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Submit the Ratio Analysis portion of the final project. For this milestone, you will be analyzing the financial performance of Starbucks using the financial ratios of liquidity, solvency, and profitability (Critical Element III).

Note: To calculate the ratio amounts, you may use the fileKey Financial Ratios Explained and Set Up in Excel. This Excel document may also be used for your final project.

For additional details, please refer to theMilestone Two Guidelines and Rubricdocument and theFinal Project Guidelines and Rubricdocument in the Assignment Guidelines and Rubrics section of the course.

KEY FINANCIAL STATEMENT RATIOS Liquidity ratios rev. 3-19-2010 rev. Feb 2010 Example: Current Ratio Current Assets Current Liabilities 2.0 to 1 Quick Ratio "Acid Test" Quick Assets * Current Liabilities A "2.0 to 1" ratio means that there is $2.00 of current assets for every $1 in current liabilities, which suggests that short-term creditors can be reasonably sure of being paid. If current liabilities are rising faster than the current assets from which they must be paid, company could become insolvent (unable to pay its debts) and eventually bankrupt. 0.9 to 1 Indicates extent to which claims of If Current Ratio is OK, but Quick Ratio short-term creditors are covered by is low or declining, the cause may "quick" assets*. be excessive nonliquid inventory. * Quick assets include Cash, Marketable Securities, and Accounts Receivable (excludes Inventory) Asset Management Ratios Accts Receivable Sales (credit only) Turnover Accounts receivable Avg Number of Days to Collect Inventory Turnover 365 (days in year) A/R turnover ratio Cost of Goods Sold* Inventory* 6.0 times 60.8 days 4.0 times Number of times per year receivables were generated and then paid ("turned over") Number of days customers are taking to pay Number of times merchandise items are sold and restocked ("turned over") per year. * Some publications use "Sales" as the numerator, and/or average inventory as denominator Avg Number of Days in Inventory 365 (days in year) Inv. turnover ratio 91.3 days If the turnover ratio is decreasing or avg number of days to collect is increasing or is substantially greater than credit terms (e.g., "30 days, net"), then credit and collection policies may need to be strengthened. If the turnover ratio is decreasing or number of days in Inventory is increasing , inventory may becoming outdated and possibly overstated Number of days inventory remains unsold Debt (Leverage) (Long-term Solvency) Ratios Debt to Assets Total Liabilities Total Assets 0.50 The portion of the total financing supplied by creditors as opposed to the owner-stockholders. Debt to Equity Total Liabilities Total Equity 1.5 The financing supplied by creditors as compared to financing supplied by the owner-stockholders. Times interest Earned EBIT* Interest expense 3.2 Measures the extent to which operating income can decline before firm is unable to meet interest payments Debt to Assets and Debt to Equity are alternative benchmarks that measure long-term solvency. Higher ratios (high leverage) mean greater risk that cash flows from operations will be insufficient to cover interest and principal payments. Low ratio = low margin of safety, and can make it difficult to borrow. * EBIT means "Earnings before Interest and Taxes" Profitability Ratios (not applicable if net loss) Net Profit Margin (%) Net Income Sales (net) 5.1% Net income as a percentage of sales. If trend is down, product costs and/or operating expenses are rising faster than sales. Low percentage = low safety margin: higher risk that a decline in sales will erase profits and result in a net loss. Gross Profit on Sales (%) Gross Profit Sales (net) 35.2% Gross Profit as a percentage of sales. If low or declining, product costs may be increasing and/or selling prices decreasing (steeper discounts). A low or declining Gross Profit % indicates less ability to sell goods at intended selling price, or rising cost of goods, or both. Measures how well management is managing assets to generate profit from operations. A low or declining rate could mean that assets are not being utilized effectively. Measures rate of return on stockholders investment. (However, "dividend yield" for stockholders is generally much less.) Low return could be caused by high debt, i.e., high interest expense. Return on Assets (%) aka ROI Return on Equity (%) Operating Income* 15.3% Total Operating Assets Net Income ** Total Equity ** 18.4% * Some publications use Net income (after tax) instead of Operating income (i.e., earnings before interest and income tax, or EBIT) ** If preferred stock exists, subtract Preferred Dividends from Net Income, and also subtract Preferred Stock from Total Equity Market Value Ratios Earnings per Net Income * $1.23 Share (EPS) Common shares outstanding EPS is the "real" measure of profitability used by potential investors (not used by creditors). * If preferred stock exists, subtract Preferred Dividends from Net Income. EPS can decline despite an increase in total earnings and thus drive down the market price per share. Price/Earnings Ratio (P/E) High P/E ratio means that investors perceive good growth potentialbut they could be (and often are) wrong. Market Price EPS * 16.5 times The multiple-times-earnings that investors are willing to pay, based on their perception of future share price. * If EPS is negative, ratio is "not applicable" KEY FINANCIAL STATEMENT RATIOS THIS YEAR Amounts Answer LAST YEAR Amounts Answer Industry Average Liquidity ratios Current Ratio Quick Ratio, or "Acid Test" Current Assets = Current Liabilities = = Quick Assets * Current Liabilities * Quick assets include Cash, Marketable Securities, and Accounts Receivable (excludes Inventory) Asset Management Ratios Inventory Turnover Cost of Goods Sold Inventory* Accts Receivable Turnover Sales Accts Receivable* * Textbooks generally use "average" for the year (beginning + ending) / 2, but it's OK to use ending only Debt (Leverage) (Long-term Solvency) Ratios Debt to Assets Total Liabilities Total Assets Debt to Equity Total Liabilities Total Equity Times interest Earned EBIT* Interest expense * EBIT means "Earnings before Interest and Taxes" Profitability Ratios (not applicable if net loss) Net Profit Margin (%) Net Income Sales Gross Profit on Sales (%) Gross Profit Sales Return on Assets (%) aka ROI Net Operating Income Total Operating Assets Return on Equity (%) Net Income Total Equity Market Value Ratios Earnings per Share (EPS) Net Income No. shares outstanding Price/Earnings* Ratio (P/E) Market Price EPS Industry avg. not relevant prior year not required * P/E ratio changes daily with market price. If EPS is negative, ratio is "not applicable". Use "Basic" , not "Diluted". MBA 503 Milestone Two Guidelines and Rubric For this assignment, due in Module Six, you will submit the Ratio Analysis portion of the final project. For this milestone, you will be analyzing the financial performance of Starbucks using the financial ratios of liquidity, solvency, and profitability (Critical Element III). Include your calculations and amounts in a table in the appendix of your paper. Be sure to show your calculations for each ratio. You will also discuss what each ratio and ratio category tells the user about the financial health of the company, including stating appropriate methods for comparison such as benchmarking and trend analysis. Note: To calculate the ratio amounts you may use the document Key Financial Ratios Explained and Set Up in Excel. This Excel document may also be used for your final project. Specifically, the following critical elements must be addressed: I. Ratio Analysis: Analyze and discuss the financial performance of Starbucks using financial ratios. Include your calculations and amounts in a table in the appendix of your paper. Be sure to show your calculation for each ratio. A. Liquidity Ratios 1. Accurately present and calculate two liquidity ratios for Starbucks. 