Starbucks 2011 Annual Report Download - page 77

As of October 2, 2011, Starbucks had foreign tax credit carryforwards of $7.5 million, with expiration dates between
fiscal years 2018 and 2019, capital loss carryforwards of $7.8 million, with an expiration date of 2015, and foreign
net operating losses of $305.4 million, with the predominant amount having no expiration date.
Taxes currently payable of $30.1 million and $24.7 million are included in accrued taxes on the consolidated
balance sheets as of October 2, 2011 and October 3, 2010, respectively.
Uncertain Tax Positions
As of October 2, 2011, we had $52.9 million of gross unrecognized tax benefits of which $27.3 million, if
recognized, would affect our effective tax rate. We recognize interest and penalties related to income tax matters in
income tax expense. As of October 2, 2011 and October 3, 2010, we had accrued interest and penalties of $6.2
million and $16.8 million, respectively, before the benefit of the federal tax deduction, recorded on our consolidated
balance sheets.
The following table summarizes the activity related to our unrecognized tax benefits (in millions):
Oct 2, 2011 Oct 3, 2010 Sep 27, 2009
Beginningbalance..................................... $68.4 $ 49.1 $ 52.6
Increase related to prior year tax positions .................. 4.4 35.0 4.2
Decrease related to prior year tax positions .................. (32.3) (21.4) (11.6)
Increase related to current year tax positions ................. 26.0 14.1 8.4
Decrease related to current year tax positions ................ (0.8) (8.1) (0.9)
Decreases related to settlements with taxing authorities ........ (5.0) 0.0 (3.0)
Decreases related to lapsing of statute of limitations ........... (7.8) (0.3) (0.6)
Endingbalance ....................................... $52.9 $ 68.4 $ 49.1
We are currently under routine audit by various jurisdictions outside the US as well as US state taxing jurisdictions
for fiscal years 2006 through 2010. We are no longer subject to US federal or state examination for years prior to
fiscal year 2008, with the exception of nine states. We are subject to income tax in many jurisdictions outside the
US. We are no longer subject to examination in any material international markets prior to 2006.
There is a reasonable possibility that $4.5 million of the currently remaining unrecognized tax benefits, each of
which is individually insignificant, may be recognized by the end of fiscal 2012 as a result of a lapse of the statute of
limitations.
Note 14: Earnings per Share
Calculation of net earnings per common share (“EPS”) — basic and diluted (in millions, except EPS):
Fiscal Year Ended Oct 2, 2011 Oct 3, 2010 Sep 27, 2009
Net earnings attributable to Starbucks ...................... $1,245.7 $945.6 $390.8
Weighted average common shares and common stock units
outstanding(forbasiccalculation)....................... 748.3 744.4 738.7
Dilutive effect of outstanding common stock options and
RSUs............................................. 21.4 19.8 7.2
Weighted average common and common equivalent shares
outstanding(fordilutedcalculation) ..................... 769.7 764.2 745.9
EPS—basic ......................................... $ 1.66 $ 1.27 $ 0.53
EPS—diluted ....................................... $ 1.62 $ 1.24 $ 0.52
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