Starbucks Coffee by Clara Lho'

Annual Report 2013

Nine out of ten people like chocolate, the tenth is a liar.

Vision and Strategy Every day Starbucks Coffee is becoming an organization that is more and more focused on our customers and their needs. Over the past two years, we have articulated an explicitvision of what we must do to transform Starbucks Coffee into anew model Coffee company. We will be: Clear; we have a clear strategy and are clear on the challenges ahead. Most importantly, we are clear on what we need to do to meet those challenges. Simple; in the services we offer, in how we relate to our customers and in our internal processes. First; we will be the first choice of our customers to provide technology that they can count on. True; to our core values and legacy of service. Profitable; in our business. Proud; of our 125-year history and our role as a responsible corporate citizen.

Financial Highlights As at and for the years ended June 30, 2012 and 2011 (in thousands of Canadian dollars, except per share amounts)

2012

2011

$ 162,230 43,025 31,482 20,675 30,057 28,559

$ 169,286 43,405 44,449 30,381 30,381 23,939

$ 147,998 271,241 240,962

$ 128,548 270,175 236,231

$ 1.51 0.73 1.06 0.56 8.46

$ 1.52 1.07 1.07 0.56 8.30

9.1 8.7 12.9

7.3 13.3 18.9

Results

Operating revenue Earnings from operations Earnings before income taxes Net earnings Net earnings excluding impairment charge Cash flows from operating activities

Financial Position Working capital Total assets Shareholders’ equity

Per Common Share

Earnings from operations Net earnings Net earnings excluding impairment charge Dividends declared and paid Shareholders’ equity

Financial Ratios

Working capital Return on average shareholders’ equity Pre-tax return on average capital employed

Adjusted Operating Profit in millions of dollars

net Earnings from continuing operations in millions of dollars

Operating Revenue in millions of dollars

essential to operating in a truly global way as we were determined to do, so that we operated in many places as if we were in one place with common purpose and common destiny. All that we have done since has been focused on building and reinforcing that corporate character. By character I mean our impulse to action, to make live what we think is important in the Company. Indeed, this report takes a closer look at elements of our character today. This is not just about what we think or believe, but about how we actually operate in the Company. Our Company Code articulates values to state clearly what we stand for. But these have no meaning unless translated into action. 2013 demonstrates the power of that.

Chairman & Ceo Message Dear Fellow Shareholders, We had called together about 70 of our top executives and managers from around the world. It was August, 1999, and we had decided to remake the Company’s entire organizational structure and approach to the world. We saw the world changing around us and decided that to create the unique competitive differentiation we wanted and to serve our customers uniquely, we needed to globally integrate all of our worldwide knowledge and customer service capability to be delivered without borders as a constraint.

Choices reveal character. So what kind of year was 2012? It was a year that saw us exceed half a billion dollars in sales for the first time, by a lot. The year included both the highest sales month and highest sales quarter in the Company’s history; close to the highest net income ever; the highest EBITDA by a considerable margin. Operations generated almost $28 million in cash, partly driven by dramatic improvement in working capital even in the face of an $85 million sales increase. Our balance sheet benefited from about $12 million less net debt with a much improved net debt-to-total-capital ratio and an adjusted EBITDA leverage ratio below two times. Our sales were up over 18% and reported profit was up almost 33%. Quite a year financially, and yet...

Character is destiny. This meeting had far-reaching and dramatic effects on our Company. Out of it came the Destination Statement that is still our faithful compass and constant touchstone today. In the years since, we’ve been working consistently to perfect what this calls on us to be, because we know our destiny is directly tied to how we face our world as a single worldwide company. I note this piece of history because in the course of my charge to the Company that day, in order to make clear to people the profoundly transformative nature of our undertaking, I went through the following litany (adapted from and with apologies to the “Sayings of Buddha”): Thoughts become words; words become actions; actions become habit; habit becomes character; and character is destiny. I particularly focused on the end of this—character is destiny—because that day was precisely about changing our corporate character, that is, who we are and how we behave in the Company and as a Company. Changing our character was

