Starbucks (SBUX) 10-Q 5 Aug 09 2009 Q3 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Billions, except Share data in Millions	9 Months Ended Jun. 28, 2009	Mar. 28, 2008
Document and Company Information [Abstract]
Entity Registrant Name	STARBUCKS CORPORATION
Entity Central Index Key	0000829224
Document Type	10-Q
Document Period End Date	2009-06-28
Amendment Flag	false
Current Fiscal Year End Date	--09-27
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		12.1
Entity Common Stock, Shares Outstanding	737.1

Condensed Consolidated Statemen

Condensed Consolidated Statements of Earnings (USD $)
In Millions, except Per Share data	3 Months Ended Jun. 28, 2009	3 Months Ended Jun. 29, 2008	9 Months Ended Jun. 28, 2009	9 Months Ended Jun. 29, 2008
Net revenues:
Company-operated retail	2013.8	2180.2	6151.8	6674.6
Specialty:
Licensing	301	281.3	918.1	860.5
Foodservice and other	89.1	112.5	282.5	332.5
Total specialty	390.1	393.8	1200.6	1,193
Total net revenues	2403.9	2,574	7352.4	7867.6
Cost of sales including occupancy costs	1043.4	1163.1	3283.7	3455.8
Store operating expenses	821.4	958.3	2577.6	2812.7
Other operating expenses	69.2	79.6	205.8	248.1
Depreciation and amortization expenses	133.7	139.8	402.1	411.1
General and administrative expenses	110.3	116.1	319.8	359.6
Restructuring charges	51.6	167.7	279.2	167.7
Total operating expenses	2229.6	2624.6	7068.2	7,455
Income from equity investees	29.7	29	78.4	77.1
Operating income (loss)	204	-21.6	362.6	489.7
Interest income and other, net	21.9	0.9	18.4	11.8
Interest expense	-8.6	-12.5	-30.5	-40.8
Earnings (loss) before income taxes	217.3	-33.2	350.5	460.7
Income taxes	65.8	-26.5	109.7	150.6
Net earnings (loss)	151.5	-6.7	240.8	310.1
Net earnings (loss) per common share - basic	0.2	-0.01	0.33	0.42
Net earnings (loss) per common share - diluted	0.2	-0.01	0.32	0.42
Weighted average shares outstanding:
Basic	739.4	731.7	737.9	730.7
Diluted	746.7	731.7	741.9	741.7

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (USD $)
In Millions	Jun. 28, 2009	Sep. 28, 2008
Current assets:
Cash and cash equivalents	$292	269.8
Short-term investments - available-for-sale securities	5.6	3
Short-term investments - trading securities	39.1	49.5
Accounts receivable, net	295.2	329.5
Inventories	703.6	692.8
Prepaid expenses and other current assets	145.1	169.2
Deferred income taxes, net	237.1	234.2
Total current assets	1717.7	1,748
Long-term investments - available-for-sale securities	68.1	71.4
Equity and cost investments	340.3	302.6
Property, plant and equipment, net	2594.2	2956.4
Other assets	287.9	261.1
Other intangible assets	67.7	66.6
Goodwill	257.2	266.5
TOTAL ASSETS	5333.1	5672.6
Current liabilities:
Commercial paper and short-term borrowings	0	713
Accounts payable	258.9	324.9
Accrued compensation and related costs	255.2	253.6
Accrued occupancy costs	164.5	136.1
Accrued taxes	131.9	76.1
Insurance reserves	153	152.5
Other accrued expenses	174.3	164.4
Deferred revenue	419.7	368.4
Current portion of long-term debt	0.4	0.7
Total current liabilities	1557.9	2189.7
Long-term debt	549.4	549.6
Other long-term liabilities	407.8	442.4
Total liabilities	2515.1	3181.7
Shareholders' equity:
Common stock ($0.001 par value) - authorized, 1,200.0 shares; issued and outstanding, 740.1 and 735.5 shares, respectively (includes 3.4 common stock units in both periods)	0.7	0.7
Additional paid-in-capital	86.9	0
Other additional paid-in-capital	39.4	39.4
Retained earnings	2643.2	2402.4
Accumulated other comprehensive income	47.8	48.4
Total shareholders' equity	2,818	2490.9
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	5333.1	5672.6

