Starbucks 2006 Annual Report Download - page 61

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Scheduled principal payments on long-term debt are as follows (in thousands):
FISCAL YEAR ENDING
2007 $ 762
2008 776
2009 789
2010 337
2011 56
Total principal payments $2,720
Note 11: Other Long-term Liabilities
The Company’s other long-term liabilities consist of the following (in thousands):
FISCAL YEAR ENDED Oct 1, 2006 Oct 2, 2005
Deferred rent $203,903 $166,182
Asset retirement obligations 34,271 —
Minority interest 10,739 11,153
Other 13,944 16,230
Total $262,857 $193,565
The deferred rent liabilities as of October 1, 2006 and October 2, 2005, represent amounts for tenant improvement
allowances, rent escalation clauses and rent holidays related to certain operating leases. The Company amortizes deferred
rent over the terms of the leases as reductions to rent expense on the consolidated statements of earnings.
Asset retirement liabilities represent the estimated fair value of the Company’s future costs of removing leasehold
improvements at the termination of leases related to certain of its leased stores and administrative facilities. The Company
adopted this new accounting requirement on the last day of fiscal 2006, as discussed in more detail in Note 1.
For operations accounted for under the consolidation method, but in which Starbucks owns less than 100% of the equity
interests, long-term liabilities are maintained for the collective ownership interests of minority shareholders. As of
October 1, 2006 and October 2, 2005, Starbucks had less than 100% ownership in Coffee Concepts (Southern China)
Ltd. as well as in Chengdu Starbucks Coffee Company Limited and Urban Coffee Opportunities, LLC.
The other remaining long-term liabilities generally include obligations to be settled or paid for one year beyond each
respective fiscal year end, for items such as hedging instruments, guarantees (see Note 18), donation commitments and
the long-term portion of capital lease obligations.
Note 12: Leases
Rental expense under operating lease agreements was as follows (in thousands):
FISCAL YEAR ENDED Oct 1, 2006 Oct 2, 2005 Oct 3, 2004
Minimum rentals — retail stores $406,329 $340,474 $285,250
Minimum rentals — other 52,367 43,532 28,108
Contingent rentals 40,113 32,910 24,638
Total $498,809 $416,916 $337,996
STARBUCKS CORPORATION, FORM 10-K 57