What changed in this filing

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Item 1. Financial Statements

2021-07-27 compared with 2021-04-27 · 209 added, 159 removed, 701 unchanged (34% of the section changed)

3 unchanged sentences

(in millions, except per share data)

Quarter Ended Two Quarters Ended

Quarter Ended Three Quarters Ended

Net revenues:

11 unchanged sentences

Income from equity investees 105.5 68.4 265.3 210.3

Operating income 987.6 487.4 1,901.2 1,707.2

Operating income/(loss) 1,488.7 ( 703.9 ) 3,389.9 1,003.4

Interest income and other, net 36.0 12.7 68.6 30.7

Interest expense ( 113.4 ) ( 120.8 ) ( 349.2 ) ( 312.1 )

Earnings before income taxes 889.9 390.2 1,698.1 1,534.1

Income tax expense 230.5 65.4 416.5 324.0

Net earnings including noncontrolling interests 659.4 324.8 1,281.6 1,210.1

Net loss attributable to noncontrolling interests — ( 3.6 ) — ( 4.0 )

Net earnings attributable to Starbucks $ 659.4 $ 328.4 $ 1,281.6 $ 1,214.1

Earnings per share - basic $ 0.56 $ 0.28 $ 1.09 $ 1.03

Earnings per share - diluted $ 0.56 $ 0.28 $ 1.08 $ 1.02

Earnings/(loss) before income taxes 1,411.3 ( 812.0 ) 3,109.3 722.0

Income tax expense/(benefit) 257.1 ( 133.9 ) 673.6 190.0

Net earnings/(loss) including noncontrolling interests 1,154.2 ( 678.1 ) 2,435.7 532.0

Net earnings/(loss) attributable to noncontrolling interests 0.8 0.3 0.8 ( 3.7 )

Net earnings/(loss) attributable to Starbucks $ 1,153.4 $ ( 678.4 ) $ 2,434.9 $ 535.7

Earnings/(loss) per share - basic $ 0.98 $ ( 0.58 ) $ 2.07 $ 0.46

Earnings/(loss) per share - diluted $ 0.97 $ ( 0.58 ) $ 2.06 $ 0.45

Weighted average shares outstanding:

2 unchanged sentences

See Notes to Consolidated Financial Statements.

Table of Content s

STARBUCKS CORPORATION

1 unchanged sentence

(in millions, unaudited)

Quarter Ended Two Quarters Ended

Net earnings including noncontrolling interests $ 659.4 $ 324.8 $ 1,281.6 $ 1,210.1

Quarter Ended Three Quarters Ended

Net earnings/(loss) including noncontrolling interests $ 1,154.2 $ ( 678.1 ) $ 2,435.7 $ 532.0

Other comprehensive income/(loss), net of tax:

10 unchanged sentences

Other comprehensive income/(loss) 96.6 ( 8.1 ) 334.9 ( 31.4 )

Comprehensive income including noncontrolling interests 679.0 190.4 1,519.9 1,186.8

Comprehensive income/(loss) including noncontrolling interests 1,250.8 ( 686.2 ) 2,770.6 500.6

Comprehensive income/(loss) attributable to noncontrolling interests 0.8 0.3 0.8 ( 3.7 )

Comprehensive income attributable to Starbucks $ 679.0 $ 194.0 $ 1,519.9 $ 1,190.8

Comprehensive income/(loss) attributable to Starbucks $ 1,250.0 $ ( 686.5 ) $ 2,769.8 $ 504.3

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

44 unchanged sentences

See Notes to Consolidated Financial Statements.

Table of Content s

STARBUCKS CORPORATION

1 unchanged sentence

(in millions, unaudited)

Two Quarters Ended

Three Quarters Ended

OPERATING ACTIVITIES:

27 unchanged sentences

FINANCING ACTIVITIES:

Net proceeds/(payments) from issuance of commercial paper ( 296.5 ) 613.0

Repayments of commercial paper ( 296.5 ) —

Net proceeds from issuance of short-term debt 215.6 1,157.2

9 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 87.9 10.9

Net decrease in cash and cash equivalents ( 470.2 ) ( 114.3 )

Net increase in cash and cash equivalents 402.2 1,279.3

CASH AND CASH EQUIVALENTS:

6 unchanged sentences

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Quarters Ended March 28, 2021 and March 29, 2020

For the Quarters Ended June 27, 2021 and June 28, 2020

(in millions, except per share data, unaudited)

6 unchanged sentences

Shares Amount

Balance, December 27, 2020

Balance, March 28, 2021

1,177.9 $ 1.2 $ 595.4 $ ( 8,124.3 ) $ ( 126.3 ) $ ( 7,654.0 ) $ 5.7 $ ( 7,648.3 )

6 unchanged sentences

— — — ( 530.7 ) — ( 530.7 ) — ( 530.7 )

Balance, March 28, 2021

Balance, June 27, 2021

1,179.0 $ 1.2 $ 729.3 $ ( 7,501.6 ) $ ( 29.7 ) $ ( 6,800.8 ) $ 6.5 $ ( 6,794.3 )

Balance, December 29, 2019

Balance, March 29, 2020

1,168.1 $ 1.2 $ 41.1 $ ( 7,050.6 ) $ ( 521.8 ) $ ( 7,530.1 ) $ ( 2.8 ) $ ( 7,532.9 )

4 unchanged sentences

Sale of common stock 0.2 — 9.8 — — 9.8 — 9.8

Repurchase of common stock ( 7.3 ) — ( 80.3 ) ( 486.8 ) — ( 567.1 ) — ( 567.1 )

Cash dividends declared, $ 0.41 per share

— — — ( 479.3 ) — ( 479.3 ) ( 0.2 ) ( 479.5 )

Balance, March 29, 2020

Balance, June 28, 2020

1,168.9 $ 1.2 $ 115.4 $ ( 8,208.3 ) $ ( 529.9 ) $ ( 8,621.6 ) $ ( 2.7 ) $ ( 8,624.3 )

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY

For the Two Quarters Ended March 28, 2021 and March 29, 2020

For the Three Quarters Ended June 27, 2021 and June 28, 2020

(in millions, except per share data, unaudited)

16 unchanged sentences

— — — ( 2,118.7 ) — ( 2,118.7 ) — ( 2,118.7 )

Balance, March 28, 2021

Balance, June 27, 2021

1,179.0 $ 1.2 $ 729.3 $ ( 7,501.6 ) $ ( 29.7 ) $ ( 6,800.8 ) $ 6.5 $ ( 6,794.3 )

10 unchanged sentences

— — — ( 1,436.7 ) — ( 1,436.7 ) ( 0.2 ) ( 1,436.9 )

Balance, March 29, 2020

Balance, June 28, 2020

1,168.9 $ 1.2 $ 115.4 $ ( 8,208.3 ) $ ( 529.9 ) $ ( 8,621.6 ) $ ( 2.7 ) $ ( 8,624.3 )

See Notes to Consolidated Financial Statements.

