Starbucks 2015 Annual Report Download - page 75

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Trading Securities
Trading securities include equity mutual funds and exchange-traded funds. Our trading securities portfolio approximates a
portion of our liability under our Management Deferred Compensation Plan ("MDCP"), a defined contribution plan. Our
MDCP liability was $98.3 million and $106.4 million as of September 27, 2015 and September 28, 2014, respectively, which is
included in accrued compensation and related costs within accrued liabilities on the consolidated balance sheets. The changes
in net unrealized holding gains and losses in the trading securities portfolio included in earnings for fiscal years 2015, 2014 and
2013 were a net loss of $4.5 million, and net gains of $1.2 million, and $11.7 million, respectively. Gross unrealized holding
gains and losses on trading securities were not material as of September 27, 2015 and September 28, 2014.
Derivative Assets and Liabilities
Derivative assets and liabilities include foreign currency forward contracts, commodity futures contracts, collars and swaps,
which are described further in Note 3, Derivative Financial Instruments.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis include items such as property, plant and
equipment, goodwill and other intangible assets, equity and cost method investments, and other assets. These assets are
measured at fair value if determined to be impaired. Impairment of property, plant, and equipment is included at Note 1,
Summary of Significant Accounting Policies. During fiscal 2015 and 2014, there were no other material fair value adjustments.
Fair Value of Other Financial Instruments
The estimated fair value of our long-term debt based on the quoted market price (Level 2) is included at Note 9, Debt.
Note 5: Inventories (in millions)
Sep 27, 2015 Sep 28, 2014
Coffee:
Unroasted $ 529.4 $ 432.3
Roasted 279.7 238.9
Other merchandise held for sale 318.3 265.7
Packaging and other supplies 179.0 154.0
Total $ 1,306.4 $ 1,090.9
Other merchandise held for sale includes, among other items, serveware and tea. Inventory levels vary due to seasonality,
commodity market supply and price fluctuations.
As of September 27, 2015, we had committed to purchasing green coffee totaling $819 million under fixed-price contracts and
an estimated $266 million under price-to-be-fixed contracts. As of September 27, 2015, approximately $38 million of our price-
to-be-fixed contracts were effectively fixed through the use of futures contracts. Price-to-be-fixed contracts are purchase
commitments whereby the quality, quantity, delivery period, and other negotiated terms are agreed upon, but the date, and
therefore the price, at which the base "C" coffee commodity price component will be fixed has not yet been established. For
these types of contracts, either Starbucks or the seller has the option to "fix" the base "C" coffee commodity price prior to the
delivery date. Until prices are fixed, we estimate the total cost of these purchase commitments. We believe, based on
relationships established with our suppliers in the past, the risk of non-delivery on such purchase commitments is remote.
Starbucks Corporation 2015 Form 10-K 71