This brief summary highlights selected information from this document. It may not contain all the information that is important to you. We urge you to read carefully the entire document and the other documents to which we refer you for a more complete understanding of the proposed merger between Wachovia and Golden West. In addition, we incorporate by reference into this document important business and financial information about Wachovia and Golden West. You may obtain the information incorporated by reference into this document without charge by following the instructions in the section entitled “Where You Can Find More Information” on page 103. Each item in this summary includes a page reference directing you to a more complete description of that item.

 

 

We propose that Wachovia acquire Golden West by merging Golden West with and into a wholly-owned subsidiary of Wachovia, which we refer to as the “merger subsidiary”, with the merger subsidiary as the surviving corporation. Following the merger, Wachovia will continue to be incorporated in North Carolina with its corporate headquarters in Charlotte, North Carolina. The combined company will be called “Wachovia Corporation” and its common stock will trade on the New York Stock Exchange, or the NYSE, under the symbol “WB”. We expect to complete the merger in the fourth quarter of 2006.

 

 

Golden West Shareholders.  If you are a Golden West shareholder, 77% of your Golden West common shares will be converted in the merger into the right to receive 1.365 Wachovia common shares, and the remaining 23% of your Golden West common shares will be converted in the merger into the right to receive $81.07 in cash. This is equivalent to approximately 1.051 shares of Wachovia common stock and approximately $18.65 in cash for each share of Golden West common stock you own.

 

Wachovia will not issue fractional shares in the merger. Instead, it will pay cash for fractional common shares based on the average of the NYSE closing price per Wachovia share on the 10 trading days before the merger completion date.

 

For example, if you own 100 shares of Golden West common stock immediately prior to the merger, when the proposed merger is completed, you will receive:

 

 

If you are a Golden West shareholder, you will need to surrender your Golden West common stock certificates to receive the merger consideration for those Golden West shares, and any dividends paid by Wachovia after merger completion. Please do not surrender your certificates until you receive written instructions from Wachovia after we have completed the merger.

 

Wachovia Shareholders.  If you are a Wachovia shareholder, your shares of Wachovia common stock will be unchanged by the merger. You do not need to surrender your shares or your stock certificates.

 

Combined Company.  After merger completion, former Golden West shareholders will own approximately 17% of the outstanding common stock of the combined company, and current Wachovia shareholders will own approximately 83% of the outstanding common stock of the combined company.

 

In the merger, Golden West shareholders will receive, with respect to 77% of their shares of Golden West common stock, 1.365 shares of Wachovia common stock, and with respect to the remaining 23% of their shares of Golden West common stock, $81.07 in cash. This is equivalent to each share of Golden West common stock being

converted into the right to receive approximately 1.051 shares of Wachovia common stock and approximately $18.65 in cash. The number of Wachovia common shares and cash issued in the merger for each Golden West common shareholder is fixed and will not be adjusted for changes in the market price of either Wachovia common stock or Golden West common stock. Accordingly, any change in the price of Wachovia common stock prior to the merger will affect the market value of the stock portion of the merger consideration that Golden West shareholders will receive as a result of the merger. Neither of us is permitted to terminate the merger agreement or resolicit the vote of our respective shareholders solely because of changes in the market prices of our respective common stocks.

 

You should obtain current stock price quotations for Wachovia common stock and Golden West common stock. Wachovia common stock and Golden West common stock are listed on the NYSE under the symbols “WB” and “GDW”, respectively. The following table shows the closing prices for Wachovia common stock and Golden West common stock and the implied per share value in the merger to Golden West shareholders for the following dates and periods:

 

 

 

 

 

With respect to the portion of the merger consideration involving the issuance of Wachovia common stock, we agreed upon a fixed exchange ratio, and note the following:

 

 

Wachovia expects to continue its common stock dividend policy after the merger, but this policy is subject to the determination of Wachovia’s board of directors and may change at any time. Wachovia paid a dividend of $0.51 per share of Wachovia common stock in the second quarter of 2006, and Golden West has declared a dividend of $0.08 per share of Golden West common stock to be paid in the third quarter of 2006. For comparison, based on the equivalent 1.051 exchange ratio (i.e., 1.365 times 77%) and Wachovia’s current quarterly dividend rate of $0.51 per share, following the merger, holders of Golden West common stock would receive a quarterly dividend equivalent to $0.536 per share of Golden West common stock (i.e., 1.051 times $0.51).

