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Embracing our heritage and values
while aiming higher than ever.
Starbucks Corporation Fiscal 2012 Annual Report
1971 Seattle
2012 Mumbai

Table of contents

  • Page 1
    1971 Seattle Embracing our heritage and values while aiming higher than ever. Starbucks Corporation Fiscal 2012 Annual Report 2012 Mumbai

  • Page 2
    Fiscal 2012 Financial Highlights Net Revenues (in Billions) $11.7 $10.4 $10.7 $9.8 7%* 8% 7% $13.3 Comparable Store Sales Growth (Company-Operated Stores Open 13 Months or Longer) -3% -6% 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Operating Income (in Millions) GAAP Non-GAAP $1,...

  • Page 3
    ... rise in global comparable store sales and a 50 percent rise in revenue from Channel Development. Our operating income was $2 billion, a 16 percent increase, with our consolidated operating margin rising to 15 percent, up 20 basis points from last year. Starbucks record earnings-per-share growth...

  • Page 4
    ... of the selection, taste, and quality of the fresh food in our stores. Second, adding Evolution Fresh to our brand portfolio fulfills our commitment to health and wellness, and not just by bringing high-quality premium juices to our customers but by extending the Evolution Fresh brand to...

  • Page 5
    ...Seattle, Washington 98134 (206) 447-1575 (Address of principal executive offices, zip code, telephone number) Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class Common Stock, $0.001 par value per share Name of Each Exchange on Which Registered Nasdaq Global Select Market...

  • Page 6
    ...of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm Changes in...

  • Page 7
    ... only as of the date of this Annual Report on Form 10-K. These forward-looking statements are all based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Our actual future results and trends may differ materially depending...

  • Page 8
    ..., Starbucks Corporation's common stock trades on the NASDAQ Global Select Market ("NASDAQ") under the symbol "SBUX." We purchase and roast high-quality coffees that we sell, along with handcrafted coffee, tea and other beverages and a variety of fresh food items, through company-operated stores. We...

  • Page 9
    ... Tazo® tea K-Cup® portion packs, a variety of ready-to-drink beverages, such as Starbucks Refreshers™ beverages, and other branded products sold worldwide through channels such as grocery stores, warehouse clubs, convenience stores, and US foodservice accounts. Seattle's Best Coffee is reported...

  • Page 10
    ... Year Ended Sep 30, 2012 Oct 2, 2011 Stores Open as of Sep 30, 2012 Oct 2, 2011 Americas: US Canada Chile Brazil Puerto Rico Total Americas EMEA: UK Germany France Switzerland Austria Netherlands Total EMEA CAP: China Thailand Singapore Australia Total CAP Total company-operated (7) 7 5 4 - 1 10...

  • Page 11
    ... type for company-operated stores: Fiscal Year Ended Sep 30, 2012 Oct 2, 2011 Oct 3, 2010 Beverages Food Packaged and single serve coffees Coffee-making equipment and other merchandise Total 75% 19% 4% 2% 100% 75% 19% 4% 2% 100% 75% 19% 4% 2% 100% Starbucks Card The Starbucks stored value card...

  • Page 12
    ... 4% of total net revenues in fiscal 2012. We sell Starbucks® and Seattle's Best Coffee® whole bean and ground coffees, a selection of premium Tazo® teas, Starbucks VIA® Ready Brew, and other coffee and tea related products to institutional foodservice companies that service business and industry...

  • Page 13
    ... For these types of contracts, either Starbucks or the seller has the option to select a date on which to "fix" the base "C" coffee commodity price prior to the delivery date. Until prices are fixed, we estimate the total cost of these purchase commitments. Total green coffee purchase commitments as...

  • Page 14
    ...-operated stores and the remainder in regional support facilities and roasting and warehousing operations. The number of Starbucks employees represented by unions is not significant. We believe our current relations with our employees are good. Executive officers of the registrant Name Age Position...

  • Page 15
    ... has served as president, Channel Development and Emerging Brands since June 2012. From October 2011 to June 2012, he served as president, Channel Development and president, Seattle's Best Coffee. From June 2010 to October 2011, he served as president, Global Consumer Products and Foodservice. Prior...

  • Page 16
    ...SEC. Our corporate governance policies, code of ethics and Board committee charters and policies are also posted on the Investor Relations section of Starbucks website at investor.starbucks.com. The information on our website is not part of this or any other report Starbucks files with, or furnishes...