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
Share data in Millions	Jun. 28, 2009	Sep. 28, 2008
Common stock, par value	0.001	0.001
Common stock, shares authorized	1,200	1,200
Common stock, shares issued	740.1	735.5
Common stock, shares outstanding	740.1	735.5

2_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (USD $)
In Millions	9 Months Ended Jun. 28, 2009	9 Months Ended Jun. 29, 2008
OPERATING ACTIVITIES:
Net earnings	240.8	310.1
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	423.2	431.4
Provision for impairments and asset disposals	199	237.5
Deferred income taxes	-48.8	-89.6
Equity in income of investees	-45.5	-35.5
Distributions of income from equity investees	19.3	23.1
Stock-based compensation	63.1	59.7
Tax benefit from exercise of stock options	1.1	3.6
Excess tax benefit from exercise of stock options	-6.7	-11.8
Other	11	-0.2
Cash provided/(used) by changes in operating assets and liabilities:
Inventories	-12.4	32.6
Accounts payable	-60.4	-55.4
Accrued taxes	52.9	-19.6
Deferred revenue	48.2	76.9
Other operating assets and liabilities	131.9	115.9
Net cash provided by operating activities	1016.7	1078.7
INVESTING ACTIVITIES:
Purchase of available-for-sale securities	(7)	-64.8
Maturities and calls of available-for-sale securities	7.4	15.3
Sale of available-for-sale securities	5	75.9
Acquisitions, net of cash acquired	0	-22.5
Net purchases of equity, other investments and other assets	-13.6	-32.3
Additions to property, plant and equipment	-344.2	-733.9
Proceeds from sale of property, plant and equipment	42.1	0
Net cash used by investing activities	-310.3	-762.3
FINANCING ACTIVITIES:
Proceeds from issuance of commercial paper	20965.4	54961.8
Repayments of commercial paper	-21378.5	-55057.4
Proceeds from short-term borrowings	1,313	1.1
Repayments of short-term borrowings	(1,613)	-0.6
Proceeds from issuance of common stock	26.6	88.9
Excess tax benefit from exercise of stock options	6.7	11.8
Principal payments on long term debt	-0.5	-0.5
Repurchase of common stock	0	-311.4
Other	-1.2	-1.2
Net cash used by financing activities	-681.5	-307.5
Effect of exchange rate changes on cash and cash equivalents	-2.7	6.8
Net increase in cash and cash equivalents	22.2	15.7
CASH AND CASH EQUIVALENTS:
Beginning of period	269.8	281.3
End of period	292	297
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Net repayments of short-term borrowings and commercial paper for the period	-713.1	-95.1
Cash paid during the period for:
Interest, net of capitalized interest	22.6	31.6
Income taxes	100.6	248.4

Summary of Significant Accounti

Summary of Significant Accounting Policies
	9 Months Ended Jun. 28, 2009 USD / shares
Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Note 1: Summary of Significant Accounting Policies Financial Statement Preparation The unaudited condensed consolidated financial statements as of June28, 2009, and for the 13-week and 39-week periods ended June28, 2009 and June29, 2008, have been prepared by Starbucks Corporation (Starbucks or the Company) under the rules and regulations of the Securities and Exchange Commission (the SEC). In the opinion of management, the financial information for the 13-week and 39-week periods ended June28, 2009 and June29, 2008 reflects all adjustments and accruals, which are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The Company evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through August4, 2009, the day the financial statements were issued. The financial information as of September28, 2008 is derived from the Companys audited consolidated financial statements and notes for the fiscal year ended September28, 2008 (fiscal 2008), included in Item8 in the Fiscal 2008 Annual Report on Form 10-K (the 10-K). The information included in this Quarterly Report on Form 10-Q (the 10-Q) should be read in conjunction with managements discussion and analysis and notes to the financial statements in the 10-K. The results of operations for the 13-week and 39-week periods ended June28, 2009 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending September27, 2009 (fiscal 2009). Fair Value of Financial Instruments The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of those instruments. Details on the fair value of the Companys trading securities, available-for-sale securities and derivatives are included in Note 5, Fair Value Measurements. For equity securities of companies that are privately held, or where an observable quoted market price does not exist, the Company estimates fair value using a variety of valuation methodologies. Such methodologies include comparing the security with securities of publicly traded companies in similar lines of business, applying revenue multiples to estimated future operating results for the private company and estimating discounted cash flows for that company. Declines in fair value below the Companys carrying value deemed to be other than temporary are charged against net earnings. The fair value of the Companys debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities. The carrying value of short-term debt approximates fair value. The estimated fair value of Starbucks $550million of 6.25% Senior Notes was approximately $564million as of June28, 2009. Goodwill The Company tests its goodwill for impairment on an annual basis, or more frequently if circumstances indicate goodwill carrying values exceed reporting unit fair values. Fair value is estimated by projecting discounted cash flows from the repo