 

The merger agreement permits each of us to continue to pay regular quarterly cash dividends to our shareholders prior to merger completion. Golden West has agreed in the merger agreement to coordinate with Wachovia regarding dividend declarations and the related record dates and payment dates so that Golden West shareholders will not receive two dividends, or fail to receive one dividend, for any single quarter. Accordingly, prior to the merger,

Golden West may coordinate and alter its dividend record dates in order to effect this policy.

 

The payment of dividends by Wachovia or Golden West on their common stock in the future, either before or after the merger is completed, is subject to the determination of our respective boards of directors and depends on cash requirements, our financial condition and earnings, legal and regulatory considerations and other factors.

 

The merger will be treated as a purchase by Wachovia of Golden West under U.S. generally accepted accounting principles, or GAAP.

 

The merger is intended to constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended. Therefore, for U.S. federal income tax purposes as a result of the merger, Golden West shareholders generally will not recognize gain on the receipt of Wachovia common stock and will only recognize gain (but not loss) in an amount not to exceed any cash received as part of the merger consideration, including any cash received in lieu of fractional share interests. The merger is conditioned on the receipt of legal opinions of Sullivan & Cromwell LLP, special counsel to Wachovia, and Wachtell, Lipton, Rosen & Katz, special counsel to Golden West, that, for U.S. federal income tax purposes, the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code.

 

For a complete description of the material U.S. federal income tax consequences of the transaction, see “The Merger Agreement—Material U.S. Federal Income Tax Consequences”.

 

Tax matters are very complicated and the consequences of the merger to any particular shareholder will depend on that shareholder’s particular facts and circumstances. You are urged to consult your own tax advisor to determine your own tax consequences from the merger.

 

In connection with the merger, Wachovia’s board of directors received a written opinion from Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wachovia’s financial advisor, dated as of May 7, 2006, as to the fairness, from a financial point of view, to Wachovia of the merger consideration to be paid by Wachovia in the merger. The full text of Merrill Lynch’s written opinion is attached to this joint proxy statement-prospectus as Appendix B. We encourage you to read this opinion carefully in its entirety for a description of the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Merrill Lynch. Merrill Lynch’s opinion was provided to Wachovia’s board in its evaluation of the merger consideration, does not address any other aspect of the merger and does not constitute a recommendation to any shareholder with respect to any matters relating to the proposed merger. Merrill Lynch’s opinion will not reflect any developments that may occur or may have occurred after the date of the opinion and prior to merger completion. Wachovia does not currently expect to request an updated opinion from Merrill Lynch.

 

On May 7, 2006, the date the Golden West board of directors approved the merger, Lehman Brothers, Golden West’s financial advisor, rendered an opinion to Golden West’s board of directors that, as of that date, the merger consideration to be paid to Golden West shareholders pursuant to the merger agreement was fair from a financial point of view to the holders of Golden West common stock. The full text of Lehman Brothers’ written opinion is attached to this joint proxy statement-prospectus as Appendix C. You should read this opinion completely to understand the procedures followed, assumptions made, matters considered and limitations of the review undertaken by Lehman Brothers. Lehman Brothers’ opinion was directed to the Golden West board of directors in connection with its evaluation of the merger consideration to be offered to Golden West shareholders, does not in any manner address

the decision of the Golden West board to proceed with or effect the merger and does not constitute a recommendation to any shareholder as to any matters relating to the merger. The opinion of Lehman Brothers will not reflect any developments that may occur or may have occurred after the date of the opinion and prior to merger completion. Golden West does not currently expect to request an updated opinion from Lehman Brothers.

 

All Golden West directors and senior executive officers are shareholders of Golden West. Some of Golden West’s directors and executive officers have interests in the merger other than their interests as shareholders. The members of our boards of directors knew about these additional interests and considered them when they adopted the merger agreement and the plan of merger.

 

Directors of Golden West.  The merger agreement provides that Wachovia will cause two current members of Golden West’s board of directors to be appointed to Wachovia’s board of directors effective as of merger completion. Golden West has not awarded any stock options or other benefits to its non-management directors other than ordinary course fees for serving as directors. Consistent with its past practice, Wachovia has agreed in the merger agreement to indemnify all present and former directors, officers and employees of Golden West and its subsidiaries against costs and expenses in connection with claims arising from matters existing or occurring prior to merger completion. In addition, also consistent with its past practice, Wachovia has agreed to obtain directors’ and officers’ liability insurance for present and former officers and directors of Golden West and its subsidiaries with respect to facts or events occurring prior to merger completion.