  • Page 17
    ... target store-level unit economics in a given market; • timely completing certain supply chain capacity expansion initiatives, including increased roasting capacity and construction of a new soluble products plant and a new Evolution FreshTM plant; and • executing a multi-channel advertising...

  • Page 18
    ... inherent risks of conducting business abroad, such as: • foreign currency exchange rate fluctuations, or requirements to transact in specific currencies; • changes or uncertainties in economic, legal, regulatory, social and political conditions in our markets; • interpretation and application...

  • Page 19
    ... from meeting annual store opening targets and, in turn, negatively impact net revenues, operating income and earnings per share; and • disruption in energy supplies affecting our markets. Moreover, many of the foregoing risks are particularly acute in developing countries, which are important to...

  • Page 20
    ... in our international markets. Licensees are often authorized to use our logos and provide branded beverages, food and other products directly to customers. We provide training and support to, and monitor the operations of, certain of these business partners, but the product quality and service they...

  • Page 21
    ..., financial, and other resources. Effectively managing growth can be challenging, particularly as we continue to expand into new channels outside the retail store model, increase our focus on our Channel Development business, and expand into new markets internationally where we must balance the...

  • Page 22
    ...potential liability and loss of revenues. We rely heavily on information technology systems across our operations, including for administrative functions, point-of-sale processing and payment in our stores and online, management of our supply chain, Starbucks Cards, online business and various other...

  • Page 23
    ... under the Supply and License Agreement between the Company and Kraft, dated March 29, 2004 (the "Agreement"), which defined the main distribution arrangement between the parties. Through our arrangement with Kraft, Starbucks sold a selection of Starbucks and Seattle's Best Coffee branded packaged...

  • Page 24
    ...from the loss of sales resulting from Kraft's failure to use commercially reasonable efforts to market Starbucks® coffee, plus attorney fees. Kraft's expert opined that the fair market value of the Agreement was $1.9 billion. After applying a 35% premium and 9% interest, Kraft claimed damages of up...

  • Page 25
    ... and Issuer Purchases of Equity Securities SHAREHOLDER INFORMATION MARKET INFORMATION AND DIVIDEND POLICY Starbucks common stock is traded on NASDAQ, under the symbol "SBUX." The following table shows the quarterly high and low sale prices per share of Starbucks common stock as reported by NASDAQ...

  • Page 26
    ...of our common stock during the quarter ended September 30, 2012: Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2) Total Number of Shares Purchased Average Price Paid per Share Period...

  • Page 27
    ... an investment of $100 on that date and the reinvestment of dividends paid since that date. The stock price performance shown in the graph is not necessarily indicative of future price performance. $250 $200 $150 $100 $50 $0 9/30/07 9/28/08 Starbucks Corporation 9/27/09 S&P 500 10/3/10...

  • Page 28
    ... conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Risk Factors," and the consolidated financial statements and notes. Financial Information (in millions, except per share data): Sep 30, 2012 (52 Wks) Oct 2, 2011 (52 Wks) Oct 3, 2010 (53 Wks...

  • Page 29
    ... 4% 8% 4% 3% (3)% (4)% -% (4) Includes only Starbucks company-operated stores open 13 months or longer. For fiscal year 2010, comparable store sales percentages were calculated excluding the 53rd week. Comparable store sales exclude the effect of fluctuations in foreign currency exchange rates. 23

  • Page 30
    ... 30, 2012 (52 Wks) Oct 2, 2011 (52 Wks) Oct 3, 2010 (53 Wks) Sep 27, 2009 (52 Wks) Sep 28, 2008 (52 Wks) As of and for the Fiscal Year Ended Net stores opened (closed) during the year: Americas Company-operated stores Licensed stores(5) EMEA(6) Company-operated stores Licensed stores China / Asia...

  • Page 31
    ... global comparable store sales, 50% revenue growth in Channel Development, and 20% growth in licensed stores revenue. The comparable store sales growth in company-operated stores was comprised of a 6% increase in the number of transactions and a 1% increase in average ticket. Consolidated operating...

  • Page 32
    ... Overview Starbucks has four reportable operating segments: Americas, Europe, Middle East, and Africa ("EMEA"), China and Asia Pacific ("CAP") and Channel Development. Seattle's Best Coffee is reported in "Other," along with Evolution Fresh, Digital Ventures and unallocated corporate expenses that...

