Annual Report Provided

Restaurant Brands New Zealand LimitedAnnual Report 31 December 2021
OPEN

ALL WAYS.
The world’s had a rough ride these past two years and COVID-19 restrictions have tested businesses everywhere. As a multi-brand, multi-format, multi-geography company we can take comfort in the resilience that diversity lends our operations. We’ve had the diverse ways and means to continue to delight our customers – despite the challenges. And from market to market, we’ve had the best team of people to make sure of it.

Consolidated income statement
62
Non-GAAP financial measures
63
Financial statements December 2021
64
Independent auditor’s report
105
Shareholder information
111
Statutory information
113
Statement of corporate governance
116
Corporate directory
125
Financial calendar
125
About Restaurant Brands:Restaurant Brands New Zealand Limited operates the KFC, Pizza Hut, Taco Bell and Carl’s Jr. brands in New Zealand, the KFC and Taco Bell brands in Australia, the KFC and Taco Bell brands in California, and the Taco Bell and Pizza Hut brands in Hawaii and
Guam.
These brands - four of the world’s most famous - are distinguished for their product, look, style, ambience and service and for
the total
experience they deliver to their customers around the world.
Financial highlights
04
Year in review
05
Business at a glance
06
A 25 year success story
08
Chairman and CEO’s report
12
Business diversification
20
Our people
24
Sustainability report
30
Operations reportsBoard of Directors
60
New Zealand

50
Australia
54
Hawaii

56
California
58
ON THE MENU
Annual Report 31 December 2021
03
02
Restaurant Brands New Zealand Limited

FINANCIAL HIGHLIGHTS
YEAR IN REVIEW
TOTAL STORESTotal store numbers increased by 11 to 359 including the acquisition of five stores in Australia and two stores in California.TACO BELL IN THE SOUTHERN HEMISPHEREThe Taco Bell brand, launched in New Zealand and Australia (New South Wales) in late 2019, has continued to grow with 18 stores now successfully operating in these markets.DIVIDENDSDirectors have declared a final dividend of 32.0 cents per share, payable on 22 April 2022 to all shareholders on the register as at 8 April 2022. The dividend will be paid fully imputed to NZ tax resident holders.
TOTAL SALES Our billion dollar sales target has been achieved with total sales for the year of $1,068.2 million, up against the previous year, with full year positive same store sales growth across all four of our operating divisions.TOTAL EBITDA
1
Combined store EBITDA for the period was $172.7 million, up 18.3% on the previous year.NET PROFIT AFTER TAXReported net profit after tax of $51.9 million for the year was up $21.3 million on the last year, despite the ongoing adverse impact of COVID-19.TOTAL SALES ($NZ m)
TOTAL EBITDA ($NZ m)
HISTORICAL SUMMARY
All figures in $NZ millions unless stated
52 weeks
26 Feb 2018
52 weeks
25 Feb 2019
44 weeks
31 Dec 2019
52 weeks
31 Dec 2020
52 weeks
31 Dec 2021
FINANCIAL PERFORMANCE
Sales*New Zealand
421.4
419.8
367.5
410.4
461.1
Australia
151.8
191.5
169.1
214.9
244.1
Hawaii
167.5
182.7
168.9
215.1
206.5
California
–
–
–
51.9
156.5
Total sales
740.8
794.0
705.5
892.4
1,068.2
EBITDA before G&A*New Zealand
76.5
76.4
67.9
76.3
83.3
Australia
22.0
29.1
25.2
28.6
31.6
Hawaii
24.1
23.7
22.9
32.6
33.9
California
–
–
–
8.5
23.8
Total EBITDA
122.6
129.2
116.0
146.0
17 2 .7
Operating profit
57.8
56.2
64.4
74.8
102.1
NPAT (reported)
35.5
35.7
30.1
30.6
51.9
FINANCIAL POSITION/CASH FLOWShare capital
148.5
154.6
154.6
154.6
154.6
To t a l e q u i t y
201.6
224.7
208.0
229.8
289.7
To t a l a s s e t s
453.0
460.3
879.9
1,180.2
1,329.8
Operating cash flows
67.8
71.3
87.6
111.2
126.4
SHARESShares on issue (year end)
123,629,343
124,758,523
124,758,523
124,758,523
124,758,523
Number of shareholders (year end)
7,0 0 5
7, 1 2 7
6 ,0 2 6
5 , 4 2 8
5,180
Basic earnings per share (full year reported)
28.8c
28.8c
24.1c
24.6c
41.6c
Ordinary dividend per share
28.0c0c0c0c
32.0c
OTHERNumber of stores (year end)New Zealand
171
142
14 8
1 3 7
137
Australia
61
61
65
70
79
Hawaii
82
80
74
72
73
California
–––69
70
To t a l s t o r e s
314
283
287
348
359
Number of employeesNew Zealand
3,596
3,484
3,777
4,582
3,748
Australia
3,275
3,360
3,887
4,055
4,526
Hawaii
2,185
2,007
1,935
2,055
1,764
California
–––1,381
1,402
Total employees
9,056
8,851
9,599
12,073
11,440
* Sales and EBITDA before G&A for each of the division may not aggregate to the total due to rounding.
1 EBITDA is earnings before interest, tax, depreciation and amortisation. It is a non-GAAP financial measure and is not prepa
red in accordance with NZ IFRS.
21
1,068.2
21
17 2.7
19
18
19
20
Dec
Feb
892.4
705.5
794.0
74 0.8
19
18
19
20
Dec
Feb
146.0
116.0
129.2
122.6
TOTAL ASSETS ($NZ m)
21
1,329.8
19
18
19
20
Dec
Feb
1,180.2
879.9
460.3
453.0
NPAT (REPORTED) ($NZ m)
21
51.9
19
18
19
20
Dec
Feb
30.6
30.1
35.7
35.5
Annual Report 31 December 2021
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04
Restaurant Brands New Zealand Limited

AT A GLANCE
YEAR ENDED 31 DECEMBER 2021
OPEN FOR BUSINESS.
GROUP
DIVISIONS
OUR BRANDS
FINANCIAL RESULTS
NEW ZEALANDAUSTRALIAHAWAII
(INC. GUAM AND SAIPAN)
CALIFORNIA
11,44054.1m463
$1.1b$51.9m
$172.7m$1.3b
EMPLOYEES
HAPPY CUSTOMERS SERVED IN FY21
STORES
SALES
NPAT
EBITDA
ASSETS
YUM!
YUM!
YUM!
CKE RESTAURANTS, INC.
3,748
11111
4,5261,7641,402241797370137
359
105
71
36
60
6
8
37
10
10
16
104
104
599
EMPLOYEES
EMPLOYEES
EMPLOYEES
EMPLOYEES
STORES
STORESALL OWNED
STORESALL OWNED
STORESALL OWNEDOWNED
OWNED
SUPPORT OFFICESUPPORT OFFICECALL CENTRESUPPORT OFFICESUPPORT OFFICE
SUPPLY CHAINManaged by Yum!SUPPLY CHAINManaged by Yum!SUPPLY CHAINManaged by New Zealand logistics teamSUPPLY CHAINManaged by Yum!
FRANCHISED
FRANCHISED
Inc.
5 in Guam
1 in Saipan
Inc.
7 in Guam
Annual Report 31 December 2021
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Restaurant Brands New Zealand Limited

1997
2022
1997 Restaurant Brands (
RBD
) formed to acquire
the New Zealand operations of the KFC and Pizza Hut brands.
2012

Carl’s Jr. commenced store roll out inNew Zealand.
2016 Acquisition of QSR Pty Ltd, which owns 42 KFC stores in New South Wales, Australia.
2019 Finaccess Capital, S.A. de C.V. through its subsidiary Global Valar S.L. completed a successful takeover for 75% of the Company’s issued capital at $9.45 per share. The Company remains listed on the NZX and ASX.
2022 RBD becomes a $1b revenue company.
2000 Acquisition of Eagle Boys pizza business in New Zealand. Stores were subsequently rebranded to Pizza Hut.
2008 Sale of Pizza Hut business inVictoria, Australia.
1998 RBD secured New Zealand franchise for Starbucks Coffee, opening its first store in Parnell, Auckland.
2014 Acquired seven additional Carl’s Jr. stores in Auckland.
2011 Pizza Hut startsselling a number ofits smaller regional stores to independent franchisees.Acquired theNew Zealand franchise for Carl’s Jr.
2017 Acquisition of Pacific Island Restaurants Inc., which owns 37 Taco Bell stores and 45 Pizza Hut stores in Hawaii, Guam and Saipan.
2018 Sale of Starbucks business in New Zealand.
2002 Acquisition of51 Pizza Hut storesin Victoria, Australia.
2020 RBD purchased69 KFC stores (including 11 multibrand KFC-Taco Bell stores) in Southern California.
RESTAURANT BRANDS.A 25 YEAR SUCCESS STORY.
69
STORES
82
STORES
42
STORES
7
STORES
51
STORES
81
STORES
43
STORES
53
STORES
08
Restaurant Brands New Zealand Limited
Annual Report 31 December 2021
09

AFTER 25 YEARS, WE’VE EARNED OUR WINGS.
$1.1 billion sales
It’s been 25 years since we listed
on the NZX. So to those of you
who decided back in 1997 to invest
in Restaurant Brands may we say
congratulations, it was a good decision.
Like most, we’ve had our fair share of ups and downs. But since the 2015 strategic decision to look for growth beyond New Zealand’s shores, the business has not looked back. That decision set the bar. One billion dollars was our initial goal, and we are proud to say we’ve achieved it with $1.1 billion of revenues in the past financial year. But we’re on a trajectory and have a strategy to see growth continue. So in many respects this page is but a pause to reflect, just for a moment, on our billion dollar, 25 year milestone. That’s it. Back to business.There were no financial results issued in 2001 due to a change in balance date. The results for 1997 and 2002 are proforma resu
lts adjusted to
reflect representative 12 month periods. 2019 was a 44 week period also due to a change in balance date.
25 YEAR COMPARISON1997 - 2021
$1068.2m
21
$324.4m
11
$892.4m
20
$317.8m
10
$309.8m
09
$359.5m
15
$315.5m
05
$234.1m
00
$740.8m
18
$309.8m
08
$329.3m
14
$304.6m
04
$215.1m
99
$497.179m
17
$318.7m
07
$311.9m
13
$298.1m
03
$206.1m
98
$387.6m
16
$316.4m
06
01
$308.2m
12
$264.3m
02
$216.8m
97
Proforma 12 months
Proforma 12 months change in balance date
$794.0m
19
FEBRUARY
$705.5m
19
DECEMBER
Annual Report 31 December 2021
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10
Restaurant Brands New Zealand Limited

NET PROFIT AFTER TAX
WHEN ONE DOOR CLOSES, ANOTHER OPENS.
OVERVIEWThe FY21 result was once again adversely affected by COVID-19 with continued disruptions across all of the Company’s operations, including an extended lockdown in New Zealand. However, all divisions have generally continued to trade through the crisis and consequently have achieved improved EBITDA¹ results.Offsetting the adverse impacts of COVID-19, the Company saw its federal Paycheck Protection Programme (PPP) loan in Hawaii forgiven resulting in an additional $11.4 million income. Also, as a result of the extended lockdown in New Zealand, the Company received $7.2 million in wage subsidies which was fully passed on to staff.The resulting reported FY21 NPAT of $51.9 million is up 69.3% or $21.3 million on the prior year.
CHAIRMAN AND CEO’S REPORT
With operations spanning two
hemispheres and multiple time zones
we’re making food somewhere, some
time, all of the time. Restrictions or
not, our business never sleeps.
$NZm
Dec 2021
Dec 2020
Change ($)
Change (%)
Total sales
1,068.2
892.4
+175.8
+19.7
Net profit after tax (NPAT)
51.9
30.6
+21.3
+69.3
1
EBITDA is earnings before interest, tax, depreciation and amortisation. The EBITDA amounts
referred to throughout this report are before G&A, NZ IFRS 16 and Other Items. EBITDA is a non-GAAP financial measure and is not in accordance with NZ IFRS.
GROUP OPERATING RESULTSDirectors are pleased to report that Restaurant Brands has produced a net profit after tax (NPAT) for the year ended 31 December 2021 (FY21) of $51.9 million, up 69.3% on the reported NPAT of $30.6 million for the prior period. Direct comparisons between thetwo years remains difficult as both years have been adversely affected by COVID-19. This year’s result also includes the $11.4 million PPP loan forgiveness.Total brand sales for the Company were $1,068.2 million, up $175.8 million on the previous year. This is primarily because of the inclusion of $156.5 million of sales in California, up $104.6 million on the four months of initial ownership in 2020. All fourdivisions produced positive same
store sales. Combined store EBITDA of $172.7 million was up $26.7 million or +18.3% on the prior year driven by the full year performance of the California division, which was $15.3 million up on the FY20 year. EBITDA margins (as a % of sales) reduced from 16.5% to 16.2% due to continued cost pressures, particularly in New Zealand and Australia.Restaurant Brands’ store numbers at the end of the financial year totalled 359, comprising 137 in New Zealand, 73 in Hawaii, 79 stores in Australia and 70 stores in California.
José ParésChairman
Russel CreedyGroup CEO
Annual Report 31 December 2021
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Restaurant Brands New Zealand Limited
$51.9m

Actual
31 Dec 2021
Actual
31 Dec 2020
Change ($)
Change (%)
Store sales ($m)
461.1
410.4
+50.7
+12.4%
EBITDA ($m)
83.3
76.3
+7.0
+9.2%
EBITDA as a % of sales
18.1
18.6
Store numbers
137
137
NEW ZEALAND OPERATIONSTotal store sales in New Zealand were $461.1 million, up $50.7 million or +12.4% on the prior year ended December 2020. The 2021 result was adversely affected by COVID-19 with a Level 4 lockdown across the country (including an extended lockdown in the major Auckland region which resulted in lost sales of approximately $26 million). Whilst last year’s result was impacted by five weeks without trading due to COVID-19 with lost sales of approximately $40 million.The New Zealand business was completely closed for two weeks in August 2021 as part of the COVID-19 lockdown, with the Auckland region remaining locked down for an additional three weeks, resulting in an estimated $26 million in lost sales. The lockdown and continued restricted trading with no dine-in capacity also had a significant adverse effect on EBITDA. However, upon re-opening the business recovered well, with same store sales for the full year up +9.1%.The underlying sales growth has been driven by another good performance by both KFC andCarl’s Jr. through both the delivery and in-store channels. The new KFC online “click and collect” channel and the launch of the new KFC e-commerce website helped drive the strong result.
Taco Bell remains a small but growing portion of the New Zealand business sales with six stores opened during the year and sales from the four existing stores continuing to track to expectations.EBITDA was up $7.0 million reflecting the higher sales, despite the underlying EBITDA as a percentage of sales reducing to 18.1% from 18.6% as a result of on-going cost pressures and the distribution impact from COVID-19.As part of the government COVID-19 response, the New Zealand business received a wage subsidy of $7.2 million (2020: $22.0 million) which was fully passed on to all staff. This number has been included in the consolidated statement of comprehensive income. Restaurant Brands elected to retain all staff at 100% of their wages and salaries throughout the lockdown periods.
There were other fixed costs incurred during the mandated lockdown which contributed to an estimated $8.5 million drop in EBITDA before G&A costs over the closure period.The Pizza Hut sub-franchising process continued, with seven stores sold to franchisees during the year. This included two turnkey stores. Restaurant Brands has now consolidated on six company-owned stores with independent franchisees operating 99 stores. Overall, store numbers remained constant during the year with the seven Pizza Hut stores sold offset by three new KFC store openings and the continued roll out of Taco Bell, with six new stores opened across New Zealand including three in the South Island. Two poorly performing Carl’s Jr. stores were closed and rebranded as Taco Bell and KFC stores. All nine of the new stores are trading well.
Actual
31 Dec 2021
Actual
31 Dec 2020
Change ($)
Change (%)
Store sales ($Am)
230.0
202.4
+27.6
+13.6%
EBITDA ($Am)
29.8
27.7
+2.1
+7.6%
EBITDA as a % of sales
13.0
13.7
Store numbers
79
70
AUSTRALIAN OPERATIONSIn $NZ terms, the Australian business contributed total sales of $NZ244.1 million (up 13.6%) and a store EBITDA of $NZ31.6 million (up 7.5%).Total sales in Australia were $A230.0 million, up $A27.6 million (or +13.6%) on last year, primarily due to the effect of additional store openings and the acquisition of five stores in Sydney in February 2021. Continued disruption to the business due to COVID-19 included the temporary closure of all mall stores and Sydney CBD in-line stores. This, together with the extended closure of all dine-in facilities in our restaurants has had a continued adverse effect on the Australian results. In February 2021, the Company acquired five KFC stores in Northern Sydney that have subsequently traded above expectations. There has also been continued investment in KFC store upgrades with eight store refurbishments completed during the year. Four new drive-thru Taco Bell sites also opened during the year bringing total store numbers to 79, nine up on 2020.
The closure of the dine-in facilities due to COVID-19 resulted in the home delivery service continuing to grow in popularity. This has helped to maintain same store sales growth over the past 12 months at +1.4%. Store EBITDA of $A29.8 million (13.0% of sales) was up $A2.1 million or +7.6% on last year.
The increase was assisted by the 10 months trading from the five stores acquired in February 2021. However continued cost pressures, along with the ongoing COVID-19 disruptions, have resulted in a drop in the % EBITDA margin from 13.7% to 13.0%.
In February 2021, the Company acquired five KFC stores in Northern Sydney that have subsequently traded above expectations.
$461.1m
NEW ZEALAND TOTAL STORE SALES ($m)
$230.0m
AUSTRALIA TOTAL STORE SALES ($Am)
Annual Report 31 December 2021
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Restaurant Brands New Zealand Limited

In the first full year of trading, total sales in California were $US110.3 million, with store level EBITDA of $US16.8 million (15.2% as a percentage of sales). The reduction in % EBITDA margin was the result of supply chain issues and cost pressures which are expected to continue into 2022.The sales for the year were particularly strong, driven in part by two rounds of Government stimulus payments (the first in January and a larger second payment in March 2021). Both rounds of payments saw significant increases in consumer spending. As seen across all our divisions, delivery channels continue to be key to business success. In California, the new KFC.com platform and mobile app were launched in the second half of the year with strong uptake. In addition, the national launch of the KFC online ordering Quick Pick-Up
digital sales channel is ensuring a faster, easier and more relevant experience for our customers and adding more channel capacity to our stores. The KFC.com and mobile app has also been complementary with our aggregator delivery channels.Two new stores were acquired during the year (one in July and a second store in December). After some refurbishment, both stores were up and running well. In line with our strategy, more capital expenditure is planned for this
market, including new store builds, of which three are expected to open in the first quarter of 2022. Total store numbers are 70, up from 69 at the end of 2020.
Actual
31 Dec 2021
Actual
31 Dec 2020
Change ($)
Change (%)
Store sales ($USm)
146.3
139.3
+7.0
+5.0%
EBITDA ($USm)
24.4
21.5
+2.9
+13.5%
EBITDA as a % of sales
16.4
15.6
Store numbers
73
72
HAWAIIAN OPERATIONSIn $NZ terms, Hawaiian operations contributed $NZ206.5 million in revenues and $NZ33.9 million in EBITDA for the year. Whilst reported sales in $NZ were down $8.6 million due to the strengthening NZD/USD exchange rate, they were actually up by $US7.0 million in $US terms.Total sales in Hawaii for the period were $US146.3 million with store level EBITDA of $US24.4 million (16.4% as a percentage of sales vs 15.6% in the prior period).Reported sales are up $US7.0 million to $US146.3 million primarily due to a strong recovery by Taco Bell after being more affected by COVID-19 in 2020. Same store sales growth was 9.1% for the year, up on the 7.7% same store sales growth in the prior year.Taco Bell recovered strongly in 2021 after being harder hit in 2020 than Pizza Hut with the closure of its
dine-in channels. Increased use of delivery channels resulted in strong growth as customers continued to move away from dining out. Use of the Taco Bell mobile ordering system has also grown substantially as the mobile ordering offers customers a touchless option.The Pizza Hut ordering system also continued to grow sales with over 60% of orders now performed online. Touchless deliveries coupled with real time order tracking appeals to customers wanting to know where their pizza is from the safety of their homes. The continued growth of the delivery channels combined
with some strong promotional activities such as, the Big New Yorker Pizza and the impact of new and refurbished stores has resulted in another strong year for the Pizza Hut brand.Store numbers are up by one from December 2020 with one new Taco Bell and one new Pizza Hut store being opened during the year, offset by the closure of one Taco Bell. The new stores opened during the year are performing well.
Actual - 12 months
31 Dec 2021
Actual - 4 months
31 Dec 2020
Change ($)
Change (%)
Store sales ($USm)
110.3
35.6
+74.7
209.8%
EBITDA ($USm)
16.8
5.8
+11.0
189.7%
EBITDA as a % of sales
15.2
16.4
Store numbers
70
69
CALIFORNIAN OPERATIONSIn $NZ terms the California operations contributed $NZ156.5 million in full-year revenues and $NZ23.8 million in EBITDA, up significantly on the four month period included in FY20.
The Pizza Hut ordering system also continued to grow sales with over 60% of orders now performed online.
$146.3m
$110.3m
HAWAII TOTAL STORE SALES ($USm)
CALIFORNIA TOTAL STORE SALES ($USm)
Annual Report 31 December 2021
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Restaurant Brands New Zealand Limited

