10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended April 3, 2011

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             .

Commission File Number: 0-20322

STARBUCKS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Washington	91-1325671
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

2401 Utah Avenue South, Seattle, Washington 98134

(Address of principal executive offices)

(206) 447-1575

(Registrant’s Telephone Number, including Area Code)

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Title	Shares Outstanding as of April 29, 2011
Common Stock, par value $0.001 per share	749.6 million

STARBUCKS CORPORATION

FORM 10-Q

For the Quarterly Period Ended April 3, 2011

Table of Contents

	Page
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements (Unaudited):		3
Condensed Consolidated Statements of Earnings		3
Condensed Consolidated Balance Sheets		4
Condensed Consolidated Statements of Cash Flows		5
Notes to Condensed Consolidated Financial Statements		6
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
Item 3 Quantitative and Qualitative Disclosures About Market Risk		22
Item 4 Controls and Procedures		22
PART II. OTHER INFORMATION
Item 1 Legal Proceedings		23
Item 1A Risk Factors		23
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds		23
Item 6 Exhibits		24
Signatures		25
Index to Exhibits

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

STARBUCKS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except per share data)

(unaudited)

	13 Weeks Ended						26 Weeks Ended
	Apr 3,			Mar 28,			Apr 3,			Mar 28,
	2011			2010			2011			2010
Net revenues:
Company-operated stores	$	2,293.5		$	2,128.9		$	4,744.8		$	4,421.8
Licensed stores		237.8			210.9			491.9			427.5
CPG, foodservice and other		254.4			194.9			499.8			408.1
Total net revenues		2,785.7			2,534.7			5,736.5			5,257.4
Cost of sales including occupancy costs		1,180.1			1,064.1			2,380.9			2,209.8
Store operating expenses		885.4			828.0			1,791.0			1,724.1
Other operating expenses		101.1			61.8			193.7			133.7
Depreciation and amortization expenses		129.0			128.5			256.7			259.1
General and administrative expenses		152.3			139.0			308.9			275.9
Restructuring charges		0.0			7.9			0.0			26.2
Total operating expenses		2,447.9			2,229.3			4,931.2			4,628.8
Income from equity investees		38.3			34.4			72.7			63.8
Operating income		376.1			339.8			878.0			692.4
Interest income and other, net		19.9			4.7			34.2			29.8
Interest expense		(7.1	)		(8.0	)		(15.0	)		(16.2	)
Earnings before income taxes		388.9			336.5			897.2			706.0
Income taxes		126.5			118.7			287.3			244.7
Net earnings including noncontrolling interests		262.4			217.8			609.9			461.3
Net earnings attributable to noncontrolling interests		0.8			0.5			1.8			2.5
Net earnings attributable to Starbucks	$	261.6		$	217.3		$	608.1		$	458.8
Earnings per share - basic	$	0.35		$	0.29		$	0.81		$	0.62
Earnings per share - diluted	$	0.34		$	0.28		$	0.79		$	0.60
Weighted average shares outstanding:
Basic		750.3			747.1			748.0			745.6
Diluted		771.8			766.9			769.3			764.9
Cash dividends declared per share	$	0.13		$	0.10		$	0.26		$	0.10

See Notes to Condensed Consolidated Financial Statements

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STARBUCKS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except per share data)

(unaudited)

	Apr 3,		Oct 3,
	2011		2010
ASSETS
Current assets:
Cash and cash equivalents	$	1,645.2	$	1,164.0
Short-term investments — available-for-sale securities		224.8		236.5
Short-term investments — trading securities		57.5		49.2
Accounts receivable, net		355.7		302.7
Inventories		772.4		543.3
Prepaid expenses and other current assets		226.7		156.5
Deferred income taxes, net		258.0		304.2
Total current assets		3,540.3		2,756.4
Long-term investments — available-for-sale securities		93.5		191.8
Equity and cost investments		354.0		341.5
Property, plant and equipment, net		2,378.5		2,416.5
Other assets		323.4		346.5
Other intangible assets		72.6		70.8
Goodwill		265.3		262.4
TOTAL ASSETS	$	7,027.6	$	6,385.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		330.2		282.6
Accrued compensation and related costs		328.2		400.0
Accrued occupancy costs		153.3		173.2
Accrued taxes		63.9		100.2
Insurance reserves		145.5		146.2
Other accrued liabilities		286.1		262.8
Deferred revenue		487.0		414.1
Total current liabilities		1,794.2		1,779.1
Long-term debt		549.4		549.4
Other long-term liabilities		356.8		375.1
Total liabilities		2,700.4		2,703.6
Shareholders’ equity:
Common stock ($0.001 par value) — authorized, 1,200.0 shares; issued and outstanding, 748.8 and 742.6 shares, respectively (includes 3.4 common stock units in both periods)		0.8		0.7
Additional paid-in capital		309.3		106.2
Other additional paid-in-capital		39.4		39.4
Retained earnings		3,883.7		3,471.2
Accumulated other comprehensive income		84.6		57.2
Total shareholders’ equity		4,317.8		3,674.7
Noncontrolling interests		9.4		7.6
Total equity		4,327.2		3,682.3
TOTAL LIABILITIES AND EQUITY	$	7,027.6	$	6,385.9

See Notes to Condensed Consolidated Financial Statements

4

STARBUCKS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions, unaudited)

	26 weeks ended
	April 3,			Mar 28,
	2011			2010
OPERATING ACTIVITIES:
Net earnings including noncontrolling interests	$	609.9		$	461.3
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		271.6			272.5
Provision for impairments and asset disposals		28.0			44.3
Deferred income taxes, net		49.1			(10.6	)
Equity in income of investees		(44.9	)		(41.4	)
Distributions of income from equity investees		37.5			41.0
Stock-based compensation		71.2			53.4
Tax benefit from exercise of stock options		17.0			6.9
Excess tax benefit from exercise of stock options		(67.6	)		(13.8	)
Other		(6.9	)		(8.5	)
Cash provided/(used) by changes in operating assets and liabilities:
Inventories		(226.2	)		174.7
Accounts payable		46.1			3.3
Accrued taxes		12.5			(48.6	)
Deferred revenue		70.7			44.3
Other operating assets		(129.1	)		(1.6	)
Other operating liabilities		(69.4	)		(19.4	)
Net cash provided/(used) by operating activities		669.5			957.8
INVESTING ACTIVITIES:
Purchase of available-for-sale securities		(105.0	)		(359.8	)
Maturities and calls of available-for-sale securities		214.6			23.9
Acquisitions, net of cash acquired		0.0			(10.6	)
Net purchases of equity, other investments and other assets		(9.6	)		1.2
Additions to property, plant and equipment, net		(239.1	)		(184.5	)
Net cash provided/(used) by investing activities		(139.1	)		(529.8	)
FINANCING ACTIVITIES:
Proceeds from issuance of common stock		126.4			62.7
Excess tax benefit from exercise of stock options		67.6			13.8
Principal payments on long-term debt		0.0			(6.5	)
Cash dividends paid		(194.3	)		0.0
Repurchase of common stock		(60.5	)		0.0
Other		(0.5	)		(0.9	)
Net cash provided/(used) by financing activities		(61.3	)		69.1
Effect of exchange rate changes on cash and cash equivalents		12.1			(10.9	)
Net increase/(decrease) in cash and cash equivalents		481.2			486.2
CASH AND CASH EQUIVALENTS:
Beginning of period		1,164.0			599.8
End of period	$	1,645.2		$	1,086.0
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest, net of capitalized interest	$	17.2		$	16.2
Income taxes	$	267.2		$	292.0

See Notes to Condensed Consolidated Financial Statements

5

STARBUCKS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the 13 and 26 Weeks Ended April 3, 2011

(unaudited)

Note 1: Summary of Significant Accounting Policies

Financial Statement Preparation

The unaudited condensed consolidated financial statements as of April 3, 2011, and for the 13-week and 26-week periods ended April 3, 2011 and March 28, 2010, have been prepared by Starbucks Corporation under the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the financial information for the 13-week and 26-week periods ended April 3, 2011 and March 28, 2010 reflects all adjustments and accruals, which are of a normal recurring nature, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. In this Quarterly Report on Form 10-Q (“10-Q”) Starbucks Corporation is referred to as “Starbucks,” the “Company,” “we,” “us” or “our”.

The financial information as of October 3, 2010 is derived from our audited consolidated financial statements and notes for the fiscal year ended October 3, 2010 (“fiscal 2010”), included in Item 8 in the Fiscal 2010 Annual Report on Form 10-K (the “10-K”). The information included in this 10-Q should be read in conjunction with the footnotes and management’s discussion and analysis of the financial statements in the 10-K.

The results of operations for the 13-week and 26-week periods ended April 3, 2011 are not necessarily indicative of the results of operations that may be achieved for the entire fiscal year ending October 2, 2011 (“fiscal 2011”).

Recent Accounting Pronouncements

In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities. We adopted this new guidance effective at the beginning of the first quarter of fiscal 2011, with no impact on our financial statements.

Reclassifications

Concurrent with the change in our distribution method for packaged coffee and tea in the US, we have revised the presentation of revenues this quarter. Non-retail licensing revenues have been reclassified on the consolidated financial statements to the renamed “CPG, foodservice and other” revenue line, which includes revenues from our direct sale of packaged coffee and tea as well as licensing revenues received under the previous distribution arrangement. The previous “Licensing” revenue line now includes only licensed store revenue and therefore has been renamed “Licensed stores.” For the 13-week and 26-week periods ended March 28, 2010, $98.8 and $207.2 million, respectively, were reclassified from the previously named Licensing revenue to CPG, foodservice and other revenue. There was no impact to consolidated or segment net revenues from this change in presentation.

Note 2: Derivative Financial Instruments

Cash Flow Hedges

Net derivative losses of $15.8 million and $13.9 million, net of taxes, were included in accumulated other comprehensive income as of April 3, 2011 and October 3, 2010, respectively, related to cash flow hedges. Of the net derivative losses accumulated as of April 3, 2011, $9.3 million pertains to hedging instruments that will be dedesignated within 12 months and will also continue to experience fair value changes before affecting earnings. Ineffectiveness from hedges that were discontinued during the year-to-date periods in fiscal 2011 and 2010 was not material. Outstanding contracts will expire within 30 months.

Net Investment Hedges

Net derivative losses of $26.6 million and $26.7 million, net of taxes, were included in accumulated other comprehensive income as of April 3, 2011 and October 3, 2010, respectively, related to net investment derivative hedges. Outstanding contracts will expire within 36 months.

Other Derivatives

To mitigate the translation risk of certain balance sheet items, we enter into certain foreign currency forward contracts that are not designated as hedging instruments. These contracts are recorded at fair value, with the changes in fair value recognized in net interest income and other on the consolidated statements of earnings. Gains and losses from these instruments are largely offset by the financial impact of translating foreign currency denominated payables and receivables, which are also recognized in net interest income and other.

6

We also enter into certain swap and futures contracts from time to time that are not designated as hedging instruments to mitigate the price uncertainty of a portion of our future purchases of dairy products and diesel fuel. These contracts are recorded at fair value, with the changes in fair value recognized in net interest income and other on the consolidated statement of earnings.

The following table presents the pretax effect of derivative instruments on earnings and other comprehensive income for the 13-week period ended (in millions):

	Cash Flow Hedges						Net Investment Hedges				Other Derivatives
	Apr 3, 2011			Mar 28, 2010			Apr 3, 2011		Mar 28, 2010		Apr 3, 2011			Mar 28, 2010
Gain/(Loss) recognized in earnings	$	(3.3	)	$	(1.4	)	$	0.0	$	0.0	$	(1.2	)	$	10.1
Gain/(Loss) recognized in OCI	$	0.2		$	(2.1	)	$	3.7	$	0.7

The following table presents the pretax effect of derivative instruments on earnings and other comprehensive income for the 26-week period ended (in millions):

	Cash Flow Hedges						Net Investment Hedges				Other Derivatives
	Apr 3, 2011			Mar 28, 2010			Apr 3, 2011		Mar 28, 2010		Apr 3, 2011		Mar 28, 2010
Gain/(Loss) recognized in earnings	$	(6.2	)	$	(2.4	)	$	0.0	$	0.0	$	0.5	$	8.6
Gain/(Loss) recognized in OCI	$	(8.1	)	$	(8.5	)	$	0.1	$	2.0

Notional amounts of outstanding derivative contracts as of April 3, 2011:

• $614 million in foreign exchange contracts

• $17 million in dairy contracts

• $8 million in diesel contracts

Note 3: Investments

Fair value of investments (in millions):

	Apr 3, 2011		Oct 3, 2010
Short-term investments:
Available-for-sale securities - Agency obligations	$	20.0	$	30.0
Available-for-sale securities - Commercial paper		50.0		0.0
Available-for-sale securities - Corporate debt securities		63.8		15.0
Available-for-sale securities - Government treasury securities		91.0		190.8
Available-for-sale securities - State and local government obligations		0.0		0.7
Trading securities		57.5		49.2
Total short-term investments	$	282.3	$	285.7
Long-term investments:
Available-for-sale securities - Agency obligations	$	5.0	$	27.0
Available-for-sale securities - Corporate debt securities		60.7		123.5
Available-for-sale securities - State and local government obligations		27.8		41.3
Total long-term investments	$	93.5	$	191.8

Gross unrealized holding gains and losses were not material at April 3, 2011 and October 3, 2010.

In the first two quarters of fiscal 2011, $15.7 million of our auction rate securities (“ARS”), which are included in long-term available-for-sale state and local government obligations, were called at par.

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Note 4: Fair Value Measurements

Assets and Liabilities Measured at Fair Value on a Recurring Basis (in millions):

			Fair Value Measurements at Reporting Date Using
	Balance at April 3, 2011		Quoted Prices  in Active Markets for Identical Assets (Level 1)		Significant Other Observable  Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Available-for-sale securities	$	318.3	$	91.0	$	199.5	$	27.8
Trading securities		57.5		57.5		0.0		0.0
Total	$	375.8	$	148.5	$	199.5	$	27.8
Liabilities:
Derivatives	$	28.2	$	0.0	$	28.2	$	0.0
			Fair Value Measurements at Reporting Date Using
	Balance at Oct 3, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Available-for-sale securities	$	428.3	$	190.8	$	196.2	$	41.3
Trading securities		49.2		49.2		0.0		0.0
Total	$	477.5	$	240.0	$	196.2	$	41.3
Liabilities:
Derivatives	$	34.7	$	0.0	$	34.7	$	0.0

Changes in Level 3 Instruments Measured at Fair Value on a Recurring Basis

Financial instruments measured using level 3 inputs described above are comprised entirely of our ARS. Changes in this balance relate primarily to calls of certain of our ARS as discussed in Note 3.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis (in millions)

Assets and liabilities recognized or disclosed at fair value in the financial statements on a nonrecurring basis include items such as property, plant and equipment, equity and cost method investments, and other assets. These assets are measured at fair value if determined to be impaired.