2. Discuss what the liquidity ratios reveal about Starbucks, including any description of benchmarks, standard measurements, or other types of analysis used once the ratio amount is known. B. Solvency Ratios 1. Accurately present and calculate two solvency ratios for Starbucks. 2. Discuss what the solvency ratios reveal about the company, including any description of benchmarks, standard measurements, or other types of analysis used once the ratio amounts are known. C. Profitability Ratios 1. Accurately present and calculate two solvency ratios for Starbucks. 2. Discuss what the profitability ratios reveal about the company, including any description of benchmarks, standard measurements, or other types of analysis used once the ratio amounts are known. Rubric Guidelines for Submission: Milestone Two should adhere to the following formatting requirements: 2-3 pages (not including cover page or appendix), doublespaced, using 12-point Times New Roman font and the most current guidelines for APA formatting. Include all calculations in an Excel document. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Critical Elements Ratio: Liquidity: Calculate Proficient (100%) Accurately presents and calculates two liquidity ratios for Starbucks Ratio: Liquidity: Discuss Comprehensively discusses what liquidity ratios reveal about Starbucks Accurately presents and calculates two solvency ratios for Starbucks Ratio: Solvency: Calculate Ratio: Solvency: Discuss Ratio: Profitability: Calculate Comprehensively discusses what solvency ratios reveal about Starbucks Accurately presents and calculates two profitability ratios for Starbucks Needs Improvement (75%) Presents and calculates two liquidity ratios for Starbucks, but with gaps in accuracy, or chosen ratios are not appropriate Discusses what liquidity ratios reveal about Starbucks, but with gaps in logic or detail Presents and calculates two solvency ratios for Starbucks, but with gaps in accuracy, or chosen ratios are not appropriate Discusses what solvency ratios reveal about Starbucks, but with gaps in logic or detail Presents and calculates two profitability ratios for Starbucks, but with gaps in accuracy, or chosen ratios are not appropriate Not Evident (0%) Does not present and calculate two liquidity ratios for Starbucks Value 15 Does not discuss what liquidity ratios reveal about Starbucks 15 Does not present and calculate two solvency ratios for Starbucks 15 Does not discuss what solvency ratios reveal about Starbucks 15 Does not present and calculate two profitability ratios for Starbucks 15 Ratio: Profitability: Discuss Comprehensively discusses what profitability ratios reveal about Starbucks Discusses what profitability ratios reveal about Starbucks, but with gaps in logic or detail Does not discuss what profitability ratios reveal about Starbucks 15 Articulation of Response Submission has no major errors related to citations, grammar, spelling, syntax, or organization Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main idea Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 10 Total 100% Document And Entity Information - USD ($) shares in Millions, $ in Billions Document And Entity Information [Abstract] Document Type Amendment Flag Document Period End Date Document Fiscal Year Focus Document Fiscal Period Focus Entity Registrant Name Entity Central Index Key Current Fiscal Year End Date Entity Filer Category Entity Well-known Seasoned Issuer Entity Voluntary Filers Entity Current Reporting Status Entity Public Float Entity Common Stock, Shares Outstanding 12 Months Ended Sep. 27, 2015 10-K false Sep. 27, Nov. 06, 2015 Mar. 27, 2015 2015 2,015 FY STARBUCKS CORP 829,224 --09-27 Large Accelerated Filer Yes No Yes $ 69 1,484.8 Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions Net Revenues: Total net revenues Cost of sales including occupancy costs Store operating expenses Other operating expenses Depreciation and amortization expenses General and administrative expenses Litigation charge/(credit) Total operating expenses Income from equity investees Operating income/(loss) Gain resulting from acquisition of joint venture Loss on extinguishment of debt Interest income and other, net Interest expense Earnings/(loss) before income taxes Income tax expense/(benefit) Net earnings including noncontrolling interests Net earnings/(loss) attributable to noncontrolling interests Net earnings attributable to Starbucks Earnings per share - basic Earnings per share - diluted Weighted average shares outstanding: Basic Diluted Company-operated stores [Member] Net Revenues: Total net revenues Licensed stores [Member] Net Revenues: Total net revenues CPG, foodservice and other [Member] Net Revenues: Total net revenues [1] 12 Months Ended Sep. 27, 2015 Sep. 28, 2014 Sep. 29, 2013 $ 19,162.7 7,787.5 5,411.1 522.4 893.9 1,196.7 0 15,811.6 249.9 3,601 390.6 (61.1) 43 (70.5) 3,903 1,143.7 2,759.3 1.9 $ 2,757.4 $ 1.84 $ 1.82 [1] $ 16,447.8 6,858.8 4,638.2 457.3 709.6 991.3 (20.2) 13,635 268.3 3,081.1 0 0 142.7 (64.1) 3,159.7 1,092 2,067.7 (0.4) $ 2,068.1 $ 1.37 $ 1.35 [1] $ 14,866.8 6,382.3 4,286.1 431.8 621.4 937.9 2,784.1 15,443.6 251.4 (325.4) 0 0 123.6 (28.1) (229.9) (238.7) 8.8 0.5 $ 8.3 $ 0.01 $ 0.01 1,495.9 1,513.4 1,506.3 1,526.3 1,498.5 1,524.5 $ 15,197.3 $ 12,977.9 $ 11,793.2 1,861.9 1,588.6 1,360.5 $ 2,103.5 $ 1,881.3 $ 1,713.1 As discussed in Note 1, Summary of Significant Accounting Policies, on April 9, 2015, we effected a two-for-one stock split of our $0.001 par value common stock for shareholders of record as of March 30, 2015. All per-share data presented in this note has been retroactively adjusted to Consolidated Statements of Comprehensive Income - USD ($) $ in Millions Net earnings including noncontrolling interests Other comprehensive income/(loss), net of tax: Other comprehensive income/(loss) Comprehensive income including noncontrolling interests Comprehensive income/(loss) attributable to noncontrolling interests Comprehensive income attributable to Starbucks Available-for-sale Securities [Member] Other comprehensive income/(loss), net of tax: Unrealized holding gains/(losses) on available-for-sale securities, before tax Unrealized holding gains/(losses) on available-for-sale securities, tax (expense)/benefit Cash Flow Hedging [Member] Other comprehensive income/(loss), net of tax: Unrealized gains/(losses) on hedging instruments, before tax Unrealized gains/(losses) on hedging instruments, tax (expense)/benefit Net Investment Hedges [Member] Other comprehensive income/(loss), net of tax: Unrealized gains/(losses) on hedging instruments, before tax Unrealized gains/(losses) on hedging instruments, tax (expense)/benefit Translation Adjustment [Member] Other comprehensive income/(loss), net of tax: Translation adjustment, before tax Translation adjustment, tax (expense)/benefit Other comprehensive income/(loss) Reclassification out of Accumulated Other Comprehensive Income [Member] Other comprehensive income/(loss), net of tax: Reclassification adjustment for net gains (losses) realized in net earnings for available-for-sale securities, hedging instruments, and translation adjustment, before tax Reclassification adjustment for net gains (losses) realized in net earnings for available-for-sale securities, hedging instruments, and translation adjustment, tax expense/(benefit) 12 Months Ended Sep. 27, 2015 Sep. 28, 2014 $ 2,759.3 $ 2,067.7 Sep. 29, 2013 $ 8.8 (224.7) 2,534.6 (29.2) 2,563.8 (41.7) 2,026 (0.4) 2,026.4 44.3 53.1 0.5 52.6 1.4 (0.5) 1.6 (0.6) (0.6) 0.2 47.6 (16.8) 24.1 (7.8) 47.1 (24.6) 4.3 (1.6) 25.5 (9.4) 32.8 (12.1) (222.7) 6 (171.3) (75.8) (1.6) (77.4) (41.6) 