Restructuring Charges

Restructuring Charges
	9 Months Ended Jun. 28, 2009 USD / shares
Restructuring Charges Disclosure [Abstract]
Restructuring Charges	Note 2: Restructuring Charges In the third quarter of fiscal 2009, Starbucks continued to execute its restructuring efforts to position the Company for long-term profitable growth. These efforts are focused on both the global Company-operated store base and the non-retail support organization. Starbucks actions to rationalize its store portfolio have included the announcements (in July2008 and January2009) of plans to close a total of approximately 800 Company-operated stores in the US, restructure its Australia market, and close approximately 100 additional Company-operated stores internationally. Since those announcements, 676 US stores, 61 stores in Australia and 28 other International stores have been closed. 2009 Restructuring Charges US store closures In the third quarter of fiscal 2009, the Company closed 60 of the approximately 600 stores announced in July2008, bringing the total number of US closures under this restructuring action to 563 stores as of the end of the third quarter. The Company also closed 109 of the approximately 200 stores announced for closure in January2009, bringing the total number of closures under this restructuring action to 113 stores as of the end of the third quarter. The Company expects to complete the remaining US store closures by the end of fiscal 2009, and recognize the associated lease exit costs concurrently with the actual closures. International store closures - During the third quarter of fiscal 2009, the Company closed 25 of the approximately 100 stores announced for closure in January2009, bringing the total number of International closures under this action to 28 stores. The Company expects to complete the remaining closures in fiscal 2010, and will recognize the associated lease exit costs concurrently with the actual closures. Restructuring charges by type and a reconciliation of the associated accrued liability were as follows (in millions): Lease Exit Employee and Other Asset Termination Related Costs Impairments Costs Total Total expected costs $ 296.8 $ 327.4 $ 39.1 $ 663.3 Expenses recognized during the 13weeks ended June28, 2009 (1) 44.1 5.6 1.9 51.6 Expenses recognized during the 39weeks ended June28, 2009 (1) 135.1 125.8 18.3 279.2 Costs incurred during the 13weeks ended June28, 2009 (1) 44.0 5.6 1.9 51.5 Costs incurred during the 39weeks ended June28, 2009 (1) 120.4 125.8 18.3 264.5 Costs incurred cumulative to date 183.0 327.4 35.8 546.2 Accrued liability as of September28, 2008 $ 48.0 $ $ 5.4 $ 53.4 Costs incurred, excluding non-cash charges and credits (2) 139.2 18.2 157.4 Cash payments (109.6 ) (22.2 ) (131.8 ) Accrued liability as of June28, 2009 $ 77.6 $ $ 1.4 $ 79.0 Restructuring charges by re

