Starbucks 1999 Annual Report Download - page 21

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NOTE 7: PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recorded at cost and consist of the following (in thousands):
 ,  , 
Land $ 5,084 $ 3,602
Building 19,795 8,338
Leasehold improvements 591,640 460,020
Roasting and store equipment 273,612 218,744
Furniture, fixtures and other 130,223 79,953
1,020,354 770,657
Less accumulated depreciation and amortization (320,982) (218,455)
699,372 552,202
Work in progress 60,917 48,592
$ 760,289 $ 600,794
NOTE 8: LONG-TERM DEBT
In September 1999, the Company purchased the land and building comprising its York County,
Pennsylvania roasting plant and distribution facility. The total purchase price was $12.9 million.
In connection with this purchase, the Company assumed loans totaling $7.7 million from the
York County Industrial Development Corporation. Maturities of these loans range from 9.5 to
10.5 years, with interest rates from 0.0% to 2.0%.
Scheduled principal payments on long-term debt are as follows (in thousands):
Fiscal year ending
2000 $ 673
2001 685
2002 697
2003 710
2004 722
Thereafter 4,204
Total principal payments $ 7,691
During fiscal 1996, the Company issued $165.0 million in principal amount of 41
/4% Convertible
Subordinated Debentures due 2002. On October 21, 1997, the Company called these debentures
for redemption.The total principal amount converted, net of unamortized issue costs, accrued but
unpaid interest and costs of conversion, was credited to common stock.
NOTE 9: LEASES
The Company leases retail stores, roasting and distribution facilities and office space under
operating leases expiring through 2023. Most lease agreements contain renewal options and rent
escalation clauses. Certain leases provide for contingent rentals based upon gross sales.
Rental expense under these lease agreements was as follows (in thousands):
Fiscal year ended  ,   ,   , 
Minimum rentals $ 95,613 $ 75,912 $ 54,093
Contingent rentals 1,581 1,406 1,193
$ 97,194 $ 77,318 $ 55,286
.
STARBUCKS COFFEE COMPANY