Starbucks (SBUX) 10-K risk factor changes: FY2017 vs FY2016

As a retailer that is dependent upon consumer discretionary spending, our results of operations are sensitive to changes in [added: or uncertainty about] macro-economic conditions.

Our customers may have less money for discretionary purchases and may stop or reduce their purchases of our products or trade down to Starbucks or competitors' lower priced products as a result of job losses, foreclosures, bankruptcies, increased fuel and energy costs, higher interest rates, higher [removed: taxes and] [added: taxes,] reduced access to [removed: credit.][added: credit and economic uncertainty.]

There is also a risk that if negative economic conditions [added: or uncertainty] persist for a long period of time or worsen, consumers may make long-lasting changes to their discretionary purchasing behavior, including less frequent discretionary purchases on a more permanent basis.

Business incidents, whether isolated or recurring and whether originating from us or our business partners, that erode consumer trust, such as actual or perceived breaches of [removed: privacy,] [added: privacy or violations of domestic or international privacy laws,] contaminated food, store employees or other food handlers infected with communicable diseases, product recalls or other potential incidents discussed in this risk factors section, particularly if the incidents receive considerable publicity, including rapidly through social or digital media, or result in litigation, and failure to respond appropriately to these incidents, can significantly reduce brand [removed: value] [added: value, result in civil] and [added: criminal liability and] have a negative impact on our financial [added: results.]

| • | Incidents involving food or beverage-borne illnesses, tampering, [added: adulteration,] contamination or mislabeling, whether or not accurate, as well as adverse public or medical opinions about the health effects of consuming our products, could harm our business. |

Instances or reports, whether true or not, of unclean water supply or food-safety issues, such as food or beverage-borne illnesses, tampering, [added: adulteration,] contamination or mislabeling, either during growing, manufacturing, packaging, storing or preparation, have in the past severely injured the reputations of companies in the food and beverage processing, grocery and quick-service restaurant sectors and could affect us as well.

Any report linking us to the use of unclean water, food or beverage-borne illnesses, tampering, [added: adulteration,] contamination, mislabeling or other food or beverage-safety issues could damage our brand value and severely hurt sales of our food and beverage products and possibly lead to product liability claims, litigation (including class actions) or damages.

If customers become ill from food or beverage-borne illnesses, tampering, [added: adulteration,] contamination, mislabeling or other food or beverage-safety issues, we could be forced to temporarily close some stores and/or supply chain facilities, as well as recall products.

[removed: While we have a variety of beverage and food items, including items that are coffee-free and have reduced calories,] an unfavorable report on the health effects of caffeine or other compounds present in our products, whether accurate or not, [added: potential imposition of additional taxes on certain types of beverages,] or negative publicity or litigation arising from certain health risks could significantly reduce the demand for our beverages and food products and could materially harm our business and results of operations.

| • | The unauthorized access, [added: use,] theft or destruction of customer or employee personal, financial or other data or of Starbucks proprietary or confidential information that is stored in our information systems or by third parties on our behalf could impact our reputation and brand and expose us to potential liability and loss of revenues. |

Such security breaches also could result in a violation of applicable U.S. and international privacy and other laws, and subject us to private consumer or securities litigation and [added: governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability.]

Our ability to effectively manage our [removed: business] [added: business, launch digital] and [added: other initiatives, and] coordinate the production, distribution, administration and sale of our products depends significantly on the reliability, integrity and capacity of these systems.

[removed: Such failures may be caused by various factors, including power outages, catastrophic events, inadequate or] ineffective redundancy, problems with transitioning to upgraded or replacement systems or platforms, flaws in third party software or services, errors by our employees or third party service providers, or a breach in the security of these systems or platforms, including through cyber-attacks [added: such as those that result in the blockage of our or our third-party business partners’ or service providers’ systems and platforms and those] discussed in more detail in this risk factors section.

| • | building our leadership position around coffee, including through the development of Starbucks [removed: Reserve®] [added: Reserve™] Roasteries and Starbucks [removed: Reserve®] [added: Reserve™] stores; |

| • | continuing the global growth of our Channel Development business; [added: and] |

| • | delivering continued growth in our tea business through the Teavana [removed: brand;] [added: brand in our Starbucks® retail stores] and [added: other channels and internationally.] |

| • | driving convenience and brand engagement through our mobile, loyalty and digital [removed: capabilities.] [added: capabilities;] |

| • | increases in labor costs, both domestically and internationally, such as general market and minimum wage levels and investing in competitive compensation, increased health care and workers’ compensation insurance costs and other [added: benefits to attract and retain high quality employees with the right skill sets, whether due to regulatory mandates, changing industry practices or our expansion into new channels or technology dependent operations;] |

| • | not successfully scaling our supply chain infrastructure as our product offerings increase and as we continue to [removed: expand;] [added: expand, including our emphasis on a broad range of high-quality food offerings;] |

| • | lack of customer acceptance of new products (including due to price increases necessary to cover the costs of new products or higher input costs), brands (such as the global expansion of [removed: Teavana)] [added: the Teavana brand in our Starbucks® retail stores] and [added: other channels) and] platforms (such as mobile technology), or customers reducing their demand for our current offerings as new products are introduced; |

[removed: If our retail business partners do not provide sufficient] levels of support for our products, which is at their discretion, it could limit our ability to grow our Channel Development business.

Effectively managing growth can be challenging, particularly as we continue to expand into new channels outside the retail store model, increase our focus on our Channel Development [removed: and] [added: business, grow our] Teavana [removed: businesses,] [added: brand in our Starbucks® retail stores] and [added: other channels, and] expand into new markets internationally where we must balance the need for flexibility and a degree of autonomy for local management against the need for consistency with our goals, philosophy and standards.

Furthermore, if we are not successful in implementing these strategic initiatives, [added: such as large acquisitions and integrations,] we may be required to evaluate whether certain assets, including goodwill and other intangibles, have become impaired.

Increased competition in the U.S. packaged coffee and tea and single-serve and ready-to-drink coffee beverage markets, including from new and large entrants to this [removed: market,] [added: market] could adversely affect the profitability of the Channel Development segment.

[removed: Additionally,] [added: Furthermore,] declines in general consumer demand for specialty coffee products for any reason, including due to consumer preference for other [added: products or flattening demand for our] products, could have a negative effect on our [removed: business.][added: business, including from price discounting we may have to undertake.]

Our financial performance is highly dependent on our Americas operating segment, as it comprised approximately [removed: 69%] [added: 70%] of consolidated total net revenues in fiscal [removed: 2016.][added: 2017.]

In particular, both our China and Japan MBUs contribute meaningfully to both consolidated and CAP net revenues and [removed: earnings.][added: earnings and China in particular is a significant market for our growth.]

| • | changes or uncertainties in economic, legal, regulatory, social and political conditions in our [added: markets, as well as negative effects on U.S. businesses due to increasing anti-American sentiment in certain] markets; |

| • | interpretation and application of laws and [added: regulations, including tax, labor, merchandise, anti-bribery and privacy laws and] regulations; |

[removed: weather,] [added: The supply and price of coffee we purchase can also be affected by multiple factors in the producing countries, such as weather (including the potential effects of climate change),] natural disasters, crop disease, general increase in farm inputs and costs of production, inventory levels and political and economic conditions, as well as the actions of certain organizations and associations that have historically attempted to influence prices of green coffee through agreements establishing export quotas or by restricting coffee supplies.

| • | adverse outcomes of litigation; [removed: and] |

| • | especially in our larger or fast growing markets, labor [removed: discord,] [added: discord or disruption, geopolitical events,] war, terrorism (including incidents targeting us), political instability, boycotts, [added: increasing anti-American sentiment in certain markets,] social unrest, and natural disasters, including health pandemics that lead to avoidance of public places or restrictions on public gatherings such as in our stores. |

Our ability to find qualified suppliers and vendors who meet our standards and supply products in a timely and efficient manner is a significant challenge, especially with respect to goods sourced from outside the U.S., especially countries or regions with diminished infrastructure, developing or failing economies or experiencing political instability or social [removed: unrest.][added: unrest, and as we increase our fresh and prepared food offerings.]

We must continue to recruit, retain and motivate management and other employees sufficiently, both to maintain our current business and to execute our [added: strategic initiatives, some of which involve ongoing expansion in business channels outside of our traditional company-operated store model.]

Our policies and procedures are designed to comply with all applicable laws, accounting and reporting requirements, tax rules and other regulations and requirements, including those imposed by the SEC, NASDAQ, and foreign countries, as well as applicable trade, labor, healthcare, [removed: privacy,] [added: privacy (including the European Union’s GDPR discussed in more detail in this risk factors section),] food and beverage, labeling, anti-bribery and corruption and merchandise laws.

In addition to potential damage to our reputation and brand, failure by us or our business partners to comply with the various laws and regulations, as well as changes in laws and regulations or the manner in which they are interpreted or applied, may result in litigation, civil and criminal liability, damages, fines and penalties, increased cost of regulatory compliance and restatements of our financial [removed: statements.][added: statements and have an adverse impact on our business and financial results.]

These factors may also result in a general downturn in the restaurant industry.

While we have a variety of beverage and food items, including items that are coffee-free and have reduced calories,

For example, the European Union adopted a new regulation that becomes effective in May 2018, called the General Data Protection Regulation (“GDPR”), which requires companies to meet new requirements regarding the handling of personal data, including its use, protection and the ability of persons whose data is stored to correct or delete such data about themselves.

Failure to meet GDPR requirements could result in penalties of up to 4% of worldwide revenue.

Additionally, the success of several of our initiatives to drive growth, including our priority to increase digital relationships with our customers to drive incremental traffic and spend, is highly dependent on our technology systems.

Such failures may be caused by various factors, including power outages, catastrophic events, inadequate or

| • | moving to a more licensed store model in some markets and a more company-owned model in other markets; |

| • | continuing disruption in retail caused by on-line commerce, resulting in reduced foot traffic to “brick & mortar” retail stores; |

| • | consumers shifting categories of where they spend their discretionary income away from outside-the-home food and beverage; |

If our retail business partners do not provide sufficient

Additionally, some of our competitors are also our suppliers, which may result in their ability to offer competing products at a lower price than we do.

The broader CAP market is now one of our two significant profit engines driving our global returns, along with our North American business.

| • | severe weather or other natural or man-made disasters affecting a large market or several closely located markets that may temporarily but significantly affect our retail business in such markets; and |

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Our ability to attract and retain both corporate and retail personnel is also acutely impacted in certain international and domestic markets where the competition for a relatively small number of qualified employees is intense or in markets where large high-tech companies are able to offer more competitive salaries and benefits.

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results.

governmental investigations and proceedings, any of which could result in our exposure to material civil or criminal liability.

benefits to attract and retain high quality employees with the right skill sets, whether due to regulatory mandates, changing industry practices or our expansion into new channels or technology dependent operations;

The supply and price of coffee we purchase can also be affected by multiple factors in the producing countries, including

strategic initiatives, some of which involve ongoing expansion in business channels outside of our traditional company-operated store model.

The fiscal year ended on October 2, 2016 included 53 weeks, with the extra week falling in our fourth fiscal [removed: quarter.][added: quarter, and the fiscal year ended on September 27, 2015 included 52 weeks.]

| • | Global comparable store sales grew [removed: 5%] [added: 3%] driven by a [removed: 4%] [added: 3%] increase in average [removed: ticket and a 1% increase in the number of transactions.] [added: ticket.] |

| • | Cash flows from operations were [removed: $4.6] [added: $4.2] billion in fiscal [removed: 2016] [added: 2017] compared to [removed: $3.7] [added: $4.6] billion in fiscal [removed: 2015.] [added: 2016.] The change was primarily due to [removed: increased earnings,] the [removed: lapping of the non-cash acquisition related gain for Starbucks Japan and the] timing of our cash payments for income taxes. |

| • | Capital expenditures were [removed: $1.4] [added: $1.5] billion in fiscal [removed: 2016] [added: 2017] compared to [removed: $1.3] [added: $1.4] billion in fiscal [removed: 2015.] [added: 2016.] |

| • | We returned [removed: $3.2] [added: $3.5] billion to our shareholders in fiscal [removed: 2016] [added: 2017] through share repurchases and dividends compared to [removed: $2.4] [added: $3.2] billion in fiscal [removed: 2015.] [added: 2016.] |

Starbucks results for fiscal [removed: 2016] [added: 2017] continued to demonstrate the strength of our global business model, and our ability to successfully make disciplined investments in our business and our [removed: partners (employees).][added: partners.]