DIVIDENDDirectors have assessed at balance date the current and projected financial position of the Company, in particular its cash flows, capital expenditure demands and debt levels. Given both the strength of its cash flows and the fact that there are currently no significant acquisitions under consideration, the board has elected to pay a dividend to shareholders, the first since the FY18 year. A final dividend has been declared for 32.0 cents per ordinary share, payable on 22 April 2022 to all shareholders on the register on 8 April 2022. The dividend will be paid as fully imputed to all New Zealand resident shareholders. In addition a supplementary dividend of 5.6474 cents per share will be paid to all overseas shareholders at the same time.There is no dividend reinvestment plan in place for this dividend.
FUTURE STRATEGIESDespite the challenges of operating under ongoing COVID-19 cases, Restaurant Brands intends to continue taking a ‘business as usual’ approach with further growth through acquisitions, store refurbishments and new store roll outs.New KFC and Taco Bell store builds will continue to drive sales and profit enhancement in New Zealand and Australia.Taco Bell scrape and rebuilds in Hawaii will also further enhance the business performance.The California acquisition is now settled in and trading well, with plans for additional stores by both new store builds and ongoing acquisitions.The strong results achieved in 2021 confirms the wisdom of our geographic and brand diversification strategy.
STAFF APPRECIATIONThis has been another challenging year for the 11,440 staff members of Restaurant Brands, particularly with the uncertainty and challenges brought about by COVID-19 continuing for a second year. The entire team has done an outstanding job not only adapting to new COVID-19 challenges, but finding new and better ways to provide a great dining experience to our many satisfied customers. We also acknowledge that for many of our employees, the wider impact of COVID-19 on them and their families has been particularly difficult with some team members directly impacted by the virus.
CORPORATE & OTHERGeneral and administration (G&A) costs were $50.0 million, up $4.4 million from last year due to the inclusion of a full year of California G&A costs. G&A as a % of total revenue was 4.7% which is down from 5.1% for the period ended 31 December 2020. This was largely due to the effect of the closure of the New Zealand stores and the lost sales during both 2021 and 2020.Depreciation charges of $75.9 million for the year ended 31 December 2021 were $11.1 million higher than the prior year primarily due to the impact of the full year of California results. Of the $75.9 million, $38.2 million related to right of use asset depreciation incurred under NZ IFRS 16.Financing costs of $36.3 million were up $6.1 million on prior year, once again reflecting the impact of a full year’s results from California. Interest on bank debt for the period ended 31 December 2021 was $6.8 million, up $0.4 million on last year due to the additional debt taken on to acquire the California business in September 2020. This was partially offset by lower effective interest rates following the restructure of the Group’s debt facilities which was activated in May 2020.Tax expense was $13.9 million, in line with the prior year. The effective tax rate was 21.1% (31.2% for FY20) with a higher level of non-assessable income in the current year including the forgiveness of the PPP Loan.OTHER ITEMSOther Net Income of $7.2 million is up from a Net Expense of $4.8 million for the prior year. This relates to the forgiveness of the PPP loan of $11.4 million and the acquisition costs associated with the California acquisition of $4.3 million in the prior year. $4.2 million in systems development costs was also incurred this year as part of a major overhaul of the Company’s financial systems.
CASH FLOW &BALANCE SHEETThe total assets of the Group are $1,329.8 million, up $149.7 million primarily because of new store acquisitions and new store builds which increased the value of both property plant and equipment as well as lease assets. Equally, there has been an increase of $89.8 million in liabilities, primarily reflecting the future discounted lease liability on leases acquired and an increase in debt drawdowns arising from the acquisition of seven stores through the year.Operating cash flows up $15.2 million to $126.4 million, reflecting the strong trading performance. The inclusion of the full year of trading for the California business has also had a positive impact on operating cash flows. Net investing cash outflows were $109.6 million (versus $177.3 million last year) including the acquisition of two stores in California and five in Australia for a total of $28.0 million. Payments for fixed assets and intangibles of $85.5 million was up from $59.9 million with three new KFC and ten new Taco Bell stores in New Zealand and Australia and significant KFC refurbishment expenditure in both those markets. In addition, there were several major Taco Bell refurbishments in Hawaii. This year’s net investing cash flows also included inflows of $2.6 million received, primarily from the sale of Pizza Hut stores in New Zealand.
ANNUAL SHAREHOLDERS’ MEETINGThe Annual Shareholders’ Meeting of the Company will be held on Thursday 26 May 2022. Given the COVID-19 uncertainty, it is likely to be a virtual meeting.Signed on 28 February 2022.José ParésChairman of the Board Russel CreedyGroup CEO
Annual Report 31 December 2021
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Restaurant Brands New Zealand Limited

DELIVERING EVERYDAY.IN ALL WAYS.
Why is that? Our people. They have been truly amazing – pulling together and supporting each other – we can be proud of the strength of teamwork everyone has shown across the board, at all levels. STRENGTH. INSIDE OUTOur business has what we might call an outer resilience that ensured business continuity throughout the pandemic. In last year’s report we talked about this as our business strategic strength, afforded by having operations across different time zones and cultures, different brands and unique tastes, multiple
formats like drive-thru, delivery, click and collect and digital ordering. COVID-19’s impact could be absorbed and dispersed.But there’s an inner resilience that’s driven it, and that comes from every one of our people. It’s this staff fortitude that has pulled us through one of the most protracted and difficult periods in our company’s history. We might say we’ve become managers of chaos and have mastered – or rather got the hang of – the complexities of moving in and out of lockdown, and now of course, the squeeze of Omicron. It’s been no easy ride.
For the past two years the world has been in retreat,
hunkering down and not going out. Hospitality businesses everywhere have felt the brunt of
COVID-19 restrictions. Yet despite the chaos,
despite the stresses, we think we can be satisfied
with the way we came through it and delivered our
customers the best experience we possibly could.
MICHAELA PAYNE Area Coach, Taco Bell, NSW, Australia Michaela’s one of those people who epitomise tenacity, resilience, and leadership. As Area Coach for eight Taco Bell restaurants across New South Wales she dug deep and managed to support all her teams throughout one of the most challenging times ever. Long days would see her helping out on many fronts as all her restaurants struggled in the face of lockdowns, virus-induced staff shortages and travel restrictions.
“COVID-19 restrictions severely constrained
us so we had to mobilise skeleton teams
across New South Wales and train people up
in new skills so customers could continue to
get their food with the service they expect.”
CHANGES & CHALLENGES
Right from the start of it all, back in March 2020, we’ve had to negotiate two fundamental people issues; our people as resource, and secondly, our customers who have come to depend on us being there rain or shine. The two are, of course, intertwined.Many of our customers are regulars. In their minds we can’t close and their favourite menu item must always be available. It’s as though our restaurants have become symbols of certainty in life.
BUSINESS DIVERSIFICATION
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Restaurant Brands New Zealand Limited

ALEX CHAVEZ Restaurant GM, KFC, CaliforniaAlex knows the KFC store operation inside out having worked with the brand in Los Angeles for the past 10 years. He started out as a Team Member and has since made his way up to Restaurant General Manager. Alex is remarkable because he is one of those people who shows great leadership qualities time and again no matter what the situation. He has been the go-to manager to help many Los Angeles KFCs find their feet during and immediately after a grand opening, or to guide a store through a transition, for example, when a store has had to close and teams need help relocating.
“I feel very proud to be a part of KFC in Los Angeles and
especially proud of my team in the way they stepped
up and made sure business continued throughout all
of the COVID-19 restrictions.”
ROSIE SOLOMON Restaurant GM, Pizza Hut, Hawaii If you need proof that leadership sets the example for others to follow then look no further than Rosie. Her team are a credit to her dedication and passion for customer service. She’s full-on, everywhere greeting customers; at the counter, at the door and even at the curbside with a ‘Hi, welcome to Pizza Hut’. Rosie’s upbeat, enthusiastic and caring personality is infectious since her team were able to continue that same commitment to customers throughout the labour shortages associated with COVID-19 restrictions.
Neta’s been with KFC for 25 years. She started as a Team Member and through her passion for the brand and delighting our customers every day she has developed her career enormously. Today she heads up one of Auckland’s largest and busiest stores at Mangere Central. When the Auckland region emerged from a hard lockdown, it was big stores like Neta’s that shone. Through the strength of Neta’s positive, can-do personality, her team was able to rise to the challenges of very tight restrictions on health, travel and contactless service and meet the needs of her Mangere community hungry for their favourite food.
NEXT NORMAL?Are we – all of us in this billion dollar restaurant business – stronger for what we’ve been through these past two years? We’d like to think so. We’re becoming more confident. We know who to call, what channels to close if we have to, and how to adjust menus. We’ve learned from each other across brands and markets and we’ve become stronger company-wide as a team. Communication, coordination, collaboration and cooperation have proved critical. And like many businesses we now have well-established support and wellbeing programmes to help our teams manage the stresses. There’s a belief now that we can tackle whatever COVID-19 throws at us next. The business has shifted focus in some areas – home delivery, online ordering, click and collect took off during COVID-19 and have shown us these channels are set to grow even further. And, of course our growth strategy prevails.We love this business, and we’re extremely proud of the people who have helped to pull us through the worst. They’ve been extremely resilient and learned fast. After all we’re a fast business. An everyday business. Open and serving our customers in all the ways that we can.
So when lockdowns required us to close parts of our operation, or with New Zealand’s full lockdowns, all of it, it’s understandable how many customers struggled to understand the changes we had to make. Yes, we’ve had our share of customer tensions on our restaurants’ front line.Meanwhile, our people – our teams in the restaurants, our managers across all brands and all markets – none of them, none of us, could have imagined the challenges that the past two years would bring. How we would need to protect our people from the virus and from the anxiety of uncertainty when, overnight, operations were plunged into indefinite full or partial lockdown.Very quickly our front line managers, from Invercargill to Los Angeles, had to learn the rules of the day, be able to share them with their teams, and comfort those who found it all too much to comprehend. And then the rules might change. They learned to clean up, lock up and shut down dining areas, to suspend rosters, to cancel stock orders, preserve food or, in many cases, distributed or disposed of.Then there were the restarts. Or the shifting up a gear as markets moved down from one COVID-19 level to the next. In New Zealand’s case it meant restarting from cold. Mothballed operations needed to be up and running again within a matter of a few days. Restaurant teams would have to mobilise and new rosters prepared. Managers would need to keep their teams engaged and enthusiastic. There’d be food to order and supply lines reactivated. Everybody in the team – from management working from home to field managers and front line workers – had to know what to do, how and by when. So that when doors reopened, when customers hungry for their
favourite food queued in their cars, or online orders for the delivery or click and collect options flowed through, the customer’s experience would be the best we could possibly make it.Communication was paramount – it always was of course. But throughout the stop-start of the pandemic, and with management support working from home, we learned to tighten up even more on crystal clear, precise communication. To everyone, about everything. A ‘what-could-possibly-go-wrong’ attitude had to prevail. And it worked.Remobilisation en masse has become an all too familiar hallmark of the pandemic. In many respects it proved harder to start operations back up than it was to close them down. All our restaurants have had to adapt fast to the changes. Like rules of engagement under the traffic light system, and vaccination mandates and vaccine passes. All sources of tension and anxiety. However, our team persisted and have worked throughout these challenges.OMICRONThe game changed with Omicron. By and large to that point we had managed to protect our teams and weren’t significantly hit by infection – the restrictions prevented that. But with Omicron, our teams have suffered. Now managers and teams are struggling with staff shortages and isolations for weeks at a time. The stresses are different. So our response to Omicron has had to be different. Our agility, our ability to flex, to reschedule our hours, to manage our food orders and adjust our menus, to upskill, to re-roster at the drop of a hat, to step into someone else’s role, at a different restaurant with a different team is the new game.
“Compromising on
service and the quality
of our food is simply not
an option. So whatever,
whenever and however,
the customer comes
first. It’s something
I and my team take
very seriously.”
“Mangere loves its KFC.
Customers were queuing
immediately when we
came out of Level 4
lockdown and the team
here was awesome in
giving great service under
difficult conditions.”
NETA KELEMETE Restaurant GM, KFC, Auckland, New Zealand
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OPENING UP.
Since 2020 at the start of the
COVID-19 pandemic, our employees
throughout the world have been
preparing and delivering food to our
customers. Four of our employees
share with us their stories over the
last two years.
Meet the employees
CARL’S JR., NEW ZEALAND
ROSALINDA
OLIPHANT
JOSEPH
HANOUN
KFC, AUSTRALIA
UBALDO
NARCISO
KFC, CALIFORNIA
TACO BELL, HAWAII
LEILANI
VILLANEUVA
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Restaurant Brands New Zealand Limited

“ I love to give
our customers
the best service
I can – no
matter what.”
Rose is our guest service superstar! Her smiling face has become a trademark for the warm friendly greeting she’s been giving to our Carl’s Jr. customers for close on seven years now. It’s a shame that she’s had to hide her smile behind a mask during COVID-19 restrictions. Nonetheless, in the face of extraordinary operational challenges and barriers to the usual customer experience – like hygiene protocols, distancing, contactless service – Rose’s smiling eyes continued to shine day in day out as she engaged customers with exceptional service.We love your commitment, Rose. You’re a big part of our restaurants, the team and the local community.ROSALINDAOLIPHANT
Team member, Carl’s Jr.,
Rotorua, New Zealand.
“ Seeing a
customer
really happy is
so rewarding.
It makes me
feel good.”
How’s this for stepping up? When Ubaldo’s KFC restaurant was under severe pressure from staff shortages, Ubaldo – normally a cook – learned to take and pack orders out front, and took it upon himself to take hospitality classes at school so he could introduce improvements in overall customer service.If ever there’s a complaint (not often), he takes it personally making sure to meet the customer and see that they are satisfied. He’s learning fast and is already providing great feedback to management on how the restaurants can make even better advances in customer measures.UBALDO NARCISO
Team member, KFC,
Palmdale, California.
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A real trooper is our Joseph. He works in an area of New South Wales that was seriously hit by COVID-19 in 2020 and 2021. KFC restaurants there struggled to keep the doors open as staff succumbed to the virus and restrictions and lockdowns bit hard. Joseph went way beyond the call by helping out at practically every store, either covering someone else’s shift or working for a few weeks because a store was short-handed.In the 3.5 years that Joseph’s been with us he’s excelled, transitioning from food service to front of house and showing a real talent and attitude for what customer service is all about. So we’re promoting him – Joseph will soon complete his own training as a shift supervisor.
“ The team here
has helped me
grow – I’ve truly
learned a lot.”
JOSEPH HANOUN
Team member, KFC,
Punchbowl, NSW, Australia.
She may wear an everyday crew uniform but the rest of the team look up to Leilani as a leader. Her people skills are top notch and she never has to be told what to do – she just gets on and does it. It’s a terrific quality and Leilani epitomises what it means to be a team player. Throughout the peak of the pandemic when restaurants were short-staffed she often stayed behind to cover shifts working extra hard by covering multiple stations. Good on yer Leilani.
“ You do what
you have to do.
Being part of
a great team
makes it easier.”
LEILANIVILLANEUVA
Team member, Taco Bell,
Kapolei, Hawaii.
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Restaurant Brands New Zealand Limited
Annual Report 31 December 2021
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IMPROVINGALWAYS.
SUSTAINABILITY REPORT
ONGOING COMMITMENTOur purpose at Restaurant Brands is to be ‘a thriving business built on brands that our employees and customers love and trust’. The pillars that underpin this - our people, our planet and our food - are of paramount importance to us and we are proud of the advances we continue to make in these areas.SUSTAINABILITY GOVERNANCE Throughout our company we are committed to driving sustainable growth and being good corporate citizens. Our Board oversees Restaurant Brands’ sustainability performance and provides strategic input and governance on our Sustainability Framework. Major initiatives, programmes and policies under the framework are discussed and signed-off at Board level. The Audit & Risk Committee of the Board oversees all significant risks to our business through the Risk Management Framework and any sustainability or climate-related risks that are identified as critical to our business are closely monitored by the management committee and reported to the Audit & Risk Committee.
Operational responsibility and oversight for our sustainability strategy falls directly to our Executive Sustainability Committee who develop and support the Sustainability Framework, its strategic objectives and review progress. Input is provided by the Board, Department Heads and members of staff. It is the role of the Committee to develop, review, refine and aid the implementation of sustainability programmes and policies.Each of our business units has a committed Environmental Lead, collating and providing information on a quarterly basis and providing valuable local insights to the Executive Sustainability Committee.IMPROVING THE RECIPEWhen Restaurant Brands embarked on its journey to greater sustainability we knew the path would not be straight. In the past two years COVID-19 has certainly created unforeseen twists with ongoing restaurant closures, tight labour markets and supply chain challenges. Despite this, we have made steady progress on establishing targets, measuring our achievements and developing new initiatives to drive improvement in our environmental strategies.
Our Sustainability Framework, established in 2019, has guided us to date.Three years down the track, with many learnings under our belt, significant growth, and an ever-evolving business environment, we felt it was time to review our framework to ensure it captured industry best practice and recognised the current risks and opportunities for our business and sector. We engaged a global ESG consultancy group to conduct a peer group and gap analysis on our behalf.The most significant finding of our review was the need to fully consider and bring climate change and greenhouse gas (GHG )emissions into our Sustainability Framework and we are pleased to have completed the first step in this process. A detailed account of our plan to integrate this follows on page 42.So while the pillars of our framework remain, we have updated our strategic themes and reorganised the relative programmes to better accommodate our review findings. This updated framework will also guide the presentation of information on the coming pages. Come and see how we are getting on...
SUSTAINABILITY FRAMEWORK
ENVIRONMENT, SOCIAL & GOVERNANCE
An inclusive and productive team focused on wellbeingWastemanagementFoodcompliance
Supporting our communitiesResourcemanagementEthicalsourcing
PROGRAMMESPROGRAMMESPROGRAMMES• A diverse and inclusive work force•

Competitive remuneration
•

First job
•

Career progression
•

Staff satisfaction and wellbeing
•

Lost time injuries
•

Workforce relations and monitoring
•

Zero tolerance for forced or underage labour
• Charitable donations• Local sponsorships and partnerships• Food recovery • Local procurement
• Customer-facing packaging
waste reduction and diversion
• Back-of-house waste reduction
and diversion
• Construction waste reduction
• Develop our Carbon Management Plan• Energy usage• Solar energy innovation• Low impact home delivery • Water management• Green buildings
• Food safety and product quality • Food safety training • Supply chain food safety • Nutritional profile• Active reduction of fats / sodium / sugar • Hormone and steroid free • Responsible antibiotic use
• Supplier audit programme • Animal welfare • Palm oil free
CARING ABOUT
PEOPLE AND
COMMUNITIES
ENVIRONMENTAL
CONSCIOUSNESS
LEADING IN
FOOD QUALITY
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Restaurant Brands New Zealand Limited

CARING ABOUT PEOPLE AND COMMUNITIES
An inclusiveand productive team focused on wellbeing
A DIVERSE & INCLUSIVE WORK FORCE
MALEFEMALENOT SPECIFIED
Our ongoing goal is to keep salary and wage levels on or above market.
ADULT MINIMUM WAGE BY DIVISIONAs at 31 December 2021
PERCENTAGE OF EMPLOYEES ON MINIMUM WAGE
RESTAURANT BRANDS AVERAGE HOURLY WAGE
In New Zealand our lowest rateof pay is $20.10 per hour – 10 cents above minimum wage. 38% of our employees are on this entry-level wage.
CALIFORNIA ($US)NEW ZEALAND ($NZ)$20.87MALE
$20.00
$21.03
FEMALE
0%
AUSTRALIA ($A)$17.84MALE
$20.33
$17.89
FEMALE
0%
HAWAII ($US)$11.09MALE
$14.00($15.00 IN CITY OF LOS ANGELES METROPOLITAN AREA)
$12.14FEMALE
12.5%
$15.96
MALE
$10.10
$17.51
FEMALE
24%
Australia has a large casual workforce, with 94% of all employees working on this basis. The majority of that workforce are youth, and both casual and permanent employees are paid above the minimum Fast Food Award wage of between $8.71 to $19.61 for 15 – 20 year olds.
To remain competitive,Hawaii pays above the State minimum wage and our employee’s ‘package’ also includes medical benefits and a retirement plan.
California pays the State or applicable local jurisdiction minimum wage at point of entry.
COMPETITIVE REMUNERATION Our ongoing goal is to keep salary and wage levels on or above market; therefore, we benchmark market rates across the business to ensure our remuneration is competitive and our employees feel valued.
NEW ZEALAND
Senior leadership team
All employees
AUSTRALIA
Senior leadership team
All employees
HAWAII
Senior leadership team
All employees
CALIFORNIA
Senior leadership team
All employees
GROUP
Board
Key management team
FIRST JOB For many, a job at one of our restaurants is their first, and we are proud to be able to offer this opportunity. To ensure our new team members get off to the best start, we focus on these key areas: • ease of job application,• easy to understand, timely and
engaging onboarding,
• a well prepared and welcoming induction
for that ‘first day’,
• easy access to e-learning and a positive
restaurant training environment, and
• early conversations on development and
training paths including pay structure.
To better understand the significance of ‘first job’ roles within our company, we are now capturing data around this and will report on it in the coming years.In the meanwhile, across the divisions, there are some exciting initiatives underway including interactive based learning experiences to engage with our workforce. Watch this space!
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Restaurant Brands New Zealand Limited
71%
70%
75%
35%
56%
57%
71%
48%
40%
48%
29%
30%
25%
47 %
44%
43%
29%
52%
60%
52%
18%

