Troy Alstead - Chief Financial Officer and Chief Administrative Officer Clifford Burrows - President of Americas Region Howard D. Schultz - Founder, Chairman, Chief Executive Officer and President JoAnn DeGrande - Director of Investor Relations Jeffery J. Hansberry - President of Starbucks Channel Development, Seattle's Best Coffee

Sara H. Senatore - Sanford C. Bernstein & Co., LLC., Research Division Keith Siegner - Crédit Suisse AG, Research Division David Palmer - UBS Investment Bank, Research Division Gregory R. Badishkanian - Citigroup Inc, Research Division John S. Glass - Morgan Stanley, Research Division Matthew J. DiFrisco - Lazard Capital Markets LLC, Research Division Michael Kelter - Goldman Sachs Group Inc., Research Division John W. Ivankoe - JP Morgan Chase & Co, Research Division Jeffrey Andrew Bernstein - Barclays Capital, Research Division Joseph T. Buckley - BofA Merrill Lynch, Research Division Jason West - Deutsche Bank AG, Research Division

Good afternoon. My name is Christian, and I will be your conference operator today. At this time, I would like to welcome everyone to the Starbucks Coffee Company's Fourth Quarter and Fiscal Year End 2011 Earnings Conference Call. [Operator Instructions] Thank you. Ms. DeGrande, you may begin your conference.

Thank you. Good afternoon. This is JoAnn DeGrande, Director of Investor Relations for Starbucks Coffee Company. Thank you all for joining us today for a review of our fourth quarter and fiscal 2011 year end results. On the call with me today here in Seattle is Troy Alstead, Starbucks CFO; and joining us from New York is Howard Schultz, Chairman, President and CEO. Our discussion today will include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release as well as risk factor discussions in our filings with the SEC, including our last annual report on Form 10-K. Starbucks assumes no obligation to update any of these forward-looking statements or information. Please refer to the financial statement accompanying the earnings release to find disclosures and reconciliations of non-GAAP financial measures mentioned on today's call, along with their corresponding GAAP measures. This conference call is being webcast and an archive of the webcast will be available on our website at starbucks.com under Investor Relations. [Operator Instructions] Now let me turn the call over to Howard Schultz. Howard? Howard D. Schultz: Thank you, JoAnn, and welcome to everyone on the call. I am delighted to report the record Q4 and full year earnings Starbucks announced today. Fiscal 2011 was a remarkable year for Starbucks almost on every level. 2011 was a year in which we demonstrated our commitment and unique capabilities around food and beverage innovation, brought the Starbucks experience to new markets and consumers around the world, broadened and deepened our channels of distribution, deepened our relevancy and connection to customers, improved our customer experience and advanced our blueprint for profitable growth. It was a year in which we reported record earnings each quarter and for the full year, very strong comp growth all around the world, achieved the first $3 billion revenue quarter in Starbucks' history, powerfully asserted our coffee authority and further differentiated and distanced ourselves from competitors. It was a year in which we reaffirmed our commitment to the thousands of communities and tens of millions of consumers we serve each week around the world and we realigned our organization to best position us to go after the tremendous global opportunities that lie ahead in 2012 and beyond. What makes our fiscal 2011 performance even more remarkable is that each of these significant accomplishments was achieved despite pervasive global economic uncertainty, high global unemployment, difficult consumer environment, stubbornly high commodity costs and the formidable operating headwinds that continue to challenge global retailers. Yet once again, Starbucks' nearly 200,000 partners and leaders around the world joined together and met the challenge and delivered and extraordinary experience to our customers and exceptional operating performance, financial results and economic returns for our shareholders. Starbucks Coffee Company has never been stronger or better positioned for sustained profitable growth than it is today. I have never in my career been more excited or more optimistic about where Starbucks is and where we're going as a company or felt more strongly that we have the tools in the right places to get us there. Today I will present highlights of Q4 and full year 2011 financial and operating results and share a few accomplishments that will not be evident from the figures alone. Then I'll turn things over to Troy who will take you through the financials in detail and provide you with an update on fiscal 2012 outlook. Starbucks' total net revenues for the quarter of 2011 totaled a record $3 billion, representing a 15% increase over Q4 2010 net revenues on a comparable 13-week basis. This extraordinary year-over-year increase was driven primarily by a 9% increase in global comp store sales. For the full year, our net revenues reached a record $11.7 billion, representing an 11% increase over fiscal 2010 on a comparable 52-week basis, largely driven by an 8% increase in global comp store sales. Our full year consolidated operating margin reached a record 13.8%, excluding nonroutine items surpassing the 13.3% consolidated