Starbucks 2009 Annual Report Download - page 60

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Workforce Reduction and Other Related Costs — Workforce reductions related to store closures and non-store
support positions resulted in the recognition of $19.0 million in employee termination costs in fiscal 2009. In
addition, in fiscal 2009, Starbucks recognized $47.8 million of valuation adjustments on corporate office facilities
that were no longer intended to be occupied by the Company.
Restructuring charges by type and a reconciliation of the associated accrued liability (in millions):
Lease Exit
and Other
Related Costs Asset
Impairments
Employee
Termination
Costs Total
Total expected costs..................... $263.1 $330.8 $ 37.0 $ 630.9
Expenses recognized in fiscal 2009
(1)
........ 184.2 129.2 19.0 332.4
Expenses recognized in fiscal 2008
(1)
........ 47.8 201.6 17.5 266.9
Costs incurred in fiscal 2009
(1)
............. 169.5 129.2 19.0 317.7
Costs incurred in fiscal 2008
(1)
............. 62.6 201.6 17.5 281.7
Costs incurred cumulative to date........... 232.1 330.8 36.5 599.4
Accrued liability as of September 30, 2007 . . . $ — $ — $ —
Costs incurred in fiscal 2008, excluding non-
cash charges and credits
(2)
.............. 72.4 17.5 89.9
Cash payments ........................ (24.4) (12.1) (36.5)
Accrued liability as of September 28, 2008 . . . 48.0 5.4 53.4
Costs incurred in fiscal 2009, excluding non-
cash charges and credits
(2)
.............. 192.6 19.0 211.6
Cash payments ........................ (137.8) (23.2) (161.0)
Accrued liability as of September 27, 2009 . . . $ 102.8 $ 1.2 $ 104.0
Restructuring charges by reportable segment (in millions):
US International Unallocated
Corporate
(3)
Total
Total expected costs......................... $458.8 $75.9 $96.2 $630.9
Expenses recognized in fiscal 2009
(1)
............ 246.3 27.0 59.1 332.4
Expenses recognized in fiscal 2008
(1)
............ 210.9 19.2 36.8 266.9
Costs incurred in fiscal 2009
(1)
................. 231.4 27.1 59.2 317.7
Costs incurred in fiscal 2008
(1)
................. 225.7 19.2 36.8 281.7
Costs incurred cumulative to date............... 457.1 46.3 96.0 599.4
(1)
The difference between expenses recognized and costs incurred within a period is due to lease termination
agreements that were finalized in one period for store closures to occur in a subsequent period. Such termination
fees are amortized on a straight-line basis from the date of the termination agreement to the date of closure.
(2)
Non-cash charges and credits for Lease exit and other related costs primarily represent deferred rent balances
recognized as expense credits at the cease-use date.
(3)
Includes $1.0 million of employee termination costs for the CPG segment for fiscal 2009.
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