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STARBUCKS CORPORATION

11 unchanged sentences

Note 12 Income Taxes

Note 13 Earnings per Share

Note 13 Earnings/(Loss) per Share

Note 14 Commitments and Contingencies

Note 15 Segment Reporting

Note 16 Subsequent Event

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STARBUCKS CORPORATION

2 unchanged sentences

Financial Statement Preparation

The unaudited consolidated financial statements as of March 28, 2021, and for the quarter and two quarters ended March 28, 2021 and March 29, 2020, have been prepared by Starbucks Corporation under the rules and regulations of the Securities and Exchange Commission (“SEC”).

In the opinion of management, the financial information for the quarter and two quarters ended March 28, 2021 and March 29, 2020 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 unaudited consolidated financial statements as of June 27, 2021, and for the quarter and three quarters ended June 27, 2021 and June 28, 2020, have been prepared by Starbucks Corporation under the rules and regulations of the Securities and Exchange Commission (“SEC”).

In the opinion of management, the financial information for the quarter and three quarters ended June 27, 2021 and June 28, 2020 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.

In this Quarterly Report on Form 10-Q (“10-Q”), Starbucks Corporation is referred to as “Starbucks,” the “Company,” “we,” “us” or “our.”

Certain prior period information on the consolidated statements of cash flows has been reclassified to conform to the current year presentation.

The financial information as of September 27, 2020 is derived from our audited consolidated financial statements and notes for the fiscal year ended September 27, 2020 (“fiscal 2020”) included in Item 8 in the Fiscal 2020 Annual Report on Form 10-K (“10-K”).

The information included in this 10-Q should be read in conjunction with the footnotes and management’s discussion and analysis of the consolidated financial statements in the 10-K.

The results of operations for the quarter and two quarters ended March 28, 2021 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending October 3, 2021 (“fiscal 2021”).

The results of operations for the quarter and three quarters ended June 27, 2021 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending October 3, 2021 (“fiscal 2021”).

Additionally, our 2021 fiscal year will include 53 weeks, with the 53rd week falling in the fourth fiscal quarter.

The novel coronavirus, known as the global pandemic COVID-19, was first identified in December 2019 before spreading to markets where we have company-operated or licensed stores.

We have since established the necessary protocols to operate safely, and our businesses continue to recover as sales in the U.S.

and China, our two lead growth markets, have returned to roughly pre-pandemic levels.

As of the end of the second quarter of fiscal 2021, nearly all our company-operated and licensed stores have re-opened;

however, many were operating at less than full capacity.

The novel coronavirus, known as the global COVID-19 pandemic, was first identified in December 2019 before spreading to markets where we have company-operated or licensed stores.

We have since established the necessary protocols to operate safely, and our businesses demonstrated powerful momentum beyond recovery from the COVID-19 pandemic, despite certain markets in our International segment continuing to experience pandemic-related restrictions during the quarter.

As of the end of the third quarter of fiscal 2021, nearly all our company-operated and licensed stores had re-opened.

Segment Update

Segment information is prepared on the same basis that our management reviews financial information for operational decision-making purposes.

Effective June 28, 2021, certain changes were made to our management team, and our operating segment reporting structure was re-aligned in the fourth quarter of fiscal 2021 as a result.

Specifically, we realigned our fully licensed Latin America and Caribbean markets from our Americas operating segment to our International operating segment.

Additionally, we renamed the Americas operating segment to the North America operating segment, since it is comprised of our company-operated and licensed stores in the U.S.

The financial information presented herein does not reflect this realignment as these changes were not effective until the fourth quarter of fiscal 2021 and our ceo, who is our Chief Operating Decision Maker, continued to manage the business under the existing segment structure through the end of the third quarter of fiscal 2021.

Government Subsidies

On March 27, 2020, the U.S.

government enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which among other things, provides employer payroll tax credits for wages paid to employees who are unable to work during the COVID-19 outbreak and options to defer payroll tax payments for a limited period.

government enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”), which among other things, provides employer payroll tax credits for wages paid to employees who are unable to work during the COVID-19 pandemic and options to defer payroll tax payments for a limited period.

Based on our evaluation of the CARES Act, we qualify for certain employer payroll tax credits as well as the deferral of payroll tax payments in the future.

Additionally, the Canadian government enacted the Canada Emergency Wage Subsidy (“CEWS”) to help employers offset a portion of their employee wages for a limited period.

Additionally, the Canadian government enacted the Canada Emergency Wage Subsidy to help employers offset a portion of their employee wages for a limited period.

We elected to treat qualified government subsidies from the U.S., Canada and other governments as offsets to the related operating expenses.

During the quarter and two quarters ended March 28, 2021, qualified payroll and other credits reduced our store operating expenses by $ 97.4 million and $ 117.2 million, respectively, on our consolidated statement of earnings.

During the quarter ended March 29, 2020, the qualified payroll tax credits reduced our store operating expenses by approximately $ 35 million on our consolidated statement of earnings.

After netting the qualified credits against our payable, a receivable of $ 158.6 million was included in prepaid expenses and other current assets as of March 28, 2021.

During the quarter and two quarters ended March 28, 2021, we deferred $ 5.2 million and $ 81.7 million, respectively, of qualified payroll tax payments, and as of March 28, 2021, deferred payroll tax payments of $ 116.4 million were included in both accrued liabilities and other long-term liabilities, respectively, on our consolidated balance sheets.

During the quarter and three quarters ended June 27, 2021, qualified payroll and other credits reduced our store operating expenses by $ 56.4 million and $ 173.7 million, respectively, on our consolidated statements of earnings.

During the quarter and three quarters ended June 28, 2020, the qualified payroll credits reduced our store operating expenses by $ 266.0 million and $ 301.0 million on our consolidated statements of earnings, respectively.