operating margin we achieved in fiscal 2010. And our EPS followed suit, increasing to a record $0.37 in Q4 and a record $1.52 for the year, excluding nonroutine items. Starbucks' record performance in 2011 was a direct result of the discipline, the operating leverage and excellence in the outstanding execution our leadership team is driving and our partners are delivering across all business segments and around the world. Now I'll touch on a few highlights and some plans for each of these segments with you. Under the leadership of Cliff Burrows, our U.S. retail segment delivered against all operating and performance metrics in fiscal 2011, despite persistently high unemployment, low consumer confidence and a very weak U.S. economy overall. Accelerating double-digit comp growth in Q4, solid operating margins throughout the year and record full year results all demonstrate our deepening connection with U.S. consumers and the increasing power and growing relevancy of the Starbucks brand. But we are just getting started. Going forward, innovation, operating excellence and our partners' passion will continue to drive our operating performance and elevate the Starbucks Experience for our customers. We have a full pipeline of exciting new products that will be introduced for holiday 2011 and throughout fiscal 2012, including Starbucks K-Cups available in our U.S. retail stores next year. And we couldn't be more excited about our pipeline for products and innovation for 2012. Strong sales momentum coming into Q4 accelerated in September in response to our annual fall promotions featuring our Pumpkin Spice Latte and Salted Caramel Mocha and Tazo Chai Tea beverage platforms, and our Anniversary Blend coffee. Pumpkin Spice Latte was a notable success, growing 44% over last year. Food sales in the quarter were boosted in part by the tremendous positive response we have had to our recent Bistro Box platform launch and to our breakfast sandwich promotion. Bistro Box is available in 2 portion sizes and centered around fruits, vegetables, lean proteins and whole grains were developed and introduced in response to research showing that over 2/3 of consumers want healthy food choices with wholesome ingredients, and our food development teams delivered a great tasting, nutritious line of quality products. We will continue to roll out and expand our Bistro Box platform and remain committed to making additional wholesome and innovative food and beverage choices available to our customers in the quarters and years ahead. We also connected more deeply, more frequently and with more of our customers than ever before in our history. Customer participation in our My Starbucks Rewards program is accelerating, reflecting increased customer awareness of the enhanced value proposition that membership provides and we now have over 3.6 million active members, nearly 2 million of whom are Gold-level members. We added 1 million new members to the program in Q4 alone. In fiscal 2011, over $1.1 billion in purchases was paid for by the use of the Starbucks Card. And today, a Starbucks Card is used in 1 in every 4 transactions. Our My Starbucks Rewards program continues to drive traffic, frequency and incrementality for our business and value for our customers, creating further separation between us and everyone else in our space. The Starbucks Card mobile app continued to gain popularity as the Android app launched in June gained adoption and the updated iPhone continued to attract and gain users. At the end of September there was almost 1 million smartphones with at least one registered Starbucks Card associated with it and both the number and value of mobile transactions is on the rise. Now coffee and coffee alone will continue to be our core and coffee innovation will continue to drive our business. Two weeks ago we introduced the introduction of Starbucks Blonde Roast, a light roast coffee that represents a new roast profile and another $1 billion market opportunity for Starbucks. Blonde Roast builds on our 4-year heritage of sourcing and roasting the world's finest coffees and was developed in response to unmet demand from the approximately 54 million U.S. consumers representing over 40% of U.S. coffee drinkers and over 70% of total premium coffee sales who want Starbucks quality in a lighter super premium roast coffee. Now just as we revolutionized and are taking our fair share of the global instant coffee category with Starbucks VIA, Starbucks Blonde Roast enables us to provide consumers with a premium light roast coffee alternative and greater choice and positions us to go after a greater share of the brewed coffee market both in our stores and down the coffee aisle in CPG channels, where the majority of packaged coffee sales are of the light and medium roast varieties. Blonde provides us with the unique opportunity to attract new hot and cold beverage drinkers to the coffee category. Blonde roast will be available in whole bean and ground starting in January in our retail stores and through our grocery channels. Blonde will also be brewed in our stores available in K-Cup portion packs in January and as a Starbucks VIA variety. Looking ahead we plan to open at least 200 net stores in the U.S. in 2012 and to remodel approximately 1,700 existing stores, that's the most stores we've ever remodeled in a year. Store remodels provide us with the unique opportunity to drive traffic, increase our in-store efficiency, provide