Starbucks (SBUX) Updates Q4 GAAP Results Following Arbitration Decision (KRFT)

On October 30, 2013, Starbucks Corporation (Nasdaq: SBUX) issued a press release announcing its financial results for the fourth quarter and fiscal year ended September 29, 2013, including financial statements. On November 12, 2013 Starbucks issued a press release regarding the conclusion of its arbitration with Kraft Foods Global, Inc. (Nasdaq: KRFT) over packaged coffee. The arbitrator has ordered Starbucks to pay Kraft $2.23 billion in damages plus prejudgment interest and attorneys' fees (the "Award"). We have estimated prejudgment interest and attorneys' fees to be approximately $557 million. The Award will be reflected in the Company's fourth quarter and fiscal year ended September 29, 2013 operating results as a charge to operating expense. The information in this Item 2.02 to this Current Report on Form 8-K is being furnished in part to provide updated statements of earnings reflecting the Award (the "Updated Financial Statements"). The Updated Financial Statements are attached hereto as Exhibit 99.1. As a result of the Award, Q4 fiscal 2013 operating loss and operating margin were $2,115.2 million and -55.7%, respectively, and Q4 fiscal 2013 net loss and loss per share were $1,232.0 million and $1.64, respectively. Full year fiscal 2013 operating loss and operating margin were $325.4 million and -2.2%, respectively, and full year fiscal 2013 net earnings and earnings per share were $8.3 million and $0.01, respectively. Excluding the Award, Q4 fiscal 2013 non-GAAP operating income and non-GAAP operating margin were $668.9 million and 17.6%, respectively, and Q4 fiscal 2013 non-GAAP net earnings and non-GAAP earnings per share were $481.1 million and $0.63, respectively. Full year fiscal 2013 non-GAAP operating income and non-GAAP operating margin were $2,458.7 million and 16.5%, respectively, and full year fiscal 2013 non-GAAP net earnings and non-GAAP earnings per share were $1,721.4 million and $2.26, respectively. A reconciliation of GAAP to non-GAAP measures is attached hereto as Exhibit 99.2.

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