Investments

Investments
	9 Months Ended Jun. 28, 2009 USD / shares
Investments Disclosure [Abstract]
Investments	Note 3: Investments Available-for-sale securities The Companys available-for-sale securities as of June28, 2009 were as follows (in millions): Gross Gross Unrealized Unrealized Amortized Holding Holding Fair Cost Losses Gains Value Short-term investments Corporate debt securities $ 5.5 $ $ 0.1 $ 5.6 Long-term investments State and local government obligations $ 58.4 $ (2.5 ) $ $ 55.9 Corporate debt securities 11.5 0.7 12.2 Total long-term investments $ 69.9 $ (2.5 ) $ 0.7 $ 68.1 Total available-for-sale securities $ 75.4 $ (2.5 ) $ 0.8 $ 73.7 For available-for-sale securities, proceeds from sales were $5.0million for both the 13weeks and 39weeks ended June28, 2009. Additionally, in the third quarter of fiscal 2009, one of the Companys auction rate securities (ARS) was called at par value of $7.4million. There were immaterial amounts of realized gains and realized losses during the 13-week and 39-week periods. As of June28, 2009, the Companys long-term available-for-sale securities of $68.1million included $55.9million invested in ARS. ARS have long-dated maturities but provide liquidity through a Dutch auction process that resets the applicable interest rate at pre-determined calendar intervals. Due to the auction failures that began in mid-February2008, these securities became illiquid and were classified as long-term investments. The investment principal associated with the failed auctions will not be accessible until: successful auctions resume; an active secondary market for these securities develops; the issuers replace these securities with another form of financing; or final payments are made according to the contractual maturities of the debt issues which range from 21 to 36years. The Company intends to hold the ARS until it can recover the full principal amount and has the ability to do so based on other sources of liquidity. The Company expects such recoveries to occur prior to the contractual maturities. The Company has $2.5million of accumulated unrealized losses on ARS, determined to be temporary, which is included in accumulated other comprehensive income as a reduction in shareholders equity. The Companys ARS are collateralized by portfolios of student loans, substantially all of which are guaranteed by the United States Department of Education. As of June28, 2009, approximately $41.6 million in ARS was rated triple-A by two or more of the following major rating agencies: Moodys, Standard Poors and Fitch Ratings. All of the remaining securities were rated investment grade. The following table presents the length of time available-for-sale securities were in continuous unrealized loss positions but were not deemed to be other-than-temporarily impaired, as of June28, 2009 (in m

Derivative Financial Instrument

Derivative Financial Instruments
	9 Months Ended Jun. 28, 2009 USD / shares
Derivative Financial Instruments [Abstract]
Derivative Financial Instruments	Note 4: Derivative Financial Instruments The Company manages its exposure to certain market-based risks through an umbrella risk management policy. Under this policy, market-based risks are quantified and evaluated for potential mitigation strategies, such as entering into hedging transactions. Hedging instruments may include derivatives used to hedge interest rates, commodity prices, and foreign currency denominated revenues, purchases, assets and liabilities. The Company records all derivatives on the consolidated balance sheets at fair value. For a cash flow hedge, the effective portion of the derivatives gain or loss is initially reported as a component of other comprehensive income (OCI) and subsequently reclassified into net earnings when the hedged exposure affects net earnings. For a net investment hedge, the effective portion of the derivatives gain or loss is reported as a component of OCI. See Note 5 for additional information on the Companys fair value measurements related to derivative instruments. Cash Flow Hedges The Company and certain subsidiaries enter into cash flow derivative instruments to hedge portions of anticipated revenue streams and inventory purchases in currencies other than the entitys functional currency. Outstanding forward contracts, which comprise the majority of the Companys derivative instruments, hedge monthly forecasted revenue transactions denominated in Japanese yen and Canadian dollars, as well as forecasted inventory purchases denominated in US dollars for foreign operations. From time to time, the Company also uses futures contracts to hedge the variable price component for a small portion of its price-to-be-fixed green coffee purchase contracts. The Company had net derivative gains of $5.0million, net of taxes, in accumulated OCI as of June 28, 2009, related to cash flow hedges. Of this amount, $0.6million of net derivative gains pertains to hedging instruments that will be dedesignated within 12months and will also continue to experience fair value changes before affecting earnings. No cash flow hedges were discontinued during the 13-week and 39-week periods ended June28, 2009 and June29, 2008. Outstanding contracts will expire within 39months. Net Investment Hedges Net investment derivative instruments are used to hedge the Companys equity method investment in Starbucks Coffee Japan, Ltd. (Starbucks Japan) as well as the Companys net investments in its Canada, UK and China subsidiaries, to minimize foreign currency exposure. The Company had net derivative losses of $15.4million, net of taxes, in accumulated OCI as of June 28, 2009, related to net investment derivative hedges. Outstanding contracts will expire within 20 months. Other Derivatives The Company enters into certain foreign currency forward contracts that are not designated as hedging instruments under SFAS 133 to mitigate the translation risk of certain balance sheet items. These contracts are recorded at fair value, with the changes in fair value recognized in Interest income and other, net on the consolidated statements of earnings. The impact of the fair value adjustments on earnings is l