After netting the qualified credits against our payable, a receivable of $ 161.7 million and $ 155.1 million was included in prepaid expenses and other current assets as of June 27, 2021 and September 27, 2020, respectively.

During the three quarters ended June 27, 2021, we deferred $ 81.7 million of qualified payroll tax payments.

During the quarter ended June 27, 2021, there were no similar deferrals.

As of June 27, 2021, deferred payroll tax payments of $ 116.4 million were included in both accrued liabilities and other long-term liabilities, respectively, on our consolidated balance sheets.

As of September 27, 2020, deferred payroll tax payments of $ 151.0 million were included in other long-term liabilities on our consolidated balance sheets.

Table of Content s

Restructuring

In fiscal 2020, we announced a plan to optimize our North America store portfolio, primarily in dense metropolitan markets by developing new store formats to better cater to changing customer tastes and preferences.

As of March 28, 2021, we expect the total number of closures to be approximately 800 stores in the U.S.

and Canada and have identified 760 stores for closure under our restructuring plans.

As a result we recorded approximately $ 23.0 million and $ 95.2 million to restructuring and impairments on our consolidated statement of earnings during the quarter and two quarters ended March 28, 2021, respectively.

As of June 27, 2021, we expect the total number of closures to be approximately 820 stores in the U.S.

and Canada and have closed or identified for closure approximately 790 stores under our restructuring plan.

As a result, we recorded approximately $ 19.8 million and $ 115.0 million to restructuring and impairments on our consolidated statements of earnings during the quarter and three quarters ended June 27, 2021, respectively.

Of these totals, $ 7.8 million and $ 59.0 million related to the impairment of store assets for which either a triggering event occurred and the assets were determined not to be recoverable or the store was permanently closed, respectively.

During the quarter and two quarters ended March 28, 2021, an additional $ 14.4 million and $ 44.0 million, respectively, was associated with accelerated amortization of right-of-use (“ROU”) lease assets due to planned store closures prior to the end of contractual lease terms.

For impaired store asset groups, we estimated the fair values using an income approach incorporating internal projections of revenue growth and operating expenses that are considered Level 3 fair value measurements, as well as applicable discount

rates and market lease rates.

The application of these projections and fair value measurements did not have a significant impact on our final impairment decisions given that we plan to fully exit the majority of these identified stores over the next 9 to 12 months.

We expect total future restructuring costs, which are attributable to our Americas segment, to be approximately $ 30 million to $ 40 million.

These restructuring costs primarily include accelerated amortization or impairments of ROU assets due to planned store closures prior to the end of contractual lease terms.

The remaining balance includes store impairment and disposal costs not previously recorded as part of our ongoing store impairment process and employee termination costs.

During the quarter and three quarters ended June 27, 2021, an additional $ 12.2 million and $ 56.2 million, respectively, were associated with accelerated amortization of right-of-use (“ROU”) lease assets and other lease costs due to planned store closures prior to the end of contractual lease terms.

The application of these projections and fair value measurements did not have a significant impact on our final impairment charges given that we plan to fully exit the majority of these identified stores over the next 6 to 12 months.

As of June 27, 2021, we expect total future restructuring costs, which are attributable to our Americas segment, to be approximately $ 20 million to $ 30 million.

These restructuring costs primarily include accelerated amortization of ROU assets due to planned store closures prior to the end of contractual lease terms.

The remaining balance includes store impairment and disposal costs not previously recorded as part of our ongoing store impairment process as well as employee termination costs.

As we have previously recorded impairment charges for stores that may be identified for closure under our plans, and because store closure decisions are still subject to change, the final costs associated with these store closures may vary from these estimates.

These costs will depend on the asset carrying value and remaining lease term of the specific stores identified.

Future restructuring costs are expected to be incurred primarily over the next 9 to 12 months as stores are specifically identified for closure or, in the case of lease exit costs, either when a store ceases operations or when a reduced lease term is reasonably certain due to expected, early lease termination.

As of March 28, 2021, restructuring liabilities totaling $ 21.4 million were included in current and non-current operating lease liability for the remaining outstanding rent liabilities due to landlords.

The associated expense was recognized in fiscal 2020 or during the first two quarters of fiscal 2021 for stores that were either closed or reasonably certain to close under the plan.

Additionally, $ 10.4 million of accrued employee termination costs was included in accrued payroll and benefits.

Cash payments were $ 23.2 million for the first two quarters of fiscal 2021.

Future restructuring costs are expected to be incurred primarily during 2021 as stores are identified for closure or, in the case of lease exit costs, either when a store ceases operations or when a reduced lease term is reasonably certain due to expected, early lease termination.

Restructuring-related accrued employee termination costs included in accrued payroll and benefits on the consolidated balance sheets were $ 1.8 million and $ 15.2 million as of June 27, 2021 and September 27, 2020, respectively.

Additionally, other accrued restructuring costs included in accrued liabilities on the consolidated balance sheets were $ 8.7 million as of June 27, 2021.

There were no other accrued restructuring costs outstanding as of September 27, 2020.

Cash payments relating to these liabilities were immaterial for the quarter and three quarters ended June 27, 2021.

Recently Adopted Accounting Pronouncements

7 unchanged sentences

We are currently evaluating the impact of the transition from LIBOR to alternative reference rates but do not expect a significant impact to our consolidated financial statements.

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Derivative Financial Instruments

12 unchanged sentences

From time to time, we may enter into financial instruments, including, but not limited to, forward and swap contracts or foreign currency-denominated debt, to hedge the currency exposure of our net investments in certain international operations.

resulting gains and losses from these derivatives are recorded in AOCI and are subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated.

The resulting gains and losses from these derivatives are recorded in AOCI and are subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated.

Foreign currency forward and swap contracts not designated as hedging instruments are used to mitigate the foreign exchange risk of certain other balance sheet items.

8 unchanged sentences

For de-designated cash flow hedges in which the underlying transactions are no longer probable of occurring, the related accumulated derivative gains or losses are recognized in interest income and other, net on our consolidated statements of earnings.

During the quarter and two quarters ended March 29, 2020, we de-designated certain cash flow hedges due to the global COVID-19 impacts, which resulted in the release of an insignificant net gain from AOCI to our consolidated statement of earnings.

