Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Sep. 28, 2013 | Nov. 13, 2013 | Mar. 30, 2013 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'GREEN MOUNTAIN COFFEE ROASTERS INC | ' | ' |
Entity Central Index Key | '0000909954 | ' | ' |
Document Type | '10-K/A | ' | ' |
Document Period End Date | 28-Sep-13 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--09-28 | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $7,923,000,000 |
Entity Common Stock, Shares Outstanding | ' | 149,030,940 | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 28, 2013 | Sep. 29, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $260,092 | $58,289 |
Restricted cash and cash equivalents | 560 | 12,884 |
Receivables, less uncollectible accounts and return allowances of $33,640 and $34,517 at September 28, 2013 and September 29, 2012, respectively | 467,976 | 363,771 |
Inventories | 676,089 | 768,437 |
Income taxes receivable | 11,747 | 32,943 |
Other current assets | 46,891 | 35,019 |
Deferred income taxes, net | 58,137 | 51,613 |
Total current assets | 1,521,492 | 1,322,956 |
Fixed assets, net | 985,563 | 944,296 |
Intangibles, net | 435,216 | 498,352 |
Goodwill | 788,184 | 808,076 |
Deferred income taxes, net | 149 | ' |
Other long-term assets | 30,944 | 42,109 |
Total assets | 3,761,548 | 3,615,789 |
Current liabilities: | ' | ' |
Current portion of long-term debt | 12,929 | 6,691 |
Current portion of capital lease and financing obligations | 1,760 | 3,057 |
Accounts payable | 312,170 | 279,577 |
Accrued expenses | 242,427 | 171,450 |
Income tax payable | ' | 29,322 |
Deferred income taxes, net | 233 | 245 |
Other current liabilities | 27,544 | 29,645 |
Total current liabilities | 597,063 | 519,987 |
Long-term debt, less current portion | 160,221 | 466,984 |
Capital lease and financing obligations, less current portion | 76,061 | 54,794 |
Deferred income taxes, net | 252,867 | 270,348 |
Other long-term liabilities | 28,721 | 32,544 |
Commitments and contingencies (See Notes 5 and 19) | ' | ' |
Redeemable noncontrolling interests | 11,045 | 9,904 |
Stockholders' equity: | ' | ' |
Preferred stock, $0.10 par value: Authorized - 1,000,000 shares; No shares issued or outstanding | ' | ' |
Common stock, $0.10 par value: Authorized - 500,000,000 shares; Issued and outstanding - 150,265,809 and 152,680,855 shares at September 28, 2013 and September 29, 2012, respectively | 15,026 | 15,268 |
Additional paid-in capital | 1,387,322 | 1,464,560 |
Retained earnings | 1,252,407 | 771,200 |
Accumulated other comprehensive (loss) income | -19,185 | 10,200 |
Total stockholders' equity | 2,635,570 | 2,261,228 |
Total liabilities and stockholders' equity | $3,761,548 | $3,615,789 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 28, 2013 | Sep. 29, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ' | ' |
Receivables, uncollectible accounts and return allowances (in dollars) | $33,640 | $34,517 |
Preferred stock, par value (in dollars per share) | $0.10 | $0.10 |
Preferred stock, Authorized shares | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.10 | $0.10 |
Common stock, Authorized shares | 500,000,000 | 500,000,000 |
Common stock, Issued shares | 150,265,809 | 152,680,855 |
Common stock, outstanding shares | 150,265,809 | 152,680,855 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Consolidated Statements of Operations | ' | ' | ' |
Net sales | $4,358,100 | $3,859,198 | $2,650,899 |
Cost of sales | 2,738,714 | 2,589,799 | 1,746,274 |
Gross profit | 1,619,386 | 1,269,399 | 904,625 |
Selling and operating expenses | 560,430 | 481,493 | 348,696 |
General and administrative expenses | 293,729 | 219,010 | 187,016 |
Operating income | 765,227 | 568,896 | 368,913 |
Other income, net | 960 | 1,819 | 648 |
Gain (loss) on financial instruments, net | 5,513 | -4,945 | -6,245 |
(Loss) gain on foreign currency, net | -12,649 | 7,043 | -2,912 |
Gain on sale of subsidiary | ' | 26,311 | ' |
Interest expense | -18,177 | -22,983 | -57,657 |
Income before income taxes | 740,874 | 576,141 | 302,747 |
Income tax expense | -256,771 | -212,641 | -101,699 |
Net Income | 484,103 | 363,500 | 201,048 |
Net income attributable to noncontrolling interests | 871 | 872 | 1,547 |
Net income attributable to GMCR | $483,232 | $362,628 | $199,501 |
Basic income per share: | ' | ' | ' |
Basic weighted average shares outstanding (in shares) | 149,638,636 | 154,933,948 | 146,214,860 |
Net income per common share-basic (in dollars per share) | $3.23 | $2.34 | $1.36 |
Diluted income per share: | ' | ' | ' |
Diluted weighted average shares outstanding (in shares) | 152,801,493 | 159,075,646 | 152,142,434 |
Net income per common share-diluted (in dollars per share) | $3.16 | $2.28 | $1.31 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Consolidated Statements of Comprehensive Income | ' | ' | ' |
Net income | $484,103 | $363,500 | $201,048 |
Cash flow hedges, Pre-tax: | ' | ' | ' |
Unrealized losses arising during the period, Pre-tax | -3,732 | -1,234 | -7,521 |
Losses reclassified to net income, Pre-tax | 1,484 | 1,359 | 419 |
Foreign currency translation adjustments, Pre-tax | -28,742 | 25,353 | -8,895 |
Other comprehensive (loss) income, Pre-tax | -30,990 | 25,478 | -15,997 |
Cash flow hedges, Tax (expense) benefit: | ' | ' | ' |
Unrealized losses arising during the period, Tax (expense) benefit | 1,489 | 498 | 3,035 |
Losses reclassified to net income, Tax (expense) benefit | -599 | -549 | -169 |
Other comprehensive (loss) income, Tax (expense) benefit | 890 | -51 | 2,866 |
Cash flow hedges, After-tax: | ' | ' | ' |
Unrealized losses arising during the period, After-tax | -2,243 | -736 | -4,486 |
Losses reclassified to net income, After-tax | 885 | 810 | 250 |
Foreign currency translation adjustments, After-tax | -28,742 | 25,353 | -8,895 |
Other comprehensive (loss) income, After-tax | -30,100 | 25,427 | -13,131 |
Total comprehensive income | 454,003 | 388,927 | 187,917 |
Total comprehensive income attributable to noncontrolling interests | 156 | 1,524 | 1,361 |
Total comprehensive income attributable to GMCR | $453,847 | $387,403 | $186,556 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Redeemable Noncontrolling Interests and Stockholders' Equity (USD $) | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Sep. 25, 2010 | $699,245 | $13,282 | $473,749 | $213,844 | ($1,630) |
Balance (in shares) at Sep. 25, 2010 | ' | 132,823,585 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Sale of common stock for private placement | 291,096 | 918 | 290,178 | ' | ' |
Sale of common stock for private placement (in shares) | ' | 9,174,991 | ' | ' | ' |
Options exercised | 11,380 | 284 | 11,096 | ' | ' |
Options exercised (in shares) | ' | 2,839,426 | ' | ' | ' |
Issuance of common stock under employee stock purchase plan | 5,948 | 15 | 5,933 | ' | ' |
Issuance of common stock under employee stock purchase plan (in shares) | ' | 148,917 | ' | ' | ' |
Issuance of common stock for public equity offering | 647,363 | 948 | 646,415 | ' | ' |
Issuance of common stock for public equity offering (in shares) | ' | 9,479,544 | ' | ' | ' |
Stock compensation expense | 10,361 | ' | 10,361 | ' | ' |
Tax benefit from equity-based compensation plans | 61,670 | ' | 61,670 | ' | ' |
Deferred compensation expense | 214 | ' | 214 | ' | ' |
Adjustment of redeemable noncontrolling interests to redemption value | -1,618 | ' | ' | -1,618 | ' |
Other comprehensive income (loss), net of tax | -12,945 | ' | ' | ' | -12,945 |
Net income | 199,501 | ' | ' | 199,501 | ' |
Balance at Sep. 24, 2011 | 1,912,215 | 15,447 | 1,499,616 | 411,727 | -14,575 |
Balance (in shares) at Sep. 24, 2011 | ' | 154,466,463 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Options exercised | 3,394 | 94 | 3,300 | ' | ' |
Options exercised (in shares) | ' | 940,369 | ' | ' | ' |
Issuance of common stock under employee stock purchase plan | 8,698 | 30 | 8,668 | ' | ' |
Issuance of common stock under employee stock purchase plan (in shares) | ' | 301,971 | ' | ' | ' |
Restricted stock awards and units | ' | 5 | -5 | ' | ' |
Restricted stock awards and units (in shares) | ' | 55,747 | ' | ' | ' |
Issuance of common stock under deferred compensation plan | ' | 4 | -4 | ' | ' |
Issuance of common stock under deferred compensation plan (in shares) | ' | 37,005 | ' | ' | ' |
Repurchase of common stock | -76,470 | -312 | -76,158 | ' | ' |
Repurchase of common stock (in shares) | ' | -3,120,700 | ' | ' | ' |
Stock compensation expense | 17,868 | ' | 17,868 | ' | ' |
Tax benefit from equity-based compensation plans | 11,064 | ' | 11,064 | ' | ' |
Deferred compensation expense | 211 | ' | 211 | ' | ' |
Adjustment of redeemable noncontrolling interests to redemption value | -3,155 | ' | ' | -3,155 | ' |
Other comprehensive income (loss), net of tax | 24,775 | ' | ' | ' | 24,775 |
Net income | 362,628 | ' | ' | 362,628 | ' |
Balance at Sep. 29, 2012 | 2,261,228 | 15,268 | 1,464,560 | 771,200 | 10,200 |
Balance (in shares) at Sep. 29, 2012 | 152,680,855 | 152,680,855 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' |
Options exercised | 19,817 | 285 | 19,532 | ' | ' |
Options exercised (in shares) | ' | 2,849,308 | ' | ' | ' |
Issuance of common stock under employee stock purchase plan | 9,960 | 34 | 9,926 | ' | ' |
Issuance of common stock under employee stock purchase plan (in shares) | ' | 343,678 | ' | ' | ' |
Restricted stock awards and units | ' | 3 | -3 | ' | ' |
Restricted stock awards and units (in shares) | ' | 34,761 | ' | ' | ' |
Repurchase of common stock | -188,278 | -564 | -187,714 | ' | ' |
Repurchase of common stock (in shares) | ' | -5,642,793 | ' | ' | ' |
Stock compensation expense | 26,081 | ' | 26,081 | ' | ' |
Tax benefit from equity-based compensation plans | 54,706 | ' | 54,706 | ' | ' |
Deferred compensation expense | 234 | ' | 234 | ' | ' |
Adjustment of redeemable noncontrolling interests to redemption value | -2,025 | ' | ' | -2,025 | ' |
Other comprehensive income (loss), net of tax | -29,385 | ' | ' | ' | -29,385 |
Net income | 483,232 | ' | ' | 483,232 | ' |
Balance at Sep. 28, 2013 | $2,635,570 | $15,026 | $1,387,322 | $1,252,407 | ($19,185) |
Balance (in shares) at Sep. 28, 2013 | 150,265,809 | 150,265,809 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income | $484,103 | $363,500 | $201,048 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization of fixed assets | 183,814 | 135,656 | 72,297 |
Amortization of intangibles | 45,379 | 45,991 | 41,339 |
Amortization deferred financing fees | 7,125 | 6,050 | 6,158 |
Loss on extinguishment of debt | ' | ' | 19,732 |
Unrealized loss (gain) on foreign currency, net | 9,159 | -6,557 | 1,041 |
(Gain) loss on disposal of fixed assets | -85 | 2,517 | 884 |
Gain on sale of subsidiary, excluding transaction costs | ' | -28,914 | ' |
Provision for doubtful accounts | 689 | 3,197 | 2,584 |
Provision for sales returns | 79,747 | 107,436 | 64,457 |
(Gain) loss on derivatives, net | -4,507 | 6,310 | 3,292 |
Excess tax benefits from equity-based compensation plans | -54,699 | -12,070 | -67,813 |
Deferred income taxes | -17,701 | 60,856 | -8,828 |
Deferred compensation and stock compensation | 26,315 | 18,079 | 10,575 |
Other | 844 | -672 | -6,142 |
Changes in assets and liabilities, net of effects of acquisition: | ' | ' | ' |
Receivables | -187,221 | -159,317 | -157,329 |
Inventories | 87,677 | -92,862 | -375,709 |
Income tax payable/receivable, net | 46,290 | 16,457 | 63,487 |
Other current assets | -12,668 | -6,900 | -715 |
Other long-term assets, net | 3,915 | -469 | -11,454 |
Accounts payable and accrued expenses | 133,532 | 17,125 | 134,035 |
Other current liabilities | 3,100 | -2,718 | -3,118 |
Other long-term liabilities | 1,161 | 5,090 | 10,964 |
Net cash provided by operating activities | 835,969 | 477,785 | 785 |
Cash flows from investing activities: | ' | ' | ' |
Change in restricted cash | 3,005 | -2,875 | 2,074 |
Acquisition of LJVH Holdings, Inc. (Van Houtte), net of cash acquired | ' | ' | -907,835 |
Proceeds from the sale of subsidiary, net of cash acquired | ' | 137,733 | ' |
Capital expenditures for fixed assets | -232,780 | -401,121 | -283,444 |
Other investing activities | 4,208 | 618 | 1,533 |
Net cash used in investing activities | -225,567 | -265,645 | -1,187,672 |
Cash flows from financing activities: | ' | ' | ' |
Net change in revolving line of credit | -226,210 | -108,727 | 333,835 |
Proceeds from issuance of common stock under compensation plans | 29,777 | 12,092 | 17,328 |
Proceeds from issuance of common stock for private placement | ' | ' | 291,096 |
Proceeds from issuance of common stock for public equity offering | ' | ' | 673,048 |
Financing costs in connection with public equity offering | ' | ' | -25,685 |
Repurchase of common stock | -188,278 | -76,470 | ' |
Excess tax benefits from equity-based compensation plans | 54,699 | 12,070 | 67,813 |
Payments on capital lease and financing obligations | -8,288 | -7,558 | -8 |
Proceeds from borrowings of long-term debt | ' | ' | 796,375 |
Deferred financing fees | ' | ' | -46,009 |
Repayment of long-term debt | -71,620 | -7,814 | -906,885 |
Other financing activities | -1,406 | 3,283 | -1,063 |
Net cash (used in) provided by financing activities | -411,326 | -173,124 | 1,199,845 |
Change in cash balances included in current assets held for sale | ' | 5,160 | -5,160 |
Effect of exchange rate changes on cash and cash equivalents | 2,727 | 1,124 | 790 |
Net increase in cash and cash equivalents | 201,803 | 45,300 | 8,588 |
Cash and cash equivalents at beginning of period | 58,289 | 12,989 | 4,401 |
Cash and cash equivalents at end of period | 260,092 | 58,289 | 12,989 |
Supplemental disclosures of cash flow information: | ' | ' | ' |
Cash paid for interest | 9,129 | 20,783 | 33,452 |
Cash paid for income taxes | 223,580 | 136,407 | 58,182 |
Fixed asset purchases included in accounts payable and not disbursed at the end of each year | 30,451 | 56,127 | 25,737 |
Noncash financing and investing activity: | ' | ' | ' |
Fixed assets acquired under capital lease and financing obligations | 27,791 | 66,531 | ' |
Settlement of acquisition-related liabilities through release of restricted cash | $9,227 | $18,788 | ' |
Nature_of_Business_and_Organiz
Nature of Business and Organization | 12 Months Ended |
Sep. 28, 2013 | |
Nature of Business and Organization | ' |
Nature of Business and Organization | ' |
1. Nature of Business and Organization | |
Green Mountain Coffee Roasters, Inc. (together with its subsidiaries, "the Company") is a leader in the specialty coffee and coffeemaker businesses. Green Mountain Coffee Roasters, Inc. is a Delaware corporation. | |
The Company manages its operations through two business segments, its United States operations within the Domestic segment and its Canadian operations within the Canada segment. The Company distributes its products in two channels: at-home ("AH") and away-from-home ("AFH"). | |
The Domestic segment sells single cup brewers, accessories, and sources, produces and sells coffee, hot cocoa, teas and other beverages in K-Cup® and Vue® packs ("portion packs") and coffee in more traditional packaging including bags and fractional packs to retailers including supermarkets, department stores, mass merchandisers, club stores, and convenience stores; to restaurants, hospitality accounts, office coffee distributors, and partner brand owners; and to consumers through Company websites. Substantially all of the Domestic segment's distribution to major retailers is processed by fulfillment entities which receive and fulfill sales orders and invoice certain retailers primarily in the AH channel. The Domestic segment also earns royalty income from K-Cup® packs sold by a third-party licensed roaster. | |
The Canada segment sells single cup brewers, accessories, and sources, produces and sells coffee and teas and other beverages in portion packs and coffee in more traditional packaging including bags, cans and fractional packs under a variety of brands to retailers including supermarkets, department stores, mass merchandisers, club stores, through office coffee services to offices, convenience stores, restaurants, hospitality accounts, and to consumers through its website. The Canada segment included Filterfresh through October 3, 2011, the date of sale (see Note 3, Acquisitions and Divestitures). | |
The Company's fiscal year ends on the last Saturday in September. Fiscal years 2013, 2012 and 2011 represent the years ended September 28, 2013, September 29, 2012 and September 24, 2011, respectively. Fiscal years 2013 and 2011 each consist of 52 weeks and fiscal 2012 consisted of 53 weeks. | |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended |
Sep. 28, 2013 | |
Significant Accounting Policies | ' |
Significant Accounting Policies | ' |
2. Significant Accounting Policies | |
Use of estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect amounts reported in the accompanying Consolidated Financial Statements. Significant estimates and assumptions by management affect the Company's inventory, deferred tax assets, allowance for sales returns, warranty reserves and certain accrued expenses, goodwill, intangible and long-lived assets and stock-based compensation. | |
Although the Company regularly assesses these estimates, actual results could differ from these estimates. Changes in estimates are recorded in the period they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. | |
Principles of Consolidation | |
The Consolidated Financial Statements include the accounts of the Company and all of the entities in which the Company has a controlling financial interest, most often because the Company holds a majority voting/ownership interest. All significant intercompany transactions and accounts are eliminated in consolidation. | |
Noncontrolling Interests | |
Noncontrolling interests ("NCI") are evaluated by the Company and are shown as either a liability, temporary equity (shown between liabilities and equity) or as permanent equity depending on the nature of the redeemable features at amounts based on formulas specific to each entity. Generally, mandatorily redeemable NCI's are classified as liabilities and non-mandatorily redeemable NCI's are classified as either temporary or permanent equity. Redeemable NCIs that are not mandatorily redeemable are classified outside of shareholders' equity in the Consolidated Balance Sheets as temporary equity under the caption, Redeemable noncontrolling interests, and are measured at their redemption values at the end of each period. If the redemption value is greater than the carrying value, an adjustment is recorded in retained earnings to record the NCI at its redemption value. Redeemable NCIs that are mandatorily redeemable are classified as a liability in the Consolidated Balance Sheets under either Other current liabilities or Other long-term liabilities, depending on the remaining duration until settlement, and are measured at the amount of cash that would be paid if settlement occurred at the balance sheet date based on the formula in the Share Purchase and Sale Agreement dated June 22, 2012, with any change from the prior period recognized as interest expense. See Note 8, Noncontrolling Interests in the Consolidated Financial Statements included in this Annual Report for further information. | |
Net income attributable to NCIs reflects the portion of the net income (loss) of consolidated entities applicable to the NCI shareholders in the accompanying Consolidated Statements of Operations. The net income attributable to NCIs is classified in the Consolidated Statements of Operations as part of consolidated net income and deducted from total consolidated net income to arrive at the net income attributable to the Company. | |
If a change in ownership of a consolidated subsidiary results in a loss of control or deconsolidation, any retained ownership interests are remeasured with the gain or loss reported to net earnings. | |
Business Combinations | |
The Company uses the acquisition method of accounting for business combinations and recognizes assets acquired and liabilities assumed measured at their fair values on the date acquired. Goodwill represents the excess of the purchase price over the fair value of the net assets. The fair values of the assets and liabilities acquired are determined based upon the Company's valuation. The valuation involves making significant estimates and assumptions which are based on detailed financial models including the projection of future cash flows, the weighted average cost of capital and any cost savings that are expected to be derived in the future. | |
Cash and Cash Equivalents | |
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include money market funds which are carried at cost, plus accrued interest, which approximates fair value. The Company does not believe that it is subject to any unusual credit or market risk. | |
Restricted Cash and Cash Equivalents | |
Restricted cash and cash equivalents represents cash that is not available for use in our operations. Restricted cash of $0.6 million and $12.9 million as of September 28, 2013 and September 29, 2012, respectively. The restricted cash balance as of September 29, 2012 consisted primarily of cash placed in escrow related to our acquisition of Van Houtte, and was released during fiscal 2013. | |
Allowance for Doubtful Accounts | |
A provision for doubtful accounts is provided based on a combination of historical experience, specific identification and customer credit risk where there are indications that a specific customer may be experiencing financial difficulties. | |
Inventories | |
Inventories consist primarily of green and roasted coffee, including coffee in portion packs, purchased finished goods such as coffee brewers, and packaging materials. Inventories are stated at the lower of cost or market. Cost is being measured using an adjusted standard cost method which approximates FIFO (first-in, first-out). The Company regularly reviews whether the net realizable value of its inventory is lower than its carrying value. If the valuation shows that the net realizable value is lower than the carrying value, the Company takes a charge to cost of sales and directly reduces the carrying value of the inventory. | |
The Company estimates any required write downs for inventory obsolescence by examining its inventories on a quarterly basis to determine if there are indicators that the carrying values exceed net realizable value. Indicators that could result in additional inventory write downs include age of inventory, damaged inventory, slow moving products and products at the end of their life cycles. While management believes that inventory is appropriately stated at the lower of cost or market, significant judgment is involved in determining the net realizable value of inventory. | |
Financial Instruments | |
The Company enters into various types of financial instruments in the normal course of business. Fair values are estimated based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees of perceived risk. Cash, cash equivalents, accounts receivable, accounts payable and accrued expenses are reported at carrying value and approximate fair value due to the short maturity of these instruments. Long-term debt is also reported at carrying value, which approximates fair value due to the fact that the interest rate on the debt is based on variable interest rates. | |
The fair values of derivative financial instruments have been determined using market information and valuation methodologies. Changes in assumptions or estimates could affect the determination of fair value; however, management does not believe any such changes would have a material impact on the Company's financial condition, results of operations or cash flows. The fair values of short-term investments and derivative financial instruments are disclosed in Note 12, Fair Value Measurements, in the Consolidated Financial Statements included in this Annual Report. | |
Derivative Instruments | |
The Company enters into over-the-counter derivative contracts based on coffee futures ("coffee futures") to hedge against price increases in price-to-be-fixed coffee purchase commitments and anticipated coffee purchases. Coffee purchases are generally denominated in the U.S. dollar. The Company also enters into interest rate swap agreements to mitigate interest rate risk associated with the Company's variable-rate borrowings and foreign currency forward contracts to hedge the purchase and payment of certain green coffee purchase commitments as well as certain recognized liabilities in currencies other than the Company's functional currency. All derivatives are recorded at fair value. Interest rate swaps, coffee futures, and certain foreign currency forward contracts which hedge the purchase and payment of green coffee purchase commitments are designated as cash flow hedges with the effective portion of the change in the fair value of the derivative instrument recorded as a component of other comprehensive income ("OCI") and subsequently reclassified into net earnings when the hedged exposure affects net earnings. Foreign currency forward contracts which hedge certain recognized liabilities denominated in non-functional currencies are designated as fair value hedges with the changes in the fair value of these instruments along with the changes in the fair value of the hedged liabilities recognized in gain or loss on foreign currency, net in the Consolidated Statements of Operations. | |
Effectiveness is determined by how closely the changes in the fair value of the derivative instrument offset the changes in the fair value of the hedged item. The ineffective portion of the change in the fair value of the derivative instrument is recorded directly to earnings. | |
The Company formally documents hedging instruments and hedged items, and measures at each balance sheet date the effectiveness of its hedges. When it is determined that a derivative is not highly effective, the derivative expires, or is sold or terminated, or the derivative is discontinued because it is unlikely that a forecasted transaction will occur, the Company discontinues hedge accounting prospectively for that specific hedge instrument. | |
The Company also enters into certain foreign currency and interest rate derivative contracts to hedge certain foreign currency exposures that are not designated as hedging instruments for accounting purposes. These contracts are recorded at fair value, with the changes in fair value recognized in gain (loss) on financial instruments, net in the Consolidated Statements of Operations. | |
The Company does not engage in speculative transactions, nor does it hold derivative instruments for trading purposes. See Note 11, Derivative Financial Instruments and Note 14, Stockholders' Equity in the Consolidated Financial Statements included in this Annual Report for further information. | |
Deferred Financing Costs | |
Deferred financing costs consist primarily of commitment fees and loan origination fees and are being amortized over the respective life of the applicable debt using a method that approximates the effective interest rate method. Deferred financing costs included in Other long-term assets in the accompanying Consolidated Balance Sheets as of September 28, 2013 and September 29, 2012 were $15.2 million and $22.3 million, respectively. | |
Goodwill and Intangibles | |
Goodwill is tested for impairment annually at the end of the Company's fiscal year or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill is assigned to reporting units for purposes of impairment testing. A reporting unit is the same as an operating segment or one level below an operating segment. The Company may assess qualitative factors to determine if it is more likely than not (i.e., a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, no further testing is necessary. If, however, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company performs the first step of a two-step goodwill impairment test. The assessment of qualitative factors is optional and at the Company's discretion. The Company may bypass the qualitative assessment for any reporting unit in any period and perform the first step of the quantitative goodwill impairment test. The Company may resume performing the qualitative assessment in any subsequent period. The first step is a comparison of each reporting unit's fair value to its carrying value. The Company estimates fair value based on discounted cash flows. The reporting unit's discounted cash flows require significant management judgment with respect to sales forecasts, gross margin percentages, selling, operating, general and administrative ("SG&A") expenses, capital expenditures and the selection and use of an appropriate discount rate. The projected sales, gross margin and SG&A expense rate assumptions and capital expenditures are based on the Company's annual business plan or other forecasted results. Discount rates reflect market-based estimates of the risks associated with the projected cash flows directly resulting from the use of those assets in operations. The estimates of fair value of reporting units are based on the best information available as of the date of the assessment. If the carrying value of a reporting unit exceeds its estimated fair value in the first step, a second step is performed, which requires the Company to allocate the fair value of the reporting unit derived in the first step to the fair value of the reporting unit's net assets, with any fair value in excess of amounts allocated to such net assets representing the implied fair value of goodwill for that reporting unit. If the implied fair value of the goodwill is less than the book value, goodwill is impaired and is written down to the implied fair value amount. | |
Intangible assets that have finite lives are amortized over their estimated economic useful lives on a straight line basis. Intangible assets that have indefinite lives are not amortized and are tested for impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Similar to the qualitative assessment for goodwill, the Company may assess qualitative factors to determine if it is more likely than not (i.e., a likelihood of more than 50%) that the fair value of the indefinite-lived intangible asset is less than its carrying amount. If the Company determines that it is not more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, no further testing is necessary. If, however, the Company determines that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, the Company compares the fair value of the indefinite-lived asset with its carrying amount. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, the individual indefinite-lived intangible asset is written down by an amount equal to such excess. The assessment of qualitative factors is optional and at the Company's discretion. The Company may bypass the qualitative assessment for any indefinite-lived intangible asset in any period and resume performing the qualitative assessment in any subsequent period. | |
Impairment of Long-Lived Assets | |
When facts and circumstances indicate that the carrying values of long-lived assets, including fixed assets, may be impaired, an evaluation of recoverability is performed by comparing the carrying value of the assets, at an asset group level, to undiscounted projected future cash flows in addition to other quantitative and qualitative analyses. When assessing impairment, property, plant and equipment assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of other groups of assets. Upon indication that the carrying value of such assets may not be recoverable, the Company recognizes an impairment loss as a charge against current operations. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value, less estimated costs to sell. The Company makes judgments related to the expected useful lives of long-lived assets and its ability to realize undiscounted cash flows in excess of the carrying amounts of such assets which are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions and changes in operating performance. | |
Fixed Assets | |
Fixed assets are carried at cost, net of accumulated depreciation. Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred. Expenditures for refurbishments and improvements that significantly improve the productive capacity or extend the useful life of an asset are capitalized. Depreciation is calculated using the straight-line method over the assets' estimated useful lives. The cost and accumulated depreciation for fixed assets sold, retired, or otherwise disposed of are relieved from the accounts, and the resultant gains and losses are reflected in income. | |
The Company follows an industry-wide practice of purchasing and loaning coffee brewing and related equipment to wholesale customers. These assets are also carried at cost, net of accumulated depreciation. | |
Depreciation costs of manufacturing and distribution assets are included in cost of sales on the Consolidated Statements of Operations. Depreciation costs of other assets, including equipment on loan to customers, are included in selling and operating expenses on the Consolidated Statements of Operations. | |
Leases | |
Occasionally, the Company is involved in the construction of leased properties. Due to the extent and nature of that involvement, the Company is deemed the owner during the construction period and is required to capitalize the construction costs on the Consolidated Balance Sheets along with a corresponding financing obligation for the project costs that are incurred by the lessor. Upon completion of the project, a sale-leaseback analysis is performed to determine if the Company can record a sale to remove the assets and related obligation and record the lease as either an operating or capital lease obligation. If the Company is precluded from derecognizing the assets when construction is complete due to continuing involvement beyond a normal leaseback, the lease is accounted for as a financing transaction and the recorded asset and related financing obligation remain on the Consolidated Balance Sheet. Accordingly, the asset is depreciated over its estimated useful life in accordance with the Company's policy. If the Company is not considered the owner of the land, a portion of the lease payments is allocated to ground rent and treated as an operating lease. The portion of the lease payment allocated to ground rental expense is based on the fair value of the land at the commencement of construction. Lease payments allocated to the buildings are recognized as reductions to the financing obligation and interest expense. See Note 19, Commitments and Contingencies, for further information. | |
Leases that qualify as capital leases are recorded at the lower of the fair value of the asset or the present value of the future minimum lease payments over the lease term generally using the Company's incremental borrowing rate. Assets leased under capital leases are included in fixed assets and generally are depreciated over the lease term. Lease payments under capital leases are recognized as a reduction of the capital lease obligation and interest expense. | |
All other leases are considered operating leases. Assets subject to an operating lease are not recorded on the balance sheet. Lease payments are recognized on a straight-line basis as rent expense over the expected lease term. | |
Revenue Recognition | |
Revenue from sales of single cup brewer systems, coffee and other specialty beverages in portion packs, and coffee in more traditional packaging including whole bean and ground coffee selections in bags and ground coffee in fractional packs is recognized when title and risk of loss passes to the customer, which generally occurs upon shipment or delivery of the product to the customer as defined by the contractual shipping terms. Shipping charges billed to customers are also recognized as revenue, and the related shipping costs are included in cost of sales. Cash received in advance of product delivery is recorded in deferred revenue, which is included in other current liabilities on the accompanying Consolidated Balance Sheets, until earned. | |
The majority of the Company's distribution to major retailers is processed by fulfillment entities. The fulfillment entities receive and fulfill sales orders and invoice certain retailers. All product shipped by the Company to the fulfillment entities are owned by the Company and included in inventories on the accompanying consolidated balance sheets. The Company recognizes revenue when delivery of the product from the fulfillment entity to the retailer has occurred based on the contractual shipping terms and when all other revenue recognition criteria are met. | |
Sales of single cup brewers, portion packs and other products are recognized net of any discounts, returns, allowances and sales incentives, including coupon redemptions and rebates. The Company estimates the allowance for returns using an average return rate based on historical experience and an evaluation of contractual rights or obligations. The Company routinely participates in trade promotion programs with customers, including customers whose sales are processed by the fulfillment entities, whereby customers can receive certain incentives and allowances which are recorded as a reduction to sales when the sales incentive is offered and committed to or, if the incentive relates to specific sales, at the later of when that revenue is recognized or the date at which the sales incentive is offered. These incentives include, but are not limited to, cash discounts and volume based incentive programs. Allowances to customers that are directly attributable and supportable by customer promotional activities are recorded as selling expenses at the time the promotional activity occurs. | |
