Sprouts Farmers Market 2013 Annual Report Download - page 119

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Table of Contents
Interest terms on the Former Revolving Credit Facility were the same as the Former Term Loan.
The Company capitalized debt issuance costs of $1.8 million related to the Former Revolving Credit Facility, which were being
amortized to interest expense over the term of the facility.
There were no amounts outstanding on the Former Revolving Credit Facility at December 30, 2012. Letters of credit totaling
$8.4 million had been issued as of December 30, 2012.
Senior Subordinated Promissory Notes
In May 2012, the Company issued $35.0 million aggregate principal amount of 10.0% senior subordinated promissory notes
(“Senior Subordinated Promissory Notes”). Interest accrued at 10.0% annually for the first three years, increasing by 1.0% each
year thereafter.
On May 31, 2013, the Company repaid the entire balance of $35.0 million of outstanding Senior Subordinated Promissory
Notes and paid $0.3 million of interest accrued to date.
14. Other Long-Term Liabilities
A summary of other long-term liabilities is as follows:
Unfavorable leasehold interests of $3.9 million and $12.8 million were recognized in connection with the Sunflower
Transaction and Henry’s Transaction, respectively, and are being amortized on a straight-line basis over the term of the underlying
lease.
15. Self-Insurance Programs
General Liability and Workers’ Compensation
The Company carries insurance policies for general liability and workers’ compensation to minimize the risk of loss due to
accident, injury and commercial liability claims resulting from its operations, and to comply with certain legal and contractual
requirements.
The Company retains certain levels of exposure in its self-insurance programs and purchases coverage from third-party
insurers for exposures in excess of those levels. In addition to expensing premiums and other costs relating to excess coverage,
the Company establishes reserves for claims, both reported and incurred but not reported (“IBNR”). IBNR claims are estimated
using historical claim information, demographic factors, severity factors and other actuarial assumptions. See Note 12, “Other
Accrued Liabilities,” and Note 14, “Other Long-Term Liabilities” for amounts recorded for general liability and workers’
compensation liabilities.
114
As Of
December 29,
2013
December 30,
2012
Unamortized lease incentives
$
18,248
$
12,498
Workers’ compensation / general liability reserves
13,219
9,476
Unfavorable lease liability
12,884
14,159
Deferred rent
10,762
8,038
Closed store reserves
3,300
3,864
ARO liability
2,575
2,362
Other
429
222
Total
$
61,417
$
50,619