2012 Annual Report Our \"bottom line\" ultimately depends on our ability to satisfy all of our stakeholders. Our goal is to balance the needs and desires of our customers, team members, shareholders, suppliers, communities and the environment while creating value for all. By growing the collective pie, we create larger slices for all of our stakeholders. Our core values reflect this sense of collective fate and are the soul of our company. Selling the HIGHEST QUALITY natural and organic products available SATISFYING and DELIGHTING our customers Supporting team member HAPPINESS and EXCELLENCE Creating WEALTH through profits and growth Caring about our COMMUNITIES and our environment Creating ongoing WIN-WIN PARTNERSHIPS with our suppliers Promoting the health of our stakeholders through HEALTHY EATING EDUCATION financial highlights Fiscal year 2012 was a 53-week year. Identical Store Sales Growth 14.5% 11.5% 10.5% 6.6% 7.0% 8.0% 8.7% 10.3% 8.1% 8.4% 8.4% 2011 2012 6.5% 5.8% 3.6% -4.3% 1998 1999 2000 2001 2002 2003 2004 Net Sales (in Billions) 2005 2006 2007 2008 2009 2010 Operating Income (in Millions) & Operating Margin $11.7 $10.1 $8.0 $548 $9.0 $8.0 $438 $236 $284 $744 6.4% 5.4% 4.9% 3.5% 3.0% 2008 2009 2010 2011 Earnings per Diluted Share 2012 $2.52 2008 2009 2010 2011 Free Cash Flow* (in Millions) 2012 $463 $390 $1.93 $273 $328 $1.43 $0.82 $0.85 $(194) 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 *The Company defines Free Cash Flow as net cash provided by operating activities less capital expenditures. Net cash provided by operating activities Development costs of new locations Other property and equipment expenditures Free Cash Flow 2008 2009 2010 2011 2012 $\t335 $\t588 $\t585 $\t755 $\t920 (358) (248) (171) (203) (262) (172) (67) (85) (162) (195) (194) 273 328 390 463 letter to stakeholders Dear Fellow Stakeholders: This was the best year in our company's 32-year history. We delivered our strongest financial performance, breaking records on many levels. Our sales approached $12 billion, translating to sales per gross square foot of $932. We opened 25 new stores, expanding into eight new markets, and increased our ending square footage 8% to 12.7 million. We reported our eleventh consecutive quarter of comparable store sales growth of 7.8% or better, improved operating margin 94 basis points to 6.4%, generated over $1 billion in EBITDA, and grew diluted earnings per share by 31% to $2.52. Our stellar results substantially exceeded our own expectations, as well as Wall Street's, driving our stock price to a new all-time high of $101.86 and resulting in a 31% increase for the calendar year versus the 13% increase for the S&P 500 Index. Our solid execution, capital discipline, and increasing stock price generated $1.3 billion of cash during the fiscal year through a combination of $920 million in cash flow from operations and $370 million in proceeds from team member stock option exercises. We invested $456 million in new and existing stores, returned $95 million in quarterly dividends to our shareholders, and repurchased $29 million of common stock. Our total cash and investments nearly doubled over the prior year, increasing $745 million to $1.5 billion. Our strong operating trends and improved credit metrics resulted in two corporate rating upgrades from Standard & Poor's, and we are rated investment grade once again. With confidence that we are well positioned to maintain a healthy cash reserve and internally fund our accelerated new store growth, subsequent to the fiscal year end, our Board of Directors increased our quarterly dividend by 43% to $0.20 per share, granted an additional $300 million in stock repurchase authority, and declared a special dividend of $2 per share. We are proud that we continue to gain market share from our competitors and attribute much of our success to our visible value efforts which have positively impacted our price image. In 2012, we appropriately navigated the balance between price investments, gross margin and sales momentum. We posted robust sales gains, better-than-historical gross margin results, and decreased the pricing gap versus our competitors on known value items to its narrowest margin yet. While improving our relative value positioning remained a top priority, we also continued to find ways to raise the bar and further differentiate the Whole Foods Market shopping experience. In April we stopped selling wild-caught seafood from red-rated fisheries, and we required that all national brands of household cleaning products include full disclosure of ingredients on their packaging. We were also the first national retailer to require that all organic personal care products be third-party certified. Our internal research shows we have a healthy combination of loyal core customers and new customers discovering us for the first time. We believe our initiatives to improve our value assortment and increase the level of transparency about the products we sell are aligned with our core customer base, reinforce our position as the authentic retailer of natural and organic foods, and continue to make us the preferred choice for customers aspiring to a healthier lifestyle. We are successfully utilizing social media as a powerful way to gain positive exposure and connect with our Internet-savvy customers on a global and local level. At year end, we had over one million \"likes\" on Facebook, and we were the top retail brand on Twitter with over three million followers. letter to stakeholders Our pace of store openings is accelerating, and we are very pleased with how well our newer stores are performing. We opened a record number of new stores in 2012 and expect this to continue into 2013 and 2014 as well. For the last six quarters, on average our new store class consisted of 22 stores open for approximately six months. At 38,000 square feet in size, they produced average weekly sales of $564,000 translating to sales per square foot of $777, and generated a contribution margin of approximately 6%. These outstanding results, combined with lower average capital investment and pre-opening expenses per store, are driving solid returns. By year end, our return on invested capital for comparable stores less than two years old was 16%, our highest result since 2004. We walk our talk when it comes to our Core Values. Our 73,000 team members are the heart and soul of our company, and our \"not-so-secret\" sauce. Last January, we were extremely pleased to be ranked #32 on Fortune's list of the "100 Best Companies to Work for in America." To be one of only 13 companies ranked consecutively for 15 years validates our commitment to our Core Value of 'Supporting Team Member Happiness and Excellence.' We created over 8,500 new jobs this past year, and team member morale is very high. Our Total Health Immersion and Healthy Discount Incentive Programs were designed specifically to promote the health of our team members, and we believe we are seeing some great initial results. Since launching our Total Health Immersion Program in the fall of 2009, over 1,600 team members have participated in this multiday educational opportunity. Our Healthy Discount Incentive Program offers additional store discounts based on meeting designated biometric criteria and being nicotine-free. This year approximately 14,000 team members participated in screenings, with over 8,600 receiving higher-level discount cards. We believe these programs are helping to educate team members and create awareness of the benefits of healthier habits and contributed to year-over-year decreases in participant medical claims (net paid per claimant) and inpatient hospital stays (average paid per day), as well as an increase in annual preventive wellness exams. Our support of and leadership in causes that are important to our communities have created a loyal core customer base aligned with