SBUX » Topics » Note 11: Other Long-term Liabilities

This excerpt taken from the SBUX 10-K filed Dec 14, 2006.
Note 11: Other Long-term Liabilities
 
The Company’s other long-term liabilities consist of the following (in thousands):
 
                 
FISCAL YEAR ENDED   Oct 1, 2006     Oct 2, 2005  
 
 
Deferred rent
  $ 203,903     $ 166,182  
Asset retirement obligations
    34,271        
Minority interest
    10,739       11,153  
Other
    13,944       16,230  
 
 
Total
  $ 262,857     $ 193,565  
 
 
 
The deferred rent liabilities as of October 1, 2006 and October 2, 2005, represent amounts for tenant improvement allowances, rent escalation clauses and rent holidays related to certain operating leases. The Company amortizes deferred rent over the terms of the leases as reductions to rent expense on the consolidated statements of earnings.
 
Asset retirement liabilities represent the estimated fair value of the Company’s future costs of removing leasehold improvements at the termination of leases related to certain of its leased stores and administrative facilities. The Company adopted this new accounting requirement on the last day of fiscal 2006, as discussed in more detail in Note 1.
 
For operations accounted for under the consolidation method, but in which Starbucks owns less than 100% of the equity interests, long-term liabilities are maintained for the collective ownership interests of minority shareholders. As of October 1, 2006 and October 2, 2005, Starbucks had less than 100% ownership in Coffee Concepts (Southern China) Ltd. as well as in Chengdu Starbucks Coffee Company Limited and Urban Coffee Opportunities, LLC.
 
The other remaining long-term liabilities generally include obligations to be settled or paid for one year beyond each respective fiscal year end, for items such as hedging instruments, guarantees (see Note 18), donation commitments and the long-term portion of capital lease obligations.
 
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