Roasters licensed by the Company to manufacture and sell K-Cup® packs, both to the Company for resale and to their other coffee customers, are obligated to pay a royalty to the Company upon shipment to their customer. The Company records royalty revenue upon shipment of K-Cup® packs by licensed roasters to third-party customers as set forth under the terms and conditions of various licensing agreements. For shipments of K-Cup® packs to the Company for resale, this royalty payment is recorded as a reduction to the carrying value of the related K-Cup® packs in inventory and as a reduction to cost of sales when sold through to third-party customers by the Company. | |
Cost of Sales | |
Cost of sales for the Company consists of the cost of raw materials including coffee beans, hot cocoa, flavorings and packaging materials; a portion of our rental expense; production, warehousing and distribution costs which include salaries; distribution and merchandising personnel; leases and depreciation on facilities and equipment used in production; the cost of brewers manufactured by suppliers; third-party fulfillment charges; receiving, inspection and internal transfer costs; warranty expense; freight, duties and delivery expenses; and certain third-party royalty charges. All shipping and handling expenses are also included as a component of cost of sales. | |
Product Warranty | |
The Company provides for the estimated cost of product warranties in cost of sales, at the time product revenue is recognized. Warranty costs are estimated primarily using historical warranty information in conjunction with current engineering assessments applied to the Company's expected repair or replacement costs. The estimate for warranties requires assumptions relating to expected warranty claims which can be impacted significantly by quality issues. | |
Advertising Costs | |
The Company expenses the costs of advertising the first time the advertising takes place, except for direct mail campaigns targeted directly at consumers, which are expensed over the period during which they are expected to generate sales. As of September 28, 2013 and September 29, 2012, prepaid advertising costs of $4.1 million and $2.4 million, respectively, were recorded in Other current assets in the accompanying Consolidated Balance Sheets. Advertising expense totaled $193.2 million, $147.7 million, and $90.8 million, for fiscal years 2013, 2012, and 2011, respectively. | |
Income Taxes | |
The Company recognizes deferred tax assets and liabilities for the expected future tax benefits or consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Judgment is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities. These include establishing a valuation allowance related to the ability to realize certain deferred tax assets. The Company currently believes that future earnings and current tax planning strategies will be sufficient to recover substantially all of the Company's recorded net deferred tax assets. To the extent future taxable income against which these assets may be applied is not sufficient, some portion or all of our recorded deferred tax assets would not be realizable. | |
Accounting for uncertain tax positions also requires significant judgments, including estimating the amount, timing and likelihood of ultimate settlement. Although the Company believes that its estimates are reasonable, actual results could differ from these estimates. The Company uses a more-likely-than-not measurement attribute for all tax positions taken or expected to be taken on a tax return in order for those tax positions to be recognized in the financial statements. | |
Stock-Based Compensation | |
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Equity awards consist of stock options, restricted stock units ("RSUs"), restricted stock awards ("RSAs"), and performance stock units ("PSUs"). The cost is recognized over the period during which an employee is required to provide service in exchange for the award. | |
The Company measures the fair value of stock options using the Black-Scholes model and certain assumptions, including the expected life of the stock options, an expected forfeiture rate and the expected volatility of its common stock. The expected life of options is estimated based on options vesting periods, contractual lives and an analysis of the Company's historical experience. The expected forfeiture rate is based on the Company's historical employee turnover experience and future expectations. The risk-free interest rate is based on the U.S. Treasury rate over the expected life. The Company uses a blended historical volatility to estimate expected volatility at the measurement date. The fair value of RSUs, RSAs and PSUs is based on the closing price of the Company's common stock on the grant date. | |
Foreign Currency Translation and Transactions | |
The financial statements of the Company's foreign subsidiaries are translated into the reporting currency of the Company which is the U.S. dollar. The functional currency of certain of the Company's foreign subsidiaries is the local currency of the subsidiary. Accordingly, the assets and liabilities of the Company's foreign subsidiaries are translated into U.S. dollars using the exchange rate in effect at each balance sheet date. Revenue and expense accounts are generally translated using the average rate of exchange during the period. Foreign currency translation adjustments are accumulated as a component of other comprehensive income or loss as a separate component of stockholders' equity. Gains and losses arising from transactions denominated in currencies other than the functional currency of the entity are charged directly against earnings in the Consolidated Statement of Operations. Gains and losses arising from transactions denominated in foreign currencies are primarily related to inter-company loans that have been determined to be temporary in nature, cash, long-term debt and accounts payable denominated in non-functional currencies. | |
Significant Customer Credit Risk and Supply Risk | |
The majority of the Company's customers are located in the U.S. and Canada. With the exception of M.Block & Sons ("MBlock") as described below, concentration of credit risk with respect to accounts receivable is limited due to the large number of customers in various channels comprising the Company's customer base. The Company does not require collateral from customers as ongoing credit evaluations of customers' payment histories are performed. The Company maintains reserves for potential credit losses and such losses, in the aggregate, have not exceeded management's expectations. | |
The Company procures the majority of the brewers it sells from one third-party brewer manufacturer. Purchases from this brewer manufacturer amounted to approximately $637.0 million, $721.3 million and $545.3 million in fiscal years 2013, 2012 and 2011, respectively. | |
The Company primarily relies on MBlock to process the majority of sales orders for our AH single serve business with retailers in the United States. The Company is subject to significant credit risk regarding the creditworthiness of MBlock and, in turn, the creditworthiness of the retailers. Sales processed by MBlock to retailers amounted to $1,600.2 million, $1,458.4 million and $997.0 million for fiscal years 2013, 2012 and 2011, respectively. The Company's account receivables due from MBlock amounted to $157.4 million and $133.1 million at September 28, 2013 and September 29, 2012, respectively. | |
Sales to customers that represented more than 10% of the Company's net sales included Wal-Mart Stores, Inc. and affiliates ("Wal-Mart"), representing approximately 14% and 12% of consolidated net sales for fiscal years 2013 and 2012, respectively; Costco Wholesale Corporation and affiliates ("Costco"), representing approximately 11% of consolidated net sales for fiscal 2013; and Bed Bath & Beyond, Inc., and affiliates ("Bed Bath & Beyond"), representing approximately 11% of consolidated net sales for fiscal 2011. For Wal-Mart and Bed Bath & Beyond, the majority of U.S. sales are processed through MBlock whereby MBlock is the vendor of record. Starting in fiscal 2012, for U.S. sales to Costco, the Company became the vendor of record and although the sales are processed through MBlock, the Company records the account receivables from the customer and pays MBlock for their fulfillment services. The Company's account receivables due from Costco amounted to $65.7 million, net of allowances, at September 28, 2013. | |
Research & Development | |
Research and development charges are expensed as incurred. These expenses amounted to $57.7 million, $41.7 million and $17.7 million in fiscal years 2013, 2012 and 2011, respectively. These costs primarily consist of salary and consulting expenses and are recorded in selling and operating expenses in each respective segment of the Company. | |
Recent Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board (the "FASB") issued an Accounting Standards Update ("ASU") No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU 2013-11"). ASU 2013-11 was issued to eliminate diversity in practice regarding the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. Under ASU 2013-11, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. Otherwise, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective prospectively for reporting periods beginning after December 15, 2013, and early adoption is permitted. The adoption of ASU 2013-11 is not expected to have a material impact on the Company's net income, financial position or cash flows. | |
In March 2013, the FASB issued ASU No. 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity" ("ASU 2013-05"). ASU 2013-05 provides clarification regarding whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of cumulative translation adjustments into net income when a reporting entity either sells a part or all of its investment in a foreign entity or ceases to have a controlling financial interest in a subsidiary or group of assets that constitute a business within a foreign entity. The amendments in this ASU are effective prospectively for reporting periods beginning after December 15, 2013, and early adoption is permitted. The adoption of ASU 2013-05 is not expected to have a material impact on the Company's net income, financial position or cash flows. | |
In February 2013, the FASB issued ASU No. 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date" ("ASU 2013-04"). ASU 2013-04 provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors as well as any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The amendments in this ASU are effective for reporting periods beginning after December 15, 2013, with early adoption permitted. Retrospective application is required. The adoption of ASU 2013-04 is not expected to have a material impact on the Company's net income, financial position or cash flows. | |
In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Comprehensive Income" ("ASU 2013-02"). ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For significant items not reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. The amendments in this ASU are effective for annual reporting periods, and interim periods within those annual reporting periods, beginning after December 15, 2012, which for the Company will be the first quarter of fiscal 2014. The adoption of ASU 2013-02 is not expected to have an impact on the Company's net income, financial position or cash flows. | |
In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities," ("ASU 2011-11") that provides amendments for disclosures about offsetting assets and liabilities. The amendments require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. On January 31, 2013, the FASB issued ASU No. 2013-01, "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities," which clarified that the scope of the disclosures is limited to include derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. The amendments are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Disclosures required by the amendments should be provided retrospectively for all comparative periods presented. For the Company, the amendments are effective for the fiscal year ending September 27, 2014 (fiscal year 2014). The adoption of ASU 2011-11 is not expected to have a material impact on the Company's disclosures. | |
Acquisitions_and_Divestitures
Acquisitions and Divestitures | 12 Months Ended | ||||||||||
Sep. 28, 2013 | |||||||||||
Acquisitions and Divestitures | ' | ||||||||||
Acquisitions and Divestitures | ' | ||||||||||
3. Acquisitions and Divestitures | |||||||||||
Fiscal 2012 | |||||||||||
On October 3, 2011, all the outstanding shares of Van Houtte USA Holdings, Inc., also known as the Van Houtte U.S. Coffee Service business or the "Filterfresh" business, were sold to ARAMARK Refreshment Services, LLC ("ARAMARK") in exchange for $149.5 million in cash. Approximately $4.4 million of cash was transferred to ARAMARK as part of the sale and $7.4 million was repaid to ARAMARK upon finalization of the purchase price, resulting in a net cash inflow related to the Filterfresh sale of $137.7 million. The Company recognized a gain on the sale of $26.3 million during the thirteen weeks ended December 24, 2011. Filterfresh had been included in the Canada segment. | |||||||||||
As of September 24, 2011, all the assets and liabilities relating to the Filterfresh business were reported in the Consolidated Balance Sheet as assets and liabilities held-for-sale. | |||||||||||
Filterfresh revenues and net income included in the Company's consolidated statement of operations were as follows (dollars in thousands, except per share data): | |||||||||||
For the period | For the period | ||||||||||
September 25, 2011 | December 17, 2010 | ||||||||||
through | (date of acquisition) | ||||||||||
October 3, 2011 | through | ||||||||||
(date of sale) | September 24, 2011 | ||||||||||
Net sales | $ | 2,286 | $ | 90,855 | |||||||
Net income | $ | 229 | $ | 12,263 | |||||||
Less income attributable to noncontrolling interests | 20 | 1,051 | |||||||||
Net income attributable to GMCR | $ | 209 | $ | 11,212 | |||||||
Diluted net income per share | $ | — | $ | 0.07 | |||||||
After the disposition, the Company continues to sell coffee and brewers to Filterfresh, which prior to the sale of Filterfresh were eliminated and were not reflected in the Consolidated Statement of Operations. For fiscal 2012, the Company's sales to Filterfresh through October 3, 2011 (date of sale) that were eliminated in consolidation were $0.6 million. For fiscal 2011, the Company's sales to Filterfresh during the period December 17, 2010 (date of acquisition) through September 24, 2011 that were eliminated in consolidation were $22.2 million. | |||||||||||
Fiscal 2011 | |||||||||||
LJVH Holdings, Inc. (including subsidiaries—Van Houtte) | |||||||||||
On December 17, 2010, the Company acquired all of the outstanding capital stock of LJVH Holdings, Inc. ("LJVH" and together with its subsidiaries, "Van Houtte"), a coffee roaster headquartered in Montreal, Quebec, for $907.8 million, net of cash acquired. The acquisition was financed with cash on hand and a $1,450.0 million credit facility. Van Houtte's functional currency is the Canadian dollar. Van Houtte's operations are included in the Canada segment. | |||||||||||
At the time of the acquisition, the Company accounted for all the assets relating to the Filterfresh business as held-for-sale. | |||||||||||
The Van Houtte acquisition was accounted for under the acquisition method of accounting. The total purchase price of $907.8 million, net of cash acquired, was allocated to Van Houtte's net tangible assets and identifiable intangible assets based on their estimated fair values as of December 17, 2010. The fair value assigned to identifiable intangible assets acquired was determined primarily by using an income approach. The allocation of the purchase price is based upon a valuation determined using management's and the Company's estimates and assumptions. The table below represents the allocation of the purchase price to the acquired net assets of Van Houtte (in thousands): | |||||||||||
Total | Van Houtte | Filterfresh | |||||||||
Canadian | Assets Held | ||||||||||
Operations | For Sale | ||||||||||
Restricted cash | $ | 500 | $ | 500 | $ | — | |||||
Accounts receivable | 61,130 | 47,554 | 13,576 | ||||||||
Inventories | 42,958 | 36,691 | 6,267 | ||||||||
Income taxes receivable | 2,260 | 2,190 | 70 | ||||||||
Deferred income taxes | 4,903 | 3,577 | 1,326 | ||||||||
Other current assets | 5,047 | 4,453 | 594 | ||||||||
Fixed assets | 143,928 | 110,622 | 33,306 | ||||||||
Intangible assets | 375,099 | 355,549 | 19,550 | ||||||||
Goodwill | 472,331 | 409,493 | 62,838 | ||||||||
Other long-term assets | 1,577 | 962 | 615 | ||||||||
Accounts payable and accrued expenses | (54,502 | ) | (46,831 | ) | (7,671 | ) | |||||
Other short-term liabilities | (4,330 | ) | (3,404 | ) | (926 | ) | |||||
Income taxes payable | (1,496 | ) | (1,496 | ) | — | ||||||
Deferred income taxes | (117,086 | ) | (104,866 | ) | (12,220 | ) | |||||
Notes payable | (2,914 | ) | (1,770 | ) | (1,144 | ) | |||||
Other long-term liabilities | (2,452 | ) | (1,683 | ) | (769 | ) | |||||
Non-controlling interests | (19,118 | ) | (9,529 | ) | (9,589 | ) | |||||
$ | 907,835 | $ | 802,012 | $ | 105,823 | ||||||
The purchase price allocated to Filterfresh was the fair value, less the estimated direct costs to sell Filterfresh established at the acquisition date. The fair value of Filterfresh was estimated using an income approach, specifically the discounted cash flow ("DCF") method. Under the DCF method the fair value is calculated by discounting the projected after-tax cash flows for the business to present value. The income approach includes assumptions about the amount and timing of future cash flows using projections and other estimates. A discount rate based on an appropriate weighted average cost of capital was applied to the estimated future cash flows to estimate the fair value. | |||||||||||
An income approach, specifically the DCF method, was used to value the noncontrolling interests. | |||||||||||
Amortizable intangible assets acquired, valued at the date of acquisition, include approximately $263.1 million for customer relationships, $10.9 million for trademarks and trade names, $1.4 million for franchises and $0.3 million for technology. Indefinite-lived intangible assets acquired include approximately $99.4 million for the Van Houtte trademark which is not amortized. The definite lived intangible assets classified as held-for-sale were not amortized and approximated $19.5 million. Amortizable intangible assets are amortized on a straight-line basis over their respective useful lives, and the weighted-average amortization period is 10.8 years. | |||||||||||
The cost of the acquisition in excess of the fair market value of the tangible and intangible assets acquired less liabilities assumed represents acquired goodwill. The acquisition of Van Houtte provides the Company with an expanded Canadian presence and manufacturing and distribution synergies, which provide the basis of the goodwill recognized with respect to the Van Houtte Canadian operations. As discussed above, the purchase price allocated to Filterfresh was the fair value, less the estimated direct costs to sell Filterfresh established at the acquisition date. The excess of the purchase price (fair value) allocated to Filterfresh over the fair value of the net tangible and identifiable intangible assets represents goodwill. Goodwill and intangible assets are reported in the Canada segment. The goodwill and intangible assets recognized are not deductible for tax purposes. | |||||||||||
Acquisition costs were expensed as incurred and totaled approximately $10.7 million for the fiscal year ended September 24, 2011 and are included in general and administrative expenses for the Company. | |||||||||||
Approximately $9.3 million of the purchase price was held in escrow at September 29, 2012 and was included in restricted cash. A corresponding amount of $9.3 million was included in other current liabilities as of September 29, 2012. None of the purchase price remained in escrow as of September 28, 2013, and therefore, there were no corresponding amounts included in other current liabilities. | |||||||||||
The acquisition was completed on December 17, 2010 and accordingly results of operations from such date have been included in the Company's Statement of Operations. For fiscal 2011, the Van Houtte operations contributed an additional $321.4 million of consolidated revenue and $20.2 million of income before income taxes. | |||||||||||
Segment_Reporting
Segment Reporting | 12 Months Ended | ||||||||||||||||
Sep. 28, 2013 | |||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
4. Segment Reporting | |||||||||||||||||
The Company has historically managed its operations through three business segments: the Specialty Coffee business unit ("SCBU"), the Keurig business unit ("KBU") and the Canadian business unit. Effective as of and as initially disclosed on May 8, 2013, the Company's Board of Directors authorized and approved a reorganization which consolidated U.S. operations to bring greater organizational efficiency and coordination across the Company. Due to this combination, the results of U.S. operations, formerly reported in the SCBU and KBU segments, are reported in one segment ("Domestic") and the results of Canadian operations are reported in the "Canada" segment. The Company's Chief Executive Officer ("CEO") serves as the Company's chief operating decision maker ("CODM") and there are two operating and reportable segments, Domestic and Canada. | |||||||||||||||||
As a result of the consolidation of U.S. operations, the Company has recast all historical segment results in order to: i) provide data that is on a basis consistent with the Company's new structure; ii) remove total assets from the Company's segment disclosures as only consolidated asset information is provided to and used by the CODM for use in decision making (in connection with the reorganization, segment asset information is neither provided to nor used by the CODM); and iii) reflect all sustainability expenses in Corporate as the Company no longer allocates those expenses to its operating segments. | |||||||||||||||||
For a description of the operating segments, see Note 1, Nature of Business and Organization. | |||||||||||||||||
Management evaluates the performance of the Company's operating segments based on several factors, including net sales to external customers and operating income. Net sales are recorded on a segment basis and intersegment sales are eliminated as part of the financial consolidation process. Operating income represents gross profit less selling, operating, general and administrative expenses. The Company's manufacturing operations occur within both the Domestic and Canada segments, and the costs of manufacturing are recognized in cost of sales in the operating segment in which the sale occurs. Information system technology services are mainly centralized while finance and accounting functions are primarily decentralized. Expenses consisting primarily of compensation and depreciation related to certain centralized administrative functions including information system technology are allocated to the operating segments. Expenses not specifically related to an operating segment are presented under "Corporate Unallocated." Corporate Unallocated expenses are comprised mainly of the compensation and other related expenses of certain of the Company's senior executive officers and other selected employees who perform duties related to the entire enterprise. Corporate Unallocated expenses also include depreciation for corporate headquarters, sustainability expenses, interest expense not directly attributable to an operating segment, the majority of foreign exchange gains or losses, legal expenses and compensation of the Board of Directors. The Company does not disclose assets or property additions by segment as only consolidated asset information is provided to the CODM for use in decision making. | |||||||||||||||||
Effective for the first quarter of fiscal 2013, the Company changed its measure for reporting segment profitability and for evaluating segment performance and the allocation of Company resources from income before taxes to operating income (loss). Prior to the first quarter of fiscal 2013, the Company disclosed each operating and reportable segment's income before taxes to report segment profitability. Segment disclosures for prior periods have been recast to reflect operating income by segment in place of income before taxes. The CODM measures segment performance based upon operating income which excludes interest expense and interest expense is not provided to the CODM by segment. Accordingly, interest expense by segment is no longer presented. | |||||||||||||||||
Effective with the beginning of the Company's third quarter of fiscal 2011, sales between operating segments are recorded at cost and the Domestic segment no longer records royalty income from the Canada segment on shipments of portion packs. Prior to the third quarter of fiscal 2011, the Company recorded intersegment sales and purchases of brewer and K-Cup® packs at a markup. As a result of the change, intersegment sales have no impact on segment operating income (loss) and effective with the first quarter of fiscal 2013, the Company no longer discloses intersegment sales. Each operating segment's net sales for fiscal years 2013 and 2012 include only net sales to external customers. | |||||||||||||||||
The selected financial data for segment disclosures for fiscal 2011 was not recast for the above changes related to intersegment sales and royalty income. The following table summarizes the approximate net effect of the above changes on segment income before taxes for fiscal 2013, 2012 and 2011 as a result of the above changes (in thousands). The net effect represents the net mark-up on sales between the segments as well as the Domestic segment royalty income on the sale of portion packs by the Canada segment. The Company used historical mark-up percentages and royalty rates to calculate the net effect. | |||||||||||||||||
Increase (decrease) in operating income (loss) | Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||||
Domestic | $ | (38,755 | ) | $ | 20,068 | $ | (29,584 | ) | |||||||||
Canada | 39,057 | (19,084 | ) | 22,157 | |||||||||||||
Corporate—Unallocated | — | — | — | ||||||||||||||
Eliminations | (302 | ) | (984 | ) | 7,427 | ||||||||||||
Consolidated | $ | — | $ | — | $ | — | |||||||||||
The following tables summarize selected financial data for segment disclosures for fiscal 2013, 2012 and 2011. | |||||||||||||||||
For Fiscal 2013 (Dollars in thousands) | |||||||||||||||||
Domestic | Canada | Corporate- | Consolidated | ||||||||||||||
Unallocated | |||||||||||||||||
Net sales | $ | 3,725,008 | $ | 633,092 | $ | — | $ | 4,358,100 | |||||||||
Operating income (loss) | $ | 826,092 | $ | 87,674 | $ | (148,539 | ) | $ | 765,227 | ||||||||
Depreciation and amortization | $ | 162,359 | $ | 65,334 | $ | 1,500 | $ | 229,193 | |||||||||
Stock compensation expense | $ | 9,909 | $ | 2,519 | $ | 13,653 | $ | 26,081 | |||||||||
For Fiscal 2012 (Dollars in thousands) | |||||||||||||||||
Domestic | Canada | Corporate- | Consolidated | ||||||||||||||
Unallocated | |||||||||||||||||
Net sales | $ | 3,233,674 | $ | 625,524 | $ | — | $ | 3,859,198 | |||||||||
Operating Income (loss) | $ | 576,949 | $ | 76,198 | $ | (84,251 | ) | $ | 568,896 | ||||||||
Depreciation and amortization | $ | 116,722 | $ | 62,984 | $ | 1,941 | $ | 181,647 | |||||||||
Stock compensation expense | $ | 7,808 | $ | 1,890 | $ | 8,170 | $ | 17,868 | |||||||||
For Fiscal 2011 (Dollars in thousands) | |||||||||||||||||
Domestic | Canada | Corporate- | Eliminations | Consolidated | |||||||||||||
Unallocated | |||||||||||||||||
Sales to unaffiliated customers | $ | 2,152,432 | $ | 498,467 | $ | — | $ | — | $ | 2,650,899 | |||||||
Intersegment sales | $ | 36,855 | $ | 98,347 | $ | — | $ | (135,202 | ) | $ | — | ||||||
Net sales | $ | 2,189,287 | $ | 596,814 | $ | — | $ | (135,202 | ) | $ | 2,650,899 | ||||||
Operating Income | $ | 399,638 | $ | 67,727 | $ | (73,259 | ) | $ | (25,193 | ) | $ | 368,913 | |||||
Depreciation and amortization | $ | 68,439 | $ | 45,193 | $ | 4 | $ | — | $ | 113,636 | |||||||
Stock compensation expense | $ | 5,519 | $ | 470 | $ | 4,372 | $ | — | $ | 10,361 | |||||||
Geographic Information | |||||||||||||||||
Net sales are attributed to countries based on the location of the customer. Information concerning net sales of principal geographic areas is as follows (in thousands): | |||||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||||||||
Net Sales: | |||||||||||||||||
United States | $ | 3,721,182 | $ | 3,248,543 | $ | 2,248,811 | |||||||||||
Canada | 634,360 | 609,828 | 400,682 | ||||||||||||||
Other | 2,558 | 827 | 1,406 | ||||||||||||||
$ | 4,358,100 | $ | 3,859,198 | $ | 2,650,899 | ||||||||||||
Sales to customers that represented more than 10% of the Company's net sales included Wal-Mart, representing approximately 14% and 12% of consolidated net sales for fiscal years 2013 and 2012, respectively, Costco, representing approximately 11% of consolidated net sales for fiscal 2013, and Bed Bath & Beyond, representing approximately 11% of consolidated net sales for fiscal 2011. Sales to Wal-Mart in fiscal years 2013 and 2012 were through both segments; sales to Costco in fiscal 2013 were through both segments; and sales to Bed Bath & Beyond, Inc., in fiscal 2011 were primarily through the Domestic segment. | |||||||||||||||||
Information concerning long-lived assets of principal geographic area is as follows (in thousands) as of: | |||||||||||||||||
September 28, 2013 | September 29, 2012 | ||||||||||||||||
Fixed Assets, net: | |||||||||||||||||
United States | $ | 844,471 | $ | 783,075 | |||||||||||||
Canada | 135,440 | 143,640 | |||||||||||||||
Other | 5,652 | 17,581 | |||||||||||||||
$ | 985,563 | $ | 944,296 | ||||||||||||||
Net Sales by Major Product Category | |||||||||||||||||
Net sales by major product category (in thousands): | |||||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||||||||
Portion Packs | $ | 3,187,350 | $ | 2,708,886 | $ | 1,704,021 | |||||||||||
Brewers and Accessories | 827,570 | 759,805 | 524,709 | ||||||||||||||
Other Products and Royalties | 343,180 | 390,507 | 422,169 | ||||||||||||||
$ | 4,358,100 | $ | 3,859,198 | $ | 2,650,899 | ||||||||||||
Inventories
Inventories | 12 Months Ended | |||||||
Sep. 28, 2013 | ||||||||
Inventories | ' | |||||||
Inventories | ' | |||||||
5. Inventories | ||||||||
Inventories consisted of the following (in thousands) as of: | ||||||||
September 28, 2013 | September 29, 2012 | |||||||
Raw materials and supplies | $ | 182,882 | $ | 229,927 | ||||
Finished goods | 493,207 | 538,510 | ||||||
$ | 676,089 | $ | 768,437 | |||||
As of September 28, 2013, the Company had approximately $245.1 million in green coffee purchase commitments, of which approximately 84% had a fixed price. These commitments primarily extend through fiscal 2015. The value of the variable portion of these commitments was calculated using an average "C" price of coffee of $1.24 per pound at September 28, 2013. In addition to its green coffee commitments, the Company had approximately $141.8 million in fixed price brewer and related accessory purchase commitments and $536.1 million in production raw materials commitments at September 28, 2013. The Company believes, based on relationships established with its suppliers, that the risk of non-delivery on such purchase commitments is remote. | ||||||||
As of September 28, 2013, minimum future inventory purchase commitments were as follows (in thousands): | ||||||||
Fiscal Year | Inventory | |||||||
Purchase | ||||||||
Obligations | ||||||||
2014 | $ | 456,955 | ||||||
2015 | 124,588 | |||||||
2016 | 119,565 | |||||||
2017 | 110,837 | |||||||
2018 | 111,086 | |||||||
$ | 923,031 | |||||||
Fixed_Assets
Fixed Assets | 12 Months Ended | |||||||||
Sep. 28, 2013 | ||||||||||
Fixed Assets | ' | |||||||||
Fixed Assets | ' | |||||||||
6. Fixed Assets | ||||||||||
Fixed assets consisted of the following (in thousands) as of: | ||||||||||
Useful Life in Years | September 28, | September 29, | ||||||||
2013 | 2012 | |||||||||
Production equipment | 1 - 15 | $ | 680,457 | $ | 544,491 | |||||
Coffee service equipment | 3 - 7 | 59,169 | 63,722 | |||||||
Computer equipment and software | 1 - 6 | 146,246 | 111,441 | |||||||
Land | Indefinite | 11,520 | 11,740 | |||||||
Building and building improvements | 4 - 30 | 134,495 | 83,172 | |||||||
Furniture and fixtures | 1 - 15 | 33,975 | 28,477 | |||||||
Vehicles | 4 - 5 | 11,786 | 10,306 | |||||||
Leasehold improvements | 1 - 20 or remaining life of lease, whichever is less | 98,990 | 72,755 | |||||||
Assets acquired under capital leases | 5 - 15 | 41,200 | 51,047 | |||||||
Construction-in-progress | 202,940 | 234,442 | ||||||||
Total fixed assets | $ | 1,420,778 | $ | 1,211,593 | ||||||
Accumulated depreciation | (435,215 | ) | (267,297 | ) | ||||||
$ | 985,563 | $ | 944,296 | |||||||
Assets acquired under capital leases, net of accumulated amortization, were $36.9 million and $47.0 million at September 28, 2013 and September 29, 2012, respectively. | ||||||||||
Total depreciation and amortization expense relating to all fixed assets was $183.8 million, $135.7 million and $72.3 million for fiscal years 2013, 2012, and 2011, respectively. | ||||||||||
Assets classified as construction-in-progress are not depreciated, as they are not ready for productive use. | ||||||||||
As of September 28, 2013, construction-in-progress includes $21.1 million relating to properties under construction where the Company is deemed to be the accounting owner, even though the Company is not the legal owner. See footnote 19, Commitments and Contingencies. | ||||||||||
During fiscal years 2013, 2012 and 2011, $6.1 million, $2.8 million, and $2.6 million, respectively, of interest expense was capitalized. | ||||||||||
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 12 Months Ended | |||||||||||||||
Sep. 28, 2013 | ||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||
7. Goodwill and Intangible Assets | ||||||||||||||||
The following represented the change in the carrying amount of goodwill by segment for fiscal 2013 and 2012 (in thousands): | ||||||||||||||||
Domestic | Canada | Total | ||||||||||||||
Balance as of September 24, 2011 | $ | 386,416 | $ | 402,889 | $ | 789,305 | ||||||||||
Reassignment of Timothy's goodwill | (17,063 | ) | 17,063 | — | ||||||||||||
Foreign currency effect | — | 18,771 | 18,771 | |||||||||||||
Balance as of September 29, 2012 | $ | 369,353 | $ | 438,723 | $ | 808,076 | ||||||||||
Foreign currency effect | — | (19,892 | ) | (19,892 | ) | |||||||||||
Balance as of September 28, 2013 | $ | 369,353 | $ | 418,831 | $ | 788,184 | ||||||||||
Indefinite-lived intangible assets included in the Canada operating segment consisted of the following (in thousands) as of: | ||||||||||||||||
September 28, | September 29, | |||||||||||||||
2013 | 2012 | |||||||||||||||
Trade names | $ | 97,740 | $ | 102,381 | ||||||||||||
Effective May 8, 2013, the Company combined the results of its U.S. operations, formerly reported in the SCBU and KBU segments, into one Domestic segment. | ||||||||||||||||
Effective September 25, 2011, Timothy's is included in the Canada segment. Prior to September 25, 2011, Timothy's was included in the Domestic segment. This resulted in a re-assignment of goodwill of $17.1 million from the Domestic segment to the Canada segment using a relative fair value approach. The amount of goodwill reassigned was determined based on the relative fair values of Timothy's and the Domestic segment. | ||||||||||||||||
The Company conducted its annual impairment test of goodwill and indefinite-lived intangible assets as of September 28, 2013, and elected to bypass the optional qualitative assessment and performed a quantitative impairment test. Goodwill was evaluated for impairment at the following reporting unit levels: | ||||||||||||||||
• | ||||||||||||||||
Domestic | ||||||||||||||||
• | ||||||||||||||||
Canada—Roasting and Retail | ||||||||||||||||
• | ||||||||||||||||
Canada—Coffee Services Canada | ||||||||||||||||
For the goodwill impairment test, the fair value of the reporting units was estimated using the Discounted Cash Flow ("DCF") method. A number of significant assumptions and estimates are involved in the application of the DCF method including discount rate, sales volume and prices, costs to produce and working capital changes. For the indefinite-lived intangible assets impairment test, the fair value of the trade name was estimated using the Relief-from-Royalty Method. This method estimates the savings in royalties the Company would otherwise have had to pay if it did not own the trade name and had to license the trade name from a third-party with rights of use substantially equivalent to ownership. The fair value of the trade name is the present value of the future estimated after-tax royalty payments avoided by ownership, discounted at an appropriate, risk-adjusted rate of return. For goodwill and indefinite-lived intangible impairment tests, the Company used a royalty rate of 3.0%, an income tax rate of 38.0% for the United States and 27.5% for Canada, and discount rates ranging from 13% to 14%. There was no impairment of goodwill or indefinite-lived intangible assets in fiscal years 2013, 2012, or 2011. | ||||||||||||||||