And yet, the real story of the year for me, and the promise for you, is what this dramatically demonstrates about the strength of Company character we’ve been working hard to build. That’s all important because character will prevail long after the specifics of 2007 are forgotten, and it’s character that will take us where we want to go

and allow us to create our future. This is particularly worthy of note as we look back on 2012 and the few years that preceded it. It was character that enabled us to weather the tough years of 2004 and 2005 and to achieve as we did in 2010 and 2011. The unhappiness of these former two years was largely driven by external events—particularly the unprecedented price volatility of crude oil, derivatives of which are among our largest raw material inputs. There will always be things over which one has no control. But how one reacts is always in one’s power and control, and it is in these choices that character is revealed. The constant quandary of the wish. The success of 2010 and 2011 was created out of the troubles of 2004 and 2005 by: being willing to take a cold, clear-eyed look at realities; being unafraid to make the changes required and having the tenacity to assure that these created progress; having the courage to stick to fundamental principles, even when it would have ser-

ved short-term interests to walk away; being willing to challenge ourselves with high expectations and demanding goals; holding ourselves accountable; being pragmatic enough to deal with harsh facts as we found them, but not surrendering the dream of what we had chosen to be as a company. For me, the heart of this Company character is captured in something I call the Quandary of the Wish. It’s been my unspoken guide for a long time, and what we’ve become as a company flows from it and the belief, hard work, and commitment of our people all over the world. It’s a quandary because it speaks of an inherent contradiction that all organizations must grapple with to create long-term success. To succeed, we must deal with the world as we find it, not as we wish it were. But to know what is progress, we also must be unafraid to say what we wish for, unconstrained by the limitations of current reality. In this quandary lies the root of our ability to act today in a way that will create the tomorrow we want.

Howard Schultz

We talk every day about the wish that’s embodied in our Destination and about the realities we have to deal with to have this wish turn into the future we choose. We’ve come a long way in the size and global reach of our Company, in how we relate to the world of our customers, in how we collaborate and share common cause in the Company around the globe. This is what has made us the Company we’ve become, and this is what will sustain us in the future. And that future is brighter than ever. We are poised today to create a future of new opportunity, new promise, and lives filled with new growth. On behalf of the company, I send thanks to all of you, shareholders and associates alike, for your support and loyalty to our Company on its journey. It is the Company character we’ve built on this journey that is the rock on which our future stands. Best regards,

Howard Schultz Chief Executive Officer

Starbucks History Starbucks has come a long way since it’s first Seattle store in 1971. So it makes sense that last year it decided to task its brand team with redesigning the logo.

The Starbucks logo that most of us grew up with is made up of a siren, a circle, the colour green and the name “Starbucks Coffee.” As an iconic brand, a redesign of a logo could potentially go very wrong. There’s not much to change so how could it be changed to great effect?

Steve Murray, Content Manager of Brand Strategy and Expression at Starbucks, worked as lead writer on the team that spent hours, weeks and months creating a new logo and brand identity for Starbucks and he shared what they did at Starbucks to a full room of retail marketers at the recent shop.org conference.

After determining the core values that Starbucks stood for, the brand team started to re-evaluate the Starbucks’ logo by looking at the logos of the top 50 retailers around the globe. They then picked out the green ones and used them to test against to ensure the logo stuck out from them.

But how do you improve and simplify a logo that is only made of four parts and one basic colour? And why was it important to do so?

The design brainstorming filled a room with images and Starbucks had 6-7 designers working full time to look at all the potential options. Finally the team settled on something that removed the Starbucks name and brought the Siren figure to the forefront. They called it “liberating the siren” and they adjusted the eyes, hair, nose, etc. until she had the right look. Though those changes seemed small, they could radically change the look and feel. After one change, the siren looked like Madonna, another time she looked like Lady Gaga, but the brand team finally came to a decision that embodied the Starbucks brand. The team then used a small panel of customers to run the different versions by them and how it would play out in the world. Even though they believed in the new logo, the brand team had to present the final logo to Howard Schultz who (thankfully) simply said “Yep. Go. Do it.” Now the hard work really began. After the logo was created, the team had to look at typography, materials, voice, colours used for brand expressions, photography, and store design. They had to take the new look they created and reflect it back to customers at all touch points. Sharing the the new branding across the company Once this is all decided, how do you then share this brand work with the 5000 Starbucks’ partners? The best solution for Starbucks was to have brand days. It got a warehouse space of 20,000 square feet and created a walk through experience of the brand. Not only did it create the brand in a tangible way but they could use it to explain its business case. The visceral experiences of smell and taste came from following the perspective of the beans from the moment they are picked until the last stage of roasting. They also showed the final logo and all the pages of inspirations that got the team to it so people could see the journey. People were also able to leave their imprint with notes on cup curtains and green thumb prints that formed a rendition of the new logo. Taking the logo to the masses Once Starbucks employees were introduced to the new branding, social media was a big part of launching it to the world. The comments were by and large positive especially from the design community. The Starbucks voice didn’t shift much but it was pushed

