Starbucks 2015 Annual Report Download - page 41

All Other Segments
Fiscal Year Ended
Sep 28,
2014
Sep 29,
2013
%
Change
Net revenues:
Company-operated stores $ 238.2 $ 150.4 58.4 %
Licensed stores 5.1 9.5 (46.3 )%
CPG, foodservice and other 253.6 230.2 10.2
Total net revenues 496.9 390.1 27.4
Cost of sales 287.2 239.8 19.8
Store operating expenses 104.5 66.5 57.1
Other operating expenses 74.6 71.7 4.0
Depreciation and amortization expenses 15.2 11.7 29.9
General and administrative expenses 42.2 34.9 20.9
Total operating expenses 523.7 424.6 23.3
Operating loss $ (26.8) $ (34.5)(22.3)%
All Other Segments includes Teavana, Seattle’s Best Coffee, Evolution Fresh, and Digital Ventures.
Total net revenues for All Other Segments increased $107 million, primarily due to having an additional quarter of Teavana
revenues in fiscal 2014 as Teavana was acquired at the beginning of the second quarter of fiscal 2013 (approximately $92
million).
Total operating expenses increased $99 million, primarily due to having an additional quarter of Teavana expenses in fiscal
2014 as Teavana was acquired at the beginning of the second quarter of fiscal 2013.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Cash and Investment Overview
Starbucks cash and investments were $1.9 billion and $2.2 billion as of September 27, 2015 and September 28, 2014,
respectively. We actively manage our cash and investments in order to internally fund operating needs, make scheduled interest
and principal payments on our borrowings, make acquisitions, and return cash to shareholders through common stock cash
dividend payments and share repurchases. Our investment portfolio primarily includes highly liquid available-for-sale
securities, including corporate debt securities, government treasury securities (foreign and domestic), mortgage and asset-
backed securities, state and local government obligations and agency obligations. As of September 27, 2015, approximately
$1.0 billion of cash and investments were held in foreign subsidiaries.
Borrowing capacity
Our $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, is available for working capital, capital expenditures and other corporate purposes,
including acquisitions and share repurchases. During the second quarter of fiscal 2015, we extended the duration of our credit
facility, which is now set to mature on January 21, 2020, and amended certain facility fees and borrowing rates. 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 credit facility will bear interest at a variable rate based on LIBOR, and, for U.S.
dollar-denominated loans under certain circumstances, a Base Rate (as defined in the 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 credit facility. The current applicable margin is 0.565% for Eurocurrency Rate Loans and 0.00% for Base Rate
Loans. The 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 of September 27, 2015, we were in
compliance with all applicable covenants. No amounts were outstanding under our credit facility as of September 27, 2015.
During the first quarter of fiscal 2016, we replaced the 2013 credit facility with a new $1.5 billion unsecured, revolving credit
facility (the "2016 credit facility") with various banks, which is now set to mature on November 6, 2020. The terms and
conditions of the 2016 credit facility are substantially consistent with those of the 2013 credit facility.
Under our commercial paper program, 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 exceed 397 days from the date of issue.
Starbucks Corporation 2015 Form 10-K 37