Variable Interest Entities (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Contributions to the Canadian and U.S. Advertising Funds

Company contributions to the Canadian and U.S. advertising funds consisted of the following:


	First quarter ended
	March 31, 2013		April 1, 2012
Company contributions	$	2,704	$	2,603
Contributions from consolidated Non-owned restaurants		3,237		2,897

Total Company contributions	$	5,941	$	5,500

Schedule of Revenues and Expenses of Variable Interest Entities

The revenues and expenses associated with the Company’s consolidated Non-owned restaurants and advertising funds presented on a gross basis, prior to consolidation adjustments, are as follows:


	First quarter ended
	March 31, 2013						April 1, 2012
	Restaurant VIEs		Advertising fund VIEs		Total VIEs		Restaurant VIEs		Advertising fund VIEs		Total VIEs
Sales	$	86,760	$	0	$	86,760	$	78,014	$	0	$	78,014
Advertising levies⁽¹⁾		0		2,531		2,531		0		487		487

Total revenues		86,760		2,531		89,291		78,014		487		78,501
Cost of sales⁽²⁾		85,866		0		85,866		76,588		0		76,588
Operating expenses⁽¹⁾		0		2,099		2,099		0		385		385

Operating income		894		432		1,326		1,426		102		1,528
Interest expense		0		432		432		0		102		102

Income before taxes		894		0		894		1,426		0		1,426
Income taxes		142		0		142		226		0		226

Net income attributable to noncontrolling interests	$	752	$	0	$	752	$	1,200	$	0	$	1,200

⁽¹⁾

Generally, the advertising levies that are not related to the Expanded Menu Board Program are netted with advertising and marketing expenses incurred by the advertising funds in operating expenses, as these contributions are designated for specific purposes. The Company acts as an agent with regard to these contributions.

⁽²⁾	Includes rents, royalties, advertising expenses and product purchases from the Company which are eliminated upon the consolidation of these VIEs.

Schedule of Assets and Liabilities of Variable Interest Entities

The assets and liabilities associated with the Company’s consolidated Non-owned restaurants and advertising funds presented on a gross basis, prior to consolidation adjustments, are as follows:


	As at
	March 31, 2013				December 30, 2012
	Restaurant VIEs		Advertising fund VIEs		Restaurant VIEs		Advertising fund VIEs
Cash and cash equivalents	$	9,044	$	0	$	10,851	$	0
Advertising fund restricted assets – current		0		43,543		0		45,337
Other current assets		6,350		0		6,770		0
Property and equipment, net		18,463		56,995		19,536		57,925
Other long-term assets⁽¹⁾		440		2,341		572		2,095

Total assets	$	34,297	$	102,879	$	37,729	$	105,357

Notes payable to Tim Hortons Inc. – current⁽¹⁾	$	13,646	$	0	$	13,637	$	0
Advertising fund liabilities – current		0		44,542		0		44,893
Other current liabilities⁽¹⁾		12,652		8,830		14,548		9,919
Notes payable to Tim Hortons Inc. – long-term⁽¹⁾		1,272		0		804		0
Long-term debt⁽²⁾		0		46,411		0		46,849
Other long-term liabilities		5,174		3,096		5,887		3,696

Total liabilities		32,744		102,879		34,876		105,357

Equity of VIEs		1,553		0		2,853		0

Total liabilities and equity	$	34,297	$	102,879	$	37,729	$	105,357

⁽¹⁾	Various assets and liabilities are eliminated upon the consolidation of these VIEs, the most significant of which are the FIP Notes payable to the Company, which reduces the Notes receivable, net reported on the Condensed Consolidated Balance Sheet.

⁽²⁾	Balance as at March 31, 2013 includes $54.5 million of debt relating to the Expanded Menu Board Program (fiscal 2012: $56.5 million), of which $8.1 million is recognized in Other current liabilities (fiscal 2012: $9.7 million) with the remainder recognized as Long-term debt.