8

During the 13 weeks and 26 weeks ended April 3, 2011 and March 28, 2010, we recognized fair market value adjustments with a charge to earnings for these assets as follows:

	13 weeks ended April 3, 2011							26 weeks ended April 3, 2011
	Carrying Value before adjustment		Fair value adjustment			Carrying value after adjustment		Carrying Value before adjustment		Fair value adjustment			Carrying value after adjustment
Other assets (1)	$	10.2	$	(6.5	)	$	3.7	$	24.2	$	(20.5	)	$	3.7

	13 weeks ended March 28, 2010							26 weeks ended March 28, 2010
	Carrying Value before adjustment		Fair value adjustment			Carrying value after adjustment		Carrying Value before adjustment		Fair value adjustment			Carrying value after adjustment
Property, plant and equipment (2)	$	2.6	$	(2.3	)	$	0.3	$	16.5	$	(13.4	)	$	3.1
Equity and cost investments (1)	$	0.0	$	0.0		$	0.0	$	9.6	$	(7.5	)	$	2.1

(1) The fair value was determined using valuation techniques, including discounted cash flows, comparable transactions, and/or comparable company analyses. The resulting impairment charge was included in other operating expenses.

(2) These assets primarily consist of leasehold improvements in underperforming stores. The fair value was determined using a discounted cash flow model based on expected future store revenues and operating costs, using internal projections. The resulting impairment charge was included in store operating expenses.

Fair Value of Other Financial Instruments

The carrying value of cash and cash equivalents approximates fair value because of the short-term nature of those instruments. The estimated fair value of the $550 million of 6.25% Senior Notes was approximately $620 million and $637 million as of April 3, 2011 and October 3, 2010, respectively.

Note 5: Inventories (in millions)

	Apr 3, 2011		Oct 3, 2010		Mar 28, 2010
Coffee:
Unroasted	$	409.0	$	238.3	$	252.1
Roasted		144.2		95.1		71.9
Other merchandise held for sale		99.4		115.6		85.2
Packaging and other supplies		119.8		94.3		79.5
Total	$	772.4	$	543.3	$	488.7

Inventory levels vary due to seasonality driven primarily by the holiday season, commodity market supply and price variations, and changes in our use of fixed-price and price-to-be-fixed coffee contracts.

As of April 3, 2011, we had committed to purchasing green coffee totaling $225 million under fixed-price contracts and an estimated $300 million under price-to-be-fixed contracts. Price-to-be-fixed contracts are purchase commitments whereby the quality, quantity, delivery period, and other negotiated terms are agreed upon, but the date at which the base “C” coffee commodity price component will be fixed has not yet been established. For these types of contracts, either Starbucks or the seller has the option to “fix” the base “C” coffee commodity price prior to the delivery date. Until prices are fixed, we estimate the total cost of these purchase commitments. We believe, based on relationships established with our suppliers in the past, the risk of non-delivery on these purchase commitments is remote.

9

Note 6: Property, Plant and Equipment (in millions)

	Apr 3, 2011			Oct 3, 2010
Land	$	58.0		$	58.0
Buildings		269.8			265.7
Leasehold improvements		3,526.0			3,435.6
Store equipment		1,074.2			1,047.7
Roasting equipment		292.1			290.6
Furniture, fixtures and other		632.3			617.5
Work in progress		189.1			173.6
		6,041.5			5,888.7
Less accumulated depreciation		(3,663.0	)		(3,472.2	)
Property, plant and equipment, net	$	2,378.5		$	2,416.5

Note 7: Other Liabilities (in millions)

	Apr 3, 2011		Oct 3, 2010
Accrued dividend payable		97.8		96.5
Other		188.3		166.3
Total other accrued liabilities	$	286.1	$	262.8
Deferred rent	$	230.2	$	239.7
Unrecognized tax benefits		58.9		65.1
Asset retirement obligations		49.6		47.7
Other		18.1		22.6
Total other long term liabilities	$	356.8	$	375.1

Note 8: Equity

Components of total equity (in millions):

	26 Weeks Ended
	Apr 3, 2011			Mar 28, 2010
Beginning balance of total equity	$	3,682.3		$	3,056.9
Net earnings including noncontrolling interest		609.9			461.3
Other comprehensive income / (loss)		27.4			(17.5	)
Comprehensive income		637.3			443.8
Stock-based compensation expense		72.3			54.3
Exercise of stock options		182.1			65.1
Sale of common stock		9.3			9.4
Repurchase of common stock		(60.5	)		0.0
Cash dividends declared		(195.6	)		(74.8	)
Ending balance of total equity	$	4,327.2		$	3,554.7

Changes in noncontrolling interests for the 26 weeks ended April 3, 2011 and March 28, 2010 are not presented as they were not material.

In addition to 1.2 billion shares of authorized common stock with $0.001 par value per share, the Company has authorized 7.5 million shares of preferred stock, none of which was outstanding as of April 3, 2011.

10

Share repurchase activity during the first two quarters of fiscal 2011 (in millions, except for average price data):

Number of shares acquired		1.9
Average price per share of acquired shares	$	31.97
Total cost of acquired shares	$	60.5

As of April 3, 2011, 18.2 million shares remained available for repurchase under the current authorization. The Company did not repurchase any shares during the 26-week period ended March 28, 2010.

During the second quarter of fiscal 2011, Starbucks Board of Directors declared a quarterly cash dividend to shareholders of $0.13 per share to be paid on May 27, 2011, to shareholders of record on the close of business on May 11, 2011. The accrued dividend payable of $97.8 million is recorded in other accrued liabilities on the consolidated balance sheet.

Components of accumulated other comprehensive income, net of tax (in millions):

	Apr 3, 2011			Oct 3, 2010
Net unrealized gains / (losses) on available-for-sale securities	$	(0.3	)	$	(0.9	)
Net unrealized gains / (losses) on hedging instruments		(42.4	)		(40.5	)
Translation adjustment		127.3			98.6
Accumulated other comprehensive income	$	84.6		$	57.2

Note 9: Employee Stock Plans

As of April 3, 2011, there were 39.6 million shares of common stock available for issuance pursuant to future equity-based compensation awards and employee stock purchase plans (“ESPP”). This includes 15 million shares approved by our shareholders on March 23, 2011 which will be registered on a Form S-8 that we expect to file with the Securities and Exchange Commission during fiscal 2011. Stock-based compensation expense recognized in the consolidated statement of earnings (in millions):

	13 Weeks Ended				26 Weeks Ended
	Apr 3, 2011		Mar 28, 2010		Apr 3, 2011		Mar 28, 2010
Options	$	14.6	$	19.7	$	32.5	$	37.2
Restricted Stock Units (“RSUs”)		20.1		9.8		38.7		16.2
Total stock-based compensation	$	34.7	$	29.5	$	71.2	$	53.4
Value of awards granted and exercised during the period:
	13 Weeks Ended				26 Weeks Ended
	Apr 3, 2011		Mar 28, 2010		Apr 3, 2011		Mar 28, 2010
Estimated fair value per option granted	$	10.01	$	7.61	$	9.50	$	8.44
Weighted average option grant price	$	33.96	$	23.64	$	30.93	$	22.10
Weighted average price per option exercised	$	12.99	$	12.42	$	13.32	$	12.06
Weighted average RSU grant price	$	34.21	$	23.27	$	30.87	$	22.13

Stock option and RSU transactions from October 3, 2010 through April 3, 2011 (in millions):

	Stock Option			RSUs
Options outstanding/Nonvested RSUs, October 3, 2010		60.7			5.4
Granted		4.0			5.2
Options exercised/RSUs vested		(9.9	)		(1.6	)
Forfeited/expired		(2.1	)		(0.4	)
Options outstanding/Nonvested RSUs, April 3, 2011		52.7			8.6
Total unrecognized stock-based compensation expense, net of estimated forfeitures, as of April 3, 2011	$	67		$	103

11

Note 10: Earnings Per Share

Calculation of net earnings per common share (“EPS”) — basic and diluted (in millions, except EPS):

	13 Weeks Ended				26 Weeks Ended
	Apr 3, 2011		Mar 28, 2010		Apr 3, 2011		Mar 28, 2010
Net earnings attributable to Starbucks	$	261.6	$	217.3	$	608.1	$	458.8
Weighted average common shares and common stock units outstanding (for basic calculation)		750.3		747.1		748.0		745.6
Dilutive effect of outstanding common stock options and RSUs		21.5		19.8		21.3		19.3
Weighted average common and common equivalent shares outstanding (for diluted calculation)		771.8		766.9		769.3		764.9
EPS — basic	$	0.35	$	0.29	$	0.81	$	0.62
EPS — diluted	$	0.34	$	0.28	$	0.79	$	0.60

Potential dilutive shares consist of the incremental common shares issuable upon the exercise of outstanding stock options (both vested and non-vested) and unvested RSUs, using the treasury stock method. Potential dilutive shares are excluded from the computation of earnings per share if their effect is antidilutive. The number of antidilutive options totaled 6 million and 21 million for the 13-week periods ended April 3, 2011 and March 28, 2010, respectively. The number of antidilutive options totaled 6 million and 24 million for the 26-week periods ended April 3, 2011 and March 28, 2010, respectively.

Note 11: Commitments and Contingencies

Legal Proceedings

In the first quarter of fiscal 2011, Starbucks notified Kraft Foods Global, Inc. (“Kraft”) that we were discontinuing our distribution arrangement with Kraft on March 1, 2011 due to material breaches by Kraft of its obligations under the Supply and License Agreement between the Company and Kraft, dated March 29, 2004 (the “Agreement”), which defined the main distribution arrangement between the parties. Through our arrangement with Kraft, Starbucks sold a selection of Starbucks and Seattle’s Best Coffee® branded packaged coffees in grocery and warehouse club stores throughout the US, and to grocery stores in Canada, the UK and other European countries. Kraft managed the distribution, marketing, advertising and promotion of these products.

On November 29, 2010, Starbucks received a notice of arbitration from Kraft putting the commercial dispute between the parties into binding arbitration pursuant to the terms of the Agreement. Kraft denies it has materially breached the Agreement. Kraft further alleges that if Starbucks wished to terminate the Agreement it must compensate Kraft as provided in the Agreement in an amount equal to the fair value of the Agreement, with an additional premium of up to 35% under certain circumstances.

On December 6, 2010, Kraft commenced a federal court action against Starbucks, entitled Kraft Foods Global, Inc. v. Starbucks Corporation, in the U.S. District Court for the Southern District of New York (the “District Court”) seeking injunctive relief to prevent Starbucks from terminating the distribution arrangement until the parties’ dispute is resolved through the arbitration proceeding. On January 28, 2011, the District Court denied Kraft’s request for injunctive relief. Kraft appealed the District Court’s decision to the Second Circuit Court of Appeals. On February 25, 2011, the Second Circuit Court of Appeals affirmed the District Court’s decision. As a result, Starbucks is in full control of our packaged coffee business as of March 1, 2011.

While Starbucks believes we have valid claims of material breach by Kraft under the Agreement that allowed us to terminate the Agreement and certain other relationships with Kraft without compensation to Kraft, there exists the possibility of material adverse outcomes to Starbucks under the arbitration. At this time, the Company is unable to estimate the range of possible outcomes with respect to this matter.

Starbucks is party to various other legal proceedings arising in the ordinary course of business, but, except as noted above, is not currently a party to any legal proceeding that management believes could have a material adverse effect on our consolidated financial position or results of operations.

12

Note 12: Segment Reporting

Segment information is prepared on the same basis that management reviews financial information for operational decision-making purposes. The tables below present information by operating segment (in millions):

13 Weeks Ended
	United States		International		CPG		Other			Total
April 3, 2011
Total net revenues	$	1,926.5	$	609.8	$	204.7	$	44.7		$	2,785.7
Depreciation and amortization expenses		86.6		29.0		0.6		12.8			129.0
Income (loss) from equity investees		0.0		24.4		14.6		(0.7	)		38.3
Operating income/(loss)		356.9		71.7		63.6		(116.1	)		376.1
March 28, 2010
Total net revenues	$	1,810.4	$	532.2	$	157.5	$	34.6		$	2,534.7
Depreciation and amortization expenses		88.5		27.4		1.0		11.6			128.5
Income (loss) from equity investees		0.0		20.9		14.5		(1.0	)		34.4
Operating income/(loss)		322.7		40.4		63.5		(86.8	)		339.8
26 Weeks Ended
April 3, 2011
Total net revenues	$	3,994.3	$	1,249.7	$	399.9	$	92.6		$	5,736.5
Depreciation and amortization expenses		173.3		56.8		1.4		25.2			256.7
Income (loss) from equity investees		0.0		44.7		28.9		(0.9	)		72.7
Operating income/(loss)		809.6		176.1		130.9		(238.6	)		878.0
March 28, 2010
Total net revenues	$	3,734.0	$	1,120.9	$	331.8	$	70.7		$	5,257.4
Depreciation and amortization expenses		178.1		55.6		2.0		23.4			259.1
Income (loss) from equity investees		0.0		37.9		26.9		(1.0	)		63.8
Operating income/(loss)		656.9		83.2		127.4		(175.1	)		692.4

The following table reconciles the total of operating income in the table above to consolidated earnings before income taxes (in millions):

13 Weeks Ended	Apr 3, 2011			Mar 28, 2010
Operating income	$	376.1		$	339.8
Interest income and other, net		19.9			4.7
Interest expense		(7.1	)		(8.0	)
Earnings before income taxes	$	388.9		$	336.5
26 Weeks Ended	Apr 3, 2011			Mar 28, 2010
Operating income	$	878.0		$	692.4
Interest income and other, net		34.2			29.8
Interest expense		(15.0	)		(16.2	)
Earnings before income taxes	$	897.2		$	706.0

13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements herein, including statements regarding trends in or expectations relating to the expected effects of our initiatives and plans, as well as trends in or expectations regarding, earnings per share, revenues, operating margins, comparable store sales, sales leverage, expenses, dividends, share repurchases, other financial results, capital expenditures, scaling and expansion of the international business, profitable growth opportunities, commodity costs and our mitigation strategies, the transition from our distribution arrangement with Kraft, liquidity, cash flow from operations, anticipated store openings, the health of our business, product innovation and distribution, and closings, tax rates, and economic conditions in the US and other international markets all constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, coffee, dairy and other raw materials prices and availability, successful execution of our initiatives, successful execution of internal plans, fluctuations in US and international economies and currencies, the impact of competitors’ initiatives, the effect of legal proceedings, and other risks detailed in our filings with the SEC, including Part I Item IA. “Risk Factors” in the 10-K.