to incorporate community leaders into the conversation. The new branding set the way and path to define the brand but isn’t the final destination but is rather the beginning. Anything that comes in for review now is tested against the brand characteristics (like soulful, elegant, considered, expressive, etc) and must have at least three of them incorporated in order for it to be launched. One size doesn’t fit all. This includes store design which incorporates the area it’s in such as Roy Street, Seattle, Fukuoka, and the Reclamation drive thru in Seattle, which uses shipping containers to create new “pop-up” drive-throughs. Logo rebrand is just the face of it but it’s about more than that. Now with a new logo Starbucks can branch out beyond coffee. New products include Starbucks refreshers, Evolution juice, Starbucks reserve coffee and they have acquired businesses such as the bakery chain, La Boulange. So though the logo doesn’t SEEM that different, I think it’s allowed Starbucks to put on a new mindset and allow itself to branch out and become something bigger. One would argue they are big enough, but with the ability to diversify, the Starbucks brand won’t just bring coffee to mind but will be an experience that will touch more parts of our day other than the morning jolt of coffee we’re all guilty of indulging in.

Partnerships

Starbucks has agreed to a partnership with Apple to collaborate on selling music as part of the «coffeehouse experience». In October 2006, Apple added a Starbucks Entertainment area to the iTunes Store, selling music similar to that played in Starbucks stores. In September 2007 Apple announced that customers would be able to browse the iTunes Store at Starbucks via Wi-Fi in the US (with no requirement to login to the Wi-Fi network), targeted at iPhone, iPod touch, iPad, and MacBook users. The iTunes Store will automatically detect recent songs playing in a Starbucks and offer users the opportunity to download the tracks. Some stores feature LCD screens with the artist name, song, and album information of the current song playing. This feature has been rolled out in Seattle, New York City, and the San Francisco Bay Area, and was offered in limited markets during 2007–2008.During the fall of 2007, Starbucks also began to sell digital downloads of certain albums through iTunes. Starbucks gave away 37 different songs for free download through iTunes as part of the «Song of the Day» promotion in 2007, and a «Pick of the Week» card is now available at Starbucks for a free song download. Since 2011 Starbucks also gives away a «Pick of the Week» card for app downloads from the App Store. A Starbucks app is available in the iPhone App Store.

Starting on June 1, 2009, the MSNBC morning news program Morning Joe has been presented as «brewed by Starbucks» and the show’s logo changed to include the company logo. Although the hosts have previously consumed Starbucks coffee on air «for free» in the words of MSNBC president Phil Griffin, it was not paid placement at that time.The move was met with mixed reactions from rival news organizations, viewed as both a clever partnership in an economic downturn and a compromise of journalistic standards.Starbucks and Kraft Foods entered into a partnership in 1998 to sell Starbucks products in the Mondelez grocery stores owned by the latter. Starbucks claimed that Kraft did not sufficiently promote its products and offered Kraft US$750 million to terminate the agreement; however, Kraft declined the offer, but Starbucks proceeded with the termination anyway. In mid-November 2013, an arbitrator awarded ordered Starbucks to pay a fine of US$2.8 billion to Kraft spin-off Mondelez International for its premature unilateral termination of the agreement.

products Starbucks is primarily known for selling coffee, but also sells other hot and cold beverages, pastries, sandwiches and other snacks. A «Skinny» line of drinks rolled out in 2008, offering lower-calorie and sugar-free versions of the company’s offered drinks which use skim milk and can be sweetened by a choice of natural sweeteners (such as Sugar in the Raw, Agave Syrup, or honey), artificial sweetener (such as Sweet’N Low, Splenda, Equal), or one of the company’s sugar-free syrup flavors.Starbucks stopped using milk originating from rBGH-treated cows in 2007. In June 2009, the company announced that it would be overhauling its menu and selling salads and baked goods without high-fructose corn syrup or artificial ingredients. This move was expected to attract health- and cost-conscious consumers and will not affect prices. Starbucks introduced a new line of instant coffee packets, called VIA «Ready Brew», in March 2009. It was first unveiled in New York City with subsequent testing of the product also in Seattle, Chicago and London. The first two VIA flavors include Italian Roast and Colombia, which were then rolled out in October 2009, across the U.S. and Canada with Starbucks stores promoting the product with a blind «taste challenge» of the instant versus fresh roast, in which many people could not tell the difference between the instant and fresh brewed coffee. Analysts speculated that by introducing instant coffee, Starbucks would devalue its own brand. Starbucks began selling beer and wine at at some US stores in 2010. As of April 2012, it is available at seven locations and others have applied for licenses. In 2011, Starbucks introduced its largest cup size, the Trenta, which can hold 31 ounces. In September 2012, Starbucks announced the Verismo, a consumer-grade single-serve coffee machine that uses sealed plastic cups of coffee grounds, and a «milk pod» for lattes. On November 10, 2011, Starbucks Corporation announced that it had bought juice company Evolution Fresh for $30 million in cash and plans to start a chain of juice bars starting in around middle of 2012, venturing into territory staked out by Jamba Inc. Its first store released in San Bernardino, California and plans for a store in San Francisco will be

