Starbucks 2012 Annual Report Download - page 80

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74
ratio. The credit facility contains provisions requiring us to maintain compliance with certain covenants, including
a minimum fixed charge coverage ratio, which measures our ability to cover financing expenses.
Under our commercial paper program we may issue unsecured commercial paper notes, up to a maximum
aggregate amount outstanding at any time of $500 million, with individual maturities that may vary, but not
exceed 397 days from the date of issue. The program is backstopped by the credit facility and the combined
borrowing limit is $500 million for the commercial paper program and the credit facility. We may issue
commercial paper from time to time and the proceeds of the commercial paper financing may be used for working
capital needs, capital expenditures and other corporate purposes, including acquisitions and share repurchases. No
borrowings were outstanding under the commercial paper program at the end of fiscal 2012 or fiscal 2011.
As of September 30, 2012 and October 2, 2011, a total of $18 million and $17 million, respectively, in letters of
credit were outstanding under the respective revolving credit facility.
Long-term Debt
In August 2007, we issued $550 million of 6.25% Senior Notes (“the notes”) due in August 2017, in an
underwritten registered public offering. Interest is payable semi-annually on February 15 and August 15 of each
year. The notes require us to maintain compliance with certain covenants, which limit future liens and sale and
leaseback transactions on certain material properties. As of September 30, 2012 and October 2, 2011, we were in
compliance with each of these covenants. As of September 30, 2012 and October 2, 2011, the carrying value of
the notes, recorded on the consolidated balance sheets, was $549.6 million and $549.5 million, respectively.
Interest Expense
Interest expense, net of interest capitalized, was $32.7 million, $33.3 million, and $32.7 million in fiscal 2012,
2011 and 2010, respectively. In fiscal 2012, 2011, and 2010, $3.2 million, $4.4 million, and $4.9 million,
respectively, of interest was capitalized for asset construction projects.
Note 10: Leases
Rental expense under operating lease agreements (in millions):
Fiscal Year Ended
Minimum rentals $ 759.0 $ 715.6 $ 688.5
Contingent rentals 44.7 34.3 26.1
Total $ 803.7 $ 749.9 $ 714.6
Minimum future rental payments under non-cancelable operating leases as of September 30, 2012 (in millions):
Fiscal Year Ending
2013 $ 787.9
2014 728.5
2015 640.4
2016 531.5
2017 403.4
Thereafter 968.5
Total minimum lease payments $ 4,060.2
We have subleases related to certain of our operating leases. During fiscal 2012, 2011, and 2010, we recognized
sublease income of $10.0 million, $13.7 million, and $10.9 million, respectively.
Sep 30, 2012 Oct 2, 2011 Oct 3, 2010