 

Senior Executive Officers of Golden West.  The senior executive officers of Golden West, referred to by Golden West as its Office of the Chairman, consist of Herbert M. Sandler and Marion O. Sandler (Chairman and Chief Executive Officers), Russell W. Kettell (President and Chief Financial Officer), and James T. Judd (Senior Executive Vice President). Mr. and Mrs. Sandler are the largest individual shareholders of Golden West, and Messrs. Kettell and Judd are also shareholders of Golden West. The members of the Office of the Chairman do not have any employment agreements or other arrangements with Golden West that would entitle them to severance payments or additional benefits upon a change of control of Golden West. Mr. and Mrs. Sandler do not participate in the supplemental employee retirement agreements extended by Golden West to some of its key employees. Messrs. Kettell and Judd do participate in these supplemental employee retirement agreements, but the benefits to them under their respective agreements have already fully vested, and the merger will not result in them receiving any additional consideration from Golden West beyond that to which they have already become entitled.

 

The members of the Office of the Chairman all own stock options in Golden West. As described elsewhere in this joint proxy statement-prospectus, the stock options owned by Golden West employees, including members of the Office of the Chairman, will become fully vested upon merger completion. As of July 11, 2006:

 

 

 

 

Under Section 262 of the Delaware General Corporation Law, holders of Golden West common stock may have the right to obtain an appraisal of the value of their shares of Golden West common stock in connection with the merger. To perfect appraisal rights, a Golden West shareholder must not vote for the approval and adoption of the plan of merger and must strictly comply with all of the procedures required under Delaware law. Failure to strictly comply with Section 262 of the Delaware General Corporation Law by a Golden West shareholder may result in termination or waiver of that shareholder’s appraisal rights.

 

We have included a copy of Section 262 of the Delaware General Corporation Law as Appendix D to this joint proxy statement-prospectus.

Under North Carolina law, Wachovia shareholders are not entitled to appraisal rights in the merger.

 

Wachovia Shareholders.  Wachovia’s board of directors believes that the merger is in the best interests of Wachovia and its shareholders, and unanimously recommends that Wachovia shareholders vote “FOR” the proposal to approve the issuance of shares of Wachovia common stock as consideration in the merger.

 

Golden West Shareholders.  Golden West’s board of directors believes that the merger and the other transactions contemplated by the merger agreement are in the best interests of Golden West shareholders and that the merger consideration is fair to Golden West shareholders, and unanimously recommends that Golden West shareholders vote “FOR” the proposal to approve and adopt the plan of merger contained in the merger agreement.

 

Wachovia’s Board of Directors.  Wachovia’s board of directors is proposing that Wachovia shareholders approve the proposal to issue the Wachovia common shares as consideration in the merger because the board believes:

 

 

With respect to shareholder value, Wachovia believes that although the merger may be dilutive to Wachovia shareholders on an earnings per share basis calculated according to GAAP until 2009, the merger will be accretive to Wachovia shareholders on a cash earnings per share basis by 2008. Wachovia’s estimation of earnings per share, or EPS, accretion/dilution for each of the years 2007, 2008 and 2009 is as follows:

 

 

Wachovia’s estimated full year 2007 stand-alone GAAP earnings per share are based on consensus earnings per share estimates as reported by First Call as of May 5, 2006, adjusted to include merger-related and restructuring expenses in 2007. Wachovia’s estimated stand-alone GAAP earnings per share for 2008 and 2009 are based on 2007 consensus earnings per share estimates plus the consensus 5-year earnings per share growth expectations of 10% per year. Management believed that the 2007 First Call estimates for future earnings and growth provided a reasonable framework for illustrating the pro forma effects of the merger. Full year 2007 earnings per share estimates assume consensus earnings per share estimates for Golden West as reported by First Call as of May 5, 2006 and pro forma 2008 and 2009 estimates assume consensus 5-year earnings per share growth expectations for Golden West of 12% per year. Pro forma earnings per share are also based on the annual cost savings discussed below and on the assumptions of Wachovia’s management described in more detail under “The Merger—Recommendation of Wachovia’s Board and Its Reasons for the Merger” and under “The Merger—Opinion of Wachovia’s Financial

Advisor”. Cash earnings per share is a non-GAAP financial measure that is calculated by adding after-tax restructuring and merger-related expenses and intangible amortization to income before the cumulative effect of a change in accounting principle and dividing the result by average shares outstanding. Wachovia believes this measure provides information useful to investors in understanding our underlying operational performance, our business and performance trends, and it facilitates comparison with the performance of others in the financial services industry.

