Starbucks 2013 Annual Report Download - page 72

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Amortization expense for definite-lived intangibles was $7.7 million, $4.5 million, and $2.2 million during fiscal 2013, 2012,
and 2011, respectively. Amortization expense is estimated to be approximately $8 million each year from fiscal 2014 through
fiscal 2018, and a total of approximately $29 million thereafter.
Changes in the carrying amount of goodwill by reportable operating segment (in millions):
Americas EMEA
China /
Asia Pacific
Channel
Development
All Other
Segments Total
Balance at October 2, 2011(1)
Goodwill prior to impairment $ 162.9 $ 63.0 $ 74.8 $ 23.8 $ 5.7 $ 330.2
Accumulated impairment charges (8.6) — — — — (8.6)
Goodwill $ 154.3 $ 63.0 $ 74.8 $ 23.8 $ 5.7 $ 321.6
Acquisitions 70.5 — — — 7.0 77.5
Other(2) 2.5 (3.0) 0.5 — — —
Balance at September 30, 2012
Goodwill prior to impairment $ 235.9 $ 60.0 $ 75.3 $ 23.8 $ 12.7 $ 407.7
Accumulated impairment charges (8.6) — — — — (8.6)
Goodwill $ 227.3 $ 60.0 $ 75.3 $ 23.8 $ 12.7 $ 399.1
Acquisitions/(divestitures) (3.7) — — — 467.5 463.8
Other(2) (2.0) 2.2 (0.2) — — —
Balance at September 29, 2013
Goodwill prior to impairment $ 230.2 $ 62.2 $ 75.1 $ 23.8 $ 480.2 $ 871.5
Accumulated impairment charges (8.6) — — — — (8.6)
Goodwill $ 221.6 $ 62.2 $ 75.1 $ 23.8 $ 480.2 $ 862.9
(1) In conjunction with the change in reportable operating segments, we reclassified goodwill by segment as of October 2,
2011.
(2) Other is primarily comprised of changes in the goodwill balance as a result of foreign exchange fluctuations.
Note 9: Debt
Revolving Credit Facility and Commercial Paper Program
Our previous $500 million unsecured, revolving credit facility (the “2010 credit facility”) was set to mature in November 2014.
In the second quarter of fiscal 2013, we replaced the 2010 credit facility with a new $750 million unsecured, revolving credit
facility (the “2013 credit facility”) with various banks, of which $150 million may be used for issuances of letters of credit.
The 2013 credit facility is available for working capital, capital expenditures and other corporate purposes, including
acquisitions and share repurchases, and is currently set to mature in February 2018. Starbucks has the option, subject to
negotiation and agreement with the related banks, to increase the maximum commitment amount by an additional $750 million.
Borrowings under the 2013 credit facility will bear interest at a variable rate based on LIBOR, and, for US dollar-denominated
loans under certain circumstances, a Base Rate (as defined in the 2013 credit facility), in each case plus an applicable margin.
The applicable margin is based on the better of (i) the Company's long-term credit ratings assigned by Moody's and Standard &
Poor's rating agencies, and (ii) the Company's fixed charge coverage ratio, pursuant to a pricing grid set forth in the 2013 credit
facility. The current applicable margin is 0.795% for Eurocurrency Rate Loans and 0.00% for Base Rate Loans. The 2013 credit
facility contains provisions requiring us to maintain compliance with certain covenants, including a minimum fixed charge
coverage ratio, which measures our ability to cover financing expenses. As a result of the arbitrator’s ruling on the Kraft
litigation, the credit facility was amended on November 15, 2013 to exclude the impact of the litigation charge, including the
impact on our fixed charge coverage ratio. As of September 29, 2013, we were in compliance with each of these covenants, as
amended.
Under our commercial paper program, as approved by our board of directors, we may issue unsecured commercial paper notes
up to a maximum aggregate amount outstanding at any time of $1 billion, with individual maturities that may vary, but not
2013 10-K
Starbucks Corporation Form