Whole Foods 2008 Annual Report Download - page 68

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The components of intangible assets were as follows (in thousands):
2008
2007
Gross carrying Accumulated Gross carrying Accumulated
amount amortization amount amortization
Indefinite-lived contract-based $ 1,966 $ - $ 1,943 $ -
Definite-lived contract-based 95,424 (18,995) 103,661 (14,650)
Definite-lived marketing-related and other 8,319 (8,215) 8,519 (1,790)
$ 105,709 $ (27,210) $ 114,123 $ (16,440)
Amortization associated with the net carrying amount of intangible assets is estimated to be approximately $6.2 million in
fiscal year 2009, $6.1 million in fiscal year 2010, $6.0 million in fiscal year 2011, $5.9 million in fiscal year 2012 and $5.0
million in fiscal year 2013.
(8) Long-Term Debt
We have long-term debt and obligations under capital leases as follows (in thousands):
2008 2007
Obligations under capital lease agreements,
due in monthly installments through 2029 $ 19,021 $ 19,384
Convertible debentures, including accreted interest 2,698 24,484
Revolving line of credit 195,000 17,000
Cash flow hedge instrument 12,451 -
Senior unsecured notes 700,000 700,000
Total long-term debt 929,170 760,868
Less current installments 380 24,781
Long-term debt, less current installments $ 928,790 $ 736,087
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 (“ABR”) plus an applicable margin or LIBOR plus an applicable margin based on
the Company’s Moody’s and S&P rating. The interest period on LIBOR borrowings may range from one to six months at
our option. 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 28, 2008, we were in compliance with the all applicable debt covenants. The Company recorded
approximately $3.4 million in debt origination fees for the term loan which are being amortized on a straight-line basis over
the life of the loan. During the first quarter of fiscal year 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 exposure to interest rate fluctuations. The
Company had accumulated net derivative losses of approximately $7.6 million, net of taxes, in other comprehensive income
as of September 28, 2008, related to this cash flow hedge. Hedge ineffectiveness was not material during fiscal year 2008.
On August 28, 2007, we 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. 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 28, 2008, we were in compliance with the all applicable debt covenants. All outstanding
amounts borrowed under this agreement bear interest at our option of the ABR plus an applicable margin or LIBOR plus an
applicable margin based on the Company’s Moody’s and S&P rating. Commitment fees on the undrawn amount, reduced by
outstanding letters of credit, are payable under this agreement. At September 28, 2008 and September 30, 2007, the
Company had $195 million and $17 million, respectively, drawn under this agreement. The amount available to the
Company under the agreement was effectively reduced to $75.9 million by outstanding letters of credit totaling
approximately $79.1 million and current borrowings at September 28, 2008. Subsequent to the end of the fiscal year, the
Company repaid certain amounts outstanding under the line and increased letters of credit outstanding. As of November 21,
2008, the Company had $169 million outstanding and approximately $101.9 million available on its revolving credit facility.