Whole Foods 2012 Annual Report Download - page 34

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24
The following is a tabular reconciliation of the non-GAAP financial measure EBITDA to GAAP net income, which the Company
believes to be the most directly comparable GAAP financial measure. EBITDA was as follows (in thousands):
2012 2011 2010
Net income $ 465,573 $ 342,612 $ 245,833
Provision for income taxes 286,471 209,100 165,948
Interest expense 354 3,882 33,048
Investment and other income (8,892) (7,974) (6,854)
Operating income 743,506 547,620 437,975
Depreciation and amortization 311,550 287,109 275,589
EBITDA $ 1,055,056 $ 834,729 $ 713,564
The Company defines ROIC as annualized adjusted earnings divided by average invested capital. Earnings are annualized on
a 52-week basis. Adjustments to earnings are defined in the following tabular reconciliation. Invested capital represents a trailing
four-quarter average. ROIC was as follows (in thousands):
2012 2011 2010
Net income $ 465,573 $ 342,612 $ 245,833
Interest expense, net of taxes 219 2,411 19,730
Adjusted earnings 465,792 345,023 265,563
Total rent expense, net of taxes (1) 211,344 193,609 175,542
Estimated depreciation on capitalized operating leases, net of tax (2) (140,896)(129,073)(117,028)
Adjusted earnings, including interest related to operating leases 536,240 409,559 324,077
Annualized adjusted earnings $ 457,115 $ 345,023 $ 265,563
Annualized adjusted earnings, including interest related to
operating leases $ 526,204 $ 409,559 $ 324,077
Average working capital, excluding current portion of long-term debt $ 955,973 $ 493,187 $ 450,827
Average property and equipment, net 2,090,103 1,950,435 1,891,750
Average other assets 954,899 872,117 878,341
Average other liabilities (460,155) (389,198) (349,101)
Average invested capital $ 3,540,820 $ 2,926,541 $ 2,871,817
Average estimated asset base of capitalized operating leases (3) 2,740,419 2,501,264 2,355,315
Average invested capital, adjusted for capitalization of operating leases $ 6,281,239 $ 5,427,805 $ 5,227,132
ROIC 12.9% 11.8% 9.2%
ROIC, adjusted for capitalization of operating leases 8.4% 7.5% 6.2%
(1) Total rent includes minimum base rent of all tendered leases
(2) Estimated depreciation equals two-thirds of total rent expense
(3) Estimated asset base equals eight times total rent expense
Liquidity and Capital Resources and Changes in Financial Condition
The following table summarizes the Company’s cash and short-term investments as of the dates indicated (in thousands):
September 30,
2012
September 25,
2011
Cash and cash equivalents $ 89,016 $ 212,004
Short-term investments - available-for-sale securities 1,131,213 442,320
Total $ 1,220,229 $ 654,324
Additionally, the Company held long-term investments in available-for-sale securities totaling approximately $221.4 million
and $52.8 million at September 30, 2012 and September 25, 2011, respectively.
We generated cash flows from operating activities of approximately $919.7 million, $754.8 million and $585.3 million in fiscal
years 2012, 2011 and 2010, respectively. Cash flows from operating activities resulted primarily from our net income plus non-
cash expenses and changes in operating working capital.