[removed: Growth in our iced beverages, including coffee, tea and espresso, paired with beverage innovation and the] [added: The] success of our [added: premium] food [removed: offerings,] [added: offerings coupled with innovation across our coffee and tea beverage platforms] drove the increase in comparable store sales.

[removed: This favorability] [added: increases] was [removed: partially offset by] [added: the impact of] unfavorable foreign currency translation [added: ($33 million)] and [added: a decrease in licensed store revenues resulting from] the impact of our ownership change in Starbucks [removed: Japan.][added: Japan ($6 million).]

[removed: Partially offsetting lower company-operated] [added: Licensed] store revenues [removed: were] [added: increased $68 million, driven by] higher [removed: licensed store sales, primarily] [added: product sales to and royalty revenues from our licensees ($95 million),] resulting from the opening of [removed: 294] [added: 339] net new licensed stores and the transfer of [removed: 200] [added: 14] company-operated stores to licensed stores over the past 12 [removed: months, and the impact of the extra week in fiscal 2016.][added: months.]

[removed: Compared to fiscal 2015, EMEA operating] [added: Operating] margin declined [removed: 30] [added: 200] basis points to [removed: 13.5%] [added: 11.5%] primarily due to [added: a partial impairment of goodwill related to our Switzerland retail business,] sales deleverage [removed: at] [added: in] certain company-operated stores and [added: unfavorable foreign currency exchange.]

[removed: unfavorable foreign currency exchange,] [added: These decreases were] partially offset by sales leverage driven by the shift in the portfolio towards more licensed stores.

[removed: The] Channel Development segment revenues grew [removed: 12%] [added: by 4%] to [removed: $1.9 billion in fiscal 2016,] [added: $2.0 billion,] primarily [removed: due to higher sales of premium single-serve products,] driven by [added: increased] sales [removed: of Starbucks® K-Cup® portion packs, the impact of the extra week in fiscal 2016] [added: through our international channels] and [removed: increased] [added: sales of packaged coffee,] foodservice and [removed: packaged coffee sales.][added: single-serve products.]

Operating margin increased [removed: 400] [added: 270] basis points to [removed: 41.8%,] [added: 44.5%,] primarily driven by [removed: strong performance] [added: lower coffee costs, leverage on cost of sales and higher income] from our North American Coffee Partnership joint [removed: venture, lower coffee costs and leverage on cost of sales.][added: venture.]

Fiscal [removed: 2017] [added: 2018] — The View Ahead

These results are expected to be driven by our [removed: 7 Strategies for Growth,] [added: 6 operational priorities,] which include:

| • | [removed: Drive] [added: Gain Share of] At-Home Coffee [removed: Share and Occasions] |

[removed: Revenue] [added: We expect revenue] growth [removed: is expected] to be [added: in the high single digits for the underlying business in fiscal 2018] driven by comparable store sales [removed: in the mid-single digits] and the opening of approximately [removed: 2,100] [added: 2,300] net new [added: Starbucks] stores globally.

Capital expenditures in fiscal [removed: 2017] [added: 2018] are expected to be approximately [removed: $1.6] [added: $2.0] billion, primarily for [added: investments in our] new [removed: stores] and [removed: store renovations, as well as for other investments to support] [added: existing stores,] our [removed: ongoing growth initiatives.][added: developing Siren Retail business and our supply chain and corporate facilities.]

See [Note [removed: 2](#sF433223ADF5E7CE62BCC3264FF14E34D),] [added: 2](#sE69E50D02EF75AD594F2BAC1E5BFA7B0),] Acquisitions and Divestitures, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding acquisitions and divestitures.

Income from equity investees as a percentage of total net revenues increased 10 basis points, primarily due to higher income from our joint venture operations, primarily in China and South Korea (approximately 70 basis points and 60 basis points, [removed: respectively), partially offset by the shift in composition of our store portfolio to more company-operated stores (approximately 50 basis points) and the impact of our ownership change in Starbucks Japan (approximately 50 basis points).]

| Licensed stores | 3.9 | | | | 5.9 | | | | (33.9 | [removed: )] [added: )%] |

All Other Segments primarily includes Teavana, Seattle’s Best [removed: Coffee and] [added: Coffee,] Evolution Fresh, as well as certain developing businesses such as [removed: the Starbucks Reserve® Roastery & Tasting Rooms.][added: Siren Retail.]

RESULTS OF OPERATIONS — FISCAL [removed: 2015] [added: 2017] COMPARED TO FISCAL [removed: 2014][added: 2016]

| Fiscal Year Ended | [removed: Sep 27, 2015] [added: Oct 1, 2017] | | | | [removed: Sep 28, 2014] [added: Oct 2, 2016] | | | | % Change | |

| Company-operated stores | $ | [removed: 15,197.3] [added: 197.3] | | | $ | [removed: 12,977.9] [added: 224.3] | | | [removed: 17.1] [added: (12.0] | [removed: %] [added: )%] |

| CPG, foodservice and other | [removed: 2,103.5] [added: 2,381.1] | | | | [removed: 1,881.3] [added: 2,317.6] | | | | [removed: 11.8] [added: 2.7] | |

Total net revenues increased [removed: $2.7] [added: $1.1] billion, or [removed: 17%,] [added: 5%,] over fiscal [removed: 2014,] [added: 2016,] primarily [removed: due to] [added: driven by] increased revenues from company-operated stores [removed: (contributing $2.2 billion).][added: ($807 million).]

The growth in company-operated store revenues was primarily driven by incremental revenues from [removed: the acquisition of Starbucks Japan ($1.1 billion), an increase in comparable store sales (7% growth, or $852 million) and incremental revenues from 550] [added: 768] net new Starbucks® company-operated store openings over the past 12 months [removed: ($590 million).][added: ($869 million) and a 3% increase in comparable store sales ($496 million), attributable to a 3% increase in average ticket.]

[removed: Partially offsetting these] [added: These] increases [removed: was the impact of] [added: were partially offset by] unfavorable foreign currency translation [removed: ($252] [added: ($24 million) and the absence of the 53rd week ($6] million).

[removed: Licensed store revenue growth also contributed $273 million to the] [added: The] increase in [removed: total net revenues,] [added: licensed store revenues was] primarily [added: driven by increased product sales to and royalty revenues from our licensees ($127 million), primarily] resulting from the opening of [removed: 1,075] [added: 569] net new Starbucks® licensed stores over the past 12 months and improved comparable store [removed: sales as well as increased La Boulange food sales to our licensees in] [added: sales, partially offset by] the [removed: Americas segment.][added: absence of the 53rd week ($31 million).]

CPG, foodservice and other revenues increased [removed: $222] [added: $64] million, [added: driven by increased sales through our international channels,] primarily [removed: due to] [added: associated with our European and North American regions ($35 million),] increased sales of [removed: premium single-serve products ($116 million),] U.S. packaged coffee [removed: ($55] [added: ($32 million), foodservice ($30] million) and [removed: foodservice sales ($40] [added: premium single-serve products ($23] million).

| Cost of sales including occupancy costs | [removed: $ | 7,787.5 | |] [added: 308.0] | [removed: $] | [removed: 6,858.8] | | [added: 316.5] | [removed: 40.6] | [removed: %] | | [removed: 41.7] [added: (2.7] | [removed: %] [added: )] |

| General and administrative expenses | [removed: 1,196.7] [added: 1,393.3] | | | | [removed: 991.3] [added: 1,360.6] | | | | 6.2 | | | [removed: 6.0] [added: 6.4] | |

| Total operating expenses | [removed: 15,811.6] [added: 2,672.2] | | | | [removed: 13,635.0] [added: 2,457.3] | | | | 82.5 | | | [removed: 82.9] [added: 83.6] | |

| Income from equity investees | [removed: 249.9] [added: —] | | | | [removed: 268.3] [added: 1.5] | | | | [removed: 1.3] [added: —] | | | [removed: 1.6] [added: 0.1] | |

| Store operating expenses as a % of related revenues | | | | | | | | | [removed: 35.6] [added: 38.9] | % | | [removed: 35.7] [added: 35.6] | % |

Cost of sales including occupancy costs as a percentage of total net revenues decreased 110 basis points, primarily driven by [removed: sales and operating leverage on cost of sales (approximately 60 basis points), driven by strong sales and initiatives in our supply chain, such as improvements in sourcing, as well as sales leverage on occupancy costs] [added: favorability from the transition to China's new value added tax structure] (approximately [removed: 40] [added: 120] basis points).

Store operating expenses [removed: were flat] as a percentage of total net [removed: revenues.][added: revenues increased 60 basis points.]

[removed: Store operating expenses as] [added: As] a percentage of company-operated store revenues, [removed: decreased 10] [added: store operating expenses increased 90] basis points, primarily driven by [removed: sales leverage (approximately 50 basis points) and decreased expenses, largely salaries] [added: increased partner] and [removed: benefits, due to the shift to more licensed stores in EMEA] [added: digital investments] (approximately [removed: 40] [added: 180] basis points), partially offset by [removed: increased investments in store partners (employees)] [added: sales leverage on salaries] and [removed: digital platforms related to in-store initiatives] [added: benefits] (approximately [removed: 100] [added: 80] basis [removed: points) in the Americas segment.][added: points).]

[removed: Excluding the impact] [added: Store operating expenses as a percentage] of company-operated store [removed: revenues, other operating expenses were flat, primarily due to sales leverage (approximately 70 basis points), partially offset by] [added: revenues] increased [removed: marketing expenses (approximately 20] [added: 80] basis [removed: points),] [added: points, primarily driven by higher partner and digital investments,] largely [removed: due to timing, the impairment of certain assets] in the Americas segment (approximately [removed: 20] [added: 150] basis [removed: points) and the impact of our ownership change in Starbucks Japan] [added: points), partially offset by sales leverage] (approximately [removed: 20] [added: 90] basis points).

The fiscal year ended on October 1, 2017 included 52 weeks.

| • | Total net revenues increased 5% to $22.4 billion in fiscal 2017 compared to $21.3 billion in fiscal 2016. Excluding $412.4 million from extra week of fiscal 2016, net revenues grew 7%. |

| • | Consolidated operating income decreased to $4.1 billion in fiscal 2017 compared to operating income of $4.2 billion in fiscal 2016. Fiscal 2017 operating margin was 18.5% compared to 19.6% in fiscal 2016. Operating margin compression in fiscal 2017 was primarily driven by increased partner (employee) and digital investments, largely in the Americas segment, restructuring and impairment charges and the absence of the 53rd week, partially offset by sales leverage. |

| • | Restructuring and impairment charges for fiscal 2017 were $153.5 million and primarily related to our strategic changes in our Teavana business including a partial goodwill impairment, store asset impairments, costs associated with early closure of stores and severance. Additional amounts incurred related to an impairment of our Switzerland retail business and asset impairments of certain Starbucks® company-operated stores in Canada. |

| • | Earnings per share (“EPS”) for fiscal 2017 increased to $1.97, compared to EPS of $1.90 in fiscal 2016, which benefited $0.06 per share from the extra week in fiscal 2016. The increase was primarily driven by growth in comparable store sales, improved sales leverage and the gain on the sale of Singapore retail operations, partially offset by restructuring and impairment charges. |

Consolidated total net revenues increased 5% to $22.4 billion, primarily driven by incremental revenues from 2,320 net new store openings over the past 12 months and a 3% growth in global comparable store sales, partially offset by the absence of the 53rd week.

Consolidated operating income declined $37 million, or 1%, to $4.1 billion.

Operating margin declined 110 basis points to 18.5%, primarily due to increased partner investments, largely in the Americas segment, restructuring and impairment charges and the absence of the 53rd week, partially offset by sales leverage.

Earnings per share of $1.97 increased 4% over the prior year earnings per share of $1.90.

Americas revenue grew by 6% to $15.7 billion, primarily driven by incremental revenues from 952 net new store openings over the last 12 months and comparable store sales growth of 3%, partially offset by the absence of the 53rd week.

Operating income declined $79 million to $3.7 billion and operating margin at 23.4% declined by 190 basis points from a year ago, primarily due to increased investments in our store partners, a product mix shift largely towards food, and the absence of the 53rd week.