our mission and Core Values. This year, our cash and product donations to charitable organizations once again well exceeded our goal of 5% of our after-tax profits. In addition, our foundations and Local Producer Loan Program continued to expand their good works. Whole Planet Foundation, whose mission is to empower the poor through microcredit in communities that supply our stores with product, has partnered with various microfinance institutions to facilitate over $32 million in company, team member, supplier and customer-funded grants to micro-lending projects in 53 countries. Whole Kids Foundation, dedicated to improving children's nutrition by supporting schools and inspiring families, celebrated its first anniversary. Through the generosity of customers, team members, suppliers and community donors, nearly 1,000 schools in the U.S. and Canada received school garden grants in 2012, and to date, more than 1,500 salad bars have been provided to schools around the country through the partnership between Whole Foods Market, Whole Kids Foundation, and Let's Move Salad Bars to Schools. And, since making the first loan through our Local Producer Loan Program in February 2007, we now have loaned more than $7 million to 121 local producers across the country. Our business model is very successful and continues to benefit all of our stakeholders. When the first Whole Foods Market opened in September 1980, we had no idea that we would become the 8th largest public food and drug retailer in the U.S., ranking #264 on the Fortune 500, with over 340 stores in the U.S., Canada, and the U.K. Whole Kids Foundation, dedicated to improving children's nutrition by supporting schools and inspiring families, celebrated its first anniversary. Through the generosity of customers, team members, suppliers and community donors, nearly 1,000 schools in the U.S. and Canada received school garden grants in 2012, and to date, more than 1,500 salad bars have been provided to schools around the country through the partnership between Whole Foods Market, Whole Kids Foundation, and Let's Move Salad Bars to Schools. And, since making the first loan through our Local Producer Loan Program in February 2007, we now have loaned more than $7 million to 121 local producers across the country. letter to stakeholders letter to stakeholders Our fiscal year 2013 another yearwe of to healthy store sales and incremental Our outlook pace offor store openings isreflects accelerating, and arebenefit verycomparable pleased how wellgrowth our newer stores are business model is very successful and continues all of ourwith stakeholders. operating margin improvement. We have signed 45 new leases over the last 12 months and, based on our performing. WeWhole opened a record number of new stores in 2012 expect continue intobecome 2013 and When the first Foods Market opened in September 1980,and we had nothis ideatothat we would the2014 8th current development areononaverage track toour accelerate ourclass storeconsisted openingsofand endingopen square footage growth as well.public For thefood last and sixpipeline, quarters, new store stores largest drug retailer in the U.S., ranking #264 on the Fortune22500, with overfor 340approximately stores in the through 2014. six months. Atand 38,000 U.S., Canada, the square U.K. feet in size, they produced average weekly sales of $564,000 translating to sales per square foot of $777, and generated a contribution margin of approximately 6%. These outstanding results, We are committed to growing at a culturally sustainable rate and believe 1,000 stores in the U.S. is an achievable Our outlook forlower fiscal average year 2013 reflects another year healthy comparable salesare growth andsolid incremental combined with capital investment andof pre-opening expenses store per store, driving returns. goal. People are increasingly embracing healthier lifestyles to improve the quality of their lives and minimize Ouryear outlook forour fiscal year 2013 reflectsWe another of healthy comparable store sales growth incremental operating margin improvement. haveyear signed 45 new leasesless overthan the two last 12and months and, based on our By end, return on invested capital for comparable stores years old was 16%, our highest their healthcare costs. As America's Healthiest Grocery Store, welast are12 uniquely positioned to our benefit from this operating margin improvement. We have signed 45 new leases over the months and, based on currentsince development pipeline, are on track to accelerate our store openings and ending square footage growth result 2004. major evolution. not yet saturated in any major metro area, and our ability to design current demographic development pipeline, are onWe trackare to accelerate our store openings and ending square footage growth through 2014. through 2014. stores that aretalk \"rightsized\" for their community has opened up possibilities in markets encompassing a broad We walk our when it comes to our Core Values. range in the percentage of college graduates, population density and median household income levels. We are committed to growing atthe a culturally and1,000 believe 1,000 U.S. is an achievable We are committed growing atare a culturally sustainable believe stores in\"not-so-secret\" thestores U.S. isin anthe achievable Our 73,000 teamtomembers heart andsustainable soulrate of and ourrate company, and our sauce. Last January, goal. People are increasingly embracing healthier lifestyles to improve the quality of their lives and minimize goal. People are increasingly embracing healthier lifestyles to improve the quality of their lives and minimize we were beyond extremely be ranked #32 on Fortune's listCanada of the with "100four BestinCompanies to Work for in Looking thepleased U.S., wetocurrently operate eight stores in development and believe their healthcare costs. As America's Healthiest Grocery weforare uniquely positioned tothis benefit from this their healthcare costs. As America's Healthiest Grocery Store, weStore, are uniquely positioned to benefitour from America." To be one of only 13 companies ranked consecutively 15 years validates commitment to our sales in Canada can surpass $1 billion over the next decade. In the U.K, we have seven stores in operation with major demographic evolution. We are not yet saturated in any major metro area, and our ability toour design major demographic evolution. We are not yet saturated in any major metro area, and ability to design Corestores Value of 'Supporting Teamover Member Happiness and Excellence.' of Wethese created over 8,500 new jobs past two scheduled toforopen the next The performance new stores give usthis a much stores that are \"rightsized\" their community has year. opened up possibilities in markets encompassing awill broad stores thatteam are \"rightsized\" for their community has opened up possibilities in markets encompassing a broad year, and member morale is very high. better our long-term potential density in the and U.K.median market and expansion opportunities in other range inunderstanding ofof college graduates, population levels. range inthe thepercentage percentage of college graduates, population density andhousehold median income household income levels. international markets as well. Our Total Health and Healthy Discount designedand specifically Looking beyond theImmersion U.S., we currently operate eight storesIncentive in CanadaPrograms with four inwere development believe to promote Looking beyond the U.S., we currently operate eight stores inweCanada withstores fourinin development and believe sales in Canada can surpass $1 billion over the next decade. In the U.K, have seven operation the health of our team members, and we believe we are seeing some great initial results. launching our We are more passionate than ever about our future and the positive impact we can make in Since