0.3 (65.9) (1.5) 46.3 $ 23.5 $ 3.8 $ (3.5) Consolidated Balance Sheets - USD ($) $ in Millions Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other current assets Deferred income taxes, net Total current assets Long-term investments Equity and cost investments Property, plant and equipment, net Deferred income taxes, net Other long-term assets Other intangible assets Goodwill TOTAL ASSETS Current liabilities: Accounts payable Accrued liabilities Insurance reserves Stored value card liability Total current liabilities Long-term debt Other long-term liabilities Total liabilities Shareholders' equity: Common stock ($0.001 par value) - authorized, 2,400.0 shares; issued and outstanding, 1,485.1 and 1,499.1 shares, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive income/(loss) Total shareholders' equity Noncontrolling interests Total equity TOTAL LIABILITIES AND EQUITY Sep. 27, 2015 Sep. 28, 2014 $ 1,530.1 81.3 719 1,306.4 334.2 381.7 4,352.7 312.5 352 4,088.3 828.9 415.9 520.4 1,575.4 12,446.1 $ 1,708.4 135.4 631 1,090.9 285.6 317.4 4,168.7 318.4 514.9 3,519 903.3 198.9 273.5 856.2 10,752.9 684.2 1,760.7 224.8 983.8 3,653.5 2,347.5 625.3 6,626.3 533.7 1,514.4 196.1 794.5 3,038.7 2,048.3 392.2 5,479.2 1.5 0.7 41.1 5,974.8 (199.4) 5,818 1.8 5,819.8 $ 12,446.1 39.4 5,206.6 25.3 5,272 1.7 5,273.7 $ 10,752.9 Consolidated Balance Sheets (Parenthetical) - $ / shares Statement of Financial Position [Abstract] Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Sep. 27, 2015 Sep. 28, 2014 $ 0.001 2,400,000,000 1,485,100,000 1,485,100,000 $ 0.001 2,400,000,000 1,499,100,000 1,499,100,000 Consolidated Statements of Cash Flows - USD ($) $ in Millions OPERATING ACTIVITIES: Net earnings including noncontrolling interests Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Litigation charge Deferred income taxes, net Income earned from equity method investees Distributions received from equity method investees Gain resulting from acquisition/sale of equity in joint ventures and certain retail operations Loss on extinguishment of debt Stock-based compensation Excess tax benefit on share-based awards Other Cash provided/(used) by changes in operating assets and liabilities: Accounts receivable Inventories Accounts payable Accrued litigation charge Income taxes payable, net Accrued liabilities and insurance reserves Stored value card liability Prepaid expenses, other current assets and other long-term assets Net cash provided by operating activities INVESTING ACTIVITIES: Purchases of investments Sales of investments Maturities and calls of investments Acquisitions, net of cash acquired Additions to property, plant and equipment Proceeds from sale of equity in joint ventures and certain retail operations Other Net cash used by investing activities FINANCING ACTIVITIES: Proceeds from issuance of long-term debt Repayments of long-term debt Cash used for purchase of non-controlling interest Proceeds from issuance of common stock Excess tax benefit on share-based awards Cash dividends paid Repurchase of common stock Minimum tax withholdings on share-based awards Other Net cash used by financing activities Effect of exchange rate changes on cash and cash equivalents Net increase/(decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS: Beginning of period End of period Cash paid during the period for: Interest, net of capitalized interest Income taxes, net of refunds 12 Months Ended Sep. 27, 2015 Sep. 28, 2014 Sep. 29, 2013 $ 2,759.3 $ 2,067.7 $ 8.8 933.8 0 21.2 (190.2) 148.2 (394.3) 748.4 0 10.2 (182.7) 139.2 (70.2) 655.6 2,784.1 (1,045.9) (171.8) 115.6 (80.1) 61.1 209.8 (132.4) 53.8 0 183.2 (114.4) 36.2 0 142.3 (258.1) 23 (82.8) (207.9) 137.7 0 87.6 124.4 170.3 49.5 3,749.1 (79.7) 14.3 60.4 (2,763.9) 309.8 103.9 140.8 4.6 607.8 (68.3) 152.5 88.7 0 298.4 47.3 139.9 76.3 2,908.3 (567.4) 600.6 18.8 (284.3) (1,303.7) 8.9 6.8 (1,520.3) (1,652.5) 1,454.8 456.1 0 (1,160.9) 103.9 (19.1) (817.7) (785.9) 60.2 980 (610.4) (1,151.2) 108 (11.9) (1,411.2) 848.5 (610.1) (360.8) 191.8 132.4 (928.6) (1,436.1) (75.5) (18.1) (2,256.5) (150.6) (178.3) 748.5 0 0 139.7 114.4 (783.1) (758.6) (77.3) (6.9) (623.3) (34.1) (867.3) 749.7 (35.2) 0 247.2 258.1 (628.9) (588.1) (121.4) 10.4 (108.2) (1.8) 1,387.1 1,708.4 1,530.1 2,575.7 1,708.4 1,188.6 2,575.7 69.5 $ 1,072.2 56.2 $ 766.3 34.4 $ 539.1 Consolidated Statements of Equity - USD ($) shares in Millions, $ in Millions Common stock, Shares at Sep. 30, 2012 Balance, Amount at Sep. 30, 2012 Net earnings Other comprehensive income/(loss) Stock-based compensation expense Exercise of stock options/vesting of RSUs, including tax benefit, Shares Exercise of stock options/vesting of RSUs, including tax benefit, Amount Sale of common stock, including tax benefit, Shares Sale of common stock, including tax benefit, Amount Repurchase of common stock, Shares Repurchase of common stock, Amount Cash dividends declared Noncontrolling interest resulting from divestiture Common stock, Shares at Sep. 29, 2013 Balance, Amount at Sep. 29, 2013 Net earnings Other comprehensive income/(loss) Stock-based compensation expense Exercise of stock options/vesting of RSUs, including tax benefit, Shares Exercise of stock options/vesting of RSUs, including tax benefit, Amount Sale of common stock, including tax benefit, Shares Sale of common stock, including tax benefit, Amount Repurchase of common stock, Shares Repurchase of common stock, Amount Cash dividends declared Common stock, Shares at Sep. 28, 2014 Balance, Amount at Sep. 28, 2014 Net earnings Other comprehensive income/(loss) Stock-based compensation expense Exercise of stock options/vesting of RSUs, including tax benefit, Shares Exercise of stock options/vesting of RSUs, including tax benefit, Amount Sale of common stock, including tax benefit, Shares Sale of common stock, including tax benefit, Amount Repurchase of common stock, Shares Repurchase of common stock, Amount Cash dividends declared Two-for-one stock split, Shares Two-for-one stock split, Amount Noncontrolling interest resulting from acquisition Purchase of noncontrolling interest Common stock, Shares at Sep. 27, 2015 Balance, Amount at Sep. 27, 2015 Total $ 5,114.5 8.8 44.3 144.1 366.8 20.4 (544.1) (668.6) (3.9) 4,482.3 2,067.7 (41.7) 185.1 154.8 22.3 (769.8) $ (827) 1,499.1 $ 5,273.7 2,759.3 (224.7) 211.7 $ 224.4 0.5 $ 23.5 (1,431.8) (1,016.2) 0 411.1 $ (411.1) 1,485.1 $ 5,819.8 Common Stock [Member] 749.3 $ 0.7 0 $0 14.4 $ 0.1 0.3 $0 (10.8) $0 0 $0 753.2 $ 0.8 0 $0 6.5 $0 0.3 $0 (10.5) $ (0.1) $0 749.5 $ 0.7 0 $0 14.6 $0 0.6 $0 (29) $0 $0 749.4 $ 0.8 Additional Paid-in Capital [Member] Retained Earnings [Member] Accumulated Other Comprehensive Income/(Loss) [Member] $ 39.4 0 $ 5,046.2 8.3 144.1 0 $ 22.7 0 44.3 0 $ 5,109 8.3 44.3 144.1 366.7 0 0 366.8 20.4 0 0 20.4 (288.5) 0 0 (255.6) (668.6) 0 0 0 0 (544.1) (668.6) 0 282.1 0 4,130.3 2,068.1 185.1 0 67 0 (41.7) 0 4,480.2 2,068.1 (41.7) 185.1 154.8 0 0 154.8 22.3 0 0 22.3 (604.9) 0 (164.8) (827) 0 0 (769.8) (827) 39.4 0 5,206.6 2,757.4 211.7 0 25.3 0 (193.6) 0 5,272 2,757.4 (193.6) 211.7 224.4 0 0 224.4 23.5 0 0 23.5 (459.6) 0 (972.2) (1,016.2) 0 0 (1,431.8) (1,016.2) (0.8) 1.7 1,485.1 $ 1.5 Shareholders' Equity [Member] $ 41.1 0 (31.1) $ 5,974.8 (29.4) $ (199.4) $ 5,818 Noncontrolling Interest [Member] $ 5.5 0.5 0 0 0 0 0 0 (3.9) 2.1 (0.4) 0 0 0 0 0 0 1.7 1.9 (31.1) 0 0 0 0 0 411.1 (381.7) $ 1.8 Consolidated Statements of Equity (Parenthetical) $ in Millions Statement of Stockholders' Equity [Abstract] Tax benefit from exercise of stock options/vesting of RSUs Tax benefit from sale of common stock Cash dividends declared per share | $ / shares Sep. 27, 2015USD ($)$ / shares $ 131.3 $ 0.2 $ 0.680 12 Months Ended Sep. 28, 2014USD ($)$ / shares $ 114.8 $ 0.2 $ 0.550 Sep. 29, 2013USD ($)$ / shares $ 259.9 $ 0.2 $ 0.445 Acquisitions and Divestitures Business Combinations [Abstract] Acquisitions and Divestitures 12 Months Ended Sep. 27, 2015 Acquisitions and Divestitures Fiscal 2015 During the fourth quarter of fiscal 2015, we sold our company-operated retail store assets and operations in Puerto Rico to Baristas Del Caribe, LLC, converting these operations to a fully licensed market, for a total of $8.9 million . This transaction resulted in a pre-tax gain of $3.7 million , which was included in net interest income and other on the consolidated statements of earnings. On September 23, 2014 , we entered into a tender offer bid agreement with Starbucks Coffee Japan, Ltd. ("Starbucks Japan"), at the time a 39.5% owned equity method investment, and our former joint venture partner, Sazaby League, Ltd. ("Sazaby"), to acquire the remaining 60.5% ownership interest in Starbucks Japan. Acquiring Starbucks Japan further leverages our existing infrastructure to continue disciplined retail store growth and expand our presence into other channels in the Japan market, such as consumer packaged goods ("CPG"), licensing and foodservice . This acquisition was structured as a two-step tender offer. On October 31, 2014 , we acquired Sazaby's 39.5% ownership interest in Starbucks Japan through the first tender offer step for 55 billion in cash, or $509 million with Japanese yen converted into U.S. dollars at a reference conversion rate of 108.13 JPY to USD, based on a spot rate that approximates the rate as of the acquisition date, bringing our total ownership in Starbucks Japan to a controlling 79% interest. The following table summarizes the allocation of the total consideration to the fair values of the assets acquired and liabilities assumed as of October 31, 2014 (in millions) : Consideration: Cash paid for Sazaby's 39.5% equity interest $ 508.7 Fair value of our preexisting 39.5% equity interest 577.0 Total consideration $ 1,085.7 Fair value of assets acquired and liabilities Summary of Significant Accounting Policies Accounting Policies [Abstract] Summary Of Significant Accounting Policies 12 Months Ended Sep. 27, 2015 Summary of Significant Accounting Policies Description of Business We purchase and roast highquality coffees that we sell, along with handcrafted coffee and tea beverages and a variety of fresh food items, through our company-operated stores. We also sell a variety of coffee and tea products and license our trademarks through other channels such as licensed stores, grocery and national foodservice accounts. In this 10-K, Starbucks Corporation (together with its subsidiaries) is referred to as "Starbucks," the "Company," "we," "us" or "our." We have four reportable operating segments: 1) Americas, which is inclusive of the U.S., Canada, and Latin America; 2) China/Asia Pacific ("CAP"); 3) Europe, Middle East, and Africa ("EMEA") and 4) Channel Development. We also have several non-reportable operating segments, including Teavana, Seattle's Best Coffee, Evolution Fresh, and our Digital Ventures business, as well as certain developing businesses such as the Starbucks Reserve Roastery & Tasting Room, which are combined and referred to as All Other Segments. Unallocated corporate operating expenses, which pertain primarily to corporate administrative functions that support the operating segments but are not specifically attributable to or managed by any segment, are presented as a reconciling item between total segment operating results and consolidated financial results. Additional details on the nature of our business and our reportable operating segments are included in Note 16 , Segment Reporting, of these Consolidated Financial Statements. Principles of Consolidation Our consolidated financial statements reflect the financial position and operating results of Starbucks, including wholly-owned subsidiaries and investees that we control. Investments in entities that we do not control, but have the ability to exercise significant Derivative Financial Instruments Derivative Instruments and Hedging Activities Disclosure [Abstract] Derivative Financial Instruments 12 Months Ended Sep. 27, 2015 Derivative Financial Instruments Interest Rates Depending on market conditions, we enter into interest rate swap agreements to hedge the variability in cash flows due to changes in the benchmark interest rate related to anticipated debt issuances. These agreements are cash settled at the time of the pricing of the related debt. The effective portion of the derivative's gain or loss is recorded in accumulated other comprehensive income ("AOCI") and is subsequently reclassified to interest expense over the life of the related debt. During the first quarter of fiscal 2015 , we entered into forward-starting interest rate swap agreements with an aggregate notional amount of $250.0 million related to the $500 million of 7-year 2.700% Senior Notes (the "2022 notes") due in June 2022 issued in the third quarter of fiscal 2015. During the third quarter of fiscal 2015, we entered into forward-starting interest rate swap agreements with an aggregate notional amount of $250.0 million related to the $350 million of 30-year 4.300% Senior Notes (the "2045 notes") due in June 2045 issued in the third quarter of fiscal 2015. We cash settled these swap agreements at the time of the pricing of the 2022 and the 2045 notes, effectively locking in the benchmark interest rate in effect at the time the swap agreements were initiated. In July 2015 , we redeemed our $550 million of 6.250% Senior Notes (the "2017 notes") originally scheduled to mature in August 2017. In connection with the redemption in the fourth quarter of fiscal 2015, we reclassified $2.0 million from accumulated other comprehensive income to interest expense on our consolidated statements of earnings related to remaining unrecognized losses from interest rate contracts entered into in conjunction with the 2017 notes and designated as cash flow hedges. In the fourth quarter of fiscal Fair Value Measurements Fair Value Disclosures [Abstract] Fair Value Measurements 12 Months Ended Sep. 27, 2015 Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis (in millions): Fair Value Measurements at Reporting Date Using Balance at Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash and cash equivalents $ 1,530.1 $ 1,530.1 $ $ Shortterm investments: Available-for-sale securities Corporate debt securities 10.2 10.2 Foreign government obligations 2.0 2.0 State and local government obligations 3.3 3.3 Total available-for-sale securities 15.5 15.5 Trading securities 65.8 65.8 Total short-term investments 81.3 65.8 15.5 Prepaid expenses and other current assets: Derivative assets 50.8 50.8 Long-term investments: Available-for-sale securities Agency obligations 8.6 8.6 Corporate debt securities 121.8 121.8 Auction rate securities 5.9 5.9 Foreign government obligations 18.5 18.5 U.S. government treasury securities 104.8 104.8 State and local government obligations 9.7 9.7 Mortgage and other asset-backed securities 43.2 43.2 Total long-term investments 312.5 104.8 201.8 5.9 Other long-term assets: Derivative assets 54.7 54.7 Total assets $ 2,029.4 $ 1,700.7 $ 322.8 $ 5.9 Liabilities: Accrued liabilities: Derivative liabilities $ 19.2 $ 3.6 $ 15.6 $ Other long-term liabilities: Derivative liabilities 14.5 14.5 Total liabilities $ 33.7 $ 3.6 $ 30.1 $ Fair Value Measurements at Reporting Date Using Balance at Quoted Prices Significant Significant Assets: Cash and cash equivalents $ 1,708.4 $ 1,708.4 $ $ Short-term investments: Available-for-sale securities Corporate debt securities 4.9 4.9 Foreign government obligations 33.7 33.7 U.S. government treasury securities 10.9 10.9 State Inventories Inventory Disclosure [Abstract] Inventories 12 Months Ended Sep. 27, 2015 Inventories (in millions) Sep 27, 2015 Sep 28, 2014 Coffee: Unroasted $ 529.4 $ 432.3 Roasted 279.7 238.9 Other