Using the Table of Contents in the Form 10-K for Starbucks, navigate to Item 8 Financial Statements and Supplementary Data. In Chapter 12, we studied the Statement of Cash Flows. Locate the Starbucks Corporation Consolidated Statements of Cash Flows. Using those financial statements, answer the following questions for your first post: 1. For the year ended October 3, 2021, what is the largest item in reconciling the net income (or loss) to net cash provided by operating activities? Include the U.S. dollar amount in millions. And state if that amount increases or decreases the net earnings figure. 2. In each of the recent three years (fiscal year ended October 3, 2021, September 27, 2020 and September 29, 2019, has the company been more successful in generating operating cash flows or in generating net income (net earnings including noncontrolling interests)? Identify the figures to support each year's answer. Table of Contents Item 8. Financial Statements and Supplementary Data STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (in millions, except per share data) Fiscal Year Ended Net revenues: Company-operated stores Licensed stores Other Total net revenues Product and distribution costs Store operating expenses Other operating expenses Depreciation and amortization expenses Oct 3, 2021 Sep 27, 2020 24,607.0 S 19.164.6 $ Sep 29, 2019 21,5444 2,683.6 2,327.1 2,875.0 1,770.0 2,026.3 2,089 2 29,060.6 23,518.0 26,508,6 8,738.7 7,694.9 8.526.9 11,930.9 10,764.0 10,493.6 359.5 430.3 371.0 1,441.7 1,431.3 1,377.3 General and administrative expenses Restructuring and impairments 1,932.6 1,679.6 1,824.1 170.4 278.7 135.8 Total operating expenses 24,573.8 22,278.8 22,728.7 Income from equity investees 385.3 322.5 298.0 Operating income 4,872.1 1,561.7 4,077.9 Net gain resulting from divestiture of certain operations 864.5 622.8 Interest income and other, net 90.1 39.7 96.5 Interest expense (469.8) (437.0) (331.0) Earnings before income taxes 5,356.9 1,164.4 Income tax expense 1,156.67 239.7 4,466.2 871.6 Net earnings including noncontrolling interests 4,200.3 924.7 3,594.6 Net earnings/(loss) attributable to noncontrolling interests 1.0 (3.6) (4.6) Net earnings attributable to Starbucks 4,199.3 S 928.3 S 3,599.2 Earnings per share-basic 3.57 S 0.79 $ 2.95 Earnings per share-diluted 3.54 S 0.79 S 292 Weighted average shares outstanding Basic Diluted 1,177.6 1,185.5 1,172.8 1,221.2 1,181.8 1,233.2 See Notes to Consolidated Financial Statements STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) Fiscal Year Ended Net earnings including noncontrolling interests Other comprehensive income/(loss), net of tax: Oct 3, 2021 Sep 27, 2020 Sep 29, 2019 4,200.35 924.7 S 3,594.6 Unrealized holding gains/(losses) on available-for-sale securities (3.4) 8.3 10.5 Tax (expense)/benefit 0.7 (1.8) (23) Unrealized gains/(losses) on cash flow hedging instruments 283.8 (1263) (14.1) Tax (expense)/benefit (43.6) 31.3 3.4 Unrealized gains (losses) on net investment hedging instruments 63.1 38.7 (39.8) Tax (expense)/benefit (16.0) (9.8) 10.1 Translation adjustment and other 188.2 206.9 (146.2) Tax (expense)/benefit 2.2 1.5 25 Reclassification adjustment for net (gains)/losses realized in net earnings for available- for-sale securities, hedging instruments, translation adjustment and other 41.8 (20.1) 1.3 Tax expense/(benefit) (5.0) 5.2 1.6 Other comprehensive income/(loss) 511.8 133.9 Comprehensive income including noncontrolling interests Comprehensive income/(loss) attributable to noncontrolling interests Comprehensive income attributable to Starbucks 4,712.1 1,058.6 (173.0) 3,421.6 1.0 (3.6) (4.6) 4,711.1 5 1,062.2 S 3,426.21 I See Notes to Consolidated Financial Statements 42 ASSETS STARBUCKS CORPORATION CONSOLIDATED BALANCE SHEETS (in millions, except per share data) Oct 3. 