Wendy's 2008 Annual Report Download - page 126

Investment in joint venture with Tim Hortons Inc.
Wendy’s is a partner in a Canadian restaurant real estate joint venture with THI (“TimWen”). Wendy’s
50% share of the joint venture is accounted for using the Equity Method. Our equity in earnings from this
joint venture is included in “Other Operating Expense (Income), net” in the accompanying Consolidated
Statement of Operations (see Note 21). The Company’s equity in its investment in TimWen at December 28,
2008 of $89,771 exceeds its historical underlying net assets by $64,799. Such amount is being accounted for as
if TimWen were a consolidated subsidiary. As such, the excess is assumed to have been allocated to net
amortizable assets with an average life of 21.1 years (see Note 3 and 9).
Presented below is a summary of components related to our portion of TimWen included in our
Consolidated Balance Sheet and Consolidated Statement of Operations as of and for the quarter ended
December 28, 2008 (since the Wendy’s Merger).
2008
Historical cost basis at September 29, 2008 ..................................... $ 41,649
Purchase price adjustments (Note 3) . . .......................................... 65,455
107,104
Equity in earnings for the quarter ended December 28, 2008 ..................... 2,630
Amortization of purchase price adjustments ...................................... (656)
1,974 (a)
Distribution .................................................................. (2,864)
Currency translation adjustment included in “Comprehensive Income (loss)” ........ (16,443)
Balance at December 28, 2008 ................................................. $ 89,771 (b)
(a) Equity in earnings for the quarter ended December 28, 2008 are included in “Other operating expense,
net” in the Consolidated Statement of Operations.
(b) Included in ‘Investments” in the Consolidated Balance Sheets
Presented below is a summary of financial information of TimWen as of and for the quarter ended
December 28, 2008. The financial statements have been prepared in Canadian dollars. The summary financial
information is taken from balance sheets which do not distinguish between current and long-term assets and
liabilities and is as follows:
December 28, 2008
(Canadian)
Balance sheet information:
Properties.............................................................. C$87,292
Cash and cash equivalents ............................................... 5,063
Accounts receivable ..................................................... 3,339
Other ................................................................. 3,142
C$98,836
Accounts payable and accrued liabilities .................................. C$ 2,521
Other liabilities . ....................................................... 10,893
Partners’ equity . ....................................................... 85,422
C$98,836
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
(Formerly Triarc Companies, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)