Starbucks 2007 Annual Report Download - page 9

Research and Development
Starbucks research and development efforts are led by food scientists, engineers, chemists and culinarians in the
Research and Development department. This team is responsible for the technical development of food and
beverage products and new equipment. The Company spent approximately $7.0 million, $6.5 million and
$6.2 million during fiscal 2007, 2006 and 2005, respectively, on technical research and development activities,
in addition to customary product testing and product and process improvements in all areas of its business.
Seasonality and Quarterly Results
Starbucks business is subject to seasonal fluctuations, including fluctuations resulting from the holiday season. The
Company’s cash flows from operations are considerably higher in the fiscal first quarter than the remainder of the
year. This is largely driven by cash received as Starbucks Cards are purchased and loaded during the holiday season.
Since revenues from the Starbucks Card are recognized upon redemption and not when purchased, seasonal
fluctuations on the consolidated statements of earnings are much less pronounced. Quarterly results are affected by
the timing of the opening of new stores, and the Company’s growth may conceal the impact of other seasonal
influences. For these reasons, results for any quarter are not necessarily indicative of the results that may be
achieved for the full fiscal year.
Employees
The Company employed approximately 172,000 people worldwide as of September 30, 2007. In the United States,
Starbucks employed approximately 144,000 people, with 136,000 in Company-operated retail stores and the
remainder in the Company’s administrative and regional offices, and store development, roasting and warehousing
operations. Approximately 28,000 employees were employed outside of the United States, with 27,000 in
Company-operated retail stores and the remainder in the Company’s regional support facilities and roasting
and warehousing operations. The number of the Company’s employees represented by unions is immaterial.
Starbucks believes its current relations with its employees are good.
Available Information
Starbucks Form 10-K reports, along with all other reports and amendments filed with or furnished to the Securities
and Exchange Commission (“SEC”), are publicly available free of charge on the Investor Relations section of
Starbucks website at http://investor.starbucks.com or at www.sec.gov as soon as reasonably practicable after these
materials are filed with or furnished to the SEC. The Company’s corporate governance policies, ethics code and
Board of Directors’ committee charters are also posted within this section of the website. The information on the
Company’s website is not part of this or any other report Starbucks files with, or furnishes to, the SEC.
Starbucks demonstrates its commitment to corporate social responsibility (“CSR”) by conducting its business in
ways that produce social, environmental and economic benefits to the communities in which Starbucks operates.
The Company aligns its principles for social responsibility with its overall strategy and business operations. As a
result, Starbucks believes it delivers benefits to the Company and its stakeholders — employees, business partners,
customers, suppliers, shareholders, community members and others — while distinguishing Starbucks as a leader
within the coffee industry. Providing open communication and transparency helps the Company be accountable to
its stakeholders. To support this goal, Starbucks publishes a CSR Annual Report. Starbucks fiscal 2007 CSR Annual
Report will be available online at www.starbucks.com/csr beginning in May 2008.
Item 1A. Risk Factors
This Annual Report on Form 10-K includes forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate
strictly to historical or current facts. They often include words such as “believes,” “expects,” “anticipates,”
“estimates,” “intends,” “plans,” “seeks” or words of similar meaning, or future or conditional verbs, such as “will,”
“should,” “could” or “may.” A forward-looking statement is neither a prediction nor a guarantee of future events or
circumstances, and those future events or circumstances may not occur. Investors should not place undue reliance
on the forward-looking statements, which speak only as of the date of this Report. Starbucks is under no obligation
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