Good morning, and welcome to the Restaurant Brands International conference call regarding the acquisition of Carrols Restaurant Group. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there'll be an opportunity to ask questions. To ask a question, you may press Star, then one on your telephone keypad. You will hear a tone to confirm that you are in the queue. To exit the question queue, you may press Star, then two. All callers will be limited to one question. Please note, this event is being recorded. I'd now like to turn the conference over to Kendall Peck, RBI's Head of Investor Relations. Please go ahead. Thank you, operator. Good morning, everyone, and welcome to Restaurant Brands International's call regarding this morning's announcement of our agreement to acquire Carrols Restaurant Group. As a reminder, a live broadcast of this call may be accessed on the Investor Relations webpage at rbi.com/investors, and a recording will be available for replay. Joining me on the call today are Restaurant Brands International's Executive Chairman, Patrick Doyle, CEO, Josh Kobza, President of Burger King U.S. and Canada, Tom Curtis, and CFO, Matt Dunnigan, and Carrols Restaurant Group's CEO, Deborah Derby. Today's 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 call includes non-GAAP financial measures. Reconciliations of non-GAAP financial measures are included in the presentation posted to our investor relations website this morning. Now I'll turn the call over to Josh. Good morning, everyone. As you've likely already seen, this morning, we announced an agreement to acquire Carrols Restaurant Group. Tom is going to speak to how this all fits into our Reclaim the Flame plan for Burger King, so I will only comment briefly on why I am so excited about this transaction. We are buying one of the largest and most concentrated networks of existing Burger King restaurants anywhere in the world, operated by a talented management and operations team that we believe will enhance our capabilities, both as a franchisor and restaurant operator. We plan to use their operating cash flow to fund a rapid acceleration of remodels over the next five years, and then resell the vast majority of these restaurants back to franchisees at a market price. We've spoken before about our priorities for capital allocation, and this is about as clear as we can be: investing in ourselves, in our brands, investing to accelerate growth with attractive returns. The transaction details are pretty straightforward, so I'll cover them now, and Matt is with us this morning for any follow-up questions you may have. RBI will pay $9.55 per share in cash to acquire all of the issued and outstanding shares of Carrols capital stock that are not already held by us or our affiliates, which is about 15% of their equity. The purchase price per share represents a 23% premium to the 30-day volume-weighted average price as of January 12. When put all together, this implies a total enterprise value of approximately $1 billion. We are financing the transaction with cash on hand and $750 million of incremental financing led by JP Morgan. We expect the transaction to be approximately neutral to our results as a company, and this really has minimal or no impact on our stated goal to reach the mid-4x net leverage level by the end of 2024. On a personal level, I have worked with the owners and leaders of Carrols for my entire time at RBI. They have very impressive development, operations, and support teams that have always done a great job prioritizing culture and training in their restaurants, and we are going to continue to rely on them to do this in the coming several years. This will allow us to really focus our attention on accelerating remodels and being thoughtful about how to refranchise this restaurant network into smaller packages with new and existing franchisees who live close to the communities where they own the restaurants. I'll hand things over to Tom now to walk through the strategic fit with our Reclaim the Flame plan. Tom? Thank you, Josh, and appreciate everybody joining us today. I'm joining you today from the Carrols office in Syracuse, New York, along with Carrols CEO, Deb Derby. We met earlier this morning with the leadership team, and then later today, Deb and I are gonna be speaking with restaurant managers and the team here in Syracuse. When we announced the Reclaim the Flame plan back in September of 2022, we highlighted several areas of focus, marketing, operations, digital, and high-quality restaurant remodels. We've made very solid progress on all of these fronts, and we're gonna have more details to share in our Q4 earnings in a couple of weeks. Now, our Reclaim the Flame plan included $250 million to co-invest alongside our franchisees by accelerating the remodels of 800 restaurants through 2023 and 2024, and refreshing another 4,000 restaurants with technology, kitchen equipment, and building enhancements. Today's investment in Carrols significantly accelerates our commitment to modernizing our entire fleet across the U.S. Now, Carrols already has about 400 Burger King locations that are Modern Image. We now plan to use $500 million of additional cumulative operating cash flow from these acquired restaurant operations to remodel the other 600 or so restaurants over the next five years, which will more than double the current pace of remodeling. Now, of course, great operations are the cornerstone of a great restaurant business, and this is an area where I wanna give Deb and her team a ton of credit.... The Carrols development and operations teams are an impressive group of restaurant professionals, driving culture and training at the restaurant level through a powerful network of committed and hardworking restaurant managers. The underlying operational strength of the entire