WFMI » Topics » (7) Long-Term Debt

This excerpt taken from the WFMI 10-Q filed Feb 27, 2009.

(5) Long-Term
Debt



 



During fiscal year
2007, the Company entered into a $700 million, five-year term loan agreement to
finance the acquisition of Wild Oats Markets. The loan bears interest at our
option of the alternative base rate (“ABR”) plus an applicable margin,
currently 0.75%, or LIBOR plus an applicable margin, currently 1.75%, based on
the Company’s Moody’s and S&P rating. These applicable margins are
currently the maximum allowed under these agreements. The interest period on
LIBOR borrowings may range from one to six months at our option. During the
sixteen week period ended January 18, 2009, as a result of downgrades to
our corporate credit ratings and as called for in the loan agreement, the
participating banks obtained security interests in certain of the Company’s
assets to collateralize amounts outstanding under the term loan. The term loan
agreement contains certain affirmative covenants including maintenance of
certain financial ratios and certain negative covenants including limitations
on additional indebtedness and payments as defined in the agreement. At January 18,
2009, we were in compliance with all applicable debt covenants. During the
sixteen week period ended January 20, 2008, the Company entered into a
three-year interest rate swap agreement with a notional amount of $490 million
to effectively fix the interest rate on $490 million of the term loan at
4.718%, excluding the applicable margin and associated fees, to help manage
cash flow exposure related to interest rate fluctuations. The Company had
accumulated net derivative losses of approximately $17.3 million and $7.6
million, net of taxes, in accumulated other comprehensive income as of January 18,
2009 and September 28, 2008, respectively, related to this cash flow
hedge.



 



The Company also
has outstanding a $350 million revolving line of credit that extends to 2012.
The credit agreement contains certain affirmative covenants including
maintenance of certain financial ratios and certain negative covenants
including limitations on additional indebtedness and payments as defined in the
agreement. At January 18, 2009, we were in compliance with all applicable
debt covenants. All outstanding amounts borrowed under this agreement bear
interest at our option of the ABR plus an applicable margin, currently 0.875%,
or LIBOR plus an applicable margin, currently 1.875%, based on the Company’s
Moody’s and S&P rating. These applicable margins are currently the maximum
allowed under these agreements. During the sixteen week period ended January 18,
2009, as a result of downgrades to our corporate credit ratings and as called
for in the loan agreement, the participating banks obtained security interests
in certain of the Company’s assets to collateralize amounts outstanding under
the revolving credit facility. Commitment fees on the undrawn amount, reduced
by outstanding letters of credit, are payable under this agreement. At September 28,
2008 the Company had $195 million drawn under this agreement. During the
sixteen week period ended January 18, 2009, the Company repaid all amounts
outstanding and no amounts were drawn under this agreement at January 18,
2009. The amount available to the Company under the agreement was effectively
reduced to $260.6 million by outstanding letters of credit totaling
approximately $89.4 million at January 18, 2009.



 



During the sixteen week
period ended January 20, 2008, approximately 250 of the Company’s zero
coupon convertible subordinated debentures were converted at the option of the
holders to approximately 6,000 shares of Company common stock. The outstanding
convertible subordinated debentures had a carrying amount of approximately $2.7
million at September 28, 2008. On December 8, 2008, the Company redeemed
all remaining debentures at a redemption prices equal to the issue price plus
accrued original issue discount totaling approximately $2.7 million.



 



This excerpt taken from the WFMI 10-Q filed Aug 15, 2008.

(6) Long-Term
Debt



 



During fiscal year 2007,
the Company entered into a $700 million, five-year term loan agreement to
finance the acquisition of Wild Oats Markets. The loan bears interest at our
option of the alternative base rate or the LIBOR rate plus an applicable
margin, 1% as of July 6, 2008, based on the Company’s Moody’s and S&P
rating. Subsequent to the end of the third quarter of fiscal year 2008, the
LIBOR margin applicable to our term loan increased to 1.375% due to a downgrade
in our corporate credit rating. Our term loan does not give rise to significant
fair value risk because it is a variable interest rate loan with revolving
maturities which reflect market changes to interest rates.



