UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 2, 2006
STARBUCKS CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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| Washington |
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0-20322 |
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91-1325671 |
(State or Other Jurisdiction of
Incorporation or Organization)
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(Commission File Number)
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(IRS Employer
Identification No.) |
2401 Utah Avenue South, Seattle, Washington 98134
(Address of principal executive offices)
(206) 447-1575
(Registrant’s Telephone Number, including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On August 2, 2006, Starbucks Corporation (the “Company”) issued an earnings release announcing
its financial results for the 13 weeks ended July 2, 2006. A copy of the earnings release is
attached as Exhibit 99.1.
Effective October 3, 2005, the Company adopted the fair value recognition provisions of
Financial Accounting Standards Board Statement No. 123(R), “Share-Based Payment” (“SFAS 123R”),
requiring all stock-based compensation, including grants of employee stock options, to be
recognized in the statement of earnings based on their fair values. The Company adopted this
accounting treatment using the modified-prospective transition method, as permitted under SFAS 123R;
therefore, results for prior periods have not been restated. Prior to the adoption of SFAS 123R, the Company accounted for stock-based compensation using the intrinsic value method
prescribed in Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to
Employees,” and related interpretations. In addition to disclosing financial results calculated in
accordance with generally accepted accounting principles in the United States of America (“GAAP”),
the attached press release (at page 10) includes certain “non-GAAP
financial measures” under
applicable SEC rules because they exclude the stock-based payment expense that is included in the
directly comparable measures calculated in accordance with GAAP, to which the non-GAAP financial
measures are reconciled in a table. The non-GAAP financial measures provided on page 10 of the
attached press release and calculated in this manner are: cost of sales including occupancy costs,
store operating expenses, other operating expenses, general and administrative expenses, operating
income, earnings before income taxes, income taxes, net earnings and net earnings per common
share–diluted. These non-GAAP financial measures are not a substitute for the reported GAAP
measures and may be different from non-GAAP financial measures used by other companies.
The Company’s management finds these non-GAAP financial measures useful, and believes they
provide useful information to investors regarding the Company’s results of operations, because they
have been prepared on a basis comparable to that used in prior periods. Management also
uses the foregoing non-GAAP financial measures, in addition to the corresponding GAAP measures, in
reviewing the financial results of the Company, both on a segment and on a consolidated basis.
Management uses these non-GAAP financial measures to review financial results because the Company’s
internal budgets and targets (including under the Company’s incentive compensation plans) for
fiscal 2006 were established prior to the Company’s adoption of SFAS 123R. Therefore, assessing performance against those budgets and targets, and the
related management reporting, requires exclusion of stock-based compensation expense.
Management further believes that, where the adjustments used in calculating non-GAAP (pro forma) net earnings and net earnings per common share–diluted are based on
specific, identified charges that impact different line items in the consolidated statement of
earnings, investors may find it useful to know how these specific line items in the consolidated
statement of earnings are affected by these adjustments. In particular, now that the Company has
adopted SFAS 123R, management believes investors may find it useful to understand how the expenses
recorded as a result of the adoption of SFAS 123R are reflected in its consolidated statement of
earnings.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
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| Exhibit No. |
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Description |
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| 99.1
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Earnings release of Starbucks Corporation dated August 2, 2006 |