There were no significant cash flow hedge de-designations in fiscal 2021.

During the second and third quarters of fiscal 2020, we de-designated certain cash flow hedges due to the global COVID-19 impacts, which resulted in the release of an insignificant net gain from AOCI to our consolidated statement of earnings.

To mitigate the price uncertainty of a portion of our future purchases, including diesel fuel and other commodities, we enter into swap contracts, futures and collars that are not designated as hedging instruments.

The resulting gains and losses are recorded in interest income and other, net to help offset price fluctuations on our beverage, food, packaging and transportation costs, which are included in product and distribution costs on our consolidated statements of earnings.

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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 ):

2 unchanged sentences

Net Gains/(Losses) Expected to be Reclassified from AOCI into Earnings within 12 Months Outstanding Contract/Debt Remaining Maturity

Mar 28, 2021 Sep 27, 2020

Jun 27, 2021 Sep 27, 2020

Cash Flow Hedges:

8 unchanged sentences

Foreign currency debt ( 7.5 ) ( 37.1 ) — 33

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 ):

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

Quarter Ended

3 unchanged sentences

Location of gain/(loss)

Mar 28, 2021 Mar 29, 2020 Mar 28, 2021 Mar 29, 2020

Jun 27, 2021 Jun 28, 2020 Jun 27, 2021 Jun 28, 2020

Cash Flow Hedges:

12 unchanged sentences

Foreign currency debt 11.8 ( 17.3 ) — —

(1) As a result of the global COVID-19 impacts, Starbucks discontinued cash flow hedges during the quarter ended March 29, 2020.

Two Quarters Ended

(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

1 unchanged sentence

AOCI to Earnings Location of gain/(loss)

Mar 28, 2021 Mar 29, 2020 Mar 28, 2021 Mar 29, 2020

Jun 27, 2021 Jun 28, 2020 Jun 27, 2021 Jun 28, 2020

Cash Flow Hedges:

12 unchanged sentences

Foreign currency debt 39.7 ( 4.7 ) — —

(1) As a result of the global COVID-19 impacts, Starbucks discontinued cash flow hedges during the two quarters ended March 29, 2020.

(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.

Table of Content s

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 Two Quarters Ended

Mar 28, 2021 Mar 29, 2020 Mar 28, 2021 Mar 29, 2020

Location of gain/(loss) recognized in earnings Quarter Ended Three Quarters Ended

Jun 27, 2021 Jun 28, 2020 Jun 27, 2021 Jun 28, 2020

Non-Designated Derivatives:

Dairy Interest income and other, net $ — $ ( 1.7 ) $ — $ ( 1.6 )

Diesel fuel and other commodities Interest income and other, net 0.7 ( 0.8 ) 2.7 ( 8.7 )

4 unchanged sentences

Notional amounts of outstanding derivative contracts (in millions) :

Mar 28, 2021 Sep 27, 2020

Jun 27, 2021 Sep 27, 2020

Coffee $ 463 $ 63

3 unchanged sentences

Interest rate swap 1,750 1,750

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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 Mar 28, 2021 Sep 27, 2020

Balance Sheet Location Jun 27, 2021 Sep 27, 2020

Designated Derivative Instruments:

7 unchanged sentences

Non-designated Derivative Instruments:

Dairy Prepaid expenses and other current assets 0.1 —

Diesel fuel and other commodities Prepaid expenses and other current assets 0.5 —

1 unchanged sentence

Derivative Liabilities

Balance Sheet Location Mar 28, 2021 Sep 27, 2020

Balance Sheet Location Jun 27, 2021 Sep 27, 2020

Designated Derivative Instruments:

7 unchanged sentences

Non-designated Derivative Instruments:

Dairy Accrued liabilities 0.3 —

Diesel fuel and other commodities Accrued liabilities — 1.7

2 unchanged sentences

Carrying amount of hedged item Cumulative amount of fair value hedging adjustment included in the carrying amount

Mar 28, 2021 Sep 27, 2020 Mar 28, 2021 Sep 27, 2020

Jun 27, 2021 Sep 27, 2020 Jun 27, 2021 Sep 27, 2020

Location on the balance sheet

1 unchanged sentence

Additional disclosures related to cash flow gains and losses included in AOCI, as well as subsequent reclassifications to earnings, are included in Note 10 , Equity.

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Fair Value Measurements

1 unchanged sentence

Fair Value Measurements at Reporting Date Using

March 28, 2021 Quoted Prices in Active Markets for Identical Assets

June 27, 2021 Quoted Prices in Active Markets for Identical Assets

(Level 1) Significant Other Observable Inputs

5 unchanged sentences

Corporate debt securities 22.1 — 22.1 —

State and local government obligations 1.0 — 1.0 —

Total available-for-sale debt securities 79.1 — 79.1 —

20 unchanged sentences

Total liabilities $ 34.1 $ 1.1 $ 33.0 $ —

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Fair Value Measurements at Reporting Date Using

34 unchanged sentences

The fair values of any financial instruments presented above exclude the impact of netting assets and liabilities when a legally enforceable master netting agreement exists.

Gross unrealized holding gains and losses on available-for-sale debt securities and marketable equity securities were not material as of March 28, 2021 and September 27, 2020.

Gross unrealized holding gains and losses on available-for-sale debt securities and marketable equity securities were not material as of June 27, 2021 and September 27, 2020.

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Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

1 unchanged sentence

These assets are measured at fair value if determined to be impaired.

During our first two quarters of fiscal 2021, we recorded asset impairment charges, primarily related to restructuring efforts for our North America store portfolio.

During our fiscal third quarter, we recorded asset impairment charges, primarily related to restructuring efforts for our North America store portfolio.

See Note 1 , Summary of Significant Accounting Policies, for further discussion.

The estimated fair value of our long-term debt based on the quoted market price (Level 2) is included at Note 7 , Debt.

There were no material fair value adjustments during the two quarters ended March 28, 2021 and March 29, 2020.

There were no material fair value adjustments during the three quarters ended June 27, 2021 and June 28, 2020.

Inventories (in millions) :

Mar 28, 2021 Sep 27, 2020

Jun 27, 2021 Sep 27, 2020

Unroasted $ 709.5 $ 664.7

5 unchanged sentences

Inventory levels vary due to seasonality, commodity market supply and price fluctuations.