merchandise held for sale 318.3 265.7 Packaging and other supplies 179.0 154.0 Total $ 1,306.4 $ 1,090.9 Other merchandise held for sale includes, among other items, serveware and tea. Inventory levels vary due to seasonality, commodity market supply and price fluctuations. As of September 27, 2015 , we had committed to purchasing green coffee totaling $819 million under fixed-price contracts and an estimated $266 million under price-to-be-fixed contracts. As of September 27, 2015 , approximately $38 million of our price-to-be-fixed contracts were effectively fixed through the use of futures contracts. Price-to-be-fixed contracts are purchase commitments whereby the quality, quantity, delivery period, and other negotiated terms are agreed upon, but the date, and therefore the price, at which the base "C" coffee commodity price component will be fixed has not yet been established. For these types of contracts, either Starbucks or the seller has the option to "fix" the base "C" coffee commodity price prior to the delivery date. Until prices are fixed, we estimate the total cost of these purchase commitments. We believe, based on relationships established with our suppliers in the past, the risk of non-delivery on such purchase commitments is remote. Equity and Cost Investments Equity Method Investments and Joint Ventures [Abstract] Equity and Cost Investments 12 Months Ended Sep. 27, 2015 Equity and Cost Investments (in millions) Sep 27, Sep 28, Equity method investments $ 306.4 $ 469.3 Cost method investments 45.6 45.6 Total $ 352.0 $ 514.9 Equity Method Investments As of September 27, 2015 , we had a 50% ownership interest in each of the following international equity method investees: President Starbucks Coffee (Shanghai); Starbucks Coffee Korea Co., Ltd.; President Starbucks Coffee Corporation (Taiwan) Company Limited; and Tata Starbucks Limited (India). In addition, we had a 49% ownership interest in Starbucks Coffee Espaa, S.L. ("Starbucks Spain"). 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 Caf Favorites . On September 23, 2014 , we entered into a two-step tender offer bid agreement to acquire the remaining 60.5% interest in Starbucks Japan, at the time a 39.5% owned equity method investment. Upon the completion of the first tender offer step in the first quarter of fiscal 2015, we obtained a controlling interest in Starbucks Japan and began consolidating its results instead of applying equity method accounting. See further discussion at Note 2 , Acquisitions and Divestitures. 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 Supplemental Balance Sheet Information Balance Sheet Related Disclosures [Abstract] Supplemental Balance Sheet Information 12 Months Ended Sep. 27, 2015 Supplemental Balance Sheet Information (in millions) Property, Plant and Equipment, net Sep 27, 2015 Sep 28, 2014 Land $ 46.6 $ 46.7 Buildings 411.5 278.1 Leasehold improvements 5,409.6 4,858.4 Store equipment 1,707.5 1,493.3 Roasting equipment 542.4 410.9 Furniture, fixtures and other 1,281.7 1,078.1 Work in progress 242.5 415.6 Property, plant and equipment, gross 9,641.8 8,581.1 Accumulated depreciation (5,553.5 ) (5,062.1 ) Property, plant and equipment, net $ 4,088.3 $ 3,519.0 Accrued Liabilities Sep 27, 2015 Sep 28, 2014 Accrued compensation and related costs $ 522.3 $ 437.9 Accrued occupancy costs 137.2 119.8 Accrued taxes 259.0 272.0 Accrued dividends payable 297.0 239.8 Other 545.2 444.9 Total accrued liabilities $ 1,760.7 $ 1,514.4 Other Intangible Assets and Goodwill Goodwill and Intangible Assets Disclosure [Abstract] Other Intangible Assets and Goodwill 12 Months Ended Sep. 27, 2015 Other Intangible Assets and Goodwill Indefinite-Lived Intangible Assets (in millions) Sep 27, 2015 Sep 28, 2014 Trade names, trademarks and patents $ 202.8 $ 197.5 Other indefinite-lived intangible assets 15.1 15.1 Total indefinite-lived intangible assets $ 217.9 $ 212.6 Additional disclosure regarding changes in our intangible assets due to acquisitions is included at Note 2 , Acquisitions and Divestitures. Goodwill Changes in the carrying amount of goodwill by reportable operating segment (in millions) : Americas China/Asia Pacific EMEA Channel All Other Segments Total Balance at September 29, 2013 Goodwill prior to impairment $ 230.2 $ 75.1 $ 62.2 $ 23.8 $ 480.2 $ 871.5 Accumulated impairment charges (8.6 ) (8.6 ) Goodwill $ 221.6 $ 75.1 $ 62.2 $ 23.8 $ 480.2 $ 862.9 Impairment (0.8 ) (0.8 ) Other (1) (2.6 ) (0.2 ) (3.1 ) (5.9 ) Balance at September 28, 2014 Goodwill prior to impairment $ 227.6 $ 74.9 $ 59.1 $ 23.8 $ 480.2 $ 865.6 Accumulated impairment charges (8.6 ) (0.8 ) (9.4 ) Goodwill $ 219.0 $ 74.9 $ 59.1 $ 23.8 $ 479.4 $ 856.2 Acquisition/(divestiture) (2.5 ) 815.6 813.1 Impairment (0.5 ) (0.5 ) Other (1) (5.3 ) (86.4 ) (1.7 ) (93.4 ) Balance at September 27, 2015 Goodwill prior to impairment $ 219.8 $ 804.1 $ 57.4 $ 23.8 $ 480.2 $ 1,585.3 Accumulated impairment charges (8.6 ) (1.3 ) (9.9 ) Goodwill $ 211.2 $ 804.1 $ 57.4 $ 23.8 $ 478.9 $ 1,575.4 (1) Other is primarily comprised of changes in the goodwill balance as a result of foreign currency translation. Finite-Lived Intangible Assets Sep 27, 2015 Sep 28, 2014 (in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Debt Debt Disclosure [Abstract] Debt 12 Months Ended Sep. 27, 2015 Debt Revolving Credit Facility and Commercial Paper Program Our $750 million unsecured, revolving credit facility with various banks, of which $150 million may be used for issuances of letters of credit, is available for working capital, capital expenditures and other corporate purposes, including acquisitions and share repurchases. During the second quarter of fiscal 2015, we extended the duration of our credit facility, which is now set to mature on January 21, 2020 , and amended certain facility fees and borrowing rates. Starbucks has the option, subject to negotiation and agreement with the related banks, to increase the maximum commitment amount by an additional $750 million . Borrowings under the credit facility will bear interest at a variable rate based on LIBOR, and, for U.S. dollar-denominated loans under certain circumstances, a Base Rate (as defined in the credit facility), in each case plus an applicable margin. The applicable margin is based on the better of (i) the Company's long-term credit ratings assigned by Moody's and Standard & Poor's rating agencies and (ii) the Company's fixed charge coverage ratio, pursuant to a pricing grid set forth in the credit facility. The current applicable margin is 0.565% for Eurocurrency Rate Loans and 0.00% for Base Rate Loans. The credit facility contains provisions requiring us to maintain compliance with certain covenants, including a minimum fixed charge coverage ratio, which measures our ability to cover financing expenses. As of September 27, 2015, we were in compliance with all applicable covenants. No amounts were outstanding under our credit facility as of September 27, 2015 . Under our commercial paper program, we may issue unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $1 billion , with Leases Leases [Abstract] Leases 12 Months Ended Sep. 27, 2015 Leases Rent expense under operating lease agreements (in millions) : Fiscal Year Ended Sep 27, 2015 Sep 28, 2014 Sep 29, 2013 Minimum rent $ 1,026.3 $ 907.4 $ 838.3 Contingent rent 111.5 66.8 56.4 Total $ 1,137.8 $ 974.2 $ 894.7 Minimum future rental payments under non-cancelable operating leases and lease financing arrangements as of September 27, 2015 (in millions) : Fiscal Year Ending Operating Leases Lease Financing Arrangements 2016 $ 1,032.4 $ 3.2 2017 892.5 3.2 2018 739.8 3.2 2019 624.0 3.2 2020 548.9 3.2 Thereafter 1,831.9 31.1 Total minimum lease payments $ 5,669.5 $ 47.1 We have subleases related to certain of our operating leases. During fiscal 2015 , 2014 , and 2013 , we recognized