Starbucks 2008 Annual Report Download - page 40

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Global Consumer Products Group
Fiscal Year Ended
Sep 30,
2007
Oct 1,
2006
%
Change
Sep 30,
2007
Oct 1,
2006
As a % of CPG
Total Net
Revenues
Net revenues:
Specialty:
Licensing .................................... $366.3 $305.5 19.9% 100.0% 100.0%
Total specialty .............................. 366.3 305.5 19.9 100.0 100.0
Total net revenues increased primarily due to increased sales of US packaged coffee and tea as well as increased
product sales and royalties in the international ready-to-drink business.
Fiscal Year Ended
Sep 30,
2007
Oct 1,
2006
%
Change
Sep 30,
2007
Oct 1,
2006
As a % of CPG
Total Net
Revenues
Cost of sales ..................................... $218.3 $179.3 21.8% 59.6% 58.7%
Other operating expenses ............................ 19.5 12.2 59.8 5.3 4.0
Depreciation and amortization expenses ................. 0.1 0.1 — — —
General and administrative expenses .................... 6.3 6.4 (0.2) 1.7 2.1
Total operating expenses ....................... 244.2 198.0 23.3 66.7 64.8
Income from equity investees ......................... 61.5 59.4 3.5 16.8 19.4
Operating income ........................... $183.6 $166.9 10.0% 50.1% 54.6%
Operating margin contraction was primarily due to slower growth in income from The North American Coffee
Partnership, an equity investee, which produces ready-to-drink beverages.
Unallocated Corporate
Fiscal Year Ended
Sep 30,
2007
Oct 1,
2006
%
Change
Sep 30,
2007
Oct 1,
2006
As a % of
Total Net
Revenues
Depreciation and amortization expenses ................ $ 34.7 $ 35.7 (2.8)% 0.4% 0.5%
General and administrative expenses ................... 303.2 300.9 0.8 3.2 3.9
Operating loss ................................. $(337.9) $(336.6) 0.4% (3.6)% (4.3)%
Unallocated corporate expenses as a percentage of total net revenues decreased primarily as a result of leveraging of
the Company’s scale and infrastructure against global growth.
LIQUIDITY AND CAPITAL RESOURCES
The Company’s existing cash and liquid investments were $322.3 million and $459.7 million as of September 28,
2008 and September 30, 2007, respectively. The decrease in liquid investments was driven primarily by $59.8 mil-
lion of auction rate securities, nearly all of which are held within the Company’s wholly owned captive insurance
company, that are not currently considered liquid and were reclassified to long-term investments in the second
quarter of fiscal 2008.
34