STAFF TURNOVER (as a % of average total staff)NEW ZEALAND2019
2020
2021
70.0%
55.8%
74. 9%
6% involuntary
AUSTRALIA2019
2020
2021
42.6%
50.5%
48.7%
1% involuntary
HAWAII2019
2020
2021
60.2%
52.7%
79.0%
11% involuntary
CALIFORNIA2019
2020
2021
n/a
61.0%
86.0%
4% involuntary
Involuntary turnover is any instance where Restaurant Brands has decided to terminate an employee. This includes store closure and employment abandonment.The nature of the QSR industry and the fact that, for many, a job in QSR is a step on their career ladder means that high turnover is a systemic feature of our business. As an indicator of workplace culture and conditions, we measure staff turnover rates against those of our peers. Our aim is to manage turnover so that it doesn’t negatively impact on operations. The uncertain environment at the beginning of the COVID-19 pandemic in 2020 resulted in very low turnover, as people across the world clung to jobs. As confidence improved in 2021, the labour force became more mobile, and there was increased competition for staff. In New Zealand, Hawaii, and California, this has driven staff turnover up to unsatisfactory levels. To improve this, we are developing new retention strategies along with improving employee satisfaction, as noted earlier.
WORKFORCE RELATIONS& MONITORING New Zealand operates under both collective and individual employment agreements which provide for fixed shifts for employees. All restaurant employees are required to record their hours of work and are paid accordingly. We are also compliant in paying to the collective and individual rates of pay. Payroll and HR/Recruitment teams to ensure key employment records and pay are accurate. The Australian division operates under the KFC National Enterprise Agreement 2020 and Taco Bell Team Members Enterprise Agreement 2020. Employees in restaurants are required to record their hours of work and are paid accordingly to the hours worked. Pay records are audited annually to ensure compliance with the Enterprise Agreements. Enterprise agreements are not a feature of the Hawaiian and Californian QSR markets, but nevertheless, our policies and processes are designed to comply with local labour laws.
CAREER PROGRESSION At Restaurant Brands, we want our people to be the best they can be. To drive this, each of our divisions has brand and core competency training frameworks that encapsulate all the related knowledge, skills, abilities, and attributes an employee needs to be successful in their role and progress within the restaurant and business. These frameworks are used to hire, develop, measure performance and potential, and to promote, whilst also ensuring the business has the right people with the right skills to fulfil critical roles as they become available. For greater consistency across our network and to best identify and nurture the talent of our people we are currently working on a Career Progression Framework. This is due to be launched and implemented in the coming year. To measure Restaurant Brands’ performance in supporting our people to be the best they can be, we look at the percentage of employees that make a ‘Job step’, or are promoted, within the year. Here’s how we are doing below:
In Australia we have seen a 3% decrease in the KFC Voice of Champions survey, indicating further opportunities around employee engagement. We’ll be focusing on building greater connection, reward, and recognition into our roles. Although voluntary, all California employees are encouraged to complete the KFC Voice team engagement survey. The results of these surveys are reported back to Restaurant Brands, and together with KFC US, we work to develop an action plan for any improvements. Some of the questions include:
•
satisfaction with job,
•
recommend KFC as a great place to work,
•
plan to be working for KFC in six months,
•
personally committed to KFC’s success, and
•
energised when doing my job.
Our people are our biggest asset, and we foster an inclusive, rewarding, and safe environment in which everyone can thrive. To measure employee satisfaction, the divisions use a variety of surveys – some from franchisor Yum!, some at a brand level and, in New Zealand, a Restaurant Brands Engagement Survey.
NEW ZEALAND
13.3%
HAWAII
10.2%
AUSTRALIA
7. 4%
CALIFORNIA
8.8%
JOB STEPMOVES IN 2021
STAFF SATISFACTION & WELLBEING NEW ZEALAND Engagement survey
AUSTRALIA KFC Voice of ChampionsCALIFORNIA KFC Voice of Champions
HAWAIISatisfaction survey
66%
89%
44%
64%
Zero tolerance
for forced or
underage labour
Restaurant Brands has a zero-tolerance
policy for forced or underage labour in
effect across our business and wider
supply chain. There were no known
breaches of this policy in the last year,
and we will continue to be vigilant in
the monitoring of this.
LOST TIME INJURIES (per million hours worked)
2019
2020
2021
NEW ZEALAND
6.3
5.2
10.4
AUSTRALIA
10.0
11.9
17. 1
HAWAII
6.2
2.5
4.1
CALIFORNIA
n/a
5.2
9.1
The safety of our employees is of utmost importance and a measure of this is the time lost to injuries. This year, across the business, we have seen a disappointing increase in these injuries. To improve our performance and mitigate the number of injuries in the coming year, we will have a strong focus on injury prevention. This is primarily around following procedures and using the correct tools and PPE for the task, causation analysis (to gain further insights re-injury reduction) and supervision of tasks being performed, with each of the divisions deploying a safety plan addressing specific safety initiatives relative to their environment.
STAFF SATISFACTION
(annual average score in given survey)
34
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CHARITABLE DONATIONS Restaurant Brands is proud of its contribution to the communities we serve, delivering important economic benefits and supporting a range of community and charitable organisations. In 2019, we established the Restaurant Brands Charitable Fund through The Gift Trust, a registered charity in New Zealand. Through this ‘gifting platform’, we’ve donated $300,000 in the past three years.Supporting our communities $300,000
Beneficiaries this year include:
The Restaurant Brands Charitable Fund is committed to supporting youth-orientated New Zealand charities that focus their activities on improving access to education. As a large employer of young people, this cause is close to our hearts. Through the fund, we now donate to Birthright, a provider of social services for single parents, and Manaiakalani, which supplies devices and digital learning to underprivileged families.
$35,000to the Manaiakalani Education Trust $35,000to the Birthright New Zealand Trust$30,000to First Foundation
LOCAL SPONSORSHIPS & PARTNERSHIPS In addition to our Group charitable donations, each year, across our divisions, we assist key community organisations, offering financial, marketing and promotional support. Organisations we have supported in the past year include:NEW ZEALAND
($NZ)
$140,154Surf Life Saving New Zealand - KFCWe couldn’t be prouder of the contribution we make to these organisations that make a difference in New Zealand communities every day.
KFC has been a gold partner of Surf Life Saving New Zealand since October 2012 and, as of 31 December 2021, has raised a total of $1.58m for this very worthy organisation. Every year the money raised in our summer appeal helps keep kiwis safer at the beach, and supports the 4,500 volunteer lifeguards on duty over the summer.
Pizza Hut has also joined forces with an iconic New Zealand charity by becoming an official partner of St John New Zealand and providing the emergency ambulance service and community health services with essential fundraising support.
$51,000St John - Pizza Hut
$10,915Community donations - All brands
AUSTRALIA
($A)
$37,000KFC Youth Foundation
In Australia, a large proportion of KFC team members are under the age of 25 years, and that’s a key driver behind our passion to support Australian youth. The KFC Youth Foundation was established by Yum! to help give young people mental well-being support through charity partners; The Black Dog Institute, ReachOut Australia and Whitelion, and together with KFC restaurants across Australia, we are helping
young Aussies thrive. From launch, in May 2018, the KFC Youth Foundation has raised more than $A6 million.In 2021 fundraising was limited due to restaurant closures, limited trade and cashless operations, but this year we are pleased to be offering customers the opportunity to round up their orders and include a donation, along with cashless donations.
We are also supporting five students through tertiary study scholarships via the First Foundation. The Restaurant Brands Charitable Fund is managed at a group level by a panel responsible for reviewing the allocation of funds on an ongoing basis to ensure that they remain relevant and valuable to our communities. It includes Restaurant Brands’ executive management and Board members.
donated in the past three years
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Restaurant Brands New Zealand Limited

CALIFORNIA AND HAWAIIIn the US, the supply chain is managed by Restaurant Supply Chain Solutions; a Yum! Brands co-operative. Whilst they do not track domestic vs international spend, they only look to international supply if there isn’t a domestic supply option. For packaging, a small quantity of paper bags are sourced internationally along with resin, gloves, straws, and cutlery. That equates to < 15% of our total packaging spend coming from international sources.
NEW ZEALAND26.9 TONNESOver the past year we have partnered with KiwiHarvest to assist with food recovery and the re-distribution of chicken, bacon, cheese, beverages and fresh produce from our restaurants and distribution centres. The 2021 tonnage reflects a large amount of perishable goods distributed when COVID-19 led to mandatory restaurant closures.
Each year, a portion of our Californian restaurants’ coleslaw sales go to the KFC Foundation. This allows us to be part of the Kentucky Fried Wishes grant programme and to make a tangible impact in our community by nominating local non-profit organisations to be the recipient of one of 11 grants nationwide.This year we were delighted that our nominee, the Alzheimer’s Association of Ventura County, was selected as one of the 11 winners and, even more so, to hand over a surprise cheque for $10,000 to the organisation on 9 September, Colonel Sanders’ Birthday! Hawaii Pizza Hut has a long history of supporting literacy organisations. One of these organisations is ‘Book It’, established to motivate school students to read more books through a reward system of certificates and free pizza. Irresistible!Another is the Literacy Fund, a donor-advised fund established at the Hawaii Community Foundation. Its main purpose is to increase reading and literacy in Hawaii. In 2021, $25,000 from the Fund was donated to three organisations; Hawaii Literacy’s Bookmobile, Read to Me International 2022 conference, and Maui Hana Arts
The Taco Bell Foundation is focused on youth empowerment by helping young people explore their career passion with scholarships, experience and community support.
Literacy Theater Program, and $9,000 was awarded in college scholarships. Taco Bell is also proud to support the communities where we operate. The Taco Bell Foundation is focused on youth empowerment by helping young people explore their career passion with scholarships, experience and community support. Funds are raised via national Taco Bell fundraisers like ‘Round Up’ where customers can donate a small amount by rounding up their check to the nearest dollar. These small donations add up quickly and fund valuable scholarships to many future leaders.
CALIFORNIA
($US)
$43,517KFC Foundation/Kentucky Fried Wishes
KIWIHARVEST
FRESH CONNECTION
HAWAII
($US)
$45,000Literacy Foundation Grants & Scholarships - Pizza Hut$27,471Taco Bell Foundation Donations$9,800Taco Bell Owners Giving$4,369Book it - Pizza Hut$2,550Friends of the Library
FOOD RECOVERY Food recovery, the practice of collecting edible food that would otherwise go to landfill and distributing it to those in need, is win win. It’s good for the environment and the community. Food distributed during 2021:
AUSTRALIA1.13 TONNESIn Australia, 1.13 tonnes of cooked chicken products were donated to OZ Harvest from three restaurants, and we will continue to explore future growth opportunities. This converted to 2,260 meals.
CALIFORNIA39.24 TONNESKFC has been donating surplus food from its US restaurants in partnership with Food Donation Connection for more than 20 years through the Harvest Program, KFC’s prepared food donation programme. This coming year each of our restaurants will appoint a supervisor in charge of leading the initiative for the donations.
HAWAIIAt this time, we do not have a food recovery partner in Hawaii.
LOCAL PROCUREMENT In New Zealand we manage procurement and the supply chain for all brands and restaurants. Where possible, it is our policy to purchase local, to both support the community and reduce our the impact on the planet.Percentage of locally based suppliers in 2021: NEW ZEALAND 76%100% of our chicken is sourced locally, along with all fresh produce, fries, beverages, flour, oil, and pizza boxes. Outside of New Zealand procurement is managed by our franchisor Yum! and we are dependent on the supply chain of each brand, but we are able to share the following insights:
AUSTRALIA 93%KFCAll KFCs in Australia use 100% local chicken, bread, flour, canola oil for cooking and fresh produce are sourced from Australian farmers and suppliers (approximately 85% of all ingredients).Both brands currently source some packaging, uniforms and restaurant equipment internationally, along with Taco Bell’s sauces and rice.
80%TAC O B E L L
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Restaurant Brands New Zealand Limited

The packaging used to serve and transport our food to our customers makes up a large amount of our total waste and we constantly strive to reduce and divert this wherever possible, in ways big and small.To better understand the progress we are making and the opportunity to improve upon it, we would ideally assess the levels of our packaging sent to landfills not only by us, but also by our customers. This is a challenge with every division having operational differences and having limited control over how our customers dispose of their waste when purchased via drive-thru or delivery. In New Zealand and Australia, all general waste is compacted before going to landfill. We are keen to have
increased visibility on the tonnage of this waste and are working with our contractors to achieve this.In Australia, KFC are continuing to partner with industry, waste service providers, and packaging suppliers to innovate on solutions that will take a full life cycle approach, including options for end-of-life upcycling initiatives. In California, it is mandatory to have separate waste recycling containers in each restaurant. Currently, this waste is then measured in cubic feet. With our focus being on tonnage, we are exploring the best way to extrapolate this information from what we know and are considering options for reducing the quantity sent to the landfill.
Packaging and resource management
Despite delays caused by COVID-19 lockdowns, New Zealand is making good progress on achieving its target ahead of time. Plastic straws will begin phasing out from March 2022. In December 21 our plastic spoons transitioned to wooden ones, and we are now focused on either eliminating all other single use plastic or moving them to recycled materials.Australia is close to achieving its target and has its eye on further improvements. Taco Bell has moved all packaging, except drink cups, to recyclable material. KFC has phased out plastic straws, and cutlery packs, replacing them with paper straws and wooden cutlery and paper wraps packs which include an unbleached serviette, ahead of Single Use Packaging Bans across jurisdictions. In 2022 KFC will continue to progress toward having frozen carbonated drink cups and lids transitioned to
ENVIRONMENTAL CONSCIOUSNESS
Phase out plastic bags, straws and lids by 2025.
TARGET
:
% PHASED OUT:New ZealandAustraliaHawaiiCalifornia
70%
95%
N/AN/A
PACKAGING INNOVATIONGlobally, the Taco Bell brand is working on reducing the number of packaging items in its portfolio and designing packaging that uses fewer materials. This year the brand launched a collaboration with TerraCycle, a company that specialises in hard-to-recycle materials, to tackle recycling of its iconic hot sauce packets. The effort is an industry first, and we look forward to hearing the details of a national US recycling pilot programme later in the year.KFC Australia is also keenly focused on keeping its packaging out of landfills. For more than ten years, they have been members of the Australian Packaging Covenant Organisation (APCO), a not-for-profit organisation leading the development of a circular economy for packaging in Australia. KFC uses APCO’s online packaging evaluation
tool to determine how to improve its packaging’s recyclability and manage its environmental impact. KFC is also using the APCO evaluation tool to validate packaging and enable the use of the APCO Australasian Recycling Label Program, an on-pack labelling scheme that is helping consumers to recycle correctly and supporting brand owners to design packaging that is recyclable at end-of-life. Together they are currently exploring ways to make the KFC bucket recyclable. That’s exciting stuff for our business!In New Zealand, Restaurant Brands has also joined APCO as an International Affiliate Member, which gives us access to information and training on sustainable packaging. What’s more, the membership allows us to be part of a problem solving collective, working in collaboration with local and global sustainability leaders in government, industry, community groups and academia.
We are currently exploring ways to optimise the benefits made available through this membership and to make progress on reducing our packaging waste.
SUSTAINABLE PAPER-BASED PACKAGINGIn New Zealand, 88% of front-of-house packaging is made from responsibly managed forests and recycled sources. We’ll be working with our suppliers to get to 100% in the near future.Internationally, our major franchisor, Yum! has made a global commitment to purchase 100% of all paper-based packaging with fibre from responsibly managed forests and recycled sources by the end of 2022. California and Australia have achieved this goal, and Hawaii is working with its supplier to gather the information.
PLASTIC REDUCTIONRestaurant Brands is committed to reducing plastics across the business and is making great in-roads.
CUSTOMER-FACING PACKAGING WASTE REDUCTION & DIVERSION
polyethylene terephthalate (PET) together with moving our potato and gravy containers from rigid polystyrene to polypropylene (PP).Yum! has set itself the following targets:KFC GLOBAL 2025 COMMITMENT:Make all customer-facing plastic packaging recoverable or reusable.TACO BELL GLOBAL 2025 COMMITMENT:Make all consumer-facing packaging recyclable, compostable or reusable.
KFC GLOBAL TARGET: Purchase 100% of our paper-based packaging with fibre from responsibly managed forests and recycled sources by the end of 2020. KFC has achieved this in Australia.
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BACK-OF-HOUSE WASTE REDUCTION & DIVERSION CARDBOARDIn New Zealand, Australia and California, all back-of-house cardboard waste is recycled. Hawaii has the challenge that some restaurants have no access or space to store cardboard for recycling, nor is it mandated by the council. They are currently recycling at 51.7%. New Zealand and Australia are partnering with industry-leading innovators on waste diversion and circular economy programmes. We continue to look for ways to support circular economies in the materials we use to build restaurants, for example, purchasing carpark curbsand car stops made from upcycled plastics. We are excited about the possibilities in this space and look forward to sharing more advancements.COOKING OIL RECYCLINGAcross our business, we recycle 100% of expired oil. This recycled oil then goes into the production of bio-diesel – a renewable, clean-burning diesel with lower emissions. CONSTRUCTION WASTE REDUCTION80% of landfill waste comes from the construction industry and that’s why, in Auckland, New Zealand we partner with Junk-Run to reduce this massive impact by sorting, reusing or recycling as much site waste as possible from our new builds and refurbishments. This year it was disappointing to see this initiative disrupted by COVID-19 restrictions but it will be back up and running as soon as we can.
Climate impactDEVELOP OUR CARBON MANAGEMENT PLAN As a global food retail business Restaurant Brands is impacted by, and contributes to, climate change. This year, we embarked on a journey to better understand the opportunities and risks this presents and, most immediately, to be in a position to measure and set targets to bring our carbon footprint down.The first step to reducing our impact is to find out what it looks like now. We’ve been collecting and disclosing key data related to energy use and waste since 2019, but this can go a lot further. To help us we’ve partnered with a New Zealand sustainability consultancy.
OVER THE NEXT 12 MONTHS WE INTEND TO:
We are excited to have this plan in place and to be making progress against it. Our aim is to share our base year footprint in our 2022 Annual Report along with more information on our carbon boundaries and how our data is sourced and analysed. From there, we’ll be identifying emission ‘hotspots’, setting targets and working to reduce our footprint year on year.
1.2.3.4.5.
Define our organisation’s carbon footprint scope including setting the boundaries and determining the base year for benchmarking against. This is underway.Develop a measurement plan and tool – a roadmap of what data we will collect and when, and a tool to do so efficiently.Calculate and report our base year footprint.Third-party verification of data to assure compliance with the ISO standards.Develop a Carbon Management Plan.
Yum! has set a Science-Based Target across all of their company and franchised restaurants.
46%
REDUCTION IN GHG EMISSIONS BEFORE 2030*
*From baseline of 2019
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Restaurant Brands New Zealand Limited

In Australia and California, delivery is outsourced to food delivery aggregators such as Door Dash, Deliveroo and Uber Eats and is under the management of Yum! who have stated their goal is to reduce their GHG emissions by 46% by 2030.Reducing emissions associated with home delivery is part of their Carbon Management Plan for achieving this goal.WATER MANAGEMENT Our recent review highlighted the need to understand our water consumption better and to assess water stress across our divisions. As a first step, we are looking to collect and measure water usage data across the divisions. In Australia, in partnership with a third-party supplier, KFC has commenced capturing water usage data throughout our restaurants to give us insights as we develop our future water-saving initiatives.GREEN BUILDINGS With all-new builds, Restaurant Brands is looking for ways to reduce or eliminate the negative impacts that the restaurants might have on our climate and natural environment, and to preserve our precious natural resources. We have the greatest control over this in New Zealand, where all builds are managed inhouse. This year, one innovation that has made a positive impact on the environment and our bottom-line was the installation of an integrated hot water and fresh air tempering system into our Rolleston restaurant. The first of its kind in New Zealand, the system resulted in a reduction in electricity usage of 72.6 MWh, with an annual estimated savings of $10,900. It is now being installed across all KFC restaurants in this division.
ENERGY USAGERestaurant Brands measures energy in MWh and MWh per $million sales. The current target is to reduce the latter year on year, but as part of our commitment to climate action, we will set more ambitious targets and document them in the plan detailed on the previous page.MWh of electricity used:
2020
2021
New Zealand
38,095
37,889
Australia
19,319
21,676
Hawaii
12,774
12,031
California
n/a
3,684
SOLAR ENERGY INNOVATION In our restaurants, the ovens, grills, fryers, freezers, drink machines, ice-makers, lighting, and air-conditioners are in constant use. Whilst we are realistic about how much of this can be offset by producing solar energy, we are optimistic that as technology improves, the amount of energy created will increase. We want to maximise the opportunity this presents and reduce our demand on the grid. This year we launched our first pilot restaurant that utilises solar energy. Located in Auckland, New Zealand the Takanini KFC restaurant initially showed a lower than expected yield of 5% of the restaurant’s energy consumption, but as we moved into the summer months this rose to 30% and 50% in December and January respectively. We are greatly encouraged by this result and remain confident that improved panel design and roof orientation will continue to increase the yield. In addition to the Takanini restaurant, we have plans to launch a further pilot restaurant in New Zealand, plus one restaurant in California and ten in Australia, in the coming year. These trials will be a focus of our Carbon Management Plan and will be of great interest in markets such as Australia, where grid electricity has a large carbon footprint, and self-generated solar has the potential to reduce this significantly.LOW IMPACT HOME DELIVERY Home delivery continues to be an important part of our revenue stream and is an area of focus in regards to reducing our impact on the planet. As such, in New Zealand, where we deliver some of our orders inhouse, we have developed and introduced a new Driver Management Software. The software ensures the orders across all our brands are distributed in the most efficient way, thereby reducing the number of kilometres per order.
LED LIGHTINGTo enhance our energy efficiency, we’re transitioning to LED lighting. We’ve started with all new restaurants and refurbishments and will be broadening this to established restaurants in the near future.Here’s how we are tracking:(% of restaurants with LED lighting)We are working towards having 100% LED lights by the end of 2023.
MWh of electricity usedper $million sales:
2020
2021
New Zealand
93
82
Australia
95
94
Hawaii
109
97
California
n/a
134
Across the divisions, we can see continued improvement, attributable in part to ongoing investment into more advanced cooking equipment.In the future, we will also report on gas energy consumption and have begun to collect this data.
New ZealandAustraliaHawaiiCalifornia
47 %
45%
47 %
33%
9.2% decrease in MWhper $million sales across measurable divisions.
TAKANINI RESTAURANT SOLAR PANELS
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Restaurant Brands New Zealand Limited