These were partially offset by sales leverage.

In our China/Asia Pacific segment, revenues grew by 10% to $3.2 billion, primarily driven by incremental revenues from the opening of 1,036 net new stores over the past 12 months and a 3% increase in comparable store sales, partially offset by the absence of the 53rd week and unfavorable foreign currency translation.

Operating income grew 21% to $765 million, while operating margin expanded 210 basis points to 23.6%.

The overall margin expansion was primarily due to the transition to China's new value added tax structure in fiscal 2016 and higher income from our joint venture operations.

We now operate 7,479 stores in 15 countries in our China/Asia Pacific segment making this the second largest reportable segment.

We continue to execute on our strategy of repositioning the EMEA segment to a predominantly licensed model.

As a result of this strategy, EMEA revenues declined $111 million to $1.0 billion, or 10%, primarily driven by the absence of revenue related to the sale of our Germany retail operations in the third quarter of fiscal 2016 and unfavorable foreign currency translation.

Partially offsetting the decrease were incremental revenues from the opening of 339 net new licensed stores over the past 12 months.

When excluding the revenue of the 53rd week in fiscal 2016, segment revenues grew by 6%.

Operating income grew $86 million, or 11%, to $893 million.

Turning to fiscal 2018, we expect continued growth through thoughtful long-term investments that create value and reward shareholders.

| • | Accelerate U.S. Comparable Store Sales |

| • | Drive Innovation in Food and Beverage |

| • | Accelerate the Power and Momentum of our Digital Platform |

| • | Enable Long-Term Growth in China |

| • | Elevate the Starbucks Experience through Siren Retail |

These priorities are our main focus to grow our core business with new customer acquisition through store growth, digital engagement and innovation, while we continue to foster long-term customer relationships.

To successfully achieve these priorities, we will undertake a number of initiatives, including the pending transaction to acquire full ownership of our joint venture in East China and converting our Taiwan and Singapore markets to fully licensed operations.

We are in the process of exiting certain activities including closing Teavana™ retail stores and certain Starbucks company-operated stores in Canada, the pending sale of our Tazo brand and related assets, and aggressively rationalizing merchandise in our U.S. retail stores.

These strategic actions will enable us to focus on businesses and products with the highest growth potential and greatest prospect for returns.

An additional 2 to 3 points of revenue growth is expected related to the aforementioned strategic initiatives.

Diluted earnings per share for fiscal 2018 is expected to grow in excess of 40% when compared to fiscal 2017, largely due to the anticipated gain associated with the pending acquisition of East China.

During the fiscal year, our expected strong operational performance combined with the prudent leveraging of our balance sheet will enable us to return significant value to shareholders through share repurchases and dividends.

| | (52 Weeks Ended) | | | | (53 Weeks Ended) | | | | | |

| Company-operated stores | $ | 17,650.7 | | | $ | 16,844.1 | | | 4.8 | % |

| Licensed stores | 2,355.0 | | | | 2,154.2 | | | | 9.3 | |

| Total net revenues | $ | 22,386.8 | | | $ | 21,315.9 | | | 5.0 | % |

Partially offsetting these incremental revenues was the absence of the 53rd week ($324 million), the absence of sales from the conversion of certain company-operated stores to licensed stores ($121 million) and the impact of unfavorable foreign currency translation ($70 million).

Increased sales were partially offset by the absence of the 53rd week ($47 million) and an unfavorable revenue deduction adjustment pertaining to periods prior to fiscal 2017 ($13 million).

Fiscal years ended on September 27, 2015 and September 28, 2014 both included 52 weeks.

| • | Total net revenues increased 11% to $21.3 billion in fiscal 2016 compared to $19.2 billion in fiscal 2015. |

| • | Consolidated operating income increased to $4.2 billion in fiscal 2016 compared to operating income of $3.6 billion in fiscal 2015. Fiscal 2016 operating margin was 19.6% compared to 18.8% in fiscal 2015. Operating margin expansion in fiscal 2016 was primarily driven by sales leverage and lower commodity costs, partially offset by investments in partners (employees) and digital platforms. |

| • | Earnings per share ("EPS") for fiscal 2016 increased to $1.90 and included $0.06 per share for the extra week in fiscal 2016. Fiscal 2015 EPS was $1.82 and included $0.26 per share from the gain on the fair value adjustment of our preexisting equity interest in Starbucks Japan upon acquisition. |

Our net revenues grew 11% over fiscal 2015, and consolidated operating margin expanded 80 basis points from 18.8% in fiscal 2015 to 19.6% in fiscal 2016, largely driven by sales leverage and lower commodity costs, partially offset by investments in our partners and digital platforms.

The Americas segment continued to perform well in fiscal 2016, with revenues growing 11% to $14.8 billion, primarily driven by comparable store sales growth of 6%, comprised of a 5% increase in average ticket and a 1% increase in number of transactions, incremental revenues from 804 net new store openings over the last 12 months and the impact of the extra week in fiscal 2016.

Americas operating margin grew 110 basis points to 25.3% in fiscal 2016, primarily driven by sales leverage and lower commodity costs, partially offset by investments in our store partners and digital platforms.

Our fiscal 2016 China/Asia Pacific segment results reflected higher revenues from the opening of 981 net new stores over the past year, incremental revenues associated with the ownership change in Starbucks Japan, a 3% increase in comparable store sales and the impact of the extra week in fiscal 2016.

Operating margin expanded 60 basis points to 21.5%, driven by sales leverage, higher income from our joint venture operations and favorability from changes to certain business tax structures in China.

We now operate 6,443 stores in 15 countries in our China/Asia Pacific segment with continued strong performance, reinforcing our confidence in the long-term growth potential of this market.

As we continue to execute our strategy of achieving the appropriate balance between company-operated and licensed stores, our EMEA segment revenues declined 8% to $1.1 billion in fiscal 2016 compared to a year ago.

The decline in revenues was primarily driven by lower company-operated store revenues due to the shift to more licensed stores in the region and unfavorable foreign currency translation.

As seen through our Channel Development segment results for fiscal 2016, we continue to expand customer occasions outside of our retail stores and through our developing international presence.

Turning to fiscal 2017, we expect continued strength in our revenue, operating margin and earnings per share results in comparison to fiscal 2016.

| • | Be the Employer of Choice |

| • | Elevate Coffee |

| • | Grow the Store Portfolio |

| • | Create New Customer Occasions |

| • | Build Teavana through Starbucks and CPG |

| • | Extend Digital Engagement |

In fiscal 2017, through our 7 Strategies for Growth, we plan to expand our footprint by opening new stores and enhancing the mix and types of stores in our portfolio.

Expansion of our store portfolio is expected to be coupled with continued customer attachment through our morning and lunch dayparts.

And, our management team continues to align our leadership with our evolving businesses, including the development of our Global Roastery and Starbucks Reserve® branded stores.

As a result of these efforts, we expect consolidated revenue growth to be approximately 8% in fiscal 2017 when compared to our 53-week results in fiscal 2016.

After excluding the approximately $400 million of additional revenue attributed to the extra week in fiscal 2016, we expect consolidated revenue growth to be approximately 10% for fiscal 2017 based on a comparable 52-week year.

Additionally, for fiscal 2017, we expect to continue investing in our partners and digital platforms.

These investments provide enhanced wages and benefits and also focus on mobile and loyalty programs.

We expect partner and digital investments to increase by approximately $250 million versus an increase of approximately $160 million in fiscal 2016, further demonstrating the importance of and value creation realized from these efforts.

We plan for our consolidated operating margin to increase slightly in fiscal 2017 when compared to fiscal 2016.

Sales leverage and cost savings initiatives will offset investments in our business and partners.

For fiscal 2017, we expect an effective tax rate of about 34%, and diluted net earnings per share to be in the range of $2.09 to $2.11.

Partially offsetting these increases was the impact of unfavorable foreign currency translation ($33 million) and a decrease in licensed store revenues resulting from the impact of our ownership change in Starbucks Japan ($6 million).

During the first quarter of fiscal 2015, we recorded a gain of $391 million as a result of remeasuring our preexisting 39.5% ownership interest in Starbucks Japan to fair value upon acquisition.

During the fourth quarter of fiscal 2015, we recorded a loss of $61 million related to the redemption of our $550 million of 6.250% Senior Notes (the "2017 notes"), which were originally scheduled to mature in August 2017.

The loss primarily relates to the optional redemption premium outlined in the 2017 notes indenture, as well as the derecognition of the capitalized issuance costs and unamortized discount.

Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amounts of income we earn in those jurisdictions, as well as discrete items that may occur in any given year, but are not consistent from year to year.

| Licensed stores | 1,861.9 | | | | 1,588.6 | | | | 17.2 | |

| Total net revenues | $ | 19,162.7 | | | $ | 16,447.8 | | | 16.5 | % |

Partially offsetting these increases was a decrease in licensed store revenues resulting from the impact of our ownership change in Starbucks Japan ($45 million).

| Fiscal Year Ended | Sep 27, 2015 | | | | Sep 28, 2014 | | | | Sep 27, 2015 | | | Sep 28, 2014 | |

Formed in 1985, Starbucks Corporation’s common stock trades on the NASDAQ Global Select Market [removed: ("NASDAQ")] [added: (“NASDAQ”)] under the symbol [removed: "SBUX."] [added: “SBUX.”] We purchase and roast high-quality coffees that we sell, along with handcrafted coffee, tea and other beverages and a variety of [removed: fresh] [added: high-quality] food items, including snack offerings, through company-operated stores.

We also believe our Starbucks Global [removed: Responsibility] [added: Social Impact] strategy, commitments related to ethically sourcing high-quality coffee, contributing positively to the communities we do business in and being an employer of choice are contributors to our objective.

In this Annual Report on Form 10-K [removed: ("10-K"] [added: (“10-K”] or [removed: "Report")] [added: “Report”)] for the fiscal year ended October [removed: 2, 2016 ("fiscal 2016"),] [added: 1, 2017 (“fiscal 2017”),] Starbucks Corporation (together with its subsidiaries) is referred to as [removed: "Starbucks,"] [added: “Starbucks,”] the [removed: "Company," "we," "us"] [added: “Company,” “we,” “us”] or [removed: "our."][added: “our.”]

We also have several non-reportable operating segments, including [removed: Teavana,] [added: Teavana retail stores and] Seattle's Best [removed: Coffee and Evolution Fresh,] [added: Coffee,] as well as certain developing businesses such as [added: Siren Retail, which includes] the Starbucks [removed: Reserve®] [added: ReserveTM] Roastery & Tasting Rooms, [removed: which are combined] [added: certain Starbucks ReserveTM locations] and [removed: referred to as All Other Segments.][added: Princi operations.]

Revenues from our reportable segments and All Other Segments as a percentage of total net revenues for fiscal [removed: 2016] [added: 2017] were as follows: Americas [removed: (69%),] [added: (70%),] CAP (14%), EMEA (5%), Channel Development (9%) and All Other Segments [removed: (3%).][added: (2%).]

Starbucks segment information is included in [Note [removed: 16](#s7FAABF9A1FCDD4C657383264FFDADF75),] [added: 16](#s271D693DE98159E48C78894ADCCFBB0F),] Segment Reporting, to the consolidated financial statements included in Item 8 of Part II of this 10-K.

Company-operated and Licensed Store Summary as of October [removed: 2, 2016][added: 1, 2017]

The mix of company-operated versus licensed stores in a given market will vary based on several factors, including our ability to access desirable local retail space, the complexity and expected ultimate size of the market for Starbucks and our ability to leverage the support infrastructure [removed: in an existing] [added: within a] geographic region.

Revenue from company-operated stores accounted for 79% of total net revenues during fiscal [removed: 2016.][added: 2017.]

The Starbucks Experience is built upon superior customer [removed: service,] [added: service and a seamless digital experience] as well as clean and well-maintained stores that reflect the personalities of the communities in which they operate, thereby building a high degree of customer loyalty.

Store growth in specific existing markets will vary due to many factors, including [added: expected financial returns,] the maturity of the market, economic conditions, consumer behavior and local business practices.

