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Note 6: Equity and Cost Investments (in millions)
Sep 27,
2015
Sep 28,
2014
Equity method investments $ 306.4 $ 469.3
Cost method investments 45.6 45.6
Total $ 352.0 $ 514.9
Equity Method Investments
As of September 27, 2015, we had a 50% ownership interest in each of the following international equity method investees:
President Starbucks Coffee (Shanghai); Starbucks Coffee Korea Co., Ltd.; President Starbucks Coffee Corporation (Taiwan)
Company Limited; and Tata Starbucks Limited (India). In addition, we had a 49% ownership interest in Starbucks Coffee
España, S.L. ("Starbucks Spain"). These international entities operate licensed Starbucks® retail stores.
We also license the rights to produce and distribute Starbucks-branded products to our 50% owned joint venture, The North
American Coffee Partnership with the Pepsi-Cola Company, which develops and distributes bottled Starbucks® beverages,
including Frappuccino® coffee drinks, Starbucks Doubleshot® espresso drinks, Starbucks Refreshers® beverages, and Starbucks
Discoveries Iced Café Favorites®.
On September 23, 2014, we entered into a two-step tender offer bid agreement to acquire the remaining 60.5% interest in
Starbucks Japan, at the time a 39.5% owned equity method investment. Upon the completion of the first tender offer step in the
first quarter of fiscal 2015, we obtained a controlling interest in Starbucks Japan and began consolidating its results instead of
applying equity method accounting. See further discussion at Note 2, Acquisitions and Divestitures.
In the fourth quarter of fiscal 2014, we sold our 50% equity method ownership interest in our Malaysian joint venture, Berjaya
Starbucks Coffee Company Sdn. Bhd., to our joint venture partner, Berjaya Food Berhad, for a total purchase price of $88.0
million. This transaction resulted in a gain of $67.8 million, which was included in net interest income and other on our
consolidated statements of earnings.
In the fourth quarter of fiscal 2013, we acquired a 49% equity method ownership interest in Starbucks Spain from our licensee
partner Sigla S.A. (Grupo Vips) for approximately $33 million in cash.
Our share of income and losses from our equity method investments is included in income from equity investees on our
consolidated statements of earnings. Also included in this line item is our proportionate share of gross profit resulting from
coffee and other product sales to, and royalty and license fee revenues generated from, equity investees. Revenues generated
from these related parties were $153.4 million, $219.2 million, and $205.1 million in fiscal years 2015, 2014, and 2013,
respectively. Related costs of sales were $94.5 million, $121.2 million, and $115.4 million in fiscal years 2015, 2014, and 2013,
respectively. As of September 27, 2015 and September 28, 2014, there were $36.7 million and $54.9 million of accounts
receivable from equity investees, respectively, on our consolidated balance sheets, primarily related to product sales and royalty
revenues.
Summarized combined financial information of our equity method investees, which represent 100% of the investees’ financial
information (in millions):
Financial Position as of
Sep 27,
2015
Sep 28,
2014
Current assets $ 402.8 $ 701.3
Noncurrent assets 578.8 873.9
Current liabilities 490.0 615.6
Noncurrent liabilities 38.7 79.1
Results of Operations for Fiscal Year Ended
Sep 27,
2015
Sep 28,
2014
Sep 29,
2013
Net revenues $ 2,688.0 $ 3,461.3 $ 3,018.7
Operating income 426.4 467.7 434.8
Net earnings 392.1 382.6 358.0
72 Starbucks Corporation 2015 Form 10-K