  • Page 33
    ... business. In prior years through the first several months of fiscal 2011, we sold a selection of Starbucks and Seattle's Best Coffee branded packaged coffees and Tazo® teas in grocery and warehouse club stores throughout the US and to grocery stores in Canada, the UK and other European countries...

  • Page 34
    ... higher coffee costs. Store operating expenses as a percentage of total net revenues decreased 120 basis points, due to increased Channel Development and licensed store revenues. Store operating expenses as a percent of company-operated store revenues decreased 10 basis points due to increased sales...

  • Page 35
    ...Income and Expenses Fiscal Year Ended Sep 30, 2012 Oct 2, 2011 Sep 30, 2012 % of Total Net Revenues Oct 2, 2011 Operating income Interest income and other, net Interest expense Earnings before income taxes Income taxes Net earnings including noncontrolling interests Net earnings (loss) attributable...

  • Page 36
    ... store sales and the opening of 270 net new licensed stores over the past 12 months. Operating Expenses Cost of sales including occupancy costs as a percentage of total net revenues increased 30 basis points, primarily driven by higher commodity costs (approximately 110 basis points), mainly coffee...

  • Page 37
    ... net new licensed stores over the past 12 months. Operating Expenses Cost of sales including occupancy costs as a percentage of total net revenues increased 160 basis points, primarily driven by higher costs related to the transition to a consolidated food and dairy distribution model in the UK that...

  • Page 38
    ... driven by 294 net new licensed store openings over the past 12 months. Operating Expenses Cost of sales including occupancy costs as a percentage of total net revenues decreased 80 basis points primarily driven by the accelerated growth of company-operated stores, which contribute a higher gross...

  • Page 39
    ... increase in operating margin of 10 basis points over fiscal 2011. Channel Development Fiscal Year Ended Sep 30, 2012 Oct 2, 2011 Sep 30, 2012 Oct 2, 2011 As a % of Channel Development Total Net Revenues Total net revenues Cost of sales Other operating expenses Depreciation and amortization...

  • Page 40
    ... revenues from Evolution Fresh, which was acquired during the first quarter of fiscal 2012. Total operating expenses increased $60 million, primarily due to increased cost of sales resulting from higher commodity costs, primarily coffee, and higher general and administrative expenses to support...

  • Page 41
    ... sales leverage. Other operating expenses as a percentage of total net revenues increased 80 basis points primarily due to higher expenses to support the direct distribution model for packaged coffee and tea (approximately 40 basis points) and the impairment of certain assets in our Seattle's Best...

  • Page 42
    ...Information The following tables summarize our results of operations by segment for fiscal 2011 and 2010 (in millions). Americas Oct 2, 2011 Oct 3, 2010 Oct 2, 2011 Oct 3, 2010 Fiscal Year Ended As a % of Americas Total Net Revenues Total net revenues Cost of sales including occupancy costs Store...

  • Page 43
    ... these changes resulted in an overall increase in operating margin of 140 basis points for fiscal 2011. EMEA Fiscal Year Ended Oct 2, 2011 Oct 3, 2010 Oct 2, 2011 Oct 3, 2010 As a % of EMEA Total Net Revenues Total net revenues Cost of sales including occupancy costs Store operating expenses...

  • Page 44
    ... changes resulted in an overall increase in operating margin of 440 basis points for fiscal 2011. China / Asia Pacific Oct 2, 2011 Oct 3, 2010 Oct 2, 2011 Oct 3, 2010 Fiscal Year Ended As a % of CAP Total Net Revenues Total net revenues Cost of sales including occupancy costs Store operating...

  • Page 45
    ... sale of packaged Starbucks® and Seattle's Best Coffee® coffee products in grocery and warehouse club stores throughout the US, and to grocery stores in Canada, the UK and other European countries. We successfully transitioned the Tazo® tea business to a direct distribution model in January 2011...

  • Page 46
    ... in commodity costs was the benefit of price increases (approximately 200 basis points) and lower marketing expenses for Starbucks VIA® Ready Brew in 2011 (approximately 120 basis points). Other Fiscal Year Ended Oct 2, 2011 Oct 3, 2010 % Change Total net revenues Cost of sales Other operating...