LEADING INFOOD QUALITY
SUPPLY CHAIN FOOD SAFETY In Australia, Hawaii and California, Yum! manages the supply chain, and they uphold an industry-leading food safety programme, including processes for auditing suppliers and mitigating risk across their global supply chain. Food safety audit outcomes are reported as a performance tier, ranging from Tier 1 (top Tier) to 4 and No Tier. The 85% Yum! Standard represents the percentage of supplier audits achieving Tier 1 & Tier 2.In New Zealand, in addition to all achieving the local standards, 68% of our suppliers achieve Tier 1 and 2 of the Yum! standard, and we aim to grow this through a continuous programme of improvement.NUTRITIONAL PROFILE All nutritional information, including the amount of fats, sodium and sugar in our menu items, is listed on our brand websites, with the exception of Taco Bell in Australia, where the brand is still new, and the information is yet to be compiled. In Australia, Hawaii and California, kilojoules are also available on restaurant menus.
Beyond compliance
FOOD SAFETY & PRODUCT QUALITY The safety and quality of our food are fundamental to our business. All restaurants are inspected by the relevant local food safety bodies and have a Food Control Plan in place to ensure food sold is safe and suitable.In addition to local inspections, all Yum! restaurants; KFC, Pizza Hut, Taco Bell, are subject to brand audits. Brand audits include a food safety component along with brand standards (including health and safety), and restaurants are audited by a third-party, approved by Yum! globally. Our aim is to exceed an 85% rating on the Yum! Standard, significantly above the food safety standards prescribed by local food safety regulations.
Here’s how we performed:
2020
2021
New Zealand
98%
98%
Australia
85%
92%
Hawaii
93%
95%
California
n/a
93%
Note: there were no food safety audits carried out in California between 2 September and 31 December 2020 (the first four months of our ownership).
FOOD SAFETY TRAINING All staff must complete our food safety training programme before they enter a restaurant. This is part of the restaurant staff induction programme as well as a requirement for all other staff before they spend time in a restaurant.
100%
of restaurant staff complete food safety training
ACTIVE REDUCTION OF FATS, SODIUM & SUGAR Restaurant Brands is committed to providing food that not only can our customers love and trust, that tastes good and is good. We continually drive sustainable nutrition improvements, across our core food categories to address the public health nutrients of concern; saturated fat, sodium and sugar. In New Zealand, to achieve these improvements, we scrutinize each menu item and every ingredient to see where we can make reductions in these concern areas. For the past two years our focus has centred around sodium, and we are pleased to report a sodium reduction in nine key ingredients.In the coming year, there will be further improvements to sodium
Taco Bell Black Beans
81%
Taco Bell Black To r t i l l a s
50%
Pork Carnitas supplied to Taco Bell
14%
KFC Burger mayoCarl’s Jr. Ranch saucePizza Hut Ranch sauceCarl’s Jr. Memphis BBQ sauceKFC Supercharged sauce
20%
Sodium reduction
UC
TI
ON
Bel
l
HORMONE & STEROID FREE All our chicken is hormone and steroid free. Our suppliers must comply with this policy to ensure our customers enjoy the highest quality product. RESPONSIBLE ANTIBIOTIC USE We are dedicated to animal health, and this may necessitate the use of antibiotics to maintain or restore health. In these instances, antibiotics are used only for this purpose and at levels that are not significant in human medicines.
levels, reductions in sugar for KFC burger buns and dinner rolls and, through the work of our beverage provider, Coca-Cola Europacific Partners, a reduction of sugar in our drinks.In Australia, KFC are taking big steps on the journey to improve the nutrition and transparency of the menu. This includes sodium reduction, where they’ve reduced the sodium levels across the core chicken menu options by 6.3% together with introducing more choices such as, Crunch Bowl.KFC has also continued to develop nutrition guardrails for menu items, include more pantry ingredients across menus for nutritional improvements and progressed work to remove additives and artificial ingredients by 2025.
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In New Zealand, where we control our supply chain, all suppliers are carefully selected, undergo due diligence and are audited on an annual basis to ensure they meet our ethical standards. Our standards are based on the combination of the Yum! Supplier Code of Conduct and other best practice guidelines.
Australia, Hawaii and California are part of the Yum! supply chain and all their suppliers must adhere to their Supplier Code of Conduct which sets basic requirements of all of suppliers whether they provide food or beverages, packaging or equipment. All suppliers are audited on a regular basis.
PALM OIL FREE Historically, Restaurant Brands has targeted having no products containing palm oil. Here’s how we are tracking against that:
ANIMAL WELFARE All New Zealand manufacturing sites that produce meat and meat products supplied to Restaurant Brands must meet the requirements of the Animal Welfare Act and are audited by both SPCA and Asure Quality. We have a proud history of working with New Zealand’s two largest chicken suppliers, Tegel and Ingham’s. These two companies are committed to following all the right animal welfare codes and guidelines and ensuring the humane treatment of all their birds.Tegel and Ingham’s are members of the poultry industry body PIANZ which ensures that producers meet exacting standards in animal welfare, stockmanship and food safety. PIANZ works closely with the Ministry for Primary Industries and the National Animal Welfare Committee to review and develop new or enhanced standards. The Code standards are set by an independent Government
appointed group of welfare experts. The poultry supplied to KFC by Tegel and Ingham’s is raised in barns to tightly regulated and monitored standards.The other divisions (Australia, Hawaii and California) rely on Yum!’s supply chain controls as outlined in their Global Animal Welfare Policy. Their commitment to animal health and well-being is steadfast and guided by the holistic, science-based Sustainable Animal Protein Principles. Specifically, they are committed to the Five Freedoms in guiding the overall approach to animal welfare through the supply chain.
In 2020, KFC announced new global chicken key welfare indicators (KWIs) as a critical next step on its animal welfare journey. The KWIs address mobility while chickens are raised, overall chicken health, minimisation of medical interventions, chicken mortality and mental and physical stress. These KWIs will serve as the foundation for anim
al welfare metrics
across this brand.Yum! KFC has also set a global target for 100% cage-free eggs by 2025. Currently, in New Zealand, all our whole eggs are cage-free, and we are working with ingredient suppliers across our brands to achieve this.
FIVE FREEDOMS OF ANIMAL WELFARE
FREEDOM
FROM HUNGER
& THIRST
FREEDOM
FROM
DISCOMFORT
FREEDOM
FROM PAIN,
INJURY OR
DISEASE
FREEDOM
TO EXPRESS
NORMAL
BEHAVIOUR
FREEDOM
FROM FEAR &
DISTRESS
New ZealandAustraliaHawaiiCalifornia
99%*99%*
N/AN/A
*Working on the 1% with our food suppliers
Globally, in 2019 our Australia, California and Hawaii divisions achieved their goal of sourcing 100% of palm oil used for cooking from responsibly managed sources, with third-party certification from the Roundtable on Sustainable Palm Oil (RSPO). Further than this, Yum! have endorsed the New York Declaration on Forests and the private sector goal of eliminating deforestation from the production of agriculture commodities such as beef, soy, palm oil and paper products and collectively committed to ending natural forest loss by 2030.New Zealand has just five products and Australia three products remaining using palm oil, and in these instances, the oil is also RSPO Certified and used for functional purposes such as tortilla production.
SUPPLIER AUDIT PROGRAMME
WHERE TO FROM HERE?
The structure of Restaurants Brands, with varying franchisor relationships and operational differences across the divisions, adds complexity to our journey towards greater transparency and sustainability. But we are committed to this and challenge ourselves to always do better.This year we’ve been working hard to standardise our policies and programmes across the divisions and see a real benefit from the collaboration this entails. We’ve begun establishing a comprehensive and consistent measurement base by which we can drive our performance into future years.The expansion of our framework to include Climate Impact and the development of our Carbon Management Plan is also a significant move for us.And so the journey continues, following the map laid out in our Sustainability Framework, steered by our Executive Sustainability Committee and powered byour dedicated team and partners across the globe.
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Total store sales were up $50.7 million to $461.1 million an increase of 12.4%. Growth was across all brands with particularly strong results from KFC and Carl’s Jr. Reported growth was further assisted by a lesser COVID-19 impact with the Government mandated closures at Alert Level 4 for two weeks compared to five weeks last year. Same store sales were 9.1% for the year, up from 5.3% last year. It is estimated that the Government-mandated full store closures resulted in lost sales of $26 million in 2021 compared to $40 million in 2020.It was a great achievement for our operations teams, to navigate through the COVID-19 Level 4 lockdown and reopen safely and smoothly. COVID-19 lockdowns did present significant challenges; however we were well prepared and were able to offer increased contactless channels to consumers. Our supply chain also planned ahead to address any potential stock shortages. We were also proud to support awareness around COVID-19 vaccinations, working with the 90% Project with our “post-jab” Lolli-Popcorn Chicken giveaway.KFC remains the key contributor to the New Zealand operations. The brand once again delivered a strong result with both sales and profit performance well up on last year’s reported numbers. The strong result was enhanced by the KFC online delivery channel which continued to grow and the opening of a new online “click and collect” channel, leveraging the launch of a newKFC e-commerce website.KFC celebrated its 50 year anniversary in New Zealand, with
its first store opening at Royal Oak in 1971. Unfortunately celebrations planned to mark this historic day were impacted by New Zealandgoing into COVID-19 Alert Level 4.KFC continues to play a big part in kiwi culture with high brand awareness and great partnerships with Cricket NZ, Super Rugby and Surf Life Saving NZ.KFC was proud to open its first eco-friendly dual drive-thruKFC store in Takanini, Auckland, with a second eco-friendly store to be opened in early 2022. We’ve also continued refurbishing and upgrading our stores to add more capacity and making a more welcoming environment for customers and team members alike. Carl’s Jr. same store sales were also significantly up on last year due to the positive impact from the use of third party delivery providers. The brand also continues to refine its menu to meet the demands of the customers to ensure we offer a high quality dining experience.The Pizza Hut brand continues to evolve on the back of successful promotional activity supplemented by successful product innovation including the launch of ‘The Limo’. Pizza Hut New Zealand receiveda number of global and regionalYum! awards for the brand’s strong performance.Pizza Hut sales from company stores were down on the prior year, reflecting a reduction in company-owned store numbers through the year with seven stores sold to independent franchisee operations, however sales across the entire 105 store network were up on prior year.
UNWRAPPING
PLANS FORFUTURE
GROWTH
NEW ZEALAND
137
STORES
3,748
STAFF
TOTAL SALES ($NZ m)
19
18
20
19
21
461.1
410.4
367.5
421.4
419.8
Feb
Dec
EBITDA ($NZ m)
19
18
20
19
21
83.3
76.5
76.4
Feb
Dec
67.9
76.3
OPERATIONS REPORT
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Restaurant Brands New Zealand Limited

A 50 YEAR KIWILOVE AFFAIR1971 – 2021
KFC was proud
to open its first
eco-friendly dual drive-thru KFC
store in Takanini,
Auckland.
With ten Taco Bell restaurants now opened in New Zealand, including the first restaurant in the South Island, this brand continues to gain momentum. This is despite the adverse impact of COVID-19 lockdowns as many of the restaurants are dine-in facilities only and therefore were affected to a greater degree by COVID-19 restrictions in the Auckland region. EBITDA before G&A costs for the New Zealand business was $83.3 million, up $7.0 million reflecting the increased sales; however it was adversely impacted by rising costs. The EBITDA margin for New Zealand was 18.1%, which is down on last year. This is a result of increased cost pressures and supply chain challenges, together with higher operating costs from COVID-19. Total company owned restaurants remained at 137 due to seven Pizza Hut restaurants being sold to franchisees during the period. Off-setting the sale of company owned Pizza Hut restaurants was the opening of six new Taco Bell restaurants in Sylvia Park, Auckland, Dunedin South, Dunedin, Fairy Springs, Rotorua, Airport, Auckland (change of brands from Carl’s Jr.), Bush Inn, Christchurch and Eastgate, Christchurch as well as three new KFC restaurants opened in Takanini, Auckland, Sylvia Park, Auckland, and Avondale, Auckland (change of brand from Carl’s Jr.). The New Zealand business has also seen significant restaurant reinvestment with nine stores remodelled over the year and another 34 store refurbishments
planned during FY22. The full year impact of the major refurbishments and the ten new stores completed during FY21, together with continued high levels of marketing expenditure, continued new product innovation (with some exciting products still in the pipeline) will drive sales growth. Increased costs including rising labour costs and potential supply chain issues will continue to put pressure on EBITDA margins.There remains uncertainty around COVID-19, as we expect the pandemic to bring further challenges during 2022. In some cases, despite all safety precautions, certain stores’ ability to operate at full capacity will be impacted where staff members are required to self-isolate, an issue facing much of the hospitality industry in New Zealand and previously experienced in other divisions during 2021.
Restaurant designs are very different now. Technology has opened up new channels like digital kiosks, online ordering, click-and-collect and delivery. The menu has flexed a little too. New Zealand was one of the first markets to introduce a chicken burger, and who can forget the impact of the famous Double Down. But the menu has by and large remained the same and Kiwis like it that way.Certain good things in life don’t need to change. In KFC’s case the best has stayed the same, though we’re sure too that the best is yet to come.
It’s 1971 and New Zealand welcomes its first international fast food restaurant brand to Royal Oak in Auckland. Tom Power is there as restaurant manager with Colonel Sanders himself opening the first KFC restaurant. Staffing up in preparation for the big day was by no means easy and Tom had persuaded whoever he could to join him in this completely new venture. He even stopped and asked Dianne who he saw on the side of the road whether she was interested. She was. And Tom and Dianne have been together ever since.50 years on and the love has spread to a nation. KFC has become a part of many New Zealanders’ lives. But it’s not all nostalgia. KFC has moved with the times and stayed relevant to its ever growing loyal base of customers.
O
V
E

A
F
F
A
I
R
1
971 – 2021
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Total sales were up by $29.2 million to $NZ244.1 million, driven by the addition of nine new stores during the year as well as organic growth from the existing stores and the continued roll out of the home delivery network. In February 2021 the Company acquired five KFC stores in Northern Sydney from an independent franchisee which contributed $15.9 million in sales for the year. The impact of the Taco Bell store roll out was also positive contributing over $5.4 million in additional sales, with four new stores opening throughout the year. The sales performance from existing stores resulted in the same store sales growth for the division of 1.4% for the year.The successful introduction of delivery order processes into the KFC business through website and app during the year helped drive sales. Despite the good overall sales results the year has been particularly challenging with COVID-19 causing temporary closure of mall and in-line stores particularly those in central Sydney. The impact of COVID-19 on our people was particularly hard-felt in the second half of the year, COVID-19 also created additional challenges in our supply chain. There are however positive signs that this is now settling down with less impact expected in 2022. Profitability also remained strong, with EBITDA before G&A costs of $NZ31.6 million, up $3.0 million duein part to the five acquired KFC stores. The increase in EBITDA before G&A has been achieved despite the continued costs associated with COVID-19 restrictions with mall stores closed for an extended period, significant downturn in the inner
city trading as well as the longterm closures of the dine-in optionin most of our stores.As a % of sales, store EBITDA was 13.0%, which is down from 13.3% last year. Once again this was a direct effect of the various restrictions and lockdown challenges combined with rising costs through the Company’s supply chain. COVID-19 also impacted our ability to open new and redevelop existing stores. Despite the many challenges during the year, four new Taco Bell stores opened. We also continued to reinvest in the KFC brand with eight stores receiving major upgrades.The full impact of these investments will help drive sales and profitability in 2022.The investment in new stores and major refurbishments is expected to continue in the FY22 particularly with the Taco Bell brand which expects to open up to ten new stores along with two new KFC stores. Major refurbishments are also set to continue for the KFC branded stores with over 20 stores scheduled for upgrades. We will also look at opportunities to open our firstTaco Bell outside of NSW.Although the ongoing impact of COVID-19 is hard to determine, the positive results from the Australian operations are expected to continue into the new financial year as the economy is forecast to rebound strongly from a difficult 2021. We will also continue to gain the benefits of the new store builds and refurbishments. Continued supply issues and cost pressures will however limit this recovery.
OPENING NEW
DOORS IN
AUSTRALIA
79
AUSTRALIA
STORES
4,526
STAFF
TOTAL SALES ($NZ m)
18
20
19
21
244.1
214.9
191.5
169.1
151.8
Feb
Dec
EBITDA ($NZ m)
18
20
19
21
31.6
29.1
25.2
22.0
Feb
Dec
28.6
19
19
OPERATIONS REPORT
Annual Report 31 December 2021
55
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Restaurant Brands New Zealand Limited
Annual Report 31 December 2021
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UNLOCKING
ONLINE GROWTH
Total store sales were down $8.6 million to $NZ206.5 million due to the strengthening of the USD/NZD exchange rate. In $US terms sales were up notably $US7.0 million or 5% due to strong same store sales growth of 9.1% for the year.Taco Bell aggregator deliveriesfor the full year fueled significant growth, as customers increasingly consumed meals at home during the COVID-19 pandemic. The Taco Bell mobile ordering channel (“click and collect”) also grew under the pandemic, as it offered customers a touchless option. Pick-up is available in the drive-thru lane or in-store, appealing to all customers. Mobile ordering also allowed for a full suite of customisation and trade-ups, while paying digitally.The Pizza Hut online ordering channel also continued to grow. By December 2021, online orders grew to 64% of sales. Touchless deliveries, coupled with real time order tracking appeals to customers in the current environment. The Big New Yorker Pizza continued to be a sales mix leader, consistently resulting in strong sales growth. Hawaii is the only State where theBig New Yorker is available.Total store numbers increased by one to 73 with two new stores, one Taco Bell at Ka Makana Alii and one Pizza Hut store at Pahoa. Both stores are performing significantly above expectations. This was offset by the closure of one Taco Bell store.
In addition to new stores the continued strategy to relocate and refurbish stores has also helped maintain the strong sales performance. During the year the relocation of our Taco Bell in Kihei resulted in weekly sales more than doubling, primarily with the addition of a drive-thru (the old location was a mall based in-line store). Similar improvements were also seen with full renovations for the KahuluiTa c o B e l l s t o r e .Profitability remained strong, with EBITDA before G&A costs of $NZ33.9 million up 4.2% despite the adverse effect of the exchange rate. Both brands had strong EBITDA before G&A results above the previous year.As a % of sales, EBITDA was 16.4%, which is up from 15.1% last year. This increase is driven largely by the success of the Pizza Hut brand over prior year, whilst the Taco Bell EBITDA as a percentage of sales has also increased from last year.In 2022, we have two new Taco Bell stores scheduled to open and in addition three planned Pizza Hut stores relocations, moving from large restaurant based delivery stores to Delivery-Carryout (Delco) stores. Whilst this is expected to drive strong sales growth, there remains uncertainty around the impact of COVID-19 and in particular the timing on lessening restriction on tourism. Despite this uncertainty sales and margin performance is expected to continue at last year’s levels for FY22 financial year with the Hawaii operations expected to deliver another strong result.
73
HAWAII
STORES
1,764
STAFF
TOTAL SALES ($NZ m)
19
18
20
19
21
206.5
215.1
182.7
168.9
167.5
Feb
Dec
EBITDA ($NZ m)
19
18
20
19
21
33.9
23.7
22.9
24.1
Feb
Dec
32.6
OPERATIONS REPORT
Annual Report 31 December 2021
57
56
Restaurant Brands New Zealand Limited

70
CALIFORNIA
STORES
1,402
STAFF
TOTAL SALES ($NZ m)
20
21
156.5
51.9
EBITDA ($NZ m)
20
21
23.8
8.5
Total sales for the year were $NZ156.5 million, significantly up on the four months’ trading last year with the division established in September 2020. The strong sales were assisted by the Government stimulus payments, with the US Federal Government providing two payments, in January and March. Both rounds of stimulus saw significant increases in consumer spending and the second payment, along with the launch of the new KFC Chicken Sandwich, saw California post record monthly sales in April, exceeding $US10 million. The strong demand across the country combined with constraints on supply chain from COVID-19 and the mid-February winter storm on poultry supply resulted in product shortages and allocation limits from our suppliers. Our stores had to manage customer expectations when we ran out of some of their favourite menu items. However, with a focus on customer service and operations, we were able to continue to grow sales and continue to work on ensuring we have operations that are consistently ahead of the KFC US benchmarks.Two KFC stores were acquired during the year from independent franchisees in Adelanto and Central Los Angeles. We continue our strategy of looking to add existing KFC stores that complement our existing network or to secure corridors of potential growth from infill stores.
The increase in EBITDA before G&A costs to $NZ23.8 million were driven by the strong sales. EBITDA before G&A as a percentage of sales was 15.2% which was down from 16.4% last year. The drop in EBITDA as a percentage of sales reflects the supply chain issues as well as increased cost pressures which are expected to continue into 2022.We will be opening three new stores in California in February and March 2022, with up to five more new stores planned to open later in the year. The first trio of stores will be the first new builds on the US mainland for Restaurant Brands and also some of the first to showcase the next generation of KFC ‘American Showman’ store design with new features to help with digital salesand improvements designed to enhance the guest experience.We will continue to work with KFC US on new product innovation trials including a Beyond Fried Chicken promotion using plant-based meatless alternative which was launched nationwide in early 2022.Our challenges in 2022 will include the effects of inflation, continuing shortages in the labour market and continuing to deal with the pandemic environment. Solid further growth will come from bringing on new stores with our full development programme introducing some innovations in store design.
LIFTING THE LID ON NEW STORE DESIGNS
OPERATIONS REPORT
58
Restaurant Brands New Zealand Limited
Annual Report 31 December 2021
59