Fair Value Measurements

Fair Value Measurements
	9 Months Ended Jun. 28, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 5: Fair Value Measurements The Company adopted SFAS 157 for its financial assets and liabilities effective September29, 2008, and will adopt SFAS 157 for nonfinancial assets and liabilities in the first fiscal quarter of 2010. The two-step adoption is in accordance with FSP FAS 157-2, which allows for the delay of the effective date of SFAS 157 for nonfinancial assets and liabilities. The Company continues to evaluate the potential impact of the adoption of SFAS 157 fair value measurements related to its property, plant and equipment, goodwill and other intangible assets. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS 157 also establishes a fair value hierarchy that prioritizes the inputs used to measure fair value: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in managements best estimate of fair value. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the financial assets and liabilities measured at fair value on a recurring basis as of June28, 2009 (in millions): Jun 28, 2009 Level 1 Level 2 Level 3 Assets: Trading securities $ 39.2 $ 39.2 $ $ Available-for-sale securities 73.7 17.8 55.9 Derivatives 25.3 25.3 Total $ 138.2 $ 39.2 $ 43.1 $ 55.9 Liabilities: Derivatives $ 28.1 $ $ 28.1 $ Trading securities include mutual funds and exchange-traded-funds, which the Company holds as an economic hedge against its liability under the Management Deferred Compensation Plan (MDCP). For these securities, the Company uses quoted prices in active markets for identical assets to determine their fair value, thus they are considered to be Level 1 instruments. Available-for-sale securities include corporate bonds and auction-rate securities (ARS) collateralized by student loans, substantially all of which are guaranteed by the United States Department of Education. The Company uses observable direct and indirect inputs for corporate bonds, which are considered Level 2 instruments. Level 3 instruments are comprised solely of ARS, all of which are considered to be illiquid due to the auction failures that began in mid-February 2008. The Company values ARS using an internally developed valuation model, whose inputs include interest rate curves, credit and liquidity spreads, and effective maturity. Derivative assets and liabilities include foreign currency forward contracts

Inventories

Inventories
	9 Months Ended Jun. 28, 2009 USD / shares
Inventories [Abstract]
Inventories	Note 6: Inventories Inventories consisted of the following (in millions): Jun 28, Sep 28, Jun 29, 2009 2008 2008 Coffee: Unroasted $ 451.4 $ 377.7 $ 374.7 Roasted 56.5 89.6 84.8 Other merchandise held for sale 92.2 120.6 103.9 Packaging and other supplies 103.5 104.9 99.3 Total $ 703.6 $ 692.8 $ 662.7 As of June28, 2009, the Company had committed to purchasing green coffee totaling $205million under fixed-price contracts and an estimated $95million under price-to-be-fixed contracts. The Company believes, based on relationships established with its suppliers in the past, the risk of non-delivery on such purchase commitments is remote.

Property, Plant and Equipment

Property, Plant and Equipment
	9 Months Ended Jun. 28, 2009 USD / shares
Property Plant And Equipment Disclosure [Abstract]
Property, Plant and Equipment	Note 7: Property, Plant and Equipment Property, plant and equipment consisted of the following (in millions): Jun 28, Sep 28, 2009 2008 Land $ 57.6 $ 59.1 Buildings 235.3 217.7 Leasehold improvements 3,308.6 3,363.1 Store equipment 1,076.7 1,045.3 Roasting equipment 272.3 220.7 Furniture, fixtures and other 588.2 517.8 Work in progress 124.1 293.6 5,662.8 5,717.3 Less accumulated depreciation and amortization (3,068.7 ) (2,760.9 ) Property, plant and equipment, net $ 2,594.1 $ 2,956.4

Debt

Debt
	9 Months Ended Jun. 28, 2009 USD / shares
Debt [Abstract]
Debt	Note 8: Debt The Companys debt consisted of the following (in millions): Jun 28, Sep 28, 2009 2008 Commercial paper program (weighted average interest rate 3.4%) $ $ 413.0 Revolving credit facility (weighted average interest rate of 3.5%) 300.0 Current portion of long-term debt 0.4 0.7 Short-term debt 0.4 713.7 6.25% Senior Notes (due Aug 2017) 549.3 549.2 Other long-term debt 0.1 0.4 Long-term debt 549.4 549.6 Total debt $ 549.8 $ 1,263.3

