Starbucks 2011 Annual Report Download - page 35

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Other
Fiscal Year Ended
Oct 2,
2011
Oct 3,
2010
%
Change
Total net revenues ................................................. $ 175.8 $ 150.8 16.6%
Costofsales ...................................................... $103.1 $ 89.4 15.3%
Otheroperatingexpenses ............................................ 93.5 34.9 167.9%
Depreciationandamortizationexpenses ................................. 58.6 47.4 23.6%
Generalandadministrativeexpenses.................................... 405.2 334.1 21.3%
Totaloperatingexpenses............................................. 660.4 505.8 30.6%
Gain on sale of properties ............................................ 30.2 0.0 nm
Lossfromequityinvestee ............................................ (2.4) (3.3) (27.3)%
Operating loss .................................................... $(456.8) $(358.3) 27.5%
Other is comprised of the Seattle’s Best Coffee operating segment, the Digital Ventures business, and expenses
pertaining to corporate administrative functions that support our operating segments but are not specifically
attributable to or managed by any segment and are not included in the reported financial results of the operating
segments.
Substantially all net revenues in Other are generated from the Seattle’s Best Coffee operating segment. The increase
in revenues for Seattle’s Best Coffee was primarily due to the recognition of a full year of sales to national accounts
added in the latter part of fiscal 2010 as well as new accounts added during fiscal 2011(approximately $20 million).
This was partially offset by the impact of the closure of the Seattle’s Best Coffee locations in Borders Bookstores.
Total operating expenses in fiscal 2011 increased 31%, or $155 million. This increase is the result of an increase of
$71 million in general and administrative expenses due to higher corporate expenses to support growth initiatives
and higher donations to the Starbucks Foundation. Also contributing was an increase of $59 million in other
operating expenses primarily due to the impairment of certain assets in our Seattle’s Best Coffee business associated
with the Borders bankruptcy in April 2011 and an increase in marketing expenses. This increase in operating
expenses was partially offset by a gain on the sale of corporate real estate in fiscal 2011 (approximately $30 million).
RESULTS OF OPERATIONS — FISCAL 2010 COMPARED TO FISCAL 2009
Consolidated results of operations (in millions):
Fiscal Year Ended
Oct 3,
2010
Sep 27,
2009
%
Change
Oct 3,
2010
Sep 27,
2009
%ofTotalNet
Revenues
Net revenues:
Company-operatedstores ....................... $ 8,963.5 $8,180.1 9.6% 83.7% 83.7%
Licensedstores ............................... 875.2 795.0 10.1% 8.2% 8.1%
CPG,foodserviceandother ..................... 868.7 799.5 8.7% 8.1% 8.2%
Total net revenues .............................. $10,707.4 $9,774.6 9.5% 100.0% 100.0%
Consolidated net revenues were $10.7 billion for fiscal 2010, an increase of 9.5% over fiscal 2009. The increase was
primarily due to an increase in company-operated retail revenues driven by a 7% increase in global comparable
stores sales (contributing approximately $551 million). The increase in comparable store sales was due to a 4%
increase in number of transactions (contributing approximately $298 million) and a 3% increase in average value per
transaction (contributing approximately $253 million). Also contributing to the increase in revenues was the extra
week in fiscal 2010 (approximately $207 million), foreign currency translation resulting from the weakening of the
US dollar primarily in relation to the Canadian dollar (approximately $101 million), and the effect of consolidating
our previous joint venture in France (approximately $87 million). This increase was partially offset by a net decrease
of 72 company-operated stores from fiscal 2009 (approximately $119 million).
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