Carrols team in the restaurants, in the field, and in their home office, makes this transaction possible. We take pride in working alongside this team and believe that this will be the opportunity for all of us to work together even more closely, to strengthen Burger King's and Carrols' operating capabilities, and to better test and scale enhanced guest experience initiatives that we have, and also to accelerate our modernization efforts. Now I'd like to invite Deb to say a few words before I wrap it up and hand it over to Patrick. Thank you, Tom, and good morning, everyone. This is a great opportunity for both Carrols and Burger King. We've built strong relationships with the entire Burger King team over the past couple of years, and this merger takes that to the next level by officially making us part of the Burger King and RBI family. I think this is a great transaction on many fronts. It represents substantial value and return for our shareholders. It accelerates the remodel of more than 600 restaurants in our network, and putting our best image in front of our guests sooner is something that benefits everyone. For our team, this is very exciting. We believe our team members will now have additional career opportunities as part of the greater RBI family, in our office, in the field, and especially in our restaurants, including for long-term managers who may want to become franchisees themselves. I want to give Tom and his team a lot of credit for how they have conducted themselves and built trust in the system, especially since 2022, when they announced the Reclaim the Flame plan. They take the time to pull everyone together, listen to concerns and feedback, and include everyone in building their plan. It's why we joined 96% of other franchisees in signing up for the plan 16 months ago, and I'm very proud to be part of accelerating that plan with this transaction. Tom, I'm very much looking forward to working with you, and we'll hand things back over. Thanks, Deb. So over the next five years plus, we're going to operate and then ultimately refranchise the Carrols restaurant network with a view to creating a number of portfolios with smaller footprints, likely 50 restaurants or less, so that we further our consistent vision to have more franchisees who are operators living close to and being involved in the communities that they serve. Prior to this transaction, we were already operating about 175 corporate restaurants. This will now grow our corporate restaurant footprint to around 1,200 restaurants before we go through the process of refranchising. I'm very thankful to rely on Deb's expertise as we work through that sequence of remodeling and then refranchising. I'm looking forward to sharing the broader progress of the Reclaim the Flame plan and the momentum that we're seeing, which we plan to do when we announce earnings in a few weeks. Now I'll hand things over to Patrick to wrap up, and then we're happy to take your questions. Patrick? Thanks, Tom. To me, there are really two key takeaways everyone should have from this transaction. First, this is a clear demonstration of our strategy at work. We told you we need every Burger King in the US to be modern and competitive, and we told you that we need strong local operators, not just owners, running our restaurants. This accelerates progress on both of our objectives. Second, we're going to turn around Burger King U.S. and position it for years of growth and success. You can question how much money it might ultimately cost, and you can question how fast we're going to do it, but with this acquisition, I hope that you will no longer question if we will be successful. I am completely confident that we will. There are two phases of this transaction. First, we're acquiring about 15% of all the restaurants in our US system, and we're going to prioritize their cash flow from operations to upgrade their image and put the very best version of ourselves in front of our guests. We can discuss the exact uplifts over time, but everyone on this call should know that this is exactly the right thing to do. We are stepping up to do exactly what we are asking our franchisees to do: invest in a modern image and run excellent restaurants. And second, we're going to sell most of these restaurants back to franchisees and do it deliberately to help create more operators who have smaller portfolios and live close to the communities they are serving. This is all possible because Carrols already has terrific locations, a ton of great operators, a strong support team, and because we're willing to invest in this important business and accelerate the pace of change. You should all take away that we are willing to do what it takes to set this brand, system, and its franchisees up for the long term. Last year, that included helping some large franchisees to exit the system, knowing it required tough conversations and would result in some ugly headlines. At the same time, we're fully invested in the success of the majority of our franchisees, who are dedicated and working hard to give customers great food and great service, and to do that in modern restaurants. We committed $400 million just 16 months ago behind the Reclaim the Flame plan—and we are already seeing great progress from our efforts.... Just look at the portfolio we're buying today. Nearly 3% traffic growth for the fourth quarter and approximately 140% increase in profitability for 2023. Let me repeat those numbers, 3% traffic, 140% growth in profitability. That is our plan at work, and it's working. I'm really excited about everything the team is doing at Burger King and to bring Carrols under the fold. Tom, Deb, and their teams have my full support as they undertake this next stage of growth. I'd like to thank you all again for joining us this morning and