Other Long term Liabilities

Other Long term Liabilities
	9 Months Ended Jun. 28, 2009 USD / shares
Other Long Term Liabilities [Abstract]
Other Long-term Liabilities	Note 9: Other Long-term Liabilities The Companys other long-term liabilities consisted of the following (in millions): Jun 28, Sep 28, 2009 2008 Deferred rent $ 275.4 $ 303.9 Unrecognized tax benefits 54.6 60.4 Asset retirement obligations 43.4 44.6 Minority interest 15.5 18.3 Other 18.9 15.2 Total $ 407.8 $ 442.4

Shareholders Equity

Shareholders Equity
	9 Months Ended Jun. 28, 2009 USD / shares
Shareholders' Equity [Abstract]
Shareholders' Equity	Note 10: Shareholders Equity In addition to 1.2billion shares of authorized common stock with $0.001 par value per share, the Company has authorized 7.5million shares of preferred stock, none of which was outstanding as of June28, 2009. Share repurchase activity under the Companys publicly announced plans was as follows (in millions, except for average price data): 39 Weeks Ended Jun 28, 2009 Jun 29, 2008 Number of shares acquired 12.2 Average price per share of acquired shares $ 24.12 Total accrual-based cost of acquired shares $ 295.3 Total cash-based cost of acquired shares $ 311.4 Comprehensive Income Comprehensive income, net of related tax effects, was as follows (in millions): 13 Weeks Ended 39 Weeks Ended Jun 28, 2009 Jun 29, 2008 Jun 28, 2009 Jun 29, 2008 Net earnings/(loss) $ 151.5 $ (6.7 ) $ 240.8 $ 310.1 Unrealized holding gains/(losses) on available-for-sale securities 0.7 (0.6 ) 3.0 (0.6 ) Unrealized holding gains/(losses) on cash flow hedging instruments (10.7 ) 0.7 14.9 1.1 Unrealized holding gains/(losses) on net investment hedging instruments (5.1 ) 2.8 (2.4 ) (2.6 ) Reclassification adjustment for net (gains)/losses realized in net earnings for cash flow hedges (1.1 ) 1.2 (0.6 ) 3.6 Net unrealized gain/(loss) (16.2 ) 4.1 14.9 1.5 Translation adjustment 26.6 (9.6 ) (15.5 ) 23.5 Total comprehensive income/(loss) $ 161.9 $ (12.2 ) $ 240.2 $ 335.1 The components of accumulated other comprehensive income, net of tax, were as follows (in millions): Jun 28, 2009 Sep 28, 2008 Net unrealized gains/(losses)on available-for-sale securities $ (1.1 ) $ (4.1 ) Net unrealized gains/(losses)on hedging instruments (10.3 ) (22.2 ) Translation adjustment 59.2 74.7 Accumulated other comprehensive income $ 47.8 $ 48.4