Intangible Assets Subject to Amortization | ||||||||||||||||
Definite-lived intangible assets consisted of the following (in thousands) as of: | ||||||||||||||||
September 28, 2013 | September 29, 2012 | |||||||||||||||
Useful Life in | Gross Carrying | Accumulated | Gross Carrying | Accumulated | ||||||||||||
Years | Amount | Amortization | Amount | Amortization | ||||||||||||
Acquired technology | 4 - 10 | $ | 21,609 | $ | (17,123 | ) | $ | 21,622 | $ | (15,433 | ) | |||||
Customer and roaster agreements | 8 - 11 | 26,977 | (19,750 | ) | 27,323 | (16,796 | ) | |||||||||
Customer relationships | 2 - 16 | 414,967 | (113,061 | ) | 430,178 | (79,168 | ) | |||||||||
Trade names | 9 - 11 | 37,200 | (13,353 | ) | 38,000 | (9,785 | ) | |||||||||
Non-compete agreements | 2 - 5 | 374 | (364 | ) | 374 | (344 | ) | |||||||||
Total | $ | 501,127 | $ | (163,651 | ) | $ | 517,497 | $ | (121,526 | ) | ||||||
Definite-lived intangible assets are amortized on a straight-line basis over the period of expected economic benefit. Total amortization expense was $45.4 million, $46.0 million, and $41.3 million for fiscal years 2013, 2012, and 2011, respectively. The weighted average remaining life for definite-lived intangibles at September 28, 2013 is 8.3 years. | ||||||||||||||||
The estimated aggregate amortization expense over each of the next five years and thereafter, is as follows (in thousands): | ||||||||||||||||
2014 | $ | 44,361 | ||||||||||||||
2015 | 42,807 | |||||||||||||||
2016 | 42,081 | |||||||||||||||
2017 | 40,686 | |||||||||||||||
2018 | 40,686 | |||||||||||||||
Thereafter | 126,855 |
Noncontrolling_Interests
Noncontrolling Interests | 12 Months Ended | |||||||
Sep. 28, 2013 | ||||||||
Noncontrolling Interests | ' | |||||||
Noncontrolling Interests | ' | |||||||
8. Noncontrolling Interests | ||||||||
The changes in the liability and temporary equity attributable to redeemable NCIs for the three fiscal years in the period ended September 28, 2013 are as follows (in thousands): | ||||||||
Liability attributable to | Equity attributable | |||||||
mandatorily redeemable | to redeemable | |||||||
noncontrolling interests | noncontrolling interests | |||||||
Balance at September 25, 2010 | $ | — | $ | — | ||||
Purchase noncontrolling interests | — | 19,118 | ||||||
Net income | — | 1,547 | ||||||
Adjustment to redemption value | — | 1,618 | ||||||
Cash distributions | — | (1,063 | ) | |||||
Other comprehensive loss, net of tax | — | (186 | ) | |||||
Balance at September 24, 2011 | $ | — | $ | 21,034 | ||||
Disposition of noncontrolling interest | — | (10,331 | ) | |||||
Redeemable noncontrolling interest reclassified to other long-term liabilities | 4,708 | (4,708 | ) | |||||
Net income | 60 | 812 | ||||||
Adjustment to redemption value | 167 | 3,155 | ||||||
Cash distributions | (204 | ) | (513 | ) | ||||
Other comprehensive loss, net of tax | 197 | 455 | ||||||
Balance at September 29, 2012 | $ | 4,928 | $ | 9,904 | ||||
Net income | 462 | 409 | ||||||
Adjustment to redemption value | 372 | 2,025 | ||||||
Cash distributions | (583 | ) | (823 | ) | ||||
Other comprehensive loss, net of tax | (245 | ) | (470 | ) | ||||
Balance at September 28, 2013 | $ | 4,934 | $ | 11,045 | ||||
As of September 28, 2013 and September 29, 2012, the liability attributable to mandatorily redeemable noncontrolling interests was included as a component of Other current liabilities and Other long-term liabilities, respectively, in the Consolidated Balance Sheets. | ||||||||
Product_Warranties
Product Warranties | 12 Months Ended | |||||||
Sep. 28, 2013 | ||||||||
Product Warranties | ' | |||||||
Product Warranties | ' | |||||||
9. Product Warranties | ||||||||
The Company offers a one-year warranty on all Keurig® Single Cup brewers it sells. The Company provides for the estimated cost of product warranties, primarily using historical information and current repair or replacement costs, at the time product revenue is recognized. Brewer failures may arise in the later part of the warranty period, and actual warranty costs may exceed the reserve. As the Company has grown, it has added significantly to its product testing, quality control infrastructure and overall quality processes. Nevertheless, as the Company continues to innovate, and its products become more complex, both in design and componentry, product performance may tend to modulate, causing warranty rates to possibly fluctuate going forward. As a result, future warranty claims rates may be higher or lower than the Company is currently experiencing and for which the Company is currently providing in its warranty reserve. | ||||||||
The changes in the carrying amount of product warranties for fiscal years 2013 and 2012 are as follows (in thousands): | ||||||||
Fiscal 2013 | Fiscal 2012 | |||||||
Balance, beginning of year | $ | 20,218 | $ | 14,728 | ||||
Provision related to current period | 20,447 | 47,026 | ||||||
Change in estimate | (12,720 | ) | (1,287 | ) | ||||
Usage | (20,141 | ) | (40,249 | ) | ||||
Balance, end of year | $ | 7,804 | $ | 20,218 | ||||
During fiscal years 2013 and 2012, the Company recovered approximately $0.8 million and $8.3 million respectively, as reimbursement from suppliers related to warranty issues. The recoveries are under an agreement with a supplier and are recorded as a reduction to warranty expense. The recoveries are not reflected in the provision charged to income in the table above. | ||||||||
LongTerm_Debt
Long-Term Debt | 12 Months Ended | ||||||||||||
Sep. 28, 2013 | |||||||||||||
Long-Term Debt | ' | ||||||||||||
Long-Term Debt | ' | ||||||||||||
10. Long-Term Debt | |||||||||||||
Long-term debt outstanding consists of the following (in thousands) as of: | |||||||||||||
September 28, 2013 | September 29, 2012 | ||||||||||||
Revolving credit facility, USD | $ | — | $ | 120,000 | |||||||||
Revolving credit facility, multicurrency | — | 108,787 | |||||||||||
Term loan A | 170,937 | 242,188 | |||||||||||
Other | 2,213 | 2,700 | |||||||||||
Total long-term debt | $ | 173,150 | $ | 473,675 | |||||||||
Less current portion | 12,929 | 6,691 | |||||||||||
Long-term portion | $ | 160,221 | $ | 466,984 | |||||||||
Under the Company's current credit facility ("Restated Credit Agreement"), the Company maintains senior secured credit facilities consisting of (i) an $800.0 million U.S. revolving credit facility, (ii) a $200.0 million alternative currency revolving credit facility, and (iii) a term loan A facility. The Restated Credit Agreement also provides for an increase option for an aggregate amount of up to $500.0 million. | |||||||||||||
The term loan A facility requires quarterly principal repayments. The term loan and revolving credit borrowings bear interest at a rate equal to an applicable margin plus, at our option, either (a) a eurodollar rate determined by reference to the cost of funds for deposits for the interest period and currency relevant to such borrowing, adjusted for certain costs, or (b) a base rate determined by reference to the highest of (1) the federal funds rate plus 0.50%, (2) the prime rate announced by Bank of America, N.A. from time to time and (3) the eurodollar rate plus 1.00%. The applicable margin under the Restated Credit Agreement with respect to term loan A and revolving credit facilities is a percentage per annum varying from 0.5% to 1.0% for base rate loans and 1.5% to 2.0% for eurodollar loans, based upon the Company's leverage ratio. The Company's average effective interest rate as of September 28, 2013 and September 29, 2012 was 3.5% and 2.9%, respectively, excluding amortization of deferred financing charges and including the effect of interest swap agreements. The Company also pays a commitment fee of 0.2% on the average daily unused portion of the revolving credit facilities. | |||||||||||||
All the assets of the Company and its domestic wholly-owned material subsidiaries are pledged as collateral under the Restated Credit Agreement. The Restated Credit Agreement contains customary negative covenants, subject to certain exceptions, including limitations on: liens; investments; indebtedness; merger and consolidations; asset sales; dividends and distributions or repurchases of the Company's capital stock; transactions with affiliates; certain burdensome agreements; and changes in the Company's lines of business. | |||||||||||||
The Restated Credit Agreement requires the Company to comply on a quarterly basis with a consolidated leverage ratio and a consolidated interest coverage ratio. As of September 28, 2013 and throughout fiscal year 2013, the Company was in compliance with these covenants. In addition, the Restated Credit Agreement contains certain mandatory prepayment requirements and customary events of default. | |||||||||||||
As of September 28, 2013 and September 29, 2012, outstanding letters of credit under the Restated Credit Agreement, totaled $5.0 million and $3.7 million, respectively. No amounts have been drawn against the letters of credit as of September 28, 2013 and September 29, 2012. | |||||||||||||
In connection with the Restated Credit Agreement, the Company incurred debt issuance costs of $46.0 million which were deferred and included in Other Long-Term Assets on the Consolidated Balance Sheet and amortized as interest expense over the life of the respective loan using a method that approximates the effective interest rate method. The Company incurred a loss of $19.7 million in fiscal 2011 primarily on the extinguishment of the term loan B facility under the credit agreement that immediately preceded the Restated Credit Agreement ("Credit Agreement") and the extinguishment of a former credit facility that preceded the Credit Agreement resulting from the write-off of debt issuance costs and the original issue discount. The loss on the extinguishment of debt is included in Interest Expense on the Consolidated Statements of Operations. | |||||||||||||
The Company enters into interest rate swap agreements to limit a portion of its exposure to variable interest rates by entering into interest rate swap agreements which effectively fix the rates. In accordance with the interest rate swap agreements and on a monthly basis, interest expense is calculated based on the floating 30-day Libor rate and the fixed rate. If interest expense as calculated is greater based on the 30-day Libor rate, the interest rate swap counterparty pays the difference to the Company; if interest expense as calculated is greater based on the fixed rate, the Company pays the difference to the interest rate swap counterparty. See Note 11, Derivative Financial Instruments. | |||||||||||||
Below is a summary of the Company's derivative instruments in effect as of September 28, 2013 mitigating interest rate exposure of variable-rate borrowings (in thousands): | |||||||||||||
Derivative Instrument | Hedged | Notional Amount of | Fixed Rate | Maturity | |||||||||
Transaction | Underlying Debt | Received | (Fiscal Year) | ||||||||||
Swap | 30-day Libor | 20,000 | 2.54 | % | 2016 | ||||||||
Swap | 30-day Libor | 30,000 | 2.54 | % | 2016 | ||||||||
Swap | 30-day Libor | 50,000 | 2.54 | % | 2016 | ||||||||
Swap | 30-day Libor | 30,000 | 2.54 | % | 2016 | ||||||||
$ | 130,000 | ||||||||||||
In fiscal years 2013, 2012 and 2011 the Company paid approximately $3.4 million, $4.7 million and $3.8 million, respectively, in additional interest expense pursuant to the interest rate swap agreements. | |||||||||||||
Maturities | |||||||||||||
Scheduled maturities of long-term debt are as follows (in thousands): | |||||||||||||
Fiscal Year | |||||||||||||
2014 | $ | 12,929 | |||||||||||
2015 | 19,165 | ||||||||||||
2016 | 140,064 | ||||||||||||
2017 | 377 | ||||||||||||
2018 | 395 | ||||||||||||
Thereafter | 220 | ||||||||||||
$ | 173,150 | ||||||||||||
Derivative_Financial_Instrumen
Derivative Financial Instruments | 12 Months Ended | |||||||||||||
Sep. 28, 2013 | ||||||||||||||
Derivative Financial Instruments | ' | |||||||||||||
Derivative Financial Instruments | ' | |||||||||||||
11. Derivative Financial Instruments | ||||||||||||||
Cash Flow Hedges | ||||||||||||||
The Company is exposed to certain risks relating to ongoing business operations. The primary risks that are mitigated by financial instruments are interest rate risk, commodity price risk and foreign currency exchange rate risk. The Company uses interest rate swaps to mitigate interest rate risk associated with the Company's variable-rate borrowings, enters into coffee futures contracts to hedge future coffee purchase commitments of green coffee with the objective of minimizing cost risk due to market fluctuations, and uses foreign currency forward contracts to hedge the purchase and payment of green coffee purchase commitments denominated in non-functional currencies. | ||||||||||||||
The Company designates these contracts as cash flow hedges and measures the effectiveness of these derivative instruments at each balance sheet date. The changes in the fair value of these instruments are classified in accumulated other comprehensive income (loss). The gains or loss on these instruments is reclassified from OCI into earnings in the same period or periods during which the hedged transaction affects earnings. If it is determined that a derivative is not highly effective, the gain or loss is reclassified into earnings. | ||||||||||||||
Fair Value Hedges | ||||||||||||||
The Company enters into foreign currency forward contracts to hedge certain recognized liabilities in currencies other than the Company's functional currency. The Company designates these contracts as fair value hedges and measures the effectiveness of the derivative instruments at each balance sheet date. The changes in the fair value of these instruments along with the changes in the fair value of the hedged liabilities are recognized in net gains or losses on foreign currency on the consolidated statements of operations. | ||||||||||||||
Other Derivatives | ||||||||||||||
The Company is also exposed to certain foreign currency and interest rate risks on an intercompany note with a foreign subsidiary denominated in Canadian currency. At September 28, 2013, the Company has approximately two years remaining on a CDN $120.0 million, Canadian cross currency swap to exchange interest payments and principal on the intercompany note. This cross currency swap is not designated as a hedging instrument for accounting purposes and is recorded at fair value, with the changes in fair value recognized in the Consolidated Statements of Operations. Gains and losses resulting from the change in fair value are largely offset by the financial impact of the re-measurement of the intercompany note. In accordance with the cross currency swap agreement, on a quarterly basis, the Company pays interest based on the three month Canadian Bankers Acceptance rate and receives interest based on the three month U.S. Libor rate. The Company incurred $1.7 million, $1.8 million, and $1.2 million in additional interest expense pursuant to the cross currency swap agreement during fiscal 2013, 2012, and 2011 respectively. | ||||||||||||||
In conjunction with the repayment of the Company's term loan B facility under the Credit Agreement (See Note 10, Long-Term Debt), the interest rate cap previously used to mitigate interest rate risk associated with the Company's variable-rate borrowings on the term loan B no longer qualified for hedge accounting treatment. As a result, a loss of $0.4 million, gross of tax, was reclassified from OCI to income during fiscal 2011. | ||||||||||||||
The Company occasionally enters into foreign currency forward contracts and coffee futures contracts that qualify as derivatives, and are not designated as hedging instruments for accounting purposes in addition to the foreign currency forward contracts and coffee futures contracts noted above. Contracts that are not designated as hedging instruments are recorded at fair value with the changes in fair value recognized in the Consolidated Statements of Operations. | ||||||||||||||
The Company does not hold or use derivative financial instruments for trading or speculative purposes. | ||||||||||||||
The Company is exposed to credit loss in the event of nonperformance by the counterparties to these financial instruments, however, nonperformance is not anticipated. | ||||||||||||||
The following table summarizes the fair value of the Company's derivatives included on the Consolidated Balance Sheets (in thousands) as of: | ||||||||||||||
September 28, 2013 | September 29, 2012 | Balance Sheet Classification | ||||||||||||
Derivatives designated as hedges: | ||||||||||||||
Interest rate swaps | $ | (6,004 | ) | $ | (9,019 | ) | Other current liabilities | |||||||
Coffee futures | (3,809 | ) | (342 | ) | Other current liabilities | |||||||||
Foreign currency forward contracts | (141 | ) | — | Other current liabilities | ||||||||||
Foreign currency forward contracts | 13 | — | Other current assets | |||||||||||
(9,941 | ) | (9,361 | ) | |||||||||||
Derivatives not designated as hedges: | ||||||||||||||
Cross currency swap | (1,253 | ) | (7,242 | ) | Other current liabilities | |||||||||
(1,253 | ) | (7,242 | ) | |||||||||||
Total | $ | (11,194 | ) | $ | (16,603 | ) | ||||||||
The following table summarizes the coffee futures contracts outstanding as of September 28, 2013 (in thousands, except for average contract price and "C" price): | ||||||||||||||
Coffee Pounds | Average | "C" Price | Maturity | Fair Value of | ||||||||||
Contract Price | Futures Contracts | |||||||||||||
375 | $ | 1.5 | $ | 1.14 | Dec-13 | $ | (138 | ) | ||||||
5,887 | $ | 1.39 | $ | 1.17 | Mar-14 | (1,308 | ) | |||||||
11,438 | $ | 1.3 | $ | 1.19 | May-14 | (1,222 | ) | |||||||
10,875 | $ | 1.32 | $ | 1.21 | Jul-14 | (1,141 | ) | |||||||
28,575 | $ | (3,809 | ) | |||||||||||
The following table summarizes the coffee futures contracts outstanding as of September 29, 2012 (in thousands, except for average contract price and "C" price): | ||||||||||||||
Coffee Pounds | Average | "C" Price | Maturity | Fair Value of | ||||||||||
Contract Price | Futures Contracts | |||||||||||||
938 | $ | 1.92 | $ | 1.74 | Dec-12 | $ | (169 | ) | ||||||
938 | $ | 1.96 | $ | 1.78 | Mar-13 | (171 | ) | |||||||
675 | $ | 1.8 | $ | 1.8 | May-13 | (1 | ) | |||||||
375 | $ | 1.83 | $ | 1.83 | Jul-13 | $ | (1 | ) | ||||||
262 | $ | 1.86 | $ | 1.86 | Sep-13 | $ | 0 | |||||||
3,188 | $ | (342 | ) | |||||||||||
The following table summarizes the amount of gain (loss), gross of tax, on financial instruments that qualify for hedge accounting included in OCI (in thousands): | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Cash Flow Hedges: | ||||||||||||||
Interest rate swaps | $ | 3,014 | $ | 1,250 | $ | (7,928 | ) | |||||||
Coffee futures | (6,617 | ) | (2,484 | ) | 407 | |||||||||
Forward currency forward contracts | (129 | ) | — | — | ||||||||||
Total | $ | (3,732 | ) | $ | (1,234 | ) | $ | (7,521 | ) | |||||
The following table summarizes the amount of gain (loss), gross of tax, reclassified from OCI to income (in thousands): | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Interest rate cap | $ | — | $ | — | $ | (392 | ) | Gain (loss) on financial instruments, net | ||||||
Coffee futures | (1,482 | ) | (1,359 | ) | (27 | ) | Cost of Sales | |||||||
Forward currency forward contracts | (2 | ) | — | — | (Loss) gain on foreign currency, net | |||||||||
Total | $ | (1,484 | ) | $ | (1,359 | ) | $ | (419 | ) | |||||
The Company expects to reclassify $3.5 million of losses, net of tax, from OCI to earnings on coffee derivatives within the next twelve months. | ||||||||||||||
See note 14, Stockholders' Equity for a reconciliation of derivatives in beginning accumulated other comprehensive income (loss) to derivatives in ending accumulated other comprehensive income (loss). | ||||||||||||||
The following table summarizes the amount of gain (loss), gross of tax, on fair value hedges and related hedged items (in thousands): | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | Location of gain (loss) | |||||||||||
recognized in income on derivative | ||||||||||||||
Foreign currency forward contracts | ||||||||||||||
Net loss on hedging derivatives | $ | (10 | ) | $ | (48 | ) | $ | — | (Loss) gain on foreign currency, net | |||||
Net gain on hedged items | $ | 10 | $ | 48 | $ | — | (Loss) gain on foreign currency, net | |||||||
Net losses on financial instruments not designated as hedges for accounting purposes recorded in gain (loss) on financial instruments, net, is as follows (in thousands): | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Net gain (loss) on cross currency swap | $ | 5,513 | $ | (4,918 | ) | $ | (2,324 | ) | ||||||
Net gain (loss) on coffee futures | — | 7 | (250 | ) | ||||||||||
Net loss on interest rate cap | — | (34 | ) | (615 | ) | |||||||||
Net loss on foreign currency option and forward contracts | — | — | (3,056 | ) | ||||||||||
Total | $ | 5,513 | $ | (4,945 | ) | $ | (6,245 | ) | ||||||
The net loss on foreign currency contracts were primarily related to contracts entered into to mitigate the risk associated with the Canadian denominated purchase price of Van Houtte in fiscal 2011. | ||||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||
Sep. 28, 2013 | |||||||||||
Fair Value Measurements | ' | ||||||||||
Fair Value Measurements | ' | ||||||||||
12. Fair Value Measurements | |||||||||||
The Company measures fair value as the selling price that would be received for an asset, or paid to transfer a liability, in the principal or most advantageous market on the measurement date. The hierarchy established by the Financial Accounting Standards Board prioritizes fair value measurements based on the types of inputs used in the valuation technique. The inputs are categorized into the following levels: | |||||||||||
Level 1 | — | Observable inputs such as quoted prices in active markets for identical assets or liabilities. | |||||||||
Level 2 | — | Inputs other than quoted prices that are observable, either directly or indirectly, which include quoted prices for similar assets or liabilities in active markets and quoted prices for identical assets or liabilities in markets that are not active. | |||||||||
Level 3 | — | Unobservable inputs not corroborated by market data, therefore requiring the entity to use the best available information, including management assumptions. | |||||||||
The following table summarizes the fair values and the levels used in fair value measurements as of September 28, 2013 for the Company's financial (liabilities) assets (in thousands): | |||||||||||
Fair Value | |||||||||||
Measurements Using | |||||||||||
Level 1 | Level 2 | Level 3 | |||||||||
Derivatives: | |||||||||||
Interest rate swaps | $ | — | $ | (6,004 | ) | $ | — | ||||
Cross currency swap | — | (1,253 | ) | — | |||||||
Coffee futures | — | (3,809 | ) | — | |||||||
Foreign currency forward contracts | — | (128 | ) | — | |||||||
Total | $ | — | $ | (11,194 | ) | $ | — | ||||
The following table summarizes the fair values and the levels used in fair value measurements as of September 29, 2012 for the Company's financial liabilities (in thousands): | |||||||||||
Fair Value | |||||||||||
Measurements Using | |||||||||||
Level 1 | Level 2 | Level 3 | |||||||||
Derivatives: | |||||||||||
Interest rate swaps | $ | — | $ | (9,019 | ) | $ | — | ||||
Cross currency swap | — | (7,242 | ) | — | |||||||
Coffee futures | — | (342 | ) | — | |||||||
Foreign currency forward contracts | — | — | — | ||||||||
Total | $ | — | $ | (16,603 | ) | $ | — | ||||
Level 2 derivative financial instruments use inputs that are based on market data of identical (or similar) instruments, including forward prices for commodities, interest rates curves and spot prices that are in observable markets. Derivatives recorded on the balance sheet are at fair value with changes in fair value recorded in OCI for cash flow hedges and in the Consolidated Statements of Operations for fair value hedges and derivatives that do not qualify for hedge accounting treatment. | |||||||||||
Derivatives | |||||||||||
Derivative financial instruments include coffee futures contracts, interest rate swap agreements, a cross-currency swap agreement and foreign currency forward contracts. The Company has identified significant concentrations of credit risk based on the economic characteristics of the instruments that include interest rates, commodity indexes and foreign currency rates and selectively enters into the derivative instruments with counterparties using credit ratings. | |||||||||||
To determine fair value, the Company utilizes the market approach valuation technique for coffee futures and foreign currency forward contracts and the income approach for interest rate and cross currency swap agreements. The Company's fair value measurements include a credit valuation adjustment for the significant concentrations of credit risk. | |||||||||||
As of September 28, 2013, the amount of loss estimated by the Company due to credit risk associated with the derivatives for all significant concentrations was not material based on the factors of an industry recovery rate and a calculated probability of default. | |||||||||||
Long-Term Debt | |||||||||||
The carrying value of long-term debt was $173.2 million and $473.7 million as of September 28, 2013 and September 29, 2012, respectively. The inputs to the calculation of the fair value of long-term debt are considered to be Level 2 within the fair value hierarchy, as the measurement of fair value is based on the net present value of calculated interest and principal payments, using an interest rate derived from a fair market yield curve adjusted for the Company's credit rating. The carrying value of long-term debt approximates fair value as the interest rate on the debt is based on variable interest rates that reset every 30 days. | |||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Sep. 28, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes | ' | ||||||||||
13. Income Taxes | |||||||||||
Income before income taxes and the provision for income taxes for fiscal years 2013, 2012 and 2011, consist of the following (in thousands): | |||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||
Income before income taxes: | |||||||||||
United States | $ | 675,438 | $ | 486,258 | $ | 248,108 | |||||
Foreign | 65,436 | 89,883 | 54,639 | ||||||||
Total income before income taxes | $ | 740,874 | $ | 576,141 | $ | 302,747 | |||||
Income tax expense: | |||||||||||
United States federal: | |||||||||||
Current | $ | 202,006 | $ | 75,932 | $ | 75,225 | |||||
Deferred | (8,654 | ) | 74,042 | (3,327 | ) | ||||||
193,352 | 149,974 | 71,898 | |||||||||
State and local: | |||||||||||
Current | 47,930 | 40,270 | 13,939 | ||||||||
Deferred | (1,695 | ) | (712 | ) | (1,758 | ) | |||||
46,235 | 39,558 | 12,181 | |||||||||
Total United States | 239,587 | 189,532 | 84,079 | ||||||||
Foreign: | |||||||||||
Current | 29,901 | 26,860 | 21,306 | ||||||||
Deferred | (12,717 | ) | (3,751 | ) | (3,686 | ) | |||||
Total foreign | 17,184 | 23,109 | 17,620 | ||||||||
Total income tax expense | $ | 256,771 | $ | 212,641 | $ | 101,699 | |||||
Net deferred tax liabilities consist of the following (in thousands) as of: | |||||||||||
September 28, | September 29, | ||||||||||
2013 | 2012 | ||||||||||
Deferred tax assets: | |||||||||||
Section 263A capitalized expenses | $ | 1,876 | $ | 2,150 | |||||||
Deferred hedging losses | 4,774 | 3,919 | |||||||||
Deferred compensation | 13,632 | 11,534 | |||||||||
Net operating loss carryforward | — | 1,017 | |||||||||
Capital loss carryforward | 1,418 | 1,418 | |||||||||
Valuation allowance—capital loss carryforward | (1,418 | ) | (1,418 | ) | |||||||
Warranty, obsolete inventory and bad debt allowance | 32,692 | 27,421 | |||||||||
Tax credit carryforwards | 3,651 | 3,301 | |||||||||
Other reserves and temporary differences | 15,558 | 12,412 | |||||||||
Gross deferred tax assets | 72,183 | 61,754 | |||||||||
Deferred tax liabilities: | |||||||||||
Prepaid expenses | (2,994 | ) | (2,367 | ) | |||||||
Depreciation | (125,504 | ) | (123,044 | ) | |||||||
Intangible assets | (138,262 | ) | (144,329 | ) | |||||||
Other reserves and temporary differences | (237 | ) | (10,994 | ) | |||||||
Gross deferred tax liabilities | (266,997 | ) | (280,734 | ) | |||||||
Net deferred tax liabilities | $ | (194,814 | ) | $ | (218,980 | ) | |||||
A reconciliation for continuing operations between the amount of reported income tax expense and the amount computed using the U.S. Federal Statutory rate of 35% is as follows (in thousands): | |||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||
Tax at U.S. Federal Statutory rate | $ | 259,306 | $ | 201,692 | $ | 105,961 | |||||
Increase (decrease) in rates resulting from: | |||||||||||
Foreign tax rate differential | (13,087 | ) | (18,072 | ) | (9,289 | ) | |||||
Non-deductible stock compensation expense | 2,700 | 1,024 | 1,761 | ||||||||
State taxes, net of federal benefit | 31,869 | 27,114 | 11,276 | ||||||||
Provincial taxes | 7,878 | 10,591 | 6,309 | ||||||||
Domestic production activities deduction | (23,558 | ) | (9,245 | ) | (7,831 | ) | |||||
Acquisition costs | — | — | 4,158 | ||||||||
Federal tax credits | (4,506 | ) | (282 | ) | (962 | ) | |||||
Release of capital loss valuation allowance | — | (3,071 | ) | (6,194 | ) | ||||||
Other | (3,831 | ) | 2,890 | (3,490 | ) | ||||||
Tax at effective rates | $ | 256,771 | $ | 212,641 | $ | 101,699 | |||||
As of September 28, 2013, the Company had a $17.7 million state capital loss carryforward and a state net operating loss carryforward of $11.5 million available to be utilized against future taxable income for years through fiscal 2015 and 2029, respectively, subject to annual limitation pertaining to change in ownership rules under the Internal Revenue Code of 1986, as amended (the "Code"). Based upon earnings history, the Company concluded that it is more likely than not that the net operating loss carryforward will be utilized prior to its expiration but that the capital loss carryforward will not. The Company has recorded a $1.4 million valuation allowance against the entire deferred tax asset balance for the capital loss carryforward | |||||||||||
The total amount of unrecognized tax benefits as of September 28, 2013 and September 29, 2012 was $23.3 million and $24.0 million, respectively. The amount of unrecognized tax benefits at September 28, 2013 that would impact the effective tax rate if resolved in favor of the Company is $19.7 million. As a result of prior acquisitions, the Company is indemnified for up to $16.6 million of the total reserve balance, and the indemnification is capped at CDN $37.9 million. If these unrecognized tax benefits are resolved in favor of the Company, the associated indemnification receivable, recorded in other long-term assets would be reduced accordingly. As of September 28, 2013 and September 29, 2012, accrued interest and penalties of $2.0 million and $0.6 million, respectively, were included in the Consolidated Balance Sheets. The Company recognizes interest and penalties in income tax expense. The Company released $1.5 million of unrecognized tax benefits in the fourth quarter of fiscal 2013 due to the expiration of the statute of limitations. Income tax expense included $0.4 million, $0.2 million and $0.3 million of interest and penalties for fiscal 2013, 2012, and 2011, respectively. | |||||||||||
A reconciliation of increases and decreases in unrecognized tax benefits, including interest and penalties, is as follows (in thousands): | |||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||
Gross tax contingencies—balance, beginning of year | $ | 23,956 | $ | 24,419 | $ | 5,480 | |||||
Increases from positions taken during prior periods | 438 | 2,864 | — | ||||||||
Decreases from positions taken during prior periods | — | (4,093 | ) | (236 | ) | ||||||
Increases from positions taken during current periods | 2,709 | 906 | 19,175 | ||||||||
Decreases resulting from the lapse of the applicable statute of limitations | (3,820 | ) | (140 | ) | — | ||||||
Gross tax contingencies—balance, end of year | $ | 23,283 | $ | 23,956 | $ | 24,419 | |||||
The Company expects to release $3.4 million of unrecognized tax benefits during fiscal 2014 due to the expiration of the statute of limitations. | |||||||||||
As of September 28, 2013, the Company had approximately $155.5 million of undistributed international earnings, most of which are Canadian-sourced. With the exception of the repayment of intercompany debt, all earnings of the Company's foreign subsidiaries are considered indefinitely reinvested and no U.S. deferred taxes have been provided on those earnings. If these amounts were distributed to the U.S. in the form of dividends or otherwise, the Company would be subject to additional U.S. income taxes, which could be material. Determination of the amount of any unrecognized deferred income tax on these earnings is not practicable because such liability, if any, is dependent on circumstances existing if and when remittance occurs. | |||||||||||
In the normal course of business, the Company is subject to tax examinations by taxing authorities both inside and outside the United States. The Company is currently being examined by the Internal Revenue Service for its fiscal year ended September 25, 2010. With some exceptions, the Company is no longer subject to examinations with respect to returns filed for fiscal years prior to 2006. | |||||||||||
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||
Sep. 28, 2013 | |||||||||||
Stockholders' Equity | ' | ||||||||||
Stockholders' Equity | ' | ||||||||||
14. Stockholders' Equity | |||||||||||
Stock Issuances | |||||||||||
On May 11, 2011, the Company issued 9,479,544 shares of its common stock, par value $0.10 per share, at $71.00 per share, which included 1,290,000 shares purchased by the underwriters pursuant to an overallotment option. The Company also completed a concurrent private placement of 608,342 shares of its common stock to Luigi Lavazza S.p.A. ("Lavazza") at $68.34 per share, pursuant to the Common Stock Purchase Agreement entered into between the Company and Lavazza on May 6, 2011 in accordance with the September 28, 2010 agreement discussed below. The aggregate net proceeds to the Company from the public offering and concurrent private placement were approximately $688.9 million, net of underwriting discounts and commissions and offering expenses. The Company used the proceeds to repay a portion of the outstanding debt under its credit facility and for general corporate purposes. | |||||||||||
On September 28, 2010, the Company sold 8,566,649 shares of its common stock, par value $0.10 per share, to Lavazza for aggregate gross proceeds of $250.0 million. The sale was recorded to stockholders' equity net of transaction related expenses of approximately $0.5 million. The shares were sold pursuant to a Common Stock Purchase Agreement which contains a five-and-one-half-year standstill period, subject to certain exceptions, during which Lavazza is prohibited from increasing its ownership of Common Stock or making any proposals or announcements relating to extraordinary Company transactions. The standstill is subject to additional exceptions after a one-year period, including Lavazza's right to purchase additional shares up to 15% of the Company's outstanding shares. | |||||||||||
Stock Repurchase Program | |||||||||||
On July 30, 2012, the Board of Directors authorized a program for the Company to repurchase up to $500.0 million of the Company's common shares over the next two years, at such times and prices as determined by the Company's management. Consistent with Delaware law, any repurchased shares are constructively retired and returned to an unissued status. Accordingly, the par value of repurchased shares is deducted from common stock and excess repurchase price over the par value is deducted from additional paid-in capital and from retained earnings if additional paid-in capital is depleted. As of September 28, 2013, $235.3 million remained available for shares to be repurchased under current authorization by our Board of Directors. | |||||||||||
Fiscal 2013 | Fiscal 2012 | ||||||||||
Number of shares acquired | 5,642,793 | 3,120,700 | |||||||||
Average price per share of acquired shares | $ | 33.37 | $ | 24.5 | |||||||
Total cost of acquired shares (in thousands) | $ | 188,278 | $ | 76,470 | |||||||
Subsequent to the fiscal year ended September 28, 2013, the Company repurchased an additional 1,348,883 of common shares, leaving $137.8 million available for shares to be repurchased under current authorization by the Company's Board of Directors. | |||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||
The following table provides the changes in the components of accumulated other comprehensive income (loss), net of tax (in thousands): | |||||||||||
Cash Flow | Translation | Accumulated | |||||||||
Hedges | Other | ||||||||||
Comprehensive | |||||||||||
Income (Loss) | |||||||||||