 



During fiscal year 2007,
we also replaced our previous revolving credit facility with a new $250 million
revolving line of credit that extends to 2012. During the third quarter of
fiscal year 2008, the Company exercised the accordion feature available under
the revolving credit facility to increase the aggregate commitment to $350
million and amend certain debt covenants contained in the agreement. All
outstanding amounts borrowed under this agreement bear interest at our option
of the alternative base rate or the LIBOR plus an applicable margin, 1.125% at July 6,
2008, based on the Company’s Moody’s and S&P rating. As of July 6,
2008 and September 30, 2007, the Company had $106 million and $17 million,
respectively, drawn under the revolving credit facility. The amount available
to the Company under the agreement was effectively reduced to $164.0 million by
outstanding letters of credit totaling approximately $80.0 million and amounts
drawn at July 6, 2008.  At July 6,
2008 and September 30, 2007, we were in compliance with all applicable
debt covenants. Subsequent to the end of the third quarter of fiscal year 2008,
the Company made additional draws on the line and currently has $136.0 million
outstanding and approximately $134.7 million available on its revolving credit
facility.  Additionally, the LIBOR margin
applicable to our revolving credit facility increased to 1.5% due to a
downgrade in our corporate credit rating.



 



During the forty week
periods ended July 6, 2008 and July 1, 2007, approximately 250 and
10,000 of the Company’s zero coupon convertible subordinated debentures,
respectively, were converted at the option of the holders to approximately
6,000 and 215,000 shares, respectively, of Company common stock. The Company
assumed convertible debentures totaling approximately $115.0 million in the
Wild Oats acquisition, of which approximately $21.8 million were outstanding at
September 30, 2007 and were repaid during the first quarter of fiscal year
2008. The zero coupon convertible subordinated debentures had a carrying amount
of approximately $2.7 million and $24.5 million at July 6, 2008 and September 30,
2007, respectively.



 



This excerpt taken from the WFMI 10-Q filed May 23, 2008.

(6) Long-Term
Debt



During fiscal year 2007,
the Company entered into a $700 million, five-year term loan agreement to
finance the acquisition of Wild Oats Markets. The loan bears interest at our
option of the alternative base rate or the LIBOR rate plus an applicable
margin, 1% as of April 13, 2008, based on the Company’s Moody’s and
S&P rating. Our term loan does not give rise to significant fair value risk
because it is a variable interest rate loan with revolving maturities which
reflect market changes to interest rates.



 



As of April 13, 2008
and September 30, 2007, the Company had $81 million and $17 million,
respectively, drawn under its $250 million revolving credit facility. The
credit agreement contains an accordion feature under which the Company can
increase the revolving credit facility to $350 million. The amount available to
the Company under the agreement was effectively reduced to $89.1 million by outstanding
letters of credit totaling approximately $79.9 million and amounts drawn at April 13,
2008. At April 13, 2008 and September 30, 2007, we were in compliance
with all applicable debt covenants. 
Subsequent to the end of the second quarter of fiscal year 2008, the
Company made additional draws on the line and currently has $88.0 million
outstanding and approximately $82.1 million available on its revolving credit
facility.



 



11
















 



During the twenty-eight
week periods ended April 13, 2008 and April 8, 2007, approximately
250 and 10,000 of the Company’s zero coupon convertible subordinated
debentures, respectively, were converted at the option of the holders to
approximately 6,000 and 215,000 shares, respectively, of Company common stock.
The Company assumed convertible debentures totaling approximately $115.0
million in the Wild Oats acquisition, of which approximately $21.8 million were
outstanding at September 30, 2007 and were repaid during the first quarter
of fiscal year 2008. The zero coupon convertible subordinated debentures had a
carrying amount of approximately $2.6 million and $24.5 million at April 13,
2008 and September 30, 2007, respectively.



 



This excerpt taken from the WFMI 10-Q filed Feb 29, 2008.

(6) Long-Term
Debt



During fiscal year 2007,
the Company entered into a $700 million, five-year term loan agreement to finance
the acquisition of Wild Oats Markets. The loan bears interest at our option of
the alternative base rate or the LIBOR rate plus an applicable margin, 1% as of
January 20, 2008, based on the Company’s Moody’s and S&P rating. Our
term loan does not give rise to significant fair value risk because it is a
variable interest rate loan with revolving maturities which reflect market
changes to interest rates.



