Starbucks 2006 Annual Report Download - page 23

AS OF AND FOR THE FISCAL YEAR ENDED
(1)
Oct 1, 2006
(52 Wks)
Oct 2, 2005
(52 Wks)
Oct 3, 2004
(53 Wks)
Sept 28, 2003
(52 Wks)
Sept 29, 2002
(52 Wks)
Stores open at year end:
(8)
United States
Company-operated stores 5,728 4,918 4,338 3,817 3,239
Licensed stores 3,168 2,435 1,839 1,422 1,033
International
Company-operated stores 1,374 1,144 978 834 708
Licensed stores 2,170 1,744 1,414 1,152 906
Total 12,440 10,241 8,569 7,225 5,886
(1) The Company’s fiscal year ends on the Sunday closest to September 30.
(2) On October 10, 2001, the Company sold 30,000 of its shares of Starbucks Coffee Japan, Ltd. at approximately $495 per share, net
of related costs, which resulted in a gain of $13.4 million.
(3) As discussed in Note 1 “Asset Retirement Obligations” under the Notes to Consolidated Financial Statements included in Item 8,
“Financial Statements and Supplementary Data” of this Form 10-K, Starbucks adopted FASB Interpretation No. 47, “Accounting
for Conditional Asset Retirement Obligations — an interpretation of FASB Statement No. 143” at the end of the fourth fiscal
quarter of 2006.
(4) Working capital deficit as of October 1, 2006 was primarily due to increased current liabilities from short term borrowings under
the revolving credit facility. See (5) below.
(5) In August 2006, the Company increased its borrowing capacity under the five-year revolving credit facility to $1 billion and had
borrowings of $700 million outstanding as of October 1, 2006.
(6) Includes only Starbucks Company-operated retail stores open 13 months or longer. Comparable store sales percentage for fiscal
2004 excludes the extra sales week.
(7) Store openings are reported net of closures.
(8) International store information has been adjusted for the fiscal 2006 acquisitions of Hawaii and Puerto Rico and fiscal 2005
acquisitions of Germany, Southern China and Chile licensed operations by reclassifying historical information from Licensed
stores to Company-operated stores. United States store information was also adjusted to align with the Hawaii operations segment
change by reclassifying historical information from International Company-operated stores to the United States.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
Starbucks Corporation’s fiscal year ends on the Sunday closest to September 30. The fiscal years ended on October 1,
2006 and October 2, 2005, included 52 weeks. The fiscal year ended October 3, 2004, included 53 weeks, with the
53rd week falling in the fiscal fourth quarter.
MANAGEMENT OVERVIEW
During the fiscal year ended October 1, 2006, the Company’s focus on execution in all areas of its business, from U.S. and
International Company-operated retail operations to the Company’s specialty businesses, delivered strong financial
performance. Management believes that its ability to achieve the balance between growing the core business and building
the foundation for future growth is the key to increasing long-term shareholder value. Starbucks fiscal 2006 performance
reflects the Company’s continuing commitment to achieving this balance.
The primary driver of the Company’s revenue growth continues to be the opening of new retail stores, both Company-
operated and licensed, in pursuit of the Company’s objective to establish Starbucks as one of the most recognized and
respected brands in the world. Starbucks opened 2,199 new stores in fiscal 2006 and plans to open approximately 2,400
in fiscal 2007. With a presence in 37 countries, serving customers more than 40 million times per week, management
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