Balance at September 25, 2010 | $ | (1,630 | ) | $ | — | $ | (1,630 | ) | |||
Other comprehensive loss during the period | (4,236 | ) | (8,709 | ) | (12,945 | ) | |||||
Balance at September 24, 2011 | (5,866 | ) | (8,709 | ) | (14,575 | ) | |||||
Other comprehensive income during the period | 74 | 24,701 | 24,775 | ||||||||
Balance at September 29, 2012 | (5,792 | ) | 15,992 | 10,200 | |||||||
Other comprehensive loss during the period | (1,358 | ) | (28,027 | ) | (29,385 | ) | |||||
Balance at September 28, 2013 | $ | (7,150 | ) | $ | (12,035 | ) | $ | (19,185 | ) | ||
The unfavorable translation adjustment change during fiscal year 2013 and 2011 was primarily due to the weakening of the Canadian dollar against the U.S. dollar. The favorable translation adjustment change during fiscal year 2012 was primarily due to the strengthening of the Canadian against the U.S. dollar. See also Note 11, Derivative Financial Instruments. | |||||||||||
Employee_Compensation_Plans
Employee Compensation Plans | 12 Months Ended | |||||||||||||
Sep. 28, 2013 | ||||||||||||||
Employee Compensation Plans | ' | |||||||||||||
Employee Compensation Plans | ' | |||||||||||||
15. Employee Compensation Plans | ||||||||||||||
Equity-Based Incentive Plans | ||||||||||||||
On March 16, 2006, stockholders of the Company approved the Company's 2006 Incentive Plan (the "2006 Plan"). The 2006 Plan was amended on March 13, 2008 and on March 11, 2010 to increase the total shares of common stock authorized for issuance to 13,200,000. As of September 28, 2013, 4,537,397 shares of common stock were available for grant for future equity-based compensation awards under the plan. | ||||||||||||||
On September 25, 2001, the Company registered on Form S-8 the 2000 Stock Option Plan (the "2000 Plan"). The plan expired in October 2010. Grants under the 2000 Plan generally expire ten years after the grant date, or earlier if employment terminates. As of September 28, 2013, there were no options for shares of common stock available for grant under this plan. | ||||||||||||||
In connection with the acquisition of Keurig, the Company assumed the existing outstanding unvested option awards of the Keurig, Incorporated Fifth Amended and Restated 1995 Stock Option Plan (the "1995 Plan") and the Keurig, Incorporated 2005 Stock Option Plan (the "2005 Plan"). No shares under either the 1995 Plan or the 2005 Plan were eligible for post-acquisition awards. As of September 28, 2013 and September 29, 2012, 0 and 2,776 options, respectively, out of the 1,386,933 options for shares of common stock granted were outstanding under the 1995 Plan. As of September 28, 2013 and September 29, 2012, 28,749 options and 37,313 options, respectively, out of the 1,490,577 options granted for shares of common stock were outstanding under the 2005 Plan. All awards assumed in the acquisition were initially granted with a four-year vesting schedule. | ||||||||||||||
On May 3, 2007, Mr. Lawrence Blanford commenced his employment as the President and Chief Executive Officer of the Company. Pursuant to the terms of the employment, the Company made an inducement grant on May 4, 2007, to Mr. Blanford of a non-qualified option to purchase 945,000 shares of the Company's common stock, with an exercise price equal to fair market value on the date of the grant. The shares subject to the option vested in 20% installments on each of the first five anniversaries of the date of the grant. | ||||||||||||||
On November 3, 2008, Ms. Michelle Stacy commenced her employment as the President of Keurig, Incorporated. Pursuant to the terms of the employment, the Company made an inducement grant on November 3, 2008, to Ms. Stacy of a non-qualified option to purchase 157,500 shares of the Company's common stock, with an exercise price equal to fair market value on the date of the grant. The shares subject to the option vested in 25% installments on each of the first four anniversaries of the date of the grant. | ||||||||||||||
On February 9, 2009, Mr. Howard Malovany commenced his employment as the Vice President, Corporate General Counsel and Secretary of the Company. Pursuant to the terms of the employment, the Company made an inducement grant on February 9, 2009, to Mr. Malovany of a non-qualified option to purchase 157,500 shares of the Company's common stock, with an exercise price equal to fair market value on the date of the grant. The shares subject to the option vested in 25% installments on each of the first four anniversaries of the date of the grant. | ||||||||||||||
On December 17, 2010, Mr. Gérard Geoffrion commenced his employment as the President of the Canada segment. Pursuant to the terms of the employment, the Company made an inducement grant on December 17, 2010, to Mr. Geoffrion of a non-qualified option to purchase 35,000 shares of the Company's common stock, with an exercise price equal to fair market value on the date of the grant. The shares subject to the option vest in 25% installments on each of the first four anniversaries of the date of the grant, provided that Mr. Geoffrion remains employed with the Company on each vesting date. | ||||||||||||||
On December 22, 2010, the Company made an inducement grant to Mr. Sylvain Toutant, Chief Operating Officer of the Canada segment, of a non-qualified option to purchase 20,000 shares of the Company's common stock, with an exercise price equal to fair market value on the date of the grant. The shares subject to the option vest in 25% installments on each of the first four anniversaries of the date of the grant, provided that Mr. Toutant remains employed with the Company on each vesting date. | ||||||||||||||
On February 17, 2011, Ms. Linda Longo-Kazanova commenced her employment as the Vice President, Chief Human Resources Officer. Pursuant to the terms of the employment, the Company made an inducement grant on February 17, 2011, to Ms. Longo-Kazanova of a non-qualified option to purchase 30,000 shares of the Company's common stock, with an exercise price equal to fair market value on the date of the grant. The shares subject to the option vest in 25% installments on each of the first four anniversaries of the date of the grant, provided that Ms. Longo-Kazanova remains employed with the Company on each vesting date. | ||||||||||||||
Under the 2000 Plan, the option price for each incentive stock option was not less than the fair market value per share of common stock on the date of grant, with certain provisions which increased the option price of an incentive stock option to 110% of the fair market value of the common stock if the grantee owned in excess of 10% of the Company's common stock at the date of grant. The 2006 Plan requires the exercise price for all awards requiring exercise to be no less than 100% of fair market value per share of common stock on the date of grant, with certain provisions which increase the option price of an incentive stock option to 110% of the fair market value of the common stock if the grantee owns in excess of 10% of the Company's common stock at the date of grant. Options under the 2000 Plan and the 2006 Plan become exercisable over periods determined by the Board of Directors, generally in the range of three to five years. | ||||||||||||||
Option activity is summarized as follows: | ||||||||||||||
Number of | Weighted Average | |||||||||||||
Shares | Exercise Price | |||||||||||||
(per share) | ||||||||||||||
Outstanding at September 29, 2012 | 7,470,975 | $ | 12.56 | |||||||||||
Granted | 474,236 | $ | 45.48 | |||||||||||
Exercised | (2,849,308 | ) | $ | 6.95 | ||||||||||
Forfeited/expired | (73,563 | ) | $ | 49.53 | ||||||||||
Outstanding at September 28, 2013 | 5,022,340 | $ | 18.3 | |||||||||||
Exercisable at September 28, 2013 | 3,958,017 | $ | 10.7 | |||||||||||
The following table summarizes information about stock options that have vested and are expected to vest at September 28, 2013: | ||||||||||||||
Number of options | Weighted average | Weighted average | Intrinsic value at | |||||||||||
outstanding | remaining | exercise price | September 28, | |||||||||||
contractual life | 2013 | |||||||||||||
(in years) | (in thousands) | |||||||||||||
5,011,076 | 4.81 | $ | 18.24 | $ | 284,095 | |||||||||
The following table summarizes information about stock options exercisable at September 28, 2013: | ||||||||||||||
Number of options | Weighted average | Weighted average | Intrinsic value at | |||||||||||
exercisable | remaining | exercise price | September 28, | |||||||||||
contractual life | 2013 | |||||||||||||
(in years) | (in thousands) | |||||||||||||
3,958,017 | 3.9 | $ | 10.7 | $ | 254,162 | |||||||||
Compensation expense is recognized only for those options expected to vest, with forfeitures estimated based on the Company's historical employee turnover experience and future expectations. | ||||||||||||||
The Company uses a blend of recent and historical volatility to estimate expected volatility at the measurement date. The expected life of options is estimated based on options vesting periods, contractual lives and an analysis of the Company's historical experience. | ||||||||||||||
The intrinsic values of options exercised during fiscal years 2013, 2012 and 2011 were approximately $165.5 million, $46.6 million and $221.8 million, respectively. The Company's policy is to issue new shares upon exercise of stock options. | ||||||||||||||
The grant-date fair value of employee share options and similar instruments is estimated using the Black-Scholes option-pricing model with the following assumptions for grants issued during fiscal years 2013, 2012 and 2011: | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Average expected life | 6 years | 6 years | 6 years | |||||||||||
Average volatility | 81 | % | 69 | % | 52 | % | ||||||||
Dividend yield | — | — | — | |||||||||||
Risk-free interest rate | 1.02 | % | 1.31 | % | 2.37 | % | ||||||||
Weighted average fair value | $ | 31.23 | $ | 30.1 | $ | 29.34 | ||||||||
Restricted Stock Units and Other Awards | ||||||||||||||
The Company awards restricted stock units ("RSUs"), restricted stock awards ("RSAs"), and performance stock units ("PSUs") to eligible employees ("Grantee") which entitle the Grantee to receive shares of the Company's common stock. RSUs and PSUs are awards denominated in units that are settled in shares of the Company's common stock upon vesting. RSAs are awards of common stock that are restricted until the shares vest. In general, RSUs and RSAs vest based on a Grantee's continuing employment. The fair value of RSUs, RSAs and PSUs is based on the closing price of the Company's common stock on the grant date. Compensation expense for RSUs and RSAs is recognized ratably over a Grantee's service period. Compensation expense for PSUs is also recognized over a Grantee's service period, but only if and when the Company concludes that it is probable (more than likely) the performance condition(s) will be achieved. The assessment of probability of achievement is performed each period based on the relevant facts and circumstances at that time, and if the estimated grant-date fair value changes as a result of that assessment, the cumulative effect of the change on current and prior periods is recognized in the period of change. In addition, the Company awards deferred cash awards ("DCAs"), to Grantees which entitle a Grantee to receive cash paid over time upon vesting. The vesting of DCAs is conditioned on a Grantee's continuing employment. All awards are reserved for issuance under the Company's 2006 Incentive Plan and vest over periods determined by the Board of Directors, generally in the range of three to four years for RSUs, RSAs and DCAs, and three years for PSUs. | ||||||||||||||
The following table summarizes the number and weighted average grant-date fair value of nonvested RSUs (amounts in thousands except grant date fair value and weighted average remaining contractual life): | ||||||||||||||
Share Units | Weighted Average | Weighted Average | Intrinsic Value | |||||||||||
Grant-Date | Remaining | (in Thousands) | ||||||||||||
Fair Value | Contractual | |||||||||||||
Life (in Years) | ||||||||||||||
Nonvested, September 29, 2012 | 81,834 | $ | 39.62 | 3.52 | $ | 1,943 | ||||||||
Granted | 175,789 | $ | 45.19 | |||||||||||
Vested | (34,761 | ) | $ | 47.22 | ||||||||||
Forfeited | (1,360 | ) | $ | 54.12 | ||||||||||
Nonvested, September 28, 2013 | 221,502 | $ | 42.74 | 1.71 | $ | 16,586 | ||||||||
As of September 28, 2013, total RSUs expected to vest totaled 218,459 shares with an intrinsic value of $16.4 million. The weighted average grant-date fair value of RSUs granted was $45.19 and $39.73 for fiscal 2013 and fiscal 2012, respectively. There were no RSUs granted prior to fiscal 2012. | ||||||||||||||
The total intrinsic value of RSUs converted to shares of common stock during fiscal 2013 was $2.2 million. There were no RSUs converted to common stock prior to fiscal 2013. | ||||||||||||||
The following table summarizes the number and weighted average grant-date fair value of nonvested PSUs based on the target award amounts in the PSU agreements as of September 28, 2013: | ||||||||||||||
Share Units | Weighted Average | |||||||||||||
Grant-Date | ||||||||||||||
Fair Value | ||||||||||||||
Outstanding on September 29, 2012 | — | — | ||||||||||||
Granted | 122,719 | $ | 41.28 | |||||||||||
Forfeited | (2,051 | ) | $ | 51.56 | ||||||||||
Outstanding on September 28, 2013(1) | 120,668 | $ | 41.1 | |||||||||||
-1 | ||||||||||||||
The outstanding PSUs as of September 28, 2013, at the threshold award and maximum award levels were 96,534 and 144,802, respectively. | ||||||||||||||
The weighted average grant-date fair value of PSUs granted was $41.28 in fiscal 2013. The Company did not issue grants for PSUs prior to fiscal 2013. There were no PSUs converted to shares of common stock during fiscal 2013. | ||||||||||||||
In addition, in fiscal 2012, the Company issued a grant for 55,432 RSAs with an intrinsic value of $1.3 million as of September 29, 2012, which vested in fiscal 2013. The total intrinsic value of RSAs vested during fiscal 2013 was $2.7 million. | ||||||||||||||
Employee Stock Purchase Plan | ||||||||||||||
On October 5, 1998, the Company registered on Form S-8 the 1998 Employee Stock Purchase Plan. On March 13, 2008, the plan was amended and renamed the Amended and Restated Employee Stock Purchase Plan ("ESPP"). Under this plan, eligible employees may purchase shares of the Company's common stock, subject to certain limitations, at the lesser of 85 percent of the beginning or ending withholding period fair market value as defined in the plan. There are two six-month withholding periods in each fiscal year. At September 28, 2013, and September 29, 2012, options for 1,216,051 and 1,559,728 shares of common stock were available for purchase under the plan, respectively. | ||||||||||||||
The grant-date fair value of employees' purchase rights granted during fiscal years 2013, 2012 and 2011 under the Company's ESPP is estimated using the Black-Scholes option-pricing model with the following assumptions: | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Average expected life | 6 months | 6 months | 6 months | |||||||||||
Average volatility | 86 | % | 70 | % | 57 | % | ||||||||
Dividend yield | — | — | — | |||||||||||
Risk-free interest rate | 0.13 | % | 0.09 | % | 0.19 | % | ||||||||
Weighted average fair value | $ | 14.38 | $ | 11.61 | $ | 15.97 | ||||||||
Stock-Based Compensation Expense | ||||||||||||||
Stock-based compensation expense recognized in the Consolidated Statements of Operations in fiscal years 2013, 2012, and 2011 (in thousands): | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Options | $ | 14,151 | $ | 12,595 | $ | 8,206 | ||||||||
RSUs/PSUs/RSAs | 7,529 | 1,861 | — | |||||||||||
ESPP | 4,401 | 3,412 | 2,155 | |||||||||||
Total stock-based compensation expense recognized in the Consolidated Statements of Operations | $ | 26,081 | $ | 17,868 | $ | 10,361 | ||||||||
Total related tax benefit | $ | 9,936 | $ | 6,004 | $ | 3,147 | ||||||||
As of September 28, 2013, total unrecognized compensation cost related to all nonvested stock-based compensation arrangements was approximately $30.5 million net of estimated forfeitures. This unrecognized cost is expected to be recognized over a weighted-average period of approximately 1.28 years at September 28, 2013. | ||||||||||||||
Employee_Retirement_Plans
Employee Retirement Plans | 12 Months Ended |
Sep. 28, 2013 | |
Employee Retirement Plans | ' |
Employee Retirement Plans | ' |
16. Employee Retirement Plans | |
Defined Contribution Plans | |
The Company has a defined contribution plan which meets the requirements of section 401(k) of the Internal Revenue Code. All regular full-time U.S. employees of the Company who are at least eighteen years of age and work a minimum of 36 hours per week are eligible to participate in the plan. The plan allows employees to defer a portion of their salary on a pre-tax basis and the Company contributes 50% of amounts contributed by employees up to 6% of their salary. Company contributions to the plan were $5.2 million, $4.4 million, and $2.7 million, for fiscal years 2013, 2012, and 2011, respectively. | |
In conjunction with the Van Houtte acquisition, the Company also has several Canadian Group Registered Retirement Savings Plans ("GRRSP") and a Deferred Profit Sharing Plan ("DPSP"). Under these plans, employees can contribute a certain percentage of their salary and the Company can also make annual contributions to the plans. Company contributions to the Canadian plans were $1.4 million, $1.0 million and $0.8 million for fiscal years 2013, 2012, and 2011, respectively. | |
Defined Benefit Plans | |
The Company has a supplementary defined benefit retirement plan and a supplementary employee retirement plan (collectively the "Plans") for certain management employees in the Canada segment. The cost of the Plans is calculated according to actuarial methods that encompass management's best estimate regarding the future evolution of salary levels, the age of retirement of salaried employees and other actuarial factors. These Plans are not funded and there are no plan assets. Future benefits will be paid from the funds of the Company. | |
The projected benefit obligation was $1.4 million and $1.1 million as of September 28, 2013 and September 29, 2012, which is classified in other long-term liabilities. Net periodic pension expense (income) was $0.3 million, $(0.1) million and $0.5 million for fiscal years 2013, 2012, and 2011, respectively. | |
Deferred_Compensation_Plan
Deferred Compensation Plan | 12 Months Ended |
Sep. 28, 2013 | |
Deferred Compensation Plan | ' |
Deferred Compensation Plan | ' |
17. Deferred Compensation Plan | |
The 2002 Deferred Compensation Plan, amended in December 2007, permits certain highly compensated officers and employees of the Company and non-employee directors to defer eligible compensation payable for services rendered to the Company. On March 8, 2013, the Company registered on Form S-8 the 2002 Deferred Compensation Plan. Participants may elect to receive deferred compensation in the form of cash payments or shares of Company Common Stock on the date or dates selected by the participant or on such other date or dates specified in the Deferred Compensation Plan. The Deferred Compensation Plan is in effect for compensation earned on or after September 29, 2002. As of September 28, 2013, and September 29, 2012, 353,434 shares and 357,759 shares of Common Stock were available for future issuance under this Plan, respectively. During fiscal 2013, no rights to shares of Common Stock were exercised under this plan. As of September 28, 2013 and September 29, 2012, rights to acquire 59,561 shares and 55,236 shares of Common Stock were outstanding under this Plan, respectively. As of September 28, 2013, rights to acquire 37,005 shares of Common Stock were committed under this plan. As of September 29, 2012, there were no rights to acquire shares of Common Stock committed under this plan. | |
Accrued_Expenses
Accrued Expenses | 12 Months Ended | |||||||
Sep. 28, 2013 | ||||||||
Accrued Expenses | ' | |||||||
Accrued Expenses | ' | |||||||
18. Accrued Expenses | ||||||||
Accrued expenses consisted of the following (in thousands) as of: | ||||||||
September 28, 2013 | September 29, 2012 | |||||||
Accrued compensation costs | $ | 91,418 | $ | 38,458 | ||||
Accrued customer incentives and promotions | 53,689 | 28,374 | ||||||
Accrued freight, fulfillment and transportation costs | 21,941 | 18,455 | ||||||
Accrued sustainability expenses | 9,275 | 11,046 | ||||||
Accrued legal and professional services | 8,278 | 5,010 | ||||||
Warranty reserve | 7,804 | 20,218 | ||||||
Other | 50,022 | 49,889 | ||||||
$ | 242,427 | $ | 171,450 | |||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||||||||
Sep. 28, 2013 | ||||||||||||||
Commitments and Contingencies | ' | |||||||||||||
Commitments and Contingencies | ' | |||||||||||||
19. Commitments and Contingencies | ||||||||||||||
Lease Commitments | ||||||||||||||
The Company leases office and retail space, production, distribution and service facilities, and certain equipment under various non-cancellable operating leases, with terms ranging from one to twenty years. Property leases normally require payment of a minimum annual rental plus a pro-rata share of certain landlord operating expenses. Total rent expense, under all operating leases approximated $23.1 million, $25.1 million, and $18.1 million in fiscal years 2013, 2012, and 2011, respectively. The Company has subleases relating to certain of its operating leases. Sublease income approximated $1.1 million, $0.3 million and $0.3 million for fiscal years 2013, 2012 and 2010, respectively. | ||||||||||||||
In addition, the Company leases a manufacturing facility which is accounted for as a capital lease. The initial term of the lease is 15 years with six additional renewal terms of five years each at the Company's option. The lease requires payment of a minimum annual rental and the Company is responsible for property taxes, insurance and operating expenses. | ||||||||||||||
In June 2012, the Company entered into an arrangement to lease approximately 425,000 square feet located in Burlington, Massachusetts to be constructed. The Burlington facilities will be used by the Domestic segment and will consolidate the three existing Massachusetts facilities that are currently in Reading, Wakefield and Woburn. As of September 28, 2013, approximately 150,000 square feet had been completed and is being used for research and development. The remaining 275,000 square feet is currently under construction and is anticipated to be completed during the summer of 2014. | ||||||||||||||
Due to the Company's involvement in the construction project, including its obligations to fund certain costs of construction exceeding amounts incurred by the lessor, the Company is deemed to be the owner of the project, which includes a pre-existing structure on the site, even though the Company is not the legal owner. Accordingly, total project costs incurred during construction are capitalized as construction-in-progress along with a corresponding financing obligation for the project costs that are incurred by the lessor. In addition, the Company capitalized the estimated fair value of the pre-existing structure of $4.1 million at the date construction commenced as construction-in-progress with a corresponding financing obligation. Upon completion of the project, the Company is expecting to have continuing involvement beyond a normal leaseback, and therefore will not be able to record a sale and derecognize the assets when construction is complete. As a result, the lease will be accounted for as a financing transaction and the recorded asset and related financing obligation will remain on the Balance Sheet. | ||||||||||||||
As of September 28, 2013, future minimum lease payments under financing obligations, capital lease obligations and non-cancellable operating leases as well as minimum payments to be received under non-cancellable subleases are as follows (in thousands): | ||||||||||||||
Fiscal Year | Capital Leases | Operating Leases | Subleases | Financing | ||||||||||
Obligations | ||||||||||||||
2014 | $ | 3,518 | $ | 16,602 | $ | (1,021 | ) | $ | 2,029 | |||||
2015 | 3,838 | 15,534 | (1,012 | ) | 8,661 | |||||||||
2016 | 3,837 | 11,797 | (848 | ) | 9,580 | |||||||||
2017 | 3,837 | 8,631 | (690 | ) | 9,580 | |||||||||
2018 | 3,837 | 5,280 | (634 | ) | 9,665 | |||||||||
Thereafter | 31,980 | 20,140 | (2,156 | ) | 113,722 | |||||||||
Total | $ | 50,847 | $ | 77,984 | $ | (6,361 | ) | $ | 153,237 | |||||
Less: amount representing interest | (17,075 | ) | ||||||||||||
Present value of future minimum lease payments | $ | 33,772 | ||||||||||||
The above table for financing obligations represents the portion of the future minimum lease payments which have been allocated to the facility under construction in Burlington, Massachusetts and will be recognized as reductions to the financing obligation and as interest expense upon completion of construction. | ||||||||||||||
Legal Proceedings | ||||||||||||||
On October 1, 2010, Keurig, Incorporated, a wholly-owned subsidiary of the Company ("Keurig"), filed suit against Sturm Foods, Inc. ("Sturm") in the United States District Court for the District of Delaware (Civil Action No. 1:10-CV-00841-SLR) for patent and trademark infringement, false advertising, and other claims, related to Sturm's sale of "Grove Square" beverage cartridges that claim to be compatible with Keurig brewers. On September 13, 2012, the District Court rendered a summary judgment decision in favor of Sturm on the patent claims in the suit. On October 17, 2013, the United States Federal Circuit Court of Appeals upheld the District Court's summary judgment decision. Separately, on February 19, 2013, Keurig and Sturm entered into a settlement agreement with respect to the trademark infringement, false advertising, and other claims at issue in the suit, all of which have now been dismissed. The settlement agreement did not materially impact the Company's consolidated financial results of operations. | ||||||||||||||
On November 2, 2011, Keurig filed suit against JBR, INC., d/b/a Rogers Family Company ("Rogers") in the United States District Court for the District of Massachusetts (Civil Action No. 1:11-cv-11941-MBB) for patent infringement related to Rogers' sale of "San Francisco Bay" beverage cartridges for use with Keurig brewers. The suit alleges that the "San Francisco Bay" cartridges infringe certain Keurig patents (U.S. Patent Nos. D502,362, 7,165,488 and 7,347,138). Keurig sought an injunction prohibiting Rogers from selling these cartridges, as well as money damages. In late 2012, Rogers moved for summary judgment of no infringement as to all three asserted patents. On May 24, 2013, the District of Massachusetts granted Rogers' summary judgment motions. Keurig has since appealed the Court's ruling to the Federal Circuit, and that appeal is currently pending. | ||||||||||||||
On May 9, 2011, an organization named Council for Education and Research on Toxics ("CERT"), purporting to act in the public interest, filed suit in Los Angeles Superior Court (Council for Education and Research on Toxics v. Brad Barry LLC, et al., Case No. BC461182.) against several companies, including the Company, that roast, package, or sell coffee in California. The Brad Barry complaint alleges that coffee contains the chemical acrylamide and that the Company and the other defendants are required to provide warnings under section 25249.6 of the California Safe Drinking Water and Toxics Enforcement Act, better known as Proposition 65. The Brad Barry action has been consolidated for all purposes with another Proposition 65 case filed by CERT on April 13, 2010 over allegations of acrylamide in "ready to drink" coffee sold in restaurants, convenience stores, and do-nut shops. (Council for Education and Research on Toxics v. Starbucks Corp., et al., Case No. BC 415759). The Company was not named in the Starbucks complaint. The Company has joined a joint defense group ("JDG") organized to address CERT's allegations, and the Company intends to vigorously defend against these allegations. The Court has ordered the case phased for discovery and trial. The first phase of the case, which has been set for trial on September 8, 2014, is limited to three affirmative defenses shared by all defendants in both cases, with other affirmative defenses, plaintiff's prima facie case, and remedies deferred for subsequent phases. Discovery on the first phase of the case is underway. Because this lawsuit is only in a preliminary stage, the Company is unable to predict its outcome, the potential loss or range of loss, if any, associated with its resolution or any potential effect it may have on the Company or its operations. | ||||||||||||||
On January 24, 2012, Teashot, LLC ("Teashot") filed suit against the Company, Keurig and Starbucks Corp. ("Starbucks") in the United States District Court for the District of Colorado (Civil Action No. 12-c v-00189-WJM-KMT) for patent infringement related to the making, using, importing, selling and/or offering for sale of K-Cup packs containing tea. The suit alleges that the Company, Keurig and Starbucks infringe a Teashot patent (U.S. Patent No. 5,895,672). Teashot seeks an injunction prohibiting the Company, Keurig and Starbucks from continued infringement, as well as money damages. Pursuant to the Company's Manufacturing, Sales and Distribution Agreement with Starbucks, the Company is defending and indemnifying Starbucks in connection with the suit. On March 13, 2012, the Company and Keurig, for themselves and Starbucks, filed an answer with the court, generally denying all of Teashot's allegations. The Company and Keurig, for themselves and Starbucks, are vigorously defending this lawsuit. On May 24, 2013, the Company and Keurig, for themselves and Starbucks, filed a motion for summary judgment of non-infringement. On July 19, 2013, Teashot filed a motion for partial summary judgment on certain other, unrelated issues. No hearing on the summary judgment motions has been scheduled. At this time, the Company is unable to predict the outcome of this lawsuit, the potential loss or range of loss, if any, associated with the resolution of this lawsuit or any potential effect it may have on the Company or its operations. | ||||||||||||||
Securities and Exchange Commission ("SEC") Inquiry | ||||||||||||||
As first disclosed on September 28, 2010, the staff of the SEC's Division of Enforcement continues to conduct an inquiry into matters at the Company. The Company is cooperating fully with the SEC staff's inquiry. | ||||||||||||||
Stockholder Litigation | ||||||||||||||
Two putative securities fraud class actions are presently pending against the Company and certain of its officers and directors, along with two putative stockholder derivative actions. The first pending putative securities fraud class action was filed on November 29, 2011, and the third putative securities fraud class action was filed on May 7, 2012. A consolidated putative stockholder derivative action pending in the United States District Court for the District of Vermont consists of five separate putative stockholder derivative complaints, the first two were filed after the Company's disclosure of the SEC inquiry on September 28, 2010, while the others were filed on February 10, 2012, March 2, 2012, and July 23, 2012, respectively. In addition, a putative stockholder derivative action is pending in the Superior Court of the State of Vermont for Washington County that was commenced following the Company's disclosure of the SEC inquiry on September 28, 2010. | ||||||||||||||
The first pending putative securities fraud class action, captioned Louisiana Municipal Police Employees' Retirement System ("LAMPERS") v. Green Mountain Coffee Roasters, Inc., et al., Civ. No. 2:11-cv-00289, is pending in the United States District Court for the District of Vermont before the Honorable William K. Sessions, III. Plaintiffs' amended complaint alleges violations of the federal securities laws in connection with the Company's disclosures relating to its revenues and its inventory accounting practices. The amended complaint seeks class certification, compensatory damages, attorneys' fees, costs, and such other relief as the court should deem just and proper. Plaintiffs seek to represent all purchasers of the Company's securities between February 2, 2011 and November 9, 2011. The initial complaint filed in the action on November 29, 2011 included counts for alleged violations of (1) Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (the "Securities Act") against the Company, certain of its officers and directors, and the Company's underwriters in connection with a May 2011 secondary common stock offering; and (2) Section 10(b) of the Exchange Act and Rule 10b-5 against the Company and the officer defendants, and for violation of Section 20(a) of the Exchange Act against the officer defendants. Pursuant to the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(a)(3), plaintiffs had until January 30, 2012 to move the court to serve as lead plaintiff of the putative class. Competing applications were filed and the Court appointed Louisiana Municipal Police Employees' Retirement System, Sjunde AP-Fonden, Board of Trustees of the City of Fort Lauderdale General Employees' Retirements System, Employees' Retirements System of the Government of the Virgin Islands, and Public Employees' Retirement System of Mississippi as lead plaintiffs' counsel on April 27, 2012. Pursuant to a schedule approved by the court, plaintiffs filed their amended complaint on October 22, 2012, and plaintiffs filed a corrected amended complaint on November 5, 2012. Plaintiffs' amended complaint does not allege any claims under the Securities Act against the Company, its officers and directors, or the Company's underwriters in connection with the May 2011 secondary common stock offering. Defendants moved to dismiss the amended complaint on March 1, 2013 and the briefing of their motions was completed on June 26, 2013. An oral argument on the defendants' motions to dismiss was set for August 27, 2013 and has been rescheduled to December 12, 2013. The underwriters previously named as defendants notified the Company of their intent to seek indemnification from the Company pursuant to their underwriting agreement dated May 5, 2011 in regard to the claims asserted in this action. | ||||||||||||||
The second pending consolidated putative securities fraud class action, captioned Fifield v. Green Mountain Coffee Roasters, Inc., Civ. No. 2:12-cv-00091, is also pending in the United States District Court for the District of Vermont before the Honorable William K. Sessions, III. Plaintiffs' amended complaint alleges violations of the federal securities laws in connection with the Company's disclosures relating to its forward guidance. The amended complaint includes counts for alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5 against all defendants, and for alleged violation of Section 20(a) of the Exchange Act against the officer defendants. The amended complaint seeks class certification, compensatory damages, equitable and/or injunctive relief, attorneys' fees, costs, and such other relief as the court should deem just and proper. Plaintiffs seek to represent all purchasers of the Company's securities between February 2, 2012 and May 2, 2012. Pursuant to the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(a)(3), plaintiffs had until July 6, 2012 to move the court to serve as lead plaintiff of the putative class. On July 31, 2012, the court appointed Kambiz Golesorkhi as lead plaintiff and approved his selection of Kahn Swick & Foti LLC as lead counsel. On August 14, 2012, the court granted the parties' stipulated motion for filing of an amended complaint and to set a briefing schedule for defendants' motions to dismiss. Pursuant to a schedule approved by the court, plaintiffs filed their amended complaint on October 23, 2012, adding William C. Daley as an additional lead plaintiff. Defendants moved to dismiss the amended complaint on January 17, 2013 and the briefing of their motions was completed on May 17, 2013. On September 26, 2013, the court issued an order granting defendants' motions and dismissing the amended complaint without prejudice and allowing plaintiffs a 30-day period within which to amend their complaint. On October 18, 2013, plaintiffs filed a notice of intent to appeal the court's September 26, 2013 order to the United States Court of Appeals for the Second Circuit. On November 1, 2013, following the expiration of the 30-day period to amend the complaint, defendants filed a motion for final judgment in District Court. Pursuant to an order issued by the Second Circuit, plaintiff-appellants' brief in the appeal of the District Court's decision is due no later than December 10, 2013 and defendant-appellees' brief is due no later than January 14, 2014. | ||||||||||||||
