Starbucks 2014 Annual Report Download - page 82

78 Starbucks Corporation 2014 Form 10-K
Starbucks is party to various other legal proceedings arising in the ordinary course of business, including, at times, certain
employment litigation cases that have been certified as class or collective actions, but is not currently a party to any legal
proceeding that management believes could have a material adverse effect on our consolidated financial position, results of
operations or cash flows.
Note 16: Segment Reporting
Segment information is prepared on the same basis that our ceo, who is our chief operating decision maker, manages the
segments, evaluates financial results, and makes key operating decisions. Beginning with the first quarter of fiscal 2012, we
redefined our reportable operating segments to align with the three-region leadership and organizational structure of our retail
business that took effect at the beginning of fiscal 2012. The three-region structure includes: 1) Americas, inclusive of the US,
Canada, and Latin America; 2) Europe, Middle East, and Africa ("EMEA"); and 3) China/Asia Pacific ("CAP").
Accordingly, beginning with the first quarter of fiscal 2012, we revised our reportable operating segments from 1) US, 2)
International, and 3) Global Consumer Products Group to the following four reportable segments: 1) Americas, 2) EMEA, 3)
CAP, and 4) Global Consumer Products Group. In the second quarter of fiscal 2012, we renamed our Global Consumer
Products Group segment "Channel Development."
Effective at the beginning of fiscal 2013, we decentralized certain leadership functions in the areas of retail marketing and
category management, global store development and partner resources to support and align with the respective operating
segment presidents. In conjunction with these moves, certain general and administrative and depreciation and amortization
expenses associated with these functions, which were previously reported as unallocated corporate expenses within "Other," are
now reported within the respective reportable operating segments to align with the regions which they support.
Concurrent with the change in reportable operating segments and realignment of certain operating expenses noted above, we
revised our prior period financial information to reflect comparable financial information for the new segment structure and
reporting changes. Historical financial information presented herein reflects these changes. There was no impact on
consolidated net revenues, total operating expenses, operating income, or net earnings as a result of these changes.
Beginning in the second quarter of fiscal 2013, we removed unallocated corporate expenses from Other. Other is now referred
to as All Other Segments and includes Teavana, Seattle's Best Coffee and Evolution Fresh, as well as our Digital Ventures
business. Unallocated corporate operating expenses, which pertain primarily to corporate administrative functions that support
the operating segments, but are not specifically attributable to or managed by any segment, are presented as a reconciling item
between total segment operating results and consolidated financial results. While our consolidated results are not impacted, our
historical segment financial information has been revised to be consistent with the current presentation.
Americas, EMEA and CAP operations sell coffee and other beverages, complementary food, packaged coffees, single-serve
coffee products and a focused selection of merchandise through company-operated stores and licensed stores. Our Americas
segment is our most mature business and has achieved significant scale. Certain markets within our EMEA and CAP operations
are still in the early stages of development and require a more extensive support organization, relative to their current levels of
revenue and operating income, than our Americas operations. The Americas and EMEA segments also include certain
foodservice accounts, primarily in Canada and the UK. Our Americas segment also includes our La Boulange® retail stores.
Channel Development operations sell a selection of packaged coffees as well as a selection of premium Tazo® teas globally.
Channel Development operations also produce and sell a variety of ready-to-drink beverages, such as Frappuccino® coffee
drinks, Starbucks Doubleshot® espresso drinks and Starbucks Refreshers® beverages, as well as Starbucks- and Tazo-branded
single-serve products. The US foodservice business, which is included in the Channel Development segment, sells coffee and
other related products to institutional foodservice companies.