sublease income of $11.9 million , $13.3 million , and $9.3 million , respectively. Additionally, as of September 27, 2015 , the gross carrying value of assets related to build-to-suit lease arrangements accounted for as financing leases was $66.8 million with associated accumulated depreciation of $2.5 million . We had no built-to-suit lease arrangements as of September 28, 2014 . Equity Equity [Abstract] Equity 12 Months Ended Sep. 27, 2015 Equity As discussed in Note 1 , Summary of Significant Accounting Policies, on April 9, 2015, we effected a two -for-one stock split of our $0.001 par value common stock for shareholders of record as of March 30, 2015. All share data presented in this note has been retroactively adjusted to reflect this stock split. In addition to 2.4 billion shares of authorized common stock with $0.001 par value per share, we have authorized 7.5 million shares of preferred stock, none of which was outstanding at September 27, 2015 . Included in additional paid-in capital in our consolidated statements of equity as of September 27, 2015 and September 28, 2014 is $39.4 million related to the increase in value of our share of the net assets of Starbucks Japan at the time of its initial public stock offering in fiscal 2002. Also included in additional paid-in capital as of September 27, 2015 is $1.7 million , which represents the difference between the carrying value of the remaining outstanding noncontrolling interests in Starbucks Japan prior to obtaining full ownership and the cash paid to acquire the noncontrolling interests. Refer to Note 2 , Acquisitions and Divestitures, for further discussion. We repurchased 29.0 million shares of common stock at a total cost of $1.4 billion , and 21.0 million shares at a total cost of $769.8 million for the year s ended September 27, 2015 and September 28, 2014 , respectively. On July 23, 2015 , we announced that our Board of Directors approved an increase of 50 million shares to our ongoing share repurchase program. As of September 27, 2015 , 52.7 million shares remained available for repurchase under current authorizations. During fiscal years 2015 and 2014 , our Board of Directors declared the following Employee Stock and Benefit Plans Disclosure of Compensation Related Costs, Share-based Payments [Abstract] Employee Stock and Benefit Plans 12 Months Ended Sep. 27, 2015 Employee Stock and Benefit Plans We maintain several equity incentive plans under which we may grant non-qualified stock options, incentive stock options, restricted stock, restricted stock units ("RSUs"), or stock appreciation rights to employees, non-employee directors and consultants. We issue new shares of common stock upon exercise of stock options and the vesting of RSUs. We also have an employee stock purchase plan ("ESPP"). As discussed in Note 1 , Summary of Significant Accounting Policies, on April 9, 2015, we effected a two -for-one stock split of our $0.001 par value common stock for shareholders of record as of March 30, 2015. All share and per-share data presented in this note has been retroactively adjusted to reflect this stock split. As of September 27, 2015 , there were 96.3 million shares of common stock available for issuance pursuant to future equity-based compensation awards and 14.3 million shares available for issuance under our ESPP. Stock-based compensation expense recognized in the consolidated financial statements (in millions) : Fiscal Year Ended Sep 27, 2015 Sep 28, 2014 Sep 29, 2013 Options $ 37.8 $ 41.8 $ 37.1 RSUs 172.0 141.4 105.2 Total stock-based compensation expense recognized in the consolidated statements of earnings $ 209.8 $ 183.2 $ 142.3 Total related tax benefit $ 72.3 $ 63.4 $ 49.8 Total capitalized stock-based compensation included in net property, plant and equipment and inventories on the consolidated balance sheets $ 1.9 $ 1.9 $ 1.8 Stock Option Plans Stock options to purchase our common stock are granted at the fair value of the stock on the grant date. The majority of options become exercisable in four equal installments beginning a year from the grant date and generally expire 10 years from the grant date. Options granted to non-employee directors Income Taxes Income Tax Disclosure [Abstract] Income Taxes 12 Months Ended Sep. 27, 2015 Income Taxes Components of earnings/(loss) before income taxes (in millions) : Fiscal Year Ended Sep 27, 2015 Sep 28, 2014 Sep 29, 2013 Total Litigation charge All Other United States $ 2,837.2 $ 2,572.4 $ (674.0 ) $ (2,784.1 ) $ 2,110.1 Foreign 1,065.8 587.3 444.1 444.1 Total earnings/(loss) before income taxes $ 3,903.0 $ 3,159.7 $ (229.9 ) $ (2,784.1 ) $ 2,554.2 Provision/(benefit) for income taxes (in millions) : Fiscal Year Ended Sep 27, 2015 Sep 28, 2014 Sep 29, 2013 Total Litigation charge All Other Current taxes: U.S. federal $ 801.0 $ 822.7 $ 616.6 $ $ 616.6 U.S. state and local 150.1 132.9 93.8 93.8 Foreign 172.2 128.8 95.9 95.9 Total current taxes 1,123.3 1,084.4 806.3 806.3 Deferred taxes: U.S. federal 56.5 12.0 (898.8 ) (922.3 ) 23.5 U.S. state and local 4.0 (4.9 ) (144.0 ) (148.7 ) 4.7 Foreign (40.1 ) 0.5 (2.2 ) (2.2 ) Total deferred taxes 20.4 7.6 (1,045.0 ) (1,071.0 ) 26.0 Total income tax expense/(benefit) $ 1,143.7 $ 1,092.0 $ (238.7 ) $ (1,071.0 ) $ 832.3 Reconciliation of the statutory U.S. federal income tax rate with our effective income tax rate: Fiscal Year Ended Sep 27, 2015 Sep 28, 2014 Sep 29, 2013 Total Litigation charge All Other Statutory rate 35.0 % 35.0 % 35.0 % 35.0 % 35.0 % State income taxes, net of federal tax benefit 2.8 2.6 15.8 3.5 2.4 Benefits and taxes related to foreign operations (2.1 ) (1.9 ) 37.5 (3.4 ) Domestic production activity deduction (2.2 ) (0.7 ) 8.1 (0.7 ) Domestic tax credits (0.2 ) (0.2 ) 2.8 (0.3 ) Charitable contributions (0.3 ) (0.4 ) 3.9 (0.3 ) Gain resulting from acquisition of joint venture (3.7 ) Other, net 0.2 0.7 (0.1 ) Effective tax rate 29.3 % 34.6 % 103.8 % 38.5 % 32.6 % Our effective tax rate in fiscal 2013 was significantly affected by the litigation charge we recorded as a Earnings Per Share Earnings Per Share [Abstract] Earnings per Share 12 Months Ended Sep. 27, 2015 Earnings per Share As discussed in Note 1 , Summary of Significant Accounting Policies, on April 9, 2015, we effected a two -for-one stock split of our $0.001 par value common stock for shareholders of record as of March 30, 2015. All share and per-share data presented in this note has been retroactively adjusted to reflect this stock split. Calculation of net earnings per common share ("EPS") basic and diluted (in millions, except EPS) : Fiscal Year Ended Sep 27, 2015 Sep 28, 2014 Sep 29, 2013 Net earnings attributable to Starbucks $ 2,757.4 $ 2,068.1 $ 8.3 Weighted average common shares outstanding (for basic calculation) 1,495.9 1,506.3 1,498.5 Dilutive effect of outstanding common stock options and RSUs 17.5 20.0 26.0 Weighted average common and common equivalent shares outstanding (for diluted calculation) 1,513.4 1,526.3 1,524.5 EPS basic $ 1.84 $ 1.37 $ 0.01 EPS diluted $ 1.82 $ 1.35 $ 0.01 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. The calculation of dilutive shares outstanding excludes 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 have been antidilutive. We had no out-of-the-money stock options as of September 27, 2015 and September 29, 2013 , respectively. There were 5.3 million out-of-themoney stock options as of September 28, 2014 . Commitments And Contingencies (Notes) Commitments and Contingencies Disclosure [Abstract] Commitments And Contingencies 12 Months Ended Sep. 27, 2015 Commitments and Contingencies Legal Proceedings On November 12, 2013, the arbitrator in our arbitration with Kraft Foods Global, Inc. (now known as Kraft Foods Group, Inc.) ("Kraft") ordered Starbucks to pay Kraft $2,227.5 million in damages plus prejudgment interest