Starbucks 2000 Annual Report Download - page 29

Deferred income taxes (benefits) reflect the tax effect of temporary differences between the amounts of
assets and liabilities for financial reporting purposes and amounts as measured for tax purposes. The
Company will establish a valuation allowance if it is more likely than not these items will either expire
before the Company is able to realize their benefits, or that future deductibility is uncertain. At October
1, 2000, the Company established a valuation allowance of $5.7 million as a result of the losses incurred
on Internet-related investments. The tax effect of temporary differences and carryforwards that cause
significant portions of deferred tax assets and liabilities is as follows (in thousands):
Oct 1, 2000 Oct 3, 1999
Deferred tax assets:
Loss on investments $ 22,635 $ -
Accrued rent 10,321 8,234
Accrued compensation and related costs 6,710 5,622
Inventory related costs 3,550 2,067
Other 15,222 9,900
Total 58,438 25,823
Valuation allowance (5,659) -
Total deferred tax asset, net of valuation allowance 52,779 25,823
Deferred tax liabilities:
Depreciation (36,249) (29,826)
Investments in joint ventures (4,616) (3,990)
Other (4,020) (3,760)
Total (44,885) (37,576)
Net deferred tax asset (liability) $ 7,894 $ (11,753)
Taxes currently payable of $17.9 million and $16.3 million are included in “Accrued taxes” on the
accompanying consolidated balance sheets as of October 1, 2000 and October 3, 1999, respectively.
Note 14: Earnings per share
The following table represents the calculation of net earnings per common share – basic (in thousands,
except earnings per share):
Fiscal year ended Oct 1, 2000 Oct 3, 1999 Sept 27, 1998
Net earnings $ 94,564 $ 101,693 $ 68,372
Weighted average common shares and common stock units outstanding 185,595 181,842 176,110
Net earnings per common share - basic $ 0.51 $ 0.56 $ 0.39
The following table represents the calculation of net earnings per common and common equivalent
share - diluted (in thousands, except earnings per share):
Fiscal year ended Oct 1, 2000 Oct 3, 1999 Sept 27, 1998
Net earnings calculation:
Net earnings $ 94,564 $ 101,693 $ 68,372
Add after-tax interest expense on debentures - - 348
Add after-tax amortization of issuance costs related to the debentures - - 30
Adjusted net earnings $ 94,564 $ 101,693 $ 68,750
Weighted average common shares and common stock units outstanding 185,595 181,842 176,110
Dilutive effect of outstanding common stock options 7,404 6,689 6,257
Assuming conversion of convertible subordinated debentures - - 1,404
Weighted average common and common equivalent shares outstanding 192,999 188,531 183,771
Net earnings per common and common equivalent share - diluted $ 0.49 $ 0.54 $ 0.37
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