As of March 28, 2021, we had committed to purchasing green coffee totaling $ 637 million under fixed-price contracts and an estimated $ 654 million under price-to-be-fixed contracts.

As of June 27, 2021, we had committed to purchasing green coffee totaling $ 517 million under fixed-price contracts and an estimated $ 834 million under price-to-be-fixed contracts.

We expect to take physical delivery for these contracts.

6 unchanged sentences

During the second quarter of fiscal 2020, we wrote off approximately $ 50 million of inventory that was expiring or expected to expire due to COVID-19 related store closures, primarily perishable food and beverage ingredients located at our stores, distribution centers and suppliers.

We did not record significant write-offs related to COVID-19 during the first half of fiscal 2021.

We did not record significant write-offs related to COVID-19 during the three quarters ended ended June 27, 2021.

Supplemental Balance Sheet and Statement of Earnings Information (in millions) :

Prepaid Expenses and Other Current Assets

Mar 28, 2021 Sep 27, 2020

Jun 27, 2021 Sep 27, 2020

Income tax receivable $ 67.9 $ 356.9

2 unchanged sentences

Total prepaid expenses and current assets $ 565.6 $ 739.5

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Property, Plant and Equipment, net

Mar 28, 2021 Sep 27, 2020

Jun 27, 2021 Sep 27, 2020

Land $ 46.2 $ 46.0

9 unchanged sentences

Accrued Liabilities

Mar 28, 2021 Sep 27, 2020

Jun 27, 2021 Sep 27, 2020

Accrued occupancy costs $ 80.6 $ 76.9

5 unchanged sentences

Store Operating Expenses

Quarter Ended Two Quarters Ended

Mar 28, 2021 Mar 29, 2020 Mar 28, 2021 Mar 29, 2020

Quarter Ended Three Quarters Ended

Jun 27, 2021 Jun 28, 2020 Jun 27, 2021 Jun 28, 2020

Wages and benefits $ 1,750.7 $ 1,477.7 $ 5,021.8 $ 4,683.7

4 unchanged sentences

Indefinite-Lived Intangible Assets

(in millions) Mar 28, 2021 Sep 27, 2020

(in millions) Jun 27, 2021 Sep 27, 2020

Trade names, trademarks and patents $ 96.0 $ 95.0

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Finite-Lived Intangible Assets

Mar 28, 2021 Sep 27, 2020

Jun 27, 2021 Sep 27, 2020

(in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

5 unchanged sentences

Total finite-lived intangible assets $ 1,335.9 $ ( 1,033.9 ) $ 302.0 $ 1,307.9 $ ( 850.8 ) $ 457.1

Amortization expense for finite-lived intangible assets was $ 62.2 million and $ 123.4 million for the quarter and two quarters ended March 28, 2021, respectively and $ 54.5 million and $ 108.6 million for the quarter and two quarters ended March 29, 2020, respectively.

Estimated future amortization expense as of March 28, 2021 ( in millions ):

Amortization expense for finite-lived intangible assets was $ 50.0 million and $ 173.4 million for the quarter and three quarters ended June 27, 2021, respectively, and $ 55.9 million and $ 164.5 million for the quarter and three quarters ended June 28, 2020, respectively.

During the third quarter of fiscal 2020, we recorded a charge of $ 22.1 million to restructuring and impairments on our consolidated statement of earnings related to changes in branding and marketing strategy.

Estimated future amortization expense as of June 27, 2021 ( in millions ):

Fiscal Year Total

2021 (excluding the two quarters ended March 28, 2021)

2021 (excluding the three quarters ended June 27, 2021)

Thereafter 3.1

5 unchanged sentences

2.2 72.5 — 0.1 74.8

Goodwill balance at March 28, 2021

Goodwill balance at June 27, 2021

$ 498.7 $ 3,137.5 $ 34.7 $ 1.1 $ 3,672.0

(1) “Other” consists of changes in the goodwill balance resulting from foreign currency translation.

During the third quarter of fiscal 2021, we completed our annual goodwill impairment analysis.

The results of our analysis indicated significant excess fair values over carrying values across the different reporting units, and therefore no goodwill impairment was recorded.

Short-term Debt

2 unchanged sentences

The proceeds from borrowings under our commercial paper program may be used for working capital needs, capital expenditures and other corporate purposes, including, but not limited to, business expansion, payment of cash dividends on our common stock and share repurchases.

As of March 28, 2021, we had no borrowings outstanding under the program.

As of June 27, 2021, we had no borrowings outstanding under the program.

Additionally, we hold the following Japanese yen-denominated credit facilities that are available for working capital needs and capital expenditures within our Japanese market:

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• A ¥ 5 billion, or $ 45.1 million, facility is currently set to mature on December 30, 2021 .

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Borrowings under the credit facility are subject to terms defined within the facility and will bear interest at a variable rate based on TIBOR plus an applicable margin of 0.350 %.

As of March 28, 2021, we had ¥ 2 billion , or $ 18.3 million, of borrowings outstanding under these credit facilities.

As of June 27, 2021, we had no borrowings outstanding under these credit facilities.

Long-term Debt

Components of long-term debt including the associated interest rates and related estimated fair values by calendar maturity ( in millions, except interest rates) :

Mar 28, 2021 Sep 27, 2020 Stated Interest Rate Effective Interest Rate (1)

Jun 27, 2021 Sep 27, 2020 Stated Interest Rate Effective Interest Rate (1)

Issuance Amount Estimated Fair Value Amount Estimated Fair Value

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(4) Japanese yen-denominated long-term debt.

The following table summarizes our long-term debt maturities as of March 28, 2021 by fiscal year ( in millions ):

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The following table summarizes our long-term debt maturities as of June 27, 2021 by fiscal year ( in millions ):

Fiscal Year Total

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Total $ 14,716.7

For the quarter and two quarters ended March 28, 2021, we recognized accelerated lease ROU asset amortization costs of $ 14.4 million and $ 44.0 million, which was recognized within restructuring and impairments on the consolidated statements of earnings.

For the quarter and three quarters ended June 27, 2021, we recognized accelerated amortization of ROU lease assets and other lease costs of $ 12.2 million and $ 56.2 million, respectively, which were recognized within restructuring and impairments on the consolidated statements of earnings.

For the quarter and three quarters ended June 28, 2020, we recognized accelerated amortization of ROU lease assets and other lease costs of $ 13.4 million and $ 17.0 million, respectively, and an immaterial ROU asset impairment charge, which were recorded within restructuring and impairments on the consolidated statements of earnings.