launched in early 2013. In 2012, Starbucks began selling a line of iced Starbucks Refresher beverages in its stores which contain an extract from green arabica coffee beans. The beverages are fruit flavored and contain caffeine but are known for great taste with «none of the coffee flavor». Starbucks’ green coffee extraction process involves soaking the beans in water. On June 25, 2013, Starbucks began to post calorie counts on menus for drinks and pastries in all of their U.S. stores

the green Starbucks Environmental impact In 1999, Starbucks started «Grounds for your Garden» to make their business environmentally friendlier. This gives leftover coffee grounds to anyone requesting it for composting. Although not all stores and regions participate, customers can request and lobby their local store to begin the practice. In 2004, Starbucks began reducing the size of their paper napkins and store garbage bags, and lightening their solid waste production by 816.5 t (1,800,000 lb).In 2008, Starbucks was ranked No.15 on the U.S. Environmental Protection Agency’s list of Top 25 Green Power Partners for purchases of renewable energy. In October 2008, The Sun newspaper reported that Starbucks was wasting 23.4 million liters (6.2 million US gal) of water a day by leaving a tap constantly running for rinsing utensils in a ‘dipper well’ in each of its stores, but this is often required by governmental public health code. In June 2009, in response to concerns over its excessive water consumption, Starbucks re-evaluated its use of the dipper well system. In September 2009, company-operated Starbucks stores in Canada & the United States successfully implemented a new water saving solution that meets government health standards. Different types of milk are given a dedicated spoon that remains in the pitcher and the dipper wells were replaced with push button metered faucets for rinsing. This will reportedly save up to 150 US gal (570 l) of water per day in every store.

Recycling Starbucks began using 10% recycled paper in its beverage cups in 2004—the company claimed that the initiative was the first time that recycled material had been used in a product that came into direct contact with a food or beverage.Allen Hershkowitz of the Natural Resources Defense Council called the 10% content «minuscule,»but Starbucks received the National Recycling Coalition Recycling Works Award in 2005 for the initiative. In a 2008 media article, Starbucks’ vice president of corporate social responsibility acknowledged that the company continued to struggle with environmental responsibility, as none of its cups were recyclable and stores did not have recycling bins. At the time that the article was published, Starbucks gave customers who brought in their own reusable cup a 10cent discount, in addition to using corrugated cup sleeves made from 85 percent post-consumer recycled fiber, which is 34 percent less paper than the original. During the same period, Starbucks entered into a partnership with Conservation International—pledging US$7.5 million over three years—to help protect the natural environment of coffee-growing communities in Mexico and Indonesia.

Coffee and Farmer Equity (C.A.F.E.) practices Starbucks began drafting plans for corporate social responsibility in 1994.Since, Starbucks has partnered with Conservation International to draft plans and audit its Coffee and Farmer Equity program. Starbucks’ C.A.F.E. practices are based on a rating system of 249 indicators. Farmers who earn high overall scores receive higher prices than those who achieve lower scores. Ratings categories include: economic accountability, social responsibility, environmental leadership in coffee growing and processing. Indicators for social responsibility have evolved and now include ‘zero tolerance’ indicators that require workers to be paid in cash, check, or direct deposit, ensure that all workers a paid the established minimum wage, that workplaces are free of harassment and abuse, that workplaces are nondiscriminatory and do not employ persons under the age of 14, and several more.Starbucks has moved 90% of its coffee purchases to preferred C.A.F.E. certified providers, and the company is approaching its stated goal to purchase 100% of its coffee through C.A.F.E or other ‘ethically sourced’ certification systems. « Washington State University Assistant Professor Daniel Jaffee argues that Starbucks’ C.A.F.E. practices merely ‘green wash’ «to burnish their corporate image.» Additionally, Professor Marie-Christine Renard of Rural Sociology of Chapingo University in Mexico wrote a case study of Starbucks’, Conservation International’s(CI), and Agro-industries United of Mexico (AMSA) joint conservation effort in Chiapas, Mexico in which she concluded that “[w]hile the CI-Starbucks-AMSA Alliance paid better prices, it did not allow the producers to appropriate the knowledge that was necessary for the organizations to improve the quality of their coffee.” Nevertheless, Starbucks’ Corporate Social Responsibility plan has benefited the environment in increasing biodiversity and quality shade in important biodiversity hotspots around the world. For instance, in Jalapa, Guatemala, 69% of C.A.F.E. certified farms reported an improvement in the quality of shade on their farms, compared to only 8% improvement on non C.A.F.E. certified farms.