  • Page 47
    ... of credit. The credit facility is available for working capital, capital expenditures and other corporate purposes, including acquisitions and share repurchases and is currently set to mature in November 2014. Starbucks has the option, subject to negotiation and agreement with the related banks...

  • Page 48
    ... stores and in the support infrastructure; new company-operated stores; and additional investments in manufacturing capacity. Total capital expenditures for fiscal 2013 are expected to be approximately $1.2 billion. During the first three quarters of fiscal 2011, we declared and paid a cash dividend...

  • Page 49
    ... in capital expenditures, primarily for remodeling and renovating existing company-operated stores and opening new retail stores, the absence of cash proceeds from the sale of corporate real estate in the prior year and cash paid to acquire Evolution Fresh and Bay Bread, LLC (doing business as La...

  • Page 50
    ... relate to operating lease and purchase commitments detailed in the footnotes to the consolidated financial statements in this 10-K. COMMODITY PRICES, AVAILABILITY AND GENERAL RISK CONDITIONS Commodity price risk represents Starbucks primary market risk, generated by our purchases of green coffee...

  • Page 51
    ...equity exchange-traded funds within our trading portfolio. The trading securities approximate a portion of our liability under the Management Deferred Compensation Plan ("MDCP"). A corresponding liability is included in accrued compensation and related costs on the consolidated balance sheets. These...

  • Page 52
    .... The fair value of a store's assets is estimated using a discounted cash flow model based on internal projections. Key assumptions used in this calculation include revenue growth, operating expenses and a discount rate that we believe a buyer would assume when determining a purchase price for the...

  • Page 53
    ... risks, including workers' compensation, healthcare benefits, general liability, property insurance, and director and officers' liability insurance. Key assumptions used in the estimate of our self insurance reserves include the amount of claims incurred but not reported at the balance sheet date...

  • Page 54
    ...accruals for litigation claims, if any, contain uncertainties because management is required to use judgment to estimate the probability of a loss and a range of possible losses related to each claim. Note 15 to the consolidated financial statements describes the Company's legal and other contingent...

  • Page 55
    ... Disclosures About Market Risk The information required by this item is incorporated by reference to the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations - Commodity Prices, Availability and General Risk Conditions" and "Management's Discussion...

  • Page 56
    ... STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (in millions, except per share data) Fiscal Year Ended Sep 30, 2012 Oct 2, 2011 Oct 3, 2010 Net revenues: Company-operated stores Licensed stores CPG, foodservice and other Total net revenues Cost of sales including occupancy costs Store...

  • Page 57
    STARBUCKS CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except per share data) Sep 30, 2012 Oct 2, 2011 ASSETS Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other current assets Deferred income taxes, net Total ...

  • Page 58
    ...of joint ventures Stock-based compensation Other Cash provided/(used) by changes in operating assets and liabilities: Accounts receivable Inventories Accounts payable Accrued liabilities and insurance reserves Deferred revenue Prepaid expenses, other current assets and other assets Net cash provided...

  • Page 59
    STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EQUITY (in millions) Retained Earnings Accumulated Other Comprehensive Income/(Loss) Balance, September 27, 2009 Net earnings - - (17.0) 8.8 - - - - - - Common Stock Shares Amount 742.9 $ 0.7 - - Additional Paid-in Capital $ 186.4 - $ 2,793.2 945...

  • Page 60
    ... STATEMENTS Fiscal Years ended September 30, 2012, October 2, 2011 and October 3, 2010 Note 1: Summary of Significant Accounting Policies Description of Business We purchase and roast high-quality coffees that we sell, along with handcrafted coffee and tea beverages and a variety of fresh food...

  • Page 61
    ... risks within the consolidated financial statements according to a market price risk management policy. Under this policy, we may engage in transactions involving various derivative instruments to hedge interest rates, commodity prices and foreign currency denominated revenues, purchases, assets...

  • Page 62
    ... other on the consolidated statements of earnings. Certain foreign currency forward contracts, commodity swap contracts, and futures contracts are not designated as hedging instruments for accounting purposes. These contracts are recorded at fair value, with the changes in fair value recognized in...

  • Page 63
    ... in fiscal 2012, 2011, and 2010, respectively, primarily due to underperforming company-operated stores. Depending on the underlying asset that is impaired, these losses may be recorded in any one of the operating expense lines on the consolidated statements of earnings: for retail operations, the...

