Whole Foods 2013 Annual Report Download - page 34

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25
The Company defines ROIC as annualized adjusted earnings divided by average invested capital. Earnings for fiscal year 2012
were annualized on a 52-week basis. Adjustments to earnings are defined in the following tabular reconciliation. Invested capital
reflects an average of the trailing four quarters. ROIC for the fiscal years indicated was as follows (in millions):
2013 2012 2011
Net income $ 551 $ 466 $ 343
Interest expense, net of taxes — — 2
Adjusted earnings 551 466 345
Total rent expense, net of taxes (1) 222 211 194
Estimated depreciation on capitalized operating leases, net of tax (2) (148)(141)(129)
Adjusted earnings, including interest related to operating leases 625 536 410
Annualized adjusted earnings $ 551 $ 457 $ 345
Annualized adjusted earnings, including interest related to
operating leases $ 625 $ 526 $ 410
Average working capital, excluding current portion of long-term debt $ 886 $ 956 $ 493
Average property and equipment, net 2,308 2,090 1,951
Average other assets 1,066 955 872
Average other liabilities (524) (460) (389)
Average invested capital $ 3,736 $ 3,541 $ 2,927
Average estimated asset base of capitalized operating leases (3) 2,891 2,740 2,501
Average invested capital, adjusted for capitalization of operating leases $ 6,627 $ 6,281 $ 5,428
ROIC 14.7% 12.9% 11.8%
ROIC, adjusted for capitalization of operating leases 9.4% 8.4% 7.5%
(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
The Company adjusted fiscal year 2012, a 53-week year, by removing one-thirteenth of the 13-week fourth fiscal quarter results
to remove the estimated impact of the additional week, as shown in the table below (in millions, except per share amounts).
2013 2012 2011
Sales $ 12,917 $ 11,699 $ 10,108
Less: 1/13 of fourth quarter sales in 53-week year — 224 —
Sales adjusted to 52-week year $ 12,917 $ 11,475 $ 10,108
Net income $ 551 $ 466 $ 343
Less: 1/13 of fourth quarter net income in 53-week year — 9 —
Net income adjusted to 52-week year $ 551 $ 457 $ 343
Basic earnings per share, as reported $ 1.48 $ 1.28 $ 0.98
Basic earnings per share, adjusted $ 1.48 $ 1.25 $ 0.98
Weighted average shares outstanding 371.2 364.8 350.5
Diluted earnings per share, as reported $ 1.47 $ 1.26 $ 0.97
Diluted earnings per share, adjusted $ 1.47 $ 1.24 $ 0.97
Weighted average shares outstanding, diluted basis 374.5 368.9 354.6