A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this report. We are under no obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

This information should be read in conjunction with the condensed consolidated financial statements and the notes included in Item 1 of Part I of this 10-Q and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the 10-K.

General

Our fiscal year ends on the Sunday closest to September 30. All references to store counts, including data for new store openings, are reported net of store closures, unless otherwise noted.

Overview

Starbucks results for the fiscal second quarter of 2011 demonstrate the ongoing success of our efforts over the last two years to improve the health of our core business and to position the Company for sustained, profitable growth into the future. We delivered record results in the face of formidable economic and operating headwinds that continue to confront global businesses like Starbucks.

Strong global comparable stores sales growth of 7% for the fiscal second quarter (US 7% and International 4%) drove increased sales leverage and resulted in higher operating margins and net earnings. In addition, we absorbed approximately 4 cents per share in the quarter, equivalent to approximately 200 basis point of operating margin, due to higher commodity costs compared to last year. Most of the commodity pressure was related to coffee, with dairy, cocoa, sugar and fuel accounting for the rest. While we have locked in coffee prices for the remainder of fiscal 2011, we expect coffee costs as well as other commodity costs, including dairy, cocoa, sugar and fuel, to continue to put pressure on our fiscal 2011 results.

In our US business, we continued to optimize our recently rolled-out new point-of-sale and inventory management systems and introduced a new mobile payment platform for our customers in our company-operated stores. We continue to focus on initiatives that make our store operations more efficient and profitable while at the same time enhancing our customers’ experience.

The profitability of our international business continues to improve, with the operating margin reaching 12% in the second quarter - the fourth consecutive quarter of double digit margin results. We continue to leverage the valuable lessons learned from the turnaround of our US business, and continue to make progress on scaling the infrastructure of this segment. We are aggressively pursuing the profitable expansion opportunities that exist outside the US, including disciplined growth and scale in our more mature markets, and faster expansion in key emerging markets like China and Brazil.

Our global consumer products group (“CPG”) represents another important profitable growth opportunity for us as we accelerate both product innovation and distribution. We are aggressively pursuing the opportunities beyond our more traditional store experience to offer consumers new coffee and other products in multiple forms, across new categories, and through diverse channels, leveraging our strong brand and established retail store base. We are also focused on expanding the footprint of our CPG business internationally. During the second quarter, we successfully transitioned our packaged coffee and tea businesses to an in-house direct model, away from the previous distribution arrangement. We made major gains against our plans to build the leadership and capabilities of our CPG organization. In March, we announced a strategic relationship with Green Mountain Coffee Roasters for the manufacturing, marketing, distribution and sale of Starbucks® and Tazo® tea branded K-Cup® portion packs for use in the Keurig® Single-Cup Brewing system.

14

Financial Highlights for the Second Quarter of Fiscal 2011

• Consolidated net revenues increased 10% to $2.8 billion

• Consolidated comparable store sales increased 7%, driven by a 6% increase in traffic and a 1% increase in average ticket

• U.S. comparable store sales increased 7%, driven by a 6% increase in traffic and a 1% increase in average ticket

• International comparable store sales increased 4%, driven by an increase in traffic

• Consolidated operating margin improved to 13.5%; up 10 basis points over the prior year

• U.S. operating margin improved to 18.5%; up 70 basis points over the prior year

• International operating margin improved to 11.8%; up 420 basis points over the prior year

• CPG operating margin declined to 31.1%; down 920 basis points from the prior year

• EPS increased 21% to $0.34 in the second quarter of fiscal 2011 compared to $0.28 in the second quarter of fiscal 2010

• Total cash returned to shareholders through dividends and share repurchases was $146 million

Fiscal 2011 — Financial Outlook for the Year

For fiscal year 2011, we expect revenues to grow in the high single digits based on a 52-week comparable year, driven by mid single-digit comparable store sales growth. We plan to open approximately 500 net new stores globally in fiscal 2011: approximately 100 in the U.S. and approximately 400 internationally, the majority of which are expected to be licensed stores. These net new store openings exclude the effect of Seattle’s Best Coffee store closures due to the bankruptcy of Borders Group, Inc. (“Borders”) in April 2011; during our fiscal second quarter, 225 of these stores closed.

We expect continued improvement in our consolidated operating margin in fiscal 2011 compared to the prior year, given our current revenue expectations and sales leverage, and the absence of restructuring charges in fiscal 2011, offset in part by higher commodity costs, primarily for coffee. In order to mitigate the risk of higher coffee prices on our results for fiscal 2011 we have essentially locked in all of our coffee costs for the remainder of the year with fixed-price purchase commitments.

Results of Operations for the 13 and 26 Weeks Ended April 3, 2011 and March 28, 2010 (in millions)

Results of Operations Details — Consolidated

Revenues:

	13 Weeks Ended							26 Weeks Ended
	Apr 3,		Mar 28,		%			Apr 3,		Mar 28,		%
	2011		2010		Change			2011		2010		Change
Company-operated stores	$	2,293.5	$	2,128.9		7.7	%		4,744.8		4,421.8		7.3	%
Licensed stores		237.8		210.9		12.8			491.9		427.5		15.1
CPG, foodservice and other		254.4		194.9		30.5			499.8		408.1		22.5
Total net revenues	$	2,785.7	$	2,534.7		9.9	%	$	5,736.5	$	5,257.4		9.1	%

Net revenues for the 13 weeks and 26 weeks ended April 3, 2011 increased $251 million and $479 million, respectively, compared to the corresponding periods in fiscal 2010, primarily driven by increases from company-operated stores (contributing $165 million and $323 million, respectively).

We derived 83% of total net revenues from our company-operated stores for the first two quarters of fiscal 2011. For the 13 weeks ended April 3, 2011, the increase in consolidated net revenues was driven by a 7%, or $138 million, increase in comparable store sales. The increase in comparable store sales was due to a 6% increase in the number of transactions (contributing approximately $118 million) and a 1% increase in average ticket (contributing approximately $20 million). For the 26 weeks ended April 3, 2011, consolidated net revenues increased over the prior year period driven by a 7%, or $298 million, increase in comparable store sales. The increase in comparable store sales was due to a 5% increase in the number of transactions (contributing approximately $231 million) and a 2% increase in average ticket (contributing approximately $67 million).

15

For the first two quarters of fiscal 2011 we derived 17% of total net revenues from channels outside our company-operated store base. The increase in licensed stores revenues for both the 13 weeks and 26 weeks ended April 3, 2011 was due primarily to increased royalty revenues and product sales related to our licensed stores resulting from improved comparable store sales growth and the opening of 154 net new licensed stores over the last 12 months. Revenues from CPG, foodservice and other for the 13 weeks and 26 weeks ended April 3, 2011 increased $60 million and $92 million, respectively, compared to the corresponding periods in fiscal 2010. These increases were primarily due to the transition of our packaged coffee and tea businesses to an in-house direct model from the previous distribution arrangement, and to increased sales from the expansion of Starbucks VIA^® Ready Brew in the CPG channel.

Operating Expenses:

	13 Weeks Ended										26 Weeks Ended
	April 3,		March 28,		April 3,			March 28,			April 3,		March 28,		April 3,			March 28,
	2011		2010		2011			2010			2011		2010		2011			2010
					% of Total										% of Total
					Net Revenues										Net Revenues
Cost of sales including occupancy costs	$	1,180.1	$	1,064.1		42.4	%		42.0	%	$	2,380.9	$	2,209.8		41.5	%		42.0	%
Store operating expenses		885.4		828.0		31.8			32.7			1,791.0		1,724.1		31.2			32.8
Other operating expenses		101.1		61.8		3.6			2.4			193.7		133.7		3.4			2.5
Depreciation and amortization expenses		129.0		128.5		4.6			5.1			256.7		259.1		4.5			4.9
General and administrative expenses		152.3		139.0		5.5			5.5			308.9		275.9		5.4			5.2
Restructuring charges		0.0		7.9		0.0			0.3			0.0		26.2		0.0			0.5
Total operating expenses		2,447.9		2,229.3		87.9			88.0			4,931.2		4,628.8		86.0			88.0
Income from equity investees		38.3		34.4		1.4			1.4			72.7		63.8		1.3			1.2
Operating income	$	376.1	$	339.8		13.5	%		13.4	%	$	878.0	$	692.4		15.3	%		13.2	%
Store operating expenses as a % of related revenues						38.6	%		38.9	%						37.7	%		39.0	%

Operating margin increased 10 basis points for the 13 weeks ended April 3, 2011, primarily due to sales leverage (approximately 270 basis points), which was offset by higher commodity costs (approximately 200 basis points) and increased salaries and benefits primarily in the US (approximately 90 basis points). Operating margin increased 210 basis points for the 26 weeks ended April 3, 2011, primarily due to sales leverage (approximately 250 basis points).

Cost of sales including occupancy costs as a percentage of total revenues increased 40 basis points for the 13 weeks ended April 3, 2011 driven by increased commodity costs (approximately 200 basis points). Partially offsetting these higher costs was increased sales leverage, which contributed to lower occupancy costs as a percentage of total net revenues (approximately 80 basis points) and supply chain efficiencies. Cost of sales including occupancy costs as a percentage of total revenues decreased 50 basis points for the 26 weeks ended April 3, 2011 driven by increased sales leverage which contributed to lower occupancy costs as a percentage of total net revenues (approximately 100 basis points) and supply chain efficiencies. Partially offsetting these improvements were higher commodity costs (approximately 150 basis points), primarily driven by increased coffee costs.

Store operating expenses as a percent of total revenues decreased 90 basis points for the 13 weeks ended April 3, 2011. The decrease was primarily driven by increased sales leverage (approximately 140 basis points). These improvements were partially offset by higher salaries and benefits in the US (approximately 90 basis points). Store operating expenses as a percent of total revenues decreased 160 basis points for the 26 weeks ended April 3, 2011. The decrease was driven by increased sales leverage (approximately 130 basis points).

Other operating expenses as a percent of total revenues increased 120 basis points for the 13 weeks ended April 3, 2011. The increase was primarily driven by higher marketing expenses (approximately 50 basis points), and the impairment of certain assets in our Seattle’s Best Coffee business associated with the Borders’ bankruptcy (approximately 40 basis points). Other operating expenses as a percent of total revenues increased 90 basis points for the 26 weeks ended April 3, 2011. The increase was primarily driven by increased marketing expenses (approximately 40 basis points), and the impairment of certain assets in our Seattle’s Best Coffee business associated with the Borders’ bankruptcy (approximately 30 basis points).

16

Operating income and net earnings:

	13 Weeks Ended												26 Weeks Ended
	April 3,			March 28,			April 3,			March 28,			April 3,			March 28,			April 3,			March 28,
	2011			2010			2011			2010			2011			2010			2011			2010
							% of Total												% of Total
							Net Revenues												Net Revenues
Operating income	$	376.1		$	339.8			13.5	%		13.4	%	$	878.0		$	692.4			15.3	%		13.2	%
Interest income and other, net		19.9			4.7			0.7			0.2			34.2			29.8			0.6			0.6
Interest expense		(7.1	)		(8.0	)		(0.3	)		(0.3	)		(15.0	)		(16.2	)		(0.3	)		(0.3	)
Earnings before income taxes		388.9			336.5			14.0			13.3			897.2			706.0			15.6			13.4
Income taxes		126.5			118.7			4.5			4.7			287.3			244.7			5.0			4.7
Net earnings including noncontrolling interests		262.4			217.8			9.4			8.6			609.9			461.3			10.6			8.8
Net earnings (loss) attributable to noncontrolling interest		0.8			0.5			0.0			0.0			1.8			2.5			0.0			0.0
Net earnings attributable to Starbucks	$	261.6		$	217.3			9.4	%		8.6	%	$	608.1		$	458.8			10.6	%		8.7	%
Effective tax rate including noncontrolling interest								32.5	%		35.3	%								32.0	%		34.7	%

Net interest income and other for the 13 weeks ended April 3, 2011 increased $15 million compared to the prior year. The increase was primarily driven by the impact of favorable fair-value adjustments on dairy and fuel derivatives (approximately $6 million), and favorable foreign exchange fluctuations (approximately $4 million). Also contributing to the increase was a favorable fluctuation in unrealized holding gains/losses on our trading securities portfolio (approximately $2 million), which approximates a portion of our liability under the Management Deferred Compensation Plan (“MDCP”). Gains and losses recorded here for the MDCP asset are offset by gains or losses recorded in general and administrative expenses as the MDCP liability fluctuates with investment performance.

The effective tax rate for the 13 weeks ended April 3, 2011 was 32.5% as compared to 35.3% for the same period in fiscal 2010. The effective tax rate for the 26 weeks ended April 3, 2011 was 32.0% as compared to 34.7% for the same period in fiscal 2010. The lower rate in fiscal 2011 was primarily due to higher income in foreign jurisdictions with lower tax rates.

