Panera Bread 2015 Annual Report Download - page 67

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PANERA BREAD COMPANY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
57
Current assets, including cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,136
Property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,757
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,512
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,657
Deposits and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,149
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 777
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,237
Other long-term liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,151
Redeemable noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,998
Panera Bread Company investment in Tatte. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000
Total liabilities, redeemable noncontrolling interest, and stockholders' equity . . . . . . . . . . . . . . . . $ 10,149
Redeemable noncontrolling interest reflects that the noncontrolling interest holder holds a written put option, which will allow
them to sell their noncontrolling interest to the Company at any time after the end of the third year after the Tatte Acquisition. In
addition to the written put option, the Company holds a call option to acquire the noncontrolling interest after 42 months after the
Tatte Acquisition. Under each of these alternatives, the exercise price will be based on a contractually defined multiple of cash
flows, subject to certain limitations (the “redemption value”), which is not a fair value measurement and is payable in cash. As
the written put option is redeemable at the option of the noncontrolling interest holder, and not solely within the Company's control,
the noncontrolling interest in Tatte is classified as temporary equity and reflected in redeemable noncontrolling interest between
the Liabilities and Stockholders' Equity sections of the Company's Consolidated Balance Sheets. The initial carrying amount of
the noncontrolling interest is the fair value of the noncontrolling interest as of the acquisition date.
The noncontrolling interest is adjusted each period for comprehensive income attributable to the noncontrolling interest and changes
in the Company's ownership interest in Tatte, if any. An additional adjustment to the carrying value of the noncontrolling interest
may be required if the redemption value exceeds the current carrying value. Changes in the carrying value of the noncontrolling
interest related to a change in the redemption value will be recorded against permanent equity and will not affect net income.
While there is no impact on net income, the redeemable noncontrolling interest will impact the Company's calculation of earnings
per share. Utilizing the two-class method, the Company will adjust the numerator of the earnings per share calculation to reflect
the changes in the excess, if any, of the noncontrolling interest's redemption value over the noncontrolling interest carrying amount.
The Company did not record any such adjustments as of December 29, 2015.
The pro-forma impact of the Tatte Acquisition on prior periods is not presented, as the impact is not material to reported results.
All of the recorded goodwill is included in the Company Bakery-Cafe Operations segment.
Florida Bakery-cafe Acquisition
On April 9, 2013, the Company acquired substantially all the assets of one bakery-cafe from its Hallandale, Florida franchisee for
a purchase price of $2.7 million. The Company paid approximately $2.4 million of the purchase price on April 9, 2013 and paid
the remaining $0.3 million with interest during fiscal 2014. The Consolidated Statements of Income include the results of operations
for the bakery-cafe from the date of its acquisition. The pro-forma impact of the acquisition on prior periods is not presented, as
the impact is not material to reported results.
4. Investments Held to Maturity
During fiscal 2013, the Company purchased and sold seven zero-coupon discount notes that were classified as held-to-maturity.
The amortized cost of the investments sold was $97.9 million. The Company realized a loss on the sale of less than $0.1 million.
The Company sold the investments prior to maturity during fiscal 2013 as a result of higher than anticipated liquidity needs.