Starbucks 2009 Annual Report Download - page 79

Tax effect of temporary differences and carryforwards that comprise significant portions of deferred tax assets and
liabilities (in millions):
Sep 27, 2009 Sep 28, 2008
Deferred tax assets:
Accrued occupancy costs................................... $ 51.5 $ 54.8
Accrued compensation and related costs........................ 70.1 56.2
Other accrued expenses . ................................... 24.5 25.2
Asset retirement obligation asset ............................. 13.9 13.3
Deferred revenue......................................... 39.3 36.0
Asset impairments........................................ 99.7 80.8
Tax credits ............................................. 61.4 26.1
Stock based compensation .................................. 96.6 79.6
Other ................................................. 56.1 49.6
Total.................................................. 513.1 421.6
Valuation allowance . . . ................................... (20.3) (20.0)
Total deferred tax asset, net of valuation allowance ................. 492.8 401.6
Deferred tax liabilities:
Property, plant and equipment ............................... (45.6) (18.1)
Other ................................................. (25.4) (21.4)
Total.................................................. (71.0) (39.5)
Net deferred tax asset ....................................... $421.8 $362.1
Reported as:
Current deferred income tax asset ............................ $286.6 $234.2
Long-term deferred income tax asset (included in Other assets) ...... 135.2 127.9
Net deferred tax asset ....................................... $421.8 $362.1
The Company will establish a valuation allowance if either it is more likely than not that the deferred tax asset will
expire before the Company is able to realize their benefits, or the future deductibility is uncertain. Periodically, the
valuation allowance is reviewed and adjusted based on management’s assessments of realizable deferred tax assets.
The valuation allowance as of September 27, 2009 and September 28, 2008 was related to net operating losses of
consolidated foreign subsidiaries. The net change in the total valuation allowance for the years ended September 27,
2009, and September 28, 2008, was an increase of $0.3 million and $6.3 million, respectively.
As of September 27, 2009, the Company has foreign tax credit carryforwards of $38.5 million with expiration dates
between fiscal years 2013 and 2019. As ofthe end of fiscal 2009,the Company also has capital loss carryforwards of
$1.1 million with expiration dates between fiscal years 2010 and 2014.
Taxes currently payable of $57.2 million and $14.8 million are included in Accrued taxes on the consolidated
balance sheets as of September 27, 2009 and September 28, 2008, respectively.
Uncertain Tax Positions
As described in Note 1, on October 1, 2007, the first day of the Company’s fiscal 2008, Starbucks adopted new
accounting requirements for uncertain tax positions. The cumulative effects of the related changes were recorded as
a decrease of $1.7 million and $1.6 million, respectively, to the Company’s fiscal 2008 opening balances of retained
earnings and additional paid-in capital. The Company also recorded an increase of $28.5 million to current income
tax assets, an increase of $12.2 million to long-term income tax assets, a decrease of $24.6 million to current tax
liabilities and an increase of $68.6 million to long-term tax liabilities.
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