Question

Financial Analysis: 10 K-annual reports of 2018 for Facebook and Starbucks.

Write conclusion for Facebook and Starbucks on the basis of Financial Analysis. Explain one paragraph.

Answer 1

Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 78 markets. Formed in

1985, Starbucks Corporation’s common stock trades on the NASDAQ Global Select Market (“NASDAQ”) under the symbol

“SBUX.” We purchase and roast high-quality coffees that we sell, along with handcrafted coffee, tea and other beverages and a

variety of high-quality food items through company-operated stores. We also sell a variety of coffee and tea products and

license our trademarks through other channels such as licensed stores, grocery and foodservice accounts. In addition to our

flagship Starbucks Coffee brand, we sell goods and services under the following brands: Teavana, Seattle’s Best Coffee,

Evolution Fresh, La Boulange, Ethos, Starbucks Reserve and Princi.

Our objective is to maintain Starbucks standing as one of the most recognized and respected brands in the world. To achieve

this, we are continuing the disciplined expansion of our global store base, adding stores in both existing, developed markets

such as the U.S., and in newer, higher growth markets such as China, as well as optimizing the mix of company-operated and

licensed stores around the world. In addition, by leveraging the experience gained through our traditional store model, we

continue to offer consumers new coffee and other products in a variety of forms, across new categories, diverse channels and

alternative store formats. We also believe our Starbucks Global Social Impact strategy, commitments related to ethically

sourcing high-quality coffee, contributing positively to the communities we do business in and being an employer of choice are

contributors to our objective.

In this Annual Report on Form 10-K (“10-K” or “Report”) for the fiscal year ended September 30, 2018 (“fiscal 2018”),

Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us” or “our.”

Segment Financial Information

Segment information is prepared on the same basis that our management reviews financial information for operational

decision-making purposes. On August 26, 2018, our Channel Development segment finalized licensing and distribution

agreements with Nestlé S.A. (“Nestlé”) to sell and market our consumer packaged goods (“CPG”) and foodservice products

and received an upfront prepaid royalty payment of approximately $7 billion. As a result, we realigned our organizational and

operating segment structures in support of the newly established Global Coffee Alliance. The scope of the arrangement

converts the majority of our previously defined Channel Development segment operations, as well as certain smaller businesses

previously reported in the Americas, EMEA and Corporate and Other (previously All Other Segments), to licensed operations

with Nestlé, and our reportable segments have been restated as if those smaller businesses were previously within our Channel

Development segment.

We have four reportable operating segments: 1) Americas, which is inclusive of the U.S., Canada, and Latin America; 2) China/

Asia Pacific (“CAP”); 3) Europe, Middle East, and Africa (“EMEA”) and 4) Channel Development. We also have several non-

reportable operating segments, including Siren Retail, which consists of Starbucks ReserveTM Roastery & Tasting Rooms,

Starbucks Reserve brand stores and products and Princi operations, as well as Evolution Fresh and the Teavana retail business

which substantially ceased operations during fiscal 2018. Collectively, the combined group of non-reportable operating

segments is reported within Corporate and Other. Revenues from our reportable segments and Corporate and Other as a

percentage of total net revenues for fiscal 2018 were as follows: Americas (68%), CAP (18%), EMEA (4%), Channel

Development (9%) and Corporate and Other (1%).

Our Americas, CAP and EMEA segments include both company-operated and licensed stores. Our Americas segment is our

most mature business and has achieved significant scale. Certain markets within our CAP and EMEA operations are either in

various stages of development or undergoing transformations of their business models. Therefore, they may require a more

extensive support organization, relative to their current levels of revenue and operating income, than our Americas operations.

Our Channel Development segment includes roasted whole bean and ground coffees, Seattle's Best Coffee®, Starbucks- and

Teavana-branded single-serve products, a variety of ready-to-drink beverages, such as Frappuccino®, Starbucks Doubleshot®,

Starbucks Refreshers® beverages and TeavanaTM/MC

iced tea, and other branded products sold worldwide outside of our

company-operated and licensed stores. Historically our consumer packaged goods have been sold directly to grocery,

warehouse club and specialty retail stores and through institutional foodservice companies. With the establishment of the

Global Coffee Alliance with Nestlé, a large portion of our Channel Development business transitioned to a licensed model in

the fourth quarter of fiscal 2018. Additionally, the CPG and foodservice businesses previously included in our Americas,

EMEA and Corporate and Other (previously All Other Segments) were also transitioned to a licensed model under the Global

Coffee Alliance and realigned to the Channel Development segment. Our collaborative relationships with PepsiCo, Inc.,

Anheuser-Busch InBev, Tingyi Holding Corp., Arla Foods and others for our global ready-to-drink beverage businesses in this

segment are excluded from the Global Coffee Alliance

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Annual Report on Form 10-K other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this Annual Report on Form 10-K may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

Unless expressly indicated or the context requires otherwise, the terms "Facebook," "company," "we," "us," and "our" in this document refer to Facebook, Inc., a Delaware corporation, and, where appropriate, its wholly owned subsidiaries. The term "Facebook" may also refer to our products, regardless of the manner in which they are accessed. For references to accessing Facebook on the "web" or via a "website," such terms refer to accessing Facebook on personal computers. For references to accessing Facebook on "mobile," such term refers to accessing Facebook via a mobile application or via a mobile-optimized version of our website such as m.facebook.com, whether on a mobile phone or tablet.t.