 

In considering the merger, Wachovia’s board of directors also considered the potential initial negative impact on the market price of Wachovia common stock following announcement of the merger. In addition, it considered the following potential adverse consequences of the merger:

 

 

The Wachovia board concluded, however, that the anticipated benefits of the merger were likely to substantially outweigh the risks.

 

Golden West’s Board of Directors.  Golden West’s board of directors is proposing the merger because, among other reasons:

 

 

 

 

 

Cost Savings and Accounting Charges.  Although no assurances can be made, Wachovia believes that following the merger, the combined company can achieve cost savings of approximately 9% of Golden West’s non-interest expense or 0.5% of combined non-interest expense (approximately $53 million in after-tax annual expense reductions) by 2008.

As part of these cost savings, Wachovia expects to reduce the combined company’s job positions by about 1,100 over the merger integration period. Wachovia believes that approximately 25% of these reductions could occur through normal attrition. As part of the cost savings, Wachovia expects to consolidate about 55 branch banking offices during the integration period. You can find more details about our expected cost savings under the heading “The Merger — Cost Savings”.

 

Wachovia expects to recognize an estimated $176 million of after-tax merger-related and restructuring expenses and $117 million of after-tax exit cost purchase accounting adjustments. A portion of these charges and adjustments will be recorded upon merger completion, with the remainder expected to be recorded in each year from the merger completion through 2008.

 

In the merger agreement, Golden West agreed not to initiate, solicit or encourage proposals from third parties regarding acquiring Golden West or its businesses. In addition, Golden West agreed not to engage in negotiations with or provide confidential information to a third party regarding acquiring Golden West or its businesses. However, if Golden West receives an unsolicited acquisition proposal from a third party, Golden West can participate in negotiations with and provide confidential information to the third party if, among other steps, Golden West’s board of directors concludes in good faith that the proposal is a proposal that is, or would reasonably be likely to result in, a superior proposal to our merger. Golden West’s receipt of a superior proposal or participation in such negotiations does not give Golden West the right to terminate the merger agreement.

 

In consideration of Wachovia agreeing to enter into the merger agreement, three Golden West directors, Mr. Sandler, Mrs. Sandler, and Bernard A. Osher, solely in their capacity as Golden West shareholders, have agreed that the shares of Golden West common stock that they beneficially owned on May 7, 2006 would be voted in favor of the merger and that they would not support any other merger proposal by a third party. Because the shares subject to these voting agreements represent approximately 13.5% of the outstanding shares of Golden West common stock as of the record date, these voting agreements may have the effect of discouraging a competing offer to acquire Golden West. A form of voting agreement is attached in Appendix A.

 

Wachovia Shareholders.  In order to approve the issuance of shares of Wachovia common stock as consideration in the merger, the holders of a majority of Wachovia’s common shares voting at Wachovia’s special meeting must vote in favor of the proposal. As of July 11, 2006, the record date for the Wachovia special meeting, Wachovia directors and executive officers beneficially owned about 39.0 million, or approximately 2.5%, of the shares entitled to vote at the Wachovia special meeting. Golden West and its directors and executive officers beneficially owned less than 1% of the shares entitled to vote at the Wachovia special meeting.

 

Golden West Shareholders.  In order to approve and adopt the plan of merger contained in the merger agreement, the holders of a majority of Golden West’s common shares outstanding as of July 11, 2006, the record date for the Golden West special meeting, must vote in favor of the plan of merger contained in the merger agreement. As of that date, Golden West directors and executive officers beneficially owned about 44.0 million, or approximately 14.2%, of the shares entitled to vote at the Golden West special meeting. In addition, because Mr. Sandler, Mrs. Sandler and Mr. Osher, in their capacity as Golden West shareholders, have each agreed in their respective voting agreement to vote the shares of Golden West common stock beneficially owned by them, respectively, in favor of the plan of merger, approval and adoption of the plan of merger at the Golden West special meeting would require the approval of an additional 36.5% of the outstanding Golden West shares as of the record date. Wachovia and its directors and executive officers beneficially owned less than 1% of the shares entitled to vote at the Golden West meeting (other than shares held by Wachovia in a fiduciary, custodial or agency capacity).