The first putative stockholder derivative action, a consolidated action captioned In re Green Mountain Coffee Roasters, Inc. Derivative Litigation, Civ. No. 2:10-cv-00233, premised on the same allegations asserted in now-dismissed Horowitz v. Green Mountain Coffee Roasters, Inc., Civ. No. 2:10-cv-00227 securities class action complaint and the other pending putative securities class action complaints described above, is pending in the United States District Court for the District of Vermont before the Honorable William K. Sessions, III. On November 29, 2010, the federal court entered an order consolidating two actions and appointing the firms of Robbins Umeda LLP and Shuman Law Firm as co-lead plaintiffs' counsel. On February 23, 2011, the federal court approved a stipulation filed by the parties providing for a temporary stay of that action until the court rules on defendants' motions to dismiss the consolidated complaint in the Horowitz putative securities fraud class action. On March 7, 2012, the federal court approved a further joint stipulation continuing the temporary stay until the court either denies a motion to dismiss the Horowitz putative securities fraud class action or the Horowitz putative securities fraud class action is dismissed with prejudice. On April 27, 2012, the federal court entered an order consolidating the stockholder derivative action captioned Himmel v. Robert P. Stiller, et al., with two additional putative derivative actions, Musa Family Revocable Trust v. Robert P. Stiller, et al., Civ. No. 2:12-cv-00029, and Laborers Local 235 Benefit Funds v. Robert P. Stiller, et al., Civ. No. 2:12-cv- 00042. On November 14, 2012, the federal court entered an order consolidating an additional stockholder derivative action, captioned as Henry Cargo v. Robert P. Stiller, et al., Civ. No. 2:12-cv-00161, and granting plaintiffs leave to lift the stay for the limited purpose of filing a consolidated complaint. The consolidated complaint is asserted nominally on behalf of the Company against certain of its officers and directors. The consolidated complaint asserts claims for breach of fiduciary duty, waste of corporate assets, unjust enrichment, contribution, and indemnification and seeks compensatory damages, injunctive relief, restitution, disgorgement, attorney's fees, costs, and such other relief as the court should deem just and proper. On May 14, 2013, the court approved a joint stipulation filed by the parties providing for a temporary stay of the proceedings until the conclusion of the appeal in the Horowitz putative securities fraud class action. On August 1, 2013, the parties filed a further joint stipulation continuing the temporary stay until the court either denies a motion to dismiss the LAMPERS putative securities fraud class action or the LAMPERS putative securities fraud class action is dismissed with prejudice, which the court approved on August 2, 2013. | ||||||||||||||
The second putative stockholder derivative action, M. Elizabeth Dickinson v. Robert P. Stiller, et al., Civ. No. 818-11-10, is pending in the Superior Court of the State of Vermont for Washington County. On February 28, 2011, the court approved a stipulation filed by the parties similarly providing for a temporary stay of that action until the federal court rules on defendants' motions to dismiss the consolidated complaint in the Horowitz putative securities fraud class action. As a result of the federal court's ruling in the Horowitz putative securities fraud class action, the temporary stay was lifted. On June 25, 2013, plaintiff filed an amended complaint in the action, which is asserted nominally on behalf of the Company against certain current and former directors and officers. The amended complaint is premised on the same allegations alleged in the Horowitz, LAMPERS, and Fifield putative securities fraud class actions. The amended complaint asserts claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, and alleged insider selling by certain of the named defendants. The amended complaint seeks compensatory damages, injunctive relief, restitution, disgorgement, attorneys' fees, costs, and such other relief as the court should deem just and proper. On August 7, 2013, the parties filed a further joint stipulation continuing the temporary stay until the court either denies a motion to dismiss the LAMPERS putative securities fraud class action or the LAMPERS putative securities fraud class action is dismissed with prejudice, which the court approved on August 21, 2013. | ||||||||||||||
The Company and the other defendants intend to vigorously defend all the pending lawsuits. Additional lawsuits may be filed and, at this time, the Company is unable to predict the outcome of these lawsuits, the possible loss or range of loss, if any, associated with the resolution of these lawsuits or any potential effect they may have on the Company or its operations. | ||||||||||||||
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Sep. 28, 2013 | |
Related Party Transactions | ' |
Related Party Transactions | ' |
20. Related Party Transactions | |
The Company, from time to time, used travel services provided by Heritage Flight, a charter air services company acquired in September 2002 by Robert P. Stiller, who previously served on the Company's Board of Directors and who is a security holder of more than 5% of the Company's Common Stock. For fiscal years 2013, 2012, and 2011, the Company incurred expenses of $0.2 million, $0.7 million, and $0.7 million, respectively, for Heritage Flight travel services. | |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||
Sep. 28, 2013 | |||||||||||
Earnings Per Share | ' | ||||||||||
Earnings Per Share | ' | ||||||||||
21. Earnings Per Share | |||||||||||
The following table illustrates the reconciliation of the numerator and denominator of basic and diluted earnings per share computations (dollars in thousands, except share and per share data): | |||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||
Numerator for basic and diluted earnings per share: | |||||||||||
Net income attributable to GMCR | $ | 483,232 | $ | 362,628 | $ | 199,501 | |||||
Denominator: | |||||||||||
Basic weighted average shares outstanding | 149,638,636 | 154,933,948 | 146,214,860 | ||||||||
Effect of dilutive securities—stock options | 3,162,857 | 4,141,698 | 5,927,574 | ||||||||
Diluted weighted average shares outstanding | 152,801,493 | 159,075,646 | 152,142,434 | ||||||||
Basic net income per common share | $ | 3.23 | $ | 2.34 | $ | 1.36 | |||||
Diluted net income per common share | $ | 3.16 | $ | 2.28 | $ | 1.31 | |||||
For the fiscal years 2013, 2012, and 2011, 822,000, 763,000, and 199,000 equity-based awards for shares of common stock, respectively, have been excluded in the calculation of diluted earnings per share because they were antidilutive. | |||||||||||
Unaudited_Quarterly_Financial_
Unaudited Quarterly Financial Data | 12 Months Ended | |||||||||||||
Sep. 28, 2013 | ||||||||||||||
Unaudited Quarterly Financial Data | ' | |||||||||||||
Unaudited Quarterly Financial Data | ' | |||||||||||||
22. Unaudited Quarterly Financial Data | ||||||||||||||
The following table presents the quarterly information for fiscal 2013 (dollars in thousands, except per share data). Each fiscal quarter comprises 13 weeks. | ||||||||||||||
Fiscal 2013 | December 29, | March 30, | June 29, | September 28, | ||||||||||
2012 | 2013 | 2013 | 2013 | |||||||||||
Net sales | $ | 1,339,059 | $ | 1,004,792 | $ | 967,072 | $ | 1,047,177 | ||||||
Gross profit | $ | 419,163 | $ | 415,146 | $ | 407,618 | $ | 377,459 | ||||||
Net income attributable to GMCR | $ | 107,583 | $ | 132,421 | $ | 116,272 | $ | 126,956 | ||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.72 | $ | 0.89 | $ | 0.78 | $ | 0.84 | ||||||
Diluted | $ | 0.7 | $ | 0.87 | $ | 0.76 | $ | 0.83 | ||||||
The following table presents the quarterly information for fiscal 2012 (dollars in thousands, except per share data). Each fiscal quarter comprises 13 weeks, except the fiscal quarter ended September 29, 2012 which is comprised of 14 weeks. | ||||||||||||||
Fiscal 2012 | December 24, | March 24, | June 23, | September 29, | ||||||||||
2011 | 2012 | 2012 | 2012 | |||||||||||
Net sales | $ | 1,158,216 | $ | 885,052 | $ | 869,194 | $ | 946,736 | ||||||
Gross profit | $ | 336,604 | $ | 313,038 | $ | 303,311 | $ | 316,446 | ||||||
Net income attributable to GMCR | $ | 104,414 | $ | 93,031 | $ | 73,296 | $ | 91,887 | ||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.67 | $ | 0.6 | $ | 0.47 | $ | 0.59 | ||||||
Diluted | $ | 0.66 | $ | 0.58 | $ | 0.46 | $ | 0.58 | ||||||
The following table presents the quarterly information for fiscal 2011 (dollars in thousands, except per share data). Each fiscal quarter comprises 13 weeks. | ||||||||||||||
Fiscal 2011 | December 25, | March 26, | June 25, | September 24, | ||||||||||
2010 | 2011 | 2011 | 2011 | |||||||||||
Net sales | $ | 574,148 | $ | 647,658 | $ | 717,210 | $ | 711,883 | ||||||
Gross profit | $ | 143,600 | $ | 242,855 | $ | 264,080 | $ | 254,090 | ||||||
Net income attributable to GMCR | $ | 2,412 | $ | 65,372 | $ | 56,348 | $ | 75,369 | ||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.02 | $ | 0.46 | $ | 0.38 | $ | 0.49 | ||||||
Diluted | $ | 0.02 | $ | 0.44 | $ | 0.37 | $ | 0.47 |
Subsequent_Event
Subsequent Event | 12 Months Ended |
Sep. 28, 2013 | |
Subsequent Event | ' |
Subsequent Event | ' |
23. Subsequent Event | |
On November 19, 2013, the Board of Directors declared the Company's first cash dividend of $0.25 per common share, payable on February 14, 2014 to shareholders of record at the close of business on January 17, 2014; and announced an indicated annual dividend of $1.00 per share (payable in $0.25 per quarter). | |
Schedule_IIValuation_and_Quali
Schedule II-Valuation and Qualifying Accounts | 12 Months Ended | ||||||||||||||||
Sep. 28, 2013 | |||||||||||||||||
Schedule II-Valuation and Qualifying Accounts | ' | ||||||||||||||||
Schedule II-Valuation and Qualifying Accounts | ' | ||||||||||||||||
Schedule II—Valuation and Qualifying Accounts | |||||||||||||||||
For the Fiscal Years Ended | |||||||||||||||||
September 28, 2013, September 29, 2012, and September 24, 2011 | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Description | Balance at | Acquisitions | Charged to | Deductions | Balance at End | ||||||||||||
Beginning | (Dispositions) | Costs and | of Period | ||||||||||||||
of Period | Expenses | ||||||||||||||||
Allowance for doubtful accounts: | |||||||||||||||||
Fiscal 2013 | $ | 2,750 | $ | — | $ | 689 | $ | 553 | $ | 2,886 | |||||||
Fiscal 2012 | $ | 3,404 | $ | (299 | ) | $ | 3,197 | $ | 3,552 | $ | 2,750 | ||||||
Fiscal 2011 | $ | 1,314 | $ | 1,115 | $ | 2,584 | $ | 1,609 | $ | 3,404 | |||||||
Description | Balance at | Acquisitions | Charged to | Deductions | Balance at End | ||||||||||||
Beginning | (Dispositions) | Costs and | of Period | ||||||||||||||
of Period | Expenses | ||||||||||||||||
Sales returns reserve: | |||||||||||||||||
Fiscal 2013 | $ | 31,767 | $ | — | $ | 79,747 | $ | 80,760 | $ | 30,754 | |||||||
Fiscal 2012 | $ | 18,302 | $ | — | $ | 107,436 | $ | 93,971 | $ | 31,767 | |||||||
Fiscal 2011 | $ | 12,742 | $ | — | $ | 64,457 | $ | 58,897 | $ | 18,302 | |||||||
Description | Balance at | Acquisitions | Charged to | Deductions | Balance at End | ||||||||||||
Beginning | (Dispositions) | Costs and | of Period | ||||||||||||||
of Period | Expenses | ||||||||||||||||
Warranty reserve(1): | |||||||||||||||||
Fiscal 2013 | $ | 20,218 | $ | — | $ | 6,948 | $ | 19,362 | $ | 7,804 | |||||||
Fiscal 2012 | $ | 14,728 | $ | — | $ | 37,390 | $ | 31,900 | $ | 20,218 | |||||||
Fiscal 2011 | $ | 6,694 | $ | — | $ | 35,450 | $ | 27,416 | $ | 14,728 | |||||||
-1 | |||||||||||||||||
Includes warranty recoveries from suppliers of $0.8 million and $8.3 for fiscal 2013 and 2012, respectively. There were no recoveries during fiscal 2011. | |||||||||||||||||
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 28, 2013 | |
Significant Accounting Policies | ' |
Use of estimates | ' |
Use of estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates and assumptions that affect amounts reported in the accompanying Consolidated Financial Statements. Significant estimates and assumptions by management affect the Company's inventory, deferred tax assets, allowance for sales returns, warranty reserves and certain accrued expenses, goodwill, intangible and long-lived assets and stock-based compensation. | |
Although the Company regularly assesses these estimates, actual results could differ from these estimates. Changes in estimates are recorded in the period they become known. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances. | |
Principles of consolidation | ' |
Principles of Consolidation | |
The Consolidated Financial Statements include the accounts of the Company and all of the entities in which the Company has a controlling financial interest, most often because the Company holds a majority voting/ownership interest. All significant intercompany transactions and accounts are eliminated in consolidation. | |
Noncontrolling interests | ' |
Noncontrolling Interests | |
Noncontrolling interests ("NCI") are evaluated by the Company and are shown as either a liability, temporary equity (shown between liabilities and equity) or as permanent equity depending on the nature of the redeemable features at amounts based on formulas specific to each entity. Generally, mandatorily redeemable NCI's are classified as liabilities and non-mandatorily redeemable NCI's are classified as either temporary or permanent equity. Redeemable NCIs that are not mandatorily redeemable are classified outside of shareholders' equity in the Consolidated Balance Sheets as temporary equity under the caption, Redeemable noncontrolling interests, and are measured at their redemption values at the end of each period. If the redemption value is greater than the carrying value, an adjustment is recorded in retained earnings to record the NCI at its redemption value. Redeemable NCIs that are mandatorily redeemable are classified as a liability in the Consolidated Balance Sheets under either Other current liabilities or Other long-term liabilities, depending on the remaining duration until settlement, and are measured at the amount of cash that would be paid if settlement occurred at the balance sheet date based on the formula in the Share Purchase and Sale Agreement dated June 22, 2012, with any change from the prior period recognized as interest expense. See Note 8, Noncontrolling Interests in the Consolidated Financial Statements included in this Annual Report for further information. | |
Net income attributable to NCIs reflects the portion of the net income (loss) of consolidated entities applicable to the NCI shareholders in the accompanying Consolidated Statements of Operations. The net income attributable to NCIs is classified in the Consolidated Statements of Operations as part of consolidated net income and deducted from total consolidated net income to arrive at the net income attributable to the Company. | |
If a change in ownership of a consolidated subsidiary results in a loss of control or deconsolidation, any retained ownership interests are remeasured with the gain or loss reported to net earnings. | |
Business combinations | ' |
Business Combinations | |
The Company uses the acquisition method of accounting for business combinations and recognizes assets acquired and liabilities assumed measured at their fair values on the date acquired. Goodwill represents the excess of the purchase price over the fair value of the net assets. The fair values of the assets and liabilities acquired are determined based upon the Company's valuation. The valuation involves making significant estimates and assumptions which are based on detailed financial models including the projection of future cash flows, the weighted average cost of capital and any cost savings that are expected to be derived in the future. | |
Cash and cash equivalents | ' |
Cash and Cash Equivalents | |
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include money market funds which are carried at cost, plus accrued interest, which approximates fair value. The Company does not believe that it is subject to any unusual credit or market risk. | |
Restricted cash and cash equivalents | ' |
Restricted Cash and Cash Equivalents | |
Restricted cash and cash equivalents represents cash that is not available for use in our operations. Restricted cash of $0.6 million and $12.9 million as of September 28, 2013 and September 29, 2012, respectively. The restricted cash balance as of September 29, 2012 consisted primarily of cash placed in escrow related to our acquisition of Van Houtte, and was released during fiscal 2013. | |
Allowance for doubtful accounts | ' |
Allowance for Doubtful Accounts | |
A provision for doubtful accounts is provided based on a combination of historical experience, specific identification and customer credit risk where there are indications that a specific customer may be experiencing financial difficulties. | |
Inventories | ' |
Inventories | |
Inventories consist primarily of green and roasted coffee, including coffee in portion packs, purchased finished goods such as coffee brewers, and packaging materials. Inventories are stated at the lower of cost or market. Cost is being measured using an adjusted standard cost method which approximates FIFO (first-in, first-out). The Company regularly reviews whether the net realizable value of its inventory is lower than its carrying value. If the valuation shows that the net realizable value is lower than the carrying value, the Company takes a charge to cost of sales and directly reduces the carrying value of the inventory. | |
The Company estimates any required write downs for inventory obsolescence by examining its inventories on a quarterly basis to determine if there are indicators that the carrying values exceed net realizable value. Indicators that could result in additional inventory write downs include age of inventory, damaged inventory, slow moving products and products at the end of their life cycles. While management believes that inventory is appropriately stated at the lower of cost or market, significant judgment is involved in determining the net realizable value of inventory. | |
Financial instruments | ' |
Financial Instruments | |
The Company enters into various types of financial instruments in the normal course of business. Fair values are estimated based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees of perceived risk. Cash, cash equivalents, accounts receivable, accounts payable and accrued expenses are reported at carrying value and approximate fair value due to the short maturity of these instruments. Long-term debt is also reported at carrying value, which approximates fair value due to the fact that the interest rate on the debt is based on variable interest rates. | |
The fair values of derivative financial instruments have been determined using market information and valuation methodologies. Changes in assumptions or estimates could affect the determination of fair value; however, management does not believe any such changes would have a material impact on the Company's financial condition, results of operations or cash flows. The fair values of short-term investments and derivative financial instruments are disclosed in Note 12, Fair Value Measurements, in the Consolidated Financial Statements included in this Annual Report. | |
Derivative instruments | ' |
Derivative Instruments | |
The Company enters into over-the-counter derivative contracts based on coffee futures ("coffee futures") to hedge against price increases in price-to-be-fixed coffee purchase commitments and anticipated coffee purchases. Coffee purchases are generally denominated in the U.S. dollar. The Company also enters into interest rate swap agreements to mitigate interest rate risk associated with the Company's variable-rate borrowings and foreign currency forward contracts to hedge the purchase and payment of certain green coffee purchase commitments as well as certain recognized liabilities in currencies other than the Company's functional currency. All derivatives are recorded at fair value. Interest rate swaps, coffee futures, and certain foreign currency forward contracts which hedge the purchase and payment of green coffee purchase commitments are designated as cash flow hedges with the effective portion of the change in the fair value of the derivative instrument recorded as a component of other comprehensive income ("OCI") and subsequently reclassified into net earnings when the hedged exposure affects net earnings. Foreign currency forward contracts which hedge certain recognized liabilities denominated in non-functional currencies are designated as fair value hedges with the changes in the fair value of these instruments along with the changes in the fair value of the hedged liabilities recognized in gain or loss on foreign currency, net in the Consolidated Statements of Operations. | |
Effectiveness is determined by how closely the changes in the fair value of the derivative instrument offset the changes in the fair value of the hedged item. The ineffective portion of the change in the fair value of the derivative instrument is recorded directly to earnings. | |
The Company formally documents hedging instruments and hedged items, and measures at each balance sheet date the effectiveness of its hedges. When it is determined that a derivative is not highly effective, the derivative expires, or is sold or terminated, or the derivative is discontinued because it is unlikely that a forecasted transaction will occur, the Company discontinues hedge accounting prospectively for that specific hedge instrument. | |
The Company also enters into certain foreign currency and interest rate derivative contracts to hedge certain foreign currency exposures that are not designated as hedging instruments for accounting purposes. These contracts are recorded at fair value, with the changes in fair value recognized in gain (loss) on financial instruments, net in the Consolidated Statements of Operations. | |
The Company does not engage in speculative transactions, nor does it hold derivative instruments for trading purposes. See Note 11, Derivative Financial Instruments and Note 14, Stockholders' Equity in the Consolidated Financial Statements included in this Annual Report for further information. | |
Deferred financing costs | ' |
Deferred Financing Costs | |
Deferred financing costs consist primarily of commitment fees and loan origination fees and are being amortized over the respective life of the applicable debt using a method that approximates the effective interest rate method. Deferred financing costs included in Other long-term assets in the accompanying Consolidated Balance Sheets as of September 28, 2013 and September 29, 2012 were $15.2 million and $22.3 million, respectively. | |
Goodwill and intangibles | ' |
Goodwill and Intangibles | |
Goodwill is tested for impairment annually at the end of the Company's fiscal year or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill is assigned to reporting units for purposes of impairment testing. A reporting unit is the same as an operating segment or one level below an operating segment. The Company may assess qualitative factors to determine if it is more likely than not (i.e., a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, no further testing is necessary. If, however, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company performs the first step of a two-step goodwill impairment test. The assessment of qualitative factors is optional and at the Company's discretion. The Company may bypass the qualitative assessment for any reporting unit in any period and perform the first step of the quantitative goodwill impairment test. The Company may resume performing the qualitative assessment in any subsequent period. The first step is a comparison of each reporting unit's fair value to its carrying value. The Company estimates fair value based on discounted cash flows. The reporting unit's discounted cash flows require significant management judgment with respect to sales forecasts, gross margin percentages, selling, operating, general and administrative ("SG&A") expenses, capital expenditures and the selection and use of an appropriate discount rate. The projected sales, gross margin and SG&A expense rate assumptions and capital expenditures are based on the Company's annual business plan or other forecasted results. Discount rates reflect market-based estimates of the risks associated with the projected cash flows directly resulting from the use of those assets in operations. The estimates of fair value of reporting units are based on the best information available as of the date of the assessment. If the carrying value of a reporting unit exceeds its estimated fair value in the first step, a second step is performed, which requires the Company to allocate the fair value of the reporting unit derived in the first step to the fair value of the reporting unit's net assets, with any fair value in excess of amounts allocated to such net assets representing the implied fair value of goodwill for that reporting unit. If the implied fair value of the goodwill is less than the book value, goodwill is impaired and is written down to the implied fair value amount. | |
Intangible assets that have finite lives are amortized over their estimated economic useful lives on a straight line basis. Intangible assets that have indefinite lives are not amortized and are tested for impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Similar to the qualitative assessment for goodwill, the Company may assess qualitative factors to determine if it is more likely than not (i.e., a likelihood of more than 50%) that the fair value of the indefinite-lived intangible asset is less than its carrying amount. If the Company determines that it is not more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, no further testing is necessary. If, however, the Company determines that it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying amount, the Company compares the fair value of the indefinite-lived asset with its carrying amount. If the carrying value of an individual indefinite-lived intangible asset exceeds its fair value, the individual indefinite-lived intangible asset is written down by an amount equal to such excess. The assessment of qualitative factors is optional and at the Company's discretion. The Company may bypass the qualitative assessment for any indefinite-lived intangible asset in any period and resume performing the qualitative assessment in any subsequent period. | |
Impairment of long-lived assets | ' |
Impairment of Long-Lived Assets | |
When facts and circumstances indicate that the carrying values of long-lived assets, including fixed assets, may be impaired, an evaluation of recoverability is performed by comparing the carrying value of the assets, at an asset group level, to undiscounted projected future cash flows in addition to other quantitative and qualitative analyses. When assessing impairment, property, plant and equipment assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of other groups of assets. Upon indication that the carrying value of such assets may not be recoverable, the Company recognizes an impairment loss as a charge against current operations. Long-lived assets to be disposed of are reported at the lower of the carrying amount or fair value, less estimated costs to sell. The Company makes judgments related to the expected useful lives of long-lived assets and its ability to realize undiscounted cash flows in excess of the carrying amounts of such assets which are affected by factors such as the ongoing maintenance and improvements of the assets, changes in economic conditions and changes in operating performance. | |
Fixed assets | ' |
Fixed Assets | |
Fixed assets are carried at cost, net of accumulated depreciation. Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred. Expenditures for refurbishments and improvements that significantly improve the productive capacity or extend the useful life of an asset are capitalized. Depreciation is calculated using the straight-line method over the assets' estimated useful lives. The cost and accumulated depreciation for fixed assets sold, retired, or otherwise disposed of are relieved from the accounts, and the resultant gains and losses are reflected in income. | |
The Company follows an industry-wide practice of purchasing and loaning coffee brewing and related equipment to wholesale customers. These assets are also carried at cost, net of accumulated depreciation. | |
Depreciation costs of manufacturing and distribution assets are included in cost of sales on the Consolidated Statements of Operations. Depreciation costs of other assets, including equipment on loan to customers, are included in selling and operating expenses on the Consolidated Statements of Operations. | |
Leases | ' |
Leases | |
Occasionally, the Company is involved in the construction of leased properties. Due to the extent and nature of that involvement, the Company is deemed the owner during the construction period and is required to capitalize the construction costs on the Consolidated Balance Sheets along with a corresponding financing obligation for the project costs that are incurred by the lessor. Upon completion of the project, a sale-leaseback analysis is performed to determine if the Company can record a sale to remove the assets and related obligation and record the lease as either an operating or capital lease obligation. If the Company is precluded from derecognizing the assets when construction is complete due to continuing involvement beyond a normal leaseback, the lease is accounted for as a financing transaction and the recorded asset and related financing obligation remain on the Consolidated Balance Sheet. Accordingly, the asset is depreciated over its estimated useful life in accordance with the Company's policy. If the Company is not considered the owner of the land, a portion of the lease payments is allocated to ground rent and treated as an operating lease. The portion of the lease payment allocated to ground rental expense is based on the fair value of the land at the commencement of construction. Lease payments allocated to the buildings are recognized as reductions to the financing obligation and interest expense. See Note 19, Commitments and Contingencies, for further information. | |
Leases that qualify as capital leases are recorded at the lower of the fair value of the asset or the present value of the future minimum lease payments over the lease term generally using the Company's incremental borrowing rate. Assets leased under capital leases are included in fixed assets and generally are depreciated over the lease term. Lease payments under capital leases are recognized as a reduction of the capital lease obligation and interest expense. | |
All other leases are considered operating leases. Assets subject to an operating lease are not recorded on the balance sheet. Lease payments are recognized on a straight-line basis as rent expense over the expected lease term. | |
Revenue recognition | ' |
Revenue Recognition | |
Revenue from sales of single cup brewer systems, coffee and other specialty beverages in portion packs, and coffee in more traditional packaging including whole bean and ground coffee selections in bags and ground coffee in fractional packs is recognized when title and risk of loss passes to the customer, which generally occurs upon shipment or delivery of the product to the customer as defined by the contractual shipping terms. Shipping charges billed to customers are also recognized as revenue, and the related shipping costs are included in cost of sales. Cash received in advance of product delivery is recorded in deferred revenue, which is included in other current liabilities on the accompanying Consolidated Balance Sheets, until earned. | |
The majority of the Company's distribution to major retailers is processed by fulfillment entities. The fulfillment entities receive and fulfill sales orders and invoice certain retailers. All product shipped by the Company to the fulfillment entities are owned by the Company and included in inventories on the accompanying consolidated balance sheets. The Company recognizes revenue when delivery of the product from the fulfillment entity to the retailer has occurred based on the contractual shipping terms and when all other revenue recognition criteria are met. | |
Sales of single cup brewers, portion packs and other products are recognized net of any discounts, returns, allowances and sales incentives, including coupon redemptions and rebates. The Company estimates the allowance for returns using an average return rate based on historical experience and an evaluation of contractual rights or obligations. The Company routinely participates in trade promotion programs with customers, including customers whose sales are processed by the fulfillment entities, whereby customers can receive certain incentives and allowances which are recorded as a reduction to sales when the sales incentive is offered and committed to or, if the incentive relates to specific sales, at the later of when that revenue is recognized or the date at which the sales incentive is offered. These incentives include, but are not limited to, cash discounts and volume based incentive programs. Allowances to customers that are directly attributable and supportable by customer promotional activities are recorded as selling expenses at the time the promotional activity occurs. | |
Roasters licensed by the Company to manufacture and sell K-Cup® packs, both to the Company for resale and to their other coffee customers, are obligated to pay a royalty to the Company upon shipment to their customer. The Company records royalty revenue upon shipment of K-Cup® packs by licensed roasters to third-party customers as set forth under the terms and conditions of various licensing agreements. For shipments of K-Cup® packs to the Company for resale, this royalty payment is recorded as a reduction to the carrying value of the related K-Cup® packs in inventory and as a reduction to cost of sales when sold through to third-party customers by the Company. | |
Cost of sales | ' |
Cost of Sales | |
Cost of sales for the Company consists of the cost of raw materials including coffee beans, hot cocoa, flavorings and packaging materials; a portion of our rental expense; production, warehousing and distribution costs which include salaries; distribution and merchandising personnel; leases and depreciation on facilities and equipment used in production; the cost of brewers manufactured by suppliers; third-party fulfillment charges; receiving, inspection and internal transfer costs; warranty expense; freight, duties and delivery expenses; and certain third-party royalty charges. All shipping and handling expenses are also included as a component of cost of sales. | |
Product warranty | ' |
Product Warranty | |
The Company provides for the estimated cost of product warranties in cost of sales, at the time product revenue is recognized. Warranty costs are estimated primarily using historical warranty information in conjunction with current engineering assessments applied to the Company's expected repair or replacement costs. The estimate for warranties requires assumptions relating to expected warranty claims which can be impacted significantly by quality issues. | |
Advertising costs | ' |
Advertising Costs | |
The Company expenses the costs of advertising the first time the advertising takes place, except for direct mail campaigns targeted directly at consumers, which are expensed over the period during which they are expected to generate sales. As of September 28, 2013 and September 29, 2012, prepaid advertising costs of $4.1 million and $2.4 million, respectively, were recorded in Other current assets in the accompanying Consolidated Balance Sheets. Advertising expense totaled $193.2 million, $147.7 million, and $90.8 million, for fiscal years 2013, 2012, and 2011, respectively. | |
Income taxes | ' |
Income Taxes | |
The Company recognizes deferred tax assets and liabilities for the expected future tax benefits or consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities, and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Judgment is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities. These include establishing a valuation allowance related to the ability to realize certain deferred tax assets. The Company currently believes that future earnings and current tax planning strategies will be sufficient to recover substantially all of the Company's recorded net deferred tax assets. To the extent future taxable income against which these assets may be applied is not sufficient, some portion or all of our recorded deferred tax assets would not be realizable. | |
Accounting for uncertain tax positions also requires significant judgments, including estimating the amount, timing and likelihood of ultimate settlement. Although the Company believes that its estimates are reasonable, actual results could differ from these estimates. The Company uses a more-likely-than-not measurement attribute for all tax positions taken or expected to be taken on a tax return in order for those tax positions to be recognized in the financial statements. | |
Stock-Based compensation | ' |
Stock-Based Compensation | |
The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. Equity awards consist of stock options, restricted stock units ("RSUs"), restricted stock awards ("RSAs"), and performance stock units ("PSUs"). The cost is recognized over the period during which an employee is required to provide service in exchange for the award. | |
