Starbucks 2015 Annual Report Download - page 88

The following table summarizes the activity related to our unrecognized tax benefits (in millions):
Sep 27, 2015 Sep 28, 2014 Sep 29, 2013
Beginning balance $ 112.7 $ 88.8 $ 75.3
Increase related to prior year tax positions 7.9 1.4 8.9
Decrease related to prior year tax positions (0.9)(2.2)(9.3)
Increase related to current year tax positions 32.0 26.7 19.3
Decrease related to current year tax positions (0.6)(1.9)(0.4)
Decreases related to settlements with taxing authorities (0.7)(0.1) —
Decreases related to lapsing of statute of limitations — — (5.0)
Ending balance $ 150.4 $ 112.7 $ 88.8
We are currently under examination, or may be subject to examination, by various jurisdictions inside and outside the U.S. as
well as U.S. state and municipal taxing jurisdictions for fiscal years 2006 through 2014. We are no longer subject to U.S.
federal or state examination for years prior to fiscal year 2010, with the exception of one state and one city. We are no longer
subject to examination in any material international markets prior to 2006.
There is a reasonable possibility that $31.2 million of the currently remaining unrecognized tax benefits may be recognized by
the end of fiscal 2016 as a result of a lapse of the statute of limitations and expected consent from taxing authorities.
Note 14: Earnings per Share
As discussed in Note 1, Summary of Significant Accounting Policies, on April 9, 2015, we effected a two-for-one stock split of
our $0.001 par value common stock for shareholders of record as of March 30, 2015. All share and per-share data presented in
this note has been retroactively adjusted to reflect this stock split.
Calculation of net earnings per common share ("EPS") — basic and diluted (in millions, except EPS):
Fiscal Year Ended Sep 27, 2015 Sep 28, 2014 Sep 29, 2013
Net earnings attributable to Starbucks $ 2,757.4 $ 2,068.1 $ 8.3
Weighted average common shares outstanding (for basic
calculation) 1,495.9 1,506.3 1,498.5
Dilutive effect of outstanding common stock options and RSUs 17.5 20.0 26.0
Weighted average common and common equivalent shares
outstanding (for diluted calculation) 1,513.4 1,526.3 1,524.5
EPS — basic $ 1.84 $ 1.37 $ 0.01
EPS — diluted $ 1.82 $ 1.35 $ 0.01
Potential dilutive shares consist of the incremental common shares issuable upon the exercise of outstanding stock options
(both vested and non-vested) and unvested RSUs, calculated using the treasury stock method. The calculation of dilutive shares
outstanding excludes out-of-the-money stock options (i.e., such options’ exercise prices were greater than the average market
price of our common shares for the period) because their inclusion would have been antidilutive. We had no out-of-the-money
stock options as of September 27, 2015 and September 29, 2013, respectively. There were 5.3 million out-of-the-money stock
options as of September 28, 2014.
Note 15: Commitments and Contingencies
Legal Proceedings
On November 12, 2013, the arbitrator in our arbitration with Kraft Foods Global, Inc. (now known as Kraft Foods Group, Inc.)
("Kraft") ordered Starbucks to pay Kraft $2,227.5 million in damages plus prejudgment interest and attorneys' fees. We
estimated prejudgment interest, which included an accrual through the estimated payment date, and attorneys' fees to be
approximately $556.6 million. As a result, we recorded a litigation charge of $2,784.1 million in our fiscal 2013 operating
results.
In the first quarter of fiscal 2014, Starbucks paid all amounts due to Kraft under the arbitration, including prejudgment interest
and attorneys' fees, and fully extinguished the litigation charge liability. Of the $2,784.1 million litigation charge accrued in the
84 Starbucks Corporation 2015 Form 10-K