 



As of January 20,
2008 and September 30, 2007, the Company had $30 million and $17 million,
respectively, drawn under its $250 million revolving credit facility. The
credit agreement contains an accordion feature under which the Company can
increase the revolving credit facility to $350 million. The amount available to
the Company under the agreement was effectively reduced to $134.1 million by
outstanding letters of credit totaling approximately $85.9 million and amounts
drawn at January 20, 2008. At January 20, 2008 and September 30,
2007, we were in compliance with all applicable debt covenants.  Subsequent to the end of the first quarter of
fiscal year 2008, the Company made additional draws on the line and currently
has $59.0 million outstanding and approximately $105.1 million available on its
revolving credit facility.



 



During the first quarter
of fiscal years 2008 and 2007, approximately 250 and 10,000 of the Company’s
zero coupon convertible subordinated debentures, respectively, were converted
at the option of the holders to approximately 6,000 and 215,000 shares,
respectively, of Company common stock. The Company assumed convertible
debentures totaling approximately $115.0 million in the Wild Oats acquisition,
of which approximately $21.8 million were outstanding at September 30,
2007 and were repaid during the first quarter of fiscal year 2008. The zero
coupon convertible subordinated debentures had a carrying amount of
approximately $2.6 million and $24.5 million at January 20, 2008 and September 30,
2007, respectively.



 



This excerpt taken from the WFMI 10-Q filed Feb 23, 2007.

(3) Long-Term Debt

During the first quarter of fiscal years 2007 and 2006, approximately 10,000 and 7,000 of the Company’s zero coupon convertible subordinated debentures, respectively, were converted at the option of the holders to approximately 215,000 and 145,000 shares, respectively, of Company common stock. The zero coupon convertible subordinated debentures had a carrying amount of approximately $2.6 million and $8.3 million at January 14, 2007 and September 24, 2006, respectively.

7




This excerpt taken from the WFMI 10-K filed Dec 8, 2006.

(7) Long-Term Debt

We have long-term debt and obligations under capital leases as follows (in thousands):

 

     2006    2005

Obligations under capital lease agreements for equipment, due in monthly installments through 2012

   $ 335    $ 300

Senior unsecured notes

     —        5,714

Convertible debentures, including accreted interest

     8,320      12,850
             

Total Long-term debt

     8,655      18,864

Less current installments

     49      5,932
             

Long-term debt, less current installments

   $ 8,606    $ 12,932
             

On October 1, 2004, we amended our credit facility to extend the maturity of our $100 million revolving line of credit to October 1, 2009. The credit agreement contains certain affirmative covenants including maintenance of certain financial ratios and certain negative covenants including limitations on additional indebtedness as defined in the agreement. At September 24, 2006 and September 25, 2005, we were in compliance with the applicable debt covenants. All outstanding amounts borrowed under this agreement bear interest at our option of either the defined base rate or the LIBOR rate plus a premium. Commitment fees of 0.15% of the undrawn amount are payable under this agreement. At September 24, 2006 and September 25, 2005 no amounts were drawn under the agreement. The amount available to the Company under the agreement was effectively reduced to $88.4 million by outstanding letters of credit totaling approximately $11.6 million at September 25, 2005. On November 7, 2005, we amended our credit facility to delete negative covenants related to the repurchase of Company stock and payment of dividends.

We have outstanding zero coupon convertible subordinated debentures which had a carrying amount of approximately $8.3 million and $12.9 million at September 24, 2006 and September 25, 2005, respectively. The debentures have an effective yield to maturity of 5 percent and a scheduled maturity date of March 2, 2018. The debentures are convertible at the option of the holder, at any time on or prior to maturity, unless previously redeemed or otherwise purchased. The debentures may be redeemed at the option of the holder on March 2, 2008 or March 2, 2013 at the issue price plus accrued original discount to the date of redemption. Subject to certain limitations, at our option, we may elect to pay this purchase price in cash, shares of common stock or any combination thereof. The debentures may also be redeemed in cash at the option of the holder if there is a change in control at the issue price plus accrued original discount to the date of redemption. The Company may redeem the debentures for cash, in whole or in part, at redemption prices equal to the issue price plus accrued original discount to the date of redemption. The debentures are subordinated in the right of payment to all existing and future senior indebtedness. The debentures have a conversion rate of 21.280 shares of Company common stock per $1,000 principal amount at maturity, or approximately 311,000 shares and 505,000 shares at September 24, 2006 and September 25, 2005, respectively. Approximately $5.0 million and $150.1 million of the carrying amount of the debentures were voluntarily converted by holders to shares of Company common stock during fiscal years 2006 and 2005, respectively.