Company-operated store data for the year-ended October [removed: 2, 2016:][added: 1, 2017:]

| | [removed: Sep 27, 2015] [added: Oct 2, 2016] | | | Opened | | | Closed | | | Transfers | | | Net | | | Oct [removed: 2, 2016] [added: 1, 2017] | |

| Canada | [removed: 1,009] [added: 1,035] | | | 45 | | | [removed: (19] [added: (8] | ) | | [removed: —] [added: 11] | | | [removed: 26] [added: 48] | | | [removed: 1,035] [added: 1,083] | |

| Brazil | [removed: 103] [added: 104] | | | [removed: 3] [added: 5] | | | [removed: (2] [added: (1] | ) | | — | | | [removed: 1] [added: 4] | | | [removed: 104] [added: 108] | |

| China/Asia [removed: Pacific:] [added: Pacific(1):] | | | | | | | | | | | | | | | | | |

| Japan | [removed: 1,073] [added: 1,140] | | | [removed: 85] [added: 90] | | | [removed: (18] [added: (12] | ) | | — | | | [removed: 67] [added: 78] | | | [removed: 1,140] [added: 1,218] | |

| Thailand | [removed: 237] [added: 273] | | | [removed: 38] [added: 39] | | | [removed: (2] [added: —] | [removed: )] | | — | | | [removed: 36] [added: 39] | | | [removed: 273] [added: 312] | |

| Singapore | [removed: 116] [added: 126] | | | [removed: 13] [added: 10] | | | (3 | ) | | [removed: —] [added: (133] | [added: )] | | [removed: 10] [added: (126] | [added: )] | | [removed: 126] [added: —] | |

| Total China/Asia Pacific | [removed: 2,452] [added: 2,811] | | | [removed: 389] [added: 424] | | | [removed: (30] [added: (32] | ) | | [removed: —] [added: (133] | [added: )] | | [removed: 359] [added: 259] | | | [removed: 2,811] [added: 3,070] | |

| [removed: EMEA(1):] [added: EMEA:] | | | | | | | | | | | | | | | | | |

| U.K. | [removed: 428] [added: 366] | | | [removed: 3] [added: 14] | | | [removed: (12] [added: (21] | ) | | [removed: (53] [added: (14] | ) | | [removed: (62] [added: (21] | ) | | [removed: 366] [added: 345] | |

| Total EMEA | [removed: 737] [added: 523] | | | [removed: 5] [added: 16] | | | [removed: (19] [added: (23] | ) | | [removed: (200] [added: (14] | ) | | [removed: (214] [added: (21] | ) | | [removed: 523] [added: 502] | |

| Teavana | [removed: 371] [added: 355] | | | [removed: 3] [added: —] | | | [removed: (19] [added: (67] | ) | | — | | | [removed: (16] [added: (67] | ) | | [removed: 355] [added: 288] | |

| Evolution Fresh | [removed: 3] [added: 2] | | | — | | | [removed: (1] [added: (2] | ) | | — | | | [removed: (1] [added: (2] | ) | | [removed: 2] [added: —] | |

| Total All Other Segments | [removed: 375] [added: 358] | | | [removed: 3] [added: 1] | | | [removed: (20] [added: (69] | ) | | — | | | [removed: (17] [added: (68] | ) | | [removed: 358] [added: 290] | |

[removed: |] (1) [removed: | EMEA] [added: China/Asia Pacific] store data includes the transfer of [removed: 144 Germany] [added: 133 Singapore] company-operated retail stores to licensed stores as a result of the sale to [removed: AmRest Holdings SE] [added: Maxim's Caterers Limited] in the [removed: third] [added: fourth] quarter of fiscal [removed: 2016. |][added: 2017.]

| Fiscal Year Ended | Oct [added: 1, 2017 | | | Oct] 2, 2016 | | | Sep 27, 2015 | | [removed: | Sep 28, 2014 | |]

| Beverages | [removed: 74] [added: 73] | % | | [removed: 73] [added: 74] | % | | 73 | % |

| Food | [removed: 19] [added: 20] | % | | 19 | % | | [removed: 18] [added: 19] | % |

| Packaged and single-serve coffees and teas | 3 | % | | 3 | % | | [removed: 4] [added: 3] | % |

| Other(1) | 4 | % | | [removed: 5] [added: 4] | % | | 5 | % |

| (1) | [removed: "Other"] [added: “Other”] primarily consists of sales of [added: serveware,] ready-to-drink [removed: beverages, serveware] [added: beverages] and coffee-making equipment, among other items. |

The Starbucks [removed: Card and] [added: Card,] our [removed: other] branded stored value card [removed: programs are] [added: program, is] designed to provide customers with a convenient payment method, support gifting and increase the frequency of store visits by cardholders, in part through the related Starbucks Rewards™ (previously My Starbucks Rewards®) loyalty program where available, as discussed below.

They can be obtained in our company-operated and most licensed stores in North America, [removed: Japan,] China, [removed: Brazil,] [added: Japan, Latin America,] and many of our markets in [removed: the EMEA segment, as well as on-line, via the Starbucks® mobile app,] [added: our CAP] and [removed: through other retailers, including a number of other international locations.][added: EMEA segments.]

Customers may access their card balances by utilizing their stored value card or the Starbucks® [removed: mobile app] [added: Mobile App] in participating stores, which also include certain [removed: Teavana® and Evolution Fresh®] [added: Teavana ™] locations.

[removed: Customers who register their card in the U.S., Canada, and certain other countries are automatically enrolled in the Starbucks Rewards™ program and] [added: Registered members] can receive various benefits depending on factors such as the number of reward points [removed: ("Stars")] [added: (“Stars”)] earned.

Refer to [Note [removed: 1](#sBF041B249E11B2955A7B3264FFE7C6C5),] [added: 1](#s461C234D931A5580889ADE17854AE761),] Summary of Significant Accounting Policies, included in Item 8 of Part II of this 10-K, for further discussion of our stored value cards and loyalty program.

Revenues from our licensed stores accounted for [removed: 10%] [added: 11%] of total net revenues in fiscal [removed: 2016.][added: 2017.]

For [removed: Teavana® and] Starbucks® [added: and Teavana™] stores within certain international markets, we also use traditional franchising and include these stores in the results of operations from our other licensed stores.

Collectively, the combined group of non-reportable operating segments will be referred to as All Other Segments.

| Company-operated stores | 9,413 | | | 57 | % | | 3,070 | | | 41 | % | | 502 | | | 17 | % | | 290 | | | 89 | % | | 13,275 | | | 49 | % |

| Licensed stores | 7,146 | | | 43 | % | | 4,409 | | | 59 | % | | 2,472 | | | 83 | % | | 37 | | | 11 | % | | 14,064 | | | 51 | % |

| Total | 16,559 | | | 100 | % | | 7,479 | | | 100 | % | | 2,974 | | | 100 | % | | 327 | | | 100 | % | | 27,339 | | | 100 | % |

| U.S. | 7,880 | | | 372 | | | (30 | ) | | — | | | 342 | | | 8,222 | |

| Total Americas | 9,019 | | | 422 | | | (39 | ) | | 11 | | | 394 | | | 9,413 | |

| China | 1,272 | | | 285 | | | (17 | ) | | — | | | 268 | | | 1,540 | |

| All Other | 157 | | | 2 | | | (2 | ) | | — | | | — | | | 157 | |

| Siren Retail | 1 | | | 1 | | | — | | | — | | | 1 | | | 2 | |

| Total company-operated | 12,711 | | | 863 | | | (163 | ) | | (136 | ) | | 564 | | | 13,275 | |

Stored value cards can also be obtained on-line, via the Starbucks® Mobile App, and through other U.S. and international retailers.

In nearly all markets, including the U.S. and Canada, customers who register their cards are automatically enrolled in the Starbucks Rewards™ program.

| | Oct 2, 2016 | | | Opened | | | Closed | | | Transfers | | | Net | | | Oct 1, 2017 | |

| U.S. | 5,292 | | | 477 | | | (61 | ) | | — | | | 416 | | | 5,708 | |

| Latin America | 369 | | | 66 | | | (6 | ) | | — | | | 60 | | | 429 | |

| Total Americas | 6,588 | | | 646 | | | (77 | ) | | (11 | ) | | 558 | | | 7,146 | |

| China/Asia Pacific(1): | | | | | | | | | | | | | | | | | |

| China | 1,110 | | | 310 | | | (24 | ) | | — | | | 286 | | | 1,396 | |

| Korea | 952 | | | 164 | | | (8 | ) | | — | | | 156 | | | 1,108 | |

| All Other | 399 | | | 76 | | | (12 | ) | | 133 | | | 197 | | | 596 | |

| EMEA: | | | | | | | | | | | | | | | | | |

| All Other | 574 | | | 132 | | | (17 | ) | | — | | | 115 | | | 689 | |

| Total EMEA | 2,119 | | | 398 | | | (59 | ) | | 14 | | | 353 | | | 2,472 | |

| Total licensed | 12,374 | | | 1,749 | | | (195 | ) | | 136 | | | 1,690 | | | 14,064 | |

(1) China/Asia Pacific store data includes the transfer of 133 Singapore company-operated retail stores to licensed stores as a result of the sale to Maxim's Caterers Limited in the fourth quarter of fiscal 2017.

| Rosalind G. Brewer | | 55 | | group president, Americas and chief operating officer |

| Paul Mutty | | 58 | | senior vice president, interim general counsel |

(1) Channels includes various business groups, including channel development and certain emerging brands, including Seattle's Best Coffee and Evolution Fresh.

Mr. Johnson served as president and chief operating officer from March 2015 to April 2017.

Rosalind G.

Brewer has served as group president, Americas and chief operating officer since October 2017, and has been a director of Starbucks since March 2017.

Ms. Brewer served as President and Chief Executive Officer of Sam's Club, a membership-only retail warehouse club and a division of Walmart, from February 2012 to February 2017.

Previously, Ms. Brewer was Executive Vice President and President of Walmart's East Business Unit from February 2011 to January 2012; Executive Vice President and President of Walmart South from February 2010 to February 2011; Senior Vice President and Division President of the Southeast Operating Division from March 2007 to January 2010; and Regional General Manager, Georgia Operations, from 2006 to February 2007.

Prior to joining Walmart, Ms. Brewer was President of Global Nonwovens Division for Kimberly-Clark Corporation, a global health and hygiene products company, from 2004 to 2006 and held various management positions at Kimberly-Clark Corporation from 1984 to 2006.

She serves as the Chair of the Board of Trustees for Spelman College and formerly served on the Board of Directors for Lockheed Martin Corporation and Molson Coors Brewing Company.

Mr. Burrows also oversees Global Coffee and the Teavana brand.

From September 2016 to October 2017, he served as group president, Starbucks Global Retail.

Mr. Maw serves on the Board of Directors of Avista Corporation.

From July 2011 to July 2017, he served as senior vice president, deputy general counsel and assistant secretary.

Mr. Mutty has previously led the Starbucks legal department's EMEA region, Channel Development, Starbucks Law & Corporate Affairs business operations, global commercial, litigation, regulatory, technology, real estate and licensing legal teams.

| Company-operated stores | 9,019 | | | 58 | % | | 2,811 | | | 44 | % | | 523 | | | 20 | % | | 358 | | | 91 | % | | 12,711 | | | 51 | % |

| Licensed stores | 6,588 | | | 42 | % | | 3,632 | | | 56 | % | | 2,119 | | | 80 | % | | 35 | | | 9 | % | | 12,374 | | | 49 | % |

| Total | 15,607 | | | 100 | % | | 6,443 | | | 100 | % | | 2,642 | | | 100 | % | | 393 | | | 100 | % | | 25,085 | | | 100 | % |

| U.S. | 7,559 | | | 358 | | | (37 | ) | | — | | | 321 | | | 7,880 | |

| Total Americas | 8,671 | | | 406 | | | (58 | ) | | — | | | 348 | | | 9,019 | |

| China | 1,026 | | | 253 | | | (7 | ) | | — | | | 246 | | | 1,272 | |

| France | 76 | | | — | | | (2 | ) | | — | | | (2 | ) | | 74 | |

| Switzerland | 56 | | | 1 | | | (1 | ) | | — | | | — | | | 56 | |

| Austria | 18 | | | — | | | (1 | ) | | — | | | (1 | ) | | 17 | |

| Netherlands | 10 | | | — | | | — | | | — | | | — | | | 10 | |

| Germany | 149 | | | 1 | | | (3 | ) | | (147 | ) | | (149 | ) | | — | |

| Starbucks Reserve® Roastery & Tasting Rooms | 1 | | | — | | | — | | | — | | | — | | | 1 | |

| Total company-operated | 12,235 | | | 803 | | | (127 | ) | | (200 | ) | | 476 | | | 12,711 | |

| | |

| --- | --- |

Starbucks® stores offer a choice of coffee and tea beverages, as well as other premium coffee, tea and related products, including distinctively packaged roasted whole bean and ground coffees, a variety of premium single-serve and ready-to-drink coffee and tea products, juices and bottled water.

