Whole Foods 2008 Annual Report Download - page 48

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42
Additional term loan and line of credit information for September 28, 2008 and September 30, 2007 are as follows (in
thousands):
2008 2007
Term loan agreement:
Outstanding loan balance $ 700,000 $ 700,000
Fair value of swap agreement (asset) liability $ 12,451 $ n/a
Variable interest rate, excluding applicable margin on non-swap portion of loan 2.469% 5.179%
Interest rate swap fixed interest rate, excluding applicable margin 4.718% n/a
Applicable margin – LIBOR, based on Moody’s and S&P ratings 1.375% 1.000%
Applicable margin – ABR, based on Moody’s and S&P ratings 0.375% n/a
Line of credit agreement:
Outstanding line of credit balance $ 195,000 $ 17,000
Variable interest rate, excluding applicable margin 4.221% 6.750%
Applicable margin – LIBOR, based on Moody’s and S&P ratings 1.500% 1.000%
Applicable margin – ABR, based on Moody’s and S&P ratings 0.500% n/a
Subsequent to the end of fiscal year 2008 and due to a downgrade in our corporate credit rating by Moody’s and S&P, the
margin applicable to our term loan increased to 0.75% and 1.75% on ABR borrowings and LIBOR borrowings, respectively.
Additionally, the margin applicable to our revolving credit facility increased to 0.875% and 1.875% on ABR borrowings and
LIBOR borrowings, respectively. These applicable margins are currently the maximum allowed under these
agreements. These ratings changes also allow participating banks to obtain security interests in certain of the Company’s
equipment, inventories, accounts, intellectual property and other personal property assets to collateralize amounts
outstanding under the term loan and revolving credit facility. Pursuant to this right, the participating banks have requested
that the Company execute related security agreements and the Company intends to comply timely with this request.
Foreign Currency Risk
The Company is exposed to foreign currency exchange risk. We own and operate six supermarkets emphasizing natural and
organic foods in Canada and five supermarkets emphasizing natural and organic foods in the United Kingdom. Sales made
from the Canadian and United Kingdom stores are made in exchange for Canadian dollars and Great Britain pounds,
respectively. Historically we have not hedged against this risk because of the small amounts of funds at risk.
During fiscal year 2008, the Company repatriated approximately $59.8 million related to certain foreign operations. The
remaining undistributed earnings related to those foreign operations are considered permanently reinvested. It is the
Company’s current intention to utilize those earnings in the foreign operations for an indefinite period of time. The Company
does not currently hedge against the risk of exchange rate risk fluctuations.