Starbucks 2009 Annual Report Download - page 59

Common Stock Share Repurchases
The Company may repurchase shares of its common stock under a program authorized by its Board of Directors
including pursuant to a contract, instruction or written plan meeting the requirements of Rule 10b5-1(c)(1) of the
Securities Exchange Act of 1934. In accordance with the Washington Business Corporation Act, share repurchases
are not displayed separately as treasury stock on the consolidated balance sheets or consolidated statements of
shareholders’ equity. Instead, the par value of repurchased shares is deducted from Common stock and the
remaining excess repurchase price over par value is deducted from Additional paid-in capital and from Retained
earnings, once additional paid-in capital is depleted. See Note 13 for additional information.
Recent Accounting Pronouncements
Starbucks adopted the new guidance issued by the Financial Accounting Standards Board (“FASB”) for fair value
measurement for its financial assets and liabilities effective September 29, 2008 (see Note 5 for additional
disclosures). The guidance defines fair value, establishes a framework for measuring fair value in GAAP and
expands disclosures about fair value measurements. This guidance is effective for nonfinancial assets and liabilities
for Starbucks first fiscal quarter of 2010. The Company believes that the adoption of this new guidance for its
nonfinancial assets and liabilities will not have a material impact on its financial statements.
In December 2007, the FASB issued authoritative guidance on business combinations, establishing principles and
requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, any resulting goodwill, and any noncontrolling interest in an acquiree. The
guidance also provides for disclosures to enable users of the financial statements to evaluate the nature and financial
effects of the business combination. This new guidance will be effective for Starbucks first fiscal quarter of 2010
and must be applied prospectively to business combinations completed in fiscal 2010 and beyond.
In December 2007, the FASB issued authoritative guidance on accounting and reporting for noncontrolling interests
in subsidiaries. The guidance clarifies that a noncontrolling interest in a subsidiary should be accounted for as a
component of equity separate from the parent’s equity. Starbucks will apply the new guidance relating to
noncontrolling interests beginning in the first fiscal quarter of 2010 on a prospective basis, except for the
presentation and disclosure requirements, which will be applied retrospectively. The adoption of this guidance
will not have a material impact on the Company’s financial statements.
In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities (“VIE”),
which will be effective for Starbucks first fiscal quarter of 2011. The new guidance requires a qualitative approach
to identifying a controlling financial interest in a variable interest entity, and requires ongoing assessment of
whether an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary of the VIE. The
Company is currently evaluating the impact that adoption may have on its consolidated financial statements.
Note 2: Restructuring Charges
In fiscal 2009, Starbucks continued to execute its restructuring efforts to position the Company for long-term
profitable growth. These efforts have been focused on both the global Company-operated store base and the non-
retail support organization. Starbucks actions to rationalize its store portfolio have included plans (announced in
July 2008 and January 2009) to close approximately 800 Company-operated stores in the US, restructure its
Australia market, and close approximately 100 additional Company-operated stores internationally. Since those
announcements, nearly all of the approximately 800 US stores, 61 stores in Australia and 41 in other International
markets have been closed.
US Store Closures — In fiscal 2009, the Company closed 383 of the approximately 600 stores announced in July
2008, bringing the total number of US closures under this restructuring action to 588 stores. The Company also
closed 183 of the approximately 200 stores announced for closure in January 2009.
International Store Closures — During fiscal 2009, the Company closed 41 of the approximately 100 stores
announced for closure in January 2009. The Company expects to complete the remaining closures in fiscal 2010,
and will recognize the associated lease exit costs concurrently with the actual closures.
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