Wendy's 2009 Annual Report Download - page 92

The merger was accounted for using the purchase method of accounting and we concluded that we were
the acquirer for financial accounting purposes. The total merger consideration was allocated to Wendy’s net
tangible and intangible assets acquired and liabilities assumed based on their fair values with the excess
recognized as goodwill of which $42,282 is deductible for tax purposes. The total consideration includes
merger related costs in accordance with the applicable guidance effective as of the Closing Date. The
computation of the total merger consideration and the allocation of the consideration to the net tangible and
intangible assets acquired and liabilities assumed was finalized during the year ended January 3, 2010 and is
presented in the table below:
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 converted into Wendy’s/Arby’s options . . . . . . . . . . . . . . . . . . . . 18,296
Wendy’s Merger costs.................................................................. 21,028
Total merger consideration.............................................................. 2,515,521
Net book value of Wendy’s assets acquired and liabilities assumed . . . . . . . . . . . . . . . . . . . . . . . . . 712,794
Excess of merger consideration over net book value of Wendy’s assets acquired and liabilities
assumed ............................................................................ 1,802,727
Changes to fair values of assets and liabilities and deferred income tax liability related to the
merger:
(Increase)/decrease in:
Current assets
Accounts and notes receivable ............................................. (694)
Prepaid expenses and other current assets................................... 985
Investments (64,852)
Properties.................................................................... (46,527)
Other intangible assets
Trademark............................................................... (900,109)
Franchise agreements ..................................................... (353,000)
Favorable leases .......................................................... (121,620)
Computer software ....................................................... 9,572
Deferred costs and other assets................................................. (377)
Increase/(decrease) in:
Accrued expenses and other current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,956
Long-term debt, including current portion of $228 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56,337)
Other liabilities............................................................... (31,378)
Unfavorable leases............................................................. 70,762
Deferred income tax liability................................................... 552,718
Total adjustments............................................................. (938,901)
Total goodwill......................................................................... $ 863,826
In the Wendy’s Merger, 376,776 shares of Wendy’s/Arby’s Class A Common Stock were issued to
Wendy’s shareholders. The equity consideration was based on the 4.25 conversion factor of the Wendy’s
outstanding shares at a value of $6.57 per share which represented the average closing market price of Triarc
Class A Common Stock two days before and after the merger announcement date of April 24, 2008.
Immediately prior to the Wendy’s Merger, each share of our Class B Common Stock was converted into
Class A Common Stock on a one for one basis (the “Conversion”). In connection with the May 28, 2009
amendment and restatement of our Certificate of Incorporation, our former Class A Common Stock is now
referred to as “Common Stock.”
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)