Starbucks® stores also offer an assortment of fresh food and snack offerings, including selections focusing on high-quality ingredients, nutritional value and great flavor.

A focused selection of beverage-making equipment and accessories are also sold in our stores.

Each Starbucks® store varies its product mix depending upon the size of the store and its location.

To complement the in-store experience, our company-operated Starbucks® stores in the U.S., Canada and certain other international markets also provide customers free access to wireless internet.

| U.S. | 4,962 | | | 430 | | | (100 | ) | | — | | | 330 | | | 5,292 | |

| Other | 315 | | | 55 | | | (1 | ) | | — | | | 54 | | | 369 | |

| Total Americas | 6,132 | | | 566 | | | (110 | ) | | — | | | 456 | | | 6,588 | |

| China | 785 | | | 330 | | | (5 | ) | | — | | | 325 | | | 1,110 | |

| South Korea | 831 | | | 129 | | | (8 | ) | | — | | | 121 | | | 952 | |

| Other | 361 | | | 51 | | | (13 | ) | | — | | | 38 | | | 399 | |

| Other | 469 | | | 118 | | | (13 | ) | | — | | | 105 | | | 574 | |

| Total EMEA | 1,625 | | | 333 | | | (39 | ) | | 200 | | | 494 | | | 2,119 | |

| Total licensed | 10,808 | | | 1,559 | | | (193 | ) | | 200 | | | 1,566 | | | 12,374 | |

| Lucy Lee Helm | | 59 | | executive vice president, general counsel and secretary |

She served as senior vice president and deputy general counsel from October 2007 to April 2012 and served as interim general counsel and secretary from April 2012 to May 2012.

During her tenure at Starbucks, Ms. Helm has led various teams of the Starbucks legal department, including the Litigation and Brand protection team, the Global Business (Commercial) team and the Litigation and Employment team.

Prior to joining Starbucks, Ms. Helm was a principal at the Seattle law firm of Riddell Williams P.S. from 1990 to 1999, where she was a trial lawyer specializing in commercial, insurance coverage and environmental litigation.

Global Responsibility

members and others.

See [Note [removed: 15](#sE79CBE0928704C7C241B3265020FFD71),] [added: 15](#s23824BAD9842519282B590196F4D615E),] Commitments and Contingencies, to the consolidated financial statements included in Item 8 of Part II of this 10-K for information regarding certain legal proceedings in which we are involved.

For the Fiscal Year Ended October [removed: 2, 2016][added: 1, 2017]

[removed: ][added: ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation of S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [removed: x]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.

See the definitions of [removed: "large] [added: “large] accelerated [removed: filer," "accelerated filer" and "smaller] [added: filer,” “accelerated filer,” “smaller] reporting [removed: company"] [added: company” and “emerging growth company”] in Rule 12b-2 of the Exchange Act.

The aggregate market value of the voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter, based upon the closing sale price of the registrant’s common stock on [removed: March 27, 2016] [added: April 2, 2017] as reported on the NASDAQ Global Select Market was [removed: $83] [added: $82] billion.

As of November [removed: 11, 2016,] [added: 10, 2017,] there were [removed: 1,455.4] [added: 1,422.8] million shares of the registrant’s Common Stock outstanding.

Portions of the definitive Proxy Statement for the registrant’s Annual Meeting of Shareholders to be held on March [removed: 22, 2017] [added: 21, 2018] have been incorporated by reference into Part III of this Annual Report on Form 10-K.

| Item 1 | [removed: [Business](#sCD25A63758E0F727CB1F3265060ACC72)] [added: [Business](#s3ED8F783F0C45891AFF320FFCD9CDD48)] | [removed: [2](#sCD25A63758E0F727CB1F3265060ACC72)] [added: [2](#s3ED8F783F0C45891AFF320FFCD9CDD48)] |

| Item 1A | [Risk [removed: Factors](#s4C8B77A4F87E20C20B0E326576172376)] [added: Factors](#sC97DCEB0233457B8B83336D2C3859EA4)] | [removed: [10](#s4C8B77A4F87E20C20B0E326576172376)] [added: [10](#sC97DCEB0233457B8B83336D2C3859EA4)] |

| Item 1B | [Unresolved Staff [removed: Comments](#sB1F72537FDD6ED087997326576288E8F)] [added: Comments](#sE72C1E74B74556EAB16FC7F818A8DD1C)] | [removed: [16](#sB1F72537FDD6ED087997326576288E8F)] [added: [17](#sE72C1E74B74556EAB16FC7F818A8DD1C)] |

| Item 2 | [removed: [Properties](#s53C22949691E43B842FC326576363053)] [added: [Properties](#sE7E517376A9E5FD29DD94CA1AE251BED)] | [removed: [16](#s53C22949691E43B842FC326576363053)] [added: [17](#sE7E517376A9E5FD29DD94CA1AE251BED)] |

| Item 3 | [Legal [removed: Proceedings](#s33BD8A7ECA1DAAF8C199326576742B54)] [added: Proceedings](#sEF64579BA350511CA88B4171F015D7A7)] | [removed: [16](#s33BD8A7ECA1DAAF8C199326576742B54)] [added: [17](#sEF64579BA350511CA88B4171F015D7A7)] |

| Item 4 | [Mine Safety [removed: Disclosures](#sD2204A2E53D1DD4DA2F13265768622F7)] [added: Disclosures](#s2FE7BF324FE4595CA072F6B0CCE3FB98)] | [removed: [16](#sD2204A2E53D1DD4DA2F13265768622F7)] [added: [17](#s2FE7BF324FE4595CA072F6B0CCE3FB98)] |

| Item 5 | [Market for the Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity [removed: Securities](#s62F9AAF73F4E25309B6032653EBC7609)] [added: Securities](#s3ED832962B835320BCC9AC8BEF58A129)] | [removed: [17](#s62F9AAF73F4E25309B6032653EBC7609)] [added: [18](#s3ED832962B835320BCC9AC8BEF58A129)] |

| Item 6 | [Selected Financial [removed: Data](#sA81B26E970E8EBC307543265204EBB47)] [added: Data](#s0B74A6702A8E5EADAC1E22D863BF3B21)] | [removed: [19](#sA81B26E970E8EBC307543265204EBB47)] [added: [20](#s0B74A6702A8E5EADAC1E22D863BF3B21)] |

| Item 7 | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sAD3DC6DA3F1D0335DB71326577F39CC0)] [added: Operations](#sABFCB24F4F665CC3A67A1D19C3956E20)] | [removed: [22](#sAD3DC6DA3F1D0335DB71326577F39CC0)] [added: [23](#sABFCB24F4F665CC3A67A1D19C3956E20)] |

| Item 7A | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sE2BB4C80E05DBE2C3A3A32657B6777B3)] [added: Risk](#s0B93FD6FB15F5F7BBF44AB0B8020A13A)] | [removed: [44](#sE2BB4C80E05DBE2C3A3A32657B6777B3)] [added: [45](#s0B93FD6FB15F5F7BBF44AB0B8020A13A)] |

| Item 8 | [Financial Statements and Supplementary [removed: Data](#s92F29087F8CFADEB9B3232657B89E306)] [added: Data](#sF5873F7A06125FDDA38F31A98C8867EC)] | [removed: [45](#s92F29087F8CFADEB9B3232657B89E306)] [added: [46](#sF5873F7A06125FDDA38F31A98C8867EC)] |

| | [Index For Notes to Consolidated Financial [removed: Statements](#s6D58B9069633F607431232657D87C38F)] [added: Statements](#s078C69402F44594B915CF410C8723EB0)] | [removed: [50](#s6D58B9069633F607431232657D87C38F)] [added: [51](#s078C69402F44594B915CF410C8723EB0)] |

| | [Report of Independent Registered Public Accounting [removed: Firm](#sDF357E703B7545296F7A326586BB8B2F)] [added: Firm](#sEE80760F40965DCCAA139C1BFF99FBE6)] | [removed: [86](#sDF357E703B7545296F7A326586BB8B2F)] [added: [85](#sEE80760F40965DCCAA139C1BFF99FBE6)] |

| Item 9 | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s06086F741114F04ECA86326586E265B6)] [added: Disclosure](#s0C0138E36FC9510FBC9EA22174C9B23F)] | [removed: [87](#s06086F741114F04ECA86326586E265B6)] [added: [86](#s0C0138E36FC9510FBC9EA22174C9B23F)] |

| Item 9A | [Controls and [removed: Procedures](#sDEA32DD5DF5302CE9021326586F5E46C)] [added: Procedures](#sDE7284F6AE905A9FA2112641F81FED55)] | [removed: [87](#sDEA32DD5DF5302CE9021326586F5E46C)] [added: [86](#sDE7284F6AE905A9FA2112641F81FED55)] |

| Item 9B | [Other [removed: Information](#sC59442BFC02C316A854F32658748DBDC)] [added: Information](#s3A3A76C323795B49BDA938866BB770EF)] | [removed: [89](#sC59442BFC02C316A854F32658748DBDC)] [added: [88](#s3A3A76C323795B49BDA938866BB770EF)] |

| Item 10 | [Directors, Executive Officers and Corporate [removed: Governance](#s74DE650C7342818171B832658796C770)] [added: Governance](#s43326F91EE415493AB932277ABE73DA6)] | [removed: [90](#s74DE650C7342818171B832658796C770)] [added: [89](#s43326F91EE415493AB932277ABE73DA6)] |

| Item 11 | [Executive [removed: Compensation](#sD4F96F014BA43F05FAB1326587C80DF7)] [added: Compensation](#sB58ED578735350C3BBFA134C479C037F)] | [removed: [90](#sD4F96F014BA43F05FAB1326587C80DF7)] [added: [89](#sB58ED578735350C3BBFA134C479C037F)] |

| Item 12 | [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder [removed: Matters](#s3F3729B8CCC60E82C0D1326587E9CE93)] [added: Matters](#s5BFAAD6A925C5CE68A85691D67B23230)] | [removed: [90](#s3F3729B8CCC60E82C0D1326587E9CE93)] [added: [89](#s5BFAAD6A925C5CE68A85691D67B23230)] |

| Item 13 | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s5024FFF64C53FDCC0306326588197E7D)] [added: Independence](#sE3C252106D23583E9890319D2E0270AD)] | [removed: [90](#s5024FFF64C53FDCC0306326588197E7D)] [added: [89](#sE3C252106D23583E9890319D2E0270AD)] |

| Item 14 | [Principal Accounting Fees and [removed: Services](#s4D65FD7DB122230E272132658840790A)] [added: Services](#s7EB929EB54F556D2BCAAAD5D819E7455)] | [removed: [90](#s4D65FD7DB122230E272132658840790A)] [added: [89](#s7EB929EB54F556D2BCAAAD5D819E7455)] |

| Item 15 | [Exhibits, Financial Statement [removed: Schedules](#s8E8E28B75B64C1ACD14D3265888F6D34)] [added: Schedules](#s8D93930F4A2B52F7B3E300DE45221EA9)] | [removed: [91](#s8E8E28B75B64C1ACD14D3265888F6D34)] [added: [90](#s8D93930F4A2B52F7B3E300DE45221EA9)] |

10-K 1 sbux-1012017x10xk.htm 10-K

| | | Emerging growth company | ¨ |

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

For the Fiscal Year Ended October 1, 2017

| [SIGNATURES](#s70DA60122BBB593F936C56390E35B989) | | [97](#s70DA60122BBB593F936C56390E35B989) |

10-K 1 sbux-1022016x10xk.htm 10-K

| [SIGNATURES](#sE8CA7A23DB09F14CB48F326589374D17) | | [92](#sE8CA7A23DB09F14CB48F326589374D17) |

| [INDEX TO EXHIBITS](#s843EBA399AA65034F751326519DB6F96) | | [94](#s843EBA399AA65034F751326519DB6F96) |

| [removed: Stratford, CT] [added: Washington, DC] | [removed: 196,000] [added: 130,000] | | | Warehouse and distribution |

| Seattle, WA | [removed: 1,135,000] [added: 1,241,000] | | | Corporate administrative |

| Shanghai, China | [removed: 116,000] [added: 121,000] | | | Corporate administrative |

As of October [removed: 2, 2016,] [added: 1, 2017,] Starbucks had [removed: 12,711] [added: 13,275] company-operated stores, almost all of which are leased.

