Starbucks 2012 Annual Report Download - page 23

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17
currently choose not to participate in our plans choose to enroll when or after the law becomes effective, it may
significantly increase our healthcare coverage costs and negatively impact on our financial results.
•Failure to comply with applicable laws and regulations could harm our business and financial results.
Our policies and procedures are designed to comply with all applicable laws, accounting and reporting
requirements, tax rules and other regulations and requirements, including those imposed by the SEC, NASDAQ,
and foreign countries, as well as applicable trade, labor, healthcare, privacy, food, anti-bribery and corruption
and merchandise laws. The complexity of the regulatory environment in which we operate and the related cost
of compliance are both increasing due to additional or changing legal and regulatory requirements, our ongoing
expansion into new markets and new channels, together with the fact that foreign laws occasionally conflict
with domestic laws. In addition to potential damage to our reputation and brand, failure to comply with the
various laws and regulations as well as changes in laws and regulations or the manner in which they are
interpreted or applied, may result in civil and criminal liability, damages, fines and penalties, increased cost of
regulatory compliance and restatements of our financial statements.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The significant properties used by Starbucks in connection with its roasting, distribution and corporate
administrative operations, serving all segments, are as follows:
Location Approximate Size
in Square Feet Purpose
Rancho Cucamonga, CA 265,000 Manufacturing
Carson Valley, NV 384,000 Roasting, distribution and warehouse
York County, PA 748,000 Roasting, distribution and warehouse
Sandy Run, SC 117,000 Roasting and distribution
Auburn, WA 351,000 Warehouse and distribution
Kent, WA 332,000 Roasting and distribution
Seattle, WA 1,000,000 Corporate administrative
Amsterdam, Netherlands 97,000 Roasting and distribution
Basildon, United Kingdom 142,000 Warehouse and distribution
We own our roasting facilities and lease the majority of our warehousing and distribution locations. As of
September 30, 2012, Starbucks had approximately 9,400 company-operated stores, almost all of which are
leased. We also lease space in various locations worldwide for regional, district and other administrative offices,
training facilities and storage.
Item 3. Legal Proceedings
In the first quarter of fiscal 2011, Starbucks notified Kraft Foods Global, Inc. (“Kraft”) that we were
discontinuing our distribution arrangement with Kraft on March 1, 2011 due to material breaches by Kraft of its
obligations 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
coffees in grocery and warehouse club stores throughout the US, and to grocery stores in Canada, the UK and