a more comfortable environmentally sensitive third place for our customers, further differentiate Starbucks from competitors, provide jobs in and around local communities we serve and improve the Starbucks Experience for our customers overall. Now speaking of remodels, I would encourage each of you to visit our newly remodeled Times Square flagship store at 47th Street and Broadway, the next time you're in New York City. The Times Square store is an acclaimed showcase of retail innovation and green construction that we will be drawing upon as we build and remodel future stores across the country and around the world. The Times Square store is also a roaring financial success delivering over twice the revenue on a 70% increase in traffic compared to last year. Turning to international. I'm very pleased to report that our international business continues to accelerate. We now operate over 6,200 stores in 55 international markets and our brand has never been stronger nor our ambitions bolder. We saw accelerated transaction growth through 2011 while focused and disciplined execution enable us to leverage that growth into higher margins and profits. China remains a focal point of our international expansion efforts and last week, we opened our 500th store in China, marking an important milestone along our path toward having 1,500 stores in mainland China by 2015. In fiscal 2011, we opened on average 1 store every 4 days in China and we'll be accelerating that pace in 2012. In the fourth quarter, China delivered another very strong quarter of comp growth including a healthy increase in a number of transactions driven by the expansion of the Mooncake program and our wildly successful Frappuccino summer promotion. The broader Asia Pacific region delivered similarly strong results. 2011 marked the 15th anniversary of the opening of our first Starbucks store in Japan and our business in Japan continues to recover ahead of plan from the tragic earthquake and tsunami that struck earlier this year. A few weeks ago I personally visited our partners and customers in Sendai, an area that was utterly devastated by the dual tragedy. The resilience, energy and heart stirring compassion evidenced by our partners and customers that I observed during the trip was nothing short of inspirational and reaffirm my admiration for and commitment to the Japanese people, who continue to do so much to help and take care of one another in the wake of this extraordinary catastrophe. I went there specifically to help set up an emergency CUP Fund, Caring United Partners for Japan. The CUP Fund provides cash grants to help partners and their families who have been impacted by the disaster and is funded entirely by Starbucks partner donations. I want to personally extend my thanks and appreciation to the many partners around the world who have contributed to the fund. Looking ahead I am confident that our new 3 region organizational structure ideally positions us to pursue accelerated profitable international growth by having disciplined focus and experienced leadership at the helm of each of the China Asia Pacific Americas and EMEA regions. As president of China/Asia Pacific, John Culver brings strong leadership and deep knowledge to these markets and will ensure that we achieve our ambitions for this critical part of the world, including the opening of our first store in India in 2012 and our first store in Vietnam thereafter. As President of the Americas business, Cliff Burrows will extend the extraordinary leadership, management and operating excellence skills that he has brought to our core U.S. business to drive continued growth in Canada and Latin and South America with a strong emphasis on Brazil, Mexico, Argentina and Chile. Cliff is already demonstrating his skills and plans, having just last month strengthened and expanded Starbucks relationship with our Latin America joint venture partner enabling us to add more than 300 new stores in Mexico and Argentina by 2015. And I do know that Michelle Glass, the 15-year Starbucks leader who now serves as President of the EMEA will bring her leadership skills necessary to recalibrate certain markets that are currently not meeting our expectations and profitably grow our business in Europe, the Middle East and Africa into the future. Turning to CPG. Our Global Consumer Products and Foodservice teams operate on the extraordinary talent and leadership of Jeff Hansberry in a key area of strategic investment for Starbucks and a cornerstone of the blueprint for profitable growth that we outlined a year ago. I'm delighted to report that in both Q4 and throughout fiscal 2011, we made enormous strides in our channel development strategy of expanding the availability of our portfolio of branded products beyond Starbucks stores. In fact, as we speak today, Starbucks CPG products are available at more than 100,000 points of distribution around the world. In 2011, we successfully transitioned Starbucks' Packaged Coffee and Tea businesses in house and materially expanded our portfolio of coffee home products through an agreement with Green Mountain Coffee Roasters. We're very excited about our partnership with Green Mountain and are looking forward to expanding our presence in the fast-growing multibillion dollar single cup category in the quarters and years ahead. In fact, just a few days ago at 12:01 a.m. Eastern on Tuesday November 1, 30 million Starbucks K-Cups began rolling