For Burger King, how is basic and diluted earnings per Partnership exchangeable unit determined?
Burger_King Franchise · 2025 FDDAnswer from 2025 FDD Document
ends payable by RBI to holders of RBI common shares, and the holders of Class B exchangeable limited partnership units (the "Partnership exchangeable units") are entitled to receive distributions from Partnership in an amount per unit equal to the dividends payable by RBI on each RBI common share. Partnership's net income available to common unitholders is allocated between the Class A common units and Partnership exchangeable units on a fully-distributed basis and reflects residual net income after noncontrolling interests. Basic and diluted earnings per Class A common unit is determined by dividing net income allocated to Class A common unitholders by the weighted average number of Class A common units outstanding for the period. Basic and diluted earnings per Partnership exchangeable unit is determined by dividing net income alloc
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 109–124)
What This Means (2025 FDD)
According to Burger King's 2025 Franchise Disclosure Document, the earnings per Partnership exchangeable unit are calculated based on the net income allocated to Partnership exchangeable unitholders and the weighted average of these units.
Specifically, in 2024, the net income allocated to Partnership exchangeable unitholders was $421, and the weighted average Partnership exchangeable units were 131. This resulted in earnings per unit of $3.21. Similar calculations were performed for 2023 and 2022, with earnings per unit of $3.78 and $3.28, respectively. These figures are derived by dividing the net income allocated to Partnership exchangeable unitholders by the weighted average of the Partnership exchangeable units outstanding during the year.
For a prospective Burger King franchisee, understanding these calculations provides insight into the financial performance and distribution structure of the partnership. The earnings per unit reflect the profitability attributable to each Partnership exchangeable unit, which are in turn exchangeable for common shares. These units represent a portion of the noncontrolling interest in the Partnership, with holders entitled to distributions equal to dividends declared on common shares. The value and distributions associated with these units can impact the overall financial returns for those holding them, especially considering the exchange option for common shares or cash payments.