BOARD OF DIRECTORS
JOSÉ PARÉS
Chairman and Non-Executive DirectorTerm of officeAppointed Director 1 April 2019 and appointed Chairman 10 July 2019. Last re-elected 2019 Annual MeetingBoard committeesMember of the Audit andRisk CommitteeJosé is the Chief Executive Officer of Finaccess Capital. He is also the Chairman of the Board and an Executive Chairman of AmRest Holdings SE. During his professional career he has been director of the Board of Crown Imports, Chicago, Il, the Vice Chairman of the Board of MMI, Toronto, Canada, director of the Board of DIFA, Mexico and former member of the Beer Chamberof Mexico.Previously, José worked for 19 years at Grupo Modelo (Mexico), in various positions, including as the Vice President of Marketing and Sales International where he oversaw growth of Grupo Modelo’s annual revenues from $US1 billion to $US3 billion. José graduated from Universidad Panamericana, Mexico (Business and Finance) and completed his MBA at ITAM, Mexico as well as the Business D-1 Program at IPADE, Mexico and Executive Programme at Wharton, San Francisco.
EMILIO FULLAONDOIndependent Non-Executive Director Term of officeAppointed Director 1 April 2019. Last re-elected 2019 Annual MeetingBoard committeesChairman of the Audit and Risk Committee, Member of the Remunerations and Nominations Committee and the Health and Safety Committee.Emilio is a senior executive with over 23 years of experience in the beer industry. Emilio worked in a number of finance roles for Grupo Modelo, including four years as Chief Financial Officer. Following the acquisition of Grupo Modelo by AB InBev in 2013, Emilio oversaw significant cultural and organisational changes at AB InBev (Mexico) as Vice President, Human Resources (to 2017) and Vice President, Projects until his resignation in January 2019. Emilio is currently a director and Chairman of the Audit and Control Committee of AmRest Holdings SE. Emilio graduated from ITAM, Mexico (Public Accountant) and completed his MBA at the same institution as well as the Executive Management (AD) Program at IPADE, Mexico.
CARLOS FERNÁNDEZNon-Executive DirectorTerm of officeElected Director 10 July 2019Over the last 30 years, Carlos Fernandez has held positions in various business sectors. He was the CEO (1997-2013) and Chairman of the Board of Directors (2005-2013) of Grupo Modelo. From the time he was named CEO, up to 2013, this group consolidated its position as the leading brewing company in Mexico, the seventh biggest worldwide and the world’s biggest beer exporter.He has also served on the boards of national and international companies, including Banco Santander, SA (Spain), Anheuser Busch (US), Emerson Electric Co. (US), Seeger Industrial (Spain), Grupo Televisa (Mexico), Crown Imports Ltd. (US), Inbursa (Mexico) and Mexican Stock Exchange (Bolsa Mexicana de Valores). He has served on the advisory board of Grupo Modelo and has also been a member of the international advisory board at Banco Santander, S.A. and a director of Grupo Financiero Santander Mexico S.A.B de C.V.Carlos is currently Chairman of the Board of Directors of Grupo Finaccess S.A.P.I. de C.V. - a company of which he was founder and which controls 75% of Restaurant Brands ordinary shares and is also active in Mexico, Europe, Asia and the US. He is also a Proprietary Director of AmRest Holdings SE, S.A. and a non-executive director of Inmobiliaria Colonial, S.A.Carlos is an industrial engineer and has also studied on senior management programmes at the IPADE Business School (Instituto Panamericano de Alta Direccion de Empresa).
LUIS MIGUEL ÁLVAREZNon-Executive DirectorTerm of office Elected Director 10 July 2019Board committeesMember of the Remunerations and Nominations Committee Luis Miguel is a Board Member, Audit Committee Member and Investment Committee Member of Finaccess, S.A.P.I. de C.V. (since 2013). He is also the Founder & CEO of Compitalia, S.A. de C.V., a family investment company business which primarily invests directly in target companies through equity holdings and real estate investments, primarily in sectors such as: consumer goods, restaurants, real estate projects and financial funds.For over 25 years Luis Miguel occupied different positions within several Grupo Modelo entities (including the Vertical Companies director of Grupo Modelo, S.A.B. de C.V., President & General Manager of Gmodelo Agriculture, LLC., Idaho Falls, Idaho, Vice President & General Manager of Gmodelo Agriculture, Inc.). During his time at Grupo Modelo, Luis Miguel held various board positions within the group, including: Alternate Board Member and Executive Committee Member of Grupo Modelo, S.A.B. de C.V., Board Member and Executive Committee Member of InteGrow Malt, LLC., as well as Board Member of Impulsora Agricola, S.A. and International CO2 Extraction LLC.Luis Miguel is currently a Proprietary director of AmRest Holdings SA and a member of the Appointments & Remuneration Committee. He also serves as a board member of other private and not for profit organisations. He is an industrial engineer with studies on senior management programmes at the IPADE Business School (Instituto Panamericano de Alta Dirección de Empresa).
STEPHEN WARDIndependent Non-Executive DirectorTerm of officeElected Director 10 July 2019Board committeesChairman of the Remunerations and Nominations Committee, Member of the Audit and Risk Committee and the Health and Safety CommitteeStephen Ward is a professional director with diverse corporate governance experience inNew Zealand and Australia together with extensive expertise as a corporate and commercial lawyer in New Zealand. Stephen is a non-executive director of Sydney Airport Limited and the Chair of its Safety, Security and Sustainability Committee. Stephen is the non-executive Chair of SecureFuture Wiri Limited. He is the Deputy Chair of the National Provident Fund Trust Board and Chair of its Audit and Risk Committee.Stephen is also a non-executive director of TCF Commercial Finance New Zealand Limited and Renaissance Holdings (NZ) Limited. Stephen is the Independent Chair of the Advisory Council for the Financial Dispute Resolution Service. He holds voluntary positions on the Boards of Wellington Free Ambulance, and The Life Flight Trust. Stephen holds an LLB from the University of Canterbury, is a member of the New Zealand Law Society and is a Chartered Member of the New Zealand Institute of directors.
Term of office Appointed Director 1 April 2021 Malena has over 33 years of experience in the Fast Moving Consumer Goods and Retail Hospitality industries in the US and Europe, including senior regional roles at Unilever and Yum! Brands. Prior to her retirement from the company in 2020, Malena spent nine years in various roles at AmRest Holdings SE (six of which as a member of the AmRest Exec Committee). Her appointments included President for AmRest Spain and, most recently Chief Proprietary Brands Officer with responsibilities extending across markets in Spain, China, France, Portugal and Germany.Malena served on the board of various Yum! Brands subsidiaries that operated Pizza Hut and KFC stores in Spain and has extensive experience as an owner/operator of KFC branded restaurants in Europe as a co-founder and managing director of a restaurant operating company that grew from 14 to more than 130 restaurants prior to being acquired by AmRest. Malena is fluent in English, French and Spanish and holds a Business Administration and Management (ADE) degree from the ICADE School of Business and Economics.
HUEI MIN (LYN) LIM MNZMIndependent Non-Executive DirectorTerm of office Elected Director 10 July 2019Board committeesChairman of the Health and Safety Committee, Member of the Audit and Risk Committee and the Remunerations and Nominations CommitteeLyn Lim has diverse board and committee Chair experience and is culturally competent. She is experienced in investment structures, risk management, HR, HSW, AML, dispute management and compliance. She is on the Boards of GeneralCapital Limited and AucklandRegional Amenities Funding Board.She is also a trustee of the AsiaNew Zealand Foundation and Chair of the Middlemore Foundation.Lyn has served on the Boards of the AUT, New Zealand Shareholders’ Association, Public Trust (and chaired the Human Resources and Remuneration Committee), theNew Zealand China Trade Association, the Hong Kong and New Zealand Business Association, was the Chair of the New Zealand Chinese Youth Trust and held the positions of Trustee, Deputy Chair and Chair of Foundation North (the biggest and leading philanthropic entity in New Zealand). She has been a member of ANZ Private Bank External Advisory Board and has served as a council member of the Auckland District Law Society Inc.Lyn holds an LLB (Hons) from the University of Canterbury and has 30 years of legal practice specialising in commercial, corporate and governance issues and dispute resolution.In 2017, Lyn was appointed as a Member of the New Zealand Order of Merit for her services to New Zealand-Asia relations and governance. Lyn is a Chartered Member of the New Zealand Institute of Directors, a member of the New Zealand Law Society and a member and Vice Chair of the Women in Business Committee of the Inter-Pacific Bar Association.
MARIA ELENA (MALENA) PATO-CASTEL Independent Non-Executive Director
60
Restaurant Brands New Zealand Limited
Annual Report 31 December 2021
61

Annual Report 31 December 2021
63
62
Restaurant Brands New Zealand Limited
Non-GAAP financial measuresfor the year ended 31 December 2021
Consolidated income statementfor the year ended 31 December 2021
$NZ000’s
31 Dec 2021
52 weeks

vs Prior
%
31 Dec 2020
52 weeks
SalesTotal New Zealand sales
461,120
12.4
410,399
Total Australia sales
244,104
13.6
214,923
Total Hawaii sales
206,506
(4.0)
215,113
Total California sales
156,516
201.4
51,924
Total sales
1,068,246
19.7
892,359
Other revenue
46,195
42.7
32,369
Total operating revenue
1,114,441
20.5
924,728
Cost of goods sold
(912,359)
(19.1)
(766,054)
Gross margin
202,082
27.4
158,674
Distribution expenses
(8,555)
(19.9)
(7,138)
Marketing expenses
(55,841)
(15.5)
(48,344)
General and administration expenses
(49,974)
(9.6)
(45,595)
Government grants
7, 16 5
(67.5)
22,013
Loan forgiveness
11,419
n/a
–
Other items
(4,219)
12.6
(4,826)
Operating profit
102,077
36.5
74,78 4
Financing expenses
(36,284)
(20.1)
(30,220)
Net profit before taxation
65,793
47.6
44,564
Taxation expense
(13,912)
0.1
(13,920)
Net profit after taxation (NPAT)
51,881
69.3
30,644
% sales
% sales
EBITDA before G&ATotal New Zealand
83,319
18.1
9.2
76,304
18.6
Total Australia
31,614
13.0
10.4
28,623
13.3
Total Hawaii
33,932
16.4
4.2
32,553
15.1
Total California
23,849
15.2
180.0
8,516
16.4
Total EBITDA before G&A
172,714
16.2
18.3
145,996
16.4
RatiosNet tangible assets per security (net tangible assets divided by number of shares) in cents
8.4
(26.0)
Cost of goods sold are direct costs of operating stores: food, paper, freight, labour and store overheads. Distribution expense
s are
costs of distributing product from store. Marketing expenses are order centre, advertising and local store marketing expenses. General and administration expenses (G&A) are non-store related overheads.
The Group results are prepared in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”) and comply with New Zealand International Financial Reporting Standards (“NZ IFRS”). These financial statements include non-NZ GAAP financial measures that are not prepared in accordance with NZ IFRS. The non-NZ GAAP financial measures used in this presentation are as follows:1.
EBITDA before G&A, NZ IFRS 16 and other items.
The Group calculates Earnings Before Interest, Tax, Depreciation
and Amortisation (“EBITDA”) before G&A (general and administration expenses) and other items by taking net profit before taxation and adding back (or deducting) financing expenses, other items, depreciation, amortisation and G&A. The Group also refers to this measure as
Concept EBITDA before G&A and other items
. This measure provides the
results of the Group’s core operating business and excludes those costs not directly attributable to stores. This is believed to be a useful measure to assist in the understanding of the financial performance of the Group.
2.
Total NPAT excluding the impact of NZ IFRS 16.
Total Net Profit After Taxation (“NPAT”) excluding the impact of
NZ IFRS 16 is calculated by taking profit after taxation attributable to shareholders and adding back (or deducting) lease items whilst also allowing for any tax impact of those items. This measure reflects the performance of the business, excluding costs associated with the adoption of NZ IFRS 16 and is considered a useful measure to assist with understanding the financial performance of the Group.
3.
Capital expenditure including intangibles.
Capital expenditure including intangibles represents additions to property,
plant and equipment and intangible assets. This measure represents the amount of reinvestment in the business and is therefore a useful measure to assess the financial position of the Group.
The Group believes that these non-NZ GAAP measures provide useful information to readers to assist in the understanding of the financial performance and position of the Group but that they should not be viewed in isolation, nor considered as a substitute for measures reported in accordance with NZ IFRS. Non-NZ GAAP measures as reported by the Group may not be comparable to similarly titled amounts reported by other companies.The following is a reconciliation between these non-NZ GAAP measures and net profit after taxation:$NZ000’s
Note*
31 Dec 2021
31 Dec 2020
EBITDA before G&A, NZ IFRS 16 and other items
1
17 2 ,7 14
146,401
Depreciation
(36,944)
(33,129)
Net loss on sale of property, plant and equipment (included in depreciation)
(3,619)
(1,850)
Lease depreciation
(38,129)
(30,908)
Lease costs
53,993
44,919
Amortisation (included in cost of sales)
(9,231)
(5,515)
General and administration costs - area managers, general managers and support centre
(43,907)
(40,309)
Other income
12,364
405
Other expenses
(5,164)
(5,231)
Operating profit
102,077
74,78 4
Financing expenses
(36,284)
(30,220)
Net profit before taxation
65,793
44,564
Taxation expense
(13,912)
(13,920)
Net profit after taxation
51,881
30,644
Add back IFRS 16 impact
13,586
9,741
Taxation expense on IFRS 16 impact
(3,986)
(2,737)
Total NPAT excluding the impact of NZ IFRS 16
2
61,482
37,942
* Refers to the list of non-GAAP measures as listed above.
1

64
Restaurant Brands New Zealand Limited
Annual Report 31 December 2021
65
Financial statements December 2021Contents
Page
Directors’ statement
65
Consolidated statement of comprehensive income
66
Consolidated statement of changes in equity
67
Consolidated statement of financial position
68
Consolidated statement of cash flows
69
Notes to and forming part of the financial statements
71
Restaurant Brands New Zealand Limited is pleased to present its financial statements.The results are for the year ended 31 December 2021 as compared to the year ended 31 December 2020.Note disclosures are grouped into five sections which the Directors consider most relevant when evaluating the financial performance of the Group.
Section
Note Reference
Performance
1-3
Funding and equity
4-7
Working capital
8-12
Long term assets
13-15
Other notes
16-27
Significant accounting policies which are relevant to an understanding of the financial statements and which summarise the measurement basis used are provided throughout the notes and are denoted by the highlighted text surrounding them.
Directors’ statementfor the year ended 31 December 2021
The Directors of Restaurant Brands New Zealand Limited (Restaurant Brands) are pleased to present the financial statements for Restaurant Brands and its subsidiaries (together the Group) for the year ended 31 December 2021 contained on pages 66 to 104.Financial statements for each financial period fairly present the financial position of the Group and its financial performance and cash flows for that period and have been prepared using appropriate accounting policies, consistently applied and supported by reasonable judgements and estimates and all relevant consolidated financial reporting and accounting standards have been followed.Proper accounting records have been kept that enable, with reasonable accuracy, the determination of the financial position of the Group and facilitate compliance of the financial statements with the Financial Markets Conduct Act 2013.Adequate steps have been taken to safeguard the assets of the Group to prevent and detect fraud and other irregularities.The Directors hereby approve and authorise for issue the financial statements for the year ended 31 December 2021.For and on behalf of the Board:José Parés
Emilio Fullaondo
Chairman Director28 February 2022
28 February 2022

Annual Report 31 December 2021
67
66
Restaurant Brands New Zealand Limited
Consolidated statement of comprehensive incomefor the year ended 31 December 2021
$NZ000’s
Note
31 Dec 2021
31 Dec 2020
Store sales revenue
1,2
1,068,246
892,359
Other revenue
1,2
46,195
32,369
Total operating revenue
1,114,441
924,728
Cost of goods sold
(912,359)
(766,054)
Gross profit
202,082
158,674
Distribution expenses
(8,555)
(7,138)
Marketing expenses
(55,841)
(48,344)
General and administration expenses
(49,974)
(45,595)
Government grants
2
7, 16 5
22,013
Loan forgiveness
2
11,419
–
Other income
2
945
405
Other expenses
2
(5,164)
(5,231)
Operating profit
102,077
74,78 4
Financing expenses
(36,284)
(30,220)
Profit before taxation
65,793
44,564
Taxation expense
16
(13,912)
(13,920)
Profit after taxation attributable to shareholders
51,881
30,644
Other comprehensive income:Exchange differences on translating foreign operations
6,558
(7,874)
Derivative hedging reserve
1,820
(596)
Income tax relating to components of other comprehensive income
(370)
10
Other comprehensive income for the period, net of tax
8,008
(8,460)
Total comprehensive income for the period attributable to shareholders
59,889
22,184
Basic and diluted earnings per share (cents)
3
41.58
24.56
The accompanying accounting policies and notes form an integral part of the financial statements.
Consolidated statement of changes in equityfor the year ended 31 December 2021$NZ000’s Note
Share
capital
Foreign
currency
translation
reserve
Derivative
hedging
reserve
Retained
earnings
Total
For the year
ended 31
December
2020
Balance at 1 January
2020
154,565 (164)
(1,736)
54,999 207,664
Comprehensive incomeProfit after taxation attributable to shareholders
–
–
–
30,644
30,644
Other comprehensive incomeMovement in foreign currency translation reserve
–
(7,874)
–
–
(7,874)
Movement in derivative hedging reserve
–
–
(586)
–
(586)
Total other comprehensive income
–
(7,874)
(586)
–
(8,460)
Total comprehensive income
–
(7,874)
(586)
30,644
22,184
Balance as at 31
December
2020
7
154,565
(8,038)
(2,322)
85,643
229,848
For the year ended 31 December 2021Balance at 1 January 2021
154,565
(8,038)
(2,322)
85,643
229,848
Comprehensive incomeProfit after taxation attributable to shareholders
–
–
– 51,881 51,881
Other comprehensive incomeMovement in foreign currency translation reserve
–
6,558
–
–
6,558
Movement in derivative hedging reserve
–
-
1,450
–
1,450
Total other comprehensive income
–
6,558
1,450
–
8,008
Total comprehensive income
–
6,558
1,450
51,881
59,889
Balance as at 31 December 2021
7
154,565 (1,480)
(872)
137,524
289,737
The accompanying accounting policies and notes form an integral part of the financial statements.

Annual Report 31 December 2021
69
68
Restaurant Brands New Zealand Limited
Consolidated statement of financial positionas at 31 December 2021
$NZ000’s
Note
31 Dec 2021
31 Dec 2020
Non-current assetsProperty, plant and equipment
13
276,748
228,709
Right of use assets
14
576,527
517,085
Sub-lease receivable
993
1,144
Other receivables
765
–
Intangible assets
15
348,216
320,986
Deferred tax asset
16
38,711
39,911
Total non-current assets
1,241,960
1,107,835
Current assetsInventories
8
22,261
16,607
Trade and other receivables
9
11,012
11,394
Income tax receivable
9,452
5,271
Cash and cash equivalents
10
45,155
35,666
Held for sale – assets
11
–
551
Held for sale – assets for store developed for sale
11
–
2,833
Total current assets
87,880
72,322
Total assets
1,329,840
1,180,157
Equity attributable to shareholdersShare capital
7
154,565
154,565
Reserves
7
(2,352)
(10,360)
Retained earnings
137,524
85,643
Total equity attributable to shareholders
289,737
229,848
Non-current liabilitiesProvisions
17
4,479
3,711
Deferred income
18
17 3
250
Loans
4
246,887
227,581
Lease liabilities
14
643,072
571,788
Deferred tax liabilities
16
1,136
–
Derivative financial instruments
5
–
2,698
Total non-current liabilities
895,747
806,028
Current liabilitiesLoans
4
–
8,058
Income tax payable
5,280
6,681
Trade and other payables
12
110,476
101,589
Provisions
17
1,304
1,608
Lease liabilities
14
25,609
23,826
Deferred income
18
770
538
Derivative financial instruments
5
917
–
Held for sale – liabilities
11
–
230
Held for sale – liabilities for stores developed for sale
11
–
1,751
Total current liabilities
144,356
144,281
Total liabilities
1,040,103
950,309
Total equity and liabilities
1,329,840
1,180,157
The accompanying accounting policies and notes form an integral part of the financial statements.
Consolidated statement of cash flowsfor the year ended 31 December 2021$NZ000’s
Note
31 Dec 2021
31 Dec 2020
Cash flow from operating activitiesCash was provided by/(applied to):Receipts from customers
1,114,474
924,910
Receipts from Government grants
2
7, 16 5
22,013
Payments to suppliers and employees
(940,494)
(787,575)
Interest paid
(6,701)
(6,525)
Interest paid on leases
14
(29,450)
(23,752)
Payment of income tax
(18,619)
(17,909)
Net cash from operating activities
126,375
111,162
Cash flow from investing activitiesCash was (applied to)/provided by:Acquisition of business
26
(27,992)
(122,002)
Payments for intangibles
(2,889)
(1,265)
Purchase of property, plant and equipment
(82,564)
(58,589)
Proceeds from the disposal of property, plant and equipment
2,620
4,451
Landlord contributions received
1,257
125
Net cash used in investing activities
(109,568)
(177,280)
Cash flow from financing activitiesCash was provided by/(applied to):Proceeds from loans
370,529
710,217
Repayment of loans
(356,046)
(615,443)
Payments for lease principal
14
(24,543)
(21,167)
Net cash (used)/from financing activities
(10,060)
73,607
Net increase in cash and cash equivalents
6,747
7, 4 8 9
Cash and cash equivalents at beginning of the year
35,666
34,965
Opening cash balances acquired on acquisition
1,264
147
Foreign exchange movements
1,478
(6,935)
Cash and cash equivalents at the end of the year
45,155
35,666
Cash and cash equivalents comprise:Cash on hand
10
640
612
Cash at bank
10
44,515
35,054
45,155
35,666
The accompanying accounting policies and notes form an integral part of the financial statements.

