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48
STARBUCKS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fiscal Years ended September 29, 2013, September 30, 2012 and October 2, 2011
Note 1: Summary of Significant Accounting Policies
Description of Business
We purchase and roast high-quality coffees that we sell, along with handcrafted coffee and tea beverages and a variety of fresh
food items, through our 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 this 10-K, Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us” or
“our.”
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. Teavana, Seattle's Best Coffee,
Evolution Fresh and our Digital Ventures business are included in All Other Segments. Unallocated corporate operating
expenses, which pertain primarily to corporate administrative functions that support the operating segments but are not
specifically attributable to or managed by any segment, are presented as a reconciling item between total segment operating
results and consolidated financial results.
Additional details on the nature of our business and our reportable operating segments are included in Note 16 of these
Consolidated Financial Statements.
Principles of Consolidation
The consolidated financial statements reflect the financial position and operating results of Starbucks, including wholly owned
subsidiaries and investees that we control. Investments in entities that we do not control, but have the ability to exercise
significant influence over operating and financial policies, are accounted for under the equity method. Investments in entities in
which we do not have the ability to exercise significant influence are accounted for under the cost method. Intercompany
transactions and balances have been eliminated.
Fiscal Year End
Our fiscal year ends on the Sunday closest to September 30. Fiscal years 2013, 2012 and 2011 included 52 weeks.
Estimates and Assumptions
Preparing financial statements in conformity with accounting principles generally accepted in the United States of America
(“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses. Examples include, but are not limited to, estimates for asset and goodwill impairments, stock-based
compensation forfeiture rates, future asset retirement obligations, and inventory reserves; assumptions underlying self-
insurance reserves and income from unredeemed stored value cards; and the potential outcome of future tax consequences of
events that have been recognized in the financial statements. Actual results and outcomes may differ from these estimates and
assumptions.
Cash and Cash Equivalents
We consider all highly liquid instruments with a maturity of three months or less at the time of purchase to be cash equivalents.
We maintain cash and cash equivalent balances with financial institutions that exceed federally insured limits. We have not
experienced any losses related to these balances and we believe credit risk to be minimal.
Our cash management system provides for the funding of all major bank disbursement accounts on a daily basis as checks are
presented for payment. Under this system, outstanding checks are in excess of the cash balances at certain banks, which creates
book overdrafts. Book overdrafts are presented as a current liability in accounts payable on the consolidated balance sheets.
Short-term and Long-term Investments
Our short-term and long-term investments consist primarily of investment grade debt securities all of which are classified as
available-for-sale. Also included in our available-for-sale investment portfolio are certificates of deposit placed through an
account registry service. Available-for-sale securities are recorded at fair value, and unrealized holding gains and losses are
recorded, net of tax, as a component of accumulated other comprehensive income. Available-for-sale securities with remaining
2013 10-K
Starbucks Corporation Form