Whole Foods 2007 Annual Report Download - page 58

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52
The preliminary purchase price allocations as of the date of acquisition are as follows (in thousands):
Current assets $ 52,094
Property and equipment 77,107
Goodwill 558,056
Intangible assets 40,607
Deferred income taxes 67,793
Other assets 339
Assets held for sale 172,256
Total assets acquired 968,252
Current liabilities 145,666
Long-term debt 134,126
Other liabilities 82,321
Liabilities held for sale 7,202
Total liabilities assumed 369,315
Net assets acquired $ 598,937
Estimated fair values of intangible assets acquired are as follows (in thousands):
Weighted Average
Estimated Useful Lives
Fair Value (Years)
Non-amortizing:
Liquor licenses $ 1,165
Amortizing:
Trade and brand names 6,579 1
Favorable operating leases 32,863 16
Total amortizing 39,442 13
Total $ 40,607
Amortizing intangible assets are amortized on a straight-line basis over their remaining expected useful lives of
approximately one to 33 years.
The Company assumed debt totaling approximately $148 million in the acquisition consisting primarily of convertible
subordinated debentures and capital lease obligations. The estimated fair value of the debt assumed by the Company was
approximately $134 million.
The estimated values of operating leases with unfavorable terms compared with current market conditions totaled
approximately $1.5 million. These leases have an estimated weighted average life of approximately 14 years and are
included in other liabilities.
Henry’s and Sun Harvest Divestiture
In connection with the acquisition of Wild Oats, the Company separately entered into an agreement to sell certain assets and
liabilities, consisting primarily of fixed assets, inventories and operating leases, related to all 35 Henry’s and Sun Harvest
stores and a related distribution center in Riverside, CA to a wholly owned subsidiary of Smart & Final, Inc., a Los Angeles-
based food retailer for approximately $165 million. This sale was completed effective September 30, 2007. The proceeds
receivable are included on the accompanying Consolidated Balance Sheets under the caption “Proceeds receivable for
divestiture.” The Company received proceeds totaling approximately $165 million on October 1, 2007. As part of purchase
accounting for the Wild Oats acquisition, the Henry’s and Sun Harvest net assets were adjusted to fair value and therefore no
gain or loss was recognized related to this divestiture. The results of operations for the divested locations are not material and
are therefore included in operating income on the accompanying Consolidated Statements of Operations.