The components of lease costs (in millions) :

Quarter Ended Two Quarters Ended

Mar 28, 2021 Mar 29, 2020 Mar 28, 2021 Mar 29, 2020

Quarter Ended Three Quarters Ended

Jun 27, 2021 Jun 28, 2020 Jun 27, 2021 Jun 28, 2020

Operating lease costs (1)

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(1) Operating lease costs were net of immaterial amounts of sublease income.

For the quarter and two quarters ended March 28, 2021, operating lease costs were also net of immaterial amounts of rent concessions.

For the quarter and three quarters ended June 27, 2021, operating lease costs were also net of immaterial amounts of rent concessions.

For the quarter and three quarters ended June 28, 2020, we received $ 21.7 million in rent concessions, which was recorded as a reduction to store operating expenses on our consolidated statement of earnings.

The following table includes supplemental information (in millions) :

Two Quarters Ended

Mar 28, 2021 Mar 29, 2020

Three Quarters Ended

Jun 27, 2021 Jun 28, 2020

Cash paid related to operating lease liabilities $ 1,200.6 $ 1,089.4

Operating lease liabilities arising from obtaining ROU assets 1,030.7 770.4

Mar 28, 2021 Mar 29, 2020

Jun 27, 2021 Jun 28, 2020

Weighted-average remaining operating lease term 8.6 years 8.9 years

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Finance lease assets are recorded in property, plant and equipment, net with the corresponding lease liabilities included in accrued liabilities and other long-term liabilities on the consolidated balance sheet.

There were no material finance leases as of March 28, 2021.

There were no material finance leases as of June 27, 2021.

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Minimum future maturities of operating lease liabilities (in millions) :

Fiscal Year Total

2021 (excluding the two quarters ended March 28, 2021)

2021 (excluding the three quarters ended June 27, 2021)

Thereafter 4,366.0

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Total $ 8,906.2

As of March 28, 2021, we have entered into operating leases that have not yet commenced of $ 761.9 million, primarily related to real estate leases.

As of June 27, 2021, we have entered into operating leases that have not yet commenced of $ 846.7 million, primarily related to real estate leases.

These leases will commence between fiscal year 2021 and fiscal year 2027 with lease terms ranging from 3 years to 20 years.

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Our deferred revenue primarily consists of the prepaid royalty from Nestlé, for which we have continuing performance obligations to support the Global Coffee Alliance, our unredeemed stored value card liability and unredeemed loyalty points (“Stars”) associated with our loyalty program.

As of March 28, 2021, the current and long-term deferred revenue related to Nestlé was $ 178.9 million and $ 6.4 billion, respectively.

During both quarters and two quarters ended March 28, 2021 and March 29, 2020, we recognized $ 44.2 million and $ 88.4 million of prepaid royalty revenue related to Nestlé, respectively.

As of June 27, 2021, the current and long-term deferred revenue related to Nestlé was $ 177.9 million and $ 6.4 billion, respectively.

During the quarter and three quarters ended June 27, 2021, we recognized $ 44.2 million and $ 132.5 million of prepaid royalty revenue related to Nestlé, respectively.

During the quarter and three quarters ended June 28, 2020, we recognized $ 44.2 million and $ 132.6 million of prepaid royalty revenue related to Nestlé, respectively.

Changes in our deferred revenue balance related to our stored value cards and loyalty program (in millions) :

Quarter Ended March 28, 2021

Stored value cards and loyalty program at December 27, 2020

Quarter Ended June 27, 2021

Stored value cards and loyalty program at March 28, 2021

Revenue deferred - card activations, card reloads and Stars earned 3,170.7

Revenue recognized - card and Stars redemptions and breakage ( 3,160.0 )

Stored value cards and loyalty program at June 27, 2021 (2)

Quarter Ended June 28, 2020

Stored value cards and loyalty program at March 29, 2020

Quarter Ended March 29, 2020

Stored value cards and loyalty program at December 29, 2019

Revenue deferred - card activations, card reloads and Stars earned 1,875.4

Revenue recognized - card and Stars redemptions and breakage ( 1,842.4 )

Stored value cards and loyalty program at March 29, 2020 (2)

Two Quarters Ended March 28, 2021

Stored value cards and loyalty program at June 28, 2020 (2)

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Three Quarters Ended June 27, 2021

Stored value cards and loyalty program at September 27, 2020

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Revenue recognized - card and Stars redemptions and breakage ( 9,118.0 )

Stored value cards and loyalty program at March 28, 2021 (2)

Two Quarters Ended March 29, 2020

Stored value cards and loyalty program at June 27, 2021 (2)

Three Quarters Ended June 28, 2020

Stored value cards and loyalty program at September 29, 2019

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Revenue recognized - card and Stars redemptions and breakage ( 7,640.7 )

Stored value cards and loyalty program at March 29, 2020 (2)

Stored value cards and loyalty program at June 28, 2020 (2)

(1) “Other” primarily consists of changes in the stored value cards and loyalty program balances resulting from foreign currency translation.

(2) As of March 28, 2021 and March 29, 2020, approximately $ 1,370.4 million and $ 1,191.5 million of these amounts were current, respectively.

(2) As of June 27, 2021 and June 28, 2020, approximately $ 1,380.2 million and $ 1,226.4 million of these amounts were current, respectively.