The following table shows the quarterly high and low sale prices per share of Starbucks common stock as reported by NASDAQ for each quarter during the last two fiscal years and the quarterly cash dividend declared per share of our common stock during the periods [removed: indicated, as adjusted to give effect to the two-for-one stock split discussed in [Note 1](#sBF041B249E11B2955A7B3264FFE7C6C5), Summary of Significant Accounting Policies, included in Item 8 of Part II of this 10-K:][added: indicated:]

As of November [removed: 11, 2016,] [added: 10, 2017,] we had approximately 18,100 shareholders of record.

The following table provides information regarding repurchases of our common stock during the quarter ended October [removed: 2, 2016:][added: 1, 2017:]

| (1) | Monthly information is presented by reference to our fiscal months during the fourth quarter of fiscal [removed: 2016.] [added: 2017.] |

| (3) | This column includes the total [added: remaining] number of shares authorized for repurchase under the Company's ongoing share repurchase [removed: program and includes the additional 100 million shares authorized for repurchase as announced on April 21, 2016.] [added: program.] Shares under our ongoing share repurchase program may be repurchased in open market transactions, including [added: pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, or through privately negotiated transactions. The timing, manner, price and amount of repurchases will be] |

[removed: The timing, manner, price and amount of repurchases will be] determined at the Company's discretion, and the share repurchase program may be suspended, terminated or modified at any time for any reason.

The following graph depicts the total return to shareholders from [removed: October 2, 2011] [added: September 30, 2012] through October [removed: 2, 2016,] [added: 1, 2017,] relative to the performance of the Standard & Poor’s 500 Index, the NASDAQ Composite Index and the Standard & Poor’s 500 Consumer Discretionary Sector, a peer group that includes Starbucks.

All indices shown in the graph have been reset to a base of 100 as of [removed: October 2, 2011,] [added: September 30, 2012,] and assume an investment of $100 on that date and the reinvestment of dividends paid since that date.

[removed: ][added: ]

| | [removed: Oct 2, 2011 | | | |] Sep 30, 2012 | | | | Sep 29, 2013 | | | | Sep 28, 2014 | | | | Sep 27, 2015 | | | | Oct 2, 2016 | | | [added: | Oct 1, 2017 | | |]

| Fiscal 2017: | | | | | | | | | | | |

| Fourth Quarter | $ | 59.66 | | | $ | 52.58 | | | $ | 0.30 | |

| Third Quarter | 64.87 | | | | 57.38 | | | | 0.25 | | |

| Second Quarter | 59.00 | | | | 53.81 | | | | 0.25 | | |

| First Quarter | 59.54 | | | | 50.84 | | | | 0.25 | | |

| July 3, 2017 — July 30, 2017 | | 2,168,233 | | | $ | 58.03 | | | 2,168,233 | | | 93,238,695 | |

| July 31, 2017 — August 27, 2017 | | 4,804,970 | | | 53.87 | | | | 4,804,970 | | | 88,433,725 | |

| August 28, 2017 — October 1, 2017 | | 8,116,314 | | | 54.41 | | | | 8,116,314 | | | 80,317,411 | |

| Total | | 15,089,517 | | | $ | 54.76 | | | 15,089,517 | | | | |

| Starbucks Corporation | $ | 100.00 | | | $ | 154.67 | | | $ | 152.47 | | | $ | 238.48 | | | $ | 225.70 | | | $ | 227.92 | |

| S&P 500 | 100.00 | | | | 119.34 | | | | 142.89 | | | | 142.02 | | | | 163.93 | | | | 194.44 | | |

| NASDAQ Composite | 100.00 | | | | 123.38 | | | | 148.79 | | | | 154.52 | | | | 178.82 | | | | 220.25 | | |

| S&P Consumer Discretionary | 100.00 | | | | 131.84 | | | | 147.36 | | | | 166.78 | | | | 182.85 | | | | 209.40 | | |

| Fiscal 2015: | | | | | | | | | | | |

| Fourth Quarter | $ | 59.32 | | | $ | 42.05 | | | $ | 0.20 | |

| Third Quarter | 54.75 | | | | 46.28 | | | | 0.16 | | |

| Second Quarter | 49.60 | | | | 39.28 | | | | 0.16 | | |

| First Quarter | 42.10 | | | | 35.39 | | | | 0.16 | | |

| June 27, 2016 — July 24, 2016 | | — | | | $ | — | | | — | | | 125,119,308 | |

| July 25, 2016 — August 21, 2016 | | 4,660,655 | | | 55.92 | | | | 4,660,655 | | | 120,458,653 | |

| August 22, 2016 — October 2, 2016 | | 2,609,092 | | | 55.43 | | | | 2,609,092 | | | 117,849,561 | |

| Total | | 7,269,747 | | | $ | 55.74 | | | 7,269,747 | | | | |

pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, or through privately negotiated transactions.

| Starbucks Corporation | $ | 100.00 | | | $ | 137.95 | | | $ | 213.36 | | | $ | 210.33 | | | $ | 328.99 | | | $ | 311.36 | |

| S&P 500 | 100.00 | | | | 130.20 | | | | 155.39 | | | | 186.05 | | | | 184.91 | | | | 213.44 | | |

| NASDAQ Composite | 100.00 | | | | 131.89 | | | | 163.47 | | | | 195.96 | | | | 202.60 | | | | 234.66 | | |

| S&P Consumer Discretionary | 100.00 | | | | 136.64 | | | | 180.14 | | | | 201.34 | | | | 227.88 | | | | 249.84 | | |

All per-share data has been retroactively adjusted to give effect to the two-for-one stock split discussed in [Note [removed: 1](#sBF041B249E11B2955A7B3264FFE7C6C5),] [added: 1](#s461C234D931A5580889ADE17854AE761),] Summary of Significant Accounting Policies, included in Item 8 of Part II of this 10-K.

| | As of and for the Fiscal Year Ended (1) | Oct [added: 1, 2017 (52 Wks) | | | | Oct] 2, 2016 (53 Wks) | | | | Sep 27, 2015 (52 Wks) | | | | Sep 28, 2014 (52 Wks) | | | | Sep 29, 2013 (52 Wks) | | | [removed: | Sep 30, 2012 (52 Wks) | | |]

| | Company-operated stores | $ | [removed: 16,844.1] [added: 17,650.7] | | | $ | [removed: 15,197.3] [added: 16,844.1] | | | $ | [removed: 12,977.9] [added: 15,197.3] | | | $ | [removed: 11,793.2] [added: 12,977.9] | | | $ | [removed: 10,534.5] [added: 11,793.2] | |

| | Licensed stores | [removed: 2,154.2] [added: 2,355.0] | | | | [removed: 1,861.9] [added: 2,154.2] | | | | [removed: 1,588.6] [added: 1,861.9] | | | | [removed: 1,360.5] [added: 1,588.6] | | | | [removed: 1,210.3] [added: 1,360.5] | | |

| | CPG, foodservice and other | [removed: 2,317.6] [added: 2,381.1] | | | | [removed: 2,103.5] [added: 2,317.6] | | | | [removed: 1,881.3] [added: 2,103.5] | | | | [removed: 1,713.1] [added: 1,881.3] | | | | [removed: 1,532.0] [added: 1,713.1] | | |

| | Total net revenues | $ | [removed: 21,315.9] [added: 22,386.8] | | | $ | [removed: 19,162.7] [added: 21,315.9] | | | $ | [removed: 16,447.8] [added: 19,162.7] | | | $ | [removed: 14,866.8] [added: 16,447.8] | | | $ | [removed: 13,276.8] [added: 14,866.8] | |

| | Operating income/(loss)(2) | $ | [removed: 4,171.9] [added: 4,134.7] | | | $ | [removed: 3,601.0] [added: 4,171.9] | | | $ | [removed: 3,081.1] [added: 3,601.0] | | | $ | [removed: (325.4] [added: 3,081.1] | [removed: )] | | $ | [removed: 1,997.4] [added: (325.4] | [added: )] |

| | Net earnings including noncontrolling interests(2) | [removed: 2,818.9] [added: 2,884.9] | | | | [removed: 2,759.3] [added: 2,818.9] | | | | [removed: 2,067.7] [added: 2,759.3] | | | | [removed: 8.8] [added: 2,067.7] | | | | [removed: 1,384.7] [added: 8.8] | | |

| | Net earnings/(loss) attributable to noncontrolling interests | [added: 0.2 | | | |] 1.2 | | | | 1.9 | | | | (0.4 | | ) | | 0.5 | | | [removed: | 0.9 | | |]

| | Net earnings attributable to Starbucks(2) | [removed: 2,817.7] [added: 2,884.7] | | | | [removed: 2,757.4] [added: 2,817.7] | | | | [removed: 2,068.1] [added: 2,757.4] | | | | [removed: 8.3] [added: 2,068.1] | | | | [removed: 1,383.8] [added: 8.3] | | |

| | EPS — diluted(2) | [removed: 1.90] [added: 1.97] | | | | [removed: 1.82] [added: 1.90] | | | | [removed: 1.35] [added: 1.82] | | | | [removed: 0.01] [added: 1.35] | | | | [removed: 0.90] [added: 0.01] | | |

| | Cash dividends declared per share | [removed: 0.850] [added: 1.050] | | | | [removed: 0.680] [added: 0.850] | | | | [removed: 0.550] [added: 0.680] | | | | [removed: 0.445] [added: 0.550] | | | | [removed: 0.360] [added: 0.445] | | |

| | Net cash provided by operating activities | [removed: 4,575.1] [added: 4,174.3] | | | | [removed: 3,749.1] [added: 4,575.1] | | | | [removed: 607.8] [added: 3,749.1] | | | | [removed: 2,908.3] [added: 607.8] | | | | [removed: 1,750.3] [added: 2,908.3] | | |

| | Capital expenditures (additions to property, plant and equipment) | [removed: 1,440.3] [added: 1,519.4] | | | | [removed: 1,303.7] [added: 1,440.3] | | | | [removed: 1,160.9] [added: 1,303.7] | | | | [removed: 1,151.2] [added: 1,160.9] | | | | [removed: 856.2] [added: 1,151.2] | | |

| | Shareholders’ equity | [removed: 5,884.0] [added: 5,450.1] | | | | [removed: 5,818.0] [added: 5,884.0] | | | | [removed: 5,272.0] [added: 5,818.0] | | | | [removed: 4,480.2] [added: 5,272.0] | | | | [removed: 5,109.0] [added: 4,480.2] | | |

| (3) | Total assets for fiscal [removed: 2012] [added: 2013] through fiscal [removed: 2015] [added: 2016] have been adjusted for the adoption of new accounting guidance related to the reclassification of [removed: deferred income taxes] [added: debt issuance costs] as discussed in [Note [removed: 1](#sBF041B249E11B2955A7B3264FFE7C6C5),] [added: 1](#s461C234D931A5580889ADE17854AE761),] Summary of Significant Accounting Policies. |

| | Fiscal Year Ended | Oct [added: 1, 2017 | | | Oct] 2, 2016 | | | Sep 27, 2015 | | | Sep 28, 2014 | | | Sep 29, 2013 | | [removed: | Sep 30, 2012 | |]

| | Sales growth | [removed: 6] [added: 3] | % | | [removed: 7] [added: 6] | % | | [removed: 6] [added: 7] | % | | [removed: 7] [added: 6] | % | | [removed: 8] [added: 7] | % |

| | Change in transactions | [removed: 1] [added: —] | % | | [removed: 3] [added: 1] | % | | [removed: 2] [added: 3] | % | | [removed: 5] [added: 2] | % | | [removed: 6] [added: 5] | % |

| | Change in ticket | [removed: 5] [added: 4] | % | | [removed: 4] [added: 5] | % | | [removed: 3] [added: 4] | % | | [removed: 2] [added: 3] | % | | 2 | % |