17

Operating Segments

Segment information is prepared on the same basis that our management reviews financial information for operational decision-making purposes. The following tables summarize the results of operations by segment:

United States

	13 Weeks Ended										26 Weeks Ended
	April 3,		March 28,		April 3,			March 28,			April 3,		March 28,		April 3,			March 28,
	2011		2010		2011			2010			2011		2010		2011			2010
					% of US										% of US
					Net Revenues										Net Revenues
Total net revenues	$	1,926.5	$	1,810.4							$	3,994.3	$	3,734.0
Cost of sales including occupancy costs		746.4		701.7		38.7	%		38.8	%		1,519.8		1,450.7		38.0	%		38.9	%
Store operating expenses		700.6		658.5		36.4			36.4			1,420.6		1,365.8		35.6			36.6
Other operating expenses		15.3		13.6		0.8			0.8			30.6		27.5		0.8			0.7
Depreciation and amortization expenses		86.6		88.5		4.5			4.9			173.3		178.1		4.3			4.8
General and administrative expenses		20.7		24.2		1.1			1.3			40.4		45.9		1.0			1.2
Restructuring charges		0.0		1.2		0.0			0.1			0.0		9.1		0.0			0.2
Total operating expenses		1,569.6		1,487.7		81.5	%		82.2	%		3,184.7		3,077.1		79.7	%		82.4	%
Operating income	$	356.9	$	322.7		18.5	%		17.8	%	$	809.6	$	656.9		20.3	%		17.6	%
Store operating expenses as a % of related revenues						39.1	%		39.2	%						38.3	%		39.4	%

Total US net revenues increased 6% and 7% for the 13 weeks and 26 weeks ended April 3, 2011, respectively, due to higher company-operated store revenues. For the 13 weeks ended April 3, 2011, company-operated store revenues increased due to higher comparable store sales of 7%, or $120 million, which was comprised of a 6% increase in the number of transactions (contributing approximately $101 million) and a 1% increase in average ticket (contributing approximately $19 million). The higher comparable store sales were partially offset by the net closure of 37 company-operated stores over the last 12 months (approximately $9 million). For the 26 weeks ended April 3, 2011, company-operated store revenues increased due to higher comparable store sales of 7%, or $257 million, which was comprised of a 6% increase in the number of transactions (contributing approximately $200 million) and a 2% increase in average ticket (contributing approximately $57 million). The higher comparable store sales were partially offset by the net closure of 37 company-operated stores over the last 12 months (approximately $18 million).

Cost of sales including occupancy costs as a percentage of total revenues decreased by 10 basis points for the 13 weeks ended April 3, 2011 over the comparable prior year quarter. The decrease resulted primarily from increased commodity costs (approximately 150 basis points), driven by higher coffee costs, partially offset by increased sales leverage (approximately 100 basis points). Cost of sales including occupancy costs as a percentage of total revenues decreased by 90 basis points for the 26 weeks ended April 3, 2011 over the comparable prior year period. The decrease resulted primarily from a 90 basis point decrease in occupancy costs as a percentage of total revenues, driven primarily by increased sales leverage.

Store operating expenses as a percent of total revenues were neutral for the 13 weeks ended April 3, 2011 when compared to the prior year quarter. Increased sales leverage (approximately 140 basis points) was offset by increased salaries and benefits (approximately 110 basis points). Store operating expenses as a percent of total revenues decreased 100 basis points for the 26 weeks ended April 3, 2011 over the comparable prior year period driven by increased sales leverage (approximately 120 basis points) and lower asset impairments (approximately 50 basis points). These improvements were partially offset by increased salaries and benefits (approximately 80 basis points).

Operating margin expanded 70 basis points for the 13 weeks ended April 3, 2011 driven by the increased sales leverage (approximately 270 basis points) compared to the prior year quarter. This was partially offset by increased commodity costs (approximately 150 basis points), primarily driven by higher coffee costs, and increased salaries and benefits (approximately 110 basis points). Operating margin expanded 270 basis points for the 26 weeks ended April 3, 2011 primarily driven by increased sales leverage (approximately 250 basis points) compared to the prior year period.

18

International

	13 Weeks Ended										26 Weeks Ended
	April 3,		March 28,		April 3,			March 28,			April 3,		March 28,		April 3,			March 28,
	2011		2010		2011			2010			2011		2010		2011			2010
					% of International										% of International
					Net Revenues										Net Revenues
Total net revenues	$	609.8	$	532.2							$	1,249.7	$	1,120.9
Cost of sales including occupancy costs		297.2		257.3		48.7	%		48.3	%		589.6		537.4		47.2	%		47.9	%
Store operating expenses		184.8		169.5		30.3			31.8			370.4		358.3		29.6			32.0
Other operating expenses		21.1		20.3		3.5			3.8			41.2		45.2		3.3			4.0
Depreciation and amortization expenses		29.0		27.4		4.8			5.1			56.8		55.6		4.5			5.0
General and administrative expenses		30.4		31.5		5.0			5.9			60.3		62.0		4.8			5.5
Restructuring charges		0.0		6.7		0.0			1.3			0.0		17.1		0.0			1.5
Total operating expenses		562.5		512.7		92.2	%		96.3	%		1,118.3		1,075.6		89.5	%		96.0	%
Income from equity investees		24.4		20.9		4.0			3.9			44.7		37.9		3.6			3.4
Operating income	$	71.7	$	40.4		11.8	%		7.6	%	$	176.1	$	83.2		14.1	%		7.4	%
Store operating expenses as a % of related revenues						36.7	%		37.8	%						35.6	%		37.6	%

Total international net revenues increased 15% and 12% for the 13 weeks and 26 weeks ended April 3, 2011 primarily driven by higher company-operated and licensed stores revenue. For the 13 weeks ended April 3, 2011, company-operated stores revenue increased $54 million driven by a 4% increase in comparable store sales (contributing approximately $18 million), favorable foreign currency fluctuations (contributing approximately $18 million), and net new store openings (contributing approximately $12 million). The increase in comparable store sales was driven by a 4% increase in the number of transactions. Also contributing to the increase in total net revenues was a $22 million increase in licensed store revenue due to increased royalty revenues and product sales due to improved comparable licensed store sales growth and the opening of 308 net new licensed stores over the last 12 months. For the 26 weeks ended April 3, 2011, company-operated store revenue increased $86 million driven by a 4% increase in comparable store sales (contributing approximately $40 million), favorable foreign currency fluctuations (contributing approximately $21 million) and net new store openings (contributing approximately $13 million). The increase in comparable store sales was driven by a 3% increase in the number of transactions (contributing approximately $28 million) and a 1% increase in average ticket (contributing approximately $12 million). Also contributing to the increase in total net revenues was a $40 million increase in licensed store revenues primarily from increased royalty revenues and product sales related to our store licensees due to improved comparable licensed store sales growth and the opening of 308 net new licensed stores over the last 12 months.

Cost of sales including occupancy costs as a percentage of total net revenues increased 40 basis points for the 13 weeks ended April 3, 2011, driven by increased commodity costs (approximately 150 basis points), primarily driven by higher coffee costs, partially offset by increased sales leverage (approximately 90 basis points). Cost of sales including occupancy costs as a percentage of total net revenues decreased 70 basis points for the 26 weeks ended April 3, 2011, driven by increased sales leverage (approximately 100 basis points) and manufacturing efficiencies (approximately 50 basis points). Partially offsetting these improvements were higher commodity costs (approximately 100 basis points), driven by higher coffee costs.

Store operating expenses as a percent of total net revenues for the 13 weeks ended April 3, 2011 decreased 150 basis points with the majority of the benefit driven by increased sales leverage (approximately 90 basis points). Store operating expenses as a percent of total net revenues for the 26 weeks ended April 3, 2011 decreased 240 basis points with the majority of the benefit driven by increased sales leverage (approximately 100 basis points). Also contributing to the decrease were lower asset impairments (approximately 90 basis points) as a percent of total net revenues.

Operating margin increased 420 basis points for the 13 weeks ended April 3, 2011 primarily driven by increased sales leverage (approximately 280 basis points) and the absence of restructuring charges in the current year (approximately 130 basis points). Partially offsetting these were higher commodity costs (approximately 150 basis points), when compared to the prior year quarter. Operating margin increased 670 basis points for the 26 weeks ended April 3, 2011 primarily driven by increased sales leverage (approximately 320 basis points), lower asset impairments (approximately 160 basis points), and the absence of restructuring charges in the current year (approximately 150 basis points) when compared to the prior year period.

19

Global Consumer Products Group

	13 Weeks Ended										26 Weeks Ended
	April 3,		March 28,		April 3,			March 28,			April 3,		March 28,		April 3,			March 28,
	2011		2010		2011			2010			2011		2010		2011			2010
					% of CPG										% of CPG
					Net Revenues										Net Revenues
Total net revenues	$	204.7	$	157.5							$	399.9	$	331.8
Cost of sales		114.8		84.9		56.1	%		53.9	%		222.3		180.0		55.6	%		54.2	%
Other operating expenses		37.1		20.1		18.1			12.8			67.7		44.2		16.9			13.3
Depreciation and amortization expenses		0.6		1.0		0.3			0.6			1.4		2.0		0.4			0.6
General and administrative expenses		3.2		2.5		1.6			1.6			6.5		5.1		1.6			1.5
Total operating expenses		155.7		108.5		76.1	%		68.9	%		297.9		231.3		74.5	%		69.7	%
Income from equity investees		14.6		14.5		7.1			9.2			28.9		26.9		7.2			8.1
Operating income	$	63.6	$	63.5		31.1	%		40.3	%	$	130.9	$	127.4		32.7	%		38.4	%

Net CPG revenues increased 30% and 21% for the 13 weeks and 26 weeks ended April 3, 2011, respectively. The increases in net revenues were due primarily to increased sales in our fiscal second quarter resulting from the transition of our domestic packaged coffee and tea business to an in-house direct model, away from the previous distribution arrangement (approximately $20 million) and the expansion of Starbucks VIA^® Ready Brew (approximately $12 million for the 13 weeks and $16 million for the 26 weeks). Also contributing to the increase in the 26-week period were increased foodservice sales (approximately $10 million).

Operating margin decreased 920 basis points and 570 basis points for the 13 weeks and 26 weeks ended April 3, 2011, respectively. The 13-week and 26-week decreases were primarily due to increased commodity costs (approximately 800 basis points and 600 basis points, respectively), driven primarily by higher coffee costs. Also contributing to the decrease were increased marketing expenses for VIA^® Ready Brew (approximately 410 basis points and 290 basis points, respectively). These decreases were partially offset by the favorable impact of transitioning our packaged coffee and tea businesses from Kraft to an in-house direct model.

On March 1, 2011, Starbucks successfully transitioned from our previous distribution arrangement with Kraft for the sales of packaged Starbucks and Seattle’s Best Coffee coffee products in grocery and warehouse club stores throughout the US, and to grocery stores in Canada, the UK and other European countries. We successfully transitioned the Tazo tea business in January 2011.

Other

	13 Weeks Ended									26 Weeks Ended
	April 3,			March 28,			%			April 3,			March 28,			%
	2011			2010			Change			2011			2010			Change
Total net revenues	$	44.7		$	34.6			29.2	%	$	92.6		$	70.7			31.0	%
Cost of sales		21.7			20.2			7.4			49.2			41.7			18.0
Other operating expenses		27.6			7.8			253.8			54.2			16.8			222.6
Depreciation and amortization expenses		12.8			11.6			10.3			25.2			23.4			7.7
General and administrative expenses		98.0			80.8			21.3			201.7			162.9			23.8
Total operating expenses		160.1			120.4			33.0	%		330.3			244.8			34.9	%
Income/(loss) from equity investees		(0.7	)		(1.0	)		(30.0	)		(0.9	)		(1.0	)		(10.0	)
Operating loss	$	(116.1	)	$	(86.8	)		(33.8	)%	$	(238.6	)	$	(175.1	)		(36.3	)%

Substantially all of the net revenues in Other are generated from the Seattle’s Best Coffee operating segment. Total net revenues increased 29% and 31% for the 13-week and 26-week periods ended April 3, 2011 and were due to increases in revenues for Seattle’s Best Coffee from sales to new national accounts (contributing approximately $5 million and $12 million, respectively).

20

Operating expenses included in Other relate to the Seattle’s Best Coffee and Digital Ventures businesses as well as expenses pertaining to corporate administrative functions that support our operating segments but are not specifically attributable to or managed by any segment and are not included in the reported financial results of the operating segments. For the 13 weeks ended April 3, 2011, total operating expenses increased approximately $40 million primarily as a result of increased other operating expenses (approximately $20 million) driven by the impairment of certain assets in our Seattle’s Best Coffee business associated with the Borders’ bankruptcy in April 2011. Also contributing to the increase were higher general and administrative expenses (approximately $17 million) due in part to higher salaries and benefits. For the 26 weeks ended April 3, 2011, total operating expenses increased approximately $86 million due in part to higher general and administrative expenses (approximately $39 million) driven by higher charitable contributions and increased salaries and benefits. Also contributing to the increase were higher other operating expenses (approximately $37 million) driven by the impairment of certain assets in our Seattle’s Best Coffee business associated with the Borders’ bankruptcy.

Financial Condition, Liquidity and Capital Resources

Starbucks cash and short-term investments totaled $1.9 billion and $1.4 billion as of April 3, 2011 and October 3, 2010, respectively. We actively manage our cash and short-term investments in order to internally fund operating needs, make scheduled interest and principal payments on our borrowings, and return cash to shareholders through common stock cash dividend payments and share repurchases. Our short-term investments consisted of US Treasury securities, commercial paper, corporate bonds and US Agency securities.

Our portfolio of long-term available for sale securities consists predominantly of high investment-grade corporate bonds, diversified among industries and individual issuers. We also have investments in auction rate securities (“ARS”), all of which are classified as long-term. ARS totaling $28 million and $41 million were outstanding as of April 3, 2011 and October 3, 2010, respectively. The reduction in ARS was primarily due to $16 million in redemptions during the first two quarters of fiscal 2011 with all redemptions done at par.

Starbucks $500 million unsecured credit facility is available for working capital, capital expenditures and other corporate purposes, including acquisitions and share repurchases. The credit facility contains provisions requiring us to maintain compliance with certain covenants, including a minimum fixed charge coverage ratio, which measures our ability to cover financing expenses. As of April 3, 2011 and October 3, 2010, we were in compliance with each of these covenants. The $550 million of 10-year 6.25% Senior Notes also require us to maintain compliance with certain covenants, including limits on future liens and sale and leaseback transactions on certain material properties. As of April 3, 2011 and October 3, 2010, we were in compliance with each of these covenants.

We expect to use our cash and short-term investments, including any potential future borrowings under the credit facility and our commercial paper program, to invest in our core businesses, including product innovations and related marketing support, as well as other new business opportunities related to our core businesses. We believe that future cash flow generated from operations and existing cash and short-term investments will be sufficient to finance capital requirements for our core businesses as well as shareholder distributions for the foreseeable future. We may use our available cash resources to make proportionate capital contributions to our equity method and cost method investees. Any decisions to increase our ownership interest in our equity method investees or licensed operations will be driven by valuation and fit with our ownership strategy. Significant new joint ventures, acquisitions and/or other new business opportunities may require additional outside funding.

