Starbucks 2012 Annual Report Download - page 47

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41
SUMMARIZED QUARTERLY FINANCIAL INFORMATION (unaudited; in millions, except EPS)
First Second Third Fourth Total
2012:
Net revenues $ 3,435.9 $ 3,195.9 $ 3,303.6 $ 3,364.2 $ 13,299.5
Operating income 556.0 430.4 491.6 519.6 1,997.4
Net earnings attributable to Starbucks 382.1 309.9 333.1 359.0 1,383.8
EPS — diluted $ 0.50 $ 0.40 $ 0.43 $ 0.46 $ 1.79
2011:
Net revenues $ 2,950.8 $ 2,785.7 $ 2,932.2 $ 3,031.9 $ 11,700.4
Operating income 501.9 376.1 402.2 448.3 1,728.5
Net earnings attributable to Starbucks 346.6 261.6 279.1 358.5 1,245.7
EPS — diluted $ 0.45 $ 0.34 $ 0.36 $ 0.47 $ 1.62
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Investment Overview
Starbucks cash and short-term investments were $2.0 billion and $2.1 billion as of September 30, 2012 and
October 2, 2011, respectively. As of September 30, 2012, approximately $703 million of cash was held in foreign
subsidiaries. Of our cash held in foreign subsidiaries, $343 million is denominated in the US dollar. We actively
manage our cash and short-term investments in order to internally fund operating needs domestically and
internationally, make scheduled interest and principal payments on our borrowings, and return cash to
shareholders through common stock cash dividend payments and share repurchases. Our short-term investments
consisted predominantly of US Treasury securities, commercial paper, corporate bonds, and US Agency
securities. Also included in our short-term investment portfolio are certificates of deposit placed through an
account registry service, with maturities ranging from 91 days to one year. The principal amounts of the individual
certificates of deposit do not exceed the Federal Deposit Insurance Corporation limits. Our portfolio of long-term
available for sale securities consists predominantly of high investment-grade corporate bonds, diversified among
industries and individual issuers, as well as certificates of deposits with maturities greater than 1 year.
Borrowing capacity
In November 2010, we replaced our previous credit facility with a new $500 million unsecured credit facility ("the
credit facility”) with various banks, of which $100 million may be used for issuances of letters 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, to increase the maximum commitment amount by an
additional $500 million. The interest rate for any borrowings under the credit facility, based on Starbucks current
ratings and fixed charge coverage ratio, is 0.85% over LIBOR. The specific spread over LIBOR will depend upon
our long-term credit ratings assigned by Moody’s and Standard & Poor’s rating agencies and our fixed charge
coverage ratio. The credit facility contains provisions requiring us to maintain compliance with certain covenants,
including a minimum fixed charge coverage ratio, which measures our ability to cover financing expenses. As of
September 30, 2012 and October 2, 2011, we were in compliance with each of these covenants.
Under our commercial paper program we may issue unsecured commercial paper notes, up to a maximum
aggregate amount outstanding at any time of $500 million, with individual maturities that may vary, but not