Starbucks 2008 Annual Report Download - page 69

Company’s future costs of removing leasehold improvements at the termination of leases for certain stores and
administrative facilities. Minority interest represents the collective ownership interests of minority shareholders for
operations accounted for under the consolidation method, in which Starbucks owns less than 100% of the equity
interest. The other remaining long-term liabilities generally include obligations to be settled or paid for one year
beyond each period presented, for items such as hedging instruments and the long-term portion of capital lease
obligations.
Note 12: Leases
Rental expense under operating lease agreements was as follows (in millions):
Fiscal Year Ended Sep 28, 2008 Sep 30, 2007 Oct 1, 2006
Minimum rentals................................. $683.4 $587.2 $458.7
Contingent rentals ................................ 57.7 50.9 40.1
Total.......................................... $741.1 $638.1 $498.8
Minimum future rental payments under noncancelable operating leases as of September 28, 2008, were as follows
(in millions):
Fiscal Year Ending
2009 ................................................................ $ 741.0
2010 ................................................................ 706.6
2011 ................................................................ 660.7
2012 ................................................................ 604.6
2013 ................................................................ 546.4
Thereafter ............................................................ 1,838.8
Total minimum lease payments . ........................................... $5,098.1
The Company has subleases related to certain of its operating leases. During fiscal 2008, 2007 and 2006, the
Company recognized sublease income of $3.5 million, $3.6 million and $5.7 million, respectively.
The Company had capital lease obligations of $6.7 million and $3.1 million as of September 28, 2008 and
September 30, 2007, respectively. Capital lease obligations expire at various dates, with the latest maturity in 2018.
The current portion of the total obligation is included in “Other accrued expenses” and the remaining long-term
portion is included in “Other long-term liabilities” on the consolidated balance sheets. Assets held under capital
leases are included in “Property, plant and equipment, net,” on the consolidated balance sheets.
The Company had $91.1 million and $73.7 million in prepaid rent included in “Prepaid expenses and other current
assets” on the consolidated balance sheets as of September 28, 2008 and September 30, 2007, respectively.
Note 13: Shareholders’ Equity
In addition to 1.2 billion shares of authorized common stock with $0.001 par value per share, the Company has
authorized 7.5 million shares of preferred stock, none of which was outstanding at September 28, 2008.
Share repurchase activity was as follows (in millions, except for average price data):
Fiscal Year Ending Sep 28, 2008 Sep 30, 2007
Number of shares acquired ................................... 12.2 33.0
Average price per share of acquired shares........................ $24.12 $ 30.72
Total accrual-based cost of acquired shares ....................... $295.3 $1,012.7
Total cash-based cost of acquired shares ......................... $311.4 $ 996.8
The difference between the accrual-based and cash-based cost of acquired shares represents the effect of the net
change in unsettled trades from the prior fiscal year end. Share repurchases were funded through cash, cash
63