Notes to and forming part of the financial statementsfor the year ended 31 December 2021Note

Page
Basis of preparation
72
Performance 751. Segmental reporting
75
2.
Revenue and expenses
78
3.
Earnings per share
80
Funding and equity
80
4. Loans
80
5.
Derivatives and hedge accounting
82
6.
Financial risk management
84
7.
Equity and reserves
86
Working capital
87
8 Inventories
87
9.
Trade and other receivables
87
10. Cash and cash equivalents
88
11. Held for sale – assets and liabilities for stores developed for sale
88
12. Trade and other payables
88
Long term assets
89
13. Property, plant and equipment
89
14. NZ IFRS 16 – Leases
91
15. Intangibles
93
Other notes
96
16. Taxation
96
17. Provisions
98
18. Deferred income
98
19. Related party transactions
99
20. Commitments
100
21. Contingent liabilities
100
22. Subsequent events
100
23. Fees paid to auditor
100
24. Donations
100
25. Business combinations
101
26. Deed of Cross Guarantee
102
27. COVID-19
104
70
Restaurant Brands New Zealand Limited
Annual Report 31 December 2021
71
Consolidated statement of cash flows (continued)for the year ended 31 December 2021
$NZ000’s
Note
31 Dec 2021
31 Dec 2020
Reconciliation of profit after taxation with net cash from operating activities

Total profit after taxation attributable to shareholders
51,881
30,644
Add items classified as investing activities:Loss on disposal of property, plant and equipment
2,673
1,958
2,673
1,958
Add/(less) non-cash items:Depreciation
75,931
64,855
Loan forgiveness
2
(11,419)
–
Lease termination
(233)
(210)
(Decrease)/increase in provisions
(145)
124
Amortisation
9,231
5,516
Net increase/(decrease) in deferred tax asset
536
(4,444)
73,901
65,841
Add/(less) movement in working capital:Increase in inventories
(5,526)
(3,633)
Decrease/(increase) in trade and other receivables
1,094
(74)
Increase in trade and other payables
7, 5 9 7
15,971
(Decrease)/increase in income tax payable
(5,245)
455
(2,080)
12,719
Net cash from operating activities
126,375
111,162
Reconciliation of movement in term loansOpening balance
235,639
154,326
Net cash flow from financing activities
14,483
94,775
Decrease/(increase) in prepaid facility costs
256
(759)
Loan forgiveness
(11,419)
–
Foreign exchange movement
7, 9 2 8
(12,703)
Closing balance
246,887
235,639
The accompanying accounting policies and notes form an integral part of the financial statements.

Annual Report 31 December 2021
73
72
Restaurant Brands New Zealand Limited
Basis of preparationfor the year ended 31 December 2021
Reporting entityThe reporting entity is the consolidated group (the “Group”) comprising the economic entity Restaurant Brands New Zealand Limited (the “Company”) and its subsidiaries. Restaurant Brands New Zealand is a limited liability company incorporated and domiciled in New Zealand. The principal activity of the Group is the operation of quick service and takeaway restaurant concepts in New Zealand, Australia, California, and Hawaii (including Saipan and Guam).Restaurant Brands New Zealand Limited is registered under the Companies Act 1993 and is a FMC reporting entity under Part 7 of the Financial Markets Conduct Act 2013. The address of its registered office is Level 3, Building 7, Central Park, 666 Great South Road, Penrose, Auckland. The Company is listed on the New Zealand Stock Exchange (“NZX”) and the Australian Securities Exchange (“ASX”). The Group is designated as a for-profit entity for financial reporting purposes.Subsidiaries of the Company are as follows:Name Nature

Restaurant Brands Limited
Restaurant operating

Restaurant Brands Australia Pty Limited
Restaurant operating

QSR Pty Limited
Restaurant operating

Taco Aloha Inc.
Restaurant operating

Hawaii Pizza Hut Inc.
Restaurant operating

Pizza Hut of Guam, Inc.
Restaurant operating

Pizza Hut of Saipan, Inc.
Restaurant operating

TB Guam Inc.
Restaurant operating

RBD California Restaurants Limited
Restaurant operating

RBD US Holdings Limited
Investment holding

Pacific Island Restaurants Inc.
Investment holding

TD Food Group Inc.
Investment holding

RB Holdings Limited
Investment holding

RBP Holdings Limited
Investment holding

RBDNZ Holdings Limited
Investment holding

RBN Holdings Limited
Investment holding

Restaurant Brands Australia Holdings Pty Limited
Investment holding

Restaurant Brands Properties Limited
Property holding

Restaurant Brands Nominees Limited
Employee share option plan trustee
Restaurant Brands Pizza Limited
Non-trading
TPH Group Pty Limited
Non-trading
Basis of preparationThe financial statements of the Group have been prepared in accordance with:• New Zealand Generally Accepted Accounting Practice (“NZ GAAP”)• Part 7 of the Financial Markets Conduct Act 2013• NZX Main Board Listing RulesThey comply with New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”), NZ IFRIC interpretations, and other applicable Financial Reporting Standards, as appropriate for a for-profit entity. The financial statements comply with International Financial Reporting Standards (“IFRS”) as issued by the IASB.The measurement basis adopted in the preparation of these financial statements is historical cost, modified by the revaluation of certain investments and financial instruments as identified in the accompanying notes. The financial statements are presented in New Zealand dollars, rounded where necessary to the nearest thousand dollars. The principal accounting policies applied in the preparation of these financial statements are set out in the accompanying notes including where an accounting policy choice is provided by NZ IFRS, is new or has changed, is specific to the Group’s operations or is significant or material. These policies have been consistently applied to all the periods presented, unless otherwise stated.
Restatement of prior period balancesTo ensure consistency and comparability with the current period and the last annual financial statements, comparative figures have been reclassified where appropriate. These changes are detailed below:• The consolidated statement of financial position at 31 December 2020 excluded lease modifications of $4.9 million
and lease additions of $3.6 million in error from both lease liabilities and right of use assets. This has been corrected by increasing both non-current lease liabilities and right of use assets by $8.5 million at 31 December 2020.
• The consolidated statement of financial position at 31 December 2020 included prepaid facility fees of $0.8 million
within trade and other receivables in error, this should have been included in the non-current loans balance. This has been corrected by restating trade and other receivables and non-current loans by $0.8 million at 31 December 2020. The reconciliation of movement in term loans within the consolidated statement of cash flows have also been corrected by this amount, including a new disclosure for decrease / (increase) in prepaid facility costs.
New standards and amendmentsThere are various standards, amendments and interpretations which are published but not yet effective and were assessed as having an immaterial impact on the Group. There are no NZ IFRS, NZ IFRIC interpretations or other applicable IFRS that are effective for the first time for the financial year beginning on or after 1 January 2021 that had a material impact on the financial statements.Change in accounting policySoftware as a serviceThe Group previously capitalised costs incurred in configuring or customising certain suppliers’ application software in certain cloud computing arrangements as intangible assets, as the Group considered that it would benefit from those costs to implement the cloud-based software over the expected terms of the cloud computing arrangements. Following the IFRS Interpretations Committee (IFRIC) agenda discussion on Configuration or Customisation Costs in a Cloud Computing Arrangement in March 2021 (ratified by International Accounting Standards Board (IASB) in April 2021), the Group has reconsidered its accounting treatment and adopted the guidance set out in the IFRIC agenda decision, which is to recognise those costs as intangible assets only if the activities create an intangible asset that the Group controls and the intangible asset meets the recognition criteria. Costs that do not result in an intangible asset are expensed as incurred, unless they are paid to the suppliers of the cloud-based software to significantly customise the cloud-based software for the Group, in which case the costs paid upfront are recorded as prepayments for services and amortised over the expected terms of the cloud computing arrangements.As a result of this change in accounting policy, the Group has determined that certain costs relating to the implementation of cloud-based software would need to be expensed when they were incurred, as the amounts were paid to third parties who were not subcontracted by the supplier of the cloud-based software and did not create separate intangible assets controlled by the Group, or significantly customise the cloud-based software for the Group.The change in policy has been applied retrospectively and comparative information has been adjusted. The impact on the consolidated financial statements is as follows:• Cost of goods sold in the consolidated statement of comprehensive income for the year ended 31 December 2020
has increased by $0.4 million
• Taxation expense in the consolidated statement of comprehensive income for the year ended 31 December 2020 has
decreased by $0.1 million. The deferred tax asset in the consolidated statement of financial position at 31 December 2020 has increased by $0.1 million.
• Intangible assets in the consolidated statement of financial position at 31 December 2020 have reduced by
$0.9 million.
• Retained earnings in the consolidated statement of financial position at 31 December 2020 has reduced by
$0.5 million.
• Payments to suppliers and employees in the consolidated statement of cash flows for the year ended 31 December
2020 has increased by $0.7 million. Payment for intangibles in the consolidated statement of cash flows for the year ended 31 December 2020 has reduced by $0.7 million.
• Earnings per share for the year ended 31 December 2020 has reduced from 24.80 cents per share to 24.56 cents
per share.

Annual Report 31 December 2021
75
74
Restaurant Brands New Zealand Limited
Basis of preparation (continued)for the year ended 31 December 2021
Notes to and forming part of the financial statementsfor the year ended 31 December 2021
Other expensesThe Group has reviewed the expenses included in other expenses in the consolidated statement of comprehensive income and determined that amortisation of franchise rights, relocation and refurbishment costs, store closure costs, utilisation of depreciation provision, and make good on acquisition would be more appropriately included within cost of goods sold.The change in policy has been applied retrospectively and comparative information has been adjusted. The impact on the consolidated financial statements is as follows: • Other expenses in the consolidated statement of comprehensive income for the year ended 31 December 2020
has reduced by $4.2 million.
• Cost of goods sold in the consolidated statement of comprehensive income for the year ended 31 December 2020
has increased by $4.2 million.
Use of non-GAAP measures within the financial statementsThe financial statements include non-GAAP financial measures that are not prepared in accordance with NZ IFRS. The non-GAAP financial measures used in the financial statements are referenced below along with an explanation as to why these measures provide relevant and reliable information for investors and how the Group uses the information internally:• Operating profit before NZ IFRS 16 – Operating profit before NZ IFRS 16 is used by the Group to review the underlying
operating profit without the non-cash adjustment relating to NZ IFRS 16 – Leases. This is how many of the external users of the financial statements also view the performance of the business.
• EBITDA – Earnings Before Interest, Tax, Depreciation and Amortisation is a key business measure that provides
information on the business on a cash basis before funding and tax costs. This is a key measure used by the banks, with the Group’s debt covenants based on this figure, and also is a key assumption within the impairment testing because it reflects how management evaluate and manages the performance of its cash generating units.
• EBITDA before general and administration expenses, NZ IFRS 16 and other items – The Group calculates Earnings
Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) before G&A (general and administration expenses) and other items by taking net profit before taxation and adding back (or deducting) financing expenses, other items, depreciation, amortisation and G&A. The Group also refers to this measure as Concept EBITDA before G&A and other items. This measure provides the results of the Group’s core operating business and excludes those costs not directly attributable to stores. This is believed to be a useful measure to assist in the understanding of the financial performance of the Group.
• Net profit after taxation excluding NZ IFRS 16 – This is calculated by taking profit after taxation attributable to
shareholders and adding back (or deducting) lease items whilst also allowing for any tax impact of those items. This measure reflects the performance of the business, excluding costs associated with NZ IFRS 16 and is considered a useful measure to assist with understanding the financial performance of the Group.
• Capital expenditure including intangibles – This represents additions to property, plant and equipment and intangible
assets. This measure represents the amount of investment in the business and is therefore a useful measure to assist the understanding of the Group’s financial position.
• Other items – These relate to non core business items disclosed as other income and other expenses as set out in
note 2.
References to EBITA, EBITDA and EBITDAL within note 4 relate to the debt covenants specified by the banks and therefore these do not constitute non-GAAP measures used by the Group within the financial statements.The Group believes that these non-GAAP measures provide useful information to readers to assist in the understanding of the financial performance and position of the Group but that they should not be viewed in isolation, nor considered as a substitute for measures reported in accordance with NZ IFRS. The non-GAAP measures presented do not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities. These non-GAAP measures are used by the key management in making the business decisions for the Group as shown in note 1.These audited financial statements were authorised for issue on 28 February 2022 by the Board of Directors who do not have the power to amend afterwards.Significant accounting policies and critical estimates and assumptions are disclosed in the relevant notes to the consolidated financial statements and identified using coloured boxes.
PERFORMANCE1. SEGMENTAL REPORTINGOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers. The Group is split into four geographically distinct operating divisions; New Zealand, Australia, Hawaii and California. The chief operating decision makers, responsible for allocating resources and assessing performance of the operating segments, have been identified as the Group Chief Executive Officer (Group CEO) and Group Chief Financial Officer (Group CFO). The chief operating decision makers consider the performance of the business from a geographic perspective, being New Zealand, Australia, Hawaii (including Guam and Saipan) and California while the performance of the corporate support function is assessed separately.The Group is therefore organised into four operating segments, depicting the four geographic regions the Group operates in and the corporate support function located in New Zealand. All segments operate quick service and takeaway restaurant concepts. All operating revenue is from external customers.The Group evaluates performance and allocates resources to its operating segments on the basis of segment assets, segment revenues, concept EBITDA before general and administration expenses, NZ IFRS 16 and operating profit before other items. EBITDA refers to earnings before interest, taxation, depreciation and amortisation. Operating profit refers to earnings before interest and taxation. Operating revenue is from external customers.
Segment assets include items directly attributable to the segment (i.e. property, plant and equipment, intangible assets and inventories). Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and intangible assets other than goodwill. The Group has not disclosed segment liabilities as the chief operating decision makers evaluate performance and allocate resources purely on the basis of aggregated Group liabilities.

Annual Report 31 December 2021
77
76
Restaurant Brands New Zealand Limited
31 December 2021$NZ000’s
New Zealand
Australia
Hawaii
California
Corporate
support
function
Total
Business segment
Store sales revenue
461,120
244,104
206,506
156,516
–
1,068,246
Other revenue
46,195
–
–
–
–
46,195
Total operating revenue
507,315
244,104
206,506
156,516
–
1,114,441
EBITDA before general and administration expenses, NZ IFRS 16 and other items
76,154
31,614
33,932
23,849
–
165,549
Government grants
7,165
–
–
–
–
7,165
General and administration expenses
(13,853)
(10,870)
(8,940)
(8,146)
(2,417)
(44,226)
69,466
20,744
24,992
15,703
(2,417)
128,488
Other income
945
–
11,419
–
–
12,364
Other expenses
95
(726)
–
(641)
(3,892)
(5,164)
Depreciation
(18,446)
(10,357)
(7,779)
(3,643)
(17)
(40,242)
Amortisation
(1,707)
(1,198)
(1,266)
(5,060)
–
(9,231)
Operating profit before NZ IFRS 16
50,353
8,463
27,366
6,359
(6,326)
86,215
Adjustment for NZ IFRS 16
8,187
4,279
1,860
1,536
–
15,862
Operating profit
58,540
12,742
29,226
7,895
(6,326)
102,077
Financing expenses
(12,470)
(10,921)
(4,854)
(8,295)
256
(36,284)
Taxation expenses
(12,200)
(447)
(3,423)
458
1,700
(13,912)
Net profit after taxation (NPAT)
33,870
1,374
20,949
58
(4,370)
51,881
Current assets
49,606
12,608
14,901
10,765
–
87,880
Non-current assets
155,956
213,672
179,764
115,048
–
664,440
Non-current lease assets (excluding lease deferred tax)
184,393
151,659
78,643
162,825
–
577,520
Total assets
389,955
377,939
273,308
288,638
–
1,329,840
Capital expenditure including intangibles
40,312
21,518
17,706
5,798
–
85,334
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
31 December 2020$NZ000’s
New Zealand
Australia
Hawaii
California
Corporate
support
function
Total
Business segmentStore sales revenue
410,399
214,923
215,113
51,924
–
892,359
Other revenue
32,108
–
261
–
–
32,369
Total operating revenue
442,507
214,923
215,374
51,924
–
924,728
EBITDA before general and administration expenses, NZ IFRS 16 and other items
54,291
28,623
32,553
8,516
–
123,983
Government grants
22,013
–
–
–
–
22,013
General and administration expenses
(15,045)
(8,786)
(10,002)
(2,529)
(5,116)
(41,478)
61,259
19,837
22,551
5,987
(5,116)
104,518
Other expenses
(366)
(594)
–
(3,711)
(155)
(4,826)
Depreciation
(15,727)
(8,684)
(6,254)
(2,728)
(11)
(33,404)
Amortisation
(1,955)
(453)
(1,402)
(1,705)
–
(5,515)
Operating profit before NZ IFRS 16
43,211
10,106
14,895
(2,157)
(5,282)
60,773
Adjustment for NZ IFRS 16
8,147
3,572
1,801
491
–
14,011
Operating profit
51,358
13,678
16,696
(1,666)
(5,282)
74,784
Financing expenses
(12,133)
(9,809)
(5,496)
(2,782)
–
(30,220)
Taxation expenses
(9,822)
(3,164)
(2,069)
1,135
–
(13,920)
Net profit after taxation (NPAT)
29,403
705
9,131
(3,313)
(5,282)
30,644
Current assets
32,094
10,708
23,316
6,204
–
72,322
Non-current assets
136,829
177,485
164,125
111,167
–
589,606
Non-current lease assets (excluding lease deferred tax)
179,314
126,642
63,397
148,876
–
518,229
Total assets
348,237
314,835
250,838
266,247
–
1,180,157
Capital expenditure including intangibles
23,952
22,183
14,997
2,912
–
64,044
1.1 Reconciliation between operating profit and net profit after taxation excluding NZ IFRS 16$NZ000’s
31 Dec 2021
31 Dec 2020
Operating profit
102,077
74,78 4
Financing expenses
(36,284)
(30,220)
Net profit before taxation
65,793
44,564
Taxation expense
(13,912)
(13,920)
Net profit after taxation
51,881
30,644
Add back net financing impact of NZ IFRS 16
13,586
9,741
Less taxation expense on NZ IFRS 16
(3,985)
(2,737)
Net profit after taxation excluding NZ IFRS 16
61,482
37,648

Annual Report 31 December 2021
79
78
Restaurant Brands New Zealand Limited
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
2. REVENUE AND EXPENSESOPERATING REVENUEStore sales revenue
Revenue from store sale of goods is recognised at point of sale, measured at the fair value of the consideration received, net of returns, discounts, and excluding GST.
Other revenue
Other revenue includes sale of goods and services to independent franchisees. Sale of goods, including cost of freight, are recognised similar to store sales revenue. Sale of services is recognised over time as the independent franchisee simultaneously receives and consumes the benefit provided by the Group. Royalties received are based on the revenue generated by the independent franchisees, recognised over time.Also included in other revenue is revenue related to the sale of new stores developed and constructed under contract to franchisees. Under the terms of the contracts, the Group is contractually restricted from redirecting the properties to another customer and has an enforceable right to payment for work done. Revenue from construction of stores is therefore recognised over time using a cost-to-cost method i.e. based on the portion of the contracted costs incurred for work performed to date relative to the estimated total cost.
OPERATING EXPENSESRoyalties paid$NZ000’s
31 Dec 2021
31 Dec 2020
Royalties paid
62,533
52,796
Royalties are recognised as an expense as revenue is earned.
Wages and salaries
$NZ000’s
31 Dec 2021
31 Dec 2020
Wages and salaries
310,654
254,840
Decrease/(increase) in liability for long service leave
259
16
310,913
254,856
Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave, that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
Government grants$NZ000’s
31 Dec 2021
31 Dec 2020
Government grants
7, 16 5
22,013
As part of the New Zealand Government’s response to COVID-19 the Group received a Government wage subsidy of $7.2 million (Dec 2020: $22.0 million) due to an Alert Level 4 lockdown initiated in August 2021. This has been included as a separate line item on the consolidated statement of comprehensive income. The Group views these as a credit against wage and salaries costs, however due to the material nature of the subsidy it has been disclosed separately. It has been included as receipts from Government grants in the consolidated statement of cash flows.
Government grants are recognised when there is reasonable assurance that the Company will comply with the conditions attached to the grant and the grant will be received. A forgivable loan from the government is treated as a government grant when there is reasonable assurance that the Company will meet the terms for forgiveness of the loan.The Group will recognise a grant using the income approach with the grant recognised in profit and loss over the period in which the Company recognises as expenses the related costs for which the grant is intended to compensate.
Lease expenses$NZ000’s
31 Dec 2021
31 Dec 2020
Lease expenses
5,222
4,877
This relates to short term and variable lease costs included in the consolidated statement of comprehensive income not included in NZ IFRS 16 costs. Included in the above is rent relief of $0.5 million (Dec 2020: $1.3 million) which has been received during the year and has been included as a negative variable rent within the consolidated statement of comprehensive income. Contracts with abatement clauses total $0.3 million (Dec 2020: $0.5 million) whilst those without abatement clauses total $0.2 million (Dec 2020: $0.8 million).Other income$NZ000’s
31 Dec 2021
31 Dec 2020
Net gain on the sale of stores
945
405
Loan forgiveness
11,419
–

12,364
405
Net gain on the sale of storesDuring 2021 the Group sold five Pizza Hut stores to independent franchisees resulting in a gain of $0.9 million (Dec 2020: $0.4 million).Loan forgivenessIn June 2021 the Hawaii Paycheck Protection Programme (PPP) loan was forgiven by the US Small Business Association. This amount is shown on a separate line in the consolidated statement of comprehensive income due to its material nature. The loan forgiveness has been shown as a non-cash item in the cash flow reconciliation of profit after taxation with net cash from operating activities.Other expenses$NZ000’s
31 Dec 2021
31 Dec 2020
Acquisition costs
(715)
(4,332)
IT system implementation
(4,189)
–
Unused franchise rights
(260)
–
Leave remediation
–
(49)
Calendar realignment
–
(50)
Impairment of assets
–
(542)
Yum! GST charge
–
(87)
Yum! royalty claim
–
(171)
Total other expenses
(5,164)
(5,231)