Other than normal operating expenses, cash requirements for the remainder of fiscal 2011 are expected to consist primarily of capital expenditures for remodeling and refurbishment of, and equipment upgrades for, existing company-operated stores; systems and technology investments in stores and in the support infrastructure; and new company-operated stores. Total capital expenditures for fiscal 2011 are expected to range from $550 million to $600 million.

During the second quarter of fiscal 2011, Starbucks declared a $0.13 per share cash dividend to shareholders of record as of May 11, 2011, which will be paid on May 27, 2011. Starbucks repurchased 1.9 million shares of common stock ($61 million) during the first half of fiscal 2011 under share repurchase authorizations. The number of remaining shares authorized for repurchase at the end of the second fiscal quarter totaled 18.2 million.

Cash provided by operating activities was $670 million for the first two quarters of fiscal 2011, compared to $958 million for the same period in fiscal 2010. The decrease was primarily due to an increase in inventories resulting in part from higher coffee costs, partially offset by higher net earnings for the period.

Cash used by investing activities for the first two quarters of fiscal 2011 totaled $139 million, compared to $530 million for the same period in fiscal 2010. The decrease was primarily due to increased inflows from maturing investments, and a reduction in the reinvestment of cash into new investment securities, compared to the prior period. This decrease was partially offset by increased capital expenditures for remodeling and renovating existing company-operated stores, opening new retail stores and investments in information technology systems.

Cash used by financing activities for the first two quarters of fiscal 2011 totaled $61 million, compared to $69 million of cash provided by financing activities for the same period in fiscal 2010. The change primarily reflects dividend payments and common share repurchases in fiscal 2011, which did not occur in fiscal 2010. This was partially offset by increased proceeds from common stock issuances and a higher excess tax benefit, resulting from more stock option exercises during the period.

21

Contractual Obligations

There have been no material changes during the period covered by this 10-Q, outside of the ordinary course of our business, to the contractual obligations specified in the table of contractual obligations included in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 10-K.

Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements.

Commodity Prices, Availability and General Risk Conditions

Commodity price risk represents our primary market risk, generated by our purchases of green coffee and dairy products, among other items. We purchase, roast and sell high quality whole bean arabica coffee and related products and risk arises from the price volatility of green coffee. In addition to coffee, we also purchase significant amounts of dairy products to support the needs of our company-operated stores. The price and availability of these commodities directly impact our results of operations and can be expected to impact future results of operations. For additional details see Product Supply in Item 1 of the 10-K, as well as Risk Factors in Item 1A of the 10-K.

Seasonality and Quarterly Results

Our business is subject to seasonal fluctuations, including fluctuations resulting from the holiday season. Our cash flows from operations are considerably higher in the first fiscal quarter than the remainder of the year. This is largely driven by cash received as Starbucks Cards are purchased and loaded during the holiday season. Since revenues from the Starbucks Card are recognized upon redemption and not when purchased, seasonal fluctuations on the consolidated statements of earnings are much less pronounced. Quarterly results are affected by the timing of the opening of new stores and the closing of existing stores. For these reasons, results for any quarter are not necessarily indicative of the results that may be achieved for the full fiscal year.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 in this 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material change in the commodity price risk, foreign currency exchange risk, equity security price risk, or interest rate risk discussed in Item 7A of the 10-K.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Our disclosure controls and procedures are also designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer as appropriate, to allow timely decisions regarding required disclosure.

During the second quarter of fiscal 2011, 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 the 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 (April 3, 2011).

During the second quarter of fiscal 2011, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that materially affected or are reasonably likely to materially affect internal control over financial reporting.

The certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as exhibits 31.1 and 31.2, respectively, to this 10-Q.

22

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

In the first quarter of fiscal 2011, Starbucks notified Kraft Foods Global, Inc. (“Kraft”) that we were discontinuing our distribution arrangement with Kraft on March 1, 2011 due to material breaches by Kraft of its obligations under the Supply and License Agreement between the Company and Kraft, dated March 29, 2004 (the “Agreement”), which defined the main distribution arrangement between the parties. Through our arrangement with Kraft, Starbucks sold a selection of Starbucks and Seattle’s Best Coffee^® branded packaged coffees in grocery and warehouse club stores throughout the US, and to grocery stores in Canada, the UK and other European countries. Kraft managed the distribution, marketing, advertising and promotion of these products.

On November 29, 2010, Starbucks received a notice of arbitration from Kraft, putting the commercial dispute between the parties into binding arbitration pursuant to the terms of the Agreement. Kraft denies it has materially breached the Agreement. Kraft further alleges that if Starbucks wished to terminate the Agreement it must compensate Kraft as provided in the Agreement in an amount equal to the fair value of the Agreement, with an additional premium of up to 35% under certain circumstances.

On December 6, 2010, Kraft commenced a federal court action against Starbucks, entitled Kraft Foods Global, Inc. v. Starbucks Corporation, in the U.S. District Court for the Southern District of New York (the “District Court”) seeking injunctive relief to prevent Starbucks from terminating the distribution arrangement until the parties’ dispute is resolved through the arbitration proceeding. On January 28, 2011, the District Court denied Kraft’s request for injunctive relief. Kraft appealed the District Court’s decision to the Second Circuit Court of Appeals. On February 25, 2011, the Second Circuit Court of Appeals affirmed the District Court’s decision. As a result, Starbucks is in full control of our packaged coffee business as of March 1, 2011.

While Starbucks believes we have valid claims of material breach by Kraft under the Agreement that allowed us to terminate the Agreement and certain other relationships with Kraft without compensation to Kraft, there exists the possibility of material adverse outcomes to Starbucks under the arbitration. At this time, the Company is unable to estimate the range of possible outcomes with respect to this matter.

Starbucks is party to various other legal proceedings arising in the ordinary course of business, but, except as noted above, is not currently a party to any legal proceeding that management believes could have a material adverse effect on our consolidated financial position or results of operations.

Item 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed in the 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information regarding repurchases by the Company of its common stock during the 13-week period ended April 3, 2011:

ISSUER PURCHASES OF EQUITY SECURITIES

	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(2)
Period(1)
January 3, 2011 — January 30, 2011		50,000	$	32.26		50,000		19,661,592
January 31, 2011 — February 27, 2011		1,014,167		32.16		1,014,167		18,647,425
February 28, 2011 — April 3, 2011		445,472		32.65		445,472		18,201,953
Total		1,509,639	$	32.31		1,509,639

(1) Monthly information is presented by reference to Starbucks fiscal months during the second quarter of fiscal 2011.

(2) Starbucks share repurchase program is conducted under authorizations made from time to time by our Board of Directors. On March 24, 2010 we publicly announced the authorization of 15 million shares and on November 15, 2010 we publicly announced the authorization of up to an additional 10 million shares. These authorizations have no expiration date.

23

Item 6. Exhibits

		Incorporated by Reference
Exhibit No.	Exhibit Description	Form		File No.		Date of First Filing		Exhibit		Filed Herewith
10.1*	Starbucks Corporation 2005 Long-Term Equity Incentive Plan, as amended and restated effective March 23, 2011.		—		—		—		—		X
31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002		—		—		—		—		X
31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, As Adopted Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002		—		—		—		—		X
32	Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 USC. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002		—		—		—		—		X
101**	The following financial statements from the Company’s 10-Q for the fiscal quarter ended April 3, 2011, formatted in XBRL: (i) Condensed Consolidated Statements of Earnings, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flows (iv) Notes to Condensed Consolidated Financial Statements		—		—		—		—		—

* Denotes a management contract or compensatory plan or arrangement

** Furnished herewith.

24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

May 6, 2011

STARBUCKS CORPORATION
By:	/s/ Troy Alstead
	Troy Alstead
	chief financial officer
	and chief administrative officer
	Signing on behalf of the registrant and as principal financial officer

25

EX-10.1

Exhibit 10.1

STARBUCKS CORPORATION

2005 LONG-TERM EQUITY INCENTIVE PLAN

(Effective February 9, 2005, as amended and restated effective March 23, 2011)

STARBUCKS CORPORATION

2005 LONG-TERM EQUITY INCENTIVE PLAN

TABLE OF CONTENTS

			Page
PART I PURPOSE, ADMINISTRATION AND RESERVATION OF SHARES
Section 1.		Purpose of the Plan		1
Section 2.		Definitions		1
	(a)	Active Status		1
	(b)	ASC 7183		2
	(c)	Award		2
	(d)	Award Agreement		2
	(e)	Beneficial Ownership		2
	(f)	Board		2
	(g)	Change of Control		2
	(h)	Code		3
	(i)	Committee		3
	(j)	Common Stock		3
	(k)	Company		3
	(l)	Consultant		3
	(m)	Director		3
	(n)	Disability		3
	(o)	Exchange Act		3
	(p)	Executive Officers		3
	(q)	Fair Market Value		4
	(r)	FLSA		4
	(s)	Former Plans		4
	(t)	Incentive Stock Option		4
	(u)	Independent Director		4
	(v)	Maximum Annual Participant Award		4
	(w)	Misconduct		4
	(x)	Nasdaq		5
	(y)	Nominating and Corporate Governance Committee		5
	(z)	Non-Employee Director		5
	(aa)	Nonqualified Stock Option		5
	(bb)	Option		5
	(cc)	Optionee		5
	(dd)	Original Effective Date		5
	(ee)	Parent		5
	(ff)	Participant		6
	(gg)	Partner		6
	(hh)	Performance Criteria		6
	(ii)	Plan		6

i

	(jj)	Plan Minimum Vesting or Issuance Requirements	6
	(kk)	Reprice	6
	(ll)	Resignation (or Resign) for Good Reason	6
	(mm)	Restated Effective Date	7
	(nn)	Restricted Stock	7
	(oo)	Restricted Stock Units	7
	(pp)	Retirement	7
	(qq)	SAR	7
	(rr)	SEC	7
	(ss)	Share	7
	(tt)	Stand-Alone SARS	7
	(uu)	Subcommittee	7
	(vv)	Subsidiary	7
	(ww)	Tandem SARS	8
Section 3.		Administration of the Plan	8
	(a)	Authority	8
	(b)	Powers of the Committee	8
	(c)	Effect of Committee’s Decision	9
	(d)	Delegation	9
	(e)	Administration	9
Section 4.		Shares Subject to the Plan	10
	(a)	Reservation of Shares	10
	(b)	Time of Granting Awards	10
	(c)	Securities Law Compliance	10
	(d)	Substitutions and Assumptions	11
Section 5.		Adjustments to Shares Subject to the Plan	11
PART II TERMS APPLICABLE TO ALL AWARDS
Section 6.		General Eligibility	11
	(a)	Awards	11
	(b)	Maximum Annual Participant Award	12
	(c)	No Employment/Service Rights	12
Section 7.		Procedure for Exercise of Awards; Rights as a Shareholder	12
	(a)	Procedure	12
	(b)	Method of Payment	12
	(c)	Withholding Obligations	13
	(d)	Shareholder Rights	13
	(e)	Non-Transferability of Awards	13
Section 8.		Expiration of Awards	13
	(a)	Expiration, Termination or Forfeiture of Awards	13
	(b)	Extension of Term	14
Section 9.		Effect of Change of Control	14
	(a)	Acceleration	14
	(b)	Definition	15

ii

PART III SPECIFIC TERMS APPLICABLE TO OPTIONS AND STOCK AWARDS
Section 10.	Grant, Terms and Conditions of Options	15
(a)	Designation	15
(b)	Term of Options	15
(c)	Option Exercise Price	16
(d)	Vesting	16
(e)	Substitution of SARS for Options	16
(f)	Exercise	16
(g)	One-Time Option Exchange Offer	17
Section 11.	Grant, Terms and Conditions of Stock Awards	17
(a)	Designation	17
(b)	Performance Criteria	17
(c)	Vesting	18
(d)	Plan Minimum Vesting or Issuance Requirements	18
(e)	Exception to Plan Minimum Vesting or Issuance Requirements	18
Section 12.	Grant, Terms and Conditions of SARs	19
(a)	Grants	19
(b)	Tandem SARs	19
(c)	Stand-Alone SARs	20
(d)	Exercised SARs	20
PART IV TERM OF PLAN AND SHAREHOLDER APPROVAL
Section 13.	Term of Plan	20
Section 14.	Amendment and Termination of the Plan	20
(a)	Amendment and Termination	20
(b)	Participants in Foreign Countries	21
(c)	Effect of Amendment or Termination	21
Section 15.	Shareholder Approval	21
PART V OTHER PROVISIONS
Section 16.	No Liability of Company	21
Section 17.	Non-Exclusivity of Plan	21
Section 18.	Governing Law	21

iii

STARBUCKS CORPORATION

2005 LONG-TERM EQUITY INCENTIVE PLAN

PART I

PURPOSE, ADMINISTRATION AND RESERVATION OF SHARES

Section 1. Purpose of the Plan. The purposes of this Plan are (a) to attract and retain the most talented Partners, officers and Directors available, and (b) to promote the growth and success of the Company’s business, (i) by aligning the long-term interests of Partners, officers and Directors with those of the shareholders by providing an opportunity to acquire an interest in the Company and (ii) by providing both rewards for exceptional performance and long term incentives for future contributions to the success of the Company and its Subsidiaries.

The Plan permits the grant of Incentive Stock Options, Nonqualified Stock Options, Restricted Stock, Restricted Stock Units, or SARs, at the discretion of the Committee. Each Award will be subject to conditions specified in the Plan and in the terms of the Award Agreement, such as continued employment or satisfaction of performance criteria.

This Plan will serve as a framework for the Committee to establish sub-plans or procedures governing the grants to Partners, Directors and Consultants and Partners working outside of the United States. The awards granted under the Former Plans shall continue to be administered under the Former Plans until such time as those options are exercised, expire or become unexercisable for any reason.

Section 2. Definitions. As used herein, the following definitions shall apply:

(a) “Active Status” shall mean (i) for Partners, the absence of any interruption or termination of service as a Partner, (ii) for Directors, that the Director has not been removed from the Board for cause (as determined by the Company’s shareholders), and (iii) for Consultants, the absence of any interruption, expiration, or termination of such person’s consulting or advisory relationship with the Company or any Subsidiary or the occurrence of any termination event as set forth in such person’s Award Agreement. Active Status shall not be considered interrupted (A) for a Partner in the case of sick leave, maternity leave, infant care leave, medical emergency leave, military leave, or any other leave of absence properly taken in accordance with the policies of the Company or any applicable Subsidiary as may be in effect from time to time, and (B) for a Consultant, in the case of any temporary interruption in such person’s availability to provide services to the Company or any Subsidiary which has been granted in writing by an authorized officer of the Company. Whenever a mandatory severance period applies under applicable law with respect to a termination of service as a Partner, Active Status shall be considered terminated upon such Partner’s receipt of notice of termination in whatever form prescribed by applicable law.