  • Page 64
    ... as revenue, and the related shipping costs are included in cost of sales including occupancy costs on the consolidated statements of earnings. Initial nonrefundable development fees for licensed stores are recognized upon substantial performance of services for new market business development...

  • Page 65
    ... stored value cards, primarily Starbucks Cards, are recognized when redeemed or when the likelihood of redemption, based on historical experience, is deemed to be remote. Outstanding customer balances are included in deferred revenue on the consolidated balance sheets. There are no expiration dates...

  • Page 66
    ... using the stock price at the date of grant. Foreign Currency Translation Our international operations generally use their local currency as their functional currency. Assets and liabilities are translated at exchange rates in effect at the balance sheet date. Income and expense accounts are...

  • Page 67
    ...Common Stock Share Repurchases We may repurchase shares of Starbucks common stock under a program authorized by our Board of Directors, including pursuant to a contract, instruction or written plan meeting the requirements of Rule 10b5-1(c)(1) of the Securities Exchange Act of 1934. Under applicable...

  • Page 68
    ... for each region, reporting directly to our chief executive officer, now oversees the company-operated retail business working closely with both the licensed and joint-venture business partners in each market. The regional presidents also work closely with our Channel Development team to continue...

  • Page 69
    ... to our Americas operating segment. On November 10, 2011, we acquired the outstanding shares of Evolution Fresh, Inc., a super-premium juice company, to expand our portfolio of product offerings and enter into the super-premium juice market. We acquired Evolution Fresh for a purchase price of $30...

  • Page 70
    ... company-operated market. In the fourth quarter of fiscal 2010, we acquired 100% ownership of a previously consolidated 50% joint venture in the US with Johnson Coffee Corporation, Urban Coffee Opportunities ("UCO"). The following table shows the effects of the change in Starbucks ownership interest...

  • Page 71
    ...continue to experience fair value changes before affecting earnings. Outstanding contracts will expire within 15 months. There was insignificant coffee hedge activity in fiscal 2011. Dairy To mitigate the price uncertainty of a portion of our future purchases of dairy products, we enter into certain...

  • Page 72
    ... at Reporting Date Using Quoted Prices in Active Significant Significant Markets for Other Observable Unobservable Inputs Identical Assets Inputs (Level 3) (Level 1) (Level 2) Balance at September 30, 2012 Assets: Cash and cash equivalents Short-term investments: Available-for-sale securities...

  • Page 73
    ... treasury securities, corporate and agency bonds, commercial paper, certificates of deposit placed through an account registry service and auction rate securities ("ARS"). Level 1: For government treasury securities, we use quoted prices in active markets for identical assets to determine fair value...

  • Page 74
    ...as of September 30, 2012 and October 2, 2011, respectively, is included in accrued compensation and related costs on the consolidated balance sheets. The changes in net unrealized holding gains/losses in the trading portfolio included in earnings for fiscal years 2012 , 2011 and 2010 were a net gain...

  • Page 75
    ... transactions, and/or comparable company analyses. The resulting impairment charge was included in other operating expenses. Fair Value of Other Financial Instruments The estimated fair value of the $550 million of 6.25% Senior Notes based on the quoted market price (Level 2) was approximately $674...

  • Page 76
    ... in fiscal years 2012, 2011, and 2010, respectively. As of September 30, 2012 and October 2, 2011, there were $33.0 million and $31.9 million of accounts receivable from equity investees, respectively, on our consolidated balance sheets, primarily related to product sales and royalty revenues. 70

  • Page 77
    ...also received warrants to purchase common stock of Square that are subject to certain vesting conditions. Note 7: Supplemental Balance Sheet Information (in millions) Sep 30, 2012 Oct 2, 2011 Property, Plant and Equipment, net Land Buildings Leasehold improvements Store equipment Roasting equipment...

  • Page 78
    ... and related costs Accrued occupancy costs Accrued taxes Accrued dividend payable Other Total accrued liabilities $ $ Sep 30, 2012 Oct 2, 2011 381.6 $ 126.9 138.3 157.4 329.6 1,133.8 $ 364.4 148.3 109.2 126.6 192.4 940.9 Other Long-Term Liabilities Deferred rent Unrecognized tax benefits Asset...

  • Page 79
    Changes in the carrying amount of goodwill by reportable operating segment (in millions): China / Asia Pacific Channel Development Americas EMEA Other Total Balance at October 3, 2010 (1) Goodwill prior to impairment Accumulated impairment charges Goodwill Acquisitions Purchase price ...

