Burger King Worldwide, Inc.

During the three months ended September 30, 2014, in connection with the Tim Hortons Transaction, we discontinued hedge accounting for our Cap Agreements. Repayment of the existing 2012 Term Loans, Senior Notes and Discount Notes is expected to occur concurrently with the consummation of the Tim Hortons Transaction. As such, the forecasted interest payments are not expected to occur, resulting in the discontinuance of hedge accounting. Refer to Note 2 for further information on the Tim Hortons Transaction. Whenever hedge accounting is discontinued and the derivative remains outstanding, we continue to carry the derivative at its fair value on the balance sheet and recognize any subsequent changes in fair value in earnings. When it is probable that a forecasted transaction will not occur, we discontinue hedge accounting and recognize immediately in earnings any gains and losses, attributable to those forecasted transactions that are probable not to occur, that were accumulated in AOCI related to the hedging relationship. Prior to the discontinuance of hedge accounting, the Cap Agreements were designated as cash flow hedges and to the extent they were effective in offsetting the variability of the variable rate interest payments, changes in the derivatives’ fair values were not included in current earnings but were included in accumulated other comprehensive income (AOCI) in the accompanying condensed consolidated balance sheets. At each cap maturity date, the portion of the fair value attributable to the matured cap was reclassified from AOCI into earnings as a component of interest expense, net.

We are exposed to foreign currency risk as the cash consideration payable to Tim Hortons shareholders in connection with the Tim Hortons Transaction will be denominated in Canadian dollars. During the three months ended September 30, 2014, we entered into a foreign currency swap and two foreign currency option contracts to hedge our exposure to the volatility of the Canadian dollar. These derivative instruments do not qualify for hedge accounting and changes in fair values are immediately recognized in other operating expenses (income), net in current earnings. At September 30, 2014, we had outstanding a foreign currency swap to exchange $4,000.0 million U.S. dollars for C$4,347.2 million Canadian dollars with a maturity date of December 31, 2014. We also had two foreign currency option contracts to exchange $5,230.0 million U.S. dollars for C$5,635.3 million Canadian dollars with a maturity date of December 30, 2014. The foreign currency option contracts have a total premium of $59.9 million that is due at settlement and has been recorded as a liability within other accrued liabilities at September 30, 2014. Refer to Note 2 for additional information about the Tim Hortons Transaction and the Company’s hedging activities.

The transactions are subject to customary closing conditions. These closing conditions include, among others, the receipt of required approval of Tim Hortons shareholders, approval of the arrangement by the Ontario court, the effectiveness of the registration statement, and receipt of regulatory approvals in Canada. The governmental agencies from which the parties will seek certain of these approvals have broad discretion in administering the governing regulations. As a condition to their approval, these agencies may impose requirements, limitations or costs, require divestitures, require undertakings or place restrictions on the conduct of the Holdings business after the closing. These requirements, limitations, costs, divestitures or restrictions could jeopardize or delay the consummation of the transactions or may reduce the anticipated benefits of the transactions. Further, no assurance can be given as to the terms, conditions and timing of the required approvals. If the Company agrees to any material requirements, limitations, costs or restrictions in order to obtain any approvals required to consummate the arrangement and the merger, these requirements, limitations, costs or restrictions could materially and adversely affect the anticipated benefits of the transactions. This could result in a failure to consummate these transactions or have a material adverse effect on Holdings’ and Partnership’s business and results of operations. In addition, failure to obtain approval from any of the governmental agencies may result in the termination of the transactions. If the transactions are terminated because the Company is unable to obtain Investment Canada Act approval, the Company may be required to pay to Tim Hortons a termination fee of C$500 million.

The Company’s business relationships, including relationships with franchisees and customer relationships, may be subject to disruption due to uncertainty associated with the transactions.