Panera Bread 2011 Annual Report Download - page 60

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October 19, 2012, with any remaining holdback amounts reverting to the prior franchisee. As a result of this acquisition, the
Company gained control of 25 bakery-cafes and expanded Company-owned operations into Wisconsin. The Consolidated
Statements of Operations include the results of operations from the operating bakery-cafes from the date of the acquisition.
The acquired business contributed revenues of $42.4 million and net income of approximately $0.7 million for the period from
April 20, 2011 through December 27, 2011. The following supplemental pro forma information has been prepared for comparative
purposes and does not purport to be indicative of what would have occurred had the acquisition been made on December 30, 2009,
nor are they indicative of any future results (in thousands):
Bakery-cafe sales, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pro Forma for the Fiscal Year Ended
December 27, 2011
$ 1,607,633
136,243
December 28, 2010
$ 1,371,500
112,864
The pro forma amounts included in the table above reflect the application of the Company’s accounting policies and adjustment
of the results of the Milwaukee bakery-cafes to reflect the additional depreciation and amortization that would have been charged
assuming the fair value adjustments to property and equipment and intangible assets had been applied from December 30, 2009,
together with the consequential tax impacts.
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: $0.4 million to inventories, $9.3 million to property
and equipment, $23.3 million to intangible assets, which represents the fair value of re-acquired territory rights and favorable lease
agreements, $1.7 million to liabilities, and $10.6 million to goodwill. The fair value measurement of tangible and intangible assets
and liabilities as of the acquisition date is based on significant inputs not observed in the market and thus represents a Level 3
measurement.
Goodwill recorded in connection with this acquisition was attributable to the workforce of the acquired bakery-cafes and synergies
expected to arise from cost savings opportunities. All of the recorded goodwill is anticipated to be tax deductible and is included
in the Company Bakery-Cafe Operations segment.
New Jersey Franchisee Acquisition
On September 29, 2010 the Company purchased substantially all the assets and certain liabilities of 37 bakery-cafes and the area
development rights from its New Jersey franchisee for a purchase price of approximately $55.0 million. Approximately $52.2
million of the purchase price, as well as related transaction costs, were paid on September 29, 2010, and the remaining approximately
$2.8 million was paid with interest in fiscal 2011. As a result of this acquisition, the Company gained control of the 37 bakery-
cafes and expanded Company-owned operations into New Jersey. The Consolidated Statements of Operations include the results
of operations from the operating bakery-cafes from the date of the acquisition.
The following supplemental pro forma information has been prepared for comparative purposes and does not purport to be indicative
of what would have occurred had the acquisition been made on December 31, 2008, nor are they indicative of any future results
(in thousands):
Bakery-cafe sales, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pro Forma for the Fiscal Year End
December 28, 2010
$ 1,606,455
119,621
December 29, 2009
$ 1,433,686
90,710
The pro forma amounts included in the table above reflect the application of the Company’s accounting policies and adjustment
of the results of the New Jersey bakery-cafes to reflect the additional depreciation and amortization that would have been charged
assuming the fair value adjustments to property and equipment and intangible assets had been applied from December 30, 2009,
together with the consequential tax impacts.
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: $0.5 million to inventories, $19.9 million to property
and equipment, $31.2 million to intangible assets, which represents the fair value of re-acquired territory rights and favorable lease