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Changes in AOCI by component, net of tax (in millions) :

Quarter Ended Available-for-Sale Debt Securities Cash Flow Hedges Net Investment Hedges Translation Adjustment and Other Total

March 28, 2021

June 27, 2021

Net gains/(losses) in AOCI, beginning of period $ 2.0 $ ( 5.7 ) $ 19.6 $ ( 142.2 ) $ ( 126.3 )

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Net gains/(losses) in AOCI, end of period $ 1.7 $ 29.3 $ 41.3 $ ( 102.0 ) $ ( 29.7 )

March 29, 2020

June 28, 2020

Net gains/(losses) in AOCI, beginning of period $ 5.6 $ ( 64.8 ) $ 47.8 $ ( 510.4 ) $ ( 521.8 )

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Net gains/(losses) in AOCI, end of period $ 7.9 $ ( 83.7 ) $ 27.3 $ ( 481.4 ) $ ( 529.9 )

Two Quarters Ended Available-for-Sale Debt Securities Cash Flow Hedges Net Investment Hedges Translation Adjustment and Other Total

March 28, 2021

Three Quarters Ended Available-for-Sale Debt Securities Cash Flow Hedges Net Investment Hedges Translation Adjustment and Other Total

June 27, 2021

Net gains/(losses) in AOCI, beginning of period $ 5.7 $ ( 82.1 ) $ 11.5 $ ( 299.7 ) $ ( 364.6 )

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Net gains/(losses) in AOCI, end of period $ 1.7 $ 29.3 $ 41.3 $ ( 102.0 ) $ ( 29.7 )

March 29, 2020

June 28, 2020

Net gains/(losses) in AOCI, beginning of period $ 3.9 $ 11.0 $ ( 10.1 ) $ ( 508.1 ) $ ( 503.3 )

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Net gains/(losses) in AOCI, end of period $ 7.9 $ ( 83.7 ) $ 27.3 $ ( 481.4 ) $ ( 529.9 )

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Impact of reclassifications from AOCI on the consolidated statements of earnings (in millions) :

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the Statements of Earnings

Mar 28, 2021 Mar 29, 2020

Jun 27, 2021 Jun 28, 2020

Gains/(losses) on available-for-sale debt securities $ 0.1 $ 2.2 Interest income and other, net

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$ 0.6 $ 0.4 Net of tax

Two Quarters Ended

Three Quarters Ended

Components Amounts Reclassified from AOCI Affected Line Item in

the Statements of Earnings

Mar 28, 2021 Mar 29, 2020

Jun 27, 2021 Jun 28, 2020

Gains/(losses) on available-for-sale debt securities $ 1.8 $ 2.0 Interest income and other, net

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$ 8.5 $ 13.6 Net of tax

In addition to 2.4 billion shares of authorized common stock with $ 0.001 par value per share, the Company has authorized 7.5 million shares of preferred stock, none of which was outstanding as of March 28, 2021.

As of March 28, 2021, 48.9 million shares remained available for repurchase under current authorizations.

We have suspended our share repurchase program until we restore certain financial leverage targets, which we currently expect to occur in late fiscal 2021.

During the second quarter of fiscal 2021, our Board of Directors approved a quarterly cash dividend to shareholders of $ 0.45 per share to be paid on May 28, 2021 to shareholders of record as of the close of business on May 13, 2021.

As of June 27, 2021, 48.9 million shares remained available for repurchase under current authorizations.

We have suspended our share repurchase program until we restore certain financial leverage targets.

We currently expect the suspension of share repurchases to continue for the remainder of fiscal 2021.

During the third quarter of fiscal 2021, our Board of Directors approved a quarterly cash dividend to shareholders of 0.45 per share to be paid on August 27, 2021 to shareholders of record as of the close of business on August 12, 2021.

Employee Stock Plans

As of March 28, 2021, there were 40.1 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 11.7 million shares available for issuance under our employee stock purchase plan.

As of June 27, 2021, there were 40.7 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 11.6 million shares available for issuance under our employee stock purchase plan.

Stock-based compensation expense recognized in the consolidated statements of earnings (in millions) :

Quarter Ended Two Quarters Ended

Mar 28, 2021 Mar 29, 2020 Mar 28, 2021 Mar 29, 2020

Quarter Ended Three Quarters Ended

Jun 27, 2021 Jun 28, 2020 Jun 27, 2021 Jun 28, 2020

Options $ 0.2 $ 1.4 $ 2.0 $ 3.8

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Total stock-based compensation expense $ 80.0 $ 41.4 $ 255.3 $ 188.0

Stock option and RSU transactions from September 27, 2020 through March 28, 2021 ( in millions ):

Stock option and RSU transactions from September 27, 2020 through June 27, 2021 ( in millions ):

Stock Options RSUs

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Forfeited/expired ( 0.1 ) ( 1.2 )

Options outstanding/Nonvested RSUs, March 28, 2021

Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of March 28, 2021

Options outstanding/Nonvested RSUs, June 27, 2021

Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of June 27, 2021

$ 0.2 $ 200.3

The effective tax rate for the quarter ended March 28, 2021 was 25.9 % compared to 16.8 % for the same quarter in fiscal 2020.

The increase was primarily due to higher earnings, including the foreign rate differential on our jurisdictional mix of earnings, partially offset by lapping valuation allowances recorded against deferred tax assets of certain international jurisdictions in the prior year.

The effective tax rate for the first two quarters ended March 28, 2021 was 24.5 % compared to 21.1 % for the same period in fiscal 2020.

Earnings per Share

Calculation of net earnings per common share (“EPS”) — basic and diluted ( in millions, except EPS ):

Quarter Ended Two Quarters Ended

Mar 28, 2021 Mar 29, 2020 Mar 28, 2021 Mar 29, 2020

Net earnings attributable to Starbucks $ 659.4 $ 328.4 $ 1,281.6 $ 1,214.1

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The effective tax rate for the quarter ended June 27, 2021 was 18.2 % compared to 16.5 % for the same quarter in fiscal 2020.

The increase was primarily due to the foreign rate differential on our mix of earnings by tax jurisdiction, as well as a change in the absolute pre-tax operating results when compared to the same period of the prior year.

This was partially offset by lapping valuation allowances recorded against deferred tax assets of certain international jurisdictions in the prior year (approximately 840 basis points), a current year remeasurement of deferred tax assets due to an enacted corporate rate change (approximately 510 basis points) and lapping the release of income tax reserves related to the expiration of statute of limitations in the prior year (approximately 330 basis points).

The effective tax rate for the first three quarters ended June 27, 2021 was 21.7 % compared to 26.3 % for the same period in fiscal 2020.

The decrease was primarily due to lapping valuation allowances recorded against deferred tax assets of certain international jurisdictions in the prior year (approximately 1,400 basis points) and a current year remeasurement of deferred tax assets due to an enacted corporate rate change (approximately 230 basis points).

This was partially offset by the foreign rate differential on our mix of earnings by tax jurisdiction and lapping the release of income tax reserves related to the expiration of statute of limitations in the prior year.

