Starbucks 2013 Annual Report Download - page 10

2
PART I
Item 1. Business
General
Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 62 countries. Formed in
1985, 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 also sell a variety of coffee and tea products and license our
trademarks through other channels such as licensed stores, grocery and national foodservice accounts. In addition to our
flagship Starbucks brand, our portfolio also includes goods and services offered under these brands: Teavana, Tazo, Seattle’s
Best Coffee, Starbucks VIA, Starbucks Refreshers, Evolution Fresh, La Boulange and Verismo.
Our objective is to maintain Starbucks standing as one of the most recognized and respected brands in the world. To achieve
this, we are continuing the disciplined expansion of our global store base. In addition, by leveraging the experience gained
through our traditional store model, we continue to offer consumers new coffee and other products in a variety of forms, across
new categories, and through diverse channels. Starbucks Global Responsibility strategy and commitments related to coffee and
the communities we do business in, as well as our focus on being an employer of choice, are also key complements to our
business strategies.
In this Annual Report on Form 10-K (“10-K” or “Report”) for the fiscal year ended September 29, 2013 (“fiscal 2013”),
Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us” or “our.”
Segment Financial Information
We have four reportable operating segments: 1) Americas, inclusive of the US, Canada, and Latin America; 2) Europe, Middle
East, and Africa ("EMEA"); 3) China / Asia Pacific (“CAP”) and 4) Channel Development. Segment revenues as a percentage
of total net revenues for fiscal year 2013 were as follows: Americas (74%), EMEA (8%), CAP (6%), Channel Development
(9%), and all other segments (3%).
Our Americas, EMEA, and CAP segments include both company-operated and licensed stores. Our Americas segment is our
most mature business and has achieved significant scale. Certain markets within our EMEA and CAP operations are still in the
early stages of development and require a more extensive support organization, relative to their current levels of revenue and
operating income, than our Americas operations. The Americas and EMEA segments also include certain foodservice accounts,
primarily in Canada and the UK. Our Americas segment also includes our La Boulange® retail stores.
Our Channel Development segment includes whole bean and ground coffees, premium Tazo® teas, Starbucks- and Tazo-
branded single serve products, 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, specialty retailers, convenience
stores, and US foodservice accounts.
Our other, non-reportable, operating segments include the operating results from Teavana, Seattle's Best Coffee, Evolution
Fresh, and our Digital Ventures business. These other operating segments are referred to as All Other Segments.
Effective at the beginning of fiscal 2013, we decentralized certain leadership functions in the areas of retail marketing and
category management, global store development and partner resources to support and align with the respective operating
segment presidents. In conjunction with these moves, certain general and administrative and depreciation and amortization
expenses associated with these functions, which were previously reported as unallocated corporate expenses within "Other," are
now reported within the respective reportable operating segments to align with the regions they support.
Beginning in the second quarter of fiscal 2013, we changed the presentation of our unallocated corporate expenses, which were
previously combined with our non-reportable operating segments in "Other". Unallocated corporate operating expenses pertain
primarily to corporate administrative functions that support the operating segments but are not specifically attributable to or
managed by any segment. These expenses are now presented as a reconciling item between total segment operating results and
consolidated operating results.
Concurrent with the reporting changes noted above, we revised our prior period financial information to reflect comparable
financial information. Historical financial information presented herein reflects these changes. There was no impact on
consolidated net revenues, total operating expenses, operating income, or net earnings as a result of these changes.
Starbucks segment information is included in Note 16 to the consolidated financial statements included in Item 8 of Part II of
this 10-K.
2013 10-K
Starbucks Corporation Form