Annual Report 31 December 2021
81
80
Restaurant Brands New Zealand Limited
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
IT system implementationDue to a change in accounting policy in regards to SaaS arrangements the IT system the Group is implementing has been expensed during the period. A further $1.3 million relating to other SaaS arrangements has been included in G&A costs during 2021. These costs would have been capitalised and amortised over the life of the software in previous reporting periods. 3. EARNINGS PER SHARE

31 Dec 2021
31 Dec 2020
Basic earnings per share
Profit after taxation attributable to the shareholders ($NZ000’s)
51,881
30,644
Weighted average number of shares on issue (000’s)
124,759
124,759
Basic earnings per share (cents)
41.58
24.56
Diluted earnings per shareProfit after taxation attributable to the shareholders ($NZ000’s)
51,881
30,644
Weighted average number of shares on issue (000’s)
124,759
124,759
Basic earnings per share (cents)
41.58
24.56
Basic earnings per share (EPS) is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS reflects any commitments the Company has to issue shares in the future that would decrease EPS.
FUNDING AND EQUITY4. LOANS $NZ000’s
31 Dec 2021
31 Dec 2020
Secured bank loans denominated in:NZD
10,000
20,000
AUD
80,671
51,151
USD
156,719
165,248
Secured bank loans
247,390
236,399
A loan is classified as current if it is due for repayment within 12 months of the Group’s year end.Current
–
8,058
Term
247,390
228,341
Secured bank loans
247,390
236,399
Included within the Group’s loans as at 31 December 2020 is $11.3 million ($8.1 million current) relating to the PPP loan. This was included within the proceeds from loans within the 31 December 2020 consolidated statement of cash flows. The loan was with First Hawaiian Bank. The loan was forgiven by the US Small Business Association in June 2021 (Refer note 2). $NZ000’s
31 Dec 2021
31 Dec 2020
Secured bank loans
247,390
236,399
Less prepaid facility fees
(503)
(760)
Loan balance
246,887
235,639
Included in the loans balance in the consolidated statement of financial position is $0.5 million (Dec 2020: $0.8 million) relating to prepaid facility fees that are being amortised over the term of the loan facilities.
FacilitiesOn 24 February 2020 the Group entered into new loan facility agreements. The facilities are split between NZD, USD and AUD tranches, most of the tranches are three year terms with the remainder expiring in four years.The Group has loan facilities in place totalling $359.8 million with the following financial institutions:• Westpac Banking Corporation - $NZ20.0 million and $A70.0 million facility expiring on 1 May 2023,• Bank of China - $NZ20.0 million facility expiring on 1 May 2023 and $A40.0 million facility expiring on 1 May 2024,• J P Morgan - $US75.0 million expiring on 1 May 2023, and• Rabobank - $NZ20.0 million expiring on 1 May 2023 and $US50.0 million facility expiring on 1 May 2024.Interest rate swapsThe table below summarises the Group’s current interest rate swaps. The effective interest rate is inclusive of the swap margin and the maturity date of the swaps coincides with the maturity date of the drawn down loans.
Date entered
Face value
Maturity date
Interest rate
paid
Interest rate
received
Swap
fair value
22 January 2017
$NZ10 million
28 January 2022
3.03%
0.80%
(56)
25 January 2017
$A15 million
25 January 2022
2.52%
0.04%
(99)
14 November 2017
$A20 million
14 November 2022
2.50%
0.05%
(467)
22 May 2017
$US10 million
1 June 2022
2.06%
0.10%
(159)
29 June 2017
$US10 million
1 July 2022
2.02%
0.10%
(136)
Total
(917)
SecurityAs security over the AUD and NZD loans, banks hold a negative pledge deed between Restaurant Brands New Zealand Limited and all its Australasian subsidiary companies. The negative pledge deed includes all obligations and cross guarantees between the guaranteeing subsidiaries.As security over the USD debt facility, the bank holds guarantees and security over the USA businesses.The Group also has indemnity guarantees of $2.7 million across various properties leased in New Zealand and Australia, a standby letter of credit of $3.7 million in California, and a standby letter of credit in Hawaii of $0.4 million.The Group is subject to a number of externally imposed bank covenants as part of the terms of its secured bank loan facilities.The most significant covenants relating directly to capital management are the ratio of total debt to earnings before interest, tax and amortisation (EBITA) and restrictions relating to acquiring its own shares.The specific covenants relating to financial ratios the Group is required to meet under the new agreements are:• debt coverage ratio (i.e. net debt to EBITDA), • fixed charge coverage ratio (EBITDAL to fixed charges), with EBITDAL being EBITDA before lease costs, fixed
charges comprising interest and lease costs,
• guaranteeing group assets ratio (i.e. total guaranteeing group tangible assets to total consolidated group tangible
assets), and
• guaranteeing group earnings ratio (i.e. non-guaranteeing group EBITDA to the consolidated group EBITDA). These ratios exclude the impact of NZ IFRS 16 Leases.The covenants are reported to the banks on a six monthly basis, whilst the Board reviews covenant compliance on a monthly basis.There have been no breaches of the covenants during the period (Dec 2020: no breaches).The carrying value equates to fair value, for more information about the Group’s exposure to interest rate and foreign currency risk see note 6.

Annual Report 31 December 2021
83
82
Restaurant Brands New Zealand Limited
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the consolidated statement of comprehensive income over the period of the borrowings using the effective interest method.
Financing expense
$NZ000’s
31 Dec 2021
31 Dec 2020
Financing expense – lease
29,450
23,752
Finance expense – bank
6,834
6,468
Financing expenses
36,284
30,220
Included within the period ended 31 December 2021 is $29.5 million (Dec 2020: $23.8 million) of interest relating to leases recognised in accordance with NZ IFRS 16.
Financing expenses comprise: interest payable on borrowings calculated using the effective interest rate method; interest received on funds invested calculated using the effective interest rate method; lease interest (note 14); foreign exchange gains and losses; gains and losses on certain financial instruments that are recognised in profit or loss in the consolidated statement of comprehensive income; unwinding of the discount on provisions and impairment losses on financial assets.
5. DERIVATIVES AND HEDGE ACCOUNTING $NZ000’s
31 Dec 2021
31 Dec 2020
TermFair value of interest rate swaps
917
2,698
Financing expenses
917
2,698
Change in fair value of interest rate swaps
1,781
(481)
Change in value of hedge item used to determine hedge effectiveness
(1,781)
481
The above table shows the Group’s financial derivative holdings at period end and the change in fair value of the hedge and the underlying item being hedged. The interest rate swaps hedge ratio was 1:1 for both periods as the change in fair value of the interest rate swap mirrored the change in the fair value of the hedged item used to determine hedge effectiveness.There were no transfers between fair value levels during the period (Dec 2020: Nil). The fair values are classified as level two.The fixed interest rates of the swaps used to hedge range between 1.92% and 2.48% (Dec 2020: 1.86% to 2.75%) and the variable rates of the loans are between 0.04% and 0.8% above the applicable bank bill rates. Refer to note 4 for the interest rate swaps face values, maturity dates, currencies and interest rate ranges.The Group’s current hedge relationships are cash flow hedges. Under NZ IFRS 9 the hedged risk is designated as being changes in the variable interest rate, with changes in the full fair value of the interest rate swaps being accounted for through other comprehensive income (to the extent the hedge is effective).
Financial AssetsThe Group classifies its financial assets as those to be measured at amortised cost (loans, receivables and non-derivative financial instruments), and those to be measured subsequently at fair value either through OCI or through profit or loss (derivative financial instruments).Financial assets held at amortised costLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. The Group’s loans and receivables comprise trade receivables, other debtors and cash and cash equivalents in the consolidated statement of financial position.Financial assets that are stated at cost or amortised cost are reviewed individually at balance date to determine whether there is objective evidence of impairment. Any impairment losses are recognised in profit or loss in the consolidated statement of comprehensive income.Financial instrumentsA financial instrument is recognised when the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised when the Group’s contractual rights to the cash flows from the financial assets expire or when the Group transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at trade date, i.e. the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised when the Group’s obligations specified in the contract expire or are discharged or cancelled.Non-derivative financial instrumentsNon-derivative financial instruments comprise trade receivables and other debtors, which are initially recognised at fair value plus transaction costs and subsequently measured at amortised cost, cash and cash equivalents, loans and borrowings (initially recognised at fair value plus transaction costs and subsequently measured at amortised cost), and trade and other payables which are initially recognised at fair value and subsequently measured at amortised cost.Derivative financial instrumentsThe Group has various derivative financial instruments to manage the exposures that arise due to movements in foreign currency exchange rates and interest rates arising from operational, financing and investment activities. The Group does not hold derivative financial instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for at fair value through profit or loss. Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.
Financial assets and financial liabilities by category
$NZ000’s
31 Dec 2021
31 Dec 2020
Loans and receivables

Trade receivables
3,717
3,749
Other receivables
1,332
2,334
Cash and cash equivalents

45,155
35,666
50,204
41,749
Derivatives used for hedgingDerivative financial instruments – liabilities
917
2,698
917
2,698
Financial liabilities at amortised costLoans (excluding prepaid facility fees)
247,390
236,398
Trade and other payables (excluding indirect and other taxes and employee benefits)
77,677
70,223
325,067
306,621

Annual Report 31 December 2021
85
84
Restaurant Brands New Zealand Limited
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
6. FINANCIAL RISK MANAGEMENTExposure to credit, interest rate and foreign currency risks arises in the normal course of the Group’s business. Derivative financial instruments may be used to hedge exposure to fluctuations in foreign currency exchange rates and interest rates.(a) Foreign currency riskThe Group is exposed to foreign currency risk on purchases that are denominated in a currency other than the New Zealand dollar. The currencies giving rise to this risk are primarily Australian dollars and United States dollars.The direct exposure to foreign currency risk is small and is primarily confined to raw material purchases, some items of capital equipment and some franchise fee payments. Where any one item is significant, the Group will specifically hedge its exposure.The Group has an indirect exposure to foreign currency risk on some of its locally sourced ingredients, where those ingredients in turn have a high imported component. Where this is significant the Group contracts to a known purchase price with its domestic supplier based on a forward cover position taken by that supplier on its imported components.The Group has a foreign currency risk on its assets and liabilities that are denominated in Australian and US dollars as part of its Australian and US investments.(b) Interest rate riskThe Group’s main interest rate risk arises from bank loans. Based on a number of scenarios, the Group calculates the impact on profit or loss of a defined interest rate shift. Based on these scenarios the maximum loss potential is assessed by management as to whether it is within acceptable limits.Where necessary the Group hedges its exposure to changes in interest rates primarily through the use of interest rate swaps. There are guidelines as to the minimum prescribed level of hedging set out by the Board, however the Board reviews all swaps before they are entered into.Note 5 discusses in detail the Group’s accounting treatment for derivative financial instruments.As discussed in note 4, the Group has an interest rate swap in place to fix the interest rate on $A35 million of Australian denominated bank loans to 2022 (Dec 2020: $A35 million), $NZ10 million to 2022 (Dec 2020: $NZ10 million) and $US20 million to 2022 (Dec 2020: $US20 million). The Group will continue to monitor interest rate movements to ensure it maintains an appropriate mix of fixed and floating rate exposure within the Group’s treasury policy.(c) Liquidity riskIn respect of the Group’s cash balances, non-derivative financial liabilities and derivative financial liabilities, the followi
ng
table analyses the amounts into relevant maturity groupings based on the remaining period at balance date to the contractual maturity date, along with their effective interest rates at balance date. The amounts disclosed in the table are the contractual undiscounted cash flows.
$NZ000’s
Effective
interest rate
Total
Less than
1 year
Between
1 and 5 years
31 Dec 2021Cash on hand
–640640
–
Cash at bank
0.25%24,11524,115
–
Money market deposit
0.70%
20,400
20,400
–
Bank term loan – principal (NZD)
7.83%
(10,000)
–
(10,000)
Bank term loan – principal (AUD)
3.13%
(80,671)
–
(80,671)
Bank term loan – principal (USD)
2.25%(156,719)
–(156,719)
Bank term loan – expected interest
2.76%
(8,047)
(4,858)
(3,189)
Derivative financial instruments
–(762)(762)
–
Trade and other payables (excluding indirect and other taxes and employee benefits)
–
(77,087)
(77,087)
–
(288,131)
(37,552)
(250,579)
31
Dec 2020
Cash on hand
612
612
–
Cash at bank
0.25%
32,054
32,054
–
Money market deposit
0.20%
3,000
3,000
–
Bank term loan – principal (NZD)
4.36%
(20,000)
–
(20,000)
Bank term loan – principal (AUD)
4.66%
(51,151)
–
(51,151)
Bank term loan – principal (USD)
2.43%
(165,247)
(8,058)
(157,189)
Bank term loan – expected interest
3.08%
(16,689)
(5,378)
(11,311)
Derivative financial instruments
–
(2,466)
(1,719)
(747)
Trade and other payables (excluding indirect and other taxes and employee benefits)
–
(69,653)
(69,653)
–
(289,540)
(49,142)
(240,398)
Prudent liquidity risk management implies the availability of funding through adequate amounts of committed credit facilities. The Group aims to maintain flexibility in funding by keeping committed credit lines available.The Group has a negative working capital balance as the nature of the business results in most sales conducted on a cash basis. The Group has bank funding facilities, excluding overdraft facilities, of $359.8 million (Dec 2020: $350.6 million) available at variable rates. The amount undrawn at balance date was $112.5 million (Dec 2020: $125.5 million) and therefore the Group has the ability to fully pay debts as they fall due.The Group has fixed the interest rate on $NZ10 million of NZD bank loans, $A35 million of AUD bank loans and $US20 million of USD bank loans with the balance at a floating interest rate. The bank loans are structured as a revolving wholesale advance facility with portions of the facility renewing on a regular basis. This leads to the loans being sensitive to interest rate movement in 12 months or less.The Group has lease liabilities with future cash payments as disclosed in the table below: $NZ000’s
31 Dec 2021
31 Dec 2020
Within one year
56,801
51,831
One to five years
224,436
197,672
Beyond 5 years
802,240
724,669
1,083,477
974,172
This includes future lease options that the Group currently expects to exercise and is not discounted for the future nature of payments. This does not reflect the Group’s future contractual minimum payments.

Annual Report 31 December 2021
87
86
Restaurant Brands New Zealand Limited
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
(d) Credit riskCredit risk arises from cash deposits with banks and financial institutions and outstanding trade and other receivables.No collateral is required in respect of financial assets. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The nature of the business results in most sales being conducted on a cash basis that significantly reduces the risk that the Group is exposed to. Reputable financial institutions are used for investing and cash handling purposes.There were no financial assets past due nor impaired at balance date (Dec 2020: nil).At balance date there were no significant concentrations of credit risk and the maximum exposure to credit risk is represented by the carrying value of each financial asset in the consolidated statement of financial position. (e) Fair valuesThe carrying values of bank loans are the fair value of these liabilities. A Group set-off arrangement is in place between certain bank accounts operated by the Group.Sensitivity analysisIn managing interest rate and currency risks the Group aims to reduce the impact of short-term fluctuations on the Group’s earnings. Over the longer term, however, permanent changes in foreign exchange and interest rates on a weighted average balance will have an impact on profit.At 31 December 2021 it is estimated that a general increase of one percentage point in interest rates would decrease the Group profit before income tax by approximately $1.7 million (Dec 2020: $1.5 million), however equity would increase $0.1 million (Dec 2020: $1.3 million). A one percentage point decrease in interest rates would increase the Group profit before income tax by approximately $2.4 million (Dec 2020: $2.2 million), however equity would increase by $1.8 million (Dec 2020 $1.6 million).A general increase of one percentage point in the value of the New Zealand dollar against other foreign currencies would have minimal impact on the cost of the Group’s directly imported ingredients denominated in foreign currencies.Capital risk managementThe Group’s capital comprises share capital, reserves, retained earnings and debt.The Group’s objectives when managing capital are to safeguard the Group’s ability to continue to operate as a going concern, and to maintain an optimal capital structure commensurate with risk and return and reduce the cost of capital.In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, sell assets to reduce debt or draw down more debt.7. EQUITY AND RESERVESShare capital
31 Dec 2021
number
31 Dec 2021
$NZ000’s
31 Dec 2020
number
31 Dec 2020
$NZ000’s
124,758,523
154,565
124,758,523
154,565
The issued and authorised capital of the Company represents ordinary fully paid up shares. The par value is nil (Dec 2020: nil). All issued shares carry equal rights in respect of voting and the receipt of dividends, and upon winding up rank equally with regards to the Company’s residual assets.
Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.
Foreign currency translation reserve$NZ000’s
31 Dec 2021
31 Dec 2020
(1,480)
(8,038)
The foreign currency translation reserve comprises all exchange rate differences arising from translating the financial statements of the foreign currency operations.Derivative hedging reserve$NZ000’s
31 Dec 2021
31 Dec 2020
(872)
(2,322)
The derivative hedging reserve represents the fair value of outstanding derivatives.WORKING CAPITAL8. INVENTORIES$NZ000’s
31 Dec 2021
31 Dec 2020
Raw materials and consumables
22,261
16,607
Inventories recognised as an expense during the period ended 31 December 2021 amounted to $269.9 million (Dec 2020: $222.9 million). This is included in cost of goods sold.
Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price less the estimated costs of marketing, selling and distribution. The cost of inventories is based on the first-in first-out method and includes expenditure incurred in acquiring the inventories and bringing them to their existing condition and location. The cost of inventories consumed is recognised as an expense and included in cost of goods sold in the consolidated statement of comprehensive income.
9. TRADE AND OTHER RECEIVABLES$NZ000’s
31 Dec 2021
31 Dec 2020
Trade receivables
3,717
3,749
Prepayments
5,963
5,311
Other receivables
1,332
2,334
11,012
11,394
The carrying amount of the Group’s trade and other receivables are denominated in the following currencies: NZD
7,0 16
6,912
AUD
1,781
1,748
USD
2,215
2,734
11,012
11,394
The Group’s exposure to credit risk is minimal as the Group’s primary source of revenue is from sales made on a cash basis. The carrying value of trade and other receivables approximates fair value.
Receivables are initially recognised at fair value. They are subsequently adjusted for impairment losses. Discounting is not applied to receivables where collection is expected to occur within the next twelve months.

Annual Report 31 December 2021
89
88
Restaurant Brands New Zealand Limited
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
10. CASH AND CASH EQUIVALENTS$NZ000’s
31 Dec 2021
31 Dec 2020
Cash on hand
640
612
Cash at bank
44,515
35,054
45,155
35,666
The carrying amount of the Group’s cash and cash equivalents are denominated in the following currencies: NZD
23,829
8,218
AUD
6,944
5,855
USD
14,382
21,593
45,155
35,666
Included in cash and cash equivalents are credit card receipts and delivery receipts that are in transit at balance date.11. HELD FOR SALE – ASSETS AND LIABILITIES FOR STORES DEVELOPED FOR SALE$NZ000’s
31 Dec 2021
31 Dec 2020
Assets for stores developed for sale
–
2,833
Liabilities for store developed for sale
–
(1,751)
This related to new Pizza Hut stores developed for sale in New Zealand which were actively marketed for sale and expected to be sold. Included as part of the balances was $1.8 million of lease liabilities and $1.7 million of right of use associated with these stores. This differs from ‘held for sale - assets’ and ‘held for sale - liabilities’ which relate to existing stores currently being operated by the Group which are actively being marketed for sale. There were three stores classified as held for sale in 2020, two of these were sold to franchisees whilst one store was retained and reclassified as an owned store during 2021.12. TRADE AND OTHER PAYABLES$NZ000’s
31 Dec 2021
31 Dec 2020
Trade payables
45,443
41,265
Other payables and accruals
32,234
28,958
Employee benefits
24,476
21,297
Indirect and other taxes
8,323
10,069
110,476
101,589
The carrying amount of the Group’s trade and other payables are denominated in the following currencies:NZD
60,944
60,736
AUD
20,890
18,621
USD
28,642
22,232
110,476
101,589
The carrying value of trade payables and other payables approximates fair value.
Payables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method.
LONG TERM ASSETS13. PROPERTY, PLANT AND EQUIPMENT$NZ000’s
Land
Leasehold
improvements
Plant,
equipment
and fittings
Motor
vehicles
Leased
plant and
equipment
Capital
work in
progress
Total
CostBalance as at 31 December 2019
4,375
225,841
109,835
1,870
196
14,705
356,822
Additions
–
–
–
–
–
59,905
59,905
Acquisition of business
–
26,361
7,036
258
–
490
34,145
Transfers from work in progress
–
37,507
18,141
164
–
(55,812)
–
Disposals
–
(6,183)
(6,554)
(191)
–
–
(12,928)
Movement in exchange rates
92
(3,406)
(1,455)
(2)
–
(373)
(5,144)
Balance as at 31 December
2020
4,467
280,120
127,003
2,099
196
18,915
432,800
Additions
–
–
–
–
–
82,445
82,445
Acquisition of business
–
3,418
832
–
–
–
4,250
Transfers from work in progress
–
54,717
16,102
487
–
(71,306)
–
Disposals
–
(18,246)
(20,785)
(426)
(196)
–
(39,653)
Reclassifications
–
1,264
(3,385)
–
–
–
(2,121)
Movement in exchange rates
(15)
3,756
1,518
12
–
405
5,676
Balance as at 31 December 2021
4,452
325,029
121,285
2,172
–
30,459
483,397
Accumulated depreciationBalance as at 31 December 2019
–
(109,169)
(66,873)
(992)
(196)
–
(177,230)
Charge
–
(20,943)
(12,286)
(378)
–
–
(33,607)
Disposals
–
3,572
4,850
165
–
–
8,587
Movement in exchange rates
–
516
859
(3)
–
–
1,372
Balance as at 31 December
2020
–
(126,024)
(73,450)
(1,208)
(196)
–
(200,878)
Charge
–
(23,413)
(13,636)
(410)
–
–
(37,459)
Disposals
–
14,567
18,421
299
196
–
33,483
Reclassification
–
(582)
2,703
–
–
–
2,121
Movement in exchange rates
–
(702)
(750)
(4)
–
–
(1,456)
Balance as at 31 December 2021
–
(136,154)
(66,712)
(1,323)
––
(204,189)
Impairment provisionBalance as at 31 December 2019
–
(3,897)
86
–
–
–
(3,811)
Charge –
(97)
(108)
–
–
–
(205)
Reclassification
–
517
(517)
–
–
–
–
Utilised/disposed
–
692
111
–
–
–
803
Balance as at 31
December
2020
–
(2,785)
(428)
–
–
–
(3,213)
Charge
–
(170)
(173)
–
–
–
(343)
Utilised/disposed
–
914
316
–
–
–
1,230
Movement in exchange rates
–
(114)
(20)
–
–
–
(134)
Balance as at 31 December 2021
–
(2,155)
(305)
–
–
–
(2,460)
Carrying amountsBalance as at 31 December 2019
4,375
112,775
43,048
878
–
14,705
175,781
Balance as at 31 December 2020
4,467
151,311
53,125
891
–
18,915
228,709
Balance as at 31 December 2021
4,452
186,720
54,268
849
–
30,459
276,748

