Starbucks 2011 Annual Report Download - page 36

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Fiscal Year Ended
Oct 3,
2010
Sep 27,
2009
Oct 3,
2010
Sep 27,
2009
%ofTotalNet
Revenues
Costofsalesincludingoccupancycosts .......................... $4,458.6 $4,324.9 41.6% 44.2%
Storeoperatingexpenses...................................... 3,551.4 3,425.1 33.2% 35.0%
Otheroperatingexpenses ..................................... 293.2 264.4 2.7% 2.7%
Depreciationandamortizationexpenses .......................... 510.4 534.7 4.8% 5.5%
Generalandadministrativeexpenses ............................ 569.5 453.0 5.3% 4.6%
Restructuringcharges ........................................ 53.0 332.4 0.5% 3.4%
Totaloperatingexpenses...................................... 9,436.1 9,334.5 88.1% 95.5%
Incomefromequityinvestees .................................. 148.1 121.9 1.4% 1.2%
Operating income .......................................... $1,419.4 $ 562.0 13.3% 5.7%
Supplemental ratios as a % of related revenues:
Storeoperatingexpenses...................................... 39.6% 41.9%
Cost of sales including occupancy costs as a percentage of total revenues decreased 260 basis points. The decrease
was primarily driven by supply chain efficiencies which contributed to lower food costs (approximately 70 basis
points) and lower beverage and paper packaging product costs (approximately 50 basis points). Also contributing to
the decrease were lower occupancy costs as a percentage of total net revenues (approximately 80 basis points)
primarily due to sales leverage.
Store operating expenses as a percentage of company-operated retail revenues decreased 230 basis points primarily
due to increased sales leverage from increased revenues.
Restructuring charges include lease exit and related costs associated with the actions to rationalize our global store
portfolio and reduce the global cost structure in fiscal 2009 and 2008. The restructuring charges incurred in fiscal
2010 reflect charges incurred on the previously announced store closures. With the previously-announced store
closures essentially complete, we do not expect to report any further restructuring costs related to these activities.
Partially offsetting these favorable fluctuations were increased advertising costs included primarily in other
operating expenses and higher performance based compensation expenses, which drove the 70 basis point increase
in general and administrative expenses as a percentage of revenues.
Fiscal Year Ended
Oct 3,
2010
Sep 27,
2009
Oct 3,
2010
Sep 27,
2009
%ofTotalNet
Revenues
Operatingincome ............................................ $1,419.4 $562.0 13.3% 5.7%
Interestincomeandother,net ................................... 50.3 37.0 0.5% 0.4%
Interestexpense .............................................. (32.7) (39.1) (0.3)% (0.4)%
Earningsbeforeincometaxes ................................... 1,437.0 559.9 13.4% 5.7%
Incometaxes ................................................ 488.7 168.4 4.6% 1.7%
Net earnings including noncontrolling interests ...................... 948.3 391.5 8.9% 4.0%
Net earnings (loss) attributable to noncontrolling interests .............. 2.7 0.7 0.0% 0.0%
Net earnings attributable to Starbucks .......................... $ 945.6 $390.8 8.8% 4.0%
Effective tax rate including noncontrolling interests .................. 34.0% 30.1%
Net interest income and other increased $13 million over the prior period. The increase was driven by the impact of
an accounting gain recorded in the first quarter of fiscal 2010 related to our acquisition of a controlling interest in
our previous joint venture operations in France. In accordance with accounting principles generally accepted in the
United States of America (“GAAP”), the carrying value of the previously held joint venture interest was adjusted to
30