Equity and Cost Investments (in millions)



	Sep 28, 2014		Sep 29, 2013
Equity method investments	$	469.3	$	450.9
Cost method investments	45.6		45.6
Total	$	514.9	$	496.5

Equity Method Investments

As of September 28, 2014, we had a 50% ownership interest in each of the following international equity method investees: Starbucks Coffee Korea Co., Ltd.; President Starbucks Coffee Corporation (Taiwan); President Starbucks Coffee (Shanghai) Company Limited; and Tata Starbucks Limited (India). In addition, we had a 49% ownership interest in Starbucks Coffee España, S.L. ("Starbucks Spain") and a 39.5% ownership interest in Starbucks Coffee Japan, Ltd. ("Starbucks Japan"). 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^®.

As of September 28, 2014, the aggregate market value of our investment in Starbucks Japan was approximately $762 million, determined based on its available quoted market price, which exceeds its carrying value of $181 million. On October 31, 2014, we acquired an additional 39.5% ownership interest in Starbucks Japan, converting it to a consolidated company-operated market. See further discussion at Note 18, Subsequent Event.

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 in the 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 in the 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 $219.2 million, $205.1 million, and $190.3 million in fiscal years 2014, 2013, and 2012, respectively. Related costs of sales were $121.2 million, $115.4 million, and $111.0 million in fiscal years 2014, 2013, and 2012, respectively. As of September 28, 2014 and September 29, 2013, there were $54.9 million and $48.3 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 28, 2014		Sep 29, 2013
Current assets	$	701.3	$	675.8
Noncurrent assets	873.9		783.3
Current liabilities	615.6		466.6
Noncurrent liabilities	79.1		148.9



Results of Operations for Fiscal Year Ended	Sep 28, 2014		Sep 29, 2013		Sep 30, 2012
Net revenues	$	3,461.3	$	3,018.7	$	2,796.7
Operating income	467.7		434.8		353.5
Net earnings	382.6		358.0		286.7

Cost Method Investments

As of September 28, 2014, we had $19 million invested in equity interests of entities that develop and operate Starbucks^® licensed stores in several global markets. We have the ability to acquire additional interests in some of these cost method investees at certain intervals. Depending on our total percentage ownership interest and our ability to exercise significant influence over financial and operating policies, additional investments may require a retroactive application of the equity method of accounting. We also have a $25 million investment in the preferred stock of Square, Inc.

During the fourth quarter of fiscal 2013, we sold our 18% interest in Starbucks Coffee Argentina S.R.L. to our joint venture partner Alsea, S.A.B. de C.V., for a total purchase price of $4.4 million. This transaction resulted in a loss of $1.0 million, which was included in net interest income and other in the consolidated statements of earnings.

During the second quarter of fiscal 2013, we sold our 18% interest in Cafe Sirena S. de R.L. de CV (a Mexican limited liability company), to our controlling joint venture partner, SC de Mexico, S.A. de CV, owned by Alsea, S.A.B. de C.V., for a total purchase price of $50.3 million, which included final working capital adjustments. This transaction resulted in a gain of $35.2 million, which was included in net interest income and other in the consolidated statements of earnings.