Starbucks 2013 Annual Report Download - page 70

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62
Note 6: Equity and Cost Investments (in millions)
Sep 29,
2013
Sep 30,
2012
Equity method investments $ 450.9 $ 393.9
Cost method investments 45.6 66.0
Total $ 496.5 $ 459.9
Equity Method Investments
As of September 29, 2013, we had a 50 percent ownership interest in each of the following international equity method
investees: Starbucks Coffee Korea Co., Ltd.; President Starbucks Coffee Taiwan Ltd.; Shanghai President Coffee Co.; Berjaya
Starbucks Coffee Company Sdn. Bhd. (Malaysia); and Tata Starbucks Limited (India). In addition, we had a 49 percent
ownership interest in Starbucks Coffee España, S.L. and a 39.6 percent ownership interest in Starbucks Coffee Japan, Ltd.
These international entities operate licensed Starbucks® retail stores. We also have licensed the rights to produce and distribute
Starbucks branded products to The North American Coffee Partnership with the Pepsi-Cola Company. We have a 50 percent
ownership interest in The North American Coffee Partnership with the Pepsi-Cola Company, which develops and distributes
bottled Starbucks® beverages, including Frappuccino®coffee drinks, Starbucks Doubleshot® espresso drinks, Starbucks
Refreshers™ beverages, and Starbucks Discoveries Iced Café Favorites™.
Our share of income and losses from our equity method investments is included in income from equity investees on the
consolidated statements of earnings. Also included in this line item is our proportionate share of gross profit resulting from
coffee and other product sales to, and royalty and license fee revenues generated from, equity investees. Revenues generated
from these related parties, net of eliminations, were $205.1 million, $190.3 million, and $151.6 million in fiscal years 2013,
2012, and 2011, respectively. Related costs of sales, net of eliminations, were $115.4 million, $111.0 million, and $83.2 million
in fiscal years 2013, 2012, and 2011, respectively. As of September 29, 2013 and September 30, 2012, there were $48.3 million
and $33.0 million of accounts receivable from equity investees, respectively, on our consolidated balance sheets, primarily
related to product sales and royalty revenues.
As of September 29, 2013, the aggregate market value of our investment in Starbucks Japan was approximately $691 million,
determined based on its available quoted market price, which exceeds its carrying value of $182 million.
Summarized combined financial information of our equity method investees, which represent 100% of the investees’ financial
information (in millions):
Financial Position as of
Sep 29,
2013
Sep 30,
2012
Current assets $ 675.8 $ 603.1
Noncurrent assets 783.3 735.3
Current liabilities 466.6 411.2
Noncurrent liabilities 148.9 119.7
Results of Operations for Fiscal Year Ended
Sep 29,
2013
Sep 30,
2012
Oct 2,
2011
Net revenues $ 3,018.7 $ 2,796.7 $ 2,395.1
Operating income 434.8 353.5 277.0
Net earnings 358.0 286.7 231.1
Cost Method Investments
As of September 29, 2013, we had a $19 million investment of equity interests in entities that develop and operate Starbucks®
licensed retail stores in several global markets. We have the ability to acquire additional interests in some of these cost method
investees at certain intervals. Depending on our total percentage ownership interest and our ability to exercise significant
influence over financial and operating policies, additional investments may require a retroactive application of the equity
method of accounting.
2013 10-K
Starbucks Corporation Form