for your support. Now I'll hand it over to the operator to take your questions. Thank you. As a reminder, if you'd like to ask a question, you can press star followed by one on your telephone keypad. Please limit yourself to one question. Thank you. Our first question for today comes from David Palmer of Evercore. David, your line is now open. Please go ahead. Thanks. Just a question about how you would compare Carrols restaurant asset base versus what you see across the system. I know you've thought something like 40% of the system was in really tough shape. So I'm thinking those old blue roof type Burger Kings, so very out of date. It was my impression that Carrols would be less out of date than that, than that average. So I'm wondering how you compare sort of the reimaging upside with this portfolio versus what you see across the system. Tom, you want to take that one? Yeah. Take that one. Sure. Sounds good. Thank you, David. Around 35% of the Carrols portfolio today is Modern Image. They did a fairly substantial remodeling cycle a while back to update their portfolio to 20/20 Light, which was the prior format. So maybe that's a little bit behind by, you know, less than 5% where the system is in Modern Image. Now, as we look to, you know, remodel those, the image format is not necessarily indicative of the work that needs to be done. Some need a little bit less work and some need a little bit more work, but all in, we expect, from what we know, to spend approximately $500 million to get the Carrols portfolio nearly fully Modern Image by 2028. Thank you. Thank you. Our next question comes from John Ivankoe of JP Morgan. Your line is now open. Please go ahead. Hi, thank you. I was hoping we could talk about who your ideal franchisee of the future would be. Do you imagine it would be an existing franchisee, perhaps a new franchisee? Would you like them to be only a Burger King franchisee, or, you know, would you consider, you know, joining, you know, someone's multi-brand, you know, portfolio, if they are considered to be, you know, excellent, well-capitalized operators? Thank you. Yeah, thank you. I think that any of those, any of those answers are possibilities, and through the Reclaim the Flame plan, we've been prioritizing expanding our franchisee network and ultimately finding operators who live in the communities their restaurants serve. We typically see that smaller franchisees living locally perform well. Today, we have about 300 franchisees in the U.S., and I could see that number increasing to around 400 to 500 over the next 5 years. Basically, once again, people in their communities, healthy leverage ratios, and in their restaurants consistently, we're building that pipeline of operators that could come internally, that could come from our corporate teams, and also could come from other restaurant concepts if they're proven operators. Thank you. Thank you. Our next question comes from Andrew Charles of TD Cowen. Your line is now open. Please go ahead. Great. Thank you very much. Just wanted to come back to the remodels for the BKUS system. You know, 40% reimage today, another 600 as a result of this transaction. What's the plan to help touch up the other stores in the system, in the BKUS system, that aren't directly impacted by this transaction? Thanks. Yeah, I think that this with this transaction and the work that we'll do here, we'll get to a very strong majority of our restaurants being fully remodeled. And then, you know, over the course of time, we're gonna work with our franchisees and also figure out how we're gonna get the remainder so that we get to the vast majority of our restaurant portfolio in a Modern Image. And we're starting the conversations with franchisees now on how we get that done. Thank you. Thank you. Our next question comes from Danilo Gargiulo of Bernstein. Your line is now open. Please go ahead. Thank you. I wonder if you can expand on the point that you just made and maybe help us understand the rationale behind the acquisition of Carrols versus perhaps, increasing the level of incentives? That you may want to offer to the rest of the franchisees. So what is the strategic rationale for an acquisition compared to the expansion of the incentive program? Thank you. Sure. Thank you. I think this gives us, this presents an opportunity for us to really take charge of the BKUS image transformation and lead by example, and proactively drive that shift to a more aligned group of operators. So we're accomplishing several things here. We told you back in September of 2022, that that $400 million investment into the system was really meant to be a proof point, and we meant what we said. And if we saw a plan that was working, that we'd look for opportunities to invest more, and this is a great opportunity to do that. So we're going to prove to ourselves and to our franchisees that we have the right plan and that we are turning the system around. I think we've been proving that for a while now. We're seeing clear momentum in the business and strong initial remodel uplifts, and we're very confident that this will just help accelerate that. Danilo, this is Patrick. The one thing I would add to that is, you know, we've said before, but we believe in this strongly. Carrols has a group of very, very good operators. They have been above average at driving results for quite a few years. They're just. They're terrific at what they do. And so we look at this not only as a way to accelerate the reimaging of the system and leading within the system doing that, but we also look at it as an opportunity to work with those operators and find those operators, both general managers, district managers, and above, who are interested in being owner-operators and want to franchise. And so this is not only about, you know, accelerating the reimaging, but