thewith world by helping sales in Canada can surpass $1 billion over the next decade. In the U.K, we have seven stores in operation with two stores scheduled to open over the next year. The performance of these new stores will give us a much Total Health Immersion Program in the falland of 2009, overeducating 1,600 team members have participated in this multithe natural and organic foods industry grow succeed, our customers about healthier lifestyles, and two stores scheduled to open over the next The performance ofoffers these new stores give us a based much better understanding of our long-term potential inyear. the U.K. market and expansion opportunities inwill other day educational opportunity. Our Healthy Discount Incentive Program additional store discounts by offering a different kind of business model where profits and integrity positively impact all of our stakeholders. international markets as well. better understanding of our long-term potential in the U.K. market and expansion opportunities in other on meeting designated biometric criteriaand and being nicotine-free. This year 14,000 We see tremendous opportunity ahead look forward to continuing on approximately the journey with you. team members international markets as well. participated in screenings, with over higher-level discount We believe these programs We are more passionate than ever about our8,600 future receiving and the positive impact we can makecards. in the world by helping With deep appreciation to all of our stakeholders, the natural and organic foods industry grow and succeed, educating our customers about healthier lifestyles, and are helping educate team and of the impact benefitswe of can healthier and contributed We are moretopassionate thanmembers ever about ourcreate futureawareness and the positive make habits in the world by helping by offering a differentdecreases kind of business model where profits and integrity positively impact all of our stakeholders. to year-over-year in participant medical claims (net paid per claimant) and inpatient hospital stays the natural and organic foods industry grow and succeed, educating our customers about healthier lifestyles, and We see tremendous opportunity ahead and look forward to continuing on the journey with you. (average paid per day), as well as an increase in annual preventive wellness exams. by offering a different kind of business model where profits and integrity positively impact all of our stakeholders. letter to stakeholders With deep appreciationopportunity to all of our stakeholders, We tremendous ahead and that look are forward to continuing on the journeyhave with created you. Oursee support of and leadership in causes important to our communities a loyal core customer base aligned with our mission and Core Values. This year, our cash and product donations to chariWith deep appreciation to all of our stakeholders, table organizations once again well exceeded our goal of 5% of our after-tax profits. In addition, our foundations and Local Producer Loan Program continued to expand their good works. Whole Planet Foundation, whose mission is to empower the poor through microcredit in communities that supply our stores with product, has partnered with various microfinance institutions to facilitate over $32 million in company, team member, supplier and customer-funded grants to micro-lending projects in 53 countries. Whole Kids Foundation, dedicated to improving children's nutrition by supporting schools and inspiring families, celebrated its first anniversary. Through the generosity of customers, team members, suppliers and community donors, nearly 1,000 schools in the U.S. and Canada received school garden grants in 2012, and to date, more than 1,500 salad bars have been provided to schools around the country through the partnership between Whole Foods Market, Whole Kids Foundation, and Let's Move Salad Bars to Schools. And, since making the first loan through our Local Producer Loan Program in February 2007, we now have loaned more than $7 million to 121 local producers across the country. Our business model is very successful and continues to benefit all of our stakeholders. WhenMackey the first Whole Foods Market opened John Walter Robb in September 1980, we had no idea that we would become the 8th John Mackey Robb largest public food and drugWalter retailer in the U.S., ranking #264 on the Fortune 500, with over 340 stores in the Co-CEO Co-CEO Co-CEO U.S., Canada, and the U.K. Co-CEO UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2012 COMMISSION FILE NUMBER: 0-19797 WHOLE FOODS MARKET, INC. (Exact name of registrant as specified in its charter) Texas (State of incorporation) 74-1989366 (IRS Employer Identification No.) 550 Bowie Street, Austin, Texas (Address of principal executive offices) 78703 (Zip code) Registrant's telephone number, including area code: 512-477-4455 Securities registered pursuant to section 12(b) of the Act: Title of each class Common Stock, no par value Name of each exchange on which registered NASDAQ Global Select Market Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act). Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No The aggregate market value of all common stock held by non-affiliates of the registrant as of April 8, 2012 was $15,437,613,255. The number of shares of the registrant's common stock, no par value, outstanding as of November 16, 2012 was 185,524,944 shares. DOCUMENTS INCORPORATED BY REFERENCE The information required by Part III of this report, to the extent not set forth herein, is incorporated by reference from the Registrant's definitive Proxy Statement for the Annual Meeting of the Stockholders to be held March 15, 2013. Whole Foods Market, Inc. Annual Report on Form 10-K For the Fiscal Year Ended September 30, 2012 Table of Contents Page Number PART I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. Business. Risk Factors. Unresolved Staff Comments. Properties. Legal Proceedings. Mine Safety Disclosures. 1 11 15 16 16 16 PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Selected Financial Data. Management's Discussion and Analysis of Financial Condition and Results of Operations. Quantitative and Qualitative Disclosures About Market Risk. Financial Statements and Supplementary Data. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Controls and Procedures. Other Information. 17 19 20 30 31 55 55 55 PART III Item 10. Item 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate Governance. Executive Compensation. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Certain Relationships and Related Transactions, and Director Independence. Principal Accountant Fees and Services. 56 56 56 56 56 PART IV Item 15. Exhibits, Financial Statement Schedules. SIGNATURES 57 59 (This page intentionally left blank.) This Report on Form 10-K contains forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934 concerning our current expectations, assumptions, estimates and projections about the future. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to risks and uncertainties that could cause our actual results to differ materially from those indicated in the forward-looking statements. See \"Item 1A. Risk Factors\" for a discussion of risks and uncertainties that may affect our business. PART I Item 1. Business. General Whole Foods Market is the world's leading retailer of natural and organic foods and America's first national \"Certified Organic\" grocer. Unless otherwise specified, references to \"Whole Foods Market,\" \"Company,\" or \"we\" in this Report include the Company and its consolidated subsidiaries. The Company was formed in 1980 and is based in Austin, Texas. We completed our initial public offering in January 1992, and our common stock trades on the NASDAQ Global Select Market under the symbol \"WFM.