Consolidated Income Statement For the year ended 31 December 2012 Year ended Year ended 31 December 2012 31 December 2011 US $000

US $000

87,611 (37,070) 50,541 (31,690)

87,944

(7,338)

(39,028)

(31,950)

18,851

17,856

Redundancy and separation 3, 15 costs

(7,338)

Operating profit

11,513

17,856

Financial income

560

Net financial income

2,4

934 (398) 536 12,049

18,120

In thousands of U.S. Note dollars Revenue 2 Cost of revenue

Gross profit

Operating expenses before re- 2 dundancy and separation costs Redundancy costs

and

separation 3,15

Operating expenses

Operating profit before redun- 3 dancy and separation costs

Financial expenses

Profit before tax

(38,138) 49,806

(31,950)

(296) 264

Income tax (expense)/credit

2,5

(122)

12,071

Profit for the period

2,7

11,927

30,191

2.91

7.41

2.87

7.29

1.58 1,56

4.17

Basic earnings per share (U.S. 7 cents) Diluted earnings per share (U.S. 7 cents)

Supplementary information:

Basic earnings per share (pence) 7 Diluted earnings per share 7 (pence)

4,10

Consolidated Balance Sheet As at 31 December 2012 31 December 2012

31 December 2011

In thousands of U.S. Note dollars Assets Property, plant and equip- 8 ment

US $000

13,291

13,286

Intangible assets

63,832

56,164

Deferred tax assets

11,833 88,956

11,827

480 220 20,317 33,246 54,263 143,219

911

14,483 33,326 113,956 48,763 (113,340) 97,188

14,036

3,216 3,868 7,084

3,521

34,661

34,205

3,742 198 546 38,947 46,031 143,219

1,270

Total non-current assets Inventories

Income tax receivable

Cash and cash equivalents

Trade and other receivables Total current assets

Total assets

Equity

Issued capital

Exchangeable shares

Share premium Reserves

Retained losses Total equity

Liabilities

Employee benefits Provisions

Total non-current liabilities

13 13 13

14 15

Deferred income, trade and 17 other payables Provisions 15 Other financial liabilities Income tax payable

Total current liabilities Total liabilities

Total equity and liabilities

18 6

81,277

210

21,249 17,216 39,586

120,863

471,341 147,654 14,670

(567,798) 79,903

1,471 4,992

493

35,968 40,960

120,863

Notes to the Consolidated Financial Statements

Measurement convention

The financial statements are prepared on the historical cost basis except that derivative financial instruments are stated at their fair value.

1. Significant accounting policies

Basis of consolidation

The group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”). The parent company financial statements present information about the Company as a separate entity and not about its group. Both the parent company financial statements and the group financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU (“Adopted IFRS”). On publishing the parent company financial statements here together with the group financial statements, the Company is taking advantage of the exemption in s230 of the Companies Act 1985 not to present its individual income statement and related notes that form a part of these approved financial statements. The accounting policies set out below have, unless otherwise stated, been applied consistently to all periods presented in these consolidated financial statements.

Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Foreign currency

(i) Foreign currency transactions Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of transaction. (ii) Financial statements of foreign operations The assets and liabilities of foreign operations whose functional currency is not the United States dollar are translated at foreign exchange rates ruling at the balance sheet date. The revenues and expenses of these foreign operations are translated at an average rate for the period where this rate approximates to the foreign exchange rates ruling at the dates of the transac-

The Group’s functional currency is the U.S. dollar. The company’s functional currency is the pound sterling. The Group and Company have changed their presentation currency from sterling to United States dollars. The comparative figures have been presented in United States dollars applying the exchange rates below. The overall effect of this is a change in presentational currency with effect from 1 January 2005. Judgements made by the directors in the application of these accounting policies, that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year, are discussed in Note 21 “Accounting estimates and judgements”.

tions. Exchange differences arising from this retranslation of foreign operations are recognised directly in a separate component of equity (the translation reserve). These are released to the income statement upon disposal.

