Starbucks 2015 Annual Report Download - page 79

Estimated future amortization expense as of September 27, 2015 (in millions):
Fiscal Year Ending
2016 $ 53.2
2017 52.9
2018 51.5
2019 51.2
2020 51.1
Thereafter 42.6
Total estimated future amortization expense $ 302.5
Additional disclosure regarding changes in our intangible assets due to acquisitions is included at Note 2, Acquisitions and
Divestitures.
Note 9: Debt
Revolving Credit Facility and Commercial Paper Program
Our $750 million unsecured, revolving credit facility with various banks, of which $150 million may be used for issuances of
letters of credit, is available for working capital, capital expenditures and other corporate purposes, including acquisitions and
share repurchases. During the second quarter of fiscal 2015, we extended the duration of our credit facility, which is now set to
mature on January 21, 2020, and amended certain facility fees and borrowing rates. Starbucks has the option, subject to
negotiation and agreement with the related banks, to increase the maximum commitment amount by an additional $750 million.
Borrowings under the credit facility will bear interest at a variable rate based on LIBOR, and, for U.S. dollar-denominated
loans under certain circumstances, a Base Rate (as defined in the credit facility), in each case plus an applicable margin. The
applicable margin is based on the better of (i) the Company's long-term credit ratings assigned by Moody's and Standard &
Poor's rating agencies and (ii) the Company's fixed charge coverage ratio, pursuant to a pricing grid set forth in the credit
facility. The current applicable margin is 0.565% for Eurocurrency Rate Loans and 0.00% for Base Rate Loans. 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. As of September 27, 2015, we were in compliance with
all applicable covenants. No amounts were outstanding under our credit facility as of September 27, 2015.
Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount
outstanding at any time of $1 billion, with individual maturities that may vary, but not exceed 397 days from the date of issue.
Amounts outstanding under the commercial paper program are required to be backstopped by available commitments under our
credit facility discussed above. As of September 27, 2015, availability under our commercial paper program was approximately
$750 million (which represents the full committed credit facility amount, as the amount of outstanding letters of credit was not
material as of September 27, 2015). The proceeds from borrowings under our commercial paper program may be used for
working capital needs, capital expenditures and other corporate purposes, including share repurchases, business expansion,
payment of cash dividends on our common stock or the financing of possible acquisitions. In the fourth quarter of fiscal 2015,
we issued and subsequently repaid commercial paper borrowings of $93 million for general corporate purposes. We had no
other borrowings under our commercial paper program during fiscal 2015 or fiscal 2014, and there were no amounts
outstanding as of September 27, 2015 or September 28, 2014.
Long-term Debt
In July 2015, we redeemed our $550 million of 6.250% Senior Notes (the "2017 notes") originally scheduled to mature in
August 2017. The redemption resulted in a charge of $61.1 million, which is presented separately as loss on extinguishment of
debt within other income and expenses on our consolidated statements of earnings. This loss primarily relates to the optional
redemption payment as outlined in the 2017 notes indenture, as well as non-cash expenses related to the previously capitalized
original issuance costs and accelerated amortization of the unamortized discount. In connection with the redemption, we also
reclassified $2.0 million from accumulated other comprehensive income to interest expense on our consolidated statements of
earnings related to remaining unrecognized losses from interest rate contracts entered into in conjunction with the 2017 notes
and designated as cash flow hedges.
In June 2015, we issued additional long-term debt in an underwritten registered public offering, which consisted of $500
million of 7-year 2.700% Senior Notes (the "2022 notes") due June 2022, and $350 million of 30-year 4.300% Senior Notes
(the "2045 notes") due June 2045. Interest on the 2022 and 2045 notes is payable semi-annually on June 15 and December 15
of each year, commencing on December 15, 2015.
Starbucks Corporation 2015 Form 10-K 75