Whole Foods 2007 Annual Report Download - page 37

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The following table provides information about the Company’s store development activities:
Properties Total
Stores Opened Stores Opened Tendered Leases Signed
During Fiscal During Fiscal as of as of
Year 2006 Year 2007 November 20, 2007 November 20, 2007
Number of stores (including relocations) 13 21 20 87
Number of relocations 2 5 4 22
Number of lease acquisitions, ground leases
and owned properties 1 4 9 13
New markets 4 3 1 14
Average store size (gross square feet) 50,200 56,500 45,800 51,200
As a percentage of existing store average size 147% 167% 133% 148%
Total square footage 653,000 1,185,800 915,900 4,485,200
As a percentage of existing square footage 10% 13% 10% 48%
Average pre-opening expense per store $2.0 million $2.6 million
Average pre-opening rent per store $0.7 million $0.9 million
Average tender period, in months 7.8 8.8
Average pre-opening expense per store and average pre-opening rent per store during fiscal year 2007 in the table above
exclude the Kensington store opened in London during fiscal year 2007. The Company expects total pre-opening and
relocation costs for fiscal year 2008 to range from approximately $80 million to $90 million. Approximately $40 million to
$45 million of this total relates to stores expected to open in fiscal year 2008. These ranges are based on estimated tender
dates which are subject to change. The Company expects average pre-opening and relocation expense for stores opening in
fiscal year 2008 to be consistent with the average for stores that opened in fiscal year 2007, excluding the Kensington store
in London. On an average weekly basis, the Company expects quarterly pre-opening and relocation expense to ramp up
throughout each quarter of the year.
Net cash provided by financing activities was approximately $494.1 million and $25.2 million in fiscal years 2007 and 2005,
respectively. Net cash used by financing activities was approximately $189.7 million in fiscal year 2006. Net proceeds to the
Company from the exercise of stock options by team members are driven by a number of factors, including fluctuations in
our stock price, and totaled approximately $54.4 million, $222.0 million and $85.8 million in fiscal years 2007, 2006 and
2005, respectively. The higher rate of stock option exercises in fiscal year 2006 resulted in part from the accelerated vesting
of stock options on September 22, 2005.
On August 28, 2007, the Company entered into a $700 million, five-year term loan agreement to finance the acquisition of
Wild Oats Markets. The loan, which is secured by a pledge of substantially all of the stock of our subsidiaries, bears interest
at our option of the alternative base rate or the LIBOR plus an applicable margin, 1% as of September 30, 2007, based on the
Company’s Moody’s and S&P rating. At September 30, 2007, the applicable interest rate based on one-month LIBOR was
6.13%. 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
September 30, 2007, we were in compliance with the applicable debt covenants. Subsequent to the end of fiscal year 2007,
the Company entered into a three-year interest rate swap agreement with a notional amount of $490 million to fix the interest
rate at 5.718%, inclusive of the applicable margin and associated fees, to help manage our exposure to interest rate
fluctuations.
On August 28, 2007, we also replaced our previous revolving credit facility with a new $250 million revolving line of credit
that extends to 2012. The credit agreement contains an accordion feature under which the Company can increase the
revolving credit facility to $350 million. 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 September 30, 2007 and September 24, 2006, we were in compliance with the applicable debt
covenants. 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% at September 30, 2007, based on the Company’s Moody’s and S&P rating. At
September 30, 2007, the applicable interest rate based on the alternative base rate was 7.75%. Commitment fees of 0.2% at
September 30, 2007 of the undrawn amount, reduced by outstanding letters of credit, are payable under this agreement. At
September 30, 2007, we had $17 million drawn under this agreement, which was paid off subsequent to year-end. No
amounts were drawn under the previous agreement at September 24, 2006. The amount available to the Company under the
agreement was effectively reduced to $145.1 million by outstanding letters of credit totaling approximately $87.9 million and
current borrowings at September 30, 2007.