out our distribution centers and are already appearing on grocery store shelves across the country. And over 50 million will be shipped by the end of the month. Starbucks K-Cups will be available for purchase in Canadian CPG channels beginning in March 2012 through both Starbucks and Green Mountain website starting in December 2011 and in Starbucks retail stores in the U.S. and Canada later in 2012. We are confident that Starbucks K-Cup portion pack business will grow to be a greater than a $1 billion business over time. Growth in our Starbucks VIA platform continues to accelerate and VIA is on its way to becoming a $1 billion business for us in the years ahead. VIA exceeded $180 million in systemwide sales in its first year in the market and generated $250 million in systemwide sales in fiscal 2011. Today, VIA is available in 12 markets including China, the Philippines, Australia, Indonesia, Malaysia, Singapore, South Korea and Thailand, which were added just this year in over 70,000 points of distribution around the world. It was about a year ago that we unveiled our blueprint for growth, our unique business model that leverages the power of the Starbucks brand, our deep emotional and unique connection to consumers around the world, our 17,000-store global retail footprint and our unique ability to drive trial, build awareness and trust and draw on our CPG channel distribution capabilities to quickly reach scale in order to profitably grow the Starbucks business and plan around the world and into the future. Today, our blueprint for growth is being integrated into our thinking and executed at every level of the Starbucks organization. And it's serving as the roadmap for Starbucks evolution into a uniquely positioned branded CPG multinational company. Starbucks core will always be coffee and community. Channel will continue to innovate and be the undisputed coffee authority and we will continue to find new and exciting ways to provide consumers with the world's best quality and best tasting coffee whenever, however, and wherever they want it. But our blueprint for growth is helping us see and I'm confident that it will help us great a much larger industry-defining global enterprise that shares common values and touches consumers around the world in a way that only Starbucks can. Stay tuned. We are just getting started. Now I'll turn the call over to Troy who will walk you through the quarter and the full year's results and provide an outlook for 2012.

Thanks, Howard. And good afternoon, everyone. Today we reported earnings that continue to reinforce the strength and resiliency of our business model, the global power of our brand and the talent and dedication of our partners. In the fourth quarter, the U.S. international and CPG business segments all reported record Q4 revenues. In addition, on a consolidated basis, records were also achieved for revenue, operating income, operating margin and earnings per share. This was all accomplished despite continued pressure from macroeconomic headwinds and significantly high commodity cost. Our performance reflects the strong connection that exists between Starbucks and the communities and customers we serve and highlights the fact that the Starbucks value proposition continues to resonate deeply with customers all around the world. Today, I will provide additional details on our fourth quarter and full year performance, then I'll provide an update to our outlook for 2012. Fourth quarter consolidated net revenues were $3.0 billion, the highest of any quarter in our history and up 7% from $2.8 billion a year ago. Excluding the 53rd week in 2010, revenue growth for the quarter was 15%. Global comparable store sales continue to accelerate, increasing 9% attributable to a 6% increase in traffic and a 3% increase in average ticket. Two year same-store sales growth was 17% globally, further highlighting the momentum we're building around the world. Higher CPG revenues also contributed to the increase. Consolidated operating income of $448 million in the fourth quarter increased by 12% over the $399 million reported in last year's fiscal fourth quarter, excluding the nonroutine gain in fiscal 2011, and the impact of restructuring and the extra week in fiscal 2010, we saw a 20% increase in non-GAAP operating income compared to the fourth quarter of last year. Consolidated operating margin finished the quarter at 14.8%, a 70 basis-point improvement over last year's fourth quarter on a GAAP basis. This improvement was primarily due to increased sales leverage and again on the sale of office buildings here in Seattle, partially offset by higher commodity cost and the impact of the extra week fiscal 2010. On a non-GAAP basis, operating margins increased 60 basis points to 13.8% from 13.2%, which excludes the nonroutine gain in the fourth quarter of fiscal 2011 and the impact of restructuring and the extra week in Q4 of fiscal 2010. The increase in commodity costs, largely coffee, negatively impacted operating margin in the quarter by approximately 290 basis points. Earnings per share was $0.47 for the fourth quarter, an increase of 27% over $0.37 in the prior year period. This included approximately $0.10 attributable to nonroutine gains resulting from the acquisition of the remaining equity in our Switzerland and Austria markets and the sale of office buildings here in Seattle. Excluding the nonroutine gains in Q4 of fiscal 2011, and the impact of restructuring