Annual Report 31 December 2021
91
90
Restaurant Brands New Zealand Limited
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
Depreciation expense$NZ000’s
31 Dec 2021
31 Dec 2020
Depreciation expense
36,623
33,811
Sale of property, plant and equipmentNet loss on disposal of property, plant and equipment (included in depreciation expense)
(3,619)
(1,850)
Net gain on disposal of property, plant and equipment (included in other expenses)
945
405
Property, plant and equipment is measured at cost less accumulated depreciation and impairment losses.Depreciation is calculated on a straight line basis to allocate the cost of an asset, less any residual value, over its estimated useful life. Leased assets are depreciated over the shorter of the lease term and their useful lives. The estimated useful lives of fixed assets are as follows:Leasehold improvements
5 - 25 years
Plant and equipment
3 - 12.5 years
Motor vehicles
4 - 5 years
Furniture and fittings
3 - 10 years
Computer equipment
3 - 5 years
Depreciation methods, useful lives and residual values are reassessed at the reporting date.Depreciation expense is included in the consolidated statement of comprehensive income.Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss in the consolidated statement of comprehensive income.
Significant judgements and estimates Impairment testing is an area where estimates and judgements have a significant risk of causing a material adjustment to the carrying amount of the Group’s tangible asset balances. Estimates of future cash flows are highly subjective judgements and can be significantly impacted by changes in the business or economic conditions.Property, plant and equipment and right of use assets are reviewed for impairment semi-annually, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised in the consolidated statement of comprehensive income for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. When assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows; a restaurant’s assets is the relevant cash generating unit. If, in a subsequent period, the amount of the impairment loss decreases and it can be related objectively to an event occurring after the impairment was recognised, the reversal of the previously recognised impairment loss is recognised in the consolidated statement of comprehensive income.The value in use calculation evaluates recoverability based on the restaurant’s forecasted discounted cash flows, which incorporate estimated sales growth and margin improvement based upon current plans for the store and actual results at comparable restaurants.Key assumptions in the determination of recoverable amount are:• the estimate of future cash flows of the restaurant incorporating reasonable sales growth and margin improvement• the discount rate incorporating the rates of return based on the risk and uncertainty inherent in the forecast cash flows• the terminal growth rate is calculated based on continuous sales growth at a minimum projected inflation estimated
at 2.0%.
Management has assessed individual restaurant assets to identify whether impairment indicators existed as at balance date for associated property, plant and equipment and right of use assets. The COVID-19 pandemic has continued to have an impact on the financial performance of each of the Group’s segments.Management’s review focussed particularly on the restaurants (cash-generating units) within the Australian segment as the impacts of COVID-19 during the year caused by extended lockdown restrictions have significantly adversely effected trading. Restaurant property, plant and equipment and right of use assets for Australia amounted to $81.9 million and $152.9 million respectively as at 31 December 2021. The restaurants most effected were CBD and mall locations which were closed for an extended period of time during the year and only resumed operations when restrictions began to ease in October 2021.Following a review of store performance and consideration of other impairment indicators, the Group determined that there were six restaurants within the Australian segment that required a calculation of the recoverable amount as there were impairment indicators. The key assumptions used in the value in use calculations were as follows:
Key assumptions
Percentage used %
Sales growth
2.0 – 75.4
EBITDA margin
4.1 – 17.5
EBITDA margin terminal year
21.7
Terminal growth rate
2.0
Discount rate
7.8
The significant change in sales growth and EBITDA margin as a percentage reflects the return to normal trading levels following significant restrictions for some stores in 2021. The sales growth from 2023 returns to normal levels at approximately 4%, except for one store which is in a location catering primarily to international students that is expected to grow by 15% in 2023 before returning to normal growth levels thereafter. Based on the calculations, which in each case showed a recoverable amount higher than the respective carrying value of assets, no impairment was considered necessary.Although the other CGUs were adversely impacted by COVID-19 it was to a lesser degree. California and Hawaii were not subject to significant restrictions and New Zealand Alert Level 4 closures were for a limited period. No impairment indicators were noted for these CGUs.A full impairment test was performed as required by IAS 36 for the goodwill balance. Refer to note 15 for further detailed assumptions utilised.14. NZ IFRS 16 – LEASESKey estimates and judgementsThere are a number of judgements and estimates in calculating the future lease liabilities and right of use asset value. These include:• incremental borrowing rate. The Group engages an independent valuation expert to establish the incremental
borrowing rates applied during the period.
• lease terms, including any rights of renewal expected to be exercised. The Group has assumed that all rights
of renewal are expected to be exercised which is consistent with the Group’s strategy and previous leases. This judgement has been applied unless a store closure or a decision to relocate a store is known when valuing the lease.
• foreign exchange conversion rates.Right of use assets (ROU assets)$NZ000’s
Note
31 Dec 2021
31 Dec 2020
Opening balance
517,085
353,937
Right of use assets acquired on acquisition of businesses
26
19,072
159,310
Depreciation
(38,194)
(30,908)
Adjustments to existing right of use assets
27,070
12,077
Additions
39,838
33,398
Foreign exchange movement
11,656
(10,729)
Closing balance
576,527
517,085
Additions relate to new leases entered into by the Group.

Annual Report 31 December 2021
93
92
Restaurant Brands New Zealand Limited
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
The Group leases relate to land and buildings. Rental contracts are typically made for fixed periods of 1 to 50 years but may have extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.Under NZ IFRS 16, leases are recognised as a right of use asset and a corresponding lease liability. Each lease payment is allocated between the lease liability and the finance cost. The finance cost is charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right of use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight line basis.Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of fixed payments and known fixed lease increases, less any lease incentives receivable. Right of use assets are measured at cost comprising the amount of the initial measurement of lease liability and any restoration costs. These assets are subsequently depreciated using the straight line method from the commencement date to the end of the lease term.The Group is exposed to potential future increases in variable lease payments based on an index, rate or market rent review, which are not included in the lease liability or right of use asset until they take effect.The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.The Group has applied the recognition exemption allowed by the standard in respect short-term and low value leases. Payments associated with short term leases and leases of low value assets are recognised on a straight line basis as an expense in the statement of comprehensive income. Short term leases are leases with a lease term of 12 months or less. Low value assets comprise IT equipment and small items of office furniture.
Lease liabilities
$NZ000’s
Note
31 Dec 2021
31 Dec 2020
Opening balance
595,614
425,083
Lease liabilities acquired on acquisition of businesses
26
19,072
158,244
Cash flow payments
(54,857)
(45,843)
Interest
28,993
23,752
Adjustments to existing lease liabilities
27,786
12,281
Additions
39,510
33,052
Foreign exchange movement
12,563
(10,955)
Closing balance
668,681
595,614
Current lease liabilities
25,609
23,826
Non-current lease liabilities
643,072
571,788
Closing balance
668,681
595,614
The weighted average incremental borrowing rate applied to lease additions during the year was 4.2% (Dec 2020: 4.6%).
15. INTANGIBLES$NZ000’s Note
Goodwill
Franchise
fees
Concept
development
costs
Acquired
software
costs
Total
CostBalance as at 31 December 2019
228,672
30,119
1,290
11,586
271,667
Additions
–
1,958
–
–
1,958
Acquisition of business
29,187
58,512
–
–
87,699
Transfer from work in progress
–
–
–
1,489
1,489
Disposals
(1,332)
(3,765)
(489)
(2,480)
(8,066)
Movement in exchange rates
(7,249)
(4,419)
–
–
(11,668)
Balance as at 31 December
2020
249,278
82,405
801
10,595
343,079
Additions
–
2,689
–
200
2,889
Acquisition of business
26
18,152
5,840
–
–
23,992
Disposals
(327)
(1,583)
–
(552)
(2,462)
Reclassification from property, plant and equipment
–
–
–
2,121
2,121
Movement in exchange rates
6,992
3,765
–
–
10,757
Balance as at 31 December 2021
274,095
93,116
801
12,364
380,376
Accumulated amortisationBalance as at 31 December 2019
(831)
(12,633)
(1,220)
(8,312)
(22,996)
Charge
–
(4,168)
(5)
(1,343)
(5,516)
Disposals
–
3,336
489
2,190
6,015
Movement in exchange rates
–
404
–
–
404
Balance as at 31 December
2020
(831)
(13,061)
(736)
(7,465)
(22,093)
Charge
–
(8,151)
(5)
(1,076)
(9,232)
Disposals
–
1,392
–
350
1,742
Reclassification from property, plant and equipment
–
–
–
(2,121)
(2,121)
Movement in exchange rates
–
(456)
–
–
(456)
Balance as at 31 December 2021
(831)
(20,276)
(741)
(10,312)
(32,160)
Impairment charges are recognised in other expenses in the consolidated statement of comprehensive income.Carrying amountsBalance as at 31 December 2019
227,841
17,486
70
3,274
248,671
Balance as at 31 December 2020
248,447
69,344
65
3,130
320,986
Balance as at 31 December 2021
273,264
72,840
60
2,052
348,216

Annual Report 31 December 2021
95
94
Restaurant Brands New Zealand Limited
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
GoodwillGoodwill arises on the acquisition of subsidiaries and business combinations. Goodwill is measured at cost less accumulated impairment losses and has an indefinite useful life. Goodwill is allocated to cash generating units and is tested annually for impairment. Where the Group disposes of an operation within a cash generating unit, the goodwill associated with the operation disposed of is part of the gain or loss on disposal. Goodwill disposed of in this manner is measured based on the relative values of the operation disposed of and the portion of the cash generating unit retained.Franchise feesFranchise costs are those incurred in obtaining franchise rights or licences to operate quick service and take-away restaurant concepts. They include for example, the initial fee paid to a system franchisor when a new store is opened. These are measured at cost less accumulated amortisation and accumulated impairment costs. Amortisation is on a straight line basis over the life of the applicable franchise or licence agreement.Concept development costsConcept development costs include certain costs, other than the direct cost of obtaining the franchise, associated with the establishment of quick service and takeaway restaurant concepts. These include, for example, professional fees and consulting costs associated with the establishment of a new brand or business acquisition. These costs are capitalised where the concept is proven to be commercially feasible and the related future economic benefits are expected to exceed those costs with reasonable certainty. These are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight line basis over the period which future economic benefits are reasonably expected to be derived.Acquired software costsSoftware costs have a finite useful life. Software costs are capitalised and amortised on a straight line basis over the estimated economic life of 3-8 years.
AmortisationAmortisation charge is recognised in cost of sales and other expenses in the consolidated statement of comprehensive income.
$NZ000’s
31 Dec 2021
31 Dec 2020
Amortisation of intangibles
9,232
5,516
Significant judgements and estimates – impairment testing Impairment testing is an area where estimates and judgements have a significant risk of causing a material adjustment to the carrying amount of the Group’s goodwill balances.For the purpose of impairment testing, goodwill is allocated to the Group’s operating brands which represent the lowest level of cash generating unit within the Group at which the goodwill is monitored for internal management purposes.Allocation of goodwill by cash generating unit:$NZ000’s
31 Dec 2021
31 Dec 2020
KFC Australia
112,800
96,896
KFC New Zealand
6,528
6,528
Pizza Hut New Zealand
7, 4 3 3
7,7 8 7
Pizza Hut and Taco Bell Hawaii
118,669
112,374
KFC and Taco Bell California
27,834
24,862
Total goodwill
273,264
248,447
The recoverable amount of each cash generating unit was based on its value in use. Value in use was determined by discounting the future cash flows generated from the contin
uing use of the brand. Cash flows were projected based
on a four year financial plan as approved by the Board of Directors.
The key assumptions used for the value in use calculation are as follows:

31 Dec 2021
Sales growth
2022-2024
%
31 Dec 2021
EBITDA margin
2022-2024
%
31 Dec 2021
EBITDA margin
terminal year
%
31 Dec 2020
Sales growth
2021-2023
%
31 Dec 2020
EBITDA margin
2021-2023
%
31 Dec 2020
EBITDA margin
terminal year
%
Brand
KFC Australia
4.1 – 5.1
14.4 – 15.2
15.5
4.3
15.3
15.3
KFC New Zealand
4.1 – 5.2
20.8 – 21.3
21.3
4.1
20.1
20.1
Pizza Hut New Zealand
3.0 – 5.1
8.3 – 9.5
10.0
1.1
5.3
5.3
Pizza Hut and Taco Bell Hawaii
3.0 – 6.9
10.3 – 20.0
10.6 – 20.2
3.5 – 6.1
7.7 – 20.0
7.7 – 20.0
KFC and Taco Bell California
(4.7) – 3.5
15.0 – 17.0
18.0
2.0
16.5
16.5
The key assumptions in each cash-generating unit are broadly consistent with the prior year with the exception of:• Pizza Hut New Zealand – the disposal of unprofitable stores has been considered in developing future key
assumptions and therefore sales and EBITDA margins are expected to significantly improve compared to prior year assumptions.
• Pizza Hut and Taco Bell Hawaii – the improvement in EBITDA margin reflects the strong performance of the Pizza Hut
brand which is expected to continue.
• KFC and Taco Bell California – all key assumptions are relatively consistent with the prior year other than sales growth
where it is expected to decrease in 2022 to adjust for Government stimulus packages provided in 2021 that are not expected to recur in the future.
The terminal growth rate is calculated based on the 2025 year and assumes a continuous sales growth of a minimum of projected inflation estimates of 2.0% (Dec 2020: 1.5%).The weighted average post-tax cost of capital discount rate for each cash generating unit is set out below:

31 Dec 2021
Weighted
average
post-tax cost
of capital
%
31 Dec 2020
Weighted
average
post-tax cost
of capital
%
Brand
KFC Australia
7. 8
7. 8
KFC New Zealand
7. 8
7. 8
Pizza Hut New Zealand
10.9
10.9
Pizza Hut and Taco Bell Hawaii
8.0
8.0
KFC and Taco Bell California
8.0
8.0
The weighted average cost of capital calculation was reviewed in 2020 based on capital asset pricing model (CAPM) methodology using market inputs at the time. For 2021, management has assessed changes in current market inputs and have determined that there has been no significant change that would change the overall weighted average post-tax cost of capital from the previous year.The values assigned to the key assumptions represent management’s assessment of future trends in the industry and are based on both external sources and internal sources including Board approved forecasts (historical data). The key assumptions are detailed below:• Sales growth – Average annual growth rate over the three-year forecast period based on past performance,
management’s expectations of market development, current industry trends and including long-term inflation forecasts for each territory.
• EBITDA margin 2022-2024 and EBITDA margin terminal year – Based on past performance and management’s
expectations for the future. EBITDA growth has been disclosed as a key assumption as a number of costs are variable and link directly to revenue levels, such as the cost of labour, and food costs. Other fixed costs of the CGUs, which do not vary significantly with revenue changes, are forecast based on the current structure of the business, adjusting for inflationary increases but not reflecting any future restructurings or cost-saving measures.
• Terminal growth rate – This is the growth rate used to extrapolate cash flows beyond the budget period. The rates are
consistent with expected long-term inflation for each territory in which the CGU operates.
• The discount rate – The rate used to reflect specific risks relating to the relevant segments and the countries in
which they operate.

Annual Report 31 December 2021
97
96
Restaurant Brands New Zealand Limited
Notes to and forming part of the financial statements (continued)for the year ended 31 December 2021
In respect of the New Zealand KFC and Pizza Hut brands any reasonably possible change in the key assumptions used in the calculations would not cause the carrying amount to exceed its recoverable amount. In respect of the Hawaii brands of Taco Bell and Pizza Hut, any reasonably possible change in the key assumptions used in the calculations would not cause the carrying amount to exceed its recoverable amount.In respect of the Australian KFC brand, any reasonably possible change in the key assumptions used in the calculations would not cause the carrying amount to exceed its recoverable amount.In respect of the California brands of KFC and Taco Bell, which was a recent acquisition in September 2020, an increase to 8.1% in the weighted average post-tax cost of capital would cause the carrying amount to equal its recoverable amount, this is an increase of 0.1% on the weighted average post-tax cost of capital.OTHER NOTES16. TAXATION
Current and deferred taxation are calculated on the basis of tax rates enacted or substantially enacted at reporting date, and are recognised in profit or loss except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, tax is also recognised in other comprehensive income or directly in equity, respectively.Deferred income taxation is recognised in respect of temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements.Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred tax liability is settled.Deferred income tax assets are only recognised to the extent that it is probable that future taxable amounts will be available against which to utilise those temporary differences.Tax returns for the Group and the detailed calculations that are required for filing tax returns are not prepared until after the financial statements are prepared. Estimates of these calculations are made for the purpose of calculating income tax expense, current tax and deferred tax balances. Any difference between the final tax outcomes and the estimations made in previous years will affect current year balances.The consolidated statement of comprehensive income and statements of cash flows have been prepared exclusive of Goods and Services Taxation (GST). All items in the consolidated statement of financial position are stated net of GST, with the exception of receivables and payables, which include GST invoiced.
Taxation – consolidated statement of comprehensive incomeThe total taxation expense is analysed as follows:$NZ000’s Note
31 Dec 2021
31 Dec 2020
Total profit before taxation for the period
1
65,793
44,564
Taxation expense
1
(13,912)
(13,920)
Net profit after income tax
51,881
30,644
Taxation expense using the Company’s domestic tax rate
(28.0%)
(18,422)
(28.0%)
(12,478)
Non-assessable income
3,094
4.9%
–
Other
978
0.6%
(1,813)
Adjustments due to different jurisdictions
437
0.7%
371
(13,912)
(21.8%)
(13,920)
Taxation expense comprises:Current tax expense
(13,257)
(18,364)
Deferred tax expense
(655)
4,444
(13,912)
(13,920)
Imputation creditsThe below amounts represent the balance of the imputation account as at the end of the reporting period, adjusted for:• Imputation credits that will arise from the payment of the amount of the provision for income tax• Imputation credits that will be utilised from the payment of dividends recognised as a liability at the reporting date;
and
• Imputation credits that will arise from the receipt of dividends recognised as receivables at the reporting date.The current and deferred tax rates for the period were calculated using the rate of 28% for New Zealand, 30% for Australia and 21% for USA (Dec 2020: 28% New Zealand, 30% Australia and 21% USA). $NZ000’s
31 Dec 2021
31 Dec 2020
Imputation credits available for subsequent reporting periods
35,435
21,909
Taxation – consolidated statement of financial positionThe following are the major deferred taxation liabilities and assets recognised by the Group and movements thereon during the current and prior year:
Assets
Liabilities
Net
$NZ000’s
31 Dec 2021
31 Dec 2020
31 Dec 2021
31 Dec 2020
31 Dec 2021
31 Dec 2020
Property, plant and equipment
10,354
9,766
(5,608)
(174)
4,746
9,592
Inventory
39
57
–
–
39
57
Accounts receivable
–
–
(274)
(287)
(274)
(287)
Provisions
6,995
6,830
–
–
6,995
6,830
Intangibles
1,214
38
(3,414)
(1,958)
(2,200)
(1,920)
Leases
25,762
22,054
–
–
25,762
22,054
Other
2,507
3,585
–
–
2,507
3,585
46,871
42,330
(9,269)
(2,419)
37,575
39,911
$NZ000’s
Balance
31 December
2019
Opening
balance on
acquisition
Recognised in
consolidated
statement of
comprehensive
income
Recognised
in equity
Foreign
currency
translation
Balance 31
December 2020
Property, plant and equipment
10,766
–
(1,155)
–
(19)
9,592
Inventory
51
–
6
–
–
57
Accounts receivable
(172)
–
(111)
–
(4)
(287)
Provisions
4,463
–
2,355
–
12
6,830
Intangibles
(365)
–
(1,763)
–
208
(1,920)
Leases
19,679
(70)
2,522
–
(77)
22,054
Other
2,070
–
2,590
(872)
(203)
3,585
36,492
(70)
4,444
(872)
(83)
39,911
$NZ000’s
Balance
31 December
2020
Opening
balance on
acquisition
Recognised
in consolidated
statement of
comprehensive
income
Recognised
in equity
Foreign
currency
translation
Balance
31 December
2021
Property, plant and equipment
9,592
–
(4,817)
–
(29)
4,746
Inventory
57
–
(18)
–
–
39
Accounts receivable
(287)
–
12
–
1
(274)
Provisions
6,830
–
119
–
46
6,995
Intangibles
(1,920)
(1,290)
1,304
–
(294)
(2,200)
Leases
22,054
–
3,619
–
89
25,762
Other
3,585
–
(874)
(370)
166
2,507
39,911
(1,290)
(655)
(370)
(21)
37,575