Disney Acquisition of Marvel Entertainment 507 Exhibit 8.35 (Continued) Marvel Entertainment, Inc. stockholders' equity: Preferred stock, $.01 par value, 100,000,000 shares authorized, none issued Common stock, $.01 par value, 250,000,000 shares authorized, 134,681,030 issued and 77,997,619 outstanding in 2009 and 134,397,258 issued and 78,408,082 outstanding in 2008 Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total Marvel Entertainment, Inc. stockholders' equity before treasury stock Treasury stock, at cost, 56,683,411 shares in 2009 and 55,989,176 shares in 2008 Total Marvel Entertainment, Inc. stockholders' equity Total equity Noncontrolling interest in consolidated Joint Venture Total liabilities and equity Source: Marvel Entertainment, Inc., Quarterly Reports, June 30, 2009, and December 31, 2008. $ 1,347 $ 1,344 752,438 750,132 628,628 555,125 (4,574) (4,617) $1,377,839 $1,301,984 (921,700) $ 456,139 (1,380) (905,293) (870) $ 454,759 $ 820,529 $ 396,691 $ 395,821 $ 936,714 c. This is a 100% acquisition. What role does the 29% premium play in the computation of goodwill? If this were a less-than-100% acquisition, how would the 29% premium affect the computation of the noncontrolling interest? d. Disney will record a decrease in its cash and an increase in its shareholders' equity totaling $4 billion at the date of acquisition. Contrast the rest of the financial statement effects on Disney's own records and on its consolidated balance sheet between two scenarios: Marvel is dissolved (a merger) and Marvel continues to exist as a separate legal entity (an acquisition). e. It is unlikely that the assets and liabilities of Marvel as shown in the condensed quarterly balance sheet approximate their individual fair values at the date of acquisition. Indeed, some of Marvel's most valuable resources might not be recognized on their balance sheet. As a result, the entire excess acquisition price is not likely to be assigned to goodwill. Identify items that are likely to receive a portion of the allocation based on the differences between their book values and fair values. 536 ASSETS Current assets: Exhibit 8.35 Marvel Entertainment, Inc., Condensed Consolidated Balance Sheets (unaudited) (in thousands, except per-share amounts) June 30 2009 December 31 2008 Cash and cash equivalents Restricted cash Short-term investments $ 81,039 38,220 $ 105,335 12.272 535 - 32,975 Accounts receivable, net 29,471 144,487 Inventories, net Income tax receivable 13,473 11,362 206 2,029 Deferred income taxes, net 25,497 34,072 Prepaid expenses and other current assets 9,164 5,135 Total current assets $ 197,070 $347,667 Fixed assets, net $4,194 $3,432 Film inventory, net 192,068 181,564 Goodwill 346,152 346,152 Accounts receivable, non-current portion 7,010 1,321 Income tax receivable, non-current portion 5,906 5,906 Deferred income taxes, net-non-current portion 17,046 13,032 Deferred financing costs 3,320 5,810 Restricted cash, non-current portion 42,274 31,375 Other assets Total assets 5,489 455 $820,529 $936,714 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 2,860 $ 2,025 Accrued royalties 89,912 76,580 Accrued expenses and other current liabilities 33,826 40,635 Deferred revenue 67,468 81,335 Film facility 204,800 Total current liabilities $194,066 $405,375 Accrued royalties, non-current portion 806 10,499 Deferred revenue, non-current portion 93,696 48,939 Film facility, non-current portion 8,201 Income tax payable 66,522 59,267 Other liabilities 10,680 8,612 Total liabilities Commitments and contingencies $365,770 $540,893