Wendy's 2013 Annual Report Download - page 82

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THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
The table below presents the allocation of the total purchase price, including closing adjustments, to the fair
value of assets acquired and liabilities assumed at the acquisition date.
Total purchase price paid in cash $ 18,915
Identifiable assets acquired and liabilities assumed:
Cash ............................................................. 55
Inventories ........................................................ 149
Properties ......................................................... 12,485
Deferred taxes and other assets ......................................... 1,773
Acquired territory rights (a) ........................................... 18,390
Favorable ground leases .............................................. 222
Capitalized lease obligations ........................................... (14,394)
Deferred vendor incentives (b) ......................................... (382)
Unfavorable leases .................................................. (992)
Other liabilities ..................................................... (952)
Total identifiable net assets ........................................ 16,354
Goodwill (c) ............................................................... $ 2,561
(a) The acquired territory rights had a weighted average amortization period of 13 years. Due to the subsequent sale
of this territory, we accelerated the amortization through the date of sale.
(b) Included in “Other liabilities” at the acquisition date.
(c) This goodwill is not deductible or amortizable for income tax purposes. In addition, the goodwill was disposed
of as a result of the subsequent sale of this territory.
The fair values of the identifiable assets acquired were determined using one of the following valuation
approaches: market, income and cost. The selection of a particular method for a given asset depended on the
reliability of available data and the nature of the asset.
On July 13, 2012, Wendy’s acquired 24 franchised restaurants in the Albuquerque, New Mexico area from
Double Cheese Corporation and Double Cheese Realty Corporation (“Double Cheese”). The purchase price was
$19,181 in cash, including closing adjustments. Wendy’s also agreed to lease the real estate, buildings and
improvements related to 12 of the acquired restaurants from Double Cheese which were considered part of the
purchase transaction. Wendy’s did not incur any material acquisition-related costs with this acquisition.
The operating results of the 24 franchised restaurants acquired have been included in our consolidated financial
statements beginning on the acquisition date. Such results were not material to our consolidated financial statements.
The Company determined that this territory would be included in the system optimization initiative and met the
criteria to be classified as held for sale. As a result, the restaurants’ net assets consisting primarily of cash, inventory
and equipment are included in “Prepaid expenses and other current assets” as of December 29, 2013.
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