(b) “ASC 718” shall mean Accounting Standards Codification (ASC) Topic 718, “Stock Compensation”, as promulgated by the Financial Accounting Standards Board

(c) “Award” shall mean any award or benefits granted under the Plan, including Options, Restricted Stock, Restricted Stock Units, and SARs.

(d) “Award Agreement” shall mean a written or electronic agreement or other instrument as may be approved from time to time by the Committee setting forth the terms of the Award. An Award Agreement may be in the form of an agreement to be executed by both the Participant and the Company (or an authorized representative of the Company) or certificates, notices or similar instruments as approved by the Committee.

(e) “Beneficial Ownership” shall have the meaning set forth in Rule 13d-3 promulgated under the Exchange Act.

(f) “Board” shall mean the Board of Directors of the Company.

(g) “Change of Control” shall mean the first day that any one or more of the following conditions shall have been satisfied:

(i) the sale, liquidation or other disposition of all or substantially all of the Company’s assets in one or a series of related transactions;

(ii) an acquisition (other than directly from the Company) of any outstanding voting securities by any person, after which such person (as the term is used for purposes of Section 13(d) or 14(d) of the Exchange Act) has Beneficial Ownership of twenty-five percent (25%) or more of the then outstanding voting securities of the Company, other than a Board approved transaction;

(iii) during any 12-consecutive month period, the individuals who, at the beginning of such period, constitute the Board (“Incumbent Directors”) cease for any reason other than death to constitute at least a majority of the members of the Board; provided however that except as set forth in this Section 2(g)(iii), an individual who becomes a member of the Board subsequent to the beginning of the 12-month period, shall be deemed to have satisfied such 12-month requirement and shall be deemed an Incumbent Director if such Director was elected by or on the recommendation of or with the approval of at least two-thirds of the Directors who then qualified as Incumbent Directors either actually (because they were Directors at the beginning of such period) or by operation of the provisions of this section; if any such individual initially assumes office as a result of or in connection with either an actual or threatened solicitation with respect to the election of Directors (as such terms are used in Rule 14a-12(c) of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitations of proxies or consents by or on behalf of a person other than the Board, then such individual shall not be considered an Incumbent Director; or

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(iv) a merger, consolidation or reorganization of the Company, as a result of which the shareholders of the Company immediately prior to such merger, consolidation or reorganization own directly or indirectly immediately following such merger, consolidation or reorganization less than fifty percent (50%) of the combined voting power of the outstanding voting securities of the entity resulting from such merger, consolidation or reorganization.

(h) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(i) “Committee” shall mean the Compensation and Management Development Committee appointed by the Board.

(j) “Common Stock” shall mean the common stock of the Company, par value $0.001 per share, subject to adjustment as provided in Section 5.

(k) “Company” shall mean Starbucks Corporation, a Washington corporation, and any successor thereto.

(l) “Consultant” shall mean any person, except a Partner, engaged by the Company or any Subsidiary of the Company, to render personal services to such entity, including as an advisor, pursuant to the terms of a written agreement.

(m) “Director” shall mean a member of the Board.

(n) “Disability” shall mean (i) in the case of a Participant whose employment with the Company or a Subsidiary is subject to the terms of an employment or consulting agreement that includes a definition of “Disability,” the term “Disability” as used in this Plan shall have the meaning set forth in such employment or consulting agreement during the period that such employment or consulting agreement remains in effect; and (ii) in all other cases, the term “Disability” as used in this Plan shall have the same meaning as set forth under the Company’s long-term disability plan applicable to the Participant as may be amended from time to time, and in the event the Company does not maintain any such plan with respect to a Participant, a physical or mental condition resulting from bodily injury, disease or mental disorder which renders the Participant incapable of continuing his or her usual and customary employment with the Company or a Subsidiary, as the case may be, for a period of not less than 120 days or such other period as may be required by applicable law.

(o) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(p) “Executive Officers” shall mean the officers of the Company as such term is defined in Rule 16a-1 under the Exchange Act.

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(q) “Fair Market Value” shall mean the closing price per share of the Common Stock on Nasdaq as to the date specified (or the previous trading day if the date specified is a day on which no trading occurred), or if Nasdaq shall cease to be the principal exchange or quotation system upon which the shares of Common Stock are listed or quoted, then such exchange or quotation system as the Company elects to list or quote its shares of Common Stock and that the Committee designates as the Company’s principal exchange or quotation system.

(r) “FLSA” shall mean the Fair Labor Standards Act of 1938, as amended.

(s) “Former Plans” shall mean the Starbucks Corporation Company-Wide 1991 Stock Option Plan, as amended, the Starbucks Corporation Amended and Restated Key Employee Stock Option Plan-1994, as amended, and the Starbucks Corporation Amended and Restated 1989 Stock Option Plan for Non-Employee Directors.

(t) “Incentive Stock Option” shall mean any Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

(u) “Independent Director” shall mean a Director who: (1) meets the independence requirements of Nasdaq, or if Nasdaq shall cease to be the principal exchange or quotation system upon which the shares of Common Stock are listed or quoted, then such exchange or quotation system as the Company elects to list or quote its shares of Common Stock and that the Committee designates as the Company’s principal exchange or quotation system; (2) qualifies as an “outside director” under Section 162(m) of the Code; (3) qualifies as a “non-employee director” under Rule 16b-3 promulgated under the Exchange Act; and (4) satisfies independence criteria under any other applicable laws or regulations relating to the issuance of Shares to Partners.

(v) “Maximum Annual Participant Award” shall have the meaning set forth in Section 6(b).

(w) “Misconduct” shall mean any of the following; provided, however, that with respect to Non-Employee Directors “Misconduct” shall mean subsection (viii) only:

(i) any material breach of an agreement between the Participant and the Company or any Subsidiary which, if curable, has not been cured within twenty (20) days after the Participant has been given written notice of the need to cure such breach, or which breach, if previously cured, recurs;

(ii) willful unauthorized use or disclosure of confidential information or trade secrets of the Company or any Subsidiary by the Participant;

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(iii) the Participant’s continued willful and intentional failure to satisfactorily perform Participant’s essential responsibilities, provided that the Participant has been given at least thirty (30) days’ written notice of the need to cure the failure and cure has not been effected within that time period, or which failure, if previously cured, recurs;

(iv) material failure of the Participant to comply with rules, policies or procedures of the Company or any Subsidiary as they may be amended from time to time, provided that the Participant has been given at least thirty (30) days’ written notice of the need to cure the failure, if such failure is curable, and cure has not been effected within that time period, or which failure, if previously cured, recurs;

(v) Participant’s dishonesty, fraud or gross negligence related to the business or property of the Company or any Subsidiary;

(vi) personal conduct that is materially detrimental to the business of the Company or any Subsidiary;

(vii) conviction of or plea of nolo contendere to a felony; or

(viii) in the case of Non-Employee Directors, the removal from the Board for cause (as determined by the Company’s shareholders).

(x) “Nasdaq” shall mean The Nasdaq Stock Market, Inc.

(y) “Nominating and Corporate Governance Committee” shall mean the Nominating and Corporate Governance Committee appointed by the Board.

(z) “Non-Employee Director” shall mean a Director who is not a Partner.

(aa) “Nonqualified Stock Option” shall mean an Option that does not qualify or is not intended to qualify as an Incentive Stock Option.

(bb) “Option” shall mean a stock option granted pursuant to Section 10 of the Plan.

(cc) “Optionee” shall mean a Participant who has been granted an Option.

(dd) “Original Effective Date” shall mean February 9, 2005, the date on which the Company’s shareholders first approved this Plan in accordance with applicable Nasdaq rules.

(ee) “Parent” shall mean a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

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(ff) “Participant” shall mean a Partner, Director or Consultant granted an Award.

(gg) “Partner” shall mean any person, including an officer, who is a common law employee of, receives remuneration for personal services to, is reflected on the official human resources database as an employee of, and is on the payroll of the Company or any Subsidiary of the Company. A person is on the payroll if he or she is paid from or at the direction of the payroll department of the Company, or any Subsidiary of the Company. Persons providing services to the Company, or to any Subsidiary of the Company, pursuant to an agreement with a staff leasing organization, temporary workers engaged through or employed by temporary or leasing agencies, and workers who hold themselves out to the Company, or a Subsidiary to which they are providing services as being independent contractors, or as being employed by or engaged through another company while providing the services, and persons covered by a collective bargaining agreement (unless the collective bargaining agreement applicable to the person specifically provides for participation in this Plan) are not Partners for purposes of this Plan and do not and cannot participate in this Plan, whether or not such persons are, or may be reclassified by the courts, the Internal Revenue Service, the U. S. Department of Labor, or other person or entity as, common law employees of the Company, or any Subsidiary, either solely or jointly with another person or entity.

(hh) “Performance Criteria” shall have the meaning set forth in Section 11(b).

(ii) “Plan” shall mean this Starbucks Corporation 2005 Long-Term Equity Incentive Plan, including any amendments thereto.

(jj) “Plan Minimum Vesting or Issuance Requirements” shall mean the minimum vesting requirements for Restricted Stock or Restricted Stock Units under Plan Section 11(d) hereunder.

(kk) “Reprice” shall mean the adjustment or amendment of the exercise price of Options or SARs previously awarded whether through cancellation in exchange for cash, other Awards, or a new Option or SAR at a reduced exercise price, lowering the exercise price of a previously granted Option or SAR, or any other means.

(ll) “Resignation (or Resign) for Good Reason” shall mean any voluntary termination by written resignation of the Active Status of any Partner after a Change of Control because of: (1) a material reduction in the Partner’s authority, responsibilities or scope of employment; (2) an assignment of duties to the Partner inconsistent with the Partner’s role at the Company (including its Subsidiaries) prior to the Change of Control, (3) a reduction in the Partner’s base salary or total incentive compensation; (4) a material reduction in the Partner’s benefits unless such reduction applies to all Partners of comparable rank; or (5) the relocation of the Partner’s primary work location more than fifty (50) miles from the Partner’s primary work location prior to the Change of Control; provided that the Partner’s written notice of voluntary

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resignation must be tendered within one (1) year after the Change of Control, and shall specify which of the events described in (1) through (5) resulted in the resignation.

(mm) “Restated Effective Date” shall mean the date on which the Company’s shareholders approved this amendment and restatement of the Plan in accordance with applicable Nasdaq rules.

(nn) “Restricted Stock” shall mean a grant of Shares pursuant to Section 11 of the Plan.

(oo) “Restricted Stock Units” shall mean a grant of the right to receive Shares in the future or their cash equivalent (or both) pursuant to Section 11 of the Plan.

(pp) “Retirement” shall mean, (i) with respect to any Partner, voluntary termination of employment after attainment of age 55 and at least ten (10) years of credited service with the Company or any Subsidiary (but only during the time the Subsidiary was a Subsidiary), as determined by the Committee in its sole discretion, and (ii) with respect to any Non-Employee Director, ceasing to be a Director pursuant to election by the Company’s shareholders or by voluntary resignation with the approval of the Board’s chair after having attained the age of 55 years and served continuously on the Board for at least six years.

(qq) “SAR” shall mean a stock appreciation right awarded pursuant to Section 12 of the Plan.

(rr) “SEC” shall mean the Securities and Exchange Commission.

(ss) “Share” shall mean one share of Common Stock, as adjusted in accordance with Section 5 of the Plan.

(tt) “Stand-Alone SARs” shall have the meaning set forth in Section 12(c) of the Plan.

(uu) “Subcommittee” shall have the meaning set forth in Section 3(d).

(vv) “Subsidiary” shall mean (1) in the case of an Incentive Stock Option a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, and (2) in the case of a Nonqualified Stock Option, Restricted Stock, a Restricted Stock Unit or a SAR, in addition to a subsidiary corporation as defined in (1), (A) a limited liability company, partnership or other entity in which the Company controls fifty percent (50%) or more of the voting power or equity interests, or (B) an entity with respect to which the Company possesses the power, directly or indirectly, to direct or cause the direction of the management and policies of that entity, whether through the Company’s ownership of voting securities, by contract or otherwise.

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(ww) “Tandem SARs” shall have the meaning set forth in Section 12(b) of the Plan.

Section 3. Administration of the Plan.

(a) Authority. The Plan shall be administered by the Committee. The Committee shall have full and exclusive power to administer the Plan on behalf of the Board, subject to such terms and conditions as the Committee may prescribe. Notwithstanding anything herein to the contrary, the Committee’s power to administer the Plan, and actions the Committee takes under the Plan, shall be subject to the limitation that certain actions may be subject to review and approval by either the full Board or a panel consisting of all of the Independent Directors of the Company.

(b) Powers of the Committee. Subject to the other provisions of this Plan, the Committee shall have the authority, in its discretion:

(i) to grant Incentive Stock Options, Nonqualified Stock Options, Restricted Stock, Restricted Stock Units, and SARs to Participants and to determine the terms and conditions of such Awards, including the determination of the Fair Market Value of the Shares and the exercise price, and to modify or amend each Award, with the consent of the Participant when required;

(ii) to determine the Participants, to whom Awards, if any, will be granted hereunder, the timing of such Awards, and the number of Shares to be represented by each Award;

(iii) to construe and interpret the Plan and the Awards granted hereunder;

(iv) to prescribe, amend, and rescind rules and regulations relating to the Plan, including the forms of Award Agreement, and manner of acceptance of an Award, such as correcting a defect or supplying any omission, or reconciling any inconsistency so that the Plan or any Award Agreement complies with applicable law, regulations and listing requirements and to avoid unanticipated consequences deemed by the Committee to be inconsistent with the purposes of the Plan or any Award Agreement;

(v) to establish performance criteria for Awards made pursuant to the Plan in accordance with a methodology established by the Committee, and to determine whether performance goals have been attained;

(vi) to accelerate or defer (with the consent of the Participant) the exercise or vested date of any Award;

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(vii) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Award previously granted by the Committee;

(viii) to establish sub-plans, procedures or guidelines for the grant of Awards to Partners, Directors, Consultants and Partners working outside of the United States; and

(ix) to make all other determinations deemed necessary or advisable for the administration of the Plan;

provided that, no consent of a Participant is necessary under clauses (i) or (vi) if a modification, amendment, acceleration, or deferral, in the reasonable judgment of the Committee confers a benefit on the Participant or is made pursuant to an adjustment in accordance with Section 5.

