Starbucks 2012 Annual Report Download - page 69

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Change in revenue presentation
In the second quarter of fiscal 2011, concurrent with the change in our distribution method for packaged coffee
and tea in the US, we revised the presentation of revenues. Non-retail licensing revenues were reclassified on the
consolidated financial statements to the renamed “CPG, foodservice and other” revenue line, which includes
revenues from our direct sale of packaged coffee and tea as well as licensing revenues received under the previous
distribution arrangement. The previous “Licensing” revenue line now includes only licensed store revenue and
therefore has been renamed “Licensed stores.” For fiscal 2010, $465.7 million was reclassified from the
previously named Licensing revenue to CPG, foodservice and other revenue. There was no impact to consolidated
or segment total net revenues from this change in presentation.
Note 2: Acquisitions
On July 3, 2012, we acquired 100% ownership interest in Bay Bread, LLC and its La Boulange bakery brand
(collectively “La Boulange”), to elevate our core food offerings and build a premium, artisanal bakery brand. We
acquired La Boulange for a purchase price of approximately $100 million in cash. The following table
summarizes the allocation of the purchase price to the fair values of the assets acquired and liabilities assumed on
the closing date (in millions):
Fair Value at
July 3, 2012
Property, plant and equipment $ 18.1
Intan
g
ible assets 24.3
Goodwill 58.7
Other current and noncurrent assets 5.1
Current liabilities (6.4)
Total cash paid $ 99.8
The assets acquired and liabilities assumed are included in our Americas operating segment. Other current assets
acquired primarily include cash, trade receivables, and inventory. In addition, we assumed various current
liabilities primarily consisting of accounts payable and accrued payroll related liabilities. The intangible assets
acquired as part of the transaction include the La Boulange trade name and proprietary recipes and processes. The
La Boulange trade name was valued at $9.7 million and determined to have an indefinite life while the intangible
asset relating to the proprietary recipes and processes was valued at $14.6 million and will be amortized over a
period of 10 years. The $58.7 million of goodwill is deductible for income tax purposes and was allocated 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 million in cash. The fair value of the net assets acquired on
the acquisition date included $18 million of goodwill. Evolution Fresh is its own operating segment and is
reported in “Other” along with our Seattle’s Best Coffee operating segment, our Digital Ventures business, and
unallocated corporate expenses.
In the fourth quarter of fiscal 2011, we acquired the 50% ownership interest in Switzerland and Austria from our
joint venture partner, Marinopoulos Holdings S.A.R.L, converting these markets to 100% owned company-
operated markets, for a purchase price of $65.5 million. As a result of this acquisition, we adjusted the carrying
value of our previous equity investment to fair value, resulting in a gain of approximately $55 million which was
included in net interest income and other on our consolidated statements of earnings. The fair value of 100% of
the net assets of these markets on the acquisition date was $131.0 million and was recorded on our consolidated