 

In the merger, Wachovia will assume all Golden West employee stock options and those options will become options to purchase Wachovia common stock. Each converted option will vest in full upon merger completion. The number of shares issuable under those options and the exercise prices will be adjusted to take into account the 1.365 exchange ratio for Golden West shares converted into Wachovia shares in the merger.

 

Our obligations to complete the merger depend on a number of conditions being met. These include:

 

 

 

Where the law permits, either of us could choose to waive a condition to our obligation to complete the merger even when that condition has not been satisfied. We cannot be certain when, or if, the conditions to the merger will be satisfied or waived, or that the merger will be completed. Although the merger agreement allows us to waive the tax opinion condition, we do not currently anticipate doing so. If either of us does waive the tax opinion condition, we will inform you of this fact and ask you to vote on the merger taking this into consideration.

 

We cannot complete the merger unless it is approved by the Board of Governors of the Federal Reserve System. Pending receipt of Federal Reserve Board approval, the United States Department of Justice, or DOJ, can challenge the merger. We filed the applicable notification with the Federal Reserve Board on July 7, 2006.

 

The merger is also subject to receiving the approval of other regulatory authorities. We are in the process of preparing and filing all of the required applications and notices with regulatory authorities.

 

There can be no assurance as to whether these and other regulatory approvals will be received, the timing of those approvals, or whether any conditions will be imposed.

 

We can mutually agree at any time to terminate the merger agreement without completing the merger, even if we have obtained the appropriate shareholder approvals. Also, either of us can decide, without the consent of the other, to terminate the merger agreement:

 

merger agreement to perform its obligations under the merger agreement;

 

 

Also, Wachovia may terminate the merger agreement if Golden West’s board recommends an acquisition proposal other than the merger, or if Golden West’s board negotiates or authorizes negotiations with a third party regarding an acquisition proposal other than the merger and those negotiations continue for at least 20 business days. Wachovia’s board may not change its recommendation for the proposal to issue Wachovia common shares in the merger and therefore, Golden West has no similar termination right.

 

The failure of either Golden West or Wachovia to obtain the shareholder vote required for the merger will not by itself give either company the right to terminate the merger agreement. As long as no other termination event has occurred, both companies would remain obligated to continue to use their reasonable best efforts to complete the merger until March 31, 2007, which, depending on the timing of the failed meeting, could include calling additional shareholder meetings.

 

Whether or not the merger is completed, we will each pay our own fees and expenses, except that we will evenly divide the costs and expenses that we incur in preparing, printing and mailing this joint proxy statement-prospectus and filing fees paid in connection with the registration statement and all applications for government approvals, except fees paid to counsel, financial advisors and accountants.

 

In certain circumstances involving a competing acquisition bid for Golden West, Golden West has agreed to pay Wachovia a termination fee of $995 million, upon termination of the merger agreement or, in some cases, within a specified period of time after termination. See “The Merger Agreement—Termination Fee” for more information.

 

We may jointly amend the merger agreement, and each of us may waive our right to require the other party to follow particular provisions of the merger agreement. However, we may not amend the merger agreement after our shareholders approve the merger if the amendment would legally require merger proposals to be resubmitted to Golden West shareholders or Wachovia shareholders or would violate Delaware or North Carolina law.

 

Wachovia may also change the structure of the merger, as long as any change does not change the amount or type of stock or other payment to be received by Golden West shareholders and the holders of options to purchase Golden West common stock, does not materially delay the timing of merger completion, does not adversely affect the tax consequences of the merger to Golden West shareholders and does not cause any of the conditions to complete the merger to be incapable of being satisfied.

 

The rights of Wachovia shareholders are governed by North Carolina law and by Wachovia’s articles of incorporation and by-laws. The rights of Golden West shareholders are governed by Delaware law and by Golden West’s certificate of incorporation and by-laws. Golden West shareholders should be aware of these differences when they vote at the special meeting because, upon merger completion, they will own shares of Wachovia common stock and therefore their rights will be governed by North Carolina law and Wachovia’s articles of incorporation and by-laws.