\" Our Company mission is to promote the vitality and well-being of all individuals by supplying the highest quality, most wholesome foods available. Since the purity of our food and the health of our bodies are directly related to the purity and health of our environment, our core mission is devoted to the promotion of organically grown foods, healthy eating, and the sustainability of our entire ecosystem. Through our growth, we have had a significant and positive impact on the natural and organic foods movement throughout the United States, helping lead the industry to nationwide acceptance over the last 32 years. We have one operating segment, natural and organic foods supermarkets. We are the largest retailer of natural and organic foods in the U.S. and the 11th largest food retailer overall based on 2011 sales rankings from Progressive Grocer. As of September 30, 2012, we operated 335 stores in the United States, Canada, and the United Kingdom. Our stores average 38,000 square feet in size and 10 years in age, and are supported by our Austin headquarters, regional offices, distribution centers, bakehouse facilities, commissary kitchens, seafood-processing facilities, meat and produce procurement centers, and a specialty coffee and tea procurement and roasting operation. The following is a summary of our annual percentage sales and net long-lived assets by geographic area: Sales: United States Canada and United Kingdom Total sales Long-lived assets, net: United States Canada and United Kingdom Total long-lived assets, net 2012 2011 2010 96.8% 3.2 100.0% 96.9% 3.1 100.0% 97.0% 3.0 100.0% 95.2% 4.8 100.0% 95.9% 4.1 100.0% 96.6% 3.4 100.0% A five-year summary of certain financial and operating information can be found in Part II, \"Item 6. Selected Financial Data,\" of this Report on Form 10-K. See also Part II, \"Item 8. Financial Statements and Supplementary Data.\" Industry Overview According to Nielsen's TDLinx and Progressive Grocer, the U.S. grocery industry, which includes conventional supermarkets, supercenters, limited-assortment and natural/gourmet-positioned supermarkets, had approximately $584 billion in sales in 2011, a 3.8% increase over the prior year. Within this broader category, natural product sales through retail channels were approximately $73 billion, a 10% increase over the prior year, according to Natural Foods Merchandiser, a leading trade publication for the natural foods industry. We believe the growth in sales of natural and organic foods is being driven by numerous factors, including: heightened awareness of the role that healthy eating plays in long-term wellness; a better-educated and wealthier populace whose median age is increasing each year; increasing consumer concern over the purity and safety of food; and environmental concerns. 1 Our Core Values We believe that much of our success to date is because we remain a uniquely mission-driven company. Our Core Values succinctly express the purpose of our business, which is not only to make profits but to create value for all of our major stakeholders, each of which is linked interdependently. By maintaining our Core Values, regardless of how large we become, we are able to preserve what has always been special about our Company. Our Core Values are: Selling the highest quality natural and organic products available; Satisfying and delighting our customers; Supporting team member happiness and excellence; Creating wealth through profits and growth; Caring about our communities and our environment; Creating ongoing win-win partnerships with our suppliers; and Promoting the health of our stakeholders through healthy eating education. Differentiated Product Offering We offer a broad and differentiated selection of high-quality natural and organic products with a strong emphasis on perishable foods. Our product selection includes, but is not limited to: produce, grocery, meat and poultry, seafood, bakery, prepared foods and catering, specialty (beer, wine and cheese), coffee and tea, nutritional supplements, vitamins, body care, educational products such as books, floral items, pet products and household products. We estimate our stores carry on average approximately 21,000 SKUs, and we estimate over 30% of our food sales were organic in fiscal year 2012 (excluding seafood which does not have organic standards). The following is a summary of annual percentage sales by product category: 2012 33.0% 18.8 48.2 100.0% Non-perishables Prepared foods and bakery Other perishables Total sales 2011 33.2% 18.8 48.0 100.0% 2010 33.5% 18.8 47.7 100.0% Whole Foods Market defines natural foods as foods that are minimally processed, largely or completely free of artificial ingredients, preservatives and other non-naturally occurring chemicals and as near to their whole, natural state as possible. Organic foods are foods grown through methods that emphasize the use of renewable resources and the conservation of soil and water to enhance environmental quality. All products labeled as organic and sold within a retail store or used within the production of foods labeled as organic must be verified by an accredited certifying agency. Organic equivalency arrangements in the U.S., Canada, and the European Union help protect organic standards, enhance cooperation, and facilitate trade in organic products. Furthermore, all retailers that handle, store and sell organic products must implement measures to protect organic integrity. In the U.S., under the U.S. Department of Agriculture's (\"USDA\") Organic Rule, which was implemented into federal law in 2002, organic food products are produced using: agricultural management practices that promote healthy ecosystems and prohibit the use of genetically modified seeds or crops, sewage sludge, long-lasting pesticides, herbicides or fungicides; livestock management practices that promote healthy, humanely treated animals by providing organically grown feed, fresh air and outdoor access while using no antibiotics or growth hormones; and food-processing practices that protect the integrity of the organic product and disallow irradiation, genetically modified organisms (\"GMOs\") or synthetic preservatives. Our Quality Standards We aspire to become an international brand synonymous with not just natural and organic foods, but also with being the highest quality food retailer in every community in which we are located. We believe our strict quality standards differentiate our stores from other supermarkets and enable us to attract and maintain a broad base of loyal customers. We carefully evaluate each and every product we sell. We feature foods that are free of artificial preservatives, colors, flavors, sweeteners and hydrogenated fats. We are passionate about great tasting food and the pleasure of sharing it with others. 2 We are committed to foods that are fresh, wholesome and safe to eat. We seek out and promote organically grown foods. We provide food and nutritional products that support health and well-being. Store Brands Our nationally driven store brands currently feature approximately 2,700 SKUs led by our primary brand, 365 Everyday Value, along with a grouping of \"exclusive\" and \"control brand\" products. While some of our store brands yield greater margins than their national brand alternative, their primary purpose is to help differentiate our product selection and provide more value offerings to our customers. In addition to our nationally driven programs, we have a number of store-made and regionally made fresh items sold under the Whole Foods Market label, and we offer specialty and organic coffee, tea and drinking chocolates through our Allegro Coffee Company subsidiary. Store-branded products across all categories accounted for approximately 11% of our retail sales for both fiscal years 2012 and 2011. Value Programs We continue to evaluate and strengthen our value offerings, providing a clear range of choices in every category, and we believe our focus in this area has played a key role in driving our sales growth. In addition to supporting our 365 Everyday Value brand, we have lowered prices on thousands of known value items, extended value choices to our perishables departments, promoted our regional sales, and focused on stronger customer education. We also have The Whole Deal, our printed value guide, available in all U.S. and Canadian stores as well as online. The value guide features vendor-sponsored and Whole Foods Market store brand coupons, budget-conscious recipes, money-saving shopping and cooking tips, and Sure Deals that highlight everyday value pricing on high-quality products our customers love. Health Starts Here We are offering an increasing selection of products in our stores meeting the Health Starts Here nutritional and ingredient standards. Health Starts Here is a mindful approach to healthy eating rooted in four simple ways to build better meals - Whole Food, Plant-Strong, Healthy Fats, and Nutrient Dense. Products such as frozen items, breads and prepared foods that meet these guidelines carry our \"Health Starts Here\" logo. In addition, all of our stores feature signage on the Aggregate Nutrient Density Index (\"ANDI\"), a proprietary scoring system that ranks foods based on nutrient density (vitamins, minerals, antioxidants and phytochemicals) per calorie. Whole Trade Guarantee Products with the Whole Trade Guarantee label are sourced from developing countries and meet our high quality standards, provide more money to producers, ensure better wages and working conditions for workers, and utilize sound environmental practices. Approximately 250 products carry our Whole Trade Guarantee seal, and demand for these products continues to grow. Whole Foods Market donates 1% of sales of these products to Whole Planet Foundation to help alleviate world poverty. Locally Grown We are committed to buying from local producers whose products meet our high quality standards, particularly those who are dedicated to environmentally friendly, sustainable agriculture. For some stores, \"local\" is defined as within a certain mile radius, and for others, it means within the metro area, state, or tri-state area. Buying local allows us to offer our shoppers the freshest, most flavorful pick of seasonal products; it bolsters local economies by keeping money in the pockets of community growers, and it contributes to responsible land development and the preservation of viable green spaces. Whole Foods Market currently purchases produce from more than 2,000 different farms through various suppliers, and in fiscal year 2012, approximately 26% of the produce sold in our stores came from local farms. In addition, under our Local Producer Loan Program, we have established a budget of up to $10 million to promote local food production, and as of September 30, 2012, we had disbursed more than $7.3 million in loans to 121 local producers company-wide. Animal Welfare Whole Foods Market is dedicated to promoting animal welfare on farms and ranches. We encourage innovative animal production practices that improve the lives of animals raised for meat and poultry in our stores. We also have strong standards for food safety at processing. Work on our \"animal compassionate\" standards started in 2003, and development of an additional tiered standards program transitioned to the Global Animal Partnership foundation in 2008. Global Animal Partnership's 5-Step Animal Welfare Rating system standards have been developed for cattle, pigs, chickens, and turkeys and are underway for other species as well. As of 2011, our meat departments in all U.S. stores reflect these certifications. Seafood Sustainability We continue to collaborate with the Marine Stewardship Council (\"MSC\") to offer as much MSC-certified seafood as possible, and in September 2010, we expanded our seafood sustainability work by launching a color-coded seafood sustainability ratings 3 program developed by partnering organizations, Blue Ocean Institute and Monterey Bay Aquarium. Ratings are based on key criteria for sustainable fisheries using science-based, transparent ranking methods. Deepening our commitment to fully sustainable seafood departments, in April 2012 we phased out all wild-caught seafood from \"red-rated\" fisheries. Farmed seafood at Whole Foods Market carries the \"Responsibly Farmed\" logo to indicate that farms have passed an annual third-party audit to ensure they meet our quality standards, which remain the highest in the industry. With these ratings and standards, customers have the information they need to make informed decisions about their seafood purchases. Whole Body Standards We believe the quality of the items and ingredients people apply to their bodies topically is as important as the food they put into their bodies. While our basic standards for supplements and body care products already set us apart, ensuring high quality and organic integrity in non-food products, we have raised the bar even higher with our Premium Body Care standards and logo. This additional tier of premium standards meets our strictest guidelines for quality sourcing, environmental impact, results and safety and was designed to evolve as new science-based studies and research come to light. In addition, as of June 2011, all health and beauty products sold in our stores that make organic claims are certified to one of two standards: the USDA's National Organic Program or NSF International's 305 Standard for Personal Care Products Containing Organic Ingredients. Eco-Scale In April 2011, we introduced our exclusive Eco-Scale rating system and became the first national retailer to launch its own comprehensive set of green cleaning standards to help shoppers make informed choices for their homes and the planet. Under our Eco-Scale rating system, all household cleaning products in our stores are required to list all ingredients on their packaging, a labeling practice not currently required by the U.S. government. This color-coded rating system allows shoppers to easily identify a product's environmental impact and safety based on a red-orange-yellow-green color scale. We are committed to working with our vendors to evaluate and independently audit every product in our cleaning category, and all national brands in our stores meet our baseline orange standard. Customers Unlike shoppers at conventional grocery stores, we believe many of our customers connect with us on a deeper level because of our shared values and, for this reason, continue to shop with us even in uncertain economic times. Based on our research, we believe our customers can be segmented into four broad categories. Conscionables embody the Core Values of Whole Foods Market; they support social and environmental initiatives and are frequent shoppers who spend the largest proportion of their monthly grocery bill with us. Organics buy organically grown food as a way to maintain their personal health and for food safety reasons. Foodies equate food with love and are frequent shoppers who shop our stores for selection, value and convenience, and Experientials are driven to Whole Foods Market for unique products and special occasion items. Seasonality The Company's average weekly sales and gross profit are typically highest in the second and third fiscal quarters and lowest in the fourth fiscal quarter. Average weekly sales and gross profit are typically lower in the first fiscal quarter due to the product mix of holiday sales, and in the fourth fiscal quarter due to the seasonally slower sales during the summer months. Growth Strategy We are a Fortune 500 company, ranking number 264 on the 2012 list. Our sales have grown rapidly due to historically strong identical store sales growth, acquisitions and new store openings from approximately $92.5 million in fiscal year 1991, excluding the effect of pooling-of-interests transactions completed since 1991, to approximately $11.70 billion in fiscal year 2012, a 21year compounded annual growth rate of approximately 26%. 4 Over the last 15 fiscal years, our identical store sales growth has averaged approximately 8%. Our identical store sales growth for each of the last 15 fiscal years is shown in the following chart: Approximately 17% of our existing square footage was acquired, and while we may continue to pursue acquisitions of smaller chains that provide access to desirable geographic areas and experienced team members, such acquisitions are not expected to significantly impact our future store growth or financial results. Our growth strategy is to expand primarily through new store openings. We have a disciplined, opportunistic real estate strategy, opening stores in existing trade areas as well as new areas, including international locations. We typically target stores located on premium real estate sites, and while we may open stores as small as 15,000 square feet or as large as 75,000 square feet, the majority of our new stores are expected to fall in the range of 35,000 to 45,000 square feet going forward. Our historical store growth and sales mix is summarized below: 2012 2011 2010 2009 Stores at beginning of fiscal year 311 299 284 275 Stores opened 25 18 16 15 Acquired stores 2 Divested stores (2) Relocated stores (1) (6) (5) Closed stores (1) (1) Stores at end of fiscal year 335 311 299 284 Remodels with major expansions (1) 2 1 2 Total gross square footage at end of fiscal year 12,735,000 11,832,000 11,231,000 10,566,000 Year-over-year growth 8% 5% 6% 7% (1) Defined as remodels with expansions of square footage greater than 20% completed during the fiscal year. Sales mix: Identical stores New/relocated stores and remodels with major expansions Acquired stores Other sales, primarily non-retail external sales Total sales 2008 276 20 (7) (14) 275 1 9,895,000 6% 2012 2011 2010 2009 2008 93.3% 6.2 0.5 100.0% 94.6% 4.7 0.3 0.4 100.0% 93.2% 6.0 0.1 0.7 100.0% 91.4% 7.8 0.8 100.0% 80.9% 9.9 8.7 0.5 100.0% 5 Our historical store development pipeline is summarized below: Stores in development Average size (gross square feet) Total gross square footage in development As a percentage of existing square footage November 7, 2012 79 37,000 2,896,000 22% November 2, 2011 62 35,000 2,192,000 18% November 3, 2010 52 39,000 2,052,000 18% November 4, 2009 53 45,000 2,410,000 23% November 5, 2008 66 49,000 3,294,000 33% Store Description Each of our stores is designed to fit the size and configuration of the particular location and to reflect the community in which it is located. We strive to transform food shopping from a chore into a dynamic experience by building and operating stores with a lively, inspirational atmosphere, mission-oriented dcor, well-trained team members, an exciting product mix that emphasizes healthy eating and our high quality standards, ever-changing selections, samples, open kitchens, scratch bakeries, hand-stacked produce, and prepared foods stations. We also incorporate many environmentally sustainable aspects into our store design, and many stores have bicycle parking racks and electric vehicle charging stations. Our stores typically include sit-down eating areas, customer comment boards and customer service booths. In addition, some stores offer special services such as chair massage, personal shopping and home delivery. Others offer sit-down wine bars and tap rooms featuring local and/or craft beer and wine, creating a destination for customer gathering. We believe our stores play a unique role as a third place, besides the home and office, where people can gather, interact and learn while at the same time discovering the many joys of eating and sharing food. Most of our stores are located in high-traffic shopping areas on premier real estate sites and are either freestanding or in strip centers. We also have a number of urban stores located in high-density, mixed-use developments. In selecting store locations, we use an internally developed model to analyze potential sites based on various criteria such as education levels, population density and income levels within certain drive times. After we have selected a target site, our development group does a comprehensive site study and sales projection and works with our regional teams to develop construction and operating cost estimates. Each project must meet an internal Economic Value Added (\"EVA\") hurdle return, based on our internal weighted average cost of capital, which for new stores generally is expected to be cumulative positive EVA in five years or less. In its simplest definition, EVA is equivalent to net operating profits after taxes minus a charge on the cost of invested capital necessary to generate those profits. Our current internal weighted average cost of capital metric is 8%. The required cash investment for new stores varies depending on the size of the store, geographic location, degree of landlord incentives and complexity of site development issues. To a significant degree, it also depends on how the project is structured, including costs for elements that often increase or decrease rent, e.g., lease acquisition costs, shell and/or garage costs, and landlord allowances. Because of these differences, the average development cost per square foot may vary significantly from project to project and from year to year. Purchasing and Distribution The majority of our purchasing occurs at the regional and national levels, enabling us to negotiate better volume discounts with major vendors and distributors while allowing our store buyers to focus on local products and the unique product mix necessary to keep the neighborhood market feel in our stores. We also remain committed to buying from local producers that meet our high quality standards. We own a produce procurement center which facilitates the procurement and distribution of the majority of the produce we sell. We also operate four seafood processing and distribution facilities, a specialty coffee and tea procurement and roasting operation, and 11 regional distribution centers that focus primarily on perishables distribution to our stores across the U.S., Canada and the United Kingdom. In addition, we have four regional commissary kitchens and six bakehouse facilities, all of which distribute products to our stores. Other products are typically procured through a combination of specialty wholesalers and direct distributors. United Natural Foods, Inc. (\"UNFI\") is our single largest third-party supplier, accounting for approximately 31% of our total purchases in fiscal years 2012 and 2011. In June 2010, we extended our long-term relationship with UNFI as our primary supplier of dry grocery and frozen food products through 2020. Beginning in fiscal year 2011, UNFI also became our primary nonperishables distributor in two additional regions, allowing us to focus our internal distribution efforts in our regions around key perishables departments. Store Operations We strive to promote a strong company culture featuring a team approach to store operations that we believe is distinctly more empowering of team members than that of the traditional supermarket. Our domestic Whole Foods Market stores each employ 6 between approximately 40 and 650 team members who generally comprise 10 self-managed teams per store, each led by a team leader. Each team within a store is responsible for a different product offering or aspect of store operations such as prepared foods, grocery, or customer service, among others. We also promote a decentralized approach to store operations in which many decisions are made by teams at the individual store level. In this structure, an effective store team leader is critical to the success of the store. The store team leader works closely with one or