Starbucks 2007 Annual Report Download - page 71

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International
The Company’s International operations represent the remaining 18% of Company-operated retail revenues and
18% of total specialty revenues as well as 18% of total net revenues for fiscal year 2007. International operations
sell coffee and other beverages, complementary food, whole bean coffees, and coffee brewing equipment and
merchandise through Company-operated retail stores in the UK, Canada and eight other markets. Specialty
Operations in International primarily include retail store licensing operations in more than 30 countries and
foodservice accounts, primarily in Canada and the UK. Many of the Company’s International operations are in early
stages of development that require a more extensive support organization, relative to the current levels of revenue
and operating income, than in the United States.
Global Consumer Products Group
The Company’s CPG segment represents 26% of total specialty revenues and 4% of total net revenues for fiscal year
2007. CPG operations sell a selection of whole bean and ground coffees as well as a selection of premium Tazo»
teas through licensing arrangements in United States and international markets. CPG operations also produce and
sell ready-to-drink beverages which include, among others, bottled Frappuccino»beverages, Starbucks
DoubleShot»espresso drinks, and Discoveries»chilled cup coffee, as well as Starbucks»superpremium ice
creams and Starbucks
TM
Coffee and Cream Liqueurs, through its joint ventures and marketing and distribution
agreements.
Unallocated Corporate includes expenses pertaining to corporate administrative functions that support the oper-
ating segments but are not specifically attributable to or managed by any segment and are not included in the
reported financial results of the operating segments. These unallocated corporate expenses include certain general
and administrative expenses, related depreciation and amortization expenses and amounts included in “Net interest
and other income” on the consolidated statements of earnings.
Management evaluates the performance of its operating segments based on net revenues and operating income. 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 “Net interest and other income” 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.
69