Earnings/(Loss) per Share

Calculation of net earnings/(loss) per common share — basic and diluted ( in millions, except earnings/(loss) per share ):

Quarter Ended Three Quarters Ended

Jun 27, 2021 Jun 28, 2020 Jun 27, 2021 Jun 28, 2020

Net earnings/(loss) attributable to Starbucks $ 1,153.4 $ ( 678.4 ) $ 2,434.9 $ 535.7

Weighted average common shares outstanding (for basic calculation) 1,178.5 1,168.5 1,177.0 1,173.6

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Weighted average common and common equivalent shares outstanding (for diluted calculation) 1,186.2 1,168.5 1,184.7 1,182.7

EPS — basic $ 0.56 $ 0.28 $ 1.09 $ 1.03

EPS — diluted $ 0.56 $ 0.28 $ 1.08 $ 1.02

Earnings/(loss) per share — basic $ 0.98 $ ( 0.58 ) $ 2.07 $ 0.46

Earnings/(loss) per share — diluted $ 0.97 $ ( 0.58 ) $ 2.06 $ 0.45

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, calculated using the treasury stock method.

For the three months ended June 28, 2020, the Company had 8.1 million of outstanding stock options and unvested RSUs that could potentially dilute earnings per share in future periods that were excluded from the computation of diluted earnings per share because the effect would have been antidilutive given the net loss during the period.

The calculation of dilutive shares outstanding would exclude out-of-the-money stock options (i.e., such options’ exercise prices were greater than the average market price of our common shares for the period) because their inclusion would be antidilutive.

As of March 28, 2021 and March 29, 2020, we had no out-of-the-money stock options .

As of June 27, 2021 and June 28, 2020, we had no out-of-the-money stock options .

Commitments and Contingencies

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Plaintiff alleges that the Company and the other defendants failed to provide warnings for their coffee products of exposure to the chemical acrylamide as required under California Health and Safety Code section 25249.5, the California Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Proposition 65.

Plaintiff seeks equitable relief, including

providing warnings to consumers of coffee products, as well as civil penalties in the amount of the statutory maximum of two thousand five hundred dollars per day per violation of Proposition 65.

Plaintiff seeks equitable relief, including providing warnings to consumers of coffee products, as well as civil penalties in the amount of the statutory maximum of two thousand five hundred dollars per day per violation of Proposition 65.

The Plaintiff asserts that every consumed cup of coffee, absent a compliant warning, is equivalent to a violation under Proposition 65.

The Company, as part of a joint defense group organized to defend against the lawsuit, disputes the claims of the Plaintiff.

Acrylamide is not added to coffee but is present in all coffee in small amounts (parts per billion) as a byproduct of the coffee bean roasting process.

Acrylamide is not added to coffee but is present in all coffee in small amounts (parts per billion) as a byproduct of the coffee

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bean roasting process.

The Company has asserted multiple affirmative defenses.

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At the status conference on August 25, 2020, the trial judge granted the defendants’ motion for summary judgment, ruling that the coffee exemption regulation is a complete defense to the Plaintiff’s complaint.

The Notice of Entry of Judgment from the court was served on October 6, 2020 and the Plaintiff filed a Notice of Appeal on November 20, 2020.

The court issued a briefing schedule, and the parties are working through the appellate process.

The Notice of Entry of Judgment from the court was served on October 6, 2020, and the Plaintiff filed a Notice of Appeal on November 20, 2020 and its opening brief in the appeals process on April 9, 2021.

After the grant of an extension, defendants have until August 9, 2021 to file their brief in response.

Starbucks believes that the likelihood that the Company will ultimately incur a material loss in connection with this litigation is less than reasonably possible.

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Consolidated revenue mix by product type ( in millions ):

Quarter Ended Two Quarters Ended

Mar 28, 2021 Mar 29, 2020 Mar 28, 2021 Mar 29, 2020

Quarter Ended Three Quarters Ended

Jun 27, 2021 Jun 28, 2020 Jun 27, 2021 Jun 28, 2020

$ 4,753.1 63 % $ 2,628.8 62 % $ 13,222.6 63 % $ 10,429.1 60 %

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Total $ 7,496.5 100 % $ 4,222.1 100 % $ 20,913.9 100 % $ 17,314.9 100 %

(1) Certain prior period amounts have been reclassified to conform to current period presentation.

(1) Beverage represents sales within our company-operated stores.

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(3) “Other” primarily consists of packaged and single-serve coffees and teas, royalty and licensing revenues, serveware, beverage-related ingredients and ready-to-drink beverages, among other items.

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The table below presents financial information for our reportable operating segments and Corporate and Other segment (in millions) :

1 unchanged sentence

Americas International Channel Development Corporate and Other Total

March 28, 2021

June 27, 2021

Total net revenues $ 5,400.3 $ 1,658.4 $ 414.0 $ 23.8 $ 7,496.5

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Operating income/(loss) 1,315.7 318.3 216.0 ( 361.3 ) 1,488.7

March 29, 2020

June 28, 2020

Total net revenues $ 2,805.5 $ 949.6 $ 447.3 $ 19.7 $ 4,222.1

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Operating income/(loss) ( 404.9 ) ( 86.0 ) 124.2 ( 337.2 ) ( 703.9 )

Two Quarters Ended

Three Quarters Ended

Americas International Channel Development Corporate and Other Total

March 28, 2021

June 27, 2021

Total net revenues $ 14,768.1 $ 4,923.7 $ 1,155.3 $ 66.8 $ 20,913.9

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Operating income/(loss) 3,034.4 844.6 569.3 ( 1,058.4 ) 3,389.9

March 29, 2020

June 28, 2020

Total net revenues $ 12,146.3 $ 3,655.3 $ 1,461.0 $ 52.3 $ 17,314.9

2 unchanged sentences

Operating income/(loss) 1,315.1 174.5 489.3 ( 975.5 ) 1,003.4

Subsequent Event

On July 26, 2021 , we entered into agreements to sell our 50 % ownership in Starbucks Coffee Korea Co., Ltd.

such that our in-market joint venture partner, E-Mart Inc., will acquire an additional 17.5 % interest and Apfin Investment Pte Ltd, an affiliate of GIC Private Limited, which is a Singapore sovereign wealth fund, will acquire the remaining 32.5 %.

The sale will have a combined price of $ 1.175 billion.

The transactions are subject to regulatory approval by the Korean government and are expected to close within the next 90 days .

Upon close, the market will be transitioned to a fully licensed model, and we expect to recognize a combined material pre-tax gain on our consolidated statements of earnings.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements