Panera Bread 2007 Annual Report Download - page 68

purchase price of approximately $21.1 million plus approximately $0.5 million in acquisition costs. Approximately
$20.1 million of the acquisition price was paid with cash on hand at the time of closing, approximately $0.6 million
plus accrued interest was paid in cash during the second quarter of 2007 with the remaining approximately
$0.4 million to be paid with interest within the next twelve months. In addition, the Company has the right to
purchase the remaining 49 percent of the outstanding stock of Paradise after January 1, 2009 at a contractually
determined value, which approximates fair value. Also, if the Company has not exercised its right to purchase the
remaining 49 percent of the outstanding stock of Paradise, the remaining Paradise owners have the right to purchase
the Company’s 51 percent ownership interest in Paradise after June 30, 2009 for $21.1 million. In conjunction with
the transaction, Paradise entered into a credit facility with the Company pursuant to which Paradise borrowed
$6.1 million from the Company with approximately $4.8 million of the borrowing paid directly to Paradise’s third-
party creditors and the remaining $1.3 million retained by Paradise for working capital purposes. The Consolidated
Statements of Operations include the results of operations of Paradise from the date of the acquisition. The pro
forma impact of the acquisition on prior periods is not presented as the impact is not material to reported results. The
Company allocated the purchase price to the tangible and intangible assets acquired and liabilities assumed in the
acquisition at their estimated fair values with any remainder allocated to tax deductible goodwill as follows:
$5.1 million to current assets, $5.8 million to intangible assets, which represents the fair value of trademarks and
favorable lease agreements, $16.6 million to goodwill, $7.4 million to other long-term assets, $8.9 million to current
liabilities, $2.0 million to long-term liabilities and $2.4 million to minority interest.
On October 24, 2006, the Company purchased substantially all of the assets of 12 bakery-cafes, as well as one
bakery-cafe still under construction, and the area development rights for certain markets in Iowa, Nebraska and
South Dakota from its area developer, Panebraska, L.L.C., for a purchase price of approximately $15.3 million in
cash plus approximately $0.1 million in acquisition costs. Approximately $6.9 million of the acquisition price was
paid with cash on hand at the time of closing, and the remaining approximately $8.4 million plus accrued interest
was paid during fiscal year 2007. The Consolidated Statements of Operations include the results of operations from
the operating bakery-cafes from the date of the acquisition. The pro forma impact of the acquisition on prior periods
is not presented, as the impact is not material to reported results. The Company allocated the purchase price to the
tangible and intangible assets acquired and liabilities assumed in the acquisition at their estimated fair values with
the remainder allocated to tax deductible goodwill as follows: $0.2 million to inventories, $4.8 million to fixed
assets, $3.5 million to intangible assets, which represents the fair value of re-acquired territory rights and favorable
and unfavorable lease agreements, and $6.9 million to goodwill.
On September 27, 2006, the Company purchased from a franchisee substantially all of the assets of one bakery-
cafe for a cash purchase price of $2.4 million. Approximately $2.1 million of the acquisition price was paid with
cash on hand at the time of closing, and the remaining approximately $0.3 million plus accrued interest was paid
during the third quarter of 2007. The Consolidated Statements of Operations include the results of operations of the
one bakery-cafe from the date of acquisition. The pro forma impact of the acquisition on prior periods is not
presented, as the impact is not material to reported results. The Company allocated the purchase price to the tangible
and intangible assets acquired in the acquisition at their estimated fair values with the remainder allocated to tax
deductible goodwill as follows: $0.6 million to fixed assets, $0.1 million to intangible assets, which represents the
fair value of a re-acquired territory right and a favorable lease agreement, and $1.7 million to goodwill.
On November 1, 2005, the Company purchased from a franchisee substantially all of the assets of 21 bakery-
cafes, as well as two bakery-cafes still under construction, and the area development rights for certain markets in
Indiana for a purchase price of approximately $28.0 million in cash plus the assumption of certain liabilities
including those associated with bakery-cafe construction. The acquisition price was paid with cash on hand. The
Consolidated Statements of Operations include the results of operations from the bakery-cafes from the date of the
acquisition. The pro forma impact of the acquisition on prior periods is not presented as the impact is not material to
reported results. The Company allocated the purchase price to the tangible and intangible assets acquired and
liabilities assumed in the acquisition at their estimated fair values with the remainder allocated to tax deductible
goodwill as follows: $0.3 million to inventories, $11.6 million to fixed assets, $3.1 million to intangible assets,
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PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS — (Continued)