(c) Effect of Committee’s Decision. All decisions, determinations, and interpretations of the Committee shall be final and binding on all Participants, the Company (including its Subsidiaries), any shareholder and all other persons.

(d) Delegation. Consistent with the Committee’s charter, as such charter may be amended from time to time, the Committee may delegate (i) to one or more separate committees consisting of members of the Committee or other Directors who are Independent Directors (any such committee a “Subcommittee”), or (ii) to an Executive Officer of the Company, the ability to grant Awards and take the other actions described in Section 3(b) with respect to Participants who are not Executive Officers, and such actions shall be treated for all purposes as if taken by the Committee; provided that the grant of Awards shall be made in accordance with parameters established by the Committee. Any action by any such Subcommittee or Executive Officer within the scope of such delegation shall be deemed for all purposes to have been taken by the Committee.

(e) Administration. The Committee may delegate the administration of the Plan to an officer or officers of the Company, and such administrator(s) may have the authority to directly, or under their supervision, execute and distribute agreements or other documents evidencing or relating to Awards granted by the Committee under this Plan, to maintain records relating to the grant, vesting, exercise, forfeiture or expiration of Awards, to process or oversee the issuance of Shares upon the exercise, vesting and/or settlement of an Award, to interpret the terms of Awards and to take such other actions as the Committee may specify. Any action by any such administrator within the scope of its delegation shall be deemed for all purposes to have been taken by the Committee and references in this Plan to the Committee shall include any such administrator, provided that the actions and interpretations of any such administrator shall be subject to review and approval, disapproval or modification by the Committee.

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Section 4. Shares Subject to the Plan.

(a) Reservation of Shares. The shares of Common Stock reserved under this Plan will include reserved shares of Common Stock that are not subject to a grant or as to which the option award granted has been forfeited under the Former Plans, and an additional 15,000,000 shares of Common Stock. Subject to the provisions of Sections 5 of the Plan, the maximum aggregate number of Shares (adjusted, proportionately, in the event of any stock split or stock dividend with respect to the Shares) which may be granted as Incentive Stock Options under the Plan shall not exceed 21,000,000. The aggregate number of Shares available for issuance under the Plan will be reduced by 2.1 Shares for each Share delivered in settlement of any award of Restricted Stock or Restricted Stock Unit and one Share for each Share delivered in settlement of an Option or a SAR. If an Award expires, is forfeited, is settled in cash or becomes unexercisable for any reason without having been exercised in full, the undelivered Shares which were subject thereto shall, unless the Plan shall have been terminated, become available for future Awards under the Plan. Notwithstanding the foregoing, Shares subject to an Award under this Plan may not again be made available for issuance under this Plan if such Shares are: (i) shares that were subject to a stock-settled SAR and were not issued upon the net settlement or net exercise of such SAR, (ii) shares used to pay the exercise price of an Option, (iii) shares delivered to or withheld by the Company to pay the withholding taxes related to an Option or a Stock Appreciation Right, or (iv) shares repurchased on the open market with the proceeds of an Option exercise. Shares available for issuance under the Plan shall be increased by any shares of Common Stock subject to outstanding awards under the Former Plans on the date of shareholder approval of the Plan that later cease to be subject to such awards for any reason other than such awards having been exercised, subject to adjustment from time to time as provided in Section 5, which shares of Common Stock shall, as of the date such shares cease to be subject to such awards, cease to be available for grant and issuance under the Former Plans, but shall be available for issuance under the Plan. Any Shares that become available for grant pursuant to this Section 4(a) shall be added back as one Share if such shares were subject to Options or SARs granted under this Plan or options or stock appreciation rights granted under a Former Plan, and as 2.1 Shares if such shares were subject to Awards other than Options or SARs granted under this Plan or subject to awards other than options or stock appreciation rights granted under a Former Plan. The Shares may be authorized but unissued, or reacquired shares of Common Stock.

(b) Time of Granting Awards. The date of grant of an Award shall, for all purposes, be the date on which the Company completes the corporate action relating to the grant of such Award and all conditions to the grant have been satisfied, provided that conditions to the exercise of an Award shall not defer the date of grant. Notice of a grant shall be given to each Participant to whom an Award is so granted within a reasonable time after the determination has been made.

(c) Securities Law Compliance. Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without

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limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated under either such Act, and the requirements of any stock exchange or quotation system upon which the Shares may then be listed or quoted, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

(d) Substitutions and Assumptions. The Board or the Committee shall have the right to substitute or assume Awards in connection with mergers, reorganizations, separations, or other transactions to which Section 424(a) of the Code applies, provided such substitutions and assumptions are permitted by Section 424 of the Code and the regulations promulgated thereunder. The number of Shares reserved pursuant to Section 4(a) may be increased by the corresponding number of Awards assumed and, in the case of a substitution, by the net increase in the number of Shares subject to Awards before and after the substitution.

Section 5. Adjustments to Shares Subject to the Plan. If any change is made to the Shares by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Shares as a class without the Company’s receipt of consideration, appropriate adjustments shall be made to (i) the maximum number and/or class of securities issuable under the Plan, (ii) the number and/or class of securities and/or the price per Share covered by outstanding Awards under the Plan, (iii) the Maximum Annual Participant Award, and (iv) the maximum number of Shares that can be granted as Incentive Stock Options under the Plan. The Committee may also make adjustments described in (i)-(iv) of the previous sentence in the event of any distribution of assets to shareholders other than a normal cash dividend. In determining adjustments to be made under this Section 5, the Committee may take into account such factors as it deems appropriate, including the restrictions of applicable law and the potential tax consequences of an adjustment, and in light of such factors may make adjustments that are not uniform or proportionate among outstanding Awards. Adjustments, if any, and any determinations or interpretations, including any determination of whether a distribution is other than a normal cash dividend, made by the Committee shall be final, binding and conclusive. For purposes of this Section 5, conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.”

Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Award.

PART II

TERMS APPLICABLE TO ALL AWARDS

Section 6. General Eligibility.

(a) Awards. Awards may be granted to Participants who are Partners, Directors or Consultants; provided however that Incentive Stock Options may only be granted to Partners.

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(b) Maximum Annual Participant Award. The aggregate number of Shares with respect to which an Award or Awards may be granted to any one Participant in any one taxable year of the Company (the “Maximum Annual Participant Award”) shall not exceed 5,000,000 shares of Common Stock (increased, proportionately, in the event of any stock split or stock dividend with respect to the Shares). If an Option is in tandem with a SAR, such that the exercise of the Option or SAR with respect to a Share cancels the tandem SAR or Option right, respectively, with respect to each Share, the tandem Option and SAR rights with respect to each Share shall be counted as covering but one Share for purposes of the Maximum Annual Participant Award.

(c) No Employment/Service Rights. Nothing in the Plan shall confer upon any Participant the right to an Award or to continue in service as a Partner or Consultant for any period of specific duration, or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary employing or retaining such person), or of any Participant, which rights are hereby expressly reserved by each, to terminate such person’s services at any time for any reason, with or without cause.

Section 7. Procedure for Exercise of Awards; Rights as a Shareholder.

(a) Procedure. An Award shall be exercised when written, electronic or verbal notice of exercise has been given to the Company, or the brokerage firm or firms approved by the Company to facilitate exercises and sales under this Plan, in accordance with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised has been received by the Company or the brokerage firm or firms, as applicable. The notification to the brokerage firm shall be made in accordance with procedures of such brokerage firm approved by the Company. Full payment may, as authorized by the Committee, consist of any consideration and method of payment allowable under Section 7(b) of the Plan. The Company shall issue (or cause to be issued) such share certificate promptly upon exercise of the Award. In the event that the exercise of an Award is treated in part as the exercise of an Incentive Stock Option and in part as the exercise of a Nonqualified Stock Option pursuant to Section 10(a), the Company shall issue a share certificate evidencing the Shares treated as acquired upon the exercise of an Incentive Stock Option and a separate share certificate evidencing the Shares treated as acquired upon the exercise of a Nonqualified Stock Option, and shall identify each such certificate accordingly in its share transfer records. No adjustment will be made for a dividend or other right for which the record date is prior to the date the share certificate is issued, except as provided in Section 5 of the Plan.

(b) Method of Payment. The consideration to be paid for any Shares to be issued upon exercise or other required settlement of an Award, including the method of payment, shall be determined by the Committee at the time of settlement and which forms may include: (i) with respect to an Option, a request that the Company or the designated brokerage firm conduct a cashless exercise of the Option; (ii) cash; (iii) tender of shares of Common Stock owned by the Participant; and (iv) withholding of shares of Common Stock that otherwise would be issued

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upon exercise or settlement of the Award, in each case, in accordance with rules established by the Committee from time to time. Shares used to pay the exercise price shall be valued at their Fair Market Value on the exercise date.

(c) Withholding Obligations. To the extent required by applicable federal, state, local or foreign law, the Committee may and/or a Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise with respect to any Incentive Stock Option, Nonqualified Stock Option, SAR, Restricted Stock or Restricted Stock Units, or any sale of Shares. The Company shall not be required to issue Shares or to recognize the disposition of such Shares until such obligations are satisfied. These obligations may be satisfied by having the Company withhold a portion of the Shares that otherwise would be issued to a Participant under such Award or by tendering Shares previously acquired by the Participant in accordance with rules established by the Committee from time to time. The value of the Shares so withheld or tendered may not exceed the employer’s minimum required tax withholding rate.

(d) Shareholder Rights. Except as otherwise provided in this Plan, until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the share certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares subject to the Award, notwithstanding the exercise of the Award.

(e) Non-Transferability of Awards. An Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in exchange for consideration, except that an Award may be transferred by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant; unless the Committee permits further transferability, on a general or specific basis, in which case the Committee may impose conditions and limitations on any permitted transferability.

Section 8. Expiration of Awards.

(a) Expiration, Termination or Forfeiture of Awards. Unless otherwise provided in this Plan or in the applicable Award Agreement or any severance or employment agreement, unvested Awards granted under this Plan shall expire, terminate, or otherwise be forfeited immediately upon termination of a Participant’s Active Status for any reason, and vested Awards granted under this Plan shall expire, terminate, or otherwise be forfeited as follows:

(i) three (3) months after the date the Company delivers a notice of termination of Active Status for a Participant other than a Non-Employee Director, other than in circumstances covered by (ii), (iii), (iv) or (v) below; or thirty-six (36) months after the date a Non-Employee Director ceases to be a Director, other than in circumstances covered by (ii) and (iv) below;

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(ii) immediately upon termination of a Participant’s Active Status for Misconduct;

(iii) twelve (12) months after the date on which a Participant other than a Non-Employee Director ceased performing services as a result of his or her total and permanent Disability;

(iv) twelve (12) months after the date of the death of a Participant whose Active Status terminated as a result of his or her death; and

(v) thirty-six (36) months after the date on which the Participant ceased performing services as a result of Retirement.

(b) Extension of Term. Notwithstanding subsection (a) above, the Committee shall have the authority to extend the expiration date of any outstanding Option, other than an Incentive Stock Option, or SAR in circumstances in which it deems such action to be appropriate (provided that no such extension shall extend the term of an Option or SAR beyond the date on which the Option or SAR would have expired if no termination of the Partner’s Active Status had occurred).

Section 9. Effect of Change of Control. Notwithstanding any other provision in the Plan to the contrary, the following provisions shall apply unless otherwise provided in the most recently executed agreement between the Participant and the Company, or specifically prohibited under applicable laws, or by the rules and regulations of any applicable governmental agencies or national securities exchanges or quotation systems.

(a) Acceleration. Awards of a Participant shall be Accelerated (as defined in Section 9(b) below) as follows:

(i) With respect to Non-Employee Directors, upon the occurrence of a Change of Control;

(ii) With respect to any Partner, upon the occurrence of a Change of Control described in Section 2(g)(i);

(iii) With respect to any Partner who Resigns for Good Reason or whose Active Status is terminated within one year after a Change of Control described in Section 2(g)(ii) or (iii);

(iv) With respect to any Partner, upon the occurrence of a Change of Control described in Section 2(g)(iv) in connection with which each Award is not assumed or an equivalent award substituted by such successor entity or a parent or subsidiary of such successor entity; and

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(v) With respect to any Partner who Resigns for Good Reason or whose Active Status is terminated within one year after a Change of Control described in Section 2(g)(iv) in connection with which each Award is assumed or an equivalent award substituted by the successor entity or a parent or subsidiary of such successor entity.

(b) Definition. For purposes of this Section 9, Awards of a Participant being “Accelerated” means, with respect to such Participant:

(i) any and all Options and SARs shall become fully vested and immediately exercisable, and shall remain exercisable throughout their entire term;

(ii) any restriction periods and restrictions imposed on Restricted Stock or Restricted Stock Units that are not performance-based shall lapse;

(iii) any restriction periods and restrictions imposed on Restricted Stock or Restricted Stock Units that are performance-based (and for which the performance period has not yet been completed) shall lapse, with such performance-based criteria deemed achieved at the target level specified in the Award Agreement; and

(iv) the restrictions and deferral limitations and other conditions applicable to any other Awards shall lapse, and such other Awards shall become free of all restrictions, limitations or conditions and become fully vested and transferable to the full extent of the original grant.

PART III

SPECIFIC TERMS APPLICABLE TO OPTIONS, STOCK AWARDS AND SARS

Section 10. Grant, Terms and Conditions of Options.

(a) Designation. Each Option shall be designated in an Award Agreement as either an Incentive Stock Option or a Nonqualified Stock Option. However, notwithstanding such designations, to the extent that the aggregate Fair Market Value of the Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Partner during any calendar year (under all plans of the Company) exceeds $100,000, such excess Options shall be treated as Nonqualified Stock Options. Options shall be taken into account in the order in which they were granted.

(b) Terms of Options. The term of each Incentive Stock Option shall be no more than ten (10) years from the date of grant. However, in the case of an Incentive Stock Option granted to a Participant who, at the time the Option is granted, owns Shares representing more than ten percent (10%) of the voting power of all classes of shares of the Company or any Parent or Subsidiary, the term of the Option shall be no more than five (5) years from the date of

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grant. The term of all Nonqualified Stock Options shall be no more than ten (10) years from the date of grant.