We also had outstanding senior unsecured notes that bear interest at 7.29% payable quarterly with a carrying amount of approximately $5.7 million at September 25, 2005. The Company made the final principal payment totaling approximately $5.7 million to retire its senior notes on May 16, 2006.

This excerpt taken from the WFMI 10-K filed Dec 8, 2005.

(8) Long-Term Debt

 

We have long-term debt and obligations under capital leases as follows (in thousands):

 

     2005

   2004

Obligations under capital lease agreements for equipment, due in monthly installments through 2009

   $ 300    $ 523

Senior unsecured notes

     5,714      11,429

Convertible debentures, including accreted interest

     12,850      158,791
    

  

Total Long-term debt

     18,864      170,743

Less current installments

     5,932      5,973
    

  

Long-term debt, less current installments

   $ 12,932    $ 164,770
    

  

 

On October 1, 2004, we amended our credit facility to extend the maturity of our $100 million revolving line of credit to October 1, 2009. The credit agreement contains certain affirmative covenants including maintenance of certain financial ratios and certain negative covenants including limitations on additional indebtedness as defined in the agreement. At September 25,

 

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Table of Contents

2005 and September 26, 2004, we were in compliance with the applicable debt covenants. All outstanding amounts borrowed under this agreement bear interest at our option of either a defined base rate or the LIBOR rate plus a premium. Commitment fees of 0.15% of the undrawn amount are payable under this agreement. At September 25, 2005 and September 26, 2004 no amounts were drawn under the agreement. The amounts available to the Company under the agreement were effectively reduced to $88.4 million and $96.5 million by outstanding letters of credit totaling approximately $11.6 million and $3.5 million at September 25, 2005 and September 26, 2004, respectively. On November 7, 2005, we amended our credit facility to delete redemption, dividends and distributions negative covenants to allow for the special dividend.

 

We have outstanding zero coupon convertible subordinated debentures which had a carrying amount of approximately $12.9 million and $158.8 million at September 25, 2005 and September 26, 2004, respectively. The debentures have an effective yield to maturity of 5 percent and a scheduled maturity date of March 2, 2018. The debentures are convertible at the option of the holder, at any time on or prior to maturity, unless previously redeemed or otherwise purchased. The debentures may be redeemed at the option of the holder on March 2, 2008 or March 2, 2013 at the issue price plus accrued original discount to the date of redemption. Subject to certain limitations, at our option, we may elect to pay this purchase price in cash, shares of common stock or any combination thereof. The debentures may also be redeemed in cash at the option of the holder if there is a change in control at the issue price plus accrued original discount to the date of redemption. The Company may redeem the debentures for cash, in whole or in part, at redemption prices equal to the issue price plus accrued original discount to the date of redemption. The debentures are subordinated in the right of payment to all existing and future senior indebtedness. The debentures have a conversion rate of 10.640 shares of Company common stock per $1,000 principal amount at maturity, or approximately 253,000 shares and 3,279,000 shares at September 25, 2005 and September 26, 2004, respectively. Approximately $150.1 million and $0.3 million of the carrying amount of the debentures was voluntarily converted by holders to shares of Company common stock during fiscal years 2005 and 2004, respectively.

 

We also have outstanding senior unsecured notes that bear interest at 7.29% payable quarterly with a carrying amount of approximately $5.7 million and $11.4 million at September 25, 2005 and September 26, 2004, respectively. The remaining principal on the senior notes is payable on May 16, 2006.

 

This excerpt taken from the WFMI 10-K filed May 18, 2005.

(7) Long-Term Debt

 

We have long-term debt and obligations under capital leases as follows (in thousands):

 

     2004

   2003

Obligations under capital lease agreements for equipment, due in monthly installments through 2006

   $ 523    $ 36

Senior unsecured notes

     11,429      17,143

Convertible debentures, including accreted interest

     158,791      151,449

Other notes payable

     —        87
    

  

       170,743      168,715

Less current installments

     5,973      5,806
    

  

     $ 164,770    $ 162,909
    

  

 

On October 1, 2004, we amended our credit facility to extend the maturity of our $100 million revolving line of credit to October 1, 2009. The credit agreement contains certain affirmative covenants including maintenance of certain financial ratios and certain negative covenants including limitations on additional indebtedness as defined in the agreement. At September 26, 2004 and September 28, 2003, we were in compliance with the applicable debt covenants. All outstanding amounts borrowed under this agreement bear interest at our option of either a defined base rate or the LIBOR rate plus a premium. Commitment fees of 0.15% of the undrawn amount are payable under this agreement. At September 26, 2004 and September 28, 2003 no amounts were drawn under the agreement. The amounts available to the Company under the agreement were effectively reduced to $96.5 million and $80.2 million by outstanding letters of credit totaling approximately $3.5 million and $19.8 million at September 26, 2004 and September 28, 2003, respectively.

 

We have outstanding zero coupon convertible subordinated debentures which had a carrying amount of approximately $158.8 million and $151.4 million at September 26, 2004 and September 28, 2003, respectively. The debentures have an effective yield to maturity of 5 percent and a principal amount at maturity on March 2, 2018 of approximately $308.8 million. The debentures are convertible at the option of the holder, at any time on or prior to maturity, unless previously redeemed or otherwise purchased. The debentures have a conversion rate of 10.640 shares per $1,000 principal amount at maturity, representing approximately 3,280,000 shares. The debentures may be redeemed at the option of the holder on March 2, 2008 or March 2, 2013 at the issue price plus accrued original discount totaling approximately $188 million and $241 million, respectively. No debentures were redeemed at the option of the holder on the potential redemption date of March 2, 2003.

 

Subject to certain limitations, at our option, we may elect to pay this purchase price in cash, shares of common stock or any combination thereof. The debentures may also be redeemed in cash at the option of the holder if there is a change in control at the issue price plus accrued original discount to the date of redemption. The Company may redeem the debentures for cash, in whole or in part, at redemption prices equal to the issue price plus accrued original discount to the date of redemption. The debentures are subordinated in the right of payment to all existing and future senior indebtedness.

 

We also have outstanding senior unsecured notes that bear interest at 7.29% payable quarterly with a carrying amount of approximately $11.4 million and $17.1 million at September 26, 2004 and September 28, 2003, respectively. Principal on the senior notes is payable in annual installments of approximately $5.7 million through May 16, 2006.

 

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Table of Contents
Index to Financial Statements

Whole Foods Market, Inc.

Notes to Consolidated Financial Statements (continued)

 

This excerpt taken from the WFMI 10-K filed Mar 7, 2005.

(7) Long-Term Debt

 

We have long-term debt and obligations under capital leases as follows (in thousands):

 

     2004

   2003

Obligations under capital lease agreements for equipment, due in monthly installments through 2006

   $ 523    $ 36

Senior unsecured notes

     11,429      17,143

Convertible debentures, including accreted interest

     158,791      151,449

Other notes payable

     —        87
    

  

       170,743      168,715

Less current installments

     5,973      5,806
    

  

     $ 164,770    $ 162,909
    

  

 

On October 1, 2004, we amended our credit facility to extend the maturity of our $100 million revolving line of credit to October 1, 2009. The credit agreement contains certain affirmative covenants including maintenance of certain financial ratios and certain negative covenants including limitations on additional indebtedness as defined in the agreement. At September 26, 2004 and September 28, 2003, we were in compliance with the applicable debt covenants. All outstanding amounts borrowed under this agreement bear interest at our option of either a defined base rate or the LIBOR rate plus a premium. Commitment fees of 0.15% of the undrawn amount are payable under this agreement. At September 26, 2004 and September 28, 2003 no amounts were drawn under the agreement. The amounts available to the Company under the agreement were effectively reduced to $96.5 million and $80.2 million by outstanding letters of credit totaling approximately $3.5 million and $19.8 million at September 26, 2004 and September 28, 2003, respectively.

