Derivative Financial Instruments (Tables)

9 Months Ended

Jun. 28, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Gains and Losses Included in AOCI and Expected to be Reclassified into Earnings in 12 Months, Net of Tax

Gains and losses on derivative contracts and foreign currency-denominated debt designated as hedging instruments included in AOCI and expected to be reclassified into earnings within 12 months, net of tax (in millions):


	Net Gains/(Losses) Included in AOCI						Net Gains/(Losses) Expected to be Reclassified from AOCI into Earnings within 12 Months	Outstanding Contract/Debt Remaining Maturity (Months)
	Jun 28, 2020		Sep 29, 2019
Cash Flow Hedges:
Interest rates	$	(93.7)	$	0.5	$	8.7	148
Cross-currency swaps	5.3		(1.4)		—		53
Foreign currency - other	17.9		12.9		10.1		36
Coffee	(13.6)		(1.0)		(10.4)		18
Dairy	0.4		—		0.4		8
Net Investment Hedges:
Foreign currency	16.0		16.0		—		0
Cross-currency swaps	38.4		—		—		111
Foreign currency debt	(27.1)		(26.1)		—		45

Pretax Gains and Losses on Derivative Contracts Designated as Hedging Instruments Recognized in OCI and Reclassifications from AOCI to Earnings

Pre-tax gains and losses on derivative contracts and foreign currency-denominated long-term debt designated as hedging instruments recognized in OCI and reclassifications from AOCI to earnings (in millions):


	Quarter Ended
	Gains/(Losses) Recognized in OCI Before Reclassifications						Gains/(Losses) Reclassified from AOCI to Earnings							Location of gain/(loss)
	Jun 28, 2020		Jun 30, 2019		Jun 28, 2020		Jun 30, 2019
Cash Flow Hedges:
Interest rates	$	(8.5)	$	5.3	$	(0.7)	$	1.1		Interest expense
Cross-currency swaps	(1.0)		(5.8)		1.5		0.1			Interest expense
									(6.9)		(9.9)		Interest income and other, net
Foreign currency - other	(14.5)		(2.7)		—		2.2			Licensed stores revenues
									(5.0)		1.4		Product and distribution costs
									3.9		—		Interest income and other, net⁽¹⁾
Coffee	(13.2)		—		—		—			Product and distribution costs
Dairy	8.6		—		4.1		—			Product and distribution costs
									(1.1)		—		Interest income and other, net⁽¹⁾
Net Investment Hedges:

Cross-currency swaps	(7.3)		—		2.9		—			Interest expense
Foreign currency debt	(17.3)		(21.1)		—		—
⁽¹⁾As a result of the global COVID-19 impacts, Starbucks discontinued cash flow hedges during the quarter ended June 28, 2020.

	Three Quarters Ended
	Gains/(Losses) Recognized in OCI Before Reclassifications						Gains/(Losses) Reclassified from AOCI to Earnings							Location of gain/(loss)
	Jun 28, 2020		Jun 30, 2019		Jun 28, 2020		Jun 30, 2019
Cash Flow Hedges:
Interest rates	$	(129.1)	$	(25.3)	$	0.6	$	3.9		Interest expense
Cross-currency swaps	8.1		(8.4)		0.9		(0.5)			Interest expense
									(1.1)		(19.7)		Interest income and other, net
Foreign currency - other	7.6		9.0		4.0		4.9			Licensed stores revenues
									(7.7)		3.6		Product and distribution costs
							6.1			—		Interest income and other, net⁽¹⁾
Coffee	(14.3)		—		—		(0.3)			Product and distribution costs
Dairy	3.6		—		4.8		—			Product and distribution costs
							(1.7)			—		Interest income and other, net⁽¹⁾
Net Investment Hedges:

Cross-currency swaps	61.4		—		10.1		—			Interest expense
Foreign currency debt	(4.7)		(40.1)		—		—
⁽¹⁾As a result of the global COVID-19 impacts, Starbucks discontinued cash flow hedges during the quarters ended March 29, 2020 and June 28, 2020.

Pretax Gains and Losses on Derivative Contracts Not Designated as Hedging Instruments Recognized in Earnings

Pre-tax gains and losses on non-designated derivatives and designated fair value hedging instruments and the related fair value hedged item recognized in earnings (in millions):


		Gains/(Losses) Recognized in Earnings
	Location of gain/(loss) recognized in earnings	Quarter Ended									Three Quarters Ended
				Jun 28, 2020			Jun 30, 2019			Jun 28, 2020			Jun 30, 2019
Non-Designated Derivatives:
Foreign currency - other	Interest income and other, net	$	(5.0)		$	(2.3)		$	3.3		$	(9.7)

Dairy	Interest income and other, net	(1.7)			0.3			(1.6)			(1.9)
Diesel fuel and other commodities	Interest income and other, net	(0.8)			(0.8)			(8.7)			(5.5)
Fair Value Hedges:
Interest rate swap	Interest expense	3.9			15.0			28.3			41.2
Long-term debt (hedged item)	Interest expense	(3.1)			(16.3)			(26.4)			(44.8)

Notional Amounts of Outstanding Derivative Contracts

Notional amounts of outstanding derivative contracts (in millions):


	Jun 28, 2020		Sep 29, 2019
Interest rate swap	$	1,750	$	1,500
Cross-currency swaps	887		341
Foreign currency - other	1,206		1,125
Coffee	84		52
Dairy	21		1
Diesel fuel and other commodities	12		17

Fair Value of Outstanding Derivative Contracts

Fair value of outstanding derivative contracts (in millions) including the location of the asset and/or liability on the consolidated balance sheets:


			Derivative Assets
	Balance Sheet Location		Jun 28, 2020			Sep 29, 2019
Designated Derivative Instruments:
Interest rates	Other long-term assets		$	—		$	0.1
Cross-currency swaps	Other long-term assets		49.2			0.2
Foreign currency - other	Prepaid expenses and other current assets		15.1			11.4
		Other long-term assets			9.6			7.8
Coffee	Prepaid expenses and other current assets		0.2			—

Dairy	Prepaid expenses and other current assets		1.9			—

Interest rate swap	Other long-term assets		39.1			18.2
Non-designated Derivative Instruments:
Foreign currency	Prepaid expenses and other current assets		3.5			1.0

Diesel fuel and other commodities	Prepaid expenses and other current assets		—			0.2

			Derivative Liabilities
	Balance Sheet Location		Jun 28, 2020			Sep 29, 2019
Designated Derivative Instruments:
Interest rates	Other long-term liabilities		$	72.3		$	2.6
Cross-currency swaps	Other long-term liabilities		6.6			9.7
Foreign currency - other	Accrued liabilities		0.1			0.6
		Other long-term liabilities			1.0			0.1
Coffee	Accrued liabilities		13.9			1.0
		Other long-term liabilities			0.1			0.1
Dairy	Accrued liabilities		1.3			—

Non-designated Derivative Instruments:
Foreign currency	Accrued liabilities		2.1			3.0


Diesel fuel and other commodities	Accrued liabilities		3.9			1.1

Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

The following amounts were recorded on the consolidated balance sheets related to fixed-to-floating interest rate swaps designated in fair value hedging relationships:


	Carrying amount of hedged item						Cumulative amount of fair value hedging adjustment included in the carrying amount
	Jun 28, 2020		Sep 29, 2019		Jun 28, 2020		Sep 29, 2019
Location on the balance sheet
Long-term debt	$	788.1	$	761.8	$	38.1	$	11.8

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

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