 

301 South College Street

Charlotte, North Carolina 28288

(704) 374-6565

 

Wachovia is a financial holding company organized under the laws of North Carolina and registered under the federal Bank Holding Company Act. Wachovia has approximately 3,160 full-service financial centers, more than 700 retail brokerage offices and approximately 5,200 ATM locations.

Wachovia offers a comprehensive line of consumer and commercial banking products and services, personal trust, investment advisory, insurance, securities brokerage, investment banking, mortgage, credit card, cash management, international banking and other financial services.

 

At March 31, 2006, Wachovia had consolidated total assets of approximately $542 billion, consolidated total deposits of approximately $329 billion and consolidated stockholders equity of approximately $50 billion. Based on total assets at March 31, 2006, Wachovia was the 4th largest bank holding company in the United States.

 

1901 Harrison Street

Oakland, California 94612

(510) 446-3420

 

Golden West is a Delaware corporation and a registered savings and loan holding company. Golden West primarily operates its banking and mortgage business through its wholly-owned subsidiary, World Savings Bank, FSB, a federal savings bank primarily regulated by the Office of Thrift Supervision. Golden West, through its subsidiaries, engages in a range of consumer banking businesses, primarily deposit gathering and residential mortgage lending, from approximately 285 savings branches in 10 states and lending operations in 39 states.

 

Wachovia plans to hold its special meeting on August 31, 2006, at 9:30 a.m., Eastern time, in Grand Ballroom D, at The Westin Charlotte, 601 South College Street, Charlotte, North Carolina 28202. At the meeting, Wachovia shareholders will be asked to approve the issuance of shares of Wachovia common stock as consideration in the merger and the Amended and Restated Wachovia Corporation 2003 Stock Incentive Plan. Each of the proposals is independent, and is not contingent on approval by shareholders, of the other proposal.

 

Wachovia shareholders can vote at the Wachovia special meeting of shareholders if they owned Wachovia common stock at the close of business on July 11, 2006. As of that date, there were 1,588,703,209 shares of Wachovia common stock outstanding and entitled to vote. Wachovia shareholders can cast one vote for each share of Wachovia common stock that they owned on that date.

 

In order to approve the Amended and Restated Wachovia Corporation 2003 Stock Incentive Plan, the holders of a majority of Wachovia’s common shares voting at Wachovia’s special meeting must vote in favor of the proposal.

 

Golden West plans to hold its special meeting of shareholders on August 31, 2006, at 10:00 a.m., Pacific time, on the fourth floor of Golden West’s headquarters at 1901 Harrison Street, Oakland, California. At the meeting, Golden West shareholders will be asked to approve and adopt the plan of merger contained in the merger agreement providing for the merger of Golden West into a wholly-owned subsidiary of Wachovia.

 

Golden West shareholders can vote at the Golden West special meeting of shareholders if they owned Golden West common stock at the close of business on July 11, 2006. As of that date, there were 308,969,449 shares of Golden West common stock outstanding and entitled to vote. Golden West shareholders can cast one vote for each share of Golden West common stock that they owned on that date.

 

 

The table on the following page shows historical information about our companies’ respective earnings per share, dividends per share and book value per share, and similar information reflecting the merger, which we refer to as “pro forma” information, at or for the three months ended March 31, 2006, and at or for the year ended December 31, 2005. In presenting the comparative pro forma information for the periods shown, it is assumed that Wachovia and Golden West had been combined throughout those periods.

 

It has been assumed that the merger will be accounted for under an accounting method known as “purchase accounting”. Under the purchase method of accounting, the assets and liabilities of the company not surviving a merger are recorded, as of the completion date of the merger, at their respective fair values and added to those of the surviving company. Financial statements of the surviving company issued after merger completion reflect such values and are not restated retroactively to reflect the historical financial position or results of operations of the company not surviving.

 

The information listed as “equivalent pro forma” for Golden West was obtained by multiplying the pro forma amounts listed by Wachovia by the equivalent 1.051 exchange ratio (i.e., 1.365 times 77%). We present this information to reflect the fact that Golden West shareholders will receive the equivalent of 1.051 shares of Wachovia common stock for each share of their Golden West common stock exchanged in the merger.