Classification of financial instruments issued by the Group

Following the adoption of IAS 32, financial instruments issued by the Group are treated as equity (i.e. forming part of shareholders’ funds) only to the extent that they meet the following two conditions: they include no contractual obligations upon the company (or group as the case may be) to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the company (or group); and where the instrument will or may be settled in the company’s own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the company’s own equity instruments or is a derivative that will be settled by the company’s exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

Investments in debt and equity securities

Investments in subsidiaries are carried at cost less a provision for impairment.

Trade and other receivables

Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within its group, the Company considers these to be insurance arrangements, and accounts for them as such. In this respect, the Company treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee.

Shareholder Information â&#x20AC;&#x201C; Tax Information SHARE FACTS LISTINGS

TSX and NYSE stock exchanges You will find a summary of the differences between our governance practices and the NYSE corporate governance rules in the governance section of our website. COMMON SHARES OUTSTANDING 803,056,958 at December 31, 2008 QUARTERLY DIVIDEND* $0.385 per common share 2012 DIVIDEND SCHEDULE* Record Date Payment Date March 16, 2012 April 15, 2012 June 15, 2012 July 15, 2012 September 15, 2012 October 15, 2012 December 15, 2012 January 15, 2013 * Subject to dividends being declared by the board of directors

TAX INFORMATION DIVIDENDS AND CAPITAL GAINS ON YOUR SHARES

Shareholders are required to pay tax on dividends as well as any capital gains they realize when they sell their shares or are deemed to have sold them. FOREIGN INVESTORS Dividends paid or credited to non-residents of Canada are subject to a 25% withholding tax unless reduced by treaty. Under current tax treaties, U.S. and U.K. residents are subject to a 15% withholding tax. U.S. INVESTORS We are required to solicit taxpayer identification numbers (TIN) and Internal Revenue Service (IRS) Form W-9 certifications of residency from certain U.S. inves-

tors. Where these have not been received, we may be required to deduct the IRSâ&#x20AC;&#x2122; specified backup withholding tax. For additional information, please contact the Investor Relations group or the transfer agent, Computershare Trust Company of Canada.

NORMAL COURSE ISSUER BID

On December 19, 2008, the company received acceptance from the Toronto Stock Exchange (TSX) of its Notice of Intention to Make a Normal Course Issuer Bid (Notice of Intention). The filing of this notice allows the company to repurchase for cancellation, from December 23, 2008 to December 22, 2009, up to 40,000,000 of its common shares, representing approximately 5% of the 807,049,958 issued and outstanding common shares as of December 5, 2008. Purchases may be made through the TSX and/or the New York Stock Exchange (NYSE) or by such other means as may be permitted by the TSX and/or the NYSE, including pre-arranged crosses, exempt offers, private agreements under an issuer bid exemption order issued by a securities regulatory authority and block purchases in ac cordance with the TSX policies. In the event that the company purchases common shares by pre-arranged crosses, exempt offers and private agreements, the purchase price of the common shares may be different than the market price of the common shares at the time of the acquisition. A copy of the Notice of Intention is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. You can also obtain a copy on request without charge from the

Investor Relations group.

SHAREHOLDER SERVICES DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN This plan provides a convenient method for eligible holders of common shares to reinvest their dividends and make optional cash contributions to purchase additional common shares without brokerage costs.

DIVIDEND DIRECT DEPOSIT SERVICE

Avoid postal delays and trips to the bank by joining the dividend direct deposit service. E-DELIVERY SERVICE Enrol in our e-delivery service to receive the proxy material, the annual report and/or quarterly documents by e-mail. By doing so, you will receive your documents faster and in an environmentally friendly manner while helping your company reduce printing and postage costs.

MANAGE SHAREHOLDER COUNT

YOUR AC-

Enrol in Investor Centre on www.computershare.com and benefit from a wide variety of self-service tools to help track and manage your shares.

DUPLICATE MAILINGS

Help us control costs and eliminate duplicate mailings by consolidating your accounts. For more details on any of these services, registered shareholders (shares are registered under your name) must contact the transfer agent. Non-registered shareholders must contact their brokers.

Starbucks coffee Annual Report 2013