  • Page 80
    ... operating leases as of September 30, 2012 (in millions): Fiscal Year Ending 2013 2014 2015 2016 2017 Thereafter Total minimum lease payments $ $ 787.9 728.5 640.4 531.5 403.4 968.5 4,060.2 We have subleases related to certain of our operating leases. During fiscal 2012, 2011, and 2010...

  • Page 81
    ... assets of Starbucks Japan at the time of its initial public stock offering in fiscal 2002. Share repurchase activity (in millions, except for average price data): Fiscal Year Ended Sep 30, 2012 Oct 2, 2011 Number of shares acquired Average price per share of acquired shares Total cost of acquired...

  • Page 82
    Comprehensive income, net of related tax effects (in millions): Fiscal Year Ended September 30, 2012 October 2, 2011 October 3, 2010 Net earnings attributable to Starbucks Unrealized holding gains/(losses) on available-for-sale securities, net of tax (provision)/benefit of $(0.3), $(0.3), and $0.1,...

  • Page 83
    ... Stock Units ("RSUs") Total stock-based compensation expense recognized in the consolidated statement of earnings Total related tax benefit Total capitalized stock-based compensation included in net property, plant and equipment and inventories on the consolidated balance sheets Stock Option Plans...

  • Page 84
    ... is a summary of stock options outstanding at the end of fiscal 2012 (shares in millions): Options Outstanding Weighted Average Remaining Contractual Life Weighted Average Exercise Price Options Exercisable Weighted Average Exercise Price Range of Prices Number of Options Number of Options Under...

  • Page 85
    ... up to 10% of their base earnings toward the quarterly purchase of our common stock, subject to an annual maximum dollar amount. The purchase price is 95% of the fair market value of the stock on the last business day of the quarterly offering period. The number of shares issued under our ESPP was...

  • Page 86
    ... of ownership of common shares from the exercise of nonqualified stock options. The minimum deferral period is 5 years. As of September 30, 2012 and October 2, 2011, 3.4 million shares were deferred under the terms of this plan. The rights to receive these shares, represented by common stock units...

  • Page 87
    ...the statutory US federal income tax rate with our effective income tax rate: Fiscal Year Ended Sep 30, 2012 Oct 2, 2011 Oct 3, 2010 Statutory rate State income taxes, net of federal income tax benefit Benefits and taxes related to foreign operations Domestic production activity deduction Other, net...

  • Page 88
    ...30, 2012 Oct 2, 2011 Deferred tax assets: Property, plant and equipment Accrued occupancy costs Accrued compensation and related costs Other accrued liabilities Asset retirement obligation asset Deferred revenue Asset impairments Tax credits Stock based compensation Net operating losses Other Total...

  • Page 89
    ...Note 14: Earnings per Share Calculation of net earnings per common share ("EPS") - basic and diluted (in millions, except EPS): Fiscal Year Ended Sep 30, 2012 Oct 2, 2011 Oct 3, 2010 Net earnings attributable to Starbucks Weighted average common shares and common stock units outstanding (for basic...

  • Page 90
    ...sold a selection of Starbucks and Seattle's Best Coffee branded packaged coffees in grocery and warehouse club stores throughout the US, and to grocery stores in Canada, the UK and other European countries. Kraft managed the distribution, marketing, advertising and promotion of these products. Kraft...

  • Page 91
    ... support organization were completed in fiscal 2010. On a cumulative basis we closed 918 stores on a global basis as part of this effort. Restructuring charges by type of cost for fiscal 2010 were as follows (in millions): By Type of Cost Lease Exit and Other Asset Related Costs Impairments Total...

  • Page 92
    ...coffees, single serve coffee products and a focused selection of merchandise through company-operated stores and licensed stores. Certain markets within EMEA operations are in the early stages of development and require a more extensive support organization, relative to the current levels of revenue...

  • Page 93
    ...30, 2012 Oct 2, 2011 Oct 3, 2010 Long-lived assets: United States Other countries Total $ 2,767.1 1,252.5 $ 4,019.6 $ 2,587.1 978.4 $ 3,565.5 $ $ 2,807.9 821.6 3,629.5 Management evaluates the performance of its operating segments based on net revenues and operating income. The accounting policies...