and attorneys' fees. We estimated prejudgment interest, which included an accrual through the estimated payment date, and attorneys' fees to be approximately $556.6 million . As a result, we recorded a litigation charge of $2,784.1 million in our fiscal 2013 operating results. In the first quarter of fiscal 2014, Starbucks paid all amounts due to Kraft under the arbitration, including prejudgment interest and attorneys' fees, and fully extinguished the litigation charge liability. Of the $2,784.1 million litigation charge accrued in the fourth quarter of fiscal 2013, $2,763.9 million was paid and the remainder was released as a litigation credit to reflect a reduction to our estimated prejudgment interest payable as a result of paying our obligation earlier than anticipated. Starbucks is party to various other legal proceedings arising in the ordinary course of business, including, at times, certain employment litigation cases that have been certified as class or collective actions, but is not currently a party to any legal proceeding that management believes could have a material adverse effect on our consolidated financial position, results of operations or cash flows. Segment Reporting Segment Reporting [Abstract] Segment Reporting 12 Months Ended Sep. 27, 2015 Segment Reporting Our chief executive officer and chief operating officer comprise the Company's Chief Operating Decision Maker function ("CODM"). Segment information is prepared on the same basis that our CODM manages the segments, evaluates financial results, and makes key operating decisions. We have four reportable operating segments: 1) Americas, inclusive of the U.S., Canada, and Latin America; 2) China/Asia Pacific ("CAP"); 3) Europe, Middle East, and Africa ("EMEA") and 4) Channel Development. Americas, CAP, and EMEA operations sell coffee and other beverages, complementary food, packaged coffees, single-serve coffee products and a focused selection of merchandise through company-operated stores and licensed stores. Our Americas segment is our most mature business and has achieved significant scale. Certain markets within our CAP and EMEA operations are still in the early stages of development and require a more extensive support organization, relative to their current levels of revenue and operating income, than our Americas operations. The Americas and EMEA segments also include certain foodservice accounts, primarily in Canada and the U.K. Channel Development operations sell a selection of packaged coffees and single-serve products, as well as a selection of premium Tazo teas globally. Channel Development operations also produce and sell a variety of ready-to-drink beverages, such as Frappuccino coffee drinks, Starbucks Doubleshot espresso drinks, Starbucks Refreshers beverages and chilled multiserve beverages. The U.S. foodservice business, which is included in the Channel Development segment, sells coffee and other related products to institutional foodservice companies. Consolidated revenue mix by product type (in millions) : Fiscal Year Ended Sep 27, 2015 Sep 28, Selected Quarterly Financial Information Selected Quarterly Financial Information [Abstract] Selected Quarterly Financial Information (unaudited) 12 Months Ended Sep. 27, 2015 Selected Quarterly Financial Information (unaudited; in millions, except EPS) First Quarter Second Quarter Third Quarter Fourth Quarter Full Year Fiscal 2015: Net revenues $ 4,803.2 $ 4,563.5 $ 4,881.2 $ 4,914.8 $ 19,162.7 Operating income 915.5 777.5 938.6 969.4 3,601.0 Net earnings attributable to Starbucks 983.1 494.9 626.7 652.5 2,757.4 EPS diluted (1) 0.65 0.33 0.41 0.43 1.82 Fiscal 2014: Net revenues $ 4,239.6 $ 3,873.8 $ 4,153.7 $ 4,180.8 $ 16,447.8 Operating income 813.5 644.1 768.5 854.9 3,081.1 Net earnings attributable to Starbucks 540.7 427.0 512.6 587.9 2,068.1 EPS diluted (1) 0.35 0.28 0.34 0.39 1.35 (1) As discussed in Note 1 , Summary of Significant Accounting Policies, on April 9, 2015, we effected a two -for-one stock split of our $0.001 par value common stock for shareholders of record as of March 30, 2015. All per-share data presented in this note has been retroactively adjusted to reflect this stock split. Subsequent Events Subsequent Events [Abstract] Subsequent Events 12 Months Ended Sep. 27, 2015 Subsequent Events Subsequent to our fiscal year end, the European Commission has concluded that decisions by the tax authorities in the Netherlands with regards to the corporate income tax paid by one of our subsidiaries did not comply with European Union rules on state aid. Based on this decision, which covers a 7-year period from fiscal 2008 to fiscal 2014, we estimate the amount of assessed past taxes to be no more than 30 million , including interest, which equates to approximately $32 million with euro converted into U.S. dollars at a reference conversion rate of 1.075 EUR to USD. The exposure amount is not material and we are currently evaluating this decision, including any impact to our fiscal 2016 tax provisions. Summary of Significant Accounting Policies (Policies) Accounting Policies [Abstract] Principles of Consolidation 12 Months Ended Sep. 27, 2015 Principles of Consolidation Our consolidated financial statements reflect the financial position and operating results of Starbucks, including wholly-owned subsidiaries and investees that we control. Investments in entities that we do not control, but have the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method. Investments in entities in which we do not have the ability to exercise significant influence are accounted for under the cost method. Intercompany transactions and balances have been eliminated. Fiscal Year End Fiscal Year End Our fiscal year ends on the Sunday closest to September 30. Fiscal years 2015 , 2014 and 2013 included 52 weeks Estimates and Assumptions Estimates and Assumptions Preparing financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Examples include, but are not limited to, estimates for inventory reserves, asset and goodwill impairments, assumptions underlying self-insurance reserves, income from unredeemed stored value cards, stock-based compensation forfeiture rates, future asset retirement obligations, and the potential outcome of future tax consequences of events that have been recognized in the financial statements. Actual results and outcomes may differ from these estimates and assumptions. Cash and Cash Equivalents Cash and Cash Equivalents We consider all highly liquid instruments with maturities of three months or less at the time of purchase, as well as credit card receivables for sales to customers in our company-operated stores that generally settle within two to five days, to be cash equivalents. We maintain cash and cash equivalent balances with financial institutions that exceed federally-insured limits. We have not experienced any losses related to these balances and we believe credit risk to be minimal. Our cash management system provides for the funding of all major bank disbursement accounts on a daily basis as checks are presented for payment. Under this system, outstanding checks are in excess of the cash balances at certain banks, which creates book overdrafts. Book overdrafts are presented as a current liability in accrued liabilities on our consolidated balance sheets. Investments Investments Available-for-sale Securities Our short-term and long-term investments consist primarily of investment-grade debt securities, all of which are classified as available-for-sale. Available-for-sale securities are recorded at fair value, and unrealized holding gains and losses are recorded, net of tax, as a component of accumulated other comprehensive income. Available-forsale securities with remaining maturities of less than one year and those identified by management at the time of purchase