| | Sales growth | 3 | % | | [removed: 9] [added: 3] | % | | [removed: 7] [added: 9] | % | | [removed: 9] [added: 7] | % | | [removed: 15] [added: 9] | % |

| | Change in transactions | 1 | % | | [removed: 8] [added: 1] | % | | [removed: 6] [added: 8] | % | | [removed: 7] [added: 6] | % | | [removed: 11] [added: 7] | % |

| | Change in ticket | [removed: 2] [added: 1] | % | | [removed: 1] [added: 2] | % | | [removed: —] [added: 1] | % | | [removed: 2] [added: —] | % | | [removed: 3] [added: 2] | % |

| | [removed: EMEA] [added: EMEA(3)] | | | | | | | | | | | | | | |

| | Sales growth | [removed: —] [added: 1] | % | | [removed: 4] [added: —] | % | | [removed: 5] [added: 4] | % | | [removed: —] [added: 5] | % | | — | % |

| | Change in transactions | [added: (1 | )% | |] 1 | % | | 2 | % | | 3 | % | | 2 | % | [removed: | — | % |]

| | Change in ticket | [added: 1 | % | |] — | % | | 1 | % | | 2 | % | | (2 | )% | [removed: | — | % |]

| | Sales growth | [removed: 5] [added: 3] | % | | [removed: 7] [added: 5] | % | | [removed: 6] [added: 7] | % | | [removed: 7] [added: 6] | % | | 7 | % |

| | Change in transactions | [removed: 1] [added: —] | % | | [removed: 3] [added: 1] | % | | 3 | % | | [removed: 5] [added: 3] | % | | [removed: 6] [added: 5] | % |

| | Change in ticket | [removed: 4] [added: 3] | % | | 4 | % | | [removed: 3] [added: 4] | % | | [removed: 2] [added: 3] | % | | [removed: 1] [added: 2] | % |

| (2) | Beginning in December of fiscal 2016, comparable store sales include the results of the 1,009 company-operated stores acquired as part of the [removed: acquistion] [added: acquisition] of Starbucks Japan in the first quarter of fiscal 2015. |

| | As of and for the Fiscal Year Ended | Oct [added: 1, 2017 (52 Wks) | | | Oct] 2, 2016 (53 Wks) | | | Sep 27, 2015 (52 Wks) | | | Sep 28, 2014 (52 Wks) | | | Sep 29, 2013 (52 Wks) | | [removed: | Sep 30, 2012 (52 Wks) | |]

| | Company-operated stores | [added: 394 | | |] 348 | | | 276 | | | 317 | | | 276 | | [removed: | 228 | |]

| | Licensed stores | [added: 558 | | |] 456 | | | 336 | | | 381 | | | 404 | | [removed: | 280 | |]

| | Company-operated stores | [added: 259 | | |] 359 | | | 1,320 | | | 250 | | | 239 | | [removed: | 152 | |]

| | Licensed stores | [added: 777 | | |] 622 | | | (482 | ) | | 492 | | | 349 | | [removed: | 296 | |]

| | Company-operated stores | [added: (21 | ) | |] (214 | ) | | (80 | ) | | (9 | ) | | (29 | ) | [removed: | 10 | |]

| | Licensed stores | [added: 353 | | |] 494 | | | 302 | | | 180 | | | 129 | | [removed: | 101 | |]

| | All Other [removed: Segments (4)] [added: Segments(4)] | | | | | | | | | | | | | | |

| | Company-operated stores | [added: (68 | ) | |] (17 | ) | | 6 | | | 12 | | | 343 | | [removed: | — | |]

| | Total assets(3) | $ | 14,365.6 | | | $ | 14,312.5 | | | $ | 12,404.1 | | | $ | 10,745.0 | | | $ | 11,509.8 | |

| | Long-term debt (including current portion) | 3,932.6 | | | | 3,585.2 | | | | 2,335.3 | | | | 2,041.3 | | | | 1,293.2 | | |

| (3) | Company-operated stores represent 17% of the EMEA segment store portfolio as of October 1, 2017. |

| (1) | Americas store data includes the closure of 132 Target Canada licensed stores in the second quarter of fiscal 2015. |

| | |

| --- | --- |

| | Total assets(3) | $ | 14,329.5 | | | $ | 12,416.3 | | | $ | 10,752.0 | | | $ | 11,516.0 | | | $ | 8,217.6 | |

| | Long-term debt (including current portion) | 3,602.2 | | | | 2,347.5 | | | | 2,048.3 | | | | 1,299.4 | | | | 549.6 | | |

| (1) | Americas store data has been adjusted for the sale of store locations in Chile to a joint venture partner in the fourth quarter of fiscal 2013 by reclassifying historical information from company-operated stores to licensed stores, and to exclude Seattle's Best Coffee and Evolution Fresh, which are reported within All Other Segments. Americas store data also includes the closure of 132 Target Canada licensed stores in the second quarter of fiscal 2015. |

| Fiscal Year Ended | Oct [removed: 2, 2016] [added: 1, 2017] | | | | [removed: Sep 27, 2015] [added: Oct 2, 2016] | | | | Sep [removed: 28, 2014] [added: 27, 2015] | | |

| Company-operated stores | $ | [removed: 16,844.1] [added: 17,650.7] | | | $ | [removed: 15,197.3] [added: 16,844.1] | | | $ | [removed: 12,977.9] [added: 15,197.3] | |

| Licensed stores | [removed: 2,154.2] [added: 2,355.0] | | | | [removed: 1,861.9] [added: 2,154.2] | | | | [removed: 1,588.6] [added: 1,861.9] | | |

| CPG, foodservice and other | [removed: 2,317.6] [added: 2,381.1] | | | | [removed: 2,103.5] [added: 2,317.6] | | | | [removed: 1,881.3] [added: 2,103.5] | | |

| Total net revenues | [removed: 21,315.9] [added: 22,386.8] | | | | [removed: 19,162.7] [added: 21,315.9] | | | | [removed: 16,447.8] [added: 19,162.7] | | |

| Cost of sales including occupancy costs | [removed: 8,511.1] [added: 9,038.2] | | | | [removed: 7,787.5] [added: 8,511.1] | | | | [removed: 6,858.8] [added: 7,787.5] | | |

| Store operating expenses | [removed: 6,064.3] [added: 6,493.3] | | | | [removed: 5,411.1] [added: 6,064.3] | | | | [removed: 4,638.2] [added: 5,411.1] | | |

| Other operating expenses | [removed: 545.4] [added: 553.8] | | | | [removed: 522.4] [added: 545.4] | | | | [removed: 457.3] [added: 522.4] | | |

| Depreciation and amortization expenses | [removed: 980.8] [added: 1,011.4] | | | | [removed: 893.9] [added: 980.8] | | | | [removed: 709.6] [added: 893.9] | | |

| General and administrative expenses | [removed: 1,360.6] [added: 1,393.3] | | | | [removed: 1,196.7] [added: 1,360.6] | | | | [removed: 991.3] [added: 1,196.7] | | |

| Total operating expenses | [removed: 17,462.2] [added: 18,643.5] | | | | [removed: 15,811.6] [added: 17,462.2] | | | | [removed: 13,635.0] [added: 15,811.6] | | |

| Income from equity investees | [removed: 318.2] [added: 391.4] | | | | [removed: 249.9] [added: 318.2] | | | | [removed: 268.3] [added: 249.9] | | |

| Operating income | [removed: 4,171.9] [added: 4,134.7] | | | | [removed: 3,601.0] [added: 4,171.9] | | | | [removed: 3,081.1] [added: 3,601.0] | | |

| Gain resulting from acquisition of joint venture | — | | | | [removed: 390.6] [added: —] | | | | [removed: —] [added: 390.6] | | |

| Loss on extinguishment of debt | — | | | | [removed: (61.1] [added: —] | | [removed: )] | | [removed: —] [added: (61.1] | | [added: )] |

| Interest income and other, net | [removed: 108.0] [added: 275.3] | | | | [removed: 43.0] [added: 108.0] | | | | [removed: 142.7] [added: 43.0] | | |

| Interest expense | [removed: (81.3] [added: (92.5] | | ) | | [removed: (70.5] [added: (81.3] | | ) | | [removed: (64.1] [added: (70.5] | | ) |

| Earnings before income taxes | [removed: 4,198.6] [added: 4,317.5] | | | | [removed: 3,903.0] [added: 4,198.6] | | | | [removed: 3,159.7] [added: 3,903.0] | | |

| Income tax expense | [removed: 1,379.7] [added: 1,432.6] | | | | [removed: 1,143.7] [added: 1,379.7] | | | | [removed: 1,092.0] [added: 1,143.7] | | |

| Net earnings including noncontrolling interests | [removed: 2,818.9] [added: 2,884.9] | | | | [removed: 2,759.3] [added: 2,818.9] | | | | [removed: 2,067.7] [added: 2,759.3] | | |

| Net [removed: earnings/(loss)] [added: earnings] attributable to noncontrolling interests | [removed: 1.2] [added: 0.2] | | | | [removed: 1.9] [added: 1.2] | | | | [removed: (0.4] [added: 1.9] | | [removed: )] |

| Net earnings attributable to Starbucks | $ | [removed: 2,817.7] [added: 2,884.7] | | | $ | [removed: 2,757.4] [added: 2,817.7] | | | $ | [removed: 2,068.1] [added: 2,757.4] | |

| Earnings per share — basic | $ | [removed: 1.91] [added: 1.99] | | | $ | [removed: 1.84] [added: 1.91] | | | $ | [removed: 1.37] [added: 1.84] | |

| Earnings per share — diluted | $ | [removed: 1.90] [added: 1.97] | | | $ | [removed: 1.82] [added: 1.90] | | | $ | [removed: 1.35] [added: 1.82] | |

| Basic | [removed: 1,471.6] [added: 1,449.5] | | | | [removed: 1,495.9] [added: 1,471.6] | | | | [removed: 1,506.3] [added: 1,495.9] | | |

| Diluted | [removed: 1,486.7] [added: 1,461.5] | | | | [removed: 1,513.4] [added: 1,486.7] | | | | [removed: 1,526.3] [added: 1,513.4] | | |

| | Oct [added: 1, 2017 | | | | Oct] 2, 2016 | | | | Sep 27, 2015 | | | | [removed: Sep 28, 2014] | | | [added: | |]

| Net earnings including noncontrolling interests | $ | [removed: 2,818.9] [added: 2,884.9] | | | $ | [removed: 2,759.3] [added: 2,818.9] | | | $ | [removed: 2,067.7] [added: 2,759.3] | |

| Unrealized holding gains/(losses) on available-for-sale securities | [removed: 3.5] [added: (9.5] | | [added: )] | | [removed: 1.4] [added: 3.5] | | | | [removed: 1.6] [added: 1.4] | | |

| Tax (expense)/benefit | [removed: (1.3] [added: 2.9] | | [removed: )] | | [removed: (0.5] [added: (1.3] | | ) | | [removed: (0.6] [added: (0.5] | | ) |

| Unrealized gains/(losses) on cash flow hedging instruments | [removed: (109.6] [added: 53.2] | | [removed: )] | | [removed: 47.6] [added: (109.6] | | [added: )] | | [removed: 24.1] [added: 47.6] | | |

| Tax (expense)/benefit | [removed: 27.5] [added: (12.6] | | [added: )] | | [removed: (16.8] [added: 27.5] | | [removed: )] | | [removed: (7.8] [added: (16.8] | | ) |

| Unrealized gains/(losses) on net investment hedging instruments | [removed: —] [added: 20.1] | | | | [removed: 4.3] [added: —] | | | | [removed: 25.5] [added: 4.3] | | |

| Tax (expense)/benefit | [removed: —] [added: (7.4] | | [added: )] | | [removed: (1.6] [added: —] | | [removed: )] | | [removed: (9.4] [added: (1.6] | | ) |

| Translation adjustment and other | [removed: 85.5] [added: (38.3] | | [added: )] | | [removed: (222.7] [added: 85.5] | | [removed: )] | | [removed: (75.8] [added: (222.7] | | ) |

| Tax (expense)/benefit | [removed: 19.0] [added: (2.4] | | [added: )] | | [removed: 6.0] [added: 19.0] | | | | [removed: (1.6] [added: 6.0] | | [removed: )] |

| Reclassification adjustment for net (gains)/losses realized in net earnings for available-for-sale securities, hedging instruments, and translation adjustment | [removed: 78.2] [added: (67.2] | | [added: )] | | [removed: (65.9] [added: 78.2] | | [removed: )] | | [removed: (1.5] [added: (65.9] | | ) |

| Tax expense/(benefit) | [removed: (11.8] [added: 14.0] | | [removed: )] | | [removed: 23.5] [added: (11.8] | | [added: )] | | [removed: 3.8] [added: 23.5] | | |

| Other comprehensive income/(loss) | [removed: 91.0] [added: (47.2] | | [added: )] | | [removed: (224.7] [added: 91.0] | | [removed: )] | | [removed: (41.7] [added: (224.7] | | ) |

| Comprehensive income including noncontrolling interests | [removed: 2,909.9] [added: 2,837.7] | | | | [removed: 2,534.6] [added: 2,909.9] | | | | [removed: 2,026.0] [added: 2,534.6] | | |

| Restructuring and impairments | 153.5 | | | | — | | | | — | | |

| | Oct 1, 2017 | | | | Oct 2, 2016 | | |

| TOTAL ASSETS | $ | 14,365.6 | | | $ | 14,312.5 | |

| Total liabilities | 8,908.6 | | | | 8,421.8 | | |

| Net earnings including noncontrolling interests | $ | 2,884.9 | | | $ | 2,818.9 | | | $ | 2,759.3 | |

| Goodwill Impairments | 87.2 | | | | — | | | | — | | |

| Net earnings/(loss) | — | | | — | | | | — | | | | 2,884.7 | | | | — | | | | 2,884.7 | | | | 0.2 | | | | 2,884.9 | | |

| Repurchase of common stock | (37.5 | ) | | (0.1 | | ) | | (323.6 | | ) | | (1,755.4 | | ) | | — | | | | (2,079.1 | | ) | | — | | | | (2,079.1 | | ) |

| Balance, October 1, 2017 | 1,431.6 | | | $ | 1.4 | | | $ | 41.1 | | | $ | 5,563.2 | | | $ | (155.6 | ) | | $ | 5,450.1 | | | $ | 6.9 | | | $ | 5,457.0 | |

| Note 18 | [Subsequent Events](#s36150d034e394737b29bd95ea4657ea0) | [84](#s36150d034e394737b29bd95ea4657ea0) |

Fair Value Hedges

For derivative instruments that are designated and qualify as a fair value hedge, the changes in fair value of the derivative instruments and the offsetting changes in fair values of the underlying hedged item are recorded in interest income and other, net or interest expense on our consolidated statements of earnings.

Additionally, we recognized net impairment charges of $56.1 million, $24.1 million, and $25.8 million in fiscal 2017, 2016, and 2015, respectively, of which $39.9 million in fiscal 2017 were restructuring related and recorded in restructuring and impairment expenses.

Due to the strategic decision to close Teavana branded retail stores and our subsequent review of this reporting unit's fair value, we recorded goodwill impairment charges of $69.3 million during the third quarter of fiscal 2017.

Additionally, we recorded a partial goodwill impairment of $17.9 million related to our Switzerland retail reporting unit during the third quarter of fiscal 2017, primarily due to ongoing macro economic factors.

Refer to [Note 8](#sCDA8120EA9F15F859277F00179F3F3C2), Other Intangible Assets and Goodwill, for further discussions.

When a

During fiscal 2017, we launched Starbucks RewardsTM in Japan.

In August 2017, the Financial Accounting Standards Board (“FASB”) amended its guidance on the financial reporting of hedging relationships.

The new guidance eliminates the requirement to separately measure and report hedge ineffectiveness, expands permissible cash flow hedges on contractually specified components, and simplifies hedge documentation and effectiveness assessment.

The guidance will be effective at the beginning of our first quarter of fiscal year 2020 and will require a modified retrospective approach on existing cash flow and net investment hedges.

The presentation and disclosure requirements will be applied prospectively.

In January 2017, the FASB issued guidance that simplifies the measurement of goodwill impairment.

Under this new guidance, an impairment charge, if triggered, is calculated as the difference between a reporting unit’s carrying value and fair value, but it is limited to the carrying value of goodwill.

With this adoption, excess tax benefits and tax deficiencies related to stock-based compensation will be prospectively reflected as a reduction of, or increase in, income tax expense in our consolidated statement of earnings instead of additional paid-in capital on our consolidated balance sheet.

Additionally, within our consolidated statement of cash flows, this guidance will require excess tax benefits to be presented as an operating activity, rather than a financing activity, in the same manner as other cash flows related to income taxes.

As a result, we expect the adoption will have a significant impact on income tax expense and earnings per share, as reported in our consolidated statement of earnings and consolidated statement of cash flows.

If the new guidance had been adopted for fiscal years 2017, 2016 and 2015, approximately $78 million, $125 million and $132 million, respectively, of excess net tax benefits recorded to additional paid-in capital would have been recorded as a reduction to income tax expense.

Excess tax benefits or deficiencies are based on our stock price at the time stock options are exercised or when restricted stock units vest, therefore prior year amounts are not indicative of the future impact of this guidance.

In preparation for adoption of the guidance, we are in the process of implementing controls and key system changes to enable the preparation of financial information.

In April 2015, the FASB issued guidance on the financial statement presentation of debt issuance costs.

This guidance requires these costs to be presented in the balance sheet as a reduction of the related debt liability rather than as an asset.

We retrospectively adopted this guidance in the first quarter of fiscal 2017, which resulted in the reclassification of $17.0 million of debt issuance costs previously presented in prepaid expenses and other current assets and other long-term assets to long-term debt in our consolidated balance sheet as of October 2, 2016.

Components of our long-term debt and aggregate debt issuance costs and unamortized premium are disclosed in [Note 9](#sAFD0FE87B4E25AEDB245ACE61CC20910), Debt.

We will adopt this guidance in the first quarter of fiscal 2019.

Fiscal 2017

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

We are subject to interest rate volatility with regard to existing and future issuances of debt.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Litigation credit | — | | | | — | | | | (20.2 | | ) |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| TOTAL ASSETS | $ | 14,329.5 | | | $ | 12,416.3 | |

| Total liabilities | 8,438.8 | | | | 6,596.5 | | |

| Accrued litigation charge | — | | | | — | | | | (2,763.9 | | ) |

| Balance, September 29, 2013 | 753.2 | | | $ | 0.8 | | | $ | 282.1 | | | $ | 4,130.3 | | | $ | 67.0 | | | $ | 4,480.2 | | | $ | 2.1 | | | $ | 4,482.3 | |

| Net earnings/(loss) | — | | | — | | | | — | | | | 2,068.1 | | | | — | | | | 2,068.1 | | | | (0.4 | | ) | | 2,067.7 | | |

| Repurchase of common stock | (10.5 | ) | | (0.1 | | ) | | (604.9 | | ) | | (164.8 | | ) | | — | | | | (769.8 | | ) | | — | | | | (769.8 | | ) |

Trading securities are recorded at fair value with unrealized holding gains and losses recorded in interest income and other, net on our consolidated statements of earnings.

The

statements of earnings.

Our annual marketing expenses include many components, one of which is advertising costs.

Included in these costs were advertising expenses, which totaled $248.6 million, $227.9 million and $198.9 million in fiscal 2016, 2015, and 2014, respectively.

expense equal to the present value of the remaining lease payments to the landlord less any projected sublease income at the cease-use date.

evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations.

The guidance becomes effective on a prospective basis at the beginning of our first quarter of fiscal 2018 but permits adoption in an earlier period.

The guidance will become effective at the beginning of our first quarter of fiscal 2019, with the option to adopt in an earlier period.

In January 2016, the FASB issued guidance on the recognition and measurement of financial instruments.

This guidance retains the current accounting for classifying and measuring investments in debt securities and loans, but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation.

The guidance also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient to estimate fair value.

A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments.

The new guidance will result in a cumulative effect adjustment recognized in our balance sheet and will become effective for us at the beginning of our first quarter of fiscal 2019.

We are currently evaluating the impact of this guidance.

In November 2015, the FASB issued guidance on the presentation of deferred income taxes that requires deferred tax assets and liabilities, along with related valuation allowances, to be classified as noncurrent on the balance sheet.

As a result, each tax jurisdiction will now only have one net noncurrent deferred tax asset or liability.

The new guidance does not change the existing requirement that prohibits offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction.

The following table summarizes the adjustments made to conform prior period classifications to the new guidance (in millions):

| | September 27, 2015 | | | | | | | | | | |

| | As Filed | | | | Reclass | | | | As Adjusted | | |

| Long-term deferred income tax assets | 828.9 | | | | 351.9 | | | | 1,180.8 | | |

| Current deferred income tax liabilities (included in Accrued liabilities) | 5.4 | | | | (5.4 | | ) | | — | | |

In July 2015, the FASB issued guidance on the subsequent measurement of inventory, which changes the measurement from lower of cost or market to lower of cost or net realizable value.

We do not expect the adoption of this guidance to have a material impact on our financial statements.

The original effective date of the guidance would have required us to adopt at the beginning of our first quarter of fiscal 2018; however, the FASB approved an optional one-year deferral of the effective date.

presented or retrospectively with the cumulative effect recognized as of the date of adoption.

We are continuing our assessment, which may identify other impacts.

On October 31, 2014, we acquired a controlling interest in Starbucks Japan by funding the first tender offer step with $509 million in offshore cash.

During the fourth quarter of fiscal [removed: 2016,] [added: 2017,] we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this report (October [removed: 2, 2016).][added: 1, 2017).]

The certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as exhibits [removed: 31.1] [added: [31.1](https://www.sec.gov/Archives/edgar/data/829224/000082922417000049/sbux-1012017xexhibit311.htm)] and [removed: 31.2,] [added: [31.2](https://www.sec.gov/Archives/edgar/data/829224/000082922417000049/sbux-1012017xexhibit312.htm),] respectively, to this 10-K.

Based on this evaluation, management concluded that our internal control over financial reporting was effective as of October [removed: 2, 2016.][added: 1, 2017.]

Our internal control over financial reporting as of October [removed: 2, 2016] [added: 1, 2017] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein.

We have audited the internal control over financial reporting of Starbucks Corporation and subsidiaries (the [removed: "Company")] [added: “Company”)] as of October [removed: 2, 2016,] [added: 1, 2017,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October [removed: 2, 2016,] [added: 1, 2017,] based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the fiscal year ended October [removed: 2, 2016,] [added: 1, 2017,] of the Company and our report dated November [removed: 18, 2016] [added: 17, 2017] expressed an unqualified opinion on those financial statements.

November 17, 2017

November 18, 2016

We adopted a code of ethics that applies to our chief executive officer, [removed: chief operating officer,] [added: executive chairman,] chief financial officer, controller and other finance leaders, which is a [removed: "code] [added: “code] of [removed: ethics"] [added: ethics”] as defined by applicable rules of the SEC.

The remaining information required by this item is incorporated herein by reference to the sections entitled [removed: "Proposal] [added: “Proposal] 1 — Election of [removed: Directors"] [added: Directors”] and [removed: "Beneficial] [added: “Beneficial] Ownership of Common Stock — Section 16(a) Beneficial Ownership Reporting [removed: Compliance," "Corporate] [added: Compliance,” “Corporate] Governance — Board Committees and Related [removed: Matters"] [added: Matters”] and [removed: "Corporate] [added: “Corporate] Governance — Audit and Compliance [removed: Committee"] [added: Committee”] in our definitive Proxy Statement for the Annual Meeting of Shareholders to be held on March [removed: 22, 2017] [added: 21, 2018] (the [removed: "Proxy Statement").][added: “Proxy Statement”).]

| • | Consolidated Statements of Earnings for the fiscal years ended October [added: 1, 2017, October] 2, 2016, [removed: September 27, 2015,] and September [removed: 28, 2014;] [added: 27, 2015;] |

| • | Consolidated Statements of Comprehensive Income for the fiscal years ended October [added: 1, 2017, October] 2, 2016, [removed: September 27, 2015,] and September [removed: 28, 2014;] [added: 27, 2015;] |

| • | Consolidated Balance Sheets as of October [removed: 2, 2016] [added: 1, 2017] and [removed: September 27, 2015;] [added: October 2, 2016;] |