Segment Reporting

9 Months Ended

Jul. 01, 2012

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Segment information is prepared on the same basis that our management reviews financial information for operational decision-making purposes. Beginning with the first quarter of fiscal 2012, we redefined our reportable operating segments to align with the three-region leadership and organizational structure of our retail business that took effect at the beginning of fiscal 2012.

The three-region structure includes: 1) Americas, inclusive of the US, Canada, and Latin America; 2) China / Asia Pacific (“CAP”); and 3) Europe, Middle East, and Africa, collectively referred to as the “EMEA” region. Our ceo, who is our chief operating decision maker (“CODM”) manages these businesses, evaluates financial results, and makes key operating decisions based on the new organizational structure. Accordingly, beginning with the first quarter of fiscal 2012, we revised our reportable operating segments from 1) US, 2) International, and 3) Global Consumer Products Group to the following four reportable segments: 1) Americas, 2) CAP, 3) EMEA, and 4) Global Consumer Products Group. In the second quarter of fiscal 2012, we renamed our Global Consumer Products Group segment “Channel Development.” Segment revenues as a percentage of total net revenues for the first three quarters of fiscal 2012 were as follows: Americas (75%), EMEA (9%), China / Asia Pacific (5%), and Channel Development (10%).

Concurrent with the change in reportable operating segments, we revised our prior period financial information to reflect comparable financial information for the new segment structure. Historical financial information presented herein reflects this change.

Americas

Americas operations sell coffee and other beverages, complementary food, whole bean coffees, and a focused selection of merchandise through company-operated stores and licensed stores. The Americas segment is our most mature business and has achieved significant scale.

Europe, Middle East, and Africa

EMEA operations sell coffee and other beverages, complementary food, whole bean coffees, and a focused selection of merchandise through company-operated stores and licensed stores. Certain markets within EMEA operations are in the early stages of development and require a more extensive support organization, relative to the current levels of revenue and operating income, than Americas.

China / Asia Pacific

China /Asia Pacific operations sell coffee and other beverages, complementary food, whole bean coffees, and a focused selection of merchandise through company-operated stores and licensed stores. Certain markets within China / Asia Pacific operations are in the early stages of development and require a more extensive support organization, relative to the current levels of revenue and operating income, than Americas.

Channel Development

Channel Development operations sell a selection of whole bean and ground coffees as well as a selection of premium Tazo^® teas globally. Channel Development operations also produce and sell a variety of ready-to-drink beverages, Starbucks VIA^® Ready Brew, Starbucks^® coffee and Tazo^® tea K-Cup^® portion packs, and Starbucks^® ice creams. The US foodservice business, which is included in the Channel Development segment, sells coffee and other related products to institutional foodservice companies.

Other

Other includes Seattle’s Best Coffee, Evolution Fresh, Digital Ventures, and unallocated corporate expenses that pertain to corporate administrative functions that support the operating segments but are not specifically attributable to or managed by any segment, and are not included in the reported financial results of the operating segments.

The tables below presents financial information for our reportable operating segments and Other for the quarter and three quarters endedJuly 1, 2012 and July 3, 2011, including the reclassifications discussed in Note 1 (in millions):

Quarter Ended

	Americas		EMEA		China / Asia Pacific		Channel Development		Other			Total
July 1, 2012
Total net revenues	$	2,471.2	$	282.0	$	181.8	$	316.4	$	52.2		$	3,303.6
Depreciation and amortization expenses	97.2		14.3		5.8		0.3		19.1			136.7
Income (loss) from equity investees	—		—		30.1		21.2		0.4			51.7
Operating income/(loss)	512.1		2.6		61.4		86.5		(171.0		)	491.6
July 3, 2011
Total net revenues	$	2,275.9	$	257.9	$	138.6	$	218.4	$	41.4		$	2,932.2
Depreciation and amortization expenses	96.3		12.4		4.6		0.5		15.7			129.5
Income (loss) from equity investees	—		1.8		23.5		19.6		(0.6		)	44.3
Operating income/(loss)	450.9		4.9		44.9		69.3		(167.8		)	402.2

Three Quarters Ended

	Americas		EMEA		China / Asia Pacific		Channel Development		Other			Total
July 1, 2012
Total net revenues	$	7,424.4	$	857.5	$	523.3	$	973.7	$	156.5		$	9,935.4
Depreciation and amortization expenses	291.4		42.8		16.4		1.0		57.0			408.6
Income (loss) from equity investees	2.1		0.3		90.7		55.4		0.3			148.8
Operating income/(loss)	1,538.3		16.7		188.9		247.7		(513.7		)	1,477.9
July 3, 2011
Total net revenues	$	6,768.8	$	756.7	$	391.1	$	618.3	$	133.8		$	8,668.7
Depreciation and amortization expenses	292.5		37.6		13.2		1.9		40.9			386.1
Income (loss) from equity investees	1.6		6.0		62.3		48.5		(1.5		)	116.9
Operating income/(loss)	1,398.1		37.8		134.6		207.5		(497.7		)	1,280.3

The following table reconciles the total of operating income in the table above to consolidated earnings before income taxes (in millions):

	Quarter Ended						Three Quarters Ended
	July 1, 2012			July 3, 2011			July 1, 2012			July 3, 2011
Operating income	$	491.6		$	402.2		$	1,477.9		$	1,280.3
Interest income and other, net	9.7			16.0			68.2			50.3
Interest expense	(8.9		)	(8.5		)	(26.2		)	(23.5		)
Earnings before income taxes	$	492.4		$	409.7		$	1,519.9		$	1,307.1