Starbucks 2014 Annual Report Download - page 43

Starbucks Corporation 2014 Form 10-K 39
of fiscal 2014, we declared a cash dividend of $0.32 per share to be paid on November 28, 2014 with an expected payout of
approximately $239.8 million.
During fiscal years 2014 and 2013, we repurchased 10.5 million and 10.8 million shares of common stock, respectively, or
$769.8 million and $544.1 million, respectively, under share repurchase authorizations. The number of remaining shares
authorized for repurchase at September 28, 2014 totaled 15.9 million.
Cash Flows
Cash provided by operating activities was $607.8 million for fiscal 2014, compared to $2.9 billion for fiscal 2013. The decrease
was driven by the first quarter payment of $2.8 billion for the Kraft arbitration matter discussed above. This was partially offset
by cash provided by operating activities of $3.4 billion primarily resulting from strong earnings and favorable changes in
working capital accounts in the current year.
Cash used by investing activities totaled $817.7 million for fiscal 2014, compared to $1.4 billion for fiscal 2013. The change
was primarily due to cash paid to acquire Teavana in the prior year. Also contributing was an increase in our investments in
long-term securities during fiscal 2014, more than offset by the subsequent liquidation of a significant portion of our offshore
investment portfolio in the fourth quarter of fiscal 2014 in anticipation of funding the acquisition of Starbucks Japan.
Cash used by financing activities for fiscal 2014 totaled $623.3 million, compared to $108.2 million for fiscal 2013. The
increase was primarily due to an increase in cash returned to shareholders through share repurchases and higher dividend
payments in fiscal 2014 and decreased proceeds from the exercise of stock options and the related excess tax benefits, resulting
from fewer stock option exercises during the period.
Contractual Obligations
Our contractual obligations and borrowings as of September 28, 2014, and the timing and effect that such commitments are
expected to have on our liquidity and capital requirements in future periods (in millions):
Payments Due by Period
Contractual Obligations (1) Total Less than 1 Year 1 - 3 Years 3 - 5 Years More than 5 Years
Operating lease obligations(2) $ 4,957.9 $ 925.6 $ 1,522.9 $ 1,007.1 $ 1,502.3
Debt obligations
Principal payments 2,050.0 — 950.0 350.0 750.0
Interest payments(3) 417.7 73.8 145.8 68.2 129.9
Purchase obligations(4) 1,254.7 848.9 365.7 27.7 12.4
Other obligations(5) 55.1 2.7 5.6 5.3 41.5
Total $ 8,735.4 $ 1,851.0 $ 2,990.0 $ 1,458.3 $ 2,436.1
(1) Income tax liabilities for uncertain tax positions were excluded as we are not able to make a reasonably reliable estimate
of the amount and period of related future payments. As of September 28, 2014, we had $121.0 million of gross
unrecognized tax benefits for uncertain tax positions, which includes accrued interest and penalties.
(2) Amounts include direct lease obligations, excluding any taxes, insurance and other related expenses.
(3) Amounts exclude any gain or loss upon settlement of related interest rate swap agreements, which are described further
in Note 3, Derivative Financial Instruments.
(4) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding on
Starbucks and that specify all significant terms. Green coffee purchase commitments comprise 90% of total purchase
obligations.
(5) Other obligations include other long-term liabilities primarily consisting of asset retirement obligations, capital lease
obligations and hedging instruments.
Starbucks currently expects to fund these commitments primarily with operating cash flows generated in the normal course of
business.
Off-Balance Sheet Arrangements
Off-balance sheet arrangements relate to operating lease and purchase commitments detailed in the footnotes to the
consolidated financial statements included in Item 8 of Part II of this 10-K.