Employee Stock Plans

Employee Stock Plans
	9 Months Ended Jun. 28, 2009 USD / shares
Employee Stock Plans [Abstract]
Employee Stock Plans	Note 11: Employee Stock Plans The Company maintains several equity incentive plans under which it may grant non-qualified stock options, incentive stock options, restricted stock, restricted stock units (RSUs), or stock appreciation rights to employees, non-employee directors and consultants. As of June28, 2009, there were 36.5million shares of common stock available for issuance pursuant to future equity-based compensation awards. Stock Option Exchange Program On March18, 2009, Starbucks shareholders approved a proposal to allow for a one-time stock option exchange program, designed to provide eligible employees an opportunity to exchange certain outstanding underwater stock options for a lesser amount of new options to be granted with lower exercise prices. Stock options eligible for exchange were those with an exercise price per share greater than $19.00 that were granted prior to December1, 2007 under the Companys Amended and Restated 2005 Long-Term Equity Incentive Plan (the 2005 Plan), the Amended and Restated Key Employee Stock Option Plan-1994 or the 1991 Company-Wide Stock Option Plan. On May1, 2009 Starbucks commenced the option exchange program, which expired on May29, 2009. A total of 14.3 million eligible stock options were tendered by employees, representing 65% of the total stock options eligible for exchange. On June1, 2009, the Company granted an aggregate of 4.7million new stock options in exchange for the eligible stock options surrendered. The exercise price of the new stock options is $14.92, which was the closing price of Starbucks common stock on June1, 2009. The new stock options were granted under the 2005 Plan. No incremental stock option expense was recognized for the exchange, which was determined to be fair value neutral under SFAS 123(R), because the fair value of the surrendered options, as determined based on the Black-Scholes option pricing model, was equal to the fair value, in the aggregate, of the eligible options being exchanged. The Company also has employee stock purchase plans (ESPP). The ESPP for US employees was amended in March 2009 to change the employees purchase price to 95% of the fair market value of the stock on the last business day of the quarterly offering period. Prior to the amendment, the employees purchase price was 85% of the lesser of the fair market value of the stock on the first business day or the last business day of the quarterly offering period. The following table presents total stock-based compensation expense recognized in the consolidated statements of earnings (in millions): 13 Weeks Ended 39 Weeks Ended Jun 28, 2009 Jun 29, 2008 Jun 28, 2009 Jun 29, 2008 Stock option expense $ 16.6 $ 15.4 $ 47.7 $ 47.3 RSU expense 3.9 2.1 10.4 3.1 ESPP expense 0.1 2.9 5.0 9.3 Total stock-based compensation expense $ 20.6 $ 20.4 $ 63.1 $ 59.7 Options The following table presents the weighted average assumptions used to value stock options granted outside of the stock option exc

Earnings Per Share

Earnings Per Share
	9 Months Ended Jun. 28, 2009 USD / shares
Earnings Per Share Disclosure [Abstract]
Earnings Per Share	Note 12: Earnings/(Loss) Per Share The following table presents the calculation of net earnings/(loss) per common share (EPS) basic and diluted (in millions, except EPS): 13 Weeks Ended 39 Weeks Ended Jun 28, Jun 29, Jun 28, Jun 29, 2009 2008 2009 2008 Net earnings/(loss) $ 151.5 $ (6.7 ) $ 240.8 $ 310.1 Weighted average common shares and common stock units outstanding (for basic calculation) 739.4 731.7 737.9 730.7 Dilutive effect of outstanding common stock options and RSUs 7.3 4.0 11.0 Weighted average common and common equivalent shares outstanding (for diluted calculation) 746.7 731.7 741.9 741.7 EPS basic $ 0.20 $ (0.01 ) $ 0.33 $ 0.42 EPS diluted $ 0.20 $ (0.01 ) $ 0.32 $ 0.42 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, using the treasury stock method. Potential dilutive shares are excluded from the computation of earnings per share if their effect is antidilutive. The number of antidilutive options and RSUs totaled 37.3million for the 13-week period ended June 28, 2009. Potential dilutive options and RSUs of 69.8million for the 13-week period ended June 29, 2008 were not included in the computation of diluted net loss per common share, because to do so would have decreased the loss per share for the period. The number of antidilutive options and RSUs totaled 62.6million and 40.7million for the 39-week periods ended June28, 2009 and June29, 2008, respectively.