(c) Option Exercise Prices.

(i) The per Share exercise price under an Incentive Stock Option shall be as follows:

(A) If granted to a Partner who, at the time of the grant of such Incentive Stock Option, owns shares representing more than ten percent (10%) of the voting power of all classes of shares of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant.

(B) If granted to any other Partner, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

(ii) The per Share exercise price under a Nonqualified Stock Option or SAR shall be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant.

(iii) In no event shall the Board or the Committee be permitted to Reprice an Option after the date of grant without shareholder approval.

(d) Vesting. Unless otherwise provided in the applicable Award Agreement or any written severance or employment agreement between the Company and the Optionee, to the extent Options vest and become exercisable in increments, such Options shall cease vesting as of the date of the Optionee’s Disability or termination of such Optionee’s Active Status (or, for Directors, as of the date the Director ceases to serve as a Director) for reasons other than Retirement or death, and, in case of such Optionee’s termination of Active Status (or, for Directors, the Director’s ceasing to serve as a Director) due to Retirement or death, such Options shall become fully vested and immediately exercisable.

(e) Substitution of SARs for Options. Notwithstanding anything in this Plan to the contrary, if the Company is required to or elects to record as an expense in its consolidated statements of earnings the cost of Options pursuant to ASC 718 or a similar accounting requirement, the Committee shall have the sole discretion to substitute, without receiving Participants’ permission, SARs paid only in stock for outstanding Options; provided, the terms of the substituted SARs are the same as the terms of the Options, the number of shares underlying the number of SARs equals the number of shares underlying the Options and the difference between the Fair Market Value of the underlying Shares and the grant price of the SARs is equivalent to the difference between the Fair Market Value of the underlying shares and the exercise price of the Options.

(f) Exercise. Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Committee at the time of grant, and as are

16

permissible under the terms of the Plan. An Option may not be exercised for a fraction of a Share.

(g) One-Time Option Exchange Offer. Notwithstanding any other provision of the Plan to the contrary, upon approval of the Company’s shareholders, the Committee may provide for, and the Company may implement, a one-time-only option exchange offer, pursuant to which certain outstanding Options could, at the election of the person holding such Option, be tendered to the Company for cancellation in exchange for the issuance of a lesser amount of Options with a lower exercise price, provided that such one-time-only option exchange offer is commenced within six months of the date of such shareholder approval.

Section 11. Grant, Terms and Conditions of Stock Awards.

(a) Designation. Restricted Stock or Restricted Stock Units may be granted either alone, in addition to, or in tandem with other Awards granted under the Plan. Restricted Stock or Restricted Stock Units may include dividend or dividend equivalent rights, as may be specified in the Award Agreement; provided, however, that dividends or dividend equivalent rights shall not be paid currently with respect to any Shares underlying awards of Restricted Stock or Restricted Stock Units that vest or are earned on the basis of Performance Criteria, except to the extent that such Shares are earned. After the Committee determines that it will offer Restricted Stock or Restricted Stock Units, it will advise the Participant in writing or electronically, by means of an Award Agreement, of the terms, conditions and restrictions, including vesting, if any, related to the offer, including the number of Shares that the Participant shall be entitled to receive or purchase, the price to be paid, if any, and, if applicable, the time within which the Participant must accept the offer. The offer shall be accepted by execution of an Award Agreement or as otherwise directed by the Committee. Payment, if any, of Restricted Stock and Restricted Stock Units may be made as permitted by Section 7(b). Restricted Stock Units can be settled in Shares valued at Fair Market Value on the settlement date, in cash, or partly in Shares and partly in cash, as the Committee shall deem appropriate. The term of each award of Restricted Stock or Restricted Stock Units shall be at the discretion of the Committee.

(b) Performance Criteria. Restricted Stock and Restricted Stock Units granted pursuant to the Plan that are intended to qualify as “performance based compensation” under Section 162(m) of the Code shall be subject to the attainment of performance goals relating to the Performance Criteria selected by the Committee and specified at the time such Restricted Stock and Restricted Stock Units are granted. For purposes of this Plan, “Performance Criteria” means one or more of the following (as selected by the Committee): (i) cash flow; (ii) earnings per share, as adjusted for any stock split, stock dividend or other recapitalization; (iii) earnings measures; (iv) return on equity; (v) total shareholder return; (vi) share price performance, as adjusted for any stock split, stock dividend or other recapitalization; (vii) return on capital; (viii) revenue; (ix) income; (x) profit margin; (xi) return on operating revenue; (xii) brand recognition/acceptance; (xiii) customer satisfaction; (xiv) productivity; (xv) expense targets; (xvi) market share; (xvii) cost control measures; (xiii) inventory turns or cycle time; (xix) balance sheet metrics; or (xx) strategic initiatives; provided, however, that “Performance Criteria” shall include any derivations of these Performance Criteria (e.g., income shall include

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pre-tax income, net income, operating income, etc.). Any of these Performance Criteria may be used to measure the performance of the Company as a whole or any business unit or division of the Company. Performance Criteria may be stated in absolute terms or relative to comparison companies or indices to be achieved during a period of time.

The Committee may provide, at the time it establishes performance goals for any award, that any evaluation of performance shall include or exclude any one or more of the following events that occurs during a performance period: (i) significant acquisitions or dispositions of businesses or assets by the Company, (ii) litigation or claim judgments or settlements; (iii) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results; (iv) any reorganization and restructuring programs; (v) extraordinary items as described in Accounting Standards Codification section 225-20-20; (vi) significant, non-recurring charges or credits; and (vii) foreign exchange rates. To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that satisfies the requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C) of the Code, or any successor provision thereto.

(c) Vesting. Unless the Committee determines otherwise, the Award Agreement shall provide for the forfeiture of the non-vested Shares underlying Restricted Stock or Restricted Stock Units upon the termination of a Participant’s Active Status. To the extent that the Participant purchased the Shares granted under such Restricted Stock or Restricted Stock Units and any such Shares remain non-vested at the time the Participant’s Active Status terminates, the termination of Active Status shall cause an immediate sale of such non-vested Shares to the Company at the original price per Share paid by the Participant.

(d) Plan Minimum Vesting or Issuance Requirements. Subject to the exceptions in Section 11(e), all Restricted Stock or Restricted Stock Units subject to vesting or issuance solely based on a Participant’s continuing in Active Status may not vest in full or be issued earlier (except if accelerated pursuant to Section 9 or pursuant to any severance or employment agreements entered into by and between the Company and any Participant) than the three-year anniversary of the grant date, and all Restricted Stock or Restricted Stock Units subject to vesting or issuance based in whole or in part on performance conditions and/or the level of achievement versus such performance conditions shall be subject to a performance period of not less than one year.

(e) Exception to Plan Minimum Vesting or Issuance Requirements.

(i) Restricted Stock or Restricted Stock Units that result in issuing up to 5% of the maximum aggregate number of Shares authorized for issuance under the Plan (the “5% Limit”) may be granted to any one or more Partners, Directors or Consultants without respect to the Plan Minimum Vesting or Issuance Requirements.

(ii) All Restricted Stock or Restricted Stock Units that have their vesting or issuance discretionarily accelerated, other than pursuant to (A) Change of Control as described

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in Section 9 (including vesting acceleration in connection with employment termination following such event), (B) the death of the Participant, (C) the Disability of the Participant, or (D) the Participant’s Retirement, are subject to the 5% Limit.

(iii) Notwithstanding the foregoing, the Committee may accelerate the vesting of Restricted Stock or Restricted Stock Units such that the Plan Minimum Vesting Requirements are still satisfied, without such vesting acceleration counting toward the 5% Limit.

(iv) The 5% Limit applies in the aggregate to Restricted Stock or Restricted Stock Unit grants that do not satisfy Plan Minimum Vesting or Issuance Requirements and to the discretionary acceleration of Awards.

Section 12. Grant, Terms and Conditions of SARs.

(a) Grants. The Committee shall have the full power and authority, exercisable in its sole discretion, to grant SARs to selected Participants. The Committee is authorized to grant both tandem stock appreciation rights, consisting of SARs with underlying Options (“Tandem SARs”), and stand-alone stock appreciation rights (“Stand-Alone SARs”) as described below. The terms of SARs shall be at the discretion of the Committee. In no event shall the Board or the Committee be permitted to Reprice a SAR after the date of grant without shareholder approval.

(b) Tandem SARs.

(i) Participants may be granted a Tandem SAR, exercisable upon such terms and conditions as the Committee shall establish, to elect between the exercise of the underlying Option for Shares or the surrender of the Option in exchange for a distribution from the Company in an amount equal to the excess of (A) the Fair Market Value (on the Option surrender date) of the number of Shares in which the Participant is at the time vested under the surrendered Option (or surrendered portion thereof) over (B) the aggregate exercise price payable for such vested Shares.

(ii) No such Option surrender shall be effective unless it is approved by the Committee, either at the time of the actual Option surrender or at any earlier time. If the surrender is so approved, then the distributions to which the Participant shall become entitled under this Section 12(b) may be made in Shares valued at Fair Market Value (on the Option surrender date), in cash, or partly in Shares and partly in cash, as the Committee shall deem appropriate.

(iii) If the surrender of an Option is not approved by the Committee, then the Participant shall retain whatever rights he or she had under the surrendered Option (or surrendered portion thereof) on the Option surrender date and may exercise such rights at any time prior to the later of (A) five (5) business days after the receipt of the rejection notice or (B) the last day on which the Option is otherwise exercisable in accordance with the terms of the

19

instrument evidencing such Option, but in no event may such rights be exercised more than ten (10) years after the date of the Option grant.

(c) Stand-Alone SARs.

(i) A Participant may be granted a Stand-Alone SAR not tied to any underlying Option under Section 10 of the Plan. The Stand-Alone SAR shall cover a specified number of Shares and shall be exercisable upon such terms and conditions as the Committee shall establish. Upon exercise of the Stand-Alone SAR, the holder shall be entitled to receive a distribution from the Company in an amount equal to the excess of (A) the aggregate Fair Market Value (on the exercise date) of the Shares underlying the exercised right over (B) the aggregate base price in effect for those Shares.

(ii) The number of Shares underlying each Stand-Alone SAR and the base price in effect for those Shares shall be determined by the Committee at the time the Stand-Alone SAR is granted. In no event, however, may the base price per Share be less than the Fair Market Value per underlying Share on the grant date.

(iii) The distribution with respect to an exercised Stand-Alone SAR may be made in Shares valued at Fair Market Value on the exercise date, in cash, or partly in Shares and partly in cash, as the Committee shall deem appropriate.

(iv) The term of all Stand-Alone SARs shall be no more than ten (10) years from the date of grant.

(d) Exercised SARs. The Shares issued in settlement of any SARs exercised under this Section 12, and the Shares underlying any exercised SARs that were not issued in settlement of the SAR, shall not be available for subsequent issuance under the Plan.

PART IV

TERM OF PLAN AND SHAREHOLDER APPROVAL

Section 13. Term of Plan. The Plan was originally effective as of the Original Effective Date. It shall continue in effect until the tenth anniversary of the Restated Effective Date or until terminated under Section 14 of the Plan or extended by an amendment approved by the shareholders of the Company pursuant to Section 14(a).

Section 14. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board or the Committee may amend or terminate the Plan from time to time in such respects as the Board may deem advisable (including, but not limited to amendments which the Board deems appropriate to enhance the Company’s ability to claim deductions related to stock option exercises); provided that to the extent required by the Code or the rules of Nasdaq or the SEC, shareholder approval shall be

20

required for any amendment of the Plan. Subject to the foregoing, it is specifically intended that the Board or Committee may amend the Plan without shareholder approval to comply with legal, regulatory and listing requirements and to avoid unanticipated consequences deemed by the Committee to be inconsistent with the purpose of the Plan or any Award Agreement.

(b) Participants in Foreign Countries. The Committee shall have the authority to adopt such modifications, procedures, and sub-plans as may be necessary or desirable to comply with provisions of the laws of foreign countries in which the Company or its Subsidiaries may operate to assure the viability of the benefits from Awards granted to Participants performing services in such countries and to meet the objectives of the Plan.

(c) Effect of Amendment or Termination. Any amendment or termination of the Plan shall not impair the rights of holders of Awards and such Awards shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Participant and the Committee, which agreement must be in writing and signed by the Participant and the Company.

Section 15. Shareholder Approval. The effectiveness of the Plan is subject to approval by the shareholders of the Company in accordance with applicable Nasdaq rules.

PART V

OTHER PROVISIONS

Section 16. No Liability of Company. The Company and any Subsidiary that is in existence or hereafter comes into existence shall not be liable to a Participant or any other person as to: (i) the non-issuance or sale of Shares as to which the Company has been unable to obtain from any regulatory body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder; and (ii) any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Award granted hereunder.

Section 17. Non-Exclusivity of Plan. Neither the adoption of this Plan by the Board nor the submission of this Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or the Committee to adopt such other incentive arrangements as either may deem desirable, including without limitation, the granting of Restricted Stock, Restricted Stock Units, or Options otherwise than under this Plan or an arrangement not intended to qualify under Code Section 162(m), and such arrangements may be either generally applicable or applicable only in specific cases.

Section 18. Governing Law. This Plan and any agreements or other documents hereunder shall be interpreted and construed in accordance with the laws of the state of Washington and applicable federal law. Any reference in this Plan or in the agreement or other document evidencing any Award to a provision of law or to a rule or regulation shall be deemed to include any successor law, rule or regulation of similar effect or applicability.

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Howard Schultz, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2011 of Starbucks Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 6, 2011

/s/ Howard Schultz

Howard Schultz

chairman, president and chief executive officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Troy Alstead, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended April 3, 2011 of Starbucks Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 6, 2011

/s/ Troy Alstead

Troy Alstead

chief financial officer

and chief administrative officer

EX-32

Exhibit 32

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Starbucks Corporation (“Starbucks”) on Form 10-Q for the fiscal quarter ended April 3, 2011, as filed with the Securities and Exchange Commission on May 6, 2011 (the “Report”), Howard Schultz, chairman, president and chief executive officer, and Troy Alstead, chief financial officer and chief administrative officer of Starbucks, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Starbucks.

May 6, 2011

/s/ Howard Schultz

Howard Schultz

chairman, president and chief executive officer

May 6, 2011

/s/ Troy Alstead

Troy Alstead

chief financial officer and chief administrative officer