Wendy's 2008 Annual Report Download - page 112

Value of shares of Wendy’s/Arby’s common stock issued in exchange for Wendy’s common
shares............................................................................... $2,476,197
Value of Wendy’s stock options that have been converted into Wendy’s/Arby’s options ....... 18,495
Estimated Wendy’s Merger costs ........................................................ 20,703
Total estimated merger consideration .................................................... 2,515,395
Net book value of Wendy’s assets acquired and liabilities assumed ......................... 796,588
Less: Wendy’s historical goodwill acquired ............................................... (83,794)
Net book value of Wendy’s assets acquired and liabilities assumed ......................... 712,794
Excess of merger consideration over book value of Wendy’s assets acquired and liabilities
assumed ............................................................................ 1,802,601
Change in fair values of assets and liabilities allocated to:
(Increase)/decrease in:
Current assets
Accounts and notes receivable ............................................. (694)
Prepaid expenses and other current assets . . . ................................ 985
Investments .................................................................. (64,169)
Properties .................................................................... (44,918)
Other intangible assets
Trademark . . ............................................................. (900,109)
Franchise agreements ..................................................... (353,000)
Favorable leases .......................................................... (117,268)
Computer software ....................................................... 9,566
Deferred costs and other assets (377)
Increase/(decrease) in:
Accrued expenses and other current liabilities.................................... 5,541
Long-term debt, including current portion of $228 .............................. (56,337)
Other liabilities. . ............................................................. (46,574)
Unfavorable leases............................................................. 64,053
Deferred income tax liability................................................... 546,331
Total adjustments............................................................. (956,970)
Total goodwill......................................................................... $ 845,631
In the Wendy’s Merger, 376,776 shares of Wendy’s/Arby’s common stock were issued to Wendy’s
shareholders. The equity consideration is based on the 4.25 conversion factor of the Wendy’s outstanding
shares at a value of $6.57 per share which represents the average closing market price of Class A Common
Stock two days before and after the merger announcement date of April 24, 2008. Wendy’s shareholders held
approximately 80%, in the aggregate, of the outstanding Wendy’s/Arby’s common stock immediately
following the merger. In addition, immediately prior to the Wendy’s Merger, our Class B Common Stock was
converted into Class A Common Stock on a one for one basis (the “Conversion”).
Outstanding Wendy’s stock options were converted upon completion of the merger into stock options
with respect to Wendy’s/Arby’s common stock, based on the 4.25:1 exchange ratio. The value of Wendy’s
stock options that have been converted into Wendy’s/Arby’s stock options of $18,495 was calculated using the
Black-Scholes option pricing model as of April 24, 2008.
104
Wendy’s/Arby’s Group, Inc. and Subsidiaries
(Formerly Triarc Companies, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)