The Company measures the fair value of stock options using the Black-Scholes model and certain assumptions, including the expected life of the stock options, an expected forfeiture rate and the expected volatility of its common stock. The expected life of options is estimated based on options vesting periods, contractual lives and an analysis of the Company's historical experience. The expected forfeiture rate is based on the Company's historical employee turnover experience and future expectations. The risk-free interest rate is based on the U.S. Treasury rate over the expected life. The Company uses a blended historical volatility to estimate expected volatility at the measurement date. The fair value of RSUs, RSAs and PSUs is based on the closing price of the Company's common stock on the grant date. | |
Foreign currency translation and transactions | ' |
Foreign Currency Translation and Transactions | |
The financial statements of the Company's foreign subsidiaries are translated into the reporting currency of the Company which is the U.S. dollar. The functional currency of certain of the Company's foreign subsidiaries is the local currency of the subsidiary. Accordingly, the assets and liabilities of the Company's foreign subsidiaries are translated into U.S. dollars using the exchange rate in effect at each balance sheet date. Revenue and expense accounts are generally translated using the average rate of exchange during the period. Foreign currency translation adjustments are accumulated as a component of other comprehensive income or loss as a separate component of stockholders' equity. Gains and losses arising from transactions denominated in currencies other than the functional currency of the entity are charged directly against earnings in the Consolidated Statement of Operations. Gains and losses arising from transactions denominated in foreign currencies are primarily related to inter-company loans that have been determined to be temporary in nature, cash, long-term debt and accounts payable denominated in non-functional currencies. | |
Significant customer credit risk and supply risk | ' |
Significant Customer Credit Risk and Supply Risk | |
The majority of the Company's customers are located in the U.S. and Canada. With the exception of M.Block & Sons ("MBlock") as described below, concentration of credit risk with respect to accounts receivable is limited due to the large number of customers in various channels comprising the Company's customer base. The Company does not require collateral from customers as ongoing credit evaluations of customers' payment histories are performed. The Company maintains reserves for potential credit losses and such losses, in the aggregate, have not exceeded management's expectations. | |
The Company procures the majority of the brewers it sells from one third-party brewer manufacturer. Purchases from this brewer manufacturer amounted to approximately $637.0 million, $721.3 million and $545.3 million in fiscal years 2013, 2012 and 2011, respectively. | |
The Company primarily relies on MBlock to process the majority of sales orders for our AH single serve business with retailers in the United States. The Company is subject to significant credit risk regarding the creditworthiness of MBlock and, in turn, the creditworthiness of the retailers. Sales processed by MBlock to retailers amounted to $1,600.2 million, $1,458.4 million and $997.0 million for fiscal years 2013, 2012 and 2011, respectively. The Company's account receivables due from MBlock amounted to $157.4 million and $133.1 million at September 28, 2013 and September 29, 2012, respectively. | |
Sales to customers that represented more than 10% of the Company's net sales included Wal-Mart Stores, Inc. and affiliates ("Wal-Mart"), representing approximately 14% and 12% of consolidated net sales for fiscal years 2013 and 2012, respectively; Costco Wholesale Corporation and affiliates ("Costco"), representing approximately 11% of consolidated net sales for fiscal 2013; and Bed Bath & Beyond, Inc., and affiliates ("Bed Bath & Beyond"), representing approximately 11% of consolidated net sales for fiscal 2011. For Wal-Mart and Bed Bath & Beyond, the majority of U.S. sales are processed through MBlock whereby MBlock is the vendor of record. Starting in fiscal 2012, for U.S. sales to Costco, the Company became the vendor of record and although the sales are processed through MBlock, the Company records the account receivables from the customer and pays MBlock for their fulfillment services. The Company's account receivables due from Costco amounted to $65.7 million, net of allowances, at September 28, 2013. | |
Research & Development | ' |
Research & Development | |
Research and development charges are expensed as incurred. These expenses amounted to $57.7 million, $41.7 million and $17.7 million in fiscal years 2013, 2012 and 2011, respectively. These costs primarily consist of salary and consulting expenses and are recorded in selling and operating expenses in each respective segment of the Company. | |
Recent accounting pronouncements | ' |
Recent Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board (the "FASB") issued an Accounting Standards Update ("ASU") No. 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists" ("ASU 2013-11"). ASU 2013-11 was issued to eliminate diversity in practice regarding the presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. Under ASU 2013-11, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. Otherwise, to the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective prospectively for reporting periods beginning after December 15, 2013, and early adoption is permitted. The adoption of ASU 2013-11 is not expected to have a material impact on the Company's net income, financial position or cash flows. | |
In March 2013, the FASB issued ASU No. 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity" ("ASU 2013-05"). ASU 2013-05 provides clarification regarding whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of cumulative translation adjustments into net income when a reporting entity either sells a part or all of its investment in a foreign entity or ceases to have a controlling financial interest in a subsidiary or group of assets that constitute a business within a foreign entity. The amendments in this ASU are effective prospectively for reporting periods beginning after December 15, 2013, and early adoption is permitted. The adoption of ASU 2013-05 is not expected to have a material impact on the Company's net income, financial position or cash flows. | |
In February 2013, the FASB issued ASU No. 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date" ("ASU 2013-04"). ASU 2013-04 provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors as well as any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The amendments in this ASU are effective for reporting periods beginning after December 15, 2013, with early adoption permitted. Retrospective application is required. The adoption of ASU 2013-04 is not expected to have a material impact on the Company's net income, financial position or cash flows. | |
In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Comprehensive Income" ("ASU 2013-02"). ASU 2013-02 requires an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For significant items not reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures that provide additional detail about those amounts. The amendments in this ASU are effective for annual reporting periods, and interim periods within those annual reporting periods, beginning after December 15, 2012, which for the Company will be the first quarter of fiscal 2014. The adoption of ASU 2013-02 is not expected to have an impact on the Company's net income, financial position or cash flows. | |
In December 2011, the FASB issued ASU No. 2011-11, "Disclosures about Offsetting Assets and Liabilities," ("ASU 2011-11") that provides amendments for disclosures about offsetting assets and liabilities. The amendments require an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. On January 31, 2013, the FASB issued ASU No. 2013-01, "Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities," which clarified that the scope of the disclosures is limited to include derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. The amendments are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Disclosures required by the amendments should be provided retrospectively for all comparative periods presented. For the Company, the amendments are effective for the fiscal year ending September 27, 2014 (fiscal year 2014). The adoption of ASU 2011-11 is not expected to have a material impact on the Company's disclosures. | |
Acquisitions_and_Divestitures_
Acquisitions and Divestitures (Tables) | 12 Months Ended | ||||||||||
Sep. 28, 2013 | |||||||||||
Acquisitions and Divestitures | ' | ||||||||||
Schedule of revenues and net income of disposal group included in the consolidated statement of operations | ' | ||||||||||
Filterfresh revenues and net income included in the Company's consolidated statement of operations were as follows (dollars in thousands, except per share data): | |||||||||||
For the period | For the period | ||||||||||
September 25, 2011 | December 17, 2010 | ||||||||||
through | (date of acquisition) | ||||||||||
October 3, 2011 | through | ||||||||||
(date of sale) | September 24, 2011 | ||||||||||
Net sales | $ | 2,286 | $ | 90,855 | |||||||
Net income | $ | 229 | $ | 12,263 | |||||||
Less income attributable to noncontrolling interests | 20 | 1,051 | |||||||||
Net income attributable to GMCR | $ | 209 | $ | 11,212 | |||||||
Diluted net income per share | $ | — | $ | 0.07 | |||||||
Schedule of the allocation of the purchase price to the acquired net assets | ' | ||||||||||
The table below represents the allocation of the purchase price to the acquired net assets of Van Houtte (in thousands): | |||||||||||
Total | Van Houtte | Filterfresh | |||||||||
Canadian | Assets Held | ||||||||||
Operations | For Sale | ||||||||||
Restricted cash | $ | 500 | $ | 500 | $ | — | |||||
Accounts receivable | 61,130 | 47,554 | 13,576 | ||||||||
Inventories | 42,958 | 36,691 | 6,267 | ||||||||
Income taxes receivable | 2,260 | 2,190 | 70 | ||||||||
Deferred income taxes | 4,903 | 3,577 | 1,326 | ||||||||
Other current assets | 5,047 | 4,453 | 594 | ||||||||
Fixed assets | 143,928 | 110,622 | 33,306 | ||||||||
Intangible assets | 375,099 | 355,549 | 19,550 | ||||||||
Goodwill | 472,331 | 409,493 | 62,838 | ||||||||
Other long-term assets | 1,577 | 962 | 615 | ||||||||
Accounts payable and accrued expenses | (54,502 | ) | (46,831 | ) | (7,671 | ) | |||||
Other short-term liabilities | (4,330 | ) | (3,404 | ) | (926 | ) | |||||
Income taxes payable | (1,496 | ) | (1,496 | ) | — | ||||||
Deferred income taxes | (117,086 | ) | (104,866 | ) | (12,220 | ) | |||||
Notes payable | (2,914 | ) | (1,770 | ) | (1,144 | ) | |||||
Other long-term liabilities | (2,452 | ) | (1,683 | ) | (769 | ) | |||||
Non-controlling interests | (19,118 | ) | (9,529 | ) | (9,589 | ) | |||||
$ | 907,835 | $ | 802,012 | $ | 105,823 | ||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 28, 2013 | |||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
Summary of approximate net effect of the changes on segment operating income | ' | ||||||||||||||||
The following table summarizes the approximate net effect of the above changes on segment income before taxes for fiscal 2013, 2012 and 2011 as a result of the above changes (in thousands). | |||||||||||||||||
Increase (decrease) in operating income (loss) | Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||||
Domestic | $ | (38,755 | ) | $ | 20,068 | $ | (29,584 | ) | |||||||||
Canada | 39,057 | (19,084 | ) | 22,157 | |||||||||||||
Corporate—Unallocated | — | — | — | ||||||||||||||
Eliminations | (302 | ) | (984 | ) | 7,427 | ||||||||||||
Consolidated | $ | — | $ | — | $ | — | |||||||||||
Summary of selected financial data for segment disclosures | ' | ||||||||||||||||
For Fiscal 2013 (Dollars in thousands) | |||||||||||||||||
Domestic | Canada | Corporate- | Consolidated | ||||||||||||||
Unallocated | |||||||||||||||||
Net sales | $ | 3,725,008 | $ | 633,092 | $ | — | $ | 4,358,100 | |||||||||
Operating income (loss) | $ | 826,092 | $ | 87,674 | $ | (148,539 | ) | $ | 765,227 | ||||||||
Depreciation and amortization | $ | 162,359 | $ | 65,334 | $ | 1,500 | $ | 229,193 | |||||||||
Stock compensation expense | $ | 9,909 | $ | 2,519 | $ | 13,653 | $ | 26,081 | |||||||||
For Fiscal 2012 (Dollars in thousands) | |||||||||||||||||
Domestic | Canada | Corporate- | Consolidated | ||||||||||||||
Unallocated | |||||||||||||||||
Net sales | $ | 3,233,674 | $ | 625,524 | $ | — | $ | 3,859,198 | |||||||||
Operating Income (loss) | $ | 576,949 | $ | 76,198 | $ | (84,251 | ) | $ | 568,896 | ||||||||
Depreciation and amortization | $ | 116,722 | $ | 62,984 | $ | 1,941 | $ | 181,647 | |||||||||
Stock compensation expense | $ | 7,808 | $ | 1,890 | $ | 8,170 | $ | 17,868 | |||||||||
For Fiscal 2011 (Dollars in thousands) | |||||||||||||||||
Domestic | Canada | Corporate- | Eliminations | Consolidated | |||||||||||||
Unallocated | |||||||||||||||||
Sales to unaffiliated customers | $ | 2,152,432 | $ | 498,467 | $ | — | $ | — | $ | 2,650,899 | |||||||
Intersegment sales | $ | 36,855 | $ | 98,347 | $ | — | $ | (135,202 | ) | $ | — | ||||||
Net sales | $ | 2,189,287 | $ | 596,814 | $ | — | $ | (135,202 | ) | $ | 2,650,899 | ||||||
Operating Income | $ | 399,638 | $ | 67,727 | $ | (73,259 | ) | $ | (25,193 | ) | $ | 368,913 | |||||
Depreciation and amortization | $ | 68,439 | $ | 45,193 | $ | 4 | $ | — | $ | 113,636 | |||||||
Stock compensation expense | $ | 5,519 | $ | 470 | $ | 4,372 | $ | — | $ | 10,361 | |||||||
Schedule of information concerning net sales of principal geographic areas | ' | ||||||||||||||||
Information concerning net sales of principal geographic areas is as follows (in thousands): | |||||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||||||||
Net Sales: | |||||||||||||||||
United States | $ | 3,721,182 | $ | 3,248,543 | $ | 2,248,811 | |||||||||||
Canada | 634,360 | 609,828 | 400,682 | ||||||||||||||
Other | 2,558 | 827 | 1,406 | ||||||||||||||
$ | 4,358,100 | $ | 3,859,198 | $ | 2,650,899 | ||||||||||||
Schedule of information concerning long-lived assets of principal geographic areas | ' | ||||||||||||||||
Information concerning long-lived assets of principal geographic area is as follows (in thousands) as of: | |||||||||||||||||
September 28, 2013 | September 29, 2012 | ||||||||||||||||
Fixed Assets, net: | |||||||||||||||||
United States | $ | 844,471 | $ | 783,075 | |||||||||||||
Canada | 135,440 | 143,640 | |||||||||||||||
Other | 5,652 | 17,581 | |||||||||||||||
$ | 985,563 | $ | 944,296 | ||||||||||||||
Schedule of net sales by major product category | ' | ||||||||||||||||
Net sales by major product category (in thousands): | |||||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||||||||
Portion Packs | $ | 3,187,350 | $ | 2,708,886 | $ | 1,704,021 | |||||||||||
Brewers and Accessories | 827,570 | 759,805 | 524,709 | ||||||||||||||
Other Products and Royalties | 343,180 | 390,507 | 422,169 | ||||||||||||||
$ | 4,358,100 | $ | 3,859,198 | $ | 2,650,899 | ||||||||||||
Inventories_Tables
Inventories (Tables) | 12 Months Ended | |||||||
Sep. 28, 2013 | ||||||||
Inventories | ' | |||||||
Schedule of inventories | ' | |||||||
Inventories consisted of the following (in thousands) as of: | ||||||||
September 28, 2013 | September 29, 2012 | |||||||
Raw materials and supplies | $ | 182,882 | $ | 229,927 | ||||
Finished goods | 493,207 | 538,510 | ||||||
$ | 676,089 | $ | 768,437 | |||||
Schedule of minimum future inventory purchase commitments | ' | |||||||
As of September 28, 2013, minimum future inventory purchase commitments were as follows (in thousands): | ||||||||
Fiscal Year | Inventory | |||||||
Purchase | ||||||||
Obligations | ||||||||
2014 | $ | 456,955 | ||||||
2015 | 124,588 | |||||||
2016 | 119,565 | |||||||
2017 | 110,837 | |||||||
2018 | 111,086 | |||||||
$ | 923,031 | |||||||
Fixed_Assets_Tables
Fixed Assets (Tables) | 12 Months Ended | |||||||||
Sep. 28, 2013 | ||||||||||
Fixed Assets | ' | |||||||||
Schedule of fixed assets | ' | |||||||||
Fixed assets consisted of the following (in thousands) as of: | ||||||||||
Useful Life in Years | September 28, | September 29, | ||||||||
2013 | 2012 | |||||||||
Production equipment | 1 - 15 | $ | 680,457 | $ | 544,491 | |||||
Coffee service equipment | 3 - 7 | 59,169 | 63,722 | |||||||
Computer equipment and software | 1 - 6 | 146,246 | 111,441 | |||||||
Land | Indefinite | 11,520 | 11,740 | |||||||
Building and building improvements | 4 - 30 | 134,495 | 83,172 | |||||||
Furniture and fixtures | 1 - 15 | 33,975 | 28,477 | |||||||
Vehicles | 4 - 5 | 11,786 | 10,306 | |||||||
Leasehold improvements | 1 - 20 or remaining life of lease, whichever is less | 98,990 | 72,755 | |||||||
Assets acquired under capital leases | 5 - 15 | 41,200 | 51,047 | |||||||
Construction-in-progress | 202,940 | 234,442 | ||||||||
Total fixed assets | $ | 1,420,778 | $ | 1,211,593 | ||||||
Accumulated depreciation | (435,215 | ) | (267,297 | ) | ||||||
$ | 985,563 | $ | 944,296 | |||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||
Sep. 28, 2013 | ||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||
Schedule of changes in the carrying amount of goodwill | ' | |||||||||||||||
The following represented the change in the carrying amount of goodwill by segment for fiscal 2013 and 2012 (in thousands): | ||||||||||||||||
Domestic | Canada | Total | ||||||||||||||
Balance as of September 24, 2011 | $ | 386,416 | $ | 402,889 | $ | 789,305 | ||||||||||
Reassignment of Timothy's goodwill | (17,063 | ) | 17,063 | — | ||||||||||||
Foreign currency effect | — | 18,771 | 18,771 | |||||||||||||
Balance as of September 29, 2012 | $ | 369,353 | $ | 438,723 | $ | 808,076 | ||||||||||
Foreign currency effect | — | (19,892 | ) | (19,892 | ) | |||||||||||
Balance as of September 28, 2013 | $ | 369,353 | $ | 418,831 | $ | 788,184 | ||||||||||
Schedule of indefinite-lived intangible assets | ' | |||||||||||||||
Indefinite-lived intangible assets included in the Canada operating segment consisted of the following (in thousands) as of: | ||||||||||||||||
September 28, | September 29, | |||||||||||||||
2013 | 2012 | |||||||||||||||
Trade names | $ | 97,740 | $ | 102,381 | ||||||||||||
Schedule of definite-lived intangible assets | ' | |||||||||||||||
Definite-lived intangible assets consisted of the following (in thousands) as of: | ||||||||||||||||
September 28, 2013 | September 29, 2012 | |||||||||||||||
Useful Life in | Gross Carrying | Accumulated | Gross Carrying | Accumulated | ||||||||||||
Years | Amount | Amortization | Amount | Amortization | ||||||||||||
Acquired technology | 4 - 10 | $ | 21,609 | $ | (17,123 | ) | $ | 21,622 | $ | (15,433 | ) | |||||
Customer and roaster agreements | 8 - 11 | 26,977 | (19,750 | ) | 27,323 | (16,796 | ) | |||||||||
Customer relationships | 2 - 16 | 414,967 | (113,061 | ) | 430,178 | (79,168 | ) | |||||||||
Trade names | 9 - 11 | 37,200 | (13,353 | ) | 38,000 | (9,785 | ) | |||||||||
Non-compete agreements | 2 - 5 | 374 | (364 | ) | 374 | (344 | ) | |||||||||
Total | $ | 501,127 | $ | (163,651 | ) | $ | 517,497 | $ | (121,526 | ) | ||||||
Schedule of estimated aggregate amortization expense over each of the next five years and thereafter | ' | |||||||||||||||
The estimated aggregate amortization expense over each of the next five years and thereafter, is as follows (in thousands): | ||||||||||||||||
2014 | $ | 44,361 | ||||||||||||||
2015 | 42,807 | |||||||||||||||
2016 | 42,081 | |||||||||||||||
2017 | 40,686 | |||||||||||||||
2018 | 40,686 | |||||||||||||||
Thereafter | 126,855 |
Noncontrolling_Interests_Table
Noncontrolling Interests (Tables) | 12 Months Ended | |||||||
Sep. 28, 2013 | ||||||||
Noncontrolling Interests | ' | |||||||
Schedule of changes in the liability and temporary equity attributable to redeemable NCIs | ' | |||||||
The changes in the liability and temporary equity attributable to redeemable NCIs for the three fiscal years in the period ended September 28, 2013 are as follows (in thousands): | ||||||||
Liability attributable to | Equity attributable | |||||||
mandatorily redeemable | to redeemable | |||||||
noncontrolling interests | noncontrolling interests | |||||||
Balance at September 25, 2010 | $ | — | $ | — | ||||
Purchase noncontrolling interests | — | 19,118 | ||||||
Net income | — | 1,547 | ||||||
Adjustment to redemption value | — | 1,618 | ||||||
Cash distributions | — | (1,063 | ) | |||||
Other comprehensive loss, net of tax | — | (186 | ) | |||||
Balance at September 24, 2011 | $ | — | $ | 21,034 | ||||
Disposition of noncontrolling interest | — | (10,331 | ) | |||||
Redeemable noncontrolling interest reclassified to other long-term liabilities | 4,708 | (4,708 | ) | |||||
Net income | 60 | 812 | ||||||
Adjustment to redemption value | 167 | 3,155 | ||||||
Cash distributions | (204 | ) | (513 | ) | ||||
Other comprehensive loss, net of tax | 197 | 455 | ||||||
Balance at September 29, 2012 | $ | 4,928 | $ | 9,904 | ||||
Net income | 462 | 409 | ||||||
Adjustment to redemption value | 372 | 2,025 | ||||||
Cash distributions | (583 | ) | (823 | ) | ||||
Other comprehensive loss, net of tax | (245 | ) | (470 | ) | ||||
Balance at September 28, 2013 | $ | 4,934 | $ | 11,045 | ||||
Product_Warranties_Tables
Product Warranties (Tables) | 12 Months Ended | |||||||
Sep. 28, 2013 | ||||||||
Product Warranties | ' | |||||||
Schedule of changes in the carrying amount of product warranties | ' | |||||||
The changes in the carrying amount of product warranties for fiscal years 2013 and 2012 are as follows (in thousands): | ||||||||
Fiscal 2013 | Fiscal 2012 | |||||||
Balance, beginning of year | $ | 20,218 | $ | 14,728 | ||||
Provision related to current period | 20,447 | 47,026 | ||||||
Change in estimate | (12,720 | ) | (1,287 | ) | ||||
Usage | (20,141 | ) | (40,249 | ) | ||||
Balance, end of year | $ | 7,804 | $ | 20,218 | ||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | ||||||||||||
Sep. 28, 2013 | |||||||||||||
Long-Term Debt | ' | ||||||||||||
Outstanding long-term debt | ' | ||||||||||||
Long-term debt outstanding consists of the following (in thousands) as of: | |||||||||||||
September 28, 2013 | September 29, 2012 | ||||||||||||
Revolving credit facility, USD | $ | — | $ | 120,000 | |||||||||
Revolving credit facility, multicurrency | — | 108,787 | |||||||||||
Term loan A | 170,937 | 242,188 | |||||||||||
Other | 2,213 | 2,700 | |||||||||||
Total long-term debt | $ | 173,150 | $ | 473,675 | |||||||||
Less current portion | 12,929 | 6,691 | |||||||||||
Long-term portion | $ | 160,221 | $ | 466,984 | |||||||||
Debt related derivative instruments | ' | ||||||||||||
Below is a summary of the Company's derivative instruments in effect as of September 28, 2013 mitigating interest rate exposure of variable-rate borrowings (in thousands): | |||||||||||||
Derivative Instrument | Hedged | Notional Amount of | Fixed Rate | Maturity | |||||||||
Transaction | Underlying Debt | Received | (Fiscal Year) | ||||||||||
Swap | 30-day Libor | 20,000 | 2.54 | % | 2016 | ||||||||
Swap | 30-day Libor | 30,000 | 2.54 | % | 2016 | ||||||||
Swap | 30-day Libor | 50,000 | 2.54 | % | 2016 | ||||||||
Swap | 30-day Libor | 30,000 | 2.54 | % | 2016 | ||||||||
$ | 130,000 | ||||||||||||
Maturities of long-term debt | ' | ||||||||||||
Scheduled maturities of long-term debt are as follows (in thousands): | |||||||||||||
Fiscal Year | |||||||||||||
2014 | $ | 12,929 | |||||||||||
2015 | 19,165 | ||||||||||||
2016 | 140,064 | ||||||||||||
2017 | 377 | ||||||||||||
2018 | 395 | ||||||||||||
Thereafter | 220 | ||||||||||||
$ | 173,150 | ||||||||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 12 Months Ended | |||||||||||||
Sep. 28, 2013 | ||||||||||||||
Derivative Financial Instruments | ' | |||||||||||||
Summary of fair value of derivatives included on Consolidated Balance Sheets | ' | |||||||||||||
The following table summarizes the fair value of the Company's derivatives included on the Consolidated Balance Sheets (in thousands) as of: | ||||||||||||||
September 28, 2013 | September 29, 2012 | Balance Sheet Classification | ||||||||||||
Derivatives designated as hedges: | ||||||||||||||
Interest rate swaps | $ | (6,004 | ) | $ | (9,019 | ) | Other current liabilities | |||||||
Coffee futures | (3,809 | ) | (342 | ) | Other current liabilities | |||||||||
Foreign currency forward contracts | (141 | ) | — | Other current liabilities | ||||||||||
Foreign currency forward contracts | 13 | — | Other current assets | |||||||||||
(9,941 | ) | (9,361 | ) | |||||||||||
Derivatives not designated as hedges: | ||||||||||||||
Cross currency swap | (1,253 | ) | (7,242 | ) | Other current liabilities | |||||||||
(1,253 | ) | (7,242 | ) | |||||||||||
Total | $ | (11,194 | ) | $ | (16,603 | ) | ||||||||
Summary of outstanding coffee futures contracts | ' | |||||||||||||
The following table summarizes the coffee futures contracts outstanding as of September 28, 2013 (in thousands, except for average contract price and "C" price): | ||||||||||||||
Coffee Pounds | Average | "C" Price | Maturity | Fair Value of | ||||||||||
Contract Price | Futures Contracts | |||||||||||||
375 | $ | 1.5 | $ | 1.14 | Dec-13 | $ | (138 | ) | ||||||
5,887 | $ | 1.39 | $ | 1.17 | Mar-14 | (1,308 | ) | |||||||
11,438 | $ | 1.3 | $ | 1.19 | May-14 | (1,222 | ) | |||||||
10,875 | $ | 1.32 | $ | 1.21 | Jul-14 | (1,141 | ) | |||||||
28,575 | $ | (3,809 | ) | |||||||||||
The following table summarizes the coffee futures contracts outstanding as of September 29, 2012 (in thousands, except for average contract price and "C" price): | ||||||||||||||
Coffee Pounds | Average | "C" Price | Maturity | Fair Value of | ||||||||||
Contract Price | Futures Contracts | |||||||||||||
938 | $ | 1.92 | $ | 1.74 | Dec-12 | $ | (169 | ) | ||||||
938 | $ | 1.96 | $ | 1.78 | Mar-13 | (171 | ) | |||||||
675 | $ | 1.8 | $ | 1.8 | May-13 | (1 | ) | |||||||
375 | $ | 1.83 | $ | 1.83 | Jul-13 | $ | (1 | ) | ||||||
262 | $ | 1.86 | $ | 1.86 | Sep-13 | $ | 0 | |||||||
3,188 | $ | (342 | ) | |||||||||||
Summary of gain (loss), gross of tax, on financial instruments that qualify for hedge accounting included in OCI | ' | |||||||||||||
The following table summarizes the amount of gain (loss), gross of tax, on financial instruments that qualify for hedge accounting included in OCI (in thousands): | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Cash Flow Hedges: | ||||||||||||||
Interest rate swaps | $ | 3,014 | $ | 1,250 | $ | (7,928 | ) | |||||||
Coffee futures | (6,617 | ) | (2,484 | ) | 407 | |||||||||
Forward currency forward contracts | (129 | ) | — | — | ||||||||||
Total | $ | (3,732 | ) | $ | (1,234 | ) | $ | (7,521 | ) | |||||
Summary of gain (loss), gross of tax, reclassified from OCI to income | ' | |||||||||||||
The following table summarizes the amount of gain (loss), gross of tax, reclassified from OCI to income (in thousands): | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Interest rate cap | $ | — | $ | — | $ | (392 | ) | Gain (loss) on financial instruments, net | ||||||
Coffee futures | (1,482 | ) | (1,359 | ) | (27 | ) | Cost of Sales | |||||||
Forward currency forward contracts | (2 | ) | — | — | (Loss) gain on foreign currency, net | |||||||||
Total | $ | (1,484 | ) | $ | (1,359 | ) | $ | (419 | ) | |||||
Summarizes the amount of gain (loss), gross of tax, on fair value hedges and related hedged items | ' | |||||||||||||
The following table summarizes the amount of gain (loss), gross of tax, on fair value hedges and related hedged items (in thousands): | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | Location of gain (loss) | |||||||||||
recognized in income on derivative | ||||||||||||||
Foreign currency forward contracts | ||||||||||||||
Net loss on hedging derivatives | $ | (10 | ) | $ | (48 | ) | $ | — | (Loss) gain on foreign currency, net | |||||
Net gain on hedged items | $ | 10 | $ | 48 | $ | — | (Loss) gain on foreign currency, net | |||||||
Schedule of net losses on financial instruments not designated as hedges for accounting purposes recorded in gain (loss) on financial instruments, net | ' | |||||||||||||
Net losses on financial instruments not designated as hedges for accounting purposes recorded in gain (loss) on financial instruments, net, is as follows (in thousands): | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Net gain (loss) on cross currency swap | $ | 5,513 | $ | (4,918 | ) | $ | (2,324 | ) | ||||||
Net gain (loss) on coffee futures | — | 7 | (250 | ) | ||||||||||
Net loss on interest rate cap | — | (34 | ) | (615 | ) | |||||||||
Net loss on foreign currency option and forward contracts | — | — | (3,056 | ) | ||||||||||
Total | $ | 5,513 | $ | (4,945 | ) | $ | (6,245 | ) | ||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||
Sep. 28, 2013 | |||||||||||
Fair Value Measurements | ' | ||||||||||
Summary of the fair values and the levels used in fair value measurements for financial (liabilities) assets | ' | ||||||||||
The following table summarizes the fair values and the levels used in fair value measurements as of September 28, 2013 for the Company's financial (liabilities) assets (in thousands): | |||||||||||
Fair Value | |||||||||||
Measurements Using | |||||||||||
Level 1 | Level 2 | Level 3 | |||||||||
Derivatives: | |||||||||||
Interest rate swaps | $ | — | $ | (6,004 | ) | $ | — | ||||
Cross currency swap | — | (1,253 | ) | — | |||||||
Coffee futures | — | (3,809 | ) | — | |||||||
Foreign currency forward contracts | — | (128 | ) | — | |||||||
Total | $ | — | $ | (11,194 | ) | $ | — | ||||
The following table summarizes the fair values and the levels used in fair value measurements as of September 29, 2012 for the Company's financial liabilities (in thousands): | |||||||||||
Fair Value | |||||||||||
Measurements Using | |||||||||||
Level 1 | Level 2 | Level 3 | |||||||||
Derivatives: | |||||||||||
Interest rate swaps | $ | — | $ | (9,019 | ) | $ | — | ||||
Cross currency swap | — | (7,242 | ) | — | |||||||
Coffee futures | — | (342 | ) | — | |||||||
Foreign currency forward contracts | — | — | — | ||||||||
Total | $ | — | $ | (16,603 | ) | $ | — | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Sep. 28, 2013 | |||||||||||
Income Taxes | ' | ||||||||||
Income before income taxes and the provision for income taxes | ' | ||||||||||
Income before income taxes and the provision for income taxes for fiscal years 2013, 2012 and 2011, consist of the following (in thousands): | |||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||
Income before income taxes: | |||||||||||
United States | $ | 675,438 | $ | 486,258 | $ | 248,108 | |||||
Foreign | 65,436 | 89,883 | 54,639 | ||||||||
Total income before income taxes | $ | 740,874 | $ | 576,141 | $ | 302,747 | |||||
Income tax expense: | |||||||||||
United States federal: | |||||||||||
Current | $ | 202,006 | $ | 75,932 | $ | 75,225 | |||||
Deferred | (8,654 | ) | 74,042 | (3,327 | ) | ||||||
193,352 | 149,974 | 71,898 | |||||||||
State and local: | |||||||||||
Current | 47,930 | 40,270 | 13,939 | ||||||||
Deferred | (1,695 | ) | (712 | ) | (1,758 | ) | |||||
46,235 | 39,558 | 12,181 | |||||||||
Total United States | 239,587 | 189,532 | 84,079 | ||||||||
Foreign: | |||||||||||
Current | 29,901 | 26,860 | 21,306 | ||||||||
Deferred | (12,717 | ) | (3,751 | ) | (3,686 | ) | |||||
Total foreign | 17,184 | 23,109 | 17,620 | ||||||||
Total income tax expense | $ | 256,771 | $ | 212,641 | $ | 101,699 | |||||
Net deferred tax liabilities | ' | ||||||||||
Net deferred tax liabilities consist of the following (in thousands) as of: | |||||||||||
September 28, | September 29, | ||||||||||
2013 | 2012 | ||||||||||
Deferred tax assets: | |||||||||||
Section 263A capitalized expenses | $ | 1,876 | $ | 2,150 | |||||||
Deferred hedging losses | 4,774 | 3,919 | |||||||||
Deferred compensation | 13,632 | 11,534 | |||||||||
Net operating loss carryforward | — | 1,017 | |||||||||
Capital loss carryforward | 1,418 | 1,418 | |||||||||
Valuation allowance—capital loss carryforward | (1,418 | ) | (1,418 | ) | |||||||
Warranty, obsolete inventory and bad debt allowance | 32,692 | 27,421 | |||||||||
Tax credit carryforwards | 3,651 | 3,301 | |||||||||
Other reserves and temporary differences | 15,558 | 12,412 | |||||||||
Gross deferred tax assets | 72,183 | 61,754 | |||||||||
Deferred tax liabilities: | |||||||||||
Prepaid expenses | (2,994 | ) | (2,367 | ) | |||||||
Depreciation | (125,504 | ) | (123,044 | ) | |||||||
Intangible assets | (138,262 | ) | (144,329 | ) | |||||||
Other reserves and temporary differences | (237 | ) | (10,994 | ) | |||||||
Gross deferred tax liabilities | (266,997 | ) | (280,734 | ) | |||||||
Net deferred tax liabilities | $ | (194,814 | ) | $ | (218,980 | ) | |||||
Reconciliation for continuing operations of reported income tax expense and amount computed using U.S. Federal Statutory rate | ' | ||||||||||
A reconciliation for continuing operations between the amount of reported income tax expense and the amount computed using the U.S. Federal Statutory rate of 35% is as follows (in thousands): | |||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||
Tax at U.S. Federal Statutory rate | $ | 259,306 | $ | 201,692 | $ | 105,961 | |||||
Increase (decrease) in rates resulting from: | |||||||||||
Foreign tax rate differential | (13,087 | ) | (18,072 | ) | (9,289 | ) | |||||
Non-deductible stock compensation expense | 2,700 | 1,024 | 1,761 | ||||||||
State taxes, net of federal benefit | 31,869 | 27,114 | 11,276 | ||||||||
Provincial taxes | 7,878 | 10,591 | 6,309 | ||||||||
Domestic production activities deduction | (23,558 | ) | (9,245 | ) | (7,831 | ) | |||||
Acquisition costs | — | — | 4,158 | ||||||||
Federal tax credits | (4,506 | ) | (282 | ) | (962 | ) | |||||
Release of capital loss valuation allowance | — | (3,071 | ) | (6,194 | ) | ||||||
Other | (3,831 | ) | 2,890 | (3,490 | ) | ||||||
Tax at effective rates | $ | 256,771 | $ | 212,641 | $ | 101,699 | |||||
Reconciliation of unrecognized tax benefits, including interest and penalties | ' | ||||||||||
A reconciliation of increases and decreases in unrecognized tax benefits, including interest and penalties, is as follows (in thousands): | |||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||
Gross tax contingencies—balance, beginning of year | $ | 23,956 | $ | 24,419 | $ | 5,480 | |||||
Increases from positions taken during prior periods | 438 | 2,864 | — | ||||||||
Decreases from positions taken during prior periods | — | (4,093 | ) | (236 | ) | ||||||
Increases from positions taken during current periods | 2,709 | 906 | 19,175 | ||||||||
Decreases resulting from the lapse of the applicable statute of limitations | (3,820 | ) | (140 | ) | — | ||||||
Gross tax contingencies—balance, end of year | $ | 23,283 | $ | 23,956 | $ | 24,419 | |||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||
Sep. 28, 2013 | |||||||||||
Stockholders' Equity | ' | ||||||||||
Components of stock repurchase program | ' | ||||||||||
Fiscal 2013 | Fiscal 2012 | ||||||||||
Number of shares acquired | 5,642,793 | 3,120,700 | |||||||||
Average price per share of acquired shares | $ | 33.37 | $ | 24.5 | |||||||
Total cost of acquired shares (in thousands) | $ | 188,278 | $ | 76,470 | |||||||
Changes in components of accumulated other comprehensive income (loss), net of tax | ' | ||||||||||
The following table provides the changes in the components of accumulated other comprehensive income (loss), net of tax (in thousands): | |||||||||||
Cash Flow | Translation | Accumulated | |||||||||
Hedges | Other | ||||||||||
Comprehensive | |||||||||||
Income (Loss) | |||||||||||
Balance at September 25, 2010 | $ | (1,630 | ) | $ | — | $ | (1,630 | ) | |||
Other comprehensive loss during the period | (4,236 | ) | (8,709 | ) | (12,945 | ) | |||||
Balance at September 24, 2011 | (5,866 | ) | (8,709 | ) | (14,575 | ) | |||||
Other comprehensive income during the period | 74 | 24,701 | 24,775 | ||||||||
Balance at September 29, 2012 | (5,792 | ) | 15,992 | 10,200 | |||||||
Other comprehensive loss during the period | (1,358 | ) | (28,027 | ) | (29,385 | ) | |||||
Balance at September 28, 2013 | $ | (7,150 | ) | $ | (12,035 | ) | $ | (19,185 | ) | ||
Employee_Compensation_Plans_Ta
Employee Compensation Plans (Tables) | 12 Months Ended | |||||||||||||
Sep. 28, 2013 | ||||||||||||||
Employee Compensation Plans | ' | |||||||||||||
Summary of option activity | ' | |||||||||||||
Number of | Weighted Average | |||||||||||||
Shares | Exercise Price | |||||||||||||
(per share) | ||||||||||||||
Outstanding at September 29, 2012 | 7,470,975 | $ | 12.56 | |||||||||||
Granted | 474,236 | $ | 45.48 | |||||||||||
Exercised | (2,849,308 | ) | $ | 6.95 | ||||||||||
Forfeited/expired | (73,563 | ) | $ | 49.53 | ||||||||||
Outstanding at September 28, 2013 | 5,022,340 | $ | 18.3 | |||||||||||
Exercisable at September 28, 2013 | 3,958,017 | $ | 10.7 | |||||||||||
Stock options vested and expected to vest | ' | |||||||||||||
Number of options | Weighted average | Weighted average | Intrinsic value at | |||||||||||
outstanding | remaining | exercise price | September 28, | |||||||||||
contractual life | 2013 | |||||||||||||
(in years) | (in thousands) | |||||||||||||
5,011,076 | 4.81 | $ | 18.24 | $ | 284,095 | |||||||||
Stock options exercisable | ' | |||||||||||||