 

The pro forma financial information includes estimated adjustments to record certain assets and liabilities of Golden West at their respective fair values and to record certain exit costs related to Golden West. The pro forma adjustments included herein are subject to updates as additional information becomes available and as additional analyses are performed. Certain other assets and liabilities of Golden West will also be subject to adjustment to their respective fair values. Pending more detailed analyses, no pro forma adjustments are included herein for these assets and liabilities, including additional intangible assets which may be identified. Any change in the fair value of the net assets of Golden West will change the amount of the purchase price allocable to goodwill. Additionally, changes to Golden West’s stockholders’ equity, including dividends and net income from April 1, 2006, through the date the merger is completed, will also change the amount of goodwill recorded. In addition, the final adjustments may be materially different from the unaudited pro forma adjustments presented herein.

 

Wachovia also anticipates that the merger will provide Wachovia with financial benefits that include increased revenue opportunities and reduced operating expenses, but these financial benefits are not reflected in the pro forma information. Accordingly, the pro forma information does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies been combined during the periods presented. See “The Merger—Cost Savings”.

 

The information in the following tables is based on historical financial information and related notes that we have presented in our prior filings with the SEC. You should read all of the summary financial information provided in the following tables together with this historical financial information and related notes. The historical financial information is also incorporated into this document by reference. See “Where You Can Find More Information” for a description of where you can find this historical information.

 

 

 

The following tables show summarized historical financial data for each of Wachovia and Golden West and also show similar pro forma information reflecting the merger. The historical financial data show the financial results actually achieved by Wachovia and Golden West for the periods indicated. The pro forma information reflects the pro forma effect of accounting for the merger under the purchase method of accounting. The pro forma income statement data for the three months ended March 31, 2006, assumes a merger completion date of January 1, 2006. The pro forma income statement data for the year ended December 31, 2005, assumes a merger completion date of January 1, 2005. The pro forma balance sheet data assumes a merger completion date of March 31, 2006.

 

The pro forma financial information includes estimated adjustments to record certain assets and liabilities of Golden West at their respective fair values and to record certain exit costs related to Golden West. The pro forma adjustments included herein are subject to updates as additional information becomes available and as additional analyses are performed. Certain other assets and liabilities of Golden West will also be subject to adjustment to their respective fair values, including additional intangible assets which may be identified. Pending more detailed analyses, no pro forma adjustments are included herein for these assets and liabilities. Any change in the fair value of the net assets of Golden West will change the amount of the purchase price allocable to goodwill. Additionally, changes to Golden West’s stockholders’ equity, including net income from April 1, 2006, through the date the merger is completed, will also change the amount of goodwill recorded. In addition, the final adjustments may be materially different from the unaudited pro forma adjustments presented herein.

 

The information in the tables on the following pages is based on historical financial information and related notes that we have presented in our prior filings with the SEC. You should read all of the summary financial information provided in the following tables together with this historical financial information and related notes. The historical financial information is also incorporated into this document by reference. See “Where You Can Find More Information” for a description of where you can find this historical information.

 

Wachovia also anticipates that the merger will provide Wachovia with financial benefits that include increased revenue opportunities and reduced operating expenses, but these financial benefits are not reflected in the pro forma information. Accordingly, the pro forma information does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of the combined company would have been had our companies been combined during the periods presented. See “The Merger—Cost Savings”.

 

Since announcement of the merger, our merger integration teams have been developing plans to integrate the operations of Golden West into Wachovia so that we will continue to provide premier service to our customers while at the same time beginning to realize merger efficiencies. These plans will continue to be refined over the next several months and will address systems, facilities and equipment, personnel, contractual arrangements and other integration activities for both Golden West and Wachovia.

 

The costs associated with merger integration activities that impact certain Golden West systems, facilities and equipment, personnel and contractual arrangements will be recorded as purchase accounting adjustments as described above when the appropriate plans are in place with potential refinements up to one year after merger completion as additional information becomes available. Wachovia currently estimates that exit cost purchase accounting adjustments will amount to $117 million after-tax. The costs associated with integrating systems and operations will be recorded as merger-related expenses based on the nature and timing of the related expenses, but generally will be recorded as the expenses are incurred. Restructuring charges will be recorded based on the nature and timing of the expenses and generally will include merger integration activities that impact Wachovia systems, facilities and equipment, personnel and contractual arrangements. Wachovia expects merger-related and restructuring expenses will amount to $176 million after-tax and will be incurred and reported through 2008.

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF WACHOVIA

 

 

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF GOLDEN WEST