2021 Sep 27, 2020 Current assets: Cash and cash equivalents Short-term investments Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Long-term investments Equity investments 6,455.7 $ 4,350.9 162.2 281.2 9400 883.4 1,603.9 1,551.4 594.6 739.5 9,756.4 7,806.41 281.7 206.1 268.5 478.7 Property, plant and equipment, net 6,369.5 6,241.4 Operating lease, right-of-use asset 8,236.0 8,134.1 Deferred income taxes, net 1,874.8 1,789.9 Other long-term assets 578.5 568.6 Other intangible assets 349.9 552.1 Goodwill 3,677.3 3,597.2 TOTAL ASSETS 31,392.6 $ 29,374.5 LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) Current liabilities: Accounts payable 1,211.6 S 997.9 Accrued liabilities 1,973,2 1,160.7 Accrued payroll and benefits 772.3 696.0 Income taxes payable 348.0 98.2 Current portion of operating lease liability 1,251.3 1,248.8 Stored value card liability and current portion of deferred revenue 1,596.1 1,456.5 Short-term debt 438.8 Current portion of long-term debt 998.9 1,249.9 Total current liabilities Long-term debt Operating lease liability 8,151.4 7,346.8 13,616.9 14,659.6 7,738.0 7,661.7 Deferred revenue Other long-term liabilities Total liabilities 6,463.0 6,598.5 737.8 907.3 36,707.11 37,173.9 Shareholders' deficit Common stock ($0.001 par value)-authorized, 2,400.0 shares; issued and outstanding, 1,180.0 and 1,173.3 shares, respectively Additional paid-in capital Retained deficit Accumulated other comprehensive income/(loss) Total shareholders' deficit 1.2 846 1 (6,315.7) 147.2 (5,321.2) 1.2 373.9 (7,815.6) (3646) (7,805.1) 5.7 Noncontrolling interests : Total deficit TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) 6.7 (5,314.5) (7,799.4) 31,392.6 $ 29,374.5 See Notes to Consolidated Financial Statements STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Fiscal Year Ended OPERATING ACTIVITIES Net earnings including noncontrolling interests Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization Deferred income taxes, net Income carned from equity method investees Distributions received from equity method investees Oct 3, 2021 Sep 27, 2020 Sep 29, 2019 $ 4,200.3 $ 924.7 S 3,594.6 1,524.1 1,503.2 1,449.3 (146.2) (25.8) (1.4954) (3473) (280.7) (2506) 336.0 227.7 216.8 Net gain resulting from divestiture of certain operations Stock-based compensation (864.5) (622.8) 319.1 248.6 308.0 Goodwill impairments 10.5 Non-cash lease cost 1,248.6 1,197,6 Loss on retirement and impairment of assets 226.2 454.4 142.6 Other (6.0) 24.5 45.3 Cash provided by (used in) changes in operating assets and liabilities Accounts receivable (43.0) (2.7) (1977) Inventories (49.8) (10.9) (173.0) Prepaid expenses and other current assets 251.1 (317.5) 922.0 Income taxes payable 286.1 (1,214.6) 1,237.1 Accounts payable 189.9 (2108) 31.9 Deferred revenue Operating lease liability Other operating assets and liabilities Net cash provided by operating activities INVESTING ACTIVITIES (6.1) 31.0 (30.5) (1,488.1) (1,2314) 358.7 280.5 (141.1) 5,989.1 1,597,8 5,047.0 Purchases of investments Sales of investments Maturities and calls of