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Global Consumer Products Group
The Company’s CPG segment represents 25% of total specialty revenues and 4% of total net revenues. CPG operations
sell a selection of whole bean and ground coffees as well as a selection of premium Tazo»teas through licensing
arrangements with Kraft and other grocery and warehouse club stores in United States and international markets. CPG
operations also produce and sell ready-to-drink beverages which include, among others, bottled Frappuccino»coffee
drinks and Starbucks DoubleShot»espresso drinks, and Starbucks»superpremium ice creams, through its joint venture
partnerships and Starbucks
TM
Coffee and Cream Liqueurs through a marketing and distribution agreement. Through
other manufacturing, distribution and co-packing agreements, the Company produces and sells ready-to-drink products
in international locations.
The accounting policies of the operating segments are the same as those described in the summary of significant
accounting policies in Note 1. Operating income represents earnings before “Interest and other income, net” and
“Income taxes.” Allocations of portions of corporate overhead, interest or income taxes to the segments are not significant.
Identifiable assets by segment are those assets used in the Company’s operations in each segment. Unallocated corporate
assets include cash and investments, unallocated assets of the corporate headquarters and roasting facilities, deferred taxes
and certain other intangibles. Management evaluates performance of segments based on net revenues and operating
expenses.
The table below presents information by operating segment for the fiscal years noted (in thousands):
United States International Global CPG
Unallocated
Corporate
(1)
Total
Fiscal 2006:
Net Revenues:
Company-operated retail $5,495,240 $1,087,858 $ — $ — $6,583,098
Specialty:
Licensing 369,155 186,050 305,471 — 860,676
Foodservice and other 314,162 29,006 — — 343,168
Total specialty 683,317 215,056 305,471 — 1,203,844
Total net revenues 6,178,557 1,302,914 305,471 — 7,786,942
Earnings/(loss) before income taxes 957,631 109,494 166,918 (327,800) 906,243
Depreciation and amortization 284,625 66,800 108 35,678 387,211
Income from equity investees 151 34,370 59,416 — 93,937
Equity method investments — 163,566 41,438 — 205,004
Identifiable assets 1,996,295 746,398 94,160 1,592,088 4,428,941
Net impairment and disposition losses 9,395 10,084 — 143 19,622
Net capital expenditures 545,074 112,054 286 113,816 771,230
(1) Unallocated corporate includes certain general and administrative expenses, related depreciation and amortization expenses and
amounts included in “Interest and other income, net” on the consolidated statements of earnings.
STARBUCKS CORPORATION, FORM 10-K 67