 

We have outstanding zero coupon convertible subordinated debentures which had a carrying amount of approximately $158.8 million and $151.4 million at September 26, 2004 and September 28, 2003, respectively. The debentures have an effective yield to maturity of 5 percent and a principal amount at maturity on March 2, 2018 of approximately $308.8 million. The debentures are convertible at the option of the holder, at any time on or prior to maturity, unless previously redeemed or otherwise purchased. The debentures have a conversion rate of 10.640 shares per $1,000 principal amount at maturity, representing approximately 3,280,000 shares. The debentures may be redeemed at the option of the holder on

 

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Table of Contents
Index to Financial Statements

Whole Foods Market, Inc.

Notes to Consolidated Financial Statements (continued)

 

March 2, 2008 or March 2, 2013 at the issue price plus accrued original discount totaling approximately $188 million and $241 million, respectively. No debentures were redeemed at the option of the holder on the potential redemption date of March 2, 2003.

 

Subject to certain limitations, at our option, we may elect to pay this purchase price in cash, shares of common stock or any combination thereof. The debentures may also be redeemed in cash at the option of the holder if there is a change in control at the issue price plus accrued original discount to the date of redemption. The Company may redeem the debentures for cash, in whole or in part, at redemption prices equal to the issue price plus accrued original discount to the date of redemption. The debentures are subordinated in the right of payment to all existing and future senior indebtedness.

 

We also have outstanding senior unsecured notes that bear interest at 7.29% payable quarterly with a carrying amount of approximately $11.4 million and $17.1 million at September 26, 2004 and September 28, 2003, respectively. Principal on the senior notes is payable in annual installments of approximately $5.7 million through May 16, 2006.

 

This excerpt taken from the WFMI 10-K filed Dec 10, 2004.

(6) Long-Term Debt

 

We have long-term debt and obligations under capital leases as follows (in thousands):

 

     2004

   2003

Obligations under capital lease agreements for equipment, due in monthly installments through 2006

   $ 523    $ 36

Senior unsecured notes

     11,429      17,143

Convertible debentures, including accreted interest

     158,791      151,449

Other notes payable

     —        87
    

  

       170,743      168,715

Less current installments

     5,973      5,806
    

  

     $ 164,770    $ 162,909
    

  

 

On October 1, 2004, we amended our credit facility to extend the maturity of our $100 million revolving line of credit to October 1, 2009. The credit agreement contains certain affirmative covenants including maintenance of certain financial ratios and certain negative covenants including limitations on additional indebtedness as defined in the agreement. At September 26, 2004 and September 28, 2003, we were in compliance with the applicable debt covenants. All outstanding amounts borrowed under this agreement bear interest at our option of either a defined base rate or the LIBOR rate plus a premium. Commitment fees of 0.15% of the undrawn amount are payable under this agreement. At September 26, 2004 and September 28, 2003 no amounts were drawn under the agreement. The amounts available to the Company under the agreement were effectively reduced to $96.5 million and $80.2 million by outstanding letters of credit totaling approximately $3.5 million and $19.8 million at September 26, 2004 and September 28, 2003, respectively.

 

We have outstanding zero coupon convertible subordinated debentures which had a carrying amount of approximately $158.8 million and $151.4 million at September 26, 2004 and September 28, 2003, respectively. The debentures have an effective yield to maturity of 5 percent and a principal amount at maturity on March 2, 2018 of approximately $308.8 million. The debentures are convertible at the option of the holder, at any time on or prior to maturity, unless previously redeemed or otherwise purchased. The debentures have a conversion rate of 10.640 shares per $1,000 principal amount at maturity, representing approximately 3,280,000 shares. The debentures may be redeemed at the option of the holder on March 2, 2008 or March 2, 2013 at the issue price plus accrued original discount totaling approximately $188 million and $241 million, respectively. No debentures were redeemed at the option of the holder on the potential redemption date of March 2, 2003. Subject to certain limitations, at our option, we may elect to pay this purchase price in cash, shares of common stock or any combination thereof. The debentures may also be redeemed in cash at the option of the holder if there is a change in control at the issue price plus accrued original discount to the date of redemption. The Company may redeem the debentures for cash, in whole or in part, at redemption prices equal to the issue price plus accrued original discount to the date of redemption. The debentures are subordinated in the right of payment to all existing and future senior indebtedness.

