Starbucks 2001 Annual Report Download - page 20

Download and view the complete annual report

Please find page 20 of the 2001 Starbucks annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 36

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36

In August 2001,the FASB issued SFAS No.144,“Accounting for the Impairment or Disposal of Long-
Lived Assets,” which supercedes SFAS No.121,“Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of.” SFAS No. 144 retains the fundamental provisions of
SFAS No. 121 but sets forth new criteria for asset classification and broadens the scope of qualifying
discontinued operations. The Company will adopt SFAS No. 144 as of September 30, 2002. The
Company’s management has not yet determined the impact of adoption on its consolidated financial
position and results of operations.
In September 2001, the EITF reached a consensus regarding Issue No. 01-10,“Accounting for the
Impact of the Terrorist Attacks of September 11, 2001,” which requires that losses and other costs
incurred as a result of the September 11, 2001, events be classified as part of income from continuing
operations in the statement of operations. Additionally, certain disclosures are required in all periods
affected. As a result of the events of September 11, 2001, the Company closed its North American
Company-operated retail stores and other North American facilities for the remainder of that day.
None of the Company’s employees were injured,and the Company did not sustain significant property
loss or incur significant costs as a result of the attacks. However, the aftermath of these events, together
with the slowing economy, have had a moderately negative impact on the Company’s Specialty
Operations,which derives approximately 9.0% of its revenue from the travel and hospitality industries.
At this time, management believes that the events of September 11, 2001, will not have a material
impact on the Company’s financial position, results of operations or cash flows in fiscal 2002.
RECLASSIFICATIONS
Certain reclassifications of prior years’ balances have been made to conform to the fiscal 2001
presentation.
Note 2: Business Combinations
During fiscal 2000, Starbucks acquired the outstanding stock of Tympanum, Inc. (d/ b/ a “Hear
Music”), a music retailer, and of Coffee Partners Co. Ltd., the company licensed to operate Starbucks
stores in Thailand.The combined purchase price for these two acquisitions was $14.1 million. During
fiscal 1999, Starbucks acquired the net assets of Tazo, L.L.C., a Portland, Oregon-based tea company
that produces premium tea products, and Pasqua Inc., a San Francisco, California-based roaster and
retailer of specialty coffee.The combined purchase price for these two acquisitions was $16.5 million.
All of the above acquisitions were accounted for under the purchase method of accounting. Results
of operations of the acquired companies are included on the accompanying consolidated financial
statements from the dates of acquisition.
Note 3: Cash and Cash Equivalents
Cash and cash equivalents consist of the following (in thousands):
Sept 30, 2001 Oct 1, 2000
Operating funds and interest-bearing deposits $ 51,164 $ 35,521
Commercial paper 1,698 998
Money market funds 60,375 34,298
Total $ 113,237 $ 70,817