Starbucks 2014 Annual Report Download - page 63

Download and view the complete annual report

Please find page 63 of the 2014 Starbucks annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 100

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100

Starbucks Corporation 2014 Form 10-K 59
results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had
resided. The guidance will become effective for us at the beginning of our first quarter of fiscal 2015. We do not expect the
adoption of this guidance will have a material impact on our financial statements.
In February 2013, the FASB issued guidance that adds additional disclosure requirements for items reclassified out of
accumulated other comprehensive income. This guidance requires the disclosure of significant amounts reclassified from each
component of accumulated other comprehensive income and the income statement line items affected by the reclassification.
The guidance became effective for us at the beginning of our first quarter of fiscal 2014 and the additional disclosures are
provided in Note 11, Equity, of these consolidated financial statements.
In January 2013, the FASB issued guidance clarifying the scope of disclosure requirements for offsetting assets and liabilities.
The amended guidance limits the scope of balance sheet offsetting disclosures to derivatives, repurchase agreements, and
securities lending transactions to the extent that they are offset in the financial statements or subject to an enforceable master
netting arrangement or similar agreement. The guidance became effective for us at the beginning of our first quarter of fiscal
2014 and did not have a material impact on our financial statements.
Correction of an Immaterial Error
Effective at the beginning of fiscal 2014, we reclassified certain fees related to our US and Seattle's Best Coffee foodservice
operations in our Channel Development segment and All Other Segments, respectively, from other operating expenses to
foodservice revenues included in CPG, foodservice and other net revenues in our consolidated statements of earnings. This
reclassification results from a correction of an error in our prior period financial statements which we have determined to be
immaterial. In order to align prior period classifications with the current period presentation, the historical consolidated
financial statements have been corrected, resulting in reclassifications of $25.4 million and $22.7 million for fiscal years 2013
and 2012, respectively. The consolidated statements of earnings as corrected are presented below (in millions):
Fiscal 2013 Fiscal 2012
Q1 Q2 Q3 Q4 Full Year Full Year
Net revenues:
Company-operated stores $ 2,989.6 $ 2,807.7 $ 2,986.3 $ 3,009.6 $ 11,793.2 $ 10,534.5
Licensed stores 350.2 322.1 342.0 346.3 1,360.5 1,210.3
CPG, foodservice and other 453.4 419.8 407.0 432.9 1,713.1 1,532.0
Total net revenues 3,793.2 3,549.6 3,735.3 3,788.8 14,866.8 13,276.8
Cost of sales including occupancy costs 1,620.7 1,530.4 1,597.6 1,633.7 6,382.3 5,813.3
Store operating expenses 1,089.5 1,038.4 1,084.1 1,073.9 4,286.1 3,918.1
Other operating expenses 126.1 105.8 98.9 101.1 431.8 407.2
Depreciation and amortization expenses 148.9 153.1 153.3 166.1 621.4 550.3
General and administrative expenses 231.9 230.3 249.6 226.1 937.9 801.2
Litigation charge — — — 2,784.1 2,784.1 —
Total operating expenses 3,217.1 3,058.0 3,183.5 5,985.0 15,443.6 11,490.1
Income from equity investees 54.5 52.5 63.4 81.0 251.4 210.7
Operating income/(loss) 630.6 544.1 615.2 (2,115.2)(325.4) 1,997.4
Interest income and other, net (2.9) 50.8 3.5 72.1 123.6 94.4
Interest expense (6.6) (6.1)(6.3)(9.1)(28.1)(32.7)
Earnings/(loss) before income taxes 621.1 588.8 612.4 (2,052.2)(229.9) 2,059.1
Income tax expense/(benefit) 188.7 198.1 194.6 (820.1)(238.7) 674.4
Net earnings/(loss) including
noncontrolling interests 432.4 390.7 417.8 (1,232.1) 8.8 1,384.7
Net earnings/(loss) attributable to
noncontrolling interests 0.2 0.3 — (0.1) 0.5 0.9
Net earnings/(loss) attributable to
Starbucks $ 432.2 $ 390.4 $ 417.8 $ (1,232.0) $ 8.3 $ 1,383.8
There was no impact on operating income or net earnings as a result of the error correction, nor any impact on our consolidated
statements of comprehensive income, consolidated balance sheets or consolidated statements of cash flows. Additional
disclosure regarding this change as it relates to our segment results is included at Note 16, Segment Reporting.