Whole Foods 2010 Annual Report Download - page 42

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Whole Foods Market, Inc.
Notes to Consolidated Financial Statements
Fiscal years ended September 26, 2010, September 27, 2009 and September 28, 2008
(1) Description of Business
Whole Foods Market, Inc. and its consolidated subsidiaries (collectively “Whole Foods Market,” “Company,” or “We”) own
and operate the largest chain of natural and organic foods supermarkets. Our Company mission is to promote vitality and
well-being for all individuals by supplying the highest quality, most wholesome foods available. Through our growth, we
have had a significant and positive impact on the natural and organic foods movement throughout the United States, helping
lead the industry to nationwide acceptance over the last 30 years. As of September 26, 2010, we operated 299 stores: 288
stores in 38 U.S. states and the District of Columbia; six stores in Canada; and five stores in the United Kingdom.
The Company has one operating segment and a single reportable segment, natural and organic foods supermarkets. The
following is a summary of annual percentage sales and net long-lived assets by geographic area:
2010 2009 2008
Sales:
United States 97.0% 97.2% 96.5%
Canada and United Kingdom 3.0% 2.8% 3.5%
Total sales 100.0% 100.0% 100.0%
Long-lived assets, net:
United States 96.6% 96.5% 96.4%
Canada and United Kingdom 3.4% 3.5% 3.6%
Total long-lived assets, net 100.0% 100.0% 100.0%
The following is a summary of annual percentage sales by product category:
2010 2009 2008
Grocery 33.5% 33.8% 33.2%
Prepared foods 18.8% 19.1% 19.3%
Other perishables 47.7% 47.1% 47.5%
Total sales 100.0% 100.0% 100.0%
(2) Summary of Significant Accounting Policies
Definition of Fiscal Year
We report our results of operations on a 52- or 53-week fiscal year ending on the last Sunday in September. Fiscal years
2010, 2009 and 2008 were 52-week years.
Principles of Consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted
accounting principles. All significant majority-owned subsidiaries are consolidated on a line-by-line basis, and all significant
intercompany accounts and transactions are eliminated upon consolidation.
Cash and Cash Equivalents
We consider all highly liquid investments with an original maturity of 90 days or less to be cash equivalents.
Investments
We classify as available-for-sale our cash equivalent investments, restricted cash investments, and our investments in debt
and equity securities that have readily determinable fair values. Available-for-sale investments are recorded at fair value.
Unrealized holding gains and losses, net of the related tax effect, on available-for-sale investments are excluded from
earnings and are reported as a separate component of shareholders’ equity until realized. A decline in the fair value of any
available-for-sale security below cost that is deemed to be other-than-temporary for a period greater than two fiscal quarters
results in a reduction of the carrying amount to fair value. The impairment is charged to earnings and a new cost basis of the
security is established. Cost basis is established and maintained utilizing the specific identification method.
Restricted Cash
Restricted cash primarily relates to cash held as collateral to support a portion of our projected workers’ compensation
obligations.