and the extra week in Q4 of fiscal 2010, EPS increased 16% to a record $0.37 per share. We absorbed approximately $0.075 per share in the fourth quarter due to higher commodity costs. Today we are announcing a 31% increase to our quarterly cash dividend to $0.17 per share from $0.13 per share and the authorization of an additional 20 million shares of our share repurchase program, bringing our total number of shares available for repurchase to just over 24 million. These 2 actions reaffirm our confidence in the strength of the business and our commitment to returning excess cash to shareholders. I will now move to the results of our operating segments, which will be compared with last year's non-GAAP results that exclude the impact of restructuring and the extra week in Q4 of fiscal 2010. Please note that this will be the last quarter we report in the 3 segment structure. As we have transitioned to our new organizational model as of October 3. We will provide financial restatements including 3 years of historical data under the new segment structure along with our first quarter fiscal 2012 earnings report. Total U.S. net revenues for the quarter were $2.0 billion an 11% increase over the same period last year. Both company-operated and licensed stores saw impressive gains in Q4 with a company-operated growth driven by a 10% increase in comparable store sales. The comp increase was comprised of a healthy 7% increase in traffic and a 3% increase in average ticket. 2-year comps were 18% for the quarter, our highest mark in almost 6 years. Our same-store sales growth in Q4 was especially meaningful given the continued weakness in the U.S. economy and further validates that our commitment to a premium experience is resonating with our customers. Importantly, we saw strong transaction growth among all day parts in Q4 with the hours between 11:00 a.m. and 3:00 p.m. showing the highest percentage increase. This demonstrates the success we're seeing with some of our newer food offerings and indicates to us that Starbucks is increasingly recognized the our customers as an excellent option for a healthier lunch. Our peak morning hours also saw an impressive lift which confirms to us that we still have room for transaction growth even during our busiest time. The 3% increase in average ticket was driven by pricing and food as our petites platform and the expansion of our warming program drove incremental attachment. Operating income for the U.S. segment was $374 million, an increase of 26% compared to the same quarter last year. Operating margin expanded 210 basis points to 18.4% from 16.3%, primarily due to increased sales leverage, partially offset by higher commodity costs, which added approximately 210 basis points of cost pressure. We continue to be pleased with the growth and results the U.S. business is delivering and are excited about what lies ahead. Many opportunities still exist to efficiency and we are aggressively taking them on. The improvement in our work routines, efficiencies in our drive-through lanes and continued waste reduction efforts are just a few examples. We're also leveraging technology to improve our operations and full optimization of our new point-of-sale system, inventory management system and rollout of our new automated labor scheduling tool will help us deliver on our significant growth targets going forward. With that, I will now move to the results from our International segment. International total net revenues increased 25% to $718 million in the fourth quarter of fiscal 2011, another Q4 record. Favorable foreign currency translation contributed roughly 1/3 of the growth with comparable store sales growth of 6% and the consolidation of the Switzerland and Austria markets also contributing. The comp growth was driven by increased transactions particularly in China and Asia Pacific where comps in mainland China were once again in the mid-30s. A new contributor of revenue growth in those markets was the rollout of our loyalty program, which was implemented in South Korea in Q4 with China and Singapore added earlier in fiscal 2011. Personalized Frappuccino continued its success and in China strong customer demand for our popular seasonal Mooncakes again exceeded expectations. Somewhat offsetting the same-store sales strength in Asia was softness in Europe, where the measurable decline in consumer confidence negatively impacted summer sales. Initiatives to support via service and further innovation combined with the Summer Olympics in London give us optimism that 2012 comps in Europe will improve. International operating income reached $93 million in the fourth quarter of fiscal 2011, a 21% increase. Operating margin contracted by 40 basis points to 13.0% from 13.4%. This was due primarily to higher coffee costs, partially offset by sales leverage. Commodities impact in Q4 to International was approximately 120 basis points. China continues to perform phenomenally well for us and, as Howard mentioned earlier, we recently opened our 500th store on the mainland. Margins in China continue to be strong despite inflationary pressure and we believe our sales growth and focus on efficiencies will offset additional inflation in the near term. We added nearly 200 units in international markets in Q4 with many of those in Asia with combined efforts of our development and operations teams are leading solid returns on our investment. In July we announced that we acquired full