Whole Foods 2007 Annual Report Download - page 38

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We have outstanding zero coupon convertible subordinated debentures which had a carrying amount of approximately $24.5
million and $8.3 million at September 30, 2007 and September 24, 2006, respectively. The Company assumed convertible
debentures totaling approximately $115.0 million in the Wild Oats acquisition, of which approximately $94.2 million was
paid off during fiscal year 2007 and approximately $21.8 million, which included a related conversion premium totaling
approximately $0.9 million, was paid off subsequent to year-end. The remaining Whole Foods Market debentures have an
effective yield to maturity of 5% 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 21.28 shares of Company common stock per $1,000 principal
amount at maturity, or approximately 97,000 shares and 311,000 shares at September 30, 2007 and September 24, 2006,
respectively. Approximately $5.8 million and $5.0 million of the carrying amount of the debentures were voluntarily
converted by holders to approximately 215,000 and 194,000 shares of Company common stock during fiscal years 2007 and
2006, respectively.
The Company is committed under certain capital leases for rental of certain equipment, buildings and land. These leases
expire or become subject to renewal clauses at various dates through 2028. Capital leases totaling approximately $19.1
million were assumed with the acquisition of Wild Oats Markets.
The Company expects interest expense, net of investment income, to range from approximately $35 million to $40 million in
fiscal year 2008.
The following table shows payments due by period on contractual obligations as of September 30, 2007 (in thousands):
Less than 1 1-3 3-5 More than 5
Total Year Years Years Years
Long-term debt obligations $ 741,484 $ 24,484 $ - $ 717,000 $ -
Capital lease obligations (including interest) 36,466 1,787 4,068 4,094 26,517
Operating lease obligations 6,029,447 212,711 573,317 620,475 4,622,944
The table above includes approximately $21.8 million of convertible senior debentures assumed in the Wild Oats acquisition
which were paid off subsequent to year-end. Although the timing of any potential redemption is uncertain, the above table
reflects the assumption that the remaining Whole Foods Market convertible debentures, shown at accreted value as of
September 30, 2007, will be redeemed at the option of the holder on March 2, 2008.
We periodically make other commitments and become subject to other contractual obligations that we believe to be routine
in nature and incidental to the operation of the business. Management believes that such routine commitments and
contractual obligations do not have a material impact on our business, financial condition or results of operations.