investments Additions to property, plant and equipment (432.0) (443.9) (1904) 143,2 186.7 298.3 345.5 73.7 59.8 (1,470.0) (1,483.6) (1,806.6) Net proceeds from the divestiture of certain operations 1,175.0 684.3 Other Net cash used in investing activities FINANCING ACTIVITIES: Repayments of commercial paper Proceeds from issuance of short-term debt Repayments of short-term debt Proceeds from issuance of long-term debt Repayments of long-term debt (81.2) (3195) (44.4) (1,711.5) (562) (1.010.8) (296.5) 215.1 1,406.6 (349 8) (967.7) 4,727.6 1,996.0 Proceeds from issuance of common stock Cash dividends paid Repurchase of common stock Minimum tax withholdings on share-based awards Other Net cash provided by (used in) financing activities t 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 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period for: Interest, net of capitalized interest Income taxes (1,250,0) 2462 (2,1190) 298.8 (1.923.5) (1.698.9) (3500) 409.8 (1,7613) (10,222.3) (970) (91.9) (37.7) (1116) (17.5) (3,651.0) 1,713.3 (10,056.9) 86.2 2,104.8 64.7 1,664.3 (49.0) (6.069.7) 4,350.9 2,686.6 8,756.3 6,455.7 S 4,350.9 5 2,686 6 5011 S 396.9 S 299.5 756.3 S 1,699.1 S 4701 Ser Notes to Consolidated Financial Statements Net carnings/(loss) Balance, September 30, 2018 Cumulative effect of adoption of new accounting guidance Other comprehensive income/(loss) Stock-based compensation expense Exercise of stock options/vesting of RSUs Sale of common stock Repurchase of common stock Cash dividends declared, $1.49 per share 14.7 04 (139.6) 21111118 STARBUCKS CORPORATION CONSOLIDATED STATEMENTS OF EQUITY (in millions, except per share data) Common Stock Shares Amount 1,309.1 S 13 S Additional Paid-in Capital Retained Earnings(Deficit) Accumulated Other Comprehensive Income (Less) 41.1 S 1,457,4 S Shareholders' Noncontrolling Equity/(Deficit) Interests (330.3) S 1,169.5 S Total 63 S 1,175.8 495.6 495.6 495.6 3.599.2 3,599.2 (4.6) 3,594,6 (173.0) (173.0) (173.0) 311.3 311.3 311.3 264.9 264.9 264.9 33:4 33.4 33.4 (0.1) (609.6) (9,521.8) (1,801.6) (10,131.5) (10,131.5) (1.801.6) (1,801.6) Net distributions to noncontrolling interests (0.5) (0.5) Balance, September 29, 2019 1,184.6 S 1.2 S 41.1 S (5,771.2) S (503.3) S (6,232.2) S 12 $ (6.231.0) Cumulative effect of adoption of new accounting guidance 125 48 17.3 17.3 Net earnings/(loss) 928.3 928.3 (3.6) 924.7 Other comprehensive income/(loss) 133.9 133.9 133.9 Stock-based compensation expense 252.1 252.1 252.1 Exercise of stock options/vesting of RSUs 8.5 169.9 169.9 169.9 Sale of common stock 0.5 37.2 37.2 37.2 Repurchase of common stock (20.3) (126.4) Cash dividends declared, $1.23 per share (1,548.6) (1,436.6) (1,675.0) (1,675.0) (1,436.6) (0.2) (1,436.8) Noncontrolling interest resulting from divestiture 8.3 8.3 Balance, September 27, 2020 1,173.3 1.2 $ 373.9 (7,815.6) S (364,6) S (7.805.1) $ 5.7 S (7,799.4) Cumulative effect of adoption of new accounting guidance (2.2) (2.2) - Net carnings/(loss) 4,199.3 4,199.3 1.0 (2.2) 4,200.3 Other comprehensive income/(loss) Stock-based compensation expense Exercise of stock options/vesting of RSUs Sale of common stock Cash dividends declared, $2.29 per share Balance, October 3, 2021 511.8 511.8 511.8 322.8 322.8 322,8 6.3 04 107.0 107.0 107.0 42.4 42.4 42.4 1,180.0 $ 1.2 S 846.1 (2,697.2) (6,315.7) S (2,697.2) (2,6972) 147.2 (5,321.2) 5 67 $ (5,314.5) See Notes to Consolidated Financial Statements