And our next question comes from Jeffrey Bernstein of Barclays, please go ahead..

Great, thank you. Two questions, just one, you mentioned in your prepared remarks focus on the franchisee profitability, just wondering if you could talk maybe a little bit about maybe specifically the U.S. Burger King franchisees, [indiscernible] there is increasing pressures primarily related to labor.

I’m just wondering when you talk to these franchisees what’s your suggestion in terms of pricing or price increases I should say to mitigate it or maybe you’re hearing from the franchisees that the sales have been relatively strong and therefore they’re perhaps more comfortable lagging on price and maybe better supporting value, just wondering how those conversations are going as we’re hearing some franchisees are under increased pressure and then I have a follow-up..

Yeah. Hi Jeff, it’s Daniel. Thanks for the question.

We have two big goals here, which are delivering great guest experience and growing our guest satisfaction and growing our franchise owner profitability and pleased to report we’re executing well on both of those fronts and we view the best way of growing owner profitability is growing sales, and you’ve seen from the results we’ve done just that and franchise profitability in Burger King North America is up quite substantially year-to-date, year-on-year to high levels and we’re really pleased with the results.

We’re pleased with how we are performing and it’s obviously, it’s a balanced approach right? We have premium products, we have value products, we have core products, we reinvest in the restaurants, so there is no silver bullet, but we view the best way of growing franchise profitability as growing our top line and there’s always input pressures sometimes commodities, sometimes wages, but the way to offset that is to deliver great guest experience and grow our sales..

Got it. And then just as a follow-up, in the Asia region you’ve mentioned a couple of times that China and Japan are seeing strong comps.

I think you mentioned China was actually outsized comps, I’m wondering would you view part of that strength just due to the lapping maybe weaker comparison from the year ago that some of your peers are talking about or if you can provide some maybe directional color or sequential trends because it does seem like those are industries or those are segments, geographies that are really seeing challenges from some of your competitors..

Year sure, Jeff I probably talked to China, which is a very important and growing market for us. We put a Master Franchise Joint Venture agreement in place there and we have incredibly strong partners. We’ve grown our scale there significantly over the past few years. We’re quite small and we’re opening up a significant number of restaurants.

I think you saw in the presentation, we mentioned how many we had opened. We’re running 400 restaurants in China.

We are opening up more restaurants, opening up better restaurants, better locations, have a balanced approach to our menu and our marketing and really having great partners on the ground, running great restaurants is enabling us to grow our same-store sales albeit off a small base still, but very excited, I was actually there just last week touring restaurants and I liked what I saw..

Thank you..

And our next question comes from Perry Caicco of CIBC World Markets, please go ahead..

Yeah, thanks.

Just a couple of questions specific to Tim Hortons Canada, any sense what the long-term outlook is for the restaurant growth in Canada for Tim Hortons and the role of traditional and non-traditional units?.

Yeah, thanks for the question Perry. It’s Daniel. Actually if you see the pace of growth in Canada, it’s still growing at quite a healthy pace and despite the penetration and the strength that the Tim’s brand enjoys in our home market, we view this as still a pretty big opportunity for many years to come.

We’re not going to quantify it, but we don’t see ourselves slowing down anytime soon..

And it’s non-traditional as much of an opportunity as traditional?.

Both, both..

And my second question is do you think the SG&A line at Tim Hortons Canada is pretty much hit its run rate?.

Yeah, thanks Perry, it’s Josh. I would say stepping back we’ve been really pleased with the progress that the team has made at Tim’s and implementing our ownership mindset to costs really across the business and I think you see that in the results.

I think you really see that across the business though, you see that on the top line where the team has done a really great job driving sales. You see that in the restaurant growth, which has been strong year-to-date, you see that in our franchisees’ profitability, which is at historical highs and you see that in our profitability.

So, I think overall we’ve been pleased with the ownership mindset that’s been evidenced across the business and that comes through in all the lines with the business including SG&A..

Okay. Thanks..

Thanks, Perry..

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

Yeah, thank you very much, just two questions here. On Tim Hortons, the plan to expand the business outside of Canada was I believe to be focused more in the U.S.

and it was international lease initially, have I got that correct? Is that still the case or maybe you can give some color on that?.

Yeah, David I would tell you that our focus on growing Tim’s as you said was really outside of Canada, it’s one of the biggest opportunities that we saw in creating RBI, but I would say it’s really in the U.S.

and everywhere else around the world and we’re pursuing both of those opportunities aggressively in parallel, so I don’t think any, either one of the opportunities kind of comes before the other.

It happens to be the case that we signed up our first transaction Cincinnati this quarter and we’re very excited about that, but at the same time we’re pursuing a lot of the really exciting opportunities in a number of other countries around the world and we hope to have more to share with you on those opportunities as well on the coming quarters..

Okay.

And just on the pace of growth when we think about Burger King and I think about Tim Horton units, I think someone was trying to get out the pace of the growth over the next couple of years, I understand the pipeline is still robust, but in terms of numbers or percentages on your existing store count, I mean do you see that continuing, do you see that growing falling back and then where do you see Tim Hortons filling up the gap, if it is falling back, do you expect a steady growth rate there? I know I’m asking for a lot, but is there any kind of cadence color outlook that you can give us?.

Yes. Obviously we don’t give guidance, what I can say is that we’re really pleased with the progress we’ve made at Burger King. As Dan said, we went from just around 170 net new restaurants a year to now over 700.

And I think we have a number of new master franchise joint ventures in places like France, Southern Eastern Europe, and India that are just beginning to ramp up their growth. So, I think we see even more exciting prospects for the Burger King brand going forward. And at Tim’s we’re just getting started.

Even though we are already seeing a very positive pace of net restaurant growth for Tim’s we see even more opportunity and we think we’re just at the beginning. So, I think our goal over time will be to ramp up pretty aggressively the pace of growth at Tim’s..

Thank you..

And our next question comes from Joe Buckley of Bank of America. Please go ahead..

Thank you.

Quick question, the Tim Hortons deal that was announced, obviously in Cincinnati is continuing to areas where Tim’s has been already expanding in U.S., is that going to be the game plan over the next couple of years or do you think you will be broader geographically in the U.S.?.

Hi Joe, thanks for the question. Yes, I think what you can expect from us over at least the near to medium term is that we’ll look to build out density in the markets where we’re present, as well as expended aggressively into new markets that are generally contiguous with the markets that we’re already present in.

So, in general that’s likely to be the strategy that you will see from us in the near-term..

Okay.

And then on the quick deal, could you share some of the factual size elements of the deal, how many restaurants they have, how many of those restaurants will be converted to Burger King and whether they’re all in France or to any spillovers into other European markets?.

Yes, so Joe there are about 400 restaurants in France and we expect to convert the majority of those over time, assuming that the deal is closed as its proposed..

Okay, that’s helpful. Thank you..

Thank you..

And our final question today comes from Keith Siegner of UBS. Please go ahead..

Thank you much.

Josh, the Burger King North America business got to that 40% current image very quickly post your acquisition and using some pretty innovative and creative ways, but we haven’t really got an update on that, what is, are you happy with that status at 40%, is this pace still continuing, is the pace slowing, how do we think about system investments continue along that path, slower, fast or same rate?.

Hi Keith it’s Daniel, I know you asked for Josh, but I’ll take this one. We’re excited to take the modern image on the Burger King brand from about 10%, 9% or 10% few years ago to 40% and it doesn’t stop there.

We need to continue to reimage, we’re going to give you an update at the end of the year on that front and it’s not going to, we’re going to give an update then and it’s not going to stop there either.

We’re going to continue to reimage, our franchise owners are excited about the Burger King brand, reinvesting in Burger King business, and one of the ways for us to deliver a great experience for our guest is to deliver in a modern and friendly and incredibly strong restaurant.

So that’s something that’s obviously what we’re always focused on and we’re not stopping now and we look forward to updating you on that in a few months..

Okay thanks.

And then just a quick one on Tim Morton’s distribution business, when you first took over the business we heard a lot about some transition, different markets using third parties and some adjustments that were being made or at least looked into, what have you done lately with that business, has there been any change do you have any new thoughts on the distribution business? Thanks..

Yes, Keith as you mentioned we have some markets where third parties deliver the goods to the restaurants and we have some markets where we, RBI Tim Mortons, where we deliver the goods to the restaurants and we view our goal, our strategy here is to make sure we’re always having optimum service to the restaurants and we don’t have any plans to change the method by which we deliver goods, so some markets are company supported, some markets are third-party and there’s no plans to change that..

Okay thank you..

And this concludes our question-and-answer session. And I would like to turn the conference back over to Daniel Schwartz for any closing remarks..

Thanks. And thanks for everybody for taking the time to join us today. We’re obviously really excited about the results so far and all the future prospects for these great brands.

We’re 100% focused on continuing to deliver great guest satisfaction and growing our franchise on a profitability and we look forward to updating everybody on our full-year results early next year. Thanks..

And thank you sir. The 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..