it is also about directly working with a group of terrific operators who we think could be great franchisees for us going forward. Thank you. Thank you. Our next question comes from Joshua Long of Stephens. The line is now open. Please go ahead. Great, thank you for taking my question. I was curious if we could go back to the commentary around, you know, the opportunity to keep operators owning stores and working in their local markets. You mentioned kind of a target of 50 units or less is for the BK system as you go forward. How does that compare to the system today? I know you mentioned there were about kind of 300 franchisees in the system today, but how does that math kind of work out? And is that a target or kind of an upper-end goal that we should be thinking about in terms of the 50 units or fewer once the transaction is all said and done? Yeah, I think that's certainly the direction that we want to go in, but I do want to point out that we have some larger operators that are extremely accomplished, and they're producing great experiences for their guests and team members. And so there's certainly no need to call that as the absolute target. It really comes down to, you know, the operator's capabilities to run great restaurants, provide great guest experiences, to invest back into their business so that we have restaurants that we're proud of. And to the extent that any operator is capable of doing that, they're welcome to be part of our business. Thank you. Thank you. Our next question comes from Brian Harbour of Morgan Stanley. Your line is now open. Please go ahead. One thing I was curious about, you know, you kind of alluded to, Carrols is a very good set of operators. You know, we've seen them often deliver better same-store sales growth over time. Conscious that they're not necessarily more remodeled than the system, so therefore, it's not necessarily a difference in the asset base itself. Why are they able to do that? And how do you think that kind of, you know, will map over to the rest of the Burger King system? Yeah, I'd say two reasons in my view. First of all, they did go through a remodel cycle, just prior to what we define as Modern Image. So they invested a good bit, several years ago to get to where they are, and their stores are always extremely clean and well-organized. And as we've mentioned, they've built quite a network of operations experts with tons of tenure, tons of the expertise, and frankly, just been able to execute better in the restaurants that they have. So, you know, sometimes you might visit a Carrols restaurant and you wouldn't know that it's not, as we call it, Modern Image, just because it's very, very well maintained. But we do see a lot of opportunity, once again, to get a consistent image across the entire Burger King network. As we do that, both with the Carrols portfolio and with other franchisees across the system, those network effects can really kick in as well and provide even further uplift for the system. Thank you. Our next question comes from Lauren Silberman of Deutsche Bank. Your line is now open. Please go ahead. Thank you. On the $200 million Royal Reset remodel plan, can you just update us on the progress there in terms of allocating the funds and cadence of remodels? And then understand you'll be investing the $500 million through the operating cash flow. Just clarify what this means for your appetite to fund more remodels for the rest of the system beyond 2024. Thank you. Yeah, like I said, the progress that we've made thus far with the Reclaim the Flame investments and the investments that the franchisees have made gives us a lot of optimism that we're on the right track and gave us the optimism and the confidence that this was the right next move. We'll continue to evaluate what it's gonna take to get our system fully remodeled and look forward to that day. The Reclaim the Flame plan thus far is well underway. 2024 is a big year for us. 2023 was a big year for us. Once again, very confident with what we've seen thus far, with the lift that we've seen in the system and the enthusiasm around our new Sizzle Image as well, that we're on the right track. If anything, it's a time to press on the gas and accelerate. Laurie, if I can, if I can just add one thing, I think Tom expressed it really well. I think one of the, the things that Tom and the team did so well in, in the original Reclaim the Flame plan, is just developing that plan together with the franchisees and then sharing it with the world. And, that's a template that's really important to us in terms of how we work with all of our teams. And, you know, as we said, we're, we're open to continuing to invest in, in the system and into the future of, of Burger King. I think we're showing that pretty strongly today, and we'll work with the franchisees on some of those future plans and make sure that we come back to you once we've done that. Thank you. Thank you. Our next question comes from Jon Tower of Citi. Your line is now open. Please go ahead. Great. Thanks for taking the questions. Two quick ones on the modeling side. I'm curious, one, are you acquiring any land in this transaction? And then two, I believe Carrols was running about $100 million in G&A, roughly, for 2023. I'm just curious if you can comment, you know, going forward, how much you expect of that to continue in the system or could be pulled out over time. Hey, thanks, Jon. It's Matt here. Yeah, in terms of landownership, I would say it's not material, not meaningful in terms of what we're acquiring. And then on the G&A side, you know, thinking about synergies, I don't think there's really material synergies here worth noting. The transaction is really being done for strategic reasons, the ones that we laid out here. So that's our focus. Obviously, we'll run an