Starbucks 2011 Annual Report Download - page 42

Cash Flows
Cash provided by operating activities was $1.6 billion for fiscal year 2011, compared to $1.7 billion for fiscal year
2010. The slight decrease was primarily attributable to an increase in inventories, resulting in part from higher coffee
prices, partially offset by higher net earnings for the period and an increase in payables, primarily related to green
coffee purchases.
Cash used by investing activities for fiscal year 2011 totaled $1.0 billion, compared to $790 million for fiscal year
2010. The increase was primarily due to increased purchases of available-for-sale securities and increased capital
expenditures for remodeling and renovating existing company-operated stores, opening new retail stores and
investments in information technology systems. The increase was partially offset by increased maturities and calls of
available-for-sale securities and cash proceeds from the sale of corporate real estate during the year.
Cash used by financing activities for fiscal year 2011 totaled $608 million, compared to $346 million for fiscal year
2010. The increase was primarily due to an increase in cash returned to shareholders through dividend payments and
common share repurchases in fiscal 2011. The increase was partially offset by increased proceeds from the exercise
of stock options and the related excess tax benefits, resulting from more stock option exercises during the period.
The following table summarizes our contractual obligations and borrowings as of October 2, 2011, and the timing
and effect that such commitments are expected to have on our liquidity and capital requirements in future periods (in
millions):
Payments Due by Period
Less than 1 1 - 3 3 - 5 More than
Contractual Obligations(1) Total Year Years Years 5 Years
Operating lease obligations(2) .................. $4,057.9 $ 751.2 $1,330.6 $ 988.1 $ 988.0
Purchase obligations(3) ........................ 1,099.5 1,018.9 74.6 6.0 0.0
Debt obligations(4) ........................... 756.3 34.4 68.8 68.8 584.3
Other obligations(5) .......................... 125.1 22.3 19.7 11.4 71.7
Total ..................................... $6,038.8 $1,826.8 $1,493.7 $1,074.3 $1,644.0
(1) Income tax liabilities for uncertain tax positions were excluded as we are not able to make a reasonably reliable
estimate of the amount and period of related future payments. As of October 2, 2011, we had $52.9 million of
gross unrecognized tax benefits for uncertain tax positions.
(2) Amounts include the direct lease obligations, excluding any taxes, insurance and other related expenses.
(3) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding
on Starbucks and that specify all significant terms. Green coffee purchase commitments comprise 94% of total
purchase obligations.
(4) Debt amounts include principal maturities and scheduled interest payments on our long-term debt.
(5) Other obligations include other long-term liabilities primarily consisting of asset retirement obligations, capital
lease obligations and hedging instruments.
Starbucks currently expects to fund these commitments with operating cash flows generated in the normal course of
business.
Off-Balance Sheet Arrangement
Off-balance sheet arrangements relate to certain guarantees and are detailed in Note 15 to the consolidated financial
statements in this 10-K.
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