Starbucks 2013 Annual Report Download - page 64

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Fair Value at
Dec 31, 2012
Cash and cash equivalents $ 47.0
Inventories 21.3
Property, plant and equipment 59.7
Intangible assets 120.8
Goodwill 467.5
Other current and noncurrent assets 19.8
Current liabilities (36.0)
Long-term deferred tax liability (54.3)
Long-term debt (35.2)
Other long-term liabilities (7.0)
Total purchase price $ 603.6
Subsequent to the initial purchase price allocation performed in the second quarter of fiscal 2013, we recorded certain
immaterial purchase accounting adjustments, which are reflected in the purchase price allocation table above.
The assets acquired and liabilities assumed are reported within All Other Segments. Other current and noncurrent assets
acquired primarily include prepaid expenses, trade receivables, and deferred tax assets. In addition, we assumed various current
liabilities primarily consisting of accounts payable, accrued payroll related liabilities and other accrued operating expenses. The
intangible assets acquired as part of the transaction include the Teavana trade name, tea blends and non-compete agreements.
The Teavana trade name was valued at $105.5 million and determined to have an indefinite life, based on our expectation that
the brand will be used indefinitely and has no contractual limitations. The intangible asset related to the tea blends was valued
at $13.0 million and will be amortized on a straight-line basis over a period of 10 years, and the intangible asset related to the
non-compete agreements was valued at $2.3 million and will be amortized on a straight-line basis over a period of 3 years. The
$467.5 million of goodwill represents the intangible assets that do not qualify for separate recognition, primarily including
Teavana's established global store presence in high traffic mall locations and other high-sales-volume retail venues, Teavana's
global customer base, and Teavana's "Heaven of tea" retail experience in which store employees engage and educate customers
about the ritual and enjoyment of tea. The goodwill was allocated to All Other Segments and is not deductible for income tax
purposes.
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
Intangible 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
2013 10-K
Starbucks Corporation Form