to be used to fund operations within one year are classified as short-term. All other available-for-sale securities are classified as long-term. We evaluate our available-for-sale securities for other than temporary impairment on a quarterly basis. Unrealized losses are charged against net earnings when a decline in fair value is determined to be other than temporary. We review several factors to determine whether a loss is other than temporary, such as the length and extent of the fair value decline, the financial condition and near-term prospects of the issuer, and whether we have the intent to sell or will more likely than not be required to sell before the securities' anticipated recovery, which may be at maturity. Realized gains and losses are accounted for using the specific identification method. Purchases and sales are recorded on a trade date basis. Trading Securities We also have a trading securities portfolio, which is comprised of marketable equity mutual funds and equity exchange-traded funds. Trading securities are recorded at fair value with unrealized holding gains and losses recorded in net interest income and other on our consolidated statements of earnings. Our trading securities portfolio approximates a portion of our liability under our Management Deferred Compensation Plan ("MDCP"), which is included in Fair Value Fair value is the price we would receive to sell an asset or pay to transfer a liability (exit price) in an orderly transaction between market participants. For assets and liabilities recorded or disclosed at fair value on a recurring basis, we determine fair value based on the following: Level 1: The carrying value of cash and cash equivalents approximates fair value because of the short-term nature of these instruments. For trading and U.S. government treasury securities and commodity futures contracts, we use quoted prices in active markets for identical assets to determine fair value. Level 2: When quoted prices in active markets for identical assets are not available, we determine the fair value of our available-for-sale securities and our over-the-counter forward contracts, collars, and swaps based upon factors such as the quoted market price of similar assets or a discounted cash flow model using readily observable market data, which may include interest rate curves and forward and spot prices for currencies and commodities, depending on the nature of the investment. The fair value of our long-term debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to us for debt of the same remaining maturities. Level 3: We determine the fair value of our auction rate securities using an internallydeveloped valuation model, using inputs that include interest rate curves, credit and liquidity spreads, and effective maturity. Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis include items such as property, plant and equipment, goodwill and other intangible assets, equity and cost method investments, and other assets. We determine the fair value of these items using Level 3 inputs, as described in the related sections below. Derivative Instruments We manage our exposure to various risks within our consolidated financial statements according to a market price risk management policy. Under this policy, we may engage in transactions involving various derivative instruments to hedge interest rates, commodity prices and foreign currency denominated revenue streams, inventory purchases, assets and liabilities, and investments in certain foreign operations. We record all derivatives on our consolidated balance sheets at fair value. We generally do not offset derivative assets and liabilities in our consolidated balance sheets or enter into derivative instruments with maturities longer than three years . Refer to Note 3 , Derivative Financial Instruments, for further discussion of our derivative instruments. We do not enter into derivative instruments for trading purposes. We use various types of derivative instruments including forward contracts, commodity futures contracts, collars and swaps. Forward contracts and commodity futures contracts are agreements to buy or sell a quantity of a currency or commodity at a predetermined future date, and at a predetermined rate or price. A collar is a strategy that uses a combination of a purchased call option and a sold put option with equal premiums to hedge a portion of anticipated cash flows, or to limit the range of possible gains or losses on an underlying asset or liability to a specific range. A swap agreement is a contract between two parties to exchange cash flows based on specified underlying notional amounts, assets and/or indices. Cash Flow Hedges For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the derivative's gain or loss is reported as a component of other comprehensive income ("OCI") and recorded in accumulated other comprehensive income ("AOCI") Fair Value Derivative Instruments Receivables, net of Allowance for Doubtful Accounts Receivables, net of Allowance for Doubtful Accounts Our receivables are mainly comprised of receivables for product and equipment sales to and royalties from our licensees, as well as receivables from our CPG and foodservice business customers. Our allowance for doubtful accounts is calculated based on historical experience, customer credit risk and application of the specific identification method. As of September 27, 2015 and September 28, 2014 , the allowance for doubtful accounts was $10.8 million and $6.7 million , respectively. Inventories Inventories Inventories are stated at the lower of cost (primarily moving average cost) or market. We record inventory reserves for obsolete and slow-moving inventory and for estimated shrinkage between physical inventory counts. Inventory reserves are based on inventory obsolescence trends, historical experience and application of the specific identification method. As of September 27, 2015 and September 28, 2014 , inventory reserves were $33.8 million and $31.2 million , respectively. Property, Plant and Equipment Property, Plant and Equipment Property, plant and equipment, which includes assets under capital leases, are carried at cost less accumulated depreciation. Cost includes all direct costs necessary to acquire and prepare assets for use, including internal labor and overhead in some cases. Depreciation is computed using the straight-line method over estimated useful lives of the assets, generally ranging from 2 to 15 years for equipment and 30 to 40 years for buildings. Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease life, generally 10 years . For leases with renewal periods at our option, we generally use the original lease term, excluding renewal option periods, to determine estimated useful lives. If failure to exercise a renewal option imposes an economic penalty to us, we may determine at the inception of the lease that renewal is reasonably assured and include the renewal option period in the determination of the appropriate estimated useful lives. The portion of depreciation expense related to production and distribution facilities is included in cost of sales including occupancy costs on our consolidated statements of earnings. The costs of repairs and maintenance are expensed when incurred, while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. When assets are disposed of, whether through retirement or sale, the net gain or loss is recognized in net earnings. Long-lived assets to be disposed of are reported at the lower of their carrying amount or fair value less estimated costs to sell. We evaluate property, plant and equipment for impairment when facts and circumstances indicate that the carrying values of such assets may not be recoverable. When Goodwill We evaluate goodwill for impairment annually during our third fiscal quarter, or