Starbucks 2005 Annual Report Download - page 67

Download and view the complete annual report

Please find page 67 of the 2005 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 96

  • 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
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

Comprehensive income, net of related tax effects, is as follows (in thousands):
Fiscal Year Ended Oct 2, 2005 Oct 3, 2004 Sept 28, 2003
Net earningsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $494,467 $388,973 $265,355
Unrealized holding gains/(losses) on available-for-sale
securities, net of tax benefit/(provision) of $889,
$618 and ($53) in 2005, 2004 and 2003, respectively (1,482) (1,005) 142
Unrealized holding losses on cash flow hedges, net of
tax benefit of $2,268, $2,801 and $804 in 2005, 2004
and 2003, respectively ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (3,861) (4,769) (1,369)
Unrealized holding gains/(losses) on net investment
hedges, net of tax benefit/(provision) of ($609),
$328 and $1,903 in 2005, 2004 and 2003, respectively 1,037 (558) (3,241)
Reclassification adjustment for losses realized in net
income, net of tax benefit of $2,751, $832 and $41 in
2005, 2004 and 2003, respectively ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,656 1,407 42
Net unrealized gain/(loss)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 350 (4,925) (4,426)
Translation adjustment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (8,677) 19,892 27,241
Total comprehensive income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $486,140 $403,940 $288,170
The unfavorable translation adjustment change during fiscal year 2005 of $8.7 million was primarily due to the
strengthening of the U.S. dollar against the euro, British pound sterling and Japanese yen. The favorable
translation adjustment changes during fiscal years 2004 and 2003 of $19.9 million and $27.2 million,
respectively, were primarily due to the weakening of the U.S. dollar against several currencies, such as the
British pound sterling, Euro, Canadian dollar and Japanese yen.
The components of accumulated other comprehensive income, net of tax, were as follows (in thousands):
Fiscal Year Ended Oct 2, 2005 Oct 3, 2004
Net unrealized holding losses on available-for-sale securities ÏÏÏÏÏÏÏÏÏÏÏ $ (651) $ (523)
Net unrealized holding losses on hedging instrumentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (7,786) (8,264)
Translation adjustment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 29,351 38,028
Accumulated other comprehensive incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $20,914 $29,241
As of October 2, 2005, the translation adjustment of $29.4 million was net of tax provisions of $5.5 million.
Note 14: Employee Stock and Benefit Plans
Stock Option Plans
The Company maintains several equity incentive plans under which it may grant nonqualified stock options,
incentive stock options, restricted stock, restricted stock units or stock appreciation rights to employees,
consultants and nonemployee directors. Stock options have been granted at prices at or above the fair market
value on the date of grant. Options vest and expire according to terms established at the grant date.
65