Starbucks 2005 Annual Report Download - page 59

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Consecutive monthly unrealized losses Greater Than or
Less Than 12 Months Equal to 12 Months
Gross Gross
Unrealized Unrealized
Holding Holding Fair
October 3, 2004 Losses Fair Value Losses Value
State and local government obligationsÏÏÏÏÏÏÏÏÏÏÏ $(931) $376,318 $Ì $Ì
U.S. government agency obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏ (4) 6,651 Ì Ì
Asset-backed securitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (38) 7,097 Ì Ì
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(973) $390,066 $Ì $Ì
Gross unrealized holding losses of $0.4 million for less than twelve months and $0.7 million for greater than or
equal to twelve months as of October 2, 2005, pertain to 30 and 31 fixed income securities, respectively, and
were primarily caused by interest rate increases. Since Starbucks has the ability and intent to hold these
securities until a recovery of fair value, which may be at maturity, and because the unrealized losses were
primarily due to higher interest rates, the Company does not consider these securities to be other-than-
temporarily impaired.
Additional factors considered by management as of October 2, 2005, included the following, by category:
State and local government obligations
The contractual terms of these securities do not permit the issuer to settle at a price less than the par value of
the investment, which is the equivalent of the amount due at maturity. These securities had a minimum credit
rating of ""A'' and an average credit rating above ""AA.''
U.S. government agency obligations
These securities are obligations of an agency of the U.S. government and are rated ""AAA.'' The contractual
terms of these securities do not permit the issuer to settle at a price less than the par value of the investment,
which is the equivalent of the amount due at maturity.
Asset-backed securities
These securities are guaranteed by an agency of the U.S. government or have a ""AAA'' credit rating.
Additionally, these securities would not be settled at a price less than the par value of the investment, which is
the equivalent of the amount due at maturity.
There were no realized losses recorded for other than temporary impairments during fiscal 2005, 2004 or 2003.
Trading securities are comprised mainly of marketable equity mutual funds that approximate a portion of the
Company's liability under the Management Deferred Compensation Plan, a defined contribution plan. The
corresponding deferred compensation liability of $47.3 million in fiscal 2005 and $32.7 million in fiscal 2004 is
included in ""Accrued compensation and related costs'' on the consolidated balance sheets. In fiscal years 2005
and 2004, the changes in net unrealized holding gains in the trading portfolio included in earnings were
$2.4 million and $1.1 million, respectively.
Long-term investments generally mature in less than three years.
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