more associate store team leaders, as well as with all of the department team leaders, to operate the store as efficiently and profitably as possible. Team members are involved at all levels of our business. We strive to create a company-wide consciousness of \"shared fate\" by uniting the interests of team members as closely as possible with those of our shareholders. One way we reinforce this concept is through our Gainsharing program. Under Gainsharing, as part of our annual planning process, each team receives a labor budget expressed as a percentage of their team's sales, with leverage built into the budgets on an overall company basis. When teams come in under budget due either to higher sales or lower labor costs, a portion of the surplus is divided among the team members and paid out every four weeks, and a portion is set aside in a savings pool. When teams are over budget (or in a labor deficit position), no Gainsharing money is paid out. Instead, the overage is taken out of the team's savings pool or, in the absence of savings, paid back using future surpluses. The savings pool is paid out annually after the end of the fiscal year to all teams with a positive balance. Rewarding our team members for increases in labor productivity, something they can control, gives them a direct stake in the success of our business. We also encourage stock ownership among team members through our broadbased team member stock option plan, stock purchase plan and 401(k) plan. Team Members We created more than 8,500 new jobs throughout the Company in fiscal year 2012. As of September 30, 2012, we had approximately 72,700 team members, including approximately 53,100 full-time, 16,400 part-time and 3,200 seasonal team members. Full-time team members accounted for approximately 76% of all permanent positions at the end of fiscal year 2012, with voluntary turnover of less than 10%. We believe this is very low for the food retailing industry and allows us to better serve our customers. All of our team members are non-union, and we consider our team member relations to be very strong. For the past 15 years, our team members have helped Whole Foods Market become one of FORTUNE magazine's \"100 Best Companies to Work for in America.\" Ranking 32nd overall and 8th among large companies in 2012, we are one of only 13 companies to make the \"100 Best\" list every year since its inception. We believe in empowering our team members to make Whole Foods Market not only a great place to shop but a great place to build a career. Our salary and benefits programs reflect our philosophy of egalitarianism. To ensure they are perceived as fundamentally fair to all stakeholders, our books are open to our team members, including our annual individual compensation report. We also have a salary cap that limits the total cash compensation paid to any team member in a calendar year to 19 times the average annual wage, including bonuses, of all team members. In addition, our co-founder and Co-Chief Executive Officer, John Mackey, has voluntarily set his annual salary at $1 and receives no cash bonuses or stock option awards. All of our full-time and part-time team members are eligible to receive stock options through annual leadership grants or through service-hour grants once they have accumulated 6,000 service hours (approximately three years of full-time employment). Approximately 95% of the equity awards granted under the Company's stock plan since its inception in 1992 have been granted to team members who are not executive officers. In fiscal year 2012, more than 14,500 team members exercised over 6.7 million stock options worth approximately $197.1 million in gains before taxes, or an average of about $13,600 per team member. As medical costs continue to rise, we periodically restructure how costs are shared between the Company and team members to ensure our health plan remains sustainable. By participating in our company-wide benefits vote every three years, team members can take an active role in choosing the benefits made available by the Company and how they share in the cost. In our most recent vote, held in September 2012, 82% of eligible team members cast a ballot to determine the Company's medical plan for 2013. Under this new plan, Whole Foods Market will provide health care coverage at no cost to full-time team members who work 30 or more hours per week and have worked a minimum of 20,000 service hours (approximately 10 years). Full-time team members with 800 to 19,999 service hours will pay a premium of $10 per paycheck. Under the Company's 2012 plan, health care coverage was provided at no cost to full-time team members who work 30 or more hours per week and have worked a minimum of 10,000 service hours, while full-time team members with 800 to 9,999 service hours paid a premium of $10 per paycheck. In addition, the Company provides personal wellness dollars in the form of either a health reimbursement arrangement (\"HRA\") or health savings account (\"HSA\"). Based on service hours, team members receive up to $1,800 per year to help cover the cost of deductibles and other allowable out-of-pocket health care expenses not covered by insurance. Two initiatives developed to support our Core Value of Promoting the health of our stakeholders through healthy eating education were specifically designed for our team members. They include the Total Health Immersion Program and the Healthy Discount 7 Incentive Program. The Total Health Immersion Program provides educational opportunities for team members that are fully paid by the Company. Since launching this program in the fall of 2009, over 1,600 team members have participated. In 2012, we saw year-over-year decreases in participant medical claims (net paid per claimant) and inpatient hospital stays (average paid per day), along with an increase in annual preventive wellness exams. The Healthy Discount Incentive Program offers additional store discounts beyond the standard 20% that all team members receive, based on meeting designated biometric criteria (cholesterol/LDL, BMI or waist-height ratio, blood pressure) and being nicotine-free. In fiscal year 2012, approximately 14,000 team members participated in biometric screenings, with over 8,600 receiving higher-level discount cards compared to approximately 8,300 team members in fiscal year 2011. Competition Food retailing is a large, intensely competitive industry. Our competition varies across the Company and includes but is not limited to local, regional, national and international conventional and specialty supermarkets, natural foods stores, warehouse membership clubs, online retailers, smaller specialty stores, farmers' markets and restaurants, each of which competes with us on the basis of store ambiance and experience, product selection, quality, customer service, price or a combination of these factors. Our commitment to natural and organic products, local products, high quality standards, emphasis on perishable product sales, healthy eating products and education, range of choices based on price, and empowered team members who focus on unparalleled customer service differentiate us from the competition and have created a loyal core customer base. We believe our passionate support of causes and leadership in areas important to our customers reinforce our position as the authentic retailer of natural and organic foods, making us the preferred choice for customers aspiring to a healthier lifestyle. Marketing We spend much less on advertising and marketing than other supermarkets - approximately 0.4% of our total sales in fiscal year 2012. Instead, we rely heavily on word-of-mouth advocacy by our shoppers, which we believe is more valuable than traditional advertising; and we allocate our marketing budgets among national and regional programs and our individual stores. We have marketers in every store dedicated to local events, community non-profits and the best possible in-store experience, and most of our corporate marketing activity is centered on engaging existing shoppers and growing their basket by introducing them to a fantastic and unique product selection while constantly increasing their choices. Dollars that would be spent on traditional media buys are instead typically spent on community non-profit partnerships that help grow our business and our communities at the same time. We also connect and engage with our customers through social media, e-newsletters, and our own website and blog at www.wholefoodsmarket.com. Social Media Social media provides us with a powerful way to communicate and interact with our Internet-savvy customers, giving us insight at both a local and global level as to how we are viewed and what our customers want and expect from us. According to a Company-commissioned study, 47% of our shoppers visit Facebook daily, and 31% visit Twitter. Currently, we have over 1 million \"likes\" on Facebook and over 3 million followers on Twitter, making us the top retail brand on Twitter. In addition, many of our stores have their own Facebook and Twitter accounts that allow them to connect more directly to the tastes and needs of the communities they serve. We also are increasing our presence on new social networks like Pinterest and Instagram to broaden our reach. Global Responsibility We seek to be a deeply responsible company in the communities where we do business around the world, providing ethically sourced, high-quality products and transparent information to our customers, reducing our impact on the environment, and actively participating in our local communities. Each store retains a separate budget for making contributions to a variety of philanthropic and community activities, fostering goodwill and developing a high profile within the community. Our goal is to contribute at least 5% of our after-tax profits annually to non-profit organizations. Over the last three fiscal years, however, our donations (including in-kind contributions of food) amounted to more than 10% of our after-tax profits. We believe that many customers are concerned about health and nutrition, food safety, fair trade and the environment, and choose to shop our stores for these reasons. Our transparency regarding \"farm-to-fork\" traceability allows them to make more informed purchasing decisions and \"vote\" with their dollars. 8 Healthy Eating Education We are providing a revolutionary educational program in our stores to promote the health of our customers and team members. Supported by a team of renowned doctors, researchers and authors who comprise our Scientific and Medical Advisory Board, along with nutritionists, chefs and other experts, our Health Starts Here program consists of a simple approach to eating, paired with practical tools and valuable resources, rooted in our four principles: Whole Food: We believe that food in its purest state - unadulterated by artificial additives, sweeteners, colorings, and preservatives - is the best tasting and most nutritious food available. Plant-Strong: No matter what type of diet you follow - including those with dairy, meat and seafood - reconfigure your plate so the majority of each meal is created from an abundance of raw and cooked vegetables, fruits, legumes and beans, nuts, seeds and whole grains. Healthy Fats: Get healthy fats from whole plant sources, such as nuts, seeds and avocados. These foods are rich in micronutrients as well. Work to eliminate (or minimize) extracted oils and processed fats. Nutrient Dense: Choose foods that are rich in micronutrients when compared to their total caloric content. Micro-nutrients include vitamins, minerals, antioxidants and phytochemicals. For guidance, look for the Aggregate Nutrient Density Index (\"ANDI\") scoring system in our stores. The program includes, among other things: in-store healthy eating centers to display books and answer questions about healthy eating and cooking ideas; store tours focused on making healthy eating choices; a wide variety of educational opportunities for team members; and healthy eating classes and networking opportunities for our customers. We believe our Health Starts Here program will grow and evolve over time to become a key competitive advantage for us, and by offering an informed approach to food as a source for improved health and vitality, we hope to play a big part in the solution to the healthcare crisis in America, changing many more lives for the better. Whole Planet Foundation Created in 2005, Whole Planet Foundation (www.wholeplanetfoundation.org) is an independent, non-profit organization whose mission is to empower the poor through microcredit, with a focus on developing-world communities that supply our stores with product. Microcredit is a system pioneered by Professor Muhammad Yunus, founder of the Grameen Bank in Bangladesh and co-recipient of the 2006 Nobel Peace Prize. The philosophy behind microcredit is to provide the poor access to credit without requiring contracts or collateral, enabling them to lift themselves out of poverty by creating or expanding home-based businesses. Whole Foods Market covers all operating costs for Whole Planet Foundation. Program grants are funded in part by the sale of products under the Company's Whole Trade Guarantee Program, along with support from customers, vendors and team members. As of September 30, 2012, Whole Planet Foundation has partnered with various microfinance institutions to facilitate over $32.6 million in various donor-funded grants for 68 projects in 53 countries where the Company sources products. Over 225,000 borrower families (90% women) have received loans, which are being used for home-based businesses including poultry and pig farming, agriculture, furniture making, tailoring, and selling handicrafts, homemade and bakery-made foods, clothing and footwear. It is estimated that each woman supports a family of almost six, which means our support is contributing to the prosperity of nearly one million individuals. Whole Kids Foundation Whole Kids Foundation (www.wholekidsfoundation.org), an independent non-profit organization founded in July 2011, is dedicated to improving children's nutrition by supporting schools and inspiring families. The foundation currently provides grants for salad bar equipment and training for schools, as well as for school gardens. Through the generosity of Whole Foods Market shoppers, suppliers and community donors, nearly 1,000 schools in the U.S. and Canada received school garden grants in 2012. To date, Whole Foods Market and Whole Kids Foundation, in partnership with Let's Move Salad Bars to Schools, have provided more than 1,500 salad bars to schools around the country. Our team members and customers continue to support these initiatives, recently donating approximately $2.3 million during the foundation's fall 2012 fundraising campaign. Whole Foods Market covers all operating costs for the foundation, allowing 100% of public donations to be dedicated to program support. Green Mission We are committed to supporting wise environmental practices and being a leader in environmental stewardship. Since 2004, we have purchased over 4.3 billion megawatt hours of wind-based renewable energy, earning seven Environmental Protection Agency (\"EPA\") Green Power awards from 2004 through 2012. We have 15 stores and one distribution center using or hosting rooftop solar systems, four stores with fuel cells, and a commissary kitchen that is using biofuel from internally generated waste cooking oil. We also have installed electric vehicle charging stations at over 30 stores around the country. We have made a commitment to reduce energy consumption at all of our stores by 25% per square foot by 2015, and we build our new stores with the environment in