Sprouts Farmers Market 2014 Annual Report Download - page 98

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The Company was in compliance with all applicable covenants under the Credit Facility as of
December 28, 2014.
Former Term Loan and Revolving Credit Facility
On April 18, 2011, the Company, through a subsidiary, entered into senior secured credit facilities
(“Former Senior Secured Credit Facilities”). The Former Senior Secured Credit Facilities included a $310.0
million term loan (“Former Term Loan”) and a $50.0 million revolving credit facility (“Former Revolving
Credit Facility”).
During April 2012, the Company amended the Former Senior Secured Credit Facilities and used the
incremental commitments provision to borrow an additional $100.0 million, net of financing fees of $0.5
million and issue discount of $2.7 million, and used the proceeds to effectuate the Sunflower Transaction in
May 2012.
In connection with the April 2013 Refinancing, the Company repaid the Former Term Loan in its
entirety and recorded a related $8.2 million loss on extinguishment of debt as reflected in the consolidated
statement of operations for the year ended December 29, 2013.
Between 2011 and 2012, the Company capitalized $1.8 million of debt issuance costs (financing fees),
which were being amortized to interest expense over the term of the loan. Additionally, $16.7 million of
lender fees were reflected as a discount on the Former Term Loan and were being charged to interest
expense over the term of the Former Term Loan.
Senior Subordinated Promissory Notes
In May 2012, the Company issued $35.0 million aggregate principal amount of 10.0% senior
subordinated promissory notes (“Senior Subordinated Promissory Notes”). Interest accrued at 10.0%
annually for the first three years, increasing by 1.0% each year thereafter.
On May 31, 2013, the Company repaid the entire balance of $35.0 million of outstanding Senior
Subordinated Promissory Notes and paid $0.3 million of interest accrued to date.
14. Other Long-Term Liabilities
A summary of other long-term liabilities is as follows:
As Of
December 28,
2014
December 29,
2013
Unamortized lease incentives ................ $31,282 $18,248
Deferred rent .............................. 14,176 10,762
Workers’ compensation / general liability
reserves ................................ 12,738 13,219
Unfavorable lease liability .................... 11,408 12,884
ARO liability ............................... 2,952 2,575
Closed store reserves ....................... 1,352 3,300
Other .................................... 163 429
Total ..................................... $74,071 $61,417
Unfavorable leasehold interests of $16.7 million were recognized in connection with previous business
combinations and are being amortized on a straight-line basis over the term of the underlying leases.
95