Starbucks 2009 Annual Report Download - page 78

offerings in the immediate future. The total number of shares issuable under the plan is 1.4 million. As of
September 27, 2009, 1.3 million shares were available for future issuance.
Deferred Stock Plan
Starbucks has a deferred stock plan for certain key employees that enables participants in the plan to defer receipt of
ownership of common shares from the exercise of nonqualified stock options. The minimum deferral period is five
years. As of September 27, 2009, receipt of 3.4 million shares was deferred under the terms of this plan. The rights
to receive these shares, represented by common stock units, are included in the calculation of basic and diluted
earnings per share as common stock equivalents. No new initial deferrals are permitted under this plan; the plan
permits re-deferrals of previously deferred shares.
Defined Contribution Plans
Starbucks maintains voluntary defined contribution plans, both qualified and non-qualified, covering eligible
employees as defined in the plan documents. Participating employees may elect to defer and contribute a portion of
their eligible compensation to the plans up to limits stated in the plan documents, not to exceed the dollar amounts
set by applicable laws. Effective beginning in plan year 2009, the Company changed to a fully discretionary
matching contribution, from one based on a fixed schedule tied to participant contribution percentage and
employment tenure.
The Company’s matching contributions to all US and non-US plans were $19.7 million, $25.3 million and
$20.1 million in fiscal years 2009, 2008 and 2007, respectively.
Note 15: Income Taxes
Provision for income taxes (in millions):
Fiscal Year Ended Sep 27, 2009 Sep 28, 2008 Sep 30, 2007
Current taxes:
Federal ..................................... $165.3 $ 180.4 $326.7
State ....................................... 35.0 34.3 65.3
Foreign ..................................... 26.3 40.4 31.2
Deferred taxes, net............................... (58.2) (111.1) (39.5)
Total ......................................... $168.4 $ 144.0 $383.7
Reconciliation of the statutory federal income tax rate with the Company’s effective income tax rate:
Fiscal Year Ended Sep 27, 2009 Sep 28, 2008 Sep 30, 2007
Statutory rate................................... 35.0% 35.0% 35.0%
State income taxes, net of federal income tax benefit ..... 2.6 2.8 3.4
Foreign earnings taxed at lower rates ................. (2.3) (3.6) (1.1)
Domestic production activity deduction ............... (2.3) (2.6) (0.5)
Credit resulting from employment audit ............... (2.0) — —
Other, net ..................................... (0.9) (0.3) (0.5)
Effective tax rate ................................ 30.1% 31.3% 36.3%
US income and foreign withholding taxes have not been provided on approximately $520 million of cumulative
undistributed earnings of foreign subsidiaries and equity investees. The Company intends to reinvest these earnings
for the foreseeable future. If these amounts were distributed to the US, in the form of dividends or otherwise, the
Company would be subject to additional US income taxes. Determination of the amount of unrecognized deferred
income tax liabilities on these earnings is not practicable because such liability, if any, is dependent on circum-
stances existing if and when remittance occurs.
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