efficient operation and business, but G&A synergies are not a focus here. Got it. Thank you. Thank you. Our next question comes from Jeffrey Bernstein of Barclays. Your line is now open. Please go ahead. Great. Thank you very much. Two things. One, Patrick, I just wanted to clarify: I know you said that the Carrols fundamentals are very impressive with the 3% traffic growth. I think you were referring to the fourth quarter, and 140% improvement in profitability for presumably full year 2023. I'm just wondering, how does that compare? I mean, that sounds very impressive. I'm just wondering how you think about the Carrols system relative to the broader BK system, whether you're willing to make a comment on either of those metrics relative to the broader system. And then, Tom, just to clarify, I know you said the remodels over the next five years. I would presume that the Carrols system would have likely been doing that anyway with their existing cash flow. So I'm wondering if there's any other rationale, maybe this acquisition will allow you to accelerate new unit growth with future franchisee commitments, or maybe there's some other thoughts behind the deal, in addition to obviously the remodels that you plan to accomplish. Thank you. So, Jeff, I'll take the first one and kick it over to you, Tom. So yeah, I, I can't get into, you know, any read-through to our results for the fourth quarter. We'll be doing that in a few weeks. Tom? I think Carrols was gonna accelerate significantly in 2024 with their remodel schedule, but this really gives us an opportunity to accelerate even more, given our scale and our financial capabilities. It's certainly also a bet on ourselves. This is a unique situation. It's one public franchisee that owns about 15% of our stores, and ultimately, what we want to do with that portfolio is not something that would be easy for them to do as a public company. So this was the most expedient and a strategic way to get about, our, you know, our, our objectives. And once again, we bring in such a great team of operators that will not only be able to someday perhaps become franchisees, but will enhance the operational capabilities of Burger King as well. Thank you. Thank you. Our next question comes from William Reuter of Bank of America. The line is now open. Please go ahead. Hi. I was wondering if, with the financing that you have committed, if you plan on repaying Carrols existing high-yield bonds, or if you've thought about how you will deal with those? Yeah. Hi, Bill, it's Matt here. Yeah, we expect to effectively replace the entire capital structure with new financing that we have committed from JP Morgan. Perfect. Thank you. Thank you. As a reminder, if you'd like to ask a question, that's star one on your telephone keypad. Our next question comes from Andrew Strelzik of BMO. The line is now open. Please go ahead. Hey, good morning. Thanks for taking the question. You mentioned having started conversations with franchisees on how to get more, more of the stores remodeled going forward. And so I, you also mentioned, you know, the ability to use some of these stores as a proof point for franchisees. How did that factor into the transaction rationale? Was that some of the feedback that you'd been getting, or I guess, what other feedback are you hearing from franchisees on that front? Thanks. Yeah, I think for some time now, we've been, you know, seeing good returns from our Reclaim the Flame investments, and I think that franchisees, the enthusiasm in the system is growing. But for us, this is an opportunity once again, to set an example, and to set the example and show that we believe in the plan, and we believe in what we've accomplished and what we're going to accomplish in the future. So this is just, for us, a very important step in working with our franchisees on the work that they're doing now. As I think Josh alluded to, you know, we'll continue to work with them and discuss with them plans to continue the pace of remodeling in the future as well, so that we get to that ultimate objective of being fully modernized by around 2028. Thank you. Our final question for today comes from John Zamparo of CIBC. Your line is now open. Please go ahead. Thank you. Good morning. I'm trying to think about why it was these particular stores that you wanted to own, and it strikes me you might get more torque from turning around your underperformers. And you had the opportunity to acquire a meaningful footprint from some of those that endured financial challenges last year, and you did acquire some, but I wonder why you prefer to own the strongest or some of the stronger ones in the portfolio, and is there a meaningful opportunity to improve these stores when they're performing above the system average? Hey, the reality is we're doing a lot of work on a lot of fronts. And yes, you're correct that last year, we did take some underperformers. We had some great operators ready to take over some of those, and we've acquired some of those ourselves. And at the same time, you know, this gives us an opportunity to really accelerate the modernization of the fleet, if you will, at scale. And you know, if you're going to do it at scale, you better have a great team alongside you to get the work done. And acquiring not only these restaurants, but this fantastic team, is gonna make that possible. Great. Thank you. Thank you. We have no further questions for today, so I'll hand back to Josh for any further remarks. Thank you all for joining us today on such short notice. We really look forward to working with Deb and the whole Carrols team, and we look forward to being in touch again for our Q4 earnings here just in a few weeks. Wish everyone a great day. Thank you very much for joining. Thank you for joining today's call. You may now disconnect your lines.