Starbucks 2012 Annual Report Download - page 70

64
balance sheets. Included in these net assets were $63.8 million of goodwill and $35.1 million in definite-lived
intangible assets.
In the third quarter of fiscal 2011, we acquired the remaining 30% ownership of our business in the southern
portion of China from our noncontrolling partner, Maxim’s Caterers Limited (Maxim’s). We simultaneously sold
our 5% ownership interest in the Hong Kong market to Maxim’s.
In the first quarter of fiscal 2010, we acquired 100% ownership of our business in France, converting it from a
50% joint venture with Sigla S.A. (Grupo Vips) of Spain to a company-operated market. We simultaneously sold
our 50% ownership interests in the Spain and Portugal markets to Grupo Vips, converting them to licensed
markets.
In the fourth quarter of fiscal 2010, we acquired 100% ownership of our business in Brazil, converting it from a
49% joint venture with Caf«s Sereia do Brasil Participa©·es S.A of Brazil to a 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 in UCO and our business in
South China on Starbucks equity:
Fiscal Year Ended September 30, 2012 October 2, 2011 October 3, 2010
Net earnings attributable to Starbucks $ 1,383.8 $ 1,245.7 $ 945.6
Transfers (to) from the noncontrolling interest:
Decrease in additional paid-in capital for purchase of
interest in subsidiary
—
(28.0) (26.8)
Change from net earnings attributable to Starbucks and
transfers to noncontrolling interest $ 1,383.8 $ 1,217.7 $ 918.8
Note 3: Derivative Financial Instruments
Foreign Currency
We enter into forward and swap contracts to hedge portions of cash flows of anticipated revenue streams and
inventory purchases in currencies other than the entity's functional currency. Net derivative losses from cash flow
hedges of $2.9 million and $11.1 million, net of taxes, were included in accumulated other comprehensive income
as of September 30, 2012 and October 2, 2011, respectively. Of the net derivative losses accumulated as of
September 30, 2012, $2.9 million pertains to derivative instruments that will be dedesignated as cash flow hedges
within 12 months and will also continue to experience fair value changes before affecting earnings. Outstanding
contracts will expire within 12 months.
We also enter into net investment derivative instruments to hedge our equity method investment in Starbucks
Coffee Japan, Ltd., to minimize foreign currency exposure. Net derivative losses from net investment hedges of
$33.6 million and $34.2 million, net of taxes, were included in accumulated other comprehensive income as of
September 30, 2012 and October 2, 2011, respectively. Outstanding contracts will expire within 29 months.
In addition to the hedging instruments above, to mitigate the translation risk of certain balance sheet items, we
enter into certain foreign currency swap contracts that are not designated as hedging instruments. These contracts
are recorded at fair value, with the changes in fair value recognized in net interest income and other on the
consolidated statements of earnings. Gains and losses from these instruments are largely offset by the financial
impact of translating foreign currency denominated payables and receivables, which is also recognized in net
interest income and other.