Starbucks 2013 Annual Report Download - page 73

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65
exceed 397 days from the date of issue. Amounts outstanding under the commercial paper program are to be backstopped by
available commitments under our credit facility. Currently, we may issue up to $729 million under our commercial paper
program (the $750 million committed credit facility amount, less $21 million in outstanding letters of credit).
The proceeds from borrowings under our commercial paper program may be used for working capital needs, capital
expenditures and other corporate purposes, including acquisitions and share repurchases. During fiscal 2013 and fiscal 2012,
there were no borrowings under the credit facility or commercial paper programs. As of September 29, 2013 and September 30,
2012, a total of $21 million and $18 million, respectively, in letters of credit were outstanding under the revolving credit
facility.
Long-term Debt
In September 2013, we issued $750 million of 10-year 3.85% Senior Notes ("the 2013 notes") due October 2023, in an
underwritten registered public offering. Interest on the 2013 notes is payable semi-annually on April 1 and October 1 of each
year, commencing April 1, 2014. As discussed in Note 3, we entered into forward-starting interest rate swap agreements related
to this debt issuance that effectively locked in the benchmark interest rate, resulting in an effective borrowing cost of 2.86%. As
of September 29, 2013, the carrying value of the 2013 notes, recorded on the consolidated balance sheets, was $749.8 million.
In August 2007, we issued $550 million of 6.25% Senior Notes (“the 2007 notes”) due in August 2017, in an underwritten
registered public offering. Interest on the 2007 notes is payable semi-annually on February 15 and August 15 of each year. As
of September 29, 2013 and September 30, 2012, the carrying value of the 2007 notes, recorded on the consolidated balance
sheets, was $549.7 million and $549.6 million, respectively.
The indentures under which the 2013 notes and the 2007 notes were issued also require us to maintain compliance with certain
covenants, including limits on future liens and sale and leaseback transactions on certain material properties. As of
September 29, 2013 and September 30, 2012, we were in compliance with each of these covenants.
Interest Expense
Interest expense, net of interest capitalized, was $28.1 million, $32.7 million, and $33.3 million in fiscal 2013, 2012 and 2011,
respectively. In fiscal 2013, 2012, and 2011, $10.4 million, $3.2 million, and $4.4 million, respectively, of interest was
capitalized for asset construction projects.
Note 10: Leases
Rental expense under operating lease agreements (in millions):
Fiscal Year Ended Sep 29, 2013 Sep 30, 2012 Oct 2, 2011
Minimum rentals $ 838.3 $ 759.0 $ 715.6
Contingent rentals 56.4 44.7 34.3
Total $ 894.7 $ 803.7 $ 749.9
Minimum future rental payments under non-cancelable operating leases as of September 29, 2013 (in millions):
Fiscal Year Ending
2014 $ 875.1
2015 799.8
2016 690.4
2017 559.1
2018 419.0
Thereafter 1,242.5
Total minimum lease payments $ 4,585.9
We have subleases related to certain of our operating leases. During fiscal 2013, 2012, and 2011, we recognized sublease
income of $9.3 million, $10.0 million, and $13.7 million, respectively.
2013 10-K
Starbucks Corporation Form