  • Page 94
    ... financial information for our reportable operating segments and Other for the years ended September 30, 2012, October 2, 2011, and October 3, 2010 including the reclassifications discussed in Note 1 (in millions): Americas EMEA China / Channel Asia Pacific Development Other Total Fiscal 2012 Total...

  • Page 95
    REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Starbucks Corporation Seattle, Washington We have audited the accompanying consolidated balance sheets of Starbucks Corporation and subsidiaries (the "Company") as of September 30, 2012 and October ...

  • Page 96
    ..., our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this report (September 30, 2012). There were no changes in our internal control over financial reporting (as defined in Rules 13a-15...

  • Page 97
    ... opinion. A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other...

  • Page 98
    Item 9B. Other Information On November 13, 2012 the Starbucks Board of Directors approved an amendment to Article X of the Company's amended and restated bylaws (as amended, the "Amended Bylaws") to read as follows: ARTICLE X. AMENDMENTS These bylaws may be altered, amended or repealed, and new ...

  • Page 99
    ...entitled "Executive Compensation," "Compensation of Directors," "Corporate Governance - Compensation Committee" and "Compensation Committee Report" in the Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters The information required...

  • Page 100
    ... 2, 2011, and October 3, 2010; • Notes to Consolidated Financial Statements; and • Reports of Independent Registered Public Accounting Firm 2. Financial Statement Schedules Financial statement schedules are omitted because they are not required or are not applicable, or the required information...

  • Page 101
    ... 16, 2012. Signature Title By: /s/ Howard Schultz chairman, president and chief executive officer Howard Schultz By: /s/ Troy Alstead Troy Alstead chief financial officer and chief administrative officer (principal financial officer and principal accounting officer) director By: /s/ William...

  • Page 102
    Signature Title By: /s/ Kevin R. Johnson director Kevin R. Johnson By: /s/ Olden Lee director Olden Lee By: /s/ Joshua Cooper Ramo director Joshua Cooper Ramo By: /s/ James G. Shennan, Jr. director James G. Shennan, Jr. By: /s/ Clara Shih director Clara Shih By: /s/ Javier G. Teruel ...

  • Page 103
    ... 18, 2009 Starbucks Corporation 1991 CompanyWide Stock Option Plan - Rules of the UK Sub-Plan, as amended and restated through November 20, 2003 Starbucks Corporation Employee Stock Purchase Plan - 1995 as amended and restated through April 1, 2009 Amended and Restated Lease, dated as of January...

  • Page 104
    ... File No. Date of First Filing Exhibit Number Filed Herewith 10.7* Starbucks Corporation Management Deferred Compensation Plan, as amended and restated effective January 1, 2011 Starbucks Corporation 1997 Deferred Stock Plan Starbucks Corporation UK Share Save Plan Starbucks Corporation Directors...

  • Page 105
    ...on September 14, 2010 Form of Stock Option Grant Agreement for Purchase of Stock under the 2005 Company-Wide Sub-Plan to the Starbucks Corporation 2005 Long-Term Equity Incentive Plan Credit Agreement dated November 17, 2010 among Starbucks Corporation, Bank of America, N.A., as Administrative Agent...

  • Page 106
    ...Letter Agreement dated September 16, 2011 between Starbucks Corporation and Michelle Gass Computation of Ratio of Earnings to Fixed Charges Subsidiaries of Starbucks Corporation Consent of Independent Registered Public Accounting Firm Certification of Principal Executive Officer Pursuant to Rule 13a...

  • Page 107
    ...Description Form File No. Date of First Filing Exhibit Number Filed Herewith 101 The following financial statements from the Company's 10-K for the fiscal year ended September 30, 2012, formatted in XBRL: (i) Consolidated Statements of Earnings, (ii) Consolidated Balance Sheets, (iii) Consolidated...

  • Page 108
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    ... Global Development and Evolution Fresh Retail Craig Russell senior vice president, Global Coffee Blair Taylor senior vice president, chief community officer Vivek Varma executive vice president, Public Affairs * executive officer Updated Financial Information Please visit http://investor.starbucks...

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    ... from our original store's logo in Seattle's Pike Place Market. The second illustration comes from the interior of our first store in Mumbai, India. These drawings evoke the Starbucks Experience, treasured in Seattle since 1971 and now around the world. © 2013 STARBUCKS CORPORATION. ALL RIGHTS...