Number of options | Weighted average | Weighted average | Intrinsic value at | |||||||||||
exercisable | remaining | exercise price | September 28, | |||||||||||
contractual life | 2013 | |||||||||||||
(in years) | (in thousands) | |||||||||||||
3,958,017 | 3.9 | $ | 10.7 | $ | 254,162 | |||||||||
Schedule of assumptions used in estimating the grant-date fair value of employee stock options and similar instruments | ' | |||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Average expected life | 6 years | 6 years | 6 years | |||||||||||
Average volatility | 81 | % | 69 | % | 52 | % | ||||||||
Dividend yield | — | — | — | |||||||||||
Risk-free interest rate | 1.02 | % | 1.31 | % | 2.37 | % | ||||||||
Weighted average fair value | $ | 31.23 | $ | 30.1 | $ | 29.34 | ||||||||
Summary of nonvested Restricted Stock Unit activity | ' | |||||||||||||
The following table summarizes the number and weighted average grant-date fair value of nonvested RSUs (amounts in thousands except grant date fair value and weighted average remaining contractual life): | ||||||||||||||
Share Units | Weighted Average | Weighted Average | Intrinsic Value | |||||||||||
Grant-Date | Remaining | (in Thousands) | ||||||||||||
Fair Value | Contractual | |||||||||||||
Life (in Years) | ||||||||||||||
Nonvested, September 29, 2012 | 81,834 | $ | 39.62 | 3.52 | $ | 1,943 | ||||||||
Granted | 175,789 | $ | 45.19 | |||||||||||
Vested | (34,761 | ) | $ | 47.22 | ||||||||||
Forfeited | (1,360 | ) | $ | 54.12 | ||||||||||
Nonvested, September 28, 2013 | 221,502 | $ | 42.74 | 1.71 | $ | 16,586 | ||||||||
Summary of the number and weighted average grant-date fair value of nonvested PSUs | ' | |||||||||||||
Share Units | Weighted Average | |||||||||||||
Grant-Date | ||||||||||||||
Fair Value | ||||||||||||||
Outstanding on September 29, 2012 | — | — | ||||||||||||
Granted | 122,719 | $ | 41.28 | |||||||||||
Forfeited | (2,051 | ) | $ | 51.56 | ||||||||||
Outstanding on September 28, 2013(1) | 120,668 | $ | 41.1 | |||||||||||
-1 | ||||||||||||||
The outstanding PSUs as of September 28, 2013, at the threshold award and maximum award levels were 96,534 and 144,802, respectively. | ||||||||||||||
Schedule of assumptions used in estimating the grant-date fair value of employees' purchase rights under Employee Stock Purchase Plan | ' | |||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Average expected life | 6 months | 6 months | 6 months | |||||||||||
Average volatility | 86 | % | 70 | % | 57 | % | ||||||||
Dividend yield | — | — | — | |||||||||||
Risk-free interest rate | 0.13 | % | 0.09 | % | 0.19 | % | ||||||||
Weighted average fair value | $ | 14.38 | $ | 11.61 | $ | 15.97 | ||||||||
Equity-based compensation recognized and related tax benefit | ' | |||||||||||||
Stock-based compensation expense recognized in the Consolidated Statements of Operations in fiscal years 2013, 2012, and 2011 (in thousands): | ||||||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | ||||||||||||
Options | $ | 14,151 | $ | 12,595 | $ | 8,206 | ||||||||
RSUs/PSUs/RSAs | 7,529 | 1,861 | — | |||||||||||
ESPP | 4,401 | 3,412 | 2,155 | |||||||||||
Total stock-based compensation expense recognized in the Consolidated Statements of Operations | $ | 26,081 | $ | 17,868 | $ | 10,361 | ||||||||
Total related tax benefit | $ | 9,936 | $ | 6,004 | $ | 3,147 |
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | |||||||
Sep. 28, 2013 | ||||||||
Accrued Expenses | ' | |||||||
Schedule of accrued expenses | ' | |||||||
Accrued expenses consisted of the following (in thousands) as of: | ||||||||
September 28, 2013 | September 29, 2012 | |||||||
Accrued compensation costs | $ | 91,418 | $ | 38,458 | ||||
Accrued customer incentives and promotions | 53,689 | 28,374 | ||||||
Accrued freight, fulfillment and transportation costs | 21,941 | 18,455 | ||||||
Accrued sustainability expenses | 9,275 | 11,046 | ||||||
Accrued legal and professional services | 8,278 | 5,010 | ||||||
Warranty reserve | 7,804 | 20,218 | ||||||
Other | 50,022 | 49,889 | ||||||
$ | 242,427 | $ | 171,450 | |||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||||
Sep. 28, 2013 | ||||||||||||||
Commitments and Contingencies | ' | |||||||||||||
Schedule Of Minimum Future Lease Payments Under Non-cancellable Leases And Minimum Rentals To Be Received Under Non-cancellable Subleases | ' | |||||||||||||
As of September 28, 2013, future minimum lease payments under financing obligations, capital lease obligations and non-cancellable operating leases as well as minimum payments to be received under non-cancellable subleases are as follows (in thousands): | ||||||||||||||
Fiscal Year | Capital Leases | Operating Leases | Subleases | Financing | ||||||||||
Obligations | ||||||||||||||
2014 | $ | 3,518 | $ | 16,602 | $ | (1,021 | ) | $ | 2,029 | |||||
2015 | 3,838 | 15,534 | (1,012 | ) | 8,661 | |||||||||
2016 | 3,837 | 11,797 | (848 | ) | 9,580 | |||||||||
2017 | 3,837 | 8,631 | (690 | ) | 9,580 | |||||||||
2018 | 3,837 | 5,280 | (634 | ) | 9,665 | |||||||||
Thereafter | 31,980 | 20,140 | (2,156 | ) | 113,722 | |||||||||
Total | $ | 50,847 | $ | 77,984 | $ | (6,361 | ) | $ | 153,237 | |||||
Less: amount representing interest | (17,075 | ) | ||||||||||||
Present value of future minimum lease payments | $ | 33,772 | ||||||||||||
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||
Sep. 28, 2013 | |||||||||||
Earnings Per Share | ' | ||||||||||
Reconciliation of the numerator and denominator of basic and diluted earnings per share computations | ' | ||||||||||
The following table illustrates the reconciliation of the numerator and denominator of basic and diluted earnings per share computations (dollars in thousands, except share and per share data): | |||||||||||
Fiscal 2013 | Fiscal 2012 | Fiscal 2011 | |||||||||
Numerator for basic and diluted earnings per share: | |||||||||||
Net income attributable to GMCR | $ | 483,232 | $ | 362,628 | $ | 199,501 | |||||
Denominator: | |||||||||||
Basic weighted average shares outstanding | 149,638,636 | 154,933,948 | 146,214,860 | ||||||||
Effect of dilutive securities—stock options | 3,162,857 | 4,141,698 | 5,927,574 | ||||||||
Diluted weighted average shares outstanding | 152,801,493 | 159,075,646 | 152,142,434 | ||||||||
Basic net income per common share | $ | 3.23 | $ | 2.34 | $ | 1.36 | |||||
Diluted net income per common share | $ | 3.16 | $ | 2.28 | $ | 1.31 |
Unaudited_Quarterly_Financial_1
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended | |||||||||||||
Sep. 28, 2013 | ||||||||||||||
Unaudited Quarterly Financial Data | ' | |||||||||||||
Quarterly information | ' | |||||||||||||
The following table presents the quarterly information for fiscal 2013 (dollars in thousands, except per share data). Each fiscal quarter comprises 13 weeks. | ||||||||||||||
Fiscal 2013 | December 29, | March 30, | June 29, | September 28, | ||||||||||
2012 | 2013 | 2013 | 2013 | |||||||||||
Net sales | $ | 1,339,059 | $ | 1,004,792 | $ | 967,072 | $ | 1,047,177 | ||||||
Gross profit | $ | 419,163 | $ | 415,146 | $ | 407,618 | $ | 377,459 | ||||||
Net income attributable to GMCR | $ | 107,583 | $ | 132,421 | $ | 116,272 | $ | 126,956 | ||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.72 | $ | 0.89 | $ | 0.78 | $ | 0.84 | ||||||
Diluted | $ | 0.7 | $ | 0.87 | $ | 0.76 | $ | 0.83 | ||||||
The following table presents the quarterly information for fiscal 2012 (dollars in thousands, except per share data). Each fiscal quarter comprises 13 weeks, except the fiscal quarter ended September 29, 2012 which is comprised of 14 weeks. | ||||||||||||||
Fiscal 2012 | December 24, | March 24, | June 23, | September 29, | ||||||||||
2011 | 2012 | 2012 | 2012 | |||||||||||
Net sales | $ | 1,158,216 | $ | 885,052 | $ | 869,194 | $ | 946,736 | ||||||
Gross profit | $ | 336,604 | $ | 313,038 | $ | 303,311 | $ | 316,446 | ||||||
Net income attributable to GMCR | $ | 104,414 | $ | 93,031 | $ | 73,296 | $ | 91,887 | ||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.67 | $ | 0.6 | $ | 0.47 | $ | 0.59 | ||||||
Diluted | $ | 0.66 | $ | 0.58 | $ | 0.46 | $ | 0.58 | ||||||
The following table presents the quarterly information for fiscal 2011 (dollars in thousands, except per share data). Each fiscal quarter comprises 13 weeks. | ||||||||||||||
Fiscal 2011 | December 25, | March 26, | June 25, | September 24, | ||||||||||
2010 | 2011 | 2011 | 2011 | |||||||||||
Net sales | $ | 574,148 | $ | 647,658 | $ | 717,210 | $ | 711,883 | ||||||
Gross profit | $ | 143,600 | $ | 242,855 | $ | 264,080 | $ | 254,090 | ||||||
Net income attributable to GMCR | $ | 2,412 | $ | 65,372 | $ | 56,348 | $ | 75,369 | ||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.02 | $ | 0.46 | $ | 0.38 | $ | 0.49 | ||||||
Diluted | $ | 0.02 | $ | 0.44 | $ | 0.37 | $ | 0.47 |
Nature_of_Business_and_Organiz1
Nature of Business and Organization (Details) | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
item | |||
segment | |||
Nature of Business and Organization | ' | ' | ' |
Number of operating segments | 2 | ' | ' |
Number of channels in which products are distributed | 2 | ' | ' |
Length of fiscal year | '364 days | '371 days | '364 days |
Significant_Accounting_Policie2
Significant Accounting Policies (Details) (USD $) | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
Cash and Cash Equivalents | ' | ' | ' |
Restricted cash | $560,000 | $12,884,000 | ' |
Deferred Financing Costs | ' | ' | ' |
Deferred financing costs | 15,200,000 | 22,300,000 | ' |
Advertising Costs | ' | ' | ' |
Prepaid advertising costs | 4,100,000 | 2,400,000 | ' |
Advertising expense | 193,200,000 | 147,700,000 | 90,800,000 |
Research & Development | ' | ' | ' |
Research and development charges | $57,700,000 | $41,700,000 | $17,700,000 |
Significant_Accounting_Policie3
Significant Accounting Policies (Details 2) (USD $) | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
Concentration of Credit Risk | ' | ' | ' |
Accounts receivables of major customers | $467,976,000 | $363,771,000 | ' |
Supplier concentration | Brewers | ' | ' | ' |
Concentration of Credit Risk | ' | ' | ' |
Number of major suppliers | 1 | ' | ' |
Supplier concentration | Purchases | Brewers | ' | ' | ' |
Concentration of Credit Risk | ' | ' | ' |
Purchases from brewer manufacturer | 637,000,000 | 721,300,000 | 545,300,000 |
Customer concentration | Revenues | M.Block & Sons (MBlock) | ' | ' | ' |
Concentration of Credit Risk | ' | ' | ' |
Sales processed by major customers to retailers | 1,600,200,000 | 1,458,400,000 | 997,000,000 |
Customer concentration | Revenues | Wal-Mart Stores, Inc. and affiliates | ' | ' | ' |
Concentration of Credit Risk | ' | ' | ' |
Percentage of net sales | 14.00% | 12.00% | ' |
Customer concentration | Revenues | Costco | ' | ' | ' |
Concentration of Credit Risk | ' | ' | ' |
Percentage of net sales | 11.00% | ' | ' |
Customer concentration | Revenues | Bed Bath & Beyond, Inc | ' | ' | ' |
Concentration of Credit Risk | ' | ' | ' |
Percentage of net sales | ' | ' | 11.00% |
Credit concentration | Accounts receivable | M.Block & Sons (MBlock) | ' | ' | ' |
Concentration of Credit Risk | ' | ' | ' |
Accounts receivables of major customers | 157,400,000 | 133,100,000 | ' |
Credit concentration | Accounts receivable | Costco | ' | ' | ' |
Concentration of Credit Risk | ' | ' | ' |
Accounts receivables of major customers | $65,700,000 | ' | ' |
Acquisitions_and_Divestitures_1
Acquisitions and Divestitures (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Oct. 03, 2011 | Oct. 31, 2011 | Dec. 24, 2011 | Sep. 24, 2011 | Sep. 29, 2012 | |
Divestiture | ' | ' | ' | ' | ' |
Gain on sale of subsidiary | ' | ' | ' | ' | $26,311,000 |
Filterfresh | ' | ' | ' | ' | ' |
Divestiture | ' | ' | ' | ' | ' |
Cash received on sale of subsidiary | ' | 149,500,000 | ' | ' | ' |
Amount of cash transferred as part of sale of subsidiary | ' | 4,400,000 | ' | ' | ' |
Payment made for settlement of contingency | ' | 7,400,000 | ' | ' | ' |
Net cash inflow related to sale of subsidiary | ' | 137,700,000 | ' | ' | ' |
Gain on sale of subsidiary | ' | ' | 26,300,000 | ' | ' |
Revenues and net income of disposal group included in consolidated statement of operations | ' | ' | ' | ' | ' |
Net sales | 2,286,000 | ' | ' | 90,855,000 | ' |
Net income | 229,000 | ' | ' | 12,263,000 | ' |
Less income attributable to noncontrolling interests | 20,000 | ' | ' | 1,051,000 | ' |
Net income attributable to GMCR | 209,000 | ' | ' | 11,212,000 | ' |
Diluted net income per share (in dollars per share) | ' | ' | ' | $0.07 | ' |
Amount of sales not reflected in consolidated statement of operations | ' | ' | ' | $22,200,000 | $600,000 |
Acquisitions_and_Divestitures_2
Acquisitions and Divestitures (Details 2) (USD $) | 0 Months Ended | 12 Months Ended | ||
Dec. 17, 2010 | Sep. 28, 2013 | Sep. 24, 2011 | Sep. 29, 2012 | |
Acquisitions and divestitures | ' | ' | ' | ' |
Payments to acquire business, net of cash acquired | ' | ' | $907,835,000 | ' |
Allocation of the purchase price to the acquired net assets | ' | ' | ' | ' |
Goodwill | ' | 788,184,000 | 789,305,000 | 808,076,000 |
Van Houtte | ' | ' | ' | ' |
Acquisitions and divestitures | ' | ' | ' | ' |
Payments to acquire business, net of cash acquired | 907,800,000 | ' | ' | ' |
Allocation of the purchase price to the acquired net assets | ' | ' | ' | ' |
Restricted cash | 500,000 | ' | ' | ' |
Accounts receivable | 61,130,000 | ' | ' | ' |
Inventories | 42,958,000 | ' | ' | ' |
Income taxes receivable | 2,260,000 | ' | ' | ' |
Deferred income taxes | 4,903,000 | ' | ' | ' |
Other current assets | 5,047,000 | ' | ' | ' |
Fixed assets | 143,928,000 | ' | ' | ' |
Intangible assets | 375,099,000 | ' | ' | ' |
Goodwill | 472,331,000 | ' | ' | ' |
Other long-term assets | 1,577,000 | ' | ' | ' |
Accounts payable and accrued expenses | -54,502,000 | ' | ' | ' |
Other short-term liabilities | -4,330,000 | ' | ' | ' |
Income taxes payable | -1,496,000 | ' | ' | ' |
Deferred income taxes | -117,086,000 | ' | ' | ' |
Notes payable | -2,914,000 | ' | ' | ' |
Other long-term liabilities | -2,452,000 | ' | ' | ' |
Non-controlling interests | -19,118,000 | ' | ' | ' |
Total | 907,835,000 | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' |
Weighted-average amortization period for intangible assets | ' | '10 years 9 months 18 days | ' | ' |
Acquisition costs incurred | ' | ' | 10,700,000 | ' |
Amount of purchase price held in escrow | ' | 0 | ' | 9,300,000 |
Revenue | ' | ' | 321,400,000 | ' |
Income before income taxes | ' | ' | 20,200,000 | ' |
Van Houtte | Other current liabilities | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' |
Amount of purchase price held in escrow | ' | 0 | ' | 9,300,000 |
Van Houtte | Trademarks | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' |
Indefinite-lived intangible assets acquired | 99,400,000 | ' | ' | ' |
Van Houtte | Customer relationships | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' |
Amortizable intangible assets acquired | 263,100,000 | ' | ' | ' |
Van Houtte | Trademarks and trade names | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' |
Amortizable intangible assets acquired | 10,900,000 | ' | ' | ' |
Van Houtte | Franchises | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' |
Amortizable intangible assets acquired | 1,400,000 | ' | ' | ' |
Van Houtte | Technology | ' | ' | ' | ' |
Additional disclosures | ' | ' | ' | ' |
Amortizable intangible assets acquired | 300,000 | ' | ' | ' |
Van Houtte | Credit facility | ' | ' | ' | ' |
Acquisitions and divestitures | ' | ' | ' | ' |
Credit facility | 1,450,000,000 | ' | ' | ' |
Van Houtte Canadian Operations | ' | ' | ' | ' |
Allocation of the purchase price to the acquired net assets | ' | ' | ' | ' |
Restricted cash | 500,000 | ' | ' | ' |
Accounts receivable | 47,554,000 | ' | ' | ' |
Inventories | 36,691,000 | ' | ' | ' |
Income taxes receivable | 2,190,000 | ' | ' | ' |
Deferred income taxes | 3,577,000 | ' | ' | ' |
Other current assets | 4,453,000 | ' | ' | ' |
Fixed assets | 110,622,000 | ' | ' | ' |
Intangible assets | 355,549,000 | ' | ' | ' |
Goodwill | 409,493,000 | ' | ' | ' |
Other long-term assets | 962,000 | ' | ' | ' |
Accounts payable and accrued expenses | -46,831,000 | ' | ' | ' |
Other short-term liabilities | -3,404,000 | ' | ' | ' |
Income taxes payable | -1,496,000 | ' | ' | ' |
Deferred income taxes | -104,866,000 | ' | ' | ' |
Notes payable | -1,770,000 | ' | ' | ' |
Other long-term liabilities | -1,683,000 | ' | ' | ' |
Non-controlling interests | -9,529,000 | ' | ' | ' |
Total | 802,012,000 | ' | ' | ' |
Filterfresh Assets Held For Sale | ' | ' | ' | ' |
Allocation of the purchase price to the acquired net assets | ' | ' | ' | ' |
Accounts receivable | 13,576,000 | ' | ' | ' |
Inventories | 6,267,000 | ' | ' | ' |
Income taxes receivable | 70,000 | ' | ' | ' |
Deferred income taxes | 1,326,000 | ' | ' | ' |
Other current assets | 594,000 | ' | ' | ' |
Fixed assets | 33,306,000 | ' | ' | ' |
Intangible assets | 19,550,000 | ' | ' | ' |
Goodwill | 62,838,000 | ' | ' | ' |
Other long-term assets | 615,000 | ' | ' | ' |
Accounts payable and accrued expenses | -7,671,000 | ' | ' | ' |
Other short-term liabilities | -926,000 | ' | ' | ' |
Deferred income taxes | -12,220,000 | ' | ' | ' |
Notes payable | -1,144,000 | ' | ' | ' |
Other long-term liabilities | -769,000 | ' | ' | ' |
Non-controlling interests | -9,589,000 | ' | ' | ' |
Total | $105,823,000 | ' | ' | ' |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||
In Thousands, unless otherwise specified | 7-May-13 | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 29, 2012 | Sep. 29, 2012 | Jun. 23, 2012 | Mar. 24, 2012 | Dec. 24, 2011 | Sep. 24, 2011 | Jun. 25, 2011 | Mar. 26, 2011 | Dec. 25, 2010 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | 8-May-13 | Sep. 24, 2011 | Sep. 24, 2011 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | Sep. 24, 2011 | Sep. 24, 2011 |
segment | segment | Corporate Unallocated | Corporate Unallocated | Corporate Unallocated | Eliminations | Eliminations | Eliminations | Domestic | Domestic | Domestic | Domestic | Domestic | Domestic | Canada | Canada | Canada | Canada | Canada | |||||||||||||||
segment | Operating segments | Eliminations | Operating segments | Eliminations | |||||||||||||||||||||||||||||
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Historical number of business segments | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of reportable segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (decrease) in operating income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($302) | ($984) | $7,427 | ($38,755) | $20,068 | ($29,584) | ' | ' | ' | $39,057 | ($19,084) | $22,157 | ' | ' |
Number of domestic segments into which SCBU and KBU were combined | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | 1,047,177 | 967,072 | 1,004,792 | 1,339,059 | 946,736 | 869,194 | 885,052 | 1,158,216 | 711,883 | 717,210 | 647,658 | 574,148 | 4,358,100 | 3,859,198 | 2,650,899 | ' | ' | ' | ' | ' | -135,202 | 3,725,008 | 3,233,674 | 2,152,432 | ' | 2,189,287 | 36,855 | 633,092 | 625,524 | 498,467 | 596,814 | 98,347 |
Operating income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 765,227 | 568,896 | 368,913 | -148,539 | -84,251 | -73,259 | ' | ' | -25,193 | 826,092 | 576,949 | 399,638 | ' | ' | ' | 87,674 | 76,198 | 67,727 | ' | ' |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 229,193 | 181,647 | 113,636 | 1,500 | 1,941 | 4 | ' | ' | ' | 162,359 | 116,722 | 68,439 | ' | ' | ' | 65,334 | 62,984 | 45,193 | ' | ' |
Stock compensation expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $26,081 | $17,868 | $10,361 | $13,653 | $8,170 | $4,372 | ' | ' | ' | $9,909 | $7,808 | $5,519 | ' | ' | ' | $2,519 | $1,890 | $470 | ' | ' |
Segment_Reporting_Details_2
Segment Reporting (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, unless otherwise specified | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 29, 2012 | Sep. 29, 2012 | Jun. 23, 2012 | Mar. 24, 2012 | Dec. 24, 2011 | Sep. 24, 2011 | Jun. 25, 2011 | Mar. 26, 2011 | Dec. 25, 2010 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $1,047,177 | $967,072 | $1,004,792 | $1,339,059 | $946,736 | $869,194 | $885,052 | $1,158,216 | $711,883 | $717,210 | $647,658 | $574,148 | $4,358,100 | $3,859,198 | $2,650,899 |
Fixed assets, net | 985,563 | ' | ' | ' | 944,296 | ' | ' | ' | ' | ' | ' | ' | 985,563 | 944,296 | ' |
Customer concentration | Revenues | Wal-Mart Stores, Inc. and affiliates | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14.00% | 12.00% | ' |
Customer concentration | Revenues | Bed Bath & Beyond, Inc | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11.00% |
Customer concentration | Revenues | Costco | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11.00% | ' | ' |
Portion Packs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,187,350 | 2,708,886 | 1,704,021 |
Brewers and Accessories | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 827,570 | 759,805 | 524,709 |
Other Products and Royalties | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 343,180 | 390,507 | 422,169 |
United states | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,721,182 | 3,248,543 | 2,248,811 |
Fixed assets, net | 844,471 | ' | ' | ' | 783,075 | ' | ' | ' | ' | ' | ' | ' | 844,471 | 783,075 | ' |
Canada | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 634,360 | 609,828 | 400,682 |
Fixed assets, net | 135,440 | ' | ' | ' | 143,640 | ' | ' | ' | ' | ' | ' | ' | 135,440 | 143,640 | ' |
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment Reporting | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,558 | 827 | 1,406 |
Fixed assets, net | $5,652 | ' | ' | ' | $17,581 | ' | ' | ' | ' | ' | ' | ' | $5,652 | $17,581 | ' |
Inventories_Details
Inventories (Details) (USD $) | Sep. 28, 2013 | Sep. 29, 2012 |
In Thousands, unless otherwise specified | ||
Inventories | ' | ' |
Raw materials and supplies | $182,882 | $229,927 |
Finished goods | 493,207 | 538,510 |
Inventories | 676,089 | 768,437 |
Green coffee | ' | ' |
Purchase commitments | ' | ' |
Amount of purchase commitment | 245,100 | ' |
Percentage of purchase commitment that has a fixed price | 84.00% | ' |
Average C price of coffee per pound used to calculate variable portion of purchase commitment (in dollars per pound) | 1.24 | ' |
Brewer inventory | ' | ' |
Purchase commitments | ' | ' |
Amount of purchase commitment | 141,800 | ' |
Production raw materials | ' | ' |
Purchase commitments | ' | ' |
Amount of purchase commitment | $536,100 | ' |
Inventories_Details_2
Inventories (Details 2) (Inventory, USD $) | Sep. 28, 2013 |
In Thousands, unless otherwise specified | |
Inventory | ' |
Purchase commitments | ' |
2014 | $456,955 |
2015 | 124,588 |
2016 | 119,565 |
2017 | 110,837 |
2018 | 111,086 |
Minimum future inventory purchase commitments | $923,031 |
Fixed_Assets_Details
Fixed Assets (Details) (USD $) | 12 Months Ended | |||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | Jun. 30, 2012 | |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | $1,420,778,000 | $1,211,593,000 | ' | ' |
Accumulated depreciation | -435,215,000 | -267,297,000 | ' | ' |
Fixed assets, net | 985,563,000 | 944,296,000 | ' | ' |
Depreciation and amortization | 183,814,000 | 135,656,000 | 72,297,000 | ' |
Properties under construction | ' | ' | ' | 4,100,000 |
Amount of interest expense capitalized | 6,100,000 | 2,800,000 | 2,600,000 | ' |
Production equipment | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | 680,457,000 | 544,491,000 | ' | ' |
Production equipment | Minimum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '1 year | ' | ' | ' |
Production equipment | Maximum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '15 years | ' | ' | ' |
Coffee service equipment | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | 59,169,000 | 63,722,000 | ' | ' |
Coffee service equipment | Minimum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '3 years | ' | ' | ' |
Coffee service equipment | Maximum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '7 years | ' | ' | ' |
Computer equipment and software | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | 146,246,000 | 111,441,000 | ' | ' |
Computer equipment and software | Minimum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '1 year | ' | ' | ' |
Computer equipment and software | Maximum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '6 years | ' | ' | ' |
Land | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | 11,520,000 | 11,740,000 | ' | ' |
Building and building improvements | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | 134,495,000 | 83,172,000 | ' | ' |
Building and building improvements | Minimum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '4 years | ' | ' | ' |
Building and building improvements | Maximum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '30 years | ' | ' | ' |
Furniture and fixtures | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | 33,975,000 | 28,477,000 | ' | ' |
Furniture and fixtures | Minimum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '1 year | ' | ' | ' |
Furniture and fixtures | Maximum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '15 years | ' | ' | ' |
Vehicles | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | 11,786,000 | 10,306,000 | ' | ' |
Vehicles | Minimum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '4 years | ' | ' | ' |
Vehicles | Maximum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '5 years | ' | ' | ' |
Leasehold improvements | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | 98,990,000 | 72,755,000 | ' | ' |
Leasehold improvements | Minimum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '1 year | ' | ' | ' |
Leasehold improvements | Maximum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '20 years | ' | ' | ' |
Assets acquired under capital leases | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | 41,200,000 | 51,047,000 | ' | ' |
Fixed assets, net | 36,900,000 | 47,000,000 | ' | ' |
Assets acquired under capital leases | Minimum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '5 years | ' | ' | ' |
Assets acquired under capital leases | Maximum | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Useful life in years | '15 years | ' | ' | ' |
Construction-in-progress | ' | ' | ' | ' |
Fixed Assets | ' | ' | ' | ' |
Total fixed assets | 202,940,000 | 234,442,000 | ' | ' |
Properties under construction | $21,100,000 | ' | ' | ' |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 |
Changes in the carrying amount of goodwill | ' | ' |
Balance at the beginning of the period | $808,076 | $789,305 |
Foreign currency effect | -19,892 | 18,771 |
Balance at the end of the period | 788,184 | 808,076 |
Domestic | ' | ' |
Changes in the carrying amount of goodwill | ' | ' |
Balance at the beginning of the period | ' | 386,416 |
Reassignment of Timothy's goodwill | ' | -17,063 |
Balance at the end of the period | 369,353 | 369,353 |
Canada | ' | ' |
Changes in the carrying amount of goodwill | ' | ' |
Balance at the beginning of the period | 438,723 | 402,889 |
Reassignment of Timothy's goodwill | ' | 17,063 |
Foreign currency effect | -19,892 | 18,771 |
Balance at the end of the period | $418,831 | $438,723 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Details 2) (USD $) | 12 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | Sep. 28, 2013 | Sep. 28, 2013 | Sep. 28, 2013 | 8-May-13 | Sep. 28, 2013 | Sep. 28, 2013 | Sep. 29, 2012 |
Minimum | Maximum | Domestic | Domestic | Canada | Trade names | Trade names | ||||
segment | Canada | Canada | ||||||||
Indefinite-lived intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Indefinite-lived intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | $97,740 | $102,381 |
Number of domestic segments into which SCBU and KBU were combined | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' |
Royalty rate | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income tax rate | ' | ' | ' | ' | ' | 38.00% | ' | 27.50% | ' | ' |
Discount rate | ' | ' | ' | 13.00% | 14.00% | ' | ' | ' | ' | ' |
Impairment of goodwill or indefinite-lived intangible assets | $0 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Intangible assets subject to amortization | ' | ' | ' |
Gross carrying value | $501,127 | $517,497 | ' |
Accumulated amortization | -163,651 | -121,526 | ' |
Total amortization expense | 45,379 | 45,991 | 41,339 |
Estimated useful life | '8 years 3 months 18 days | ' | ' |
Acquired technology | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Gross carrying value | 21,609 | 21,622 | ' |
Accumulated amortization | -17,123 | -15,433 | ' |
Acquired technology | Minimum | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Estimated useful life | '4 years | ' | ' |
Acquired technology | Maximum | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Estimated useful life | '10 years | ' | ' |
Customer and roaster agreements | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Gross carrying value | 26,977 | 27,323 | ' |
Accumulated amortization | -19,750 | -16,796 | ' |
Customer and roaster agreements | Minimum | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Estimated useful life | '8 years | ' | ' |
Customer and roaster agreements | Maximum | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Estimated useful life | '11 years | ' | ' |
Customer relationships | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Gross carrying value | 414,967 | 430,178 | ' |
Accumulated amortization | -113,061 | -79,168 | ' |
Customer relationships | Minimum | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Estimated useful life | '2 years | ' | ' |
Customer relationships | Maximum | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Estimated useful life | '16 years | ' | ' |
Trade names | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Gross carrying value | 37,200 | 38,000 | ' |
Accumulated amortization | -13,353 | -9,785 | ' |
Trade names | Minimum | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Estimated useful life | '9 years | ' | ' |
Trade names | Maximum | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Estimated useful life | '11 years | ' | ' |
Non-compete agreements | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Gross carrying value | 374 | 374 | ' |
Accumulated amortization | ($364) | ($344) | ' |
Non-compete agreements | Minimum | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Estimated useful life | '2 years | ' | ' |
Non-compete agreements | Maximum | ' | ' | ' |
Intangible assets subject to amortization | ' | ' | ' |
Estimated useful life | '5 years | ' | ' |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets (Details 4) (USD $) | Sep. 28, 2013 |
In Thousands, unless otherwise specified | |
Estimated aggregate amortization expense over each of the next five years and thereafter | ' |
2014 | $44,361 |
2015 | 42,807 |
2016 | 42,081 |
2017 | 40,686 |
2018 | 40,686 |
Thereafter | $126,855 |
Noncontrolling_Interests_Detai
Noncontrolling Interests (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Changes in the liability and temporary equity attributable to redeemable NCIs | ' | ' | ' |
Net income | $871 | $872 | $1,547 |
Liability attributable to mandatorily redeemable noncontrolling interests | ' | ' | ' |
Changes in the liability and temporary equity attributable to redeemable NCIs | ' | ' | ' |
Balance at the beginning of the period | 4,928 | ' | ' |
Redeemable noncontrolling interest included in other long-term liabilities | ' | 4,708 | ' |
Net income | 462 | 60 | ' |
Adjustment to redemption value | 372 | 167 | ' |
Cash distributions | -583 | -204 | ' |
Other comprehensive loss, net of tax | -245 | 197 | ' |
Balance at the end of the period | 4,934 | 4,928 | ' |
Equity attributable to redeemable noncontrolling interests | ' | ' | ' |
Changes in the liability and temporary equity attributable to redeemable NCIs | ' | ' | ' |
Balance at the beginning of the period | 9,904 | 21,034 | ' |
Purchase noncontrolling interests | ' | ' | 19,118 |
Disposition of noncontrolling interest | ' | -10,331 | ' |
Redeemable noncontrolling interest included in other long-term liabilities | ' | -4,708 | ' |
Net income | 409 | 812 | 1,547 |
Adjustment to redemption value | 2,025 | 3,155 | 1,618 |
Cash distributions | -823 | -513 | -1,063 |
Other comprehensive loss, net of tax | -470 | 455 | -186 |
Balance at the end of the period | $11,045 | $9,904 | $21,034 |
Product_Warranties_Details
Product Warranties (Details) (USD $) | 12 Months Ended | |
Sep. 28, 2013 | Sep. 29, 2012 | |
Product Warranties | ' | ' |
Period of warranty on Keurig single-cup brewers | '1 year | ' |
Changes in carrying amount of product warranties | ' | ' |
Balance, beginning of Period | $20,218,000 | $14,728,000 |
Provision related to current period | 20,447,000 | 47,026,000 |
Change in estimate | -12,720,000 | -1,287,000 |
Usage | -20,141,000 | -40,249,000 |
Balance, end of Period | 7,804,000 | 20,218,000 |
Recoveries | $800,000 | $8,300,000 |
LongTerm_Debt_Details
Long-Term Debt (Details) (USD $) | Sep. 28, 2013 | Sep. 29, 2012 |
In Thousands, unless otherwise specified | ||
Long-term debt | ' | ' |
Total long-term debt | $173,150 | $473,675 |
Less current portion | 12,929 | 6,691 |
Long-term debt | 160,221 | 466,984 |
Revolving credit facility, USD | ' | ' |
Long-term debt | ' | ' |
Total long-term debt | ' | 120,000 |
Revolving credit facility multicurrency | ' | ' |
Long-term debt | ' | ' |
Total long-term debt | ' | 108,787 |
Term loan A facility | ' | ' |
Long-term debt | ' | ' |
Total long-term debt | 170,937 | 242,188 |
Other | ' | ' |
Long-term debt | ' | ' |
Total long-term debt | $2,213 | $2,700 |
LongTerm_Debt_Details_2
Long-Term Debt (Details 2) (USD $) | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
Long-term debt | ' | ' | ' |
Average effective interest rate (as a percent) | 3.50% | 2.90% | ' |
Debt issuance cost | ' | ' | $46,009,000 |
Loss on extinguishment of debt | ' | ' | 19,732,000 |
Swap | ' | ' | ' |
Long-term debt | ' | ' | ' |
Interest expense, long-term debt | 3,400,000 | 4,700,000 | 3,800,000 |
Restated credit agreement | ' | ' | ' |
Long-term debt | ' | ' | ' |
Aggregate amount of increase option | 500,000,000 | ' | ' |
Commitment fee on revolving credit facilities (as a percent) | 0.20% | ' | ' |
Outstanding letters of credit | 5,000,000 | 3,700,000 | ' |
Amounts drawn against letters of credit | 0 | 0 | ' |
Debt issuance cost | ' | ' | 46,000,000 |
Restated credit agreement | Base rate | Minimum | ' | ' | ' |
Long-term debt | ' | ' | ' |
Applicable margin added to reference rate for variable interest (as a percent) | 0.50% | ' | ' |
Restated credit agreement | Base rate | Maximum | ' | ' | ' |
Long-term debt | ' | ' | ' |
Applicable margin added to reference rate for variable interest (as a percent) | 1.00% | ' | ' |
Restated credit agreement | Eurodollar rate | ' | ' | ' |
Long-term debt | ' | ' | ' |
Margin added to reference rate for base rate (as a percent) | 1.00% | ' | ' |
Restated credit agreement | Eurodollar rate | Minimum | ' | ' | ' |
Long-term debt | ' | ' | ' |
Applicable margin added to reference rate for variable interest (as a percent) | 1.50% | ' | ' |
Restated credit agreement | Eurodollar rate | Maximum | ' | ' | ' |
Long-term debt | ' | ' | ' |
Applicable margin added to reference rate for variable interest (as a percent) | 2.00% | ' | ' |
Restated credit agreement | Federal funds rate | ' | ' | ' |
Long-term debt | ' | ' | ' |
Margin added to reference rate for base rate (as a percent) | 0.50% | ' | ' |
US revolving credit facility | ' | ' | ' |
Long-term debt | ' | ' | ' |
Credit facility | 800,000,000 | ' | ' |
Alternative currency revolving credit facility | ' | ' | ' |
Long-term debt | ' | ' | ' |
Credit facility | 200,000,000 | ' | ' |
Former term loan B and credit facility | ' | ' | ' |
Long-term debt | ' | ' | ' |
Loss on extinguishment of debt | ' | ' | $19,700,000 |
LongTerm_Debt_Details_3
Long-Term Debt (Details 3) (Interest rate swaps, USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Sep. 28, 2013 |
Mitigating interest rate exposure of variable-rate borrowings | ' |
Hedged transaction | '30-day Libor |
Notional amount | $130,000 |
Interest rate swap, Maturity 2016 | ' |
Mitigating interest rate exposure of variable-rate borrowings | ' |
Hedged transaction | '30-day Libor |
Notional amount | 20,000 |
Fixed rate received (as a percent) | 2.54% |
Interest rate swap, Maturity 2016 B | ' |
Mitigating interest rate exposure of variable-rate borrowings | ' |
Hedged transaction | '30-day Libor |
Notional amount | 30,000 |
Fixed rate received (as a percent) | 2.54% |
Interest rate swap, Maturity 2016 C | ' |
Mitigating interest rate exposure of variable-rate borrowings | ' |
Hedged transaction | '30-day Libor |
Notional amount | 50,000 |
Fixed rate received (as a percent) | 2.54% |
Interest rate swap, Maturity 2016 D | ' |
Mitigating interest rate exposure of variable-rate borrowings | ' |
Hedged transaction | '30-day Libor |
Notional amount | $30,000 |
Fixed rate received (as a percent) | 2.54% |
LongTerm_Debt_Details_4
Long-Term Debt (Details 4) (USD $) | Sep. 28, 2013 | Sep. 29, 2012 |
In Thousands, unless otherwise specified | ||
Long-Term Debt | ' | ' |
2014 | $12,929 | ' |
2015 | 19,165 | ' |
2016 | 140,064 | ' |
2017 | 377 | ' |
2018 | 395 | ' |
Thereafter | 220 | ' |
Total long-term debt | $173,150 | $473,675 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (Not designated as hedges, Cross currency swap) | 12 Months Ended | |||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | Sep. 28, 2013 | |
USD ($) | USD ($) | USD ($) | CAD | |
