That means a total north of $2.7 billion — a hefty amount given that when it last reported results on October 30, Starbucks had about $2.6 billion in cash and equivalents in the bank.
In a statement announcing the arbitrator’s decision, Starbucks CFO Troy Alstead said the company had “adequate liquidity both in the form of cash on hand and available borrowing capacity to fund the payment,” and that it woulds be booked as a charge in the company’s 2013 operating expenses.
Who else benefits from the deal? Governments both federal and local, Mondelez said in a statement, which will take about 37% of the payout in taxes — that’s just under $1 billion. “We’re glad to put this issue behind us,” Mondelez General Counsel Gerd Pleuhs said, with the company planning to use what’s left of the payout on more share buybacks.
Here’s how it all began: Kraft first did the deal to distribute Starbucks-brand packs of coffee in 1998, and by 2010 it had grown to a $500 million a year business. That was when Starbucks decided the partnership, which had no expiry date, should come to an end. Here’s how the WSJ reported the spat back in 2010: