Good morning, and welcome to the Restaurant Brands International Second Quarter 2016 Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Andrea John, Senior Director of Investor Relations. Please go ahead.
Thank you, operator. Good morning, everyone, and welcome to Restaurant Brands International's earnings call for the Q2 ended June 30, 2016. 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's CEO, Daniel Schwartz and CFO, Josh Koffa.
The team will be statements, which are subject to various risks set forth in the press release issued this morning. 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 with the agenda for today's call on Slide 2. Daniel will discuss highlights for the Q2 at Restaurant Brands International.
He will then review performance at Tim Hortons and Burger King. Josh will provide an update on development and discuss consolidated financial results for the quarter. Daniel will share some concluding remarks before opening the call up for Q and A. I'll now turn the call over to Daniel.
Thanks, Andrea, and good morning, everyone. Thanks for joining us today on the call. I'm pleased to update you on our performance during the Q2 at RBI. Our focus on providing a great guest experience for our guests and growing their global restaurant footprint at our 2 iconic brands, Tim Hortons and Burger King, has enabled us to achieve strong profitability growth in the period. This quarter, we reported adjusted EBITDA of $479,000,000 and adjusted diluted EPS of $0.41 per share.
Let's start on Slide 4. We achieved comparable sales growth at both brands this quarter, growing 2.7% at Tim's and 0.6% at BK despite a more challenging QSR environment. On the development front, we announced 2 development agreements in recent months at Tim Hortons, 1 in the Philippines and 1 in Minneapolis. We continue to be very excited about the prospects of bringing Tim Hortons restaurants to guests all around the world and look forward to opening our first restaurants in each of these exciting new markets. Compared to the prior year, our restaurant count across both brands grew by 3.8%, and we added 100 and 18 net new restaurants during the quarter.
Going into the second half of the year, we're working closely with our franchise partners to execute on a strong development pipeline and accelerate net restaurant growth compared to the prior year. Our comparable sales growth and net restaurant growth resulted in system wide sales growth of 4.8% at Tim Hortons and 5.9% at Burger King. Our continued growth in system sales along with cost discipline led to adjusted EBITDA of $479,000,000 which was up 16.2 percent organically compared to the prior year. We also achieved strong earnings growth with adjusted diluted EPS of $0.41 per share, up 38.3 percent versus the prior year. On Slide 6, we highlight the results for Tim Hortons.
During the quarter, same store sales grew by 2.7% and we increased our restaurant count by 3.3% year over year, adding 26 net new restaurants in the Q2. While the pace of net restaurant growth has been fairly constant as we transition to a franchisee led development model, we are very pleased with the new partnerships that we've begun to form across each of our markets and the outlook for our growth for the brand going forward. Favorable comparable sales growth and unit growth led to system wide sales growth of 4.8% in constant currency, leading to adjusted EBITDA for Tim's of $279,000,000 which grew by 24.1% organically versus the prior year period. Turning to Slide 7, we discuss Tim's results in Canada for the quarter. While we did see some increased competitive activity during the quarter, successful product launches such as the Chicken Bacon Ranch Wrap, the Potato Wedges and the Farmers Breakfast Wrap drove same store sales growth of 2.3%.
We were particularly pleased to have launched our new savory potato wedges and salads this quarter, offering our guests new side options for lunch. We believe this is a critical step toward further building our lunch business, which we view as one of our medium term opportunities for our Tim Hortons brand in Canada. On the development front, we grew restaurant count by 2.6% in the 2nd quarter, adding 25 net new restaurants. We increased our presence in our core urban areas as well as the rest of Canada and expanded our footprint through growth in both standard and non traditional restaurant formats. Moving to Slide 8.
Tim's comparable sales in the U. S. Grew by 5.9% with particular strength in coffee and cold beverages, including our new ice cap flavors, Oreo and Mocha. We also continue to grow sales during breakfast with our croissant breakfast sandwich. We're pleased with the continued strength in our Tim's business in the U.
S. With growth in our core products and categories, giving us further confidence in our focus on the market and our expansion strategy. This quarter, we announced the signing of our largest Tim's U. S. Development agreement to date in Minneapolis.
This marks the 4th area development agreement announced since the merger, along with agreements in Columbus, Cincinnati and Indianapolis. We're excited to be work with such great partners to expand Tim Hortons in the world's largest QSR market. Through these agreements, we will continue to accelerate the pace of development and bring Tim's to more places in the U. S. Than ever before.
Turning to Slide 9, we experienced some softness in the Tim's international comparable sales, primarily due to the impact of the timing of Ramenon versus the prior year period. We're pleased with our new product launches such as the steak panini, the steak wrap and the steak Philippines, which Josh will outline in greater detail on the call. Let's now turn to Slide 11 to discuss the results of Burger King. We achieved comparable sales growth of 0.6% and increased our restaurant count by 3.9% versus the prior year, adding 92 net new restaurants. System wide sales grew by 5.9% in constant currency and adjusted EBITDA of $200,000,000 grew by 6 point 5% year over year on an organic basis.
Turning to Slide 12, 2nd quarter results for the U. S. And Canada were softer during the quarter as we saw increased competitive activity and broader U. S. QSR industry softness.
We continue to launch fewer and more impactful products and maintain a balanced approach on menu and marketing. We achieved strong sales from grilled dogs and new product launches like the Mac and Cheetos, which we launched late in June, as well as from promotions such as the 2 for $10 Whopper meal. Mac and Cheetos actually became one of the most covered product launches in Burger King's history with $3,200,000,000 earned impressions, surpassing the previous record set by our launch of grilled dogs this past spring. Guests were also highly engaged with our Mac and Cheetos Snapchat filter and share their tasting experiences thousands of times across Instagram and other social media channels. While our sales results were slower for the quarter, we're very confident that we have the right strategy in place to grow the U.
S. Business for the long run. On Slide 13, comparable sales in EMEA grew by 0.8% in the quarter, led by strength in Russia and in Germany, and offset by K. And Italy. Net restaurant growth of 51 contributed to year on year restaurant growth of 6%.
Russia was a significant driver of restaurant growth in the quarter and now has more than 3 50 restaurants in the market. We also made good progress in Spain, where our new master franchise joint venture continues to develop from a very strong position in the market and in France, where we're opening very successful restaurants across the country. Going into the second half of the year, restaurant growth from our master franchise joint ventures as well as the conversions of quick restaurants to BK Stars in France give us confidence in our outlook for NRG and EMEA. Moving to slide 14, we had a strong quarter in APAC with comparable sales growth of 5.3%. Comparable sales growth was mainly driven by China as well as by strength in Korea and Japan.
We were also pleased with the pace of development in the region with restaurant count up by 17% year over year and net restaurant growth of 46 for the quarter, led by expansion in China and India. We believe there's a tremendous opportunity for BK to continue to grow its restaurant footprint in China and India and more broadly in the region and are pleased by the progress that our teams are making against this opportunity. Turning to Slide 15, LAC recorded same store sales growth of 4.9% led by Brazil and Argentina, where our new product launches and promotions such as Kingo Feritas in Brazil and Grande Pro Puestas in Argentina resonated well with our guests. We grew our restaurant count by 5% in lac during the quarter, led by development in Brazil, the relaunch of Burger King in Costa Rica and offset by some softness in Mexico. I'll now turn it over to Josh to take us through the development updates and financial results for
the quarter. Thank you, Daniel. Let's move to Slide 17, where we'll review updates on development. Back in 2011, introduced the master franchise joint venture model to Burger King. Under this franchisee led development model, we partnered with excellent operators to grow our restaurants in a region or country, enabling us to accelerate international growth.
We signed our 1st master franchise joint venture agreement for Brazil, and we now have more than 500 restaurants there. To date, we have signed 12 master franchise joint venture agreements at Burger King with notable growth in places like China and Russia. At Tim Hortons, I am very pleased to announce the closing of our first master franchise joint venture agreement, which will donuts. We view the Philippines as a natural gateway as we look to expand into Asia and as such we see it as an excellent entry point for the region. Additionally, we are pleased to announce the sale of the Quik restaurants in Belgium and Luxembourg by our master franchise joint venture Burger King France.
The transaction is expected to close in the Q3 and over time our new partner will convert quick restaurants in Belgium to Burger King units as we enter into another compelling market in Europe. We look forward to providing you with more development updates soon. Turning to Slide 19, we discuss RBI financial results for the quarter. I'm pleased to report that we achieved another quarter of double digit growth in adjusted EBITDA and adjusted diluted EPS. Our overall growth in system wide sales at both Tim Hortons and Burger King combined with discipline on costs resulted in adjusted EBITDA of $479,000,000 for the quarter, representing growth of 16 0.2% on an organic basis versus prior year results.
Adjusted net income for the quarter of $192,000,000 was up 36.5 percent versus prior year results, reflecting adjusted EBITDA growth, a $2,000,000 reduction in depreciation and amortization versus the for the quarter was $0.41 per share, representing growth of 38.3% versus the prior year. Turning to slide 20, we achieved strong free cash flow of $517,000,000 year to date, primarily as a result of adjusted EBITDA growth and reduction in capital expenditures versus the prior year. During the first half, we paid $260,000,000 in preferred common dividends and paid down $35,000,000 of debt, ending the period with a cash balance of $998,000,000 Moving to Slide 21, we review our capital structure. As of June 30, 2016, our total debt was $8,900,000,000 and our net leverage was 4.5 times LTM adjusted EBITDA, down approximately 0.7 turns year over year. Moving now to Slide 22, on August 3, 2016, the RBI Board of Directors declared a dividend of $0.16 per common share and partnership exchangeable unit of RBI LP, payable on October 4, 2016.
Finally, we also announced a 5 year $300,000,000 share repurchase authorization. Along with debt repayment, reinvesting in the business and paying dividends, share repurchases are one of the ways in which we return value to our shareholders and are a part of our balanced approach to capital allocation. I'll now hand it back to Daniel before moving to the Q and A part of our presentation.
Thanks, Josh. We made good progress this quarter in expanding the presence of both of our brands around the world and increasing the quality of each guest experience in Our commitment to our guests and communities and to building value for our franchisees has resulted in continued growth in earnings for Restaurant Brands International. While sales have slowed a bit compared to earlier in the year, we believe that we have the right plans in place to deliver great results for the long term for all of our key stakeholders, our franchisees, our employees and our shareholders. Thanks to everybody for joining us this morning and we'll now open up the call for Q and A. Operator?
Our first question comes from Nicole Miller of Piper Jaffray. Please go ahead.
Thanks. Good morning. When you talk about the softer trends across QSR or limited service domestically in the U. S, do you see that as a shorter term attitudinal shift on behalf of the consumer or a longer term situation that you have to take into account when you're really looking at your overall strategy. And just wondering with under that context, how do you then talk about comps being negative at BK and positive at Tim Hortons, trying to understand what that is a function of?
Hey, Nicole, it's Daniel. I think I can address your question. Yes, look, you're right. We did see some softness in the industry in the Q2. We feel like we made the right adjustments kind of short term.
But we've been doing this now almost 6 years and the industry changes from time to time. We try not to get too focused on macroeconomic changes. The industry has moved over time. What I'd say is we're very confident in our strategy. If you take a step back for a minute, we've had the same strategy in place the last now almost 6 years, kind of despite some of the macro fluctuations during that time period.
We took sales per restaurant from around $1,100,000 to $1,300,000 We significantly increased the profitability of our franchisees. We re imaged half of the system, had some great new innovation. And despite some ups and downs in the industry over that time period, our strategies remain constant and it will remain constant. And when I look forward, when I kind of look forward into the future, I'd say looking at the strategy that we have in place, the strategy we're going to have in place, the strong innovation pipeline we have, I'm excited. I feel good.
I'm confident in the long term outlook for the brand, the Burger King brand in the U. S. And then on the Canada side, on our Tim Hortons brand, we did post some positive same store sales of 2.3%. We saw things slow down a little bit as well in Canada, but I'd say that again, there we're quite confident in the strategy. We saw growth across breakfast and lunch day parts.
And toward the end of the quarter, we actually made some pretty good additions to the lunch menu. We launched the potato wedges, the savory wedges and we'd also launched salads to give our guests a nice kind of something nice to complement their lunch sandwich. We really view this further building an already strong lunch daypart at Tim Hortons is a big opportunity for us in the long term. And then we did some other things with cold beverages. We added, we expanded the already successful line of ice caps.
So we feel good kind of overall about, again, line of ICECAP. So we feel good kind of overall about again the long term outlook and strategy for Tim's. And again, I really can't emphasize enough and I know we've talked to you about this in the past. We try not to get too caught up, too focused on the macro kind of swings positive or negative and we just stick to our strategy of delivering that great guest experience and driving continued sales and profitability growth for
franchisees.
Our next question comes from Joe Buckley of Bank of America Merrill Lynch. Please go ahead.
Yes. Question, Daniel, in the actual release, you mentioned solid same store sales growth by the end of the quarter for both brands. Could you elaborate a little bit on that? Did you see a strengthening in June? And if you choose, could you comment on how July fared?
Yes. Hey, Joe, it's Daniel. I don't think we didn't comment on intra quarter trends and we don't guide we don't give forward guidance as we haven't in the past. What I can say though, again, probably with both brands and particularly with Burger King, we did make some changes to the strategy. And again, while we don't give forward looking guidance, what I could say is when I look at the strategy we have in place, so kind of the pipeline of new products and some good innovation, we're confident in the outlook for the business.
Tim's, we did make some big launches toward the end of the quarter where we launched our potato wedges in the month of June and expanded the line of ice cap beverages that we're offering guests to add both light as an option and mocha. And so we were pleased with the performance of our potato wedges and the cold beverage businesses at Tim's. But again, we don't get too caught up in macro. We don't really give month to month guidance, but we're confident in the outlook for both of our brands for the long run.
Our next question comes from Brian Bittner of Oppenheimer and Company. Please go ahead.
Great, thanks. This is Mike Tamas on for Brian. And you sort of touched on it a little bit, but can you talk about maybe the performance versus the peers? It seemed as though your business slowed a little bit more than others. I know it was the first negative comp for Burger King in a couple of years.
So can you just talk about maybe it value, is it something else that didn't perform quite as well, maybe some more details on kind of what was going on? Thanks.
Yes, I don't have much to add beyond what I said. We did see the business slow down a bit. We don't comment on our competitors. We feel like we have a good balance of value and premium. We had some good offers like our 2 for 10 Whopper Meal offer.
We had some good full price or premium products like the chicken fry rings, the Mac and Cheetos, some limited time offerings around our grill dogs. So I wouldn't really point to anything that kind of worked or didn't work per se. We did see things slow down a little bit. But the same strategy that we've had in place for the past 5 years is going to continue regardless of kind of if things slow down or accelerate within a quarter. Again, I think when you kind of look at what drives our business in the long run, it's more than value or premium or 1 or 2 things.
There's no silver bullet. There's it's about delivering great guest experience. We feel like we've made a really good progress in the reimaging front. At the end of last year, we crossed that 50% milestone and that's helped that's obviously helped our restaurant performance in the U. S.
Market and it's something we're going to continue investing in as well to kind of continue delivering that great guest experience. And again, I can't emphasize this enough. There's not really one silver bullet or something that worked or didn't work. We saw things slow down a little bit, but that's not going to result in any change to the strategy and we still feel really good about our ability to drive sustainable kind of long term growth in franchise profitability and further improvements in our guest experience in the U. S.
Our next question comes from Will Slabaugh of Stephens Inc. Please go ahead.
Yes. Thanks guys. I want to kind of stick on the value theme domestically if I could. I was wondering if the consumer in your view is behaving either here actually or in EMEA as if there's somewhat of a fatigue around the aggressive value messages that are out there in the near term around maybe the QSR meal deal, which became virtually sort of universal over the last 9 months or so, either at the meal deal side or at the lower end of the value spectrum. Curious your view on kind of how the consumer views that?
Yes. I wouldn't say we have a strong view or have seen any kind of major shifts in behavior across our consumers or our guests across our menu. QSR is a competitive industry. There has always been a strong presence of value amongst ourselves, our competitors, at least as long as for as long as we've been in this business. We've always believed that having a balanced approach between kind of value and premium or value and core, that really hasn't changed at all for us this quarter and I wouldn't expect it to really change going forward.
Our next question comes from Andrew Charles of Cowen. Please go
ahead.
Great. Thank you. Daniel, taking a step back and looking at what's driven your success at BKUS over the last 3 years, you guys have adopted a fewer more impactful sales strategy, but the pace of new menu intros is significantly accelerated in 2016. You've also indicated a robust pipeline later this year. We think about the reason you've implemented the fewer, more impactful strategy in the first place.
Do you get the sense that 2016 introductions are spreading operations and the marketing message too thin? And then also just a follow-up or separately, I should say, can you talk a little bit further about the dynamics that drove the net unit closures to Tim Hortons International this quarter?
Yes. On the U. S, the way I think about it, we believe in innovating around platforms. So to the extent that we have a platform and we rotate some new or exciting flavors around it, that's okay. And what we don't want to see is kind of a variety of new small products.
But to the extent we have an existing platform, innovating around that platform and making small tweaks here to there, that's okay. We haven't seen any impact on our operations on that front. And when I look at some of the product launches that we've had this year, they've been big and they've been impactful like the grilled dogs or the Mac and Cheetos. Some are here to stay, some are limited times. And when I look at the kind of the innovation pipeline coming down the road, I do feel good that the platforms that we're looking at are going to be few and obviously we're planning on them to be impactful.
And then
on your it's Josh. On your question on Tim's International, I would say that it's still early in the year and I wouldn't really read too much into it. I think the really exciting thing on Tim Hortons International is the announcement that we came out recently on the Philippines. And I think if you put my remarks a little bit ago, if you step back a bit, the biggest thing that we've talked about for a while now is how excited we are about taking Tim's all around the world. And I think it was a huge quarter for us in that sense and that we announced our biggest deal yet in the U.
S. To bring Tim's to Minneapolis. And we also announced our 1st master franchise joint venture in the Philippines, which is our first step in replicating the success that we've had all around the world with Burger King. And now we're going to apply that model to take Tim's, all around the world starting with the Philippines. And we're really pleased to take our first step there and we look forward to sharing more similar stories on that front with everyone in the near future.
Our next question comes from David Palmer of RBC Capital Markets. Please go ahead.
Hey, guys. It's Sarah Gonzalez in for Dave Palmer. Just wondering, is there an opportunity to pay down debt given that your cash balance is approaching $1,000,000,000 And then beyond that, what is your thinking about usage of free cash flow or debt pay down versus maybe opportunistic buyback, M and A or possibly even taking your payout ratio higher?
Hey, Eric, it's Josh. I think if you look back in history, we've had a fairly balanced capital allocation policy and that included a few different things including reinvesting in the business, paying down debt, paying dividends and repurchasing shares. And I think we've done some of all of those things. You probably also saw that this morning we have a new authorization for share repurchase. So I expect that you'll continue to see that same capital allocation policy going forward.
Our next question comes from John Glass of Morgan Stanley. Please go ahead.
Thanks very much. I wanted to ask about your changing investment policy at Tim's. It looks like your CapEx for the Q2 in a row has stepped down meaningfully. So I suspect this is a more a larger change at work. So I understand now you're not investing as often or as much in the buildings for franchisees up in Canada.
Are you still able to capture the lease revenue going forward just at a lower flow through because you've got to pay the sublease? How does that play out? I guess if that's true and how does that play out over time? Do you have lower revenue growth because rent's been a big piece of the revenue in Canada historically? So lower revenue at a higher margin or do you capture some of that sandwich lease, any kind of detail around that going forward would be helpful?
Yes. Hi, John. It's Daniel. I mean, I guess, the way to think about the kind of historical and future investment in our Tim's Canada business. So historically, the development of new restaurants was kind of a joint effort between the company and the franchisees.
We're moving to a franchise led, more of a franchise led development strategy where our franchisees will get to have the kind of the ownership of the real estate. And you're right, we won't capture a rent spread on that. We're pleased though to say we feel confident in our ability to even accelerate the pace of growth in Canada relative to where we've been historically based on kind of what we see in our pipeline of franchise led development today in Canada. We're not changing though the investment policy with respect to reimaging and renovating restaurants where historically the corporation has contributed a percentage of the remodel cost and we continue to do that and we plan to continue to do that into the future.
Our next question comes from Dennis Geiger of UBS. Please go ahead.
Great, thanks. Wondering if you could talk a little bit more about the 3 drivers the strong cost of sales results you put up during 1Q and how they performed during 2Q. I guess specifically if you could share the number of VIEs during the quarter and then any additional detail on the supply chain efficiencies you might have realized during the quarter? Thanks.
Hi, Dennis. It's Josh. As you mentioned, we did have a further improvement in the profitability in that segment in the quarter and compared to the prior year. And I think you can look at it in terms of a few different drivers as I've described a bit in some of the prior quarters. If you kind of break those down, there really there's VIE deconsolidation, which we continue to do.
Although quarter on quarter that was probably a smaller contributor this quarter. In terms of retail, that continued to be a growth driver, more so year on year. It's a that business has continued to be a very large growth driver year on year. And also we continue to see improvements in efficiency through the broader supply chain and the cost levels in that segment as well, which was a driver as well quarter over quarter.
Our next question comes from Mark Petrie of CIBC. Please go ahead.
Yes, good morning. I just wanted to follow-up on your comments with regards to the Tim's international business and specifically the MF JV in the Philippines. And you'd previously spoken about wanting to innovate or feeling like you needed to innovate in the menu before entering new markets. So I wonder if you could just sort of update us on where you're at in terms of that menu innovation? And should we look at this deal as an indication that you feel comfortable with where you're at?
Or was this more of a market specific deal because of the local taste there?
Yes. Hi, it's Daniel. I'd say when we look at taking the Tim's brand internationally, there will be some element of localization just like we have in our Tim's and our Tim's business that we already have in the Middle East today. And just as has been this kind of a similar case with the Burger King brand we take it internationally. And what you're going to see and it's something we're going to obviously work with our new partners in the Philippines is that there'll be a mix of the core products that we all know and love and localized products.
But I assure you, you'll still be able to get a double double and as many 10 bits as you want wherever our TINs are going to be popping up around the world. As far as the Philippines versus other markets, we view it as a great place to a great kind of gateway to enter Asia. But there's really no limit to how far the Tim's brand can travel. And as Josh alluded to earlier, we're working hard to launch more of these master franchise joint ventures in other markets all around the world.
Our next question comes from Karen Holthouse of Goldman Sachs. Please go ahead.
Hi, thanks for taking the question. If you could sort of give us an update on franchisee economics sort of trailing 12 months with puts and takes around labor inflation versus pricing or labor inflation versus commodity inflation? How they're feeling about things? And then just sort of as you get into the back half of this year, a number of franchise companies have sort of talked about working with their franchisees through sort of pricing, making sure they're managing to some extent the gap versus food at home inflation and how those conversations are going? Thanks.
Yes, sure, Karen. It's Daniel. I'd say we've seen if you kind of look at the 2 biggest markets that we have, the Tim's Canada market and the Burger King U. S. Market, we've seen good growth in franchise profitability.
Trailing 12 months, we've seen good growth in franchise profitability year to date. And as you know, there are various drivers of profitability and various cost drivers and sometimes labor inflates a bit more, sometimes COGS inflate a bit more. Right now, as you mentioned, we've seen a bit of deflation on the commodities. And yes, we do work to make sure that we're offering our guests great value for their money and that's working with our franchisees on product launches, on promotions, on pricing and that's something no changes versus kind of anything we've done historically. What I'd say is our focus on making sure that we deliver a great guest experience, value from Honey being one of the components of that and franchise profitability hasn't changed and won't change regardless of kind of the environment that we're in with respect to input costs.
Our next question comes from David Hartley of Credit Suisse. Please go ahead.
Yes, thanks. Good morning. Just a couple of questions. Of your new franchisees, just curious, when you enter a market like the Philippines announcement, how long does it take before you start seeing new stores opening? And maybe you can give me some commentary on how many stores have opened of existing new franchisee agreements in the States?
And then finally, if you can just tell us a little bit about the tax rate seems a little lower this quarter than previous, just wondering what the run rate should be on that? Thank you.
Hi, David. It's Josh. So anytime we're entering a new market, we're going to work with the franchisee in that market to open up as quickly as we can. But we want to make sure that we do the work to make sure that we open up really well and bring the right guest experience and the right product offering to that market. So it varies a lot between a market that we're already in the U.
S. And a new market that we're going to like the Philippines. We don't have a date to share yet, but you can trust that our teams are working very hard to open the 1st stores as soon as possible. And we'll let you know as soon as we do. In terms of the tax rate, I think if you look at the adjusted tax rate for the Q2, it's actually pretty much in line.
It's not very far off of where we were for the Q1. So no real big change, I think compared to where we were last time we talked.
And this concludes our question and answer session. I would now like to turn the conference back over to Daniel Schwartz for any closing remarks.
Thanks, operator. I just want to thank all the participants for joining us today. Again, we're really excited about the long term outlook for our company, excited about the continued expansion of the Burger King brand, the new expansion of the Tim Hortons brand in ways that we think will benefit all of our stakeholders all around the world and we look forward to updating everybody next quarter. Thanks.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines. Have a great day.