 

We also have outstanding senior unsecured notes that bear interest at 7.29% payable quarterly with a carrying amount of approximately $11.4 million and $17.1 million at September 26, 2004 and September 28, 2003, respectively. Principal on the senior notes is payable in annual installments of approximately $5.7 million through May 16, 2006.

 

This excerpt taken from the WFMI 10-K filed Dec 23, 2003.

(5) Long-Term Debt

 

We have long-term debt and obligations under capital leases as follows (in thousands):

 

     2003

   2002

Obligations under capital lease agreements for equipment, due in monthly installments through 2006

   $ 36    $ 53

Senior unsecured notes

     17,143      22,857

Convertible debentures, including accreted interest

     151,449      144,663

Other notes payable

     87      168
    

  

       168,715      167,741

Less current installments

     5,806      5,789
    

  

     $ 162,909    $ 161,952
    

  

 

On March 6, 2003, we amended our credit facility to extend the maturity of our revolving line of credit from July 14, 2003 to October 1, 2004 and reduce the size of the facility from $220 million to $100 million. The credit agreement contains certain restrictive covenants, including the prohibition of the payment of dividends on common stock, and certain affirmative covenants including maintenance of certain financial ratios as defined in the agreement. At September 28, 2003 and September 29, 2002, we were in compliance with the debt covenants. On November 12, 2003, we amended this agreement to allow for the payment of dividends on common stock. All outstanding amounts borrowed under this agreement bear interest at our option of either a defined base rate or the LIBOR rate plus a premium. Commitment fees of 0.20% of the undrawn amount are payable under this agreement. At September 28, 2003 and September 29, 2002 no amounts were drawn under the agreement. The amounts available to the Company under this line of credit were effectively reduced by outstanding letters of credit totaling approximately $19.8 million and $6.1 million at September 28, 2003 and September 29, 2002, respectively.

 

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Table of Contents
Index to Financial Statements

Whole Foods Market, Inc.

Notes to Consolidated Financial Statements (continued)

 

We have outstanding zero coupon convertible subordinated debentures which had a carrying amount of approximately $151.4 million at September 28, 2003. The debentures have an effective yield to maturity of 5 percent and a principal amount at maturity on March 2, 2018 of approximately $308.8 million. The debentures are convertible at the option of the holder, at any time on or prior to maturity, unless previously redeemed or otherwise purchased. The debentures have a conversion rate of 10.640 shares per $1,000 principal amount at maturity, representing approximately 3,285,000 shares. The debentures may be redeemed at the option of the holder on March 2, 2003, March 2, 2008 or March 2, 2013 at the issue price plus accrued original discount totaling approximately $147 million, $188 million and $241 million, respectively. Subject to certain limitations, at our option, we may elect to pay this purchase price in cash, shares of common stock or any combination thereof. On January 31, 2003, the Company mailed notice to the holders of its subordinated debentures informing such holders they had the right to surrender the debentures for repurchase by the Company on March 2, 2003 for $476.74 per $1,000 of principal amount at maturity, and that such purchase price would be paid entirely in cash. No debentures were redeemed on March 2, 2003. The debentures may also be redeemed in cash at the option of the holder if there is a change in control at the issue price plus accrued original discount to the date of redemption. The Company may redeem the debentures for cash, in whole or in part, at redemption prices equal to the issue price plus accrued original discount to the date of redemption. The debentures are subordinated in the right of payment to all existing and future senior indebtedness.

 

We also have outstanding approximately $17.1 million of senior unsecured notes that bear interest at 7.29% payable quarterly. Principal on the senior notes is payable in annual installments of approximately $5.7 million through May 16, 2006. The notes contain certain affirmative and negative covenants, including maintenance of certain financial ratios as defined in the agreement. At September 28, 2003 and September 29, 2002, we were in compliance with the debt covenants.

 

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