Equity method investments

12 Months Ended

Dec. 30, 2017

Equity Method Investments and Joint Ventures [Abstract]

The Company’s ownership interests in its equity method investments as of December 30, 2017 and December 31, 2016 were as follows:



Entity		Ownership
Japan JV		43.3%
South Korea JV		33.3%
Australia JV		20.0%

The Company also had a 33.3% ownership interest in the Spain JV as of December 26, 2015, which was sold during the fourth quarter of fiscal year 2016 for nominal consideration.

Summary financial information for the equity method investments on an aggregated basis was as follows (in thousands):



	December 30, 2017		December 31, 2016
Current assets	$	363,277	300,999
Current liabilities	140,113		120,611
Working capital	223,164		180,388
Property, plant, and equipment, net	165,442		153,038
Other assets	139,958		124,676
Long-term liabilities	48,429		48,460
Equity of equity method investments	$	480,135	409,642



	Fiscal year ended
	December 30, 2017		December 31, 2016	December 26, 2015
Revenues	$	646,269	629,717	622,982
Gross profit	345,302		329,206	327,684
Net income	33,791		32,529	33,650

During fiscal year 2015, the Company assessed if there was an other-than-temporary loss in value of its investment in the Japan JV based on various factors, including continued declines in the operating performance and reduced future expectations of the Baskin-Robbins business in Japan, as well as an announced reconsideration of the amount of semi-annual dividend payments by the Japan JV. Accordingly, the Company engaged a third-party valuation specialist to assist the Company in determining the fair value of its investment in the Japan JV. The valuation of the investment was determined using a combination of market and income approaches to valuation. Based in part on the fair value determined by the independent third-party valuation specialist, the Company concluded that the carrying value of the investment in the Japan JV exceeded fair value by $54.3 million and that this reduction in value was other-than-temporary. As such, the Company recorded an impairment charge for that amount in fiscal year 2015.

As the Company had previously recorded a step-up in the basis of our investment in the Japan JV comprising amortizable franchise rights and nonamortizable goodwill, the impairment was first allocated to fully impair these investor-level assets. The remaining impairment was recorded to the underlying assets of the Japan JV by fully impairing the underlying property, plant, and equipment, net of any related tax impact, with any residual impairment allocated ratably to other non-financial long-term assets.

The comparison between the carrying value of the Company’s investments in the Japan JV and the South Korea JV and the underlying equity in net assets of those investments is presented in the table below (in thousands):



	Japan JV					South Korea JV
	December 30, 2017			December 31, 2016		December 30, 2017		December 31, 2016
Carrying value of investment	$	13,886		10,789		127,225		104,253
Underlying equity in net assets of investment	35,045			34,312		133,161		109,992
Carrying value less than the underlying equity in net assets^(a)	$	(21,159	)	(23,523	)	(5,936	)	(5,739	)


(a)	The deficits of cost relative to the underlying equity in net assets of the Japan JV and the South Korea JV as of December 30, 2017 and December 31, 2016 are primarily comprised of impairments of long-lived assets, net of tax, recorded in fiscal years 2015 and 2011, respectively.

The carrying values of our investments in the Australia JV for any period presented were not material.