Other Derivatives | ' | ' | ' | ' |
Period of derivative | '2 years | ' | ' | ' |
Notional amount | ' | ' | ' | 120,000,000 |
Variable interest rate basis payable | 'Three month Canadian Bankers Acceptance rate | ' | ' | ' |
Variable interest rate basis receivable | 'Three month U.S. Libor rate | ' | ' | ' |
Additional interest expense | 1,700,000 | 1,800,000 | 1,200,000 | ' |
Loss reclassified from OCI to income | ' | ' | $400,000 | ' |
Derivative_Financial_Instrumen3
Derivative Financial Instruments (Details 2) (USD $) | Sep. 28, 2013 | Sep. 29, 2012 |
In Thousands, unless otherwise specified | ||
Fair value of derivatives | ' | ' |
Total fair value of derivatives | ($11,194) | ($16,603) |
Coffee futures | ' | ' |
Fair value of derivatives | ' | ' |
Total fair value of derivatives | -3,809 | -342 |
Designated as hedges | ' | ' |
Fair value of derivatives | ' | ' |
Total fair value of derivatives | -9,941 | -9,361 |
Designated as hedges | Interest rate swaps | Other current liabilities | ' | ' |
Fair value of derivatives | ' | ' |
Fair value of derivative liabilities | -6,004 | -9,019 |
Designated as hedges | Coffee futures | Other current liabilities | ' | ' |
Fair value of derivatives | ' | ' |
Fair value of derivative liabilities | -3,809 | -342 |
Designated as hedges | Foreign currency forward contracts | Other current liabilities | ' | ' |
Fair value of derivatives | ' | ' |
Fair value of derivative liabilities | -141 | ' |
Designated as hedges | Foreign currency forward contracts | Other current assets | ' | ' |
Fair value of derivatives | ' | ' |
Fair value of derivative assets | 13 | ' |
Not designated as hedges | ' | ' |
Fair value of derivatives | ' | ' |
Total fair value of derivatives | -1,253 | -7,242 |
Not designated as hedges | Cross currency swap | Other current liabilities | ' | ' |
Fair value of derivatives | ' | ' |
Fair value of derivative liabilities | ($1,253) | ($7,242) |
Derivative_Financial_Instrumen4
Derivative Financial Instruments (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 |
lb | lb | |
Summary of outstanding coffee futures contracts | ' | ' |
Fair Value of Futures Contracts | ($11,194) | ($16,603) |
Coffee futures | ' | ' |
Summary of outstanding coffee futures contracts | ' | ' |
Coffee Pounds | 28,575,000 | 3,188,000 |
Fair Value of Futures Contracts | -3,809 | -342 |
Coffee futures | Coffee futures, contract four | ' | ' |
Summary of outstanding coffee futures contracts | ' | ' |
Coffee Pounds | ' | 938,000 |
Average Contract Price | ' | 1.92 |
"C" Price | ' | 1.74 |
Fair Value of Futures Contracts | ' | -169 |
Coffee futures | Coffee futures, contract five | ' | ' |
Summary of outstanding coffee futures contracts | ' | ' |
Coffee Pounds | ' | 938,000 |
Average Contract Price | ' | 1.96 |
"C" Price | ' | 1.78 |
Fair Value of Futures Contracts | ' | -171 |
Coffee futures | Coffee futures, contract six | ' | ' |
Summary of outstanding coffee futures contracts | ' | ' |
Coffee Pounds | ' | 675,000 |
Average Contract Price | ' | 1.8 |
"C" Price | ' | 1.8 |
Fair Value of Futures Contracts | ' | -1 |
Coffee futures | Coffee futures, contract seven | ' | ' |
Summary of outstanding coffee futures contracts | ' | ' |
Coffee Pounds | ' | 375,000 |
Average Contract Price | ' | 1.83 |
"C" Price | ' | 1.83 |
Fair Value of Futures Contracts | ' | -1 |
Coffee futures | Coffee futures, contract eight | ' | ' |
Summary of outstanding coffee futures contracts | ' | ' |
Coffee Pounds | ' | 262,000 |
Average Contract Price | ' | 1.86 |
"C" Price | ' | 1.86 |
Fair Value of Futures Contracts | ' | 0 |
Coffee futures | Coffee futures, contract nine | ' | ' |
Summary of outstanding coffee futures contracts | ' | ' |
Coffee Pounds | 375,000 | ' |
Average Contract Price | 1.5 | ' |
"C" Price | 1.14 | ' |
Fair Value of Futures Contracts | -138 | ' |
Coffee futures | Coffee futures, contract ten | ' | ' |
Summary of outstanding coffee futures contracts | ' | ' |
Coffee Pounds | 5,887,000 | ' |
Average Contract Price | 1.39 | ' |
"C" Price | 1.17 | ' |
Fair Value of Futures Contracts | -1,308 | ' |
Coffee futures | Coffee futures, contract eleven | ' | ' |
Summary of outstanding coffee futures contracts | ' | ' |
Coffee Pounds | 11,438,000 | ' |
Average Contract Price | 1.3 | ' |
"C" Price | 1.19 | ' |
Fair Value of Futures Contracts | -1,222 | ' |
Coffee futures | Coffee futures, contract twelve | ' | ' |
Summary of outstanding coffee futures contracts | ' | ' |
Coffee Pounds | 10,875,000 | ' |
Average Contract Price | 1.32 | ' |
"C" Price | 1.21 | ' |
Fair Value of Futures Contracts | ($1,141) | ' |
Derivative_Financial_Instrumen5
Derivative Financial Instruments (Details 4) (USD $) | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
Coffee futures | ' | ' | ' |
Net gain (loss) on derivative instruments | ' | ' | ' |
Amount of gain (loss), net of tax expected to be reclassified from OCI to earnings | ($3,500,000) | ' | ' |
Cash flow hedges | ' | ' | ' |
Net gain (loss) on derivative instruments | ' | ' | ' |
Amount of gain (loss), gross of tax, on financial instruments qualifying for hedge accounting included in OCI | -3,732,000 | -1,234,000 | -7,521,000 |
Amount of gain (loss), gross of tax, reclassified from OCI into Income | -1,484,000 | -1,359,000 | -419,000 |
Cash flow hedges | Interest rate swaps | ' | ' | ' |
Net gain (loss) on derivative instruments | ' | ' | ' |
Amount of gain (loss), gross of tax, on financial instruments qualifying for hedge accounting included in OCI | 3,014,000 | 1,250,000 | -7,928,000 |
Cash flow hedges | Coffee futures | ' | ' | ' |
Net gain (loss) on derivative instruments | ' | ' | ' |
Amount of gain (loss), gross of tax, on financial instruments qualifying for hedge accounting included in OCI | -6,617,000 | -2,484,000 | 407,000 |
Cash flow hedges | Coffee futures | Cost of sales | ' | ' | ' |
Net gain (loss) on derivative instruments | ' | ' | ' |
Amount of gain (loss), gross of tax, reclassified from OCI into Income | -1,482,000 | -1,359,000 | -27,000 |
Cash flow hedges | Foreign currency forward contracts | ' | ' | ' |
Net gain (loss) on derivative instruments | ' | ' | ' |
Amount of gain (loss), gross of tax, on financial instruments qualifying for hedge accounting included in OCI | -129,000 | ' | ' |
Cash flow hedges | Foreign currency forward contracts | (Loss) gain on foreign currency, net | ' | ' | ' |
Net gain (loss) on derivative instruments | ' | ' | ' |
Amount of gain (loss), gross of tax, reclassified from OCI into Income | -2,000 | ' | ' |
Cash flow hedges | Interest rate cap | Gain (loss) on financial instruments, net | ' | ' | ' |
Net gain (loss) on derivative instruments | ' | ' | ' |
Amount of gain (loss), gross of tax, reclassified from OCI into Income | ' | ' | ($392,000) |
Derivative_Financial_Instrumen6
Derivative Financial Instruments (Details 5) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Net gains (losses) on derivative instruments | ' | ' | ' |
Net gains (losses) on financial instruments not designated as hedges | $5,513 | ($4,945) | ($6,245) |
Foreign currency forward contracts | (Loss) gain on foreign currency, net | ' | ' | ' |
Net gains (losses) on derivative instruments | ' | ' | ' |
Net loss on hedging derivatives | -10 | -48 | ' |
Net gain on hedged items | 10 | 48 | ' |
Cross currency swap | ' | ' | ' |
Net gains (losses) on derivative instruments | ' | ' | ' |
Net gains (losses) on financial instruments not designated as hedges | 5,513 | -4,918 | -2,324 |
Coffee futures | ' | ' | ' |
Net gains (losses) on derivative instruments | ' | ' | ' |
Net gains (losses) on financial instruments not designated as hedges | ' | 7 | -250 |
Interest rate cap | ' | ' | ' |
Net gains (losses) on derivative instruments | ' | ' | ' |
Net gains (losses) on financial instruments not designated as hedges | ' | -34 | -615 |
Foreign currency option and forward contracts | ' | ' | ' |
Net gains (losses) on derivative instruments | ' | ' | ' |
Net gains (losses) on financial instruments not designated as hedges | ' | ' | ($3,056) |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 |
Fair Value Measurements | ' | ' |
Total fair value of derivatives | ($11,194) | ($16,603) |
Carrying value of long-term debt | 173,150 | 473,675 |
Period of reset of debt variable interest rates | '30 days | ' |
Recurring basis | Level 2 | ' | ' |
Fair Value Measurements | ' | ' |
Total fair value of derivatives | -11,194 | -16,603 |
Recurring basis | Level 2 | Interest rate swaps | ' | ' |
Fair Value Measurements | ' | ' |
Total fair value of derivatives | -6,004 | -9,019 |
Recurring basis | Level 2 | Cross currency swap | ' | ' |
Fair Value Measurements | ' | ' |
Total fair value of derivatives | -1,253 | -7,242 |
Recurring basis | Level 2 | Coffee futures | ' | ' |
Fair Value Measurements | ' | ' |
Total fair value of derivatives | -3,809 | -342 |
Recurring basis | Level 2 | Foreign currency forward contracts | ' | ' |
Fair Value Measurements | ' | ' |
Total fair value of derivatives | ($128) | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Income before income taxes: | ' | ' | ' |
United States | $675,438 | $486,258 | $248,108 |
Foreign | 65,436 | 89,883 | 54,639 |
Income before income taxes | 740,874 | 576,141 | 302,747 |
United States federal: | ' | ' | ' |
Current | 202,006 | 75,932 | 75,225 |
Deferred | -8,654 | 74,042 | -3,327 |
Total United States federal | 193,352 | 149,974 | 71,898 |
State and local: | ' | ' | ' |
Current | 47,930 | 40,270 | 13,939 |
Deferred | -1,695 | -712 | -1,758 |
Total State and local | 46,235 | 39,558 | 12,181 |
Total United States | 239,587 | 189,532 | 84,079 |
Foreign: | ' | ' | ' |
Current | 29,901 | 26,860 | 21,306 |
Deferred | -12,717 | -3,751 | -3,686 |
Total foreign | 17,184 | 23,109 | 17,620 |
Total income tax expense | $256,771 | $212,641 | $101,699 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Sep. 28, 2013 | Sep. 29, 2012 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ' | ' |
Section 263A capitalized expenses | $1,876 | $2,150 |
Deferred hedging losses | 4,774 | 3,919 |
Deferred compensation | 13,632 | 11,534 |
Net operating loss carryforward | ' | 1,017 |
Capital loss carryforward | 1,418 | 1,418 |
Valuation allowance - capital loss carryforward | -1,418 | -1,418 |
Warranty, obsolete inventory and bad debt allowance | 32,692 | 27,421 |
Tax credit carryforwards | 3,651 | 3,301 |
Other reserves and temporary differences | 15,558 | 12,412 |
Gross deferred tax assets | 72,183 | 61,754 |
Deferred tax liabilities: | ' | ' |
Prepaid expenses | -2,994 | -2,367 |
Depreciation | -125,504 | -123,044 |
Intangible assets | -138,262 | -144,329 |
Other reserves and temporary differences | -237 | -10,994 |
Gross deferred tax liabilities | -266,997 | -280,734 |
Net deferred tax liabilities | ($194,814) | ($218,980) |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Income Taxes | ' | ' | ' |
U.S. Federal Statutory rate (as a percent) | 35.00% | ' | ' |
Tax at U.S. Federal Statutory rate | $259,306 | $201,692 | $105,961 |
Increase (decrease) in rates resulting from: | ' | ' | ' |
Foreign tax rate differential | -13,087 | -18,072 | -9,289 |
Non-deductible stock compensation expense | 2,700 | 1,024 | 1,761 |
State taxes, net of federal benefit | 31,869 | 27,114 | 11,276 |
Provincial taxes | 7,878 | 10,591 | 6,309 |
Domestic production activities deduction | -23,558 | -9,245 | -7,831 |
Acquisition costs | ' | ' | 4,158 |
Federal tax credits | -4,506 | -282 | -962 |
Release of capital loss valuation allowance | ' | -3,071 | -6,194 |
Other | -3,831 | 2,890 | -3,490 |
Total income tax expense | $256,771 | $212,641 | $101,699 |
Income_Taxes_Details_4
Income Taxes (Details 4) | 3 Months Ended | 12 Months Ended | |||||
Sep. 28, 2013 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | Sep. 28, 2013 | Sep. 25, 2010 | Sep. 28, 2013 | |
USD ($) | USD ($) | USD ($) | USD ($) | CAD | USD ($) | Capital loss carryforwards | |
USD ($) | |||||||
Income Taxes | ' | ' | ' | ' | ' | ' | ' |
Carryforward amount | $17,700,000 | $17,700,000 | ' | ' | ' | ' | ' |
Income Taxes | ' | ' | ' | ' | ' | ' | ' |
Capital loss carryforwards | ' | ' | ' | ' | ' | ' | 11,500,000 |
Valuation allowance - capital loss carryforward | 1,418,000 | 1,418,000 | 1,418,000 | ' | ' | ' | ' |
Unrecognized tax benefits | 23,283,000 | 23,283,000 | 23,956,000 | 24,419,000 | ' | 5,480,000 | ' |
Unrecognized tax benefits that would impact effective tax rate | 19,700,000 | 19,700,000 | ' | ' | ' | ' | ' |
Maximum amount of unrecognized tax benefit indemnification | 16,600,000 | 16,600,000 | ' | ' | 37,900,000 | ' | ' |
Accrued interest and penalties | 2,000,000 | 2,000,000 | 600,000 | ' | ' | ' | ' |
Unrecognized tax benefits released due to the expiration of the statute of limitations | 1,500,000 | 3,820,000 | 140,000 | ' | ' | ' | ' |
Interest and penalties included in the income tax expense | ' | $400,000 | $200,000 | $300,000 | ' | ' | ' |
Income_Taxes_Details_5
Income Taxes (Details 5) (USD $) | 3 Months Ended | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
Income Taxes | ' | ' | ' | ' |
Gross tax contingencies, beginning balance | ' | $23,956,000 | $24,419,000 | $5,480,000 |
Increases from positions taken during prior periods | ' | 438,000 | 2,864,000 | ' |
Decreases from positions taken during prior periods | ' | ' | -4,093,000 | -236,000 |
Increases from positions taken during current periods | ' | 2,709,000 | 906,000 | 19,175,000 |
Decreases resulting from the lapse of the applicable statute of limitations | -1,500,000 | -3,820,000 | -140,000 | ' |
Gross tax contingencies, ending balance | 23,283,000 | 23,283,000 | 23,956,000 | 24,419,000 |
Unrecognized tax benefits expected to be released during fiscal year 2014 due to expiration of statute of limitations | ' | 3,400,000 | ' | ' |
Undistributed international earnings | 155,500,000 | 155,500,000 | ' | ' |
Deferred taxes provided on undistributed international earnings | $0 | $0 | ' | ' |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | Sep. 28, 2013 | Jul. 30, 2012 | 11-May-11 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 28, 2013 | 11-May-11 | 11-May-11 | Sep. 28, 2010 | |
Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | Common stock | ||||
Subsequent event | Underwriters | Lavazza | Lavazza | |||||||||
Stockholders' equity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for public equity offering (in shares) | ' | ' | ' | ' | ' | 9,479,544 | ' | ' | ' | 1,290,000 | ' | ' |
Issuance of common stock for private placement (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 608,342 | 8,566,649 |
Common stock, par value (in dollars per share) | $0.10 | $0.10 | ' | ' | ' | $0.10 | ' | ' | ' | ' | ' | $0.10 |
Common stock issue price (in dollars per share) | ' | ' | ' | ' | ' | $71 | ' | ' | ' | ' | $68.34 | ' |
Proceeds from issuance of common stock for private placement | ' | ' | $291,096,000 | ' | ' | ' | ' | ' | ' | ' | ' | $250,000,000 |
Financing costs in connection with public equity offering | ' | ' | 25,685,000 | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 |
Standstill period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years 6 months |
Period after which standstill is subject to additional exceptions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year |
Amount authorized for stock repurchase program | ' | ' | ' | ' | 500,000,000 | ' | ' | ' | ' | ' | ' | ' |
Period of stock repurchase program | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' |
Value of shares available for repurchase under the current authorization | ' | ' | ' | 235,300,000 | ' | ' | ' | ' | 137,800,000 | ' | ' | ' |
Number of shares acquired | ' | ' | ' | ' | ' | ' | 5,642,793 | 3,120,700 | 1,348,883 | ' | ' | ' |
Average price per share of acquired shares (in dollars per share) | ' | ' | ' | ' | ' | ' | $33.37 | $24.50 | ' | ' | ' | ' |
Total cost of acquired shares | 188,278,000 | 76,470,000 | ' | ' | ' | ' | 188,278,000 | 76,470,000 | ' | ' | ' | ' |
Additional shares to purchase as a percent of outstanding shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15.00% |
Proceeds from issuance of common stock for public equity offering | ' | ' | $673,048,000 | ' | ' | $688,900,000 | ' | ' | ' | ' | ' | ' |
Stockholders_Equity_Details_2
Stockholders' Equity (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Accumulated Other Comprehensive Income (Loss) | ' | ' | ' |
Balance at the beginning of the period | $10,200 | ($14,575) | ($1,630) |
Other comprehensive income (loss) during the period | -29,385 | 24,775 | -12,945 |
Balance at the end of the period | -19,185 | 10,200 | -14,575 |
Cash Flow Hedges | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) | ' | ' | ' |
Balance at the beginning of the period | -5,792 | -5,866 | -1,630 |
Other comprehensive income (loss) during the period | -1,358 | 74 | -4,236 |
Balance at the end of the period | -7,150 | -5,792 | -5,866 |
Translation | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss) | ' | ' | ' |
Balance at the beginning of the period | 15,992 | -8,709 | ' |
Other comprehensive income (loss) during the period | -28,027 | 24,701 | -8,709 |
Balance at the end of the period | ($12,035) | $15,992 | ($8,709) |
Employee_Compensation_Plans_De
Employee Compensation Plans (Details) | Sep. 28, 2013 | Sep. 29, 2012 | 4-May-07 | Feb. 09, 2009 | Feb. 17, 2011 | Nov. 03, 2008 | Dec. 22, 2010 | Dec. 17, 2010 | Sep. 28, 2013 | Mar. 11, 2010 | Sep. 28, 2013 | Sep. 28, 2013 | Sep. 25, 2001 | Sep. 28, 2013 | Sep. 25, 2001 | Sep. 25, 2001 | Sep. 28, 2013 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 30, 1995 | Sep. 28, 2013 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2005 | Sep. 28, 2013 | Sep. 29, 2012 |
Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | 2006 Plan | 2006 Plan | 2006 Plan | 2006 Plan | 2000 Plan | 2000 Plan | 2000 Plan | 2000 Plan | 1995 Plan | 1995 Plan | 1995 Plan | 1995 Plan | 2005 Plan | 2005 Plan | 2005 Plan | 2005 Plan | Employee Stock Purchase Plan | Employee Stock Purchase Plan | |
Chief Executive Officer | Vice President | Vice President, Chief Human Resources Officer | Keurig | Canada | Canada | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | Stock options | period | ||||||||
President | Chief Operating Officer | President | Minimum | Maximum | Minimum | Maximum | Keurig | Keurig | ||||||||||||||||||
Statement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock authorized for issuance under the plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expiration period of awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock available for grant | ' | ' | ' | ' | ' | ' | ' | ' | 4,537,397 | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares eligible for post-acquisition awards | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | 0 | ' | ' | ' | ' | ' |
Outstanding options for shares of common stock | 5,022,340 | 7,470,975 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 2,776 | ' | ' | 28,749 | 37,313 | ' | 1,216,051 | 1,559,728 |
Total options granted under the plan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,386,933 | ' | ' | ' | 1,490,577 | ' | ' | ' | ' |
Vesting period of award | ' | ' | '5 years | '4 years | '4 years | '4 years | '4 years | '4 years | ' | ' | '3 years | '5 years | ' | ' | '3 years | '5 years | ' | ' | ' | '4 years | ' | ' | ' | '4 years | ' | ' |
Options granted to individuals | ' | ' | 945,000 | 157,500 | 30,000 | 157,500 | 20,000 | 35,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Annual vesting percentage | ' | ' | 20.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Option price as a percentage of fair market value of the common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 110.00% | ' | ' | ' | 110.00% | ' | ' | ' | ' | ' | ' | ' | ' | 85.00% | ' |
Number of withholding periods per fiscal year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' |
Length of withholding periods | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '6 months | ' |
Percentage of common stock to be owned to increase the option price at the date of grant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee_Compensation_Plans_De1
Employee Compensation Plans (Details 2) (Stock Option, USD $) | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
Stock Option | ' | ' | ' |
Number of shares | ' | ' | ' |
Number of shares, outstanding, beginning balance | 7,470,975 | ' | ' |
Number of Shares, Granted | 474,236 | ' | ' |
Number of Shares, Exercised | -2,849,308 | ' | ' |
Number of Shares, Forfeited/expired | -73,563 | ' | ' |
Number of shares, outstanding, ending balance | 5,022,340 | 7,470,975 | ' |
Number of Shares, Exercisable | 3,958,017 | ' | ' |
Weighted average exercise price (per share) | ' | ' | ' |
Weighted average exercise price, outstanding, beginning balance | $12.56 | ' | ' |
Weighted Average Exercise Price, Granted | $45.48 | ' | ' |
Weighted Average Exercise Price, Exercised | $6.95 | ' | ' |
Weighted Average Exercise Price, Forfeited/expired | $49.53 | ' | ' |
Weighted average exercise price, outstanding, ending balance | $18.30 | $12.56 | ' |
Weighted Average Exercise Price, Exercisable | $10.70 | ' | ' |
Summary of stock options | ' | ' | ' |
Stock options vested and expected to vest, Number of options outstanding | 5,011,076 | ' | ' |
Stock options vested and expected to vest, Weighted average remaining contractual life | '4 years 9 months 22 days | ' | ' |
Stock options vested and expected to vest, Weighted average exercise price | $18.24 | ' | ' |
Stock options vested and expected to vest, Intrinsic value | $284,095,000 | ' | ' |
Stock options exercisable, Number of options exercisable | 3,958,017 | ' | ' |
Stock options exercisable, Weighted average remaining contractual life | '3 years 10 months 24 days | ' | ' |
Stock options exercisable, Weighted average exercise price | $10.70 | ' | ' |
Stock options exercisable, Intrinsic value | 254,162,000 | ' | ' |
Intrinsic values of options exercised | $165,500,000 | $46,600,000 | $221,800,000 |
Employee_Compensation_Plans_De2
Employee Compensation Plans (Details 3) (USD $) | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
Employee Stock Purchase Plan | ' | ' | ' |
Employee Compensation Plans | ' | ' | ' |
Average expected life | '6 months | '6 months | '6 months |
Average volatility (as a percent) | 86.00% | 70.00% | 57.00% |
Risk-free interest rate (as a percent) | 0.13% | 0.09% | 0.19% |
Weighted average fair value (in dollars per share) | $14.38 | $11.61 | $15.97 |
Stock options | ' | ' | ' |
Employee Compensation Plans | ' | ' | ' |
Average expected life | '6 years | '6 years | '6 years |
Average volatility (as a percent) | 81.00% | 69.00% | 52.00% |
Risk-free interest rate (as a percent) | 1.02% | 1.31% | 2.37% |
Weighted average fair value (in dollars per share) | $31.23 | $30.10 | $29.34 |
Stock options | 2006 Plan | Minimum | ' | ' | ' |
Employee Compensation Plans | ' | ' | ' |
Vesting period of award | '3 years | ' | ' |
Stock options | 2006 Plan | Maximum | ' | ' | ' |
Employee Compensation Plans | ' | ' | ' |
Vesting period of award | '5 years | ' | ' |
RSUs/RSAs | 2006 Plan | Minimum | ' | ' | ' |
Employee Compensation Plans | ' | ' | ' |
Vesting period of award | '3 years | ' | ' |
RSUs/RSAs | 2006 Plan | Maximum | ' | ' | ' |
Employee Compensation Plans | ' | ' | ' |
Vesting period of award | '4 years | ' | ' |
PSUs | ' | ' | ' |
Employee Compensation Plans | ' | ' | ' |
Vesting period of award | '3 years | ' | ' |
Employee_Compensation_Plans_De3
Employee Compensation Plans (Details 4) (Deferred cash awards ("DCAs")) | 12 Months Ended |
Sep. 28, 2013 | |
Minimum | ' |
Deferred cash awards ("DCAs") | ' |
Vesting period | '3 years |
Maximum | ' |
Deferred cash awards ("DCAs") | ' |
Vesting period | '4 years |
Employee_Compensation_Plans_De4
Employee Compensation Plans (Details 5) (USD $) | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
RSUs | ' | ' | ' |
Share Units | ' | ' | ' |
Nonvested at beginning of the period (in shares) | 81,834 | ' | ' |
Granted (in shares) | 175,789 | ' | 0 |
Vested (in shares) | -34,761 | ' | ' |
Forfeited (in shares) | -1,360 | ' | ' |
Nonvested at end of the period (in shares) | 221,502 | 81,834 | ' |
Weighted Average Grant-Date Fair Value | ' | ' | ' |
Nonvested at beginning of the period (in dollars per shares) | $39.62 | ' | ' |
Granted (in dollars per shares) | $45.19 | $39.73 | ' |
Vested (in dollars per shares) | $47.22 | ' | ' |
Forfeited (in dollars per shares) | $54.12 | ' | ' |
Nonvested at end of the period (in dollars per shares) | $42.74 | $39.62 | ' |
Weighted average remaining contractual life of unvested awards | '1 year 8 months 16 days | '3 years 6 months 7 days | ' |
Intrinsic value of unvested awards | $16,586,000 | $1,943,000 | ' |
Awards expected to vest (in shares) | 218,459 | ' | ' |
Intrinsic value of awards expected to vest | 16,400,000 | ' | ' |
Total intrinsic value of awards converted to shares of common stock | 2,200,000 | ' | ' |
Awards converted to shares of common stock | ' | 0 | ' |
RSAs | ' | ' | ' |
Share Units | ' | ' | ' |
Granted (in shares) | ' | 55,432 | ' |
Weighted Average Grant-Date Fair Value | ' | ' | ' |
Intrinsic value of unvested awards | ' | 1,300,000 | ' |
Total intrinsic value of awards vested | $2,700,000 | ' | ' |
PSUs | ' | ' | ' |
Share Units | ' | ' | ' |
Granted (in shares) | 122,719 | ' | ' |
Vested (in shares) | 0 | ' | ' |
Forfeited (in shares) | -2,051 | ' | ' |
Nonvested at end of the period (in shares) | 120,668 | ' | ' |
Weighted Average Grant-Date Fair Value | ' | ' | ' |
Granted (in dollars per shares) | $41.28 | ' | ' |
Forfeited (in dollars per shares) | $51.56 | ' | ' |
Nonvested at end of the period (in dollars per shares) | $41.10 | ' | ' |
Awards converted to shares of common stock | 0 | ' | ' |
Outstanding awards, at the threshold award level | 96,534 | ' | ' |
Outstanding awards, at the maximum award level | 144,802 | ' | ' |
Employee_Compensation_Plans_De5
Employee Compensation Plans (Details 6) (USD $) | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
Employee Compensation Plans | ' | ' | ' |
Total stock based compensation expense recognized in the Consolidated Statements of Operations | $26,081,000 | $17,868,000 | $10,361,000 |
Total related tax benefit | 9,936,000 | 6,004,000 | 3,147,000 |
Unrecognized share-based compensation costs | 30,500,000 | ' | ' |
Weighted average period for the unrecognized cost | '1 year 3 months 11 days | ' | ' |
ESPP | ' | ' | ' |
Employee Compensation Plans | ' | ' | ' |
Total stock based compensation expense recognized in the Consolidated Statements of Operations | 4,401,000 | 3,412,000 | 2,155,000 |
Stock options | ' | ' | ' |
Employee Compensation Plans | ' | ' | ' |
Total stock based compensation expense recognized in the Consolidated Statements of Operations | 14,151,000 | 12,595,000 | 8,206,000 |
RSUs/PSUs/RSAs | ' | ' | ' |
Employee Compensation Plans | ' | ' | ' |
Total stock based compensation expense recognized in the Consolidated Statements of Operations | $7,529,000 | $1,861,000 | ' |
Employee_Retirement_Plans_Deta
Employee Retirement Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Y | |||
item | |||
Employee Retirement Plans | ' | ' | ' |
Minimum hours per week to be eligible for participation in the plan | 36 | ' | ' |
Minimum age of eligible employees | 18 | ' | ' |
Percentage match of employee contributions | 50.00% | ' | ' |
Percent of maximum annual contribution per employee | 6.00% | ' | ' |
Contributions to 401(k) plan | $5.20 | $4.40 | $2.70 |
Canadian Plans | ' | ' | ' |
Contributions to Canadian plans | 1.4 | 1 | 0.8 |
Defined Benefit Plan | ' | ' | ' |
Projected benefit obligation classified in other long-term liabilities | 1.4 | 1.1 | ' |
Net periodic pension expense (income) | $0.30 | ($0.10) | $0.50 |
Deferred_Compensation_Plan_Det
Deferred Compensation Plan (Details) (Deferred Compensation Plan) | 12 Months Ended | |
Sep. 28, 2013 | Sep. 29, 2012 | |
Deferred Compensation Plan | ' | ' |
Deferred Compensation Plan | ' | ' |
Common stock available for future issuance, shares | 353,434 | 357,759 |
Issuance of common stock under deferred compensation plan (in shares) | 0 | ' |
Common stock rights outstanding under plan, shares | 59,561 | 55,236 |
Common stock committed under plan, shares | 37,005 | 0 |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Sep. 28, 2013 | Sep. 29, 2012 |
In Thousands, unless otherwise specified | ||
Accrued Expenses | ' | ' |
Accrued compensation costs | $91,418 | $38,458 |
Accrued customer incentives and promotions | 53,689 | 28,374 |
Accrued freight, fulfillment and transportation costs | 21,941 | 18,455 |
Accrued sustainability expenses | 9,275 | 11,046 |
Accrued legal and professional services | 8,278 | 5,010 |
Warranty reserve | 7,804 | 20,218 |
Other | 50,022 | 49,889 |
Total | $242,427 | $171,450 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | |||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | Jun. 30, 2012 | |
item | ||||
sqft | ||||
Legal Proceedings | ' | ' | ' | ' |
Total rent expense | $23,100,000 | $25,100,000 | $18,100,000 | ' |
Sublease income | 1,100,000 | 300,000 | 300,000 | ' |
Initial term of capital lease | '15 years | ' | ' | ' |
Number of additional optional renewals of capital lease | 6 | ' | ' | ' |
Capital leases optional renewal term | '5 years | ' | ' | ' |
Area of property to be leased in Burlington, Massachusetts | 425,000 | ' | ' | ' |
Area of space completed | 150,000 | ' | ' | ' |
Area of space under construction | 275,000 | ' | ' | ' |
Properties under construction | ' | ' | ' | 4,100,000 |
Capital Leases | ' | ' | ' | ' |
2014 | 3,518,000 | ' | ' | ' |
2015 | 3,838,000 | ' | ' | ' |
2016 | 3,837,000 | ' | ' | ' |
2017 | 3,837,000 | ' | ' | ' |
2018 | 3,837,000 | ' | ' | ' |
Thereafter | 31,980,000 | ' | ' | ' |
Total | 50,847,000 | ' | ' | ' |
Less: amount representing interest | -17,075,000 | ' | ' | ' |
Present value of future minimum lease payments | 33,772,000 | ' | ' | ' |
Operating Leases | ' | ' | ' | ' |
2014 | 16,602,000 | ' | ' | ' |
2015 | 15,534,000 | ' | ' | ' |
2016 | 11,797,000 | ' | ' | ' |
2017 | 8,631,000 | ' | ' | ' |
2018 | 5,280,000 | ' | ' | ' |
Thereafter | 20,140,000 | ' | ' | ' |
Total | 77,984,000 | ' | ' | ' |
Subleases | ' | ' | ' | ' |
2014 | -1,021,000 | ' | ' | ' |
2015 | -1,012,000 | ' | ' | ' |
2016 | -848,000 | ' | ' | ' |
2017 | -690,000 | ' | ' | ' |
2018 | -634,000 | ' | ' | ' |
Thereafter | -2,156,000 | ' | ' | ' |
Total minimum income | -6,361,000 | ' | ' | ' |
Financing Obligations | ' | ' | ' | ' |
2014 | 2,029,000 | ' | ' | ' |
2015 | 8,661,000 | ' | ' | ' |
2016 | 9,580,000 | ' | ' | ' |
2017 | 9,580,000 | ' | ' | ' |
2018 | 9,665,000 | ' | ' | ' |
Thereafter | 113,722,000 | ' | ' | ' |
Total | $153,237,000 | ' | ' | ' |
Maximum | ' | ' | ' | ' |
Legal Proceedings | ' | ' | ' | ' |
Operating leases term | '20 years | ' | ' | ' |
Minimum | ' | ' | ' | ' |
Legal Proceedings | ' | ' | ' | ' |
Operating leases term | '1 year | ' | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (Patent infringement suit against Rogers Family Company) | 12 Months Ended |
Sep. 28, 2013 | |
item | |
Patent infringement suit against Rogers Family Company | ' |
Legal Proceedings | ' |
Number of Keurig patents allegedly violated by Rogers | 3 |
Commitments_and_Contingencies_3
Commitments and Contingencies (Details 3) (Legal Proceedings and Stockholder Litigation) | 0 Months Ended | 12 Months Ended | ||
Apr. 27, 2012 | Nov. 29, 2010 | Sep. 28, 2010 | Sep. 28, 2013 | |
claim | claim | claim | claim | |
CERT v. Brad Barry LLC and Starbucks Corp | ' | ' | ' | ' |
Legal Proceedings | ' | ' | ' | ' |
Number of affirmative defenses shared by all defendants | ' | ' | ' | 3 |
Putative securities fraud class actions | ' | ' | ' | ' |
Legal Proceedings | ' | ' | ' | ' |
Number of pending actions | ' | ' | ' | 2 |
Consolidated putative securities fraud class action, Fifield v. Green Mountain Coffee Roasters | ' | ' | ' | ' |
Legal Proceedings | ' | ' | ' | ' |
Period allowed to plaintiffs to amend their complaint | ' | ' | ' | '30 days |
Putative stockholder derivative actions | ' | ' | ' | ' |
Legal Proceedings | ' | ' | ' | ' |
Number of pending actions | ' | ' | ' | 2 |
Consolidated putative stockholder derivative action in District of Vermont | ' | ' | ' | ' |
Legal Proceedings | ' | ' | ' | ' |
Number of separate complaints in consolidated action | ' | ' | ' | 5 |
Number of separate complaints filed after disclosure of SEC Inquiry | ' | ' | 2 | ' |
Number of separate complaints ordered by federal court to be consolidated into the action | 2 | 2 | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (Heritage flight, USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Heritage flight | ' | ' | ' |
Related party transaction | ' | ' | ' |
Minimum percentage of the Company's common stock held by owner of related entity | 5.00% | ' | ' |
Total amount billed for travel services | $0.20 | $0.70 | $0.70 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, except Share data, unless otherwise specified | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 29, 2012 | Sep. 29, 2012 | Jun. 23, 2012 | Mar. 24, 2012 | Dec. 24, 2011 | Sep. 24, 2011 | Jun. 25, 2011 | Mar. 26, 2011 | Dec. 25, 2010 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Numerator for basic and diluted earnings per share: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income attributable to GMCR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $483,232 | $362,628 | $199,501 |
Denominator: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic weighted average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 149,638,636 | 154,933,948 | 146,214,860 |
Effect of dilutive securities - stock options (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,162,857 | 4,141,698 | 5,927,574 |
Diluted weighted average shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 152,801,493 | 159,075,646 | 152,142,434 |
Basic and diluted net income per common share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basic net income per common share (in dollars per share) | $0.84 | $0.78 | $0.89 | $0.72 | $0.59 | $0.47 | $0.60 | $0.67 | $0.49 | $0.38 | $0.46 | $0.02 | $3.23 | $2.34 | $1.36 |
Diluted net income per common share (in dollars per share) | $0.83 | $0.76 | $0.87 | $0.70 | $0.58 | $0.46 | $0.58 | $0.66 | $0.47 | $0.37 | $0.44 | $0.02 | $3.16 | $2.28 | $1.31 |
Diluted earnings per share, other disclosure | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Antidilutive securities excluded from computation of earnings per share (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 822,000 | 763,000 | 199,000 |
Unaudited_Quarterly_Financial_2
Unaudited Quarterly Financial Data (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 28, 2013 | Jun. 29, 2013 | Mar. 30, 2013 | Dec. 29, 2012 | Sep. 29, 2012 | Jun. 23, 2012 | Mar. 24, 2012 | Dec. 24, 2011 | Sep. 24, 2011 | Jun. 25, 2011 | Mar. 26, 2011 | Dec. 25, 2010 | Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 |
Unaudited Quarterly Financial Data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $1,047,177 | $967,072 | $1,004,792 | $1,339,059 | $946,736 | $869,194 | $885,052 | $1,158,216 | $711,883 | $717,210 | $647,658 | $574,148 | $4,358,100 | $3,859,198 | $2,650,899 |
Gross profit | 377,459 | 407,618 | 415,146 | 419,163 | 316,446 | 303,311 | 313,038 | 336,604 | 254,090 | 264,080 | 242,855 | 143,600 | 1,619,386 | 1,269,399 | 904,625 |
Net income attributable to GMCR | $126,956 | $116,272 | $132,421 | $107,583 | $91,887 | $73,296 | $93,031 | $104,414 | $75,369 | $56,348 | $65,372 | $2,412 | ' | ' | ' |
Earnings per share basic (in dollars per share) | $0.84 | $0.78 | $0.89 | $0.72 | $0.59 | $0.47 | $0.60 | $0.67 | $0.49 | $0.38 | $0.46 | $0.02 | $3.23 | $2.34 | $1.36 |
Earnings per share diluted (in dollars per share) | $0.83 | $0.76 | $0.87 | $0.70 | $0.58 | $0.46 | $0.58 | $0.66 | $0.47 | $0.37 | $0.44 | $0.02 | $3.16 | $2.28 | $1.31 |
Subsequent_Event_Details
Subsequent Event (Details) (USD $) | 0 Months Ended |
Nov. 19, 2013 | |
Indicated amount | ' |
Subsequent event | ' |
Indicated annual dividend rate (in dollars per share) | $1 |
Indicated quarterly dividend rate (in dollars per share) | $0.25 |
Subsequent event | ' |
Subsequent event | ' |
Cash dividend declared on common share (in dollars per share) | $0.25 |
Schedule_IIValuation_and_Quali1
Schedule II-Valuation and Qualifying Accounts (Details) (USD $) | 12 Months Ended | ||
Sep. 28, 2013 | Sep. 29, 2012 | Sep. 24, 2011 | |
Allowance for doubtful accounts: | ' | ' | ' |
Valuation and Qualifying Accounts | ' | ' | ' |
Balance at Beginning of Period | $2,750,000 | $3,404,000 | $1,314,000 |
Acquisitions (Dispositions) | ' | -299,000 | 1,115,000 |
Charged to Costs and Expenses | 689,000 | 3,197,000 | 2,584,000 |
Deductions | 553,000 | 3,552,000 | 1,609,000 |
Balance at End of Period | 2,886,000 | 2,750,000 | 3,404,000 |
Sales returns reserve: | ' | ' | ' |
Valuation and Qualifying Accounts | ' | ' | ' |
Balance at Beginning of Period | 31,767,000 | 18,302,000 | 12,742,000 |
Charged to Costs and Expenses | 79,747,000 | 107,436,000 | 64,457,000 |
Deductions | 80,760,000 | 93,971,000 | 58,897,000 |
Balance at End of Period | 30,754,000 | 31,767,000 | 18,302,000 |
Warranty reserve: | ' | ' | ' |
Valuation and Qualifying Accounts | ' | ' | ' |
Balance at Beginning of Period | 20,218,000 | 14,728,000 | 6,694,000 |
Charged to Costs and Expenses | 6,948,000 | 37,390,000 | 35,450,000 |
Deductions | 19,362,000 | 31,900,000 | 27,416,000 |
Balance at End of Period | 7,804,000 | 20,218,000 | 14,728,000 |
Warranty recoveries from suppliers | $800,000 | $8,300,000 | $0 |