Whole Foods 2013 Annual Report Download - page 37

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Subsequent to fiscal year-end, the Company’s Board of Directors authorized a new share repurchase program in the amount of
$500 million through December 31, 2015, and the Company repurchased shares in the amount of approximately $37 million
bringing the total current available authorization to approximately $763 million.
Under the repurchase programs, purchases can be made from time to time using a variety of methods, which may include open
market purchases or purchases through a Rule 10b5-1 trading plan, all in accordance with Securities and Exchange Commission
and other applicable legal requirements. The specific timing, price and size of purchases will depend on prevailing stock prices,
general economic and market conditions, and other considerations. The repurchase programs do not obligate the Company to
acquire any particular amount of common stock and may be suspended or discontinued at any time at the Company’s discretion.
Net proceeds to the Company from the exercise of stock options by team members are driven by a number of factors, including
fluctuations in our stock price, and totaled approximately $81 million, $370 million and $297 million in fiscal years 2013, 2012
and 2011, respectively. The Company intends to keep its broad-based stock option program in place, but also intends to limit
the number of shares granted in any one year so that annual earnings dilution from share-based payment expense will not exceed
10%. The Company believes this strategy is best aligned with its stakeholder philosophy because it limits future earnings dilution
from options and at the same time retains the broad-based stock option plan, which the Company believes is important to team
member morale, its unique corporate culture and its success. At September 29, 2013, September 30, 2012 and September 25,
2011, approximately 42.3 million shares, 16.8 million shares, and 23.4 million shares of our common stock, respectively, were
available for future stock incentive grants.
During fiscal year 2011, the Company repaid the $490 million outstanding balance on the term loan agreement that had been
used to finance the acquisition of Wild Oats Markets. The Company had no long-term debt amounts outstanding during fiscal
year 2013 or 2012, and its revolving line of credit expired in August 2012.
The Company is committed under certain capital leases for rental of certain equipment, buildings and land (including stores in
development), and certain operating leases for rental of facilities and equipment. These leases expire or become subject to
renewal clauses at various dates through 2054. The following table shows payments due by period on contractual obligations
as of September 29, 2013 (in millions):
Total Less than 1
year
1-3
years
3-5
years
More than 5
years
Capital lease obligations (including interest) $ 48 $ 3 $ 6 $ 6 $ 33
Operating lease obligations (1) 7,442 359 836 881 5,366
Total $ 7,490 $ 362 $ 842 $ 887 $ 5,399
(1) Amounts exclude taxes, insurance and other related expense
Gross unrecognized tax benefits and related interest and penalties at September 29, 2013 were approximately $5 million. Although
a reasonably reliable estimate of the period of cash settlement with respective taxing authorities cannot be determined due to
the high degree of uncertainty regarding the timing of future cash outflows associated with the Company’s unrecognized tax
benefits, as of September 29, 2013, the Company does not expect tax audit resolution will reduce its unrecognized tax benefits
in the next 12 months.
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.
The effect of exchange rate changes on cash included in the Consolidated Statements of Cash Flows was not material in fiscal
year 2013, 2012 or 2011.
Our principal historical sources of liquidity have included cash generated by operations, available cash and cash equivalents,
and short-term investments. Absent any significant change in market condition, we expect planned expansion and other
anticipated working capital and capital expenditure requirements for the next 12 months will be funded by these sources. There
can be no assurance, however, that the Company will continue to generate cash flows at or above current levels or that other
sources of capital will be available to us in the future.