Commitments and Contingencies

Commitments and Contingencies
	9 Months Ended Jun. 28, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 13: Commitments and Contingencies Guarantees The following table presents information on unconditional guarantees as of June28, 2009 (in millions): Fair value estimate Maximum Year Guarantee recorded on Exposure Expires in Balance Sheet Japanese yen-denominated bank loans (Starbucks Japan an unconsolidated equity investee) $ 3.5 2014 $ (1) Borrowings of other unconsolidated equity investees $ 17.1 2012 $ 3.7 (1) Since there has been no modification of these loan guarantees subsequent to the Companys adoption of FASB Interpretation No.45, Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, Starbucks has applied the disclosure provisions only and has not recorded the guarantees on its consolidated balance sheets. Legal Proceedings On October8, 2004, a former hourly employee of the Company filed a lawsuit in San Diego County Superior Court entitled Jou Chau v. Starbucks Coffee Company. The lawsuit alleges that the Company violated the California Labor Code by allowing shift supervisors to receive tips. More specifically, the lawsuit alleges that since shift supervisors direct the work of baristas, they qualify as agents of the Company and are therefore excluded from receiving tips under California Labor Code Section351, which prohibits employers and their agents from collecting or receiving tips left by patrons for other employees. The lawsuit further alleges that because the tipping practices violate the Labor Code, they also are unfair practices under the California Unfair Competition Law. In addition to recovery of an unspecified amount of tips distributed to shift supervisors, the lawsuit seeks penalties under California Labor Code Section203 for willful failure to pay wages due. Plaintiff also seeks attorneys fees and costs. On February28, 2008, the trial court ruled against the Company in the liability phase of the trial and on March20, 2008 the court ordered the Company to pay approximately $87million in restitution, plus interest. The Company appealed the decision of the trial court and on June2, 2009 the California Court of Appeal reversed the trial courts judgment in its entirety and ruled in favor of Starbucks. The Court of Appeal denied plaintiffs petition for rehearing and reaffirmed its ruling on July2, 2009. The plaintiffs have filed a petition with the California Supreme Court on July13, 2009 seeking review of the decision of the Court of Appeal. Starbucks believes that the likelihood that the Company will ultimately incur a loss in connection with this litigation is reasonably possible rather than probable. The Company has not accrued any loss related to this litigation. On June30, 2005, three individuals, Erik Lords, Hon Yeung, and Donald Brown, filed a lawsuit in Orange County Superior Court, California. The lawsuit alleges that the Company violated the California Labor Code section 432.8 by asking job applicants to disclose at the time of application convictions for marijuana-related offenses more than two years

Segment Reporting

Segment Reporting
	9 Months Ended Jun. 28, 2009 USD / shares
Segment Reporting [Abstract]
Segment Reporting	Note 14: Segment Reporting Segment information is prepared on the same basis that the Companys management reviews financial information for operational decision making purposes. The tables below present information by operating segment (in millions): United Unallocated States International Global CPG Corporate(1) Total 13 Weeks Ended June28, 2009 Company-operated retail revenues $ 1,613.2 $ 400.6 $ $ $ 2,013.8 Licensing revenues 129.4 65.3 106.3 301.0 Foodservice and other revenues 77.6 11.5 89.1 Total net revenues 1,820.2 477.4 106.3 2,403.9 Depreciation and amortization expenses 95.6 26.3 11.8 133.7 Income from equity investees 15.5 14.2 29.7 Operating income/(loss) 204.6 34.4 49.2 (84.2 ) 204.0 Earnings/(loss) before income taxes 212.0 47.7 49.2 (91.6 ) 217.3 Net impairment and disposition losses 32.9 6.8 13.6 53.3 June29, 2008 Company-operated retail revenues $ 1,730.4 $ 449.8 $ $ $ 2,180.2 Licensing revenues 119.2 71.4 90.7 281.3 Foodservice and other revenues 98.1 14.4 112.5 Total net revenues 1,947.7 535.6 90.7 2,574.0 Depreciation and amortization expenses 101.9 27.9 10.0 139.8 Income/(loss) from equity investees (0.6 ) 14.8 14.8 29.0 Operating income/(loss) (27.8 ) 35.5 48.7 (78.0 ) (21.6 ) Earnings/(loss) before income taxes (25.9 ) 35.5 48.7 (91.5 ) (33.2 ) Net impairment and disposition losses 194.2 1.2 (0.3 ) 195.1 39 Weeks Ended June28, 2009 Company-operated retail revenues $ 4,977.2 $ 1,174.6 $ $ $ 6,151.8 Licensing revenues 404.2 198.5 315.4 918.1 Foodservice and other revenues 248.8 33.7 282.5 Total net revenues 5,630.2 1,406.8 315.4 7,352.4 Depreciation and amortization expenses 290.2 75.6 36.3 402.1 Income from equity investees 0.5 38.5 39.4 78.4 Operating income/(loss) 429.2 53.3 146.0 (265.9 ) 362.6 Earnings/(loss) before income taxes 447.0 60.5 146.0 (303.0 ) 350.5 Net impairment and disposition losses 106.2 38.2 54.6 199.0 June29, 2008 Company-operated retail revenues $ 5,346.2 $ 1,328.4 $ $ $ 6,674.6 Licensing revenues 372.2 200.7 287.6 860.5 Foodservice and other revenues 291.8 40.7