ownership of our retail operations in Switzerland and Austria further leveraging our existing EMEA company-operated store infrastructure. The accounting gain resulting from the transaction approximately,, $55 million, was recorded in Q4 fiscal '11 and is reported within Interest Income and Other. This transaction also had a favorable impact on our tax rate of 90 basis points for the full year and 330 basis points in Q4. The exceptional sustained performance of our company operated portfolio, combined with the strength we're seeing in our license markets and the continued success of our new store openings are enabling our international retail portfolio to contribute more meaningfully to consolidated results. The recently announced organizational changes, which have energize our global team and will improve accountability and decision-making reinforce our expedition that our international business will one day rival our domestic one. Further diversifying our portfolio and an important part of our growth outlook is our Global Consumer Products Group, which I'll now take a few moments to review. The conclusion of Q4 marks more than 6 months since we transitioned our packaged coffee business in-house to a direct distribution model. This model, used for our packaged coffee and tea as well as VIA Ready Brew throughout the U.S., food, drug, mass and club channels, has allowed us to take direct control of our relationship with the trade which, along with our coffee authority and brand recognition, creates an unmatched proposition in the coffee category within the grocery channel. It has also laid the foundation for us to execute the highly anticipated introduction of Starbucks K-Cups in the CPG channels, which began earlier this week. In the fiscal fourth quarter, total net revenues for CPG were $242 million, an increase of 31% over last year with approximately half of the growth attributable to the transition of the packaged coffee and tea business in-house. In addition to our growing packaged coffee and tea business, the availability of VIA products continues to expand. Full year systemwide sales of VIA across all business channels reached $250 million in fiscal '11 and we reached 73% ACV in the U.S. CPG channel as of the end of the fourth quarter. For the most recent 4-week period, VIA sales in the U.S. CPG channels were up more than 75% over last year, demonstrating the continuing momentum of this platform as we approach 18 months since its initial introduction in the CPG channel. Outside the U.S., we expanded VIA distribution to 6 additional countries in the China and the Asia Pacific region now reaching more than 70,000 points of distribution on a global basis. The overall premium single cup category continues to grow at a rapid pace as more and more coffee consumers adopt various formats within the category. In response, retailers recognize the consumer demand and significant growth potential available and continue to dedicate more shelf space down the grocery aisle in support of this growth. CPG operating income for the quarter totaled $76 million, a 4% increase on a 13-week basis compared to the fourth quarter of last year. The operating margin of 31.4% was 800 basis points lower than the same quarter last year. Similar to the third quarter, higher coffee cost had a significant impact in the fourth quarter accounting for roughly 1,000 basis points of margin deterioration. As we now enter the next phase of our CPG growth plan with the introduction of Starbucks K-Cups, we remain focused on delivering premium coffee products to customers, while building strong relationships within the trade for future profitable growth. We are pleased with the results we have seen so far and believe that we are solidly on track with the aggressive growth objectives we've established for this segment. I will now recap our full year fiscal 2011 performance and a few key metrics. Excluding the nonroutine gains in Q4 of fiscal 2011 and the impact of restructuring and the extra week of fiscal 2010, EPS increased 24% to record $1.52 from $1.23 per share. Higher commodity costs, largely coffee, weighed down EPS in fiscal 2011 by approximately $0.20. Global consolidated net revenues reached a record $11.7 billion in fiscal 2011 an 11% increase on a comparative 52-week basis. The increase was mostly due to an 8% increase in global comparable store sales with CPG growth also contributing. Our 8% global comps were driven by a 6% lift in traffic and a 2% increase in average ticket. Same-store sales in the U.S. were 8% for the fiscal year and were 5% for the year in international. Our comp momentum remains broad-based and continued focus on the excellence of the customer experience in our stores continued expansion of the frequency driving the rewards program and robust innovation we're making both in products, like petite, and in technology, like mobile payment, are laying the foundation for future growth. By driving efficiencies and heavily managing spend, we are able to flow the sales increases through to the bottom line as our fiscal 2011 consolidated operating income of $1.7 billion and operating margin of 14.8% were both records. Excluding the nonroutine gain in fiscal '11 and the impact of restructuring in the extra week in fiscal '10 operating margin expanded 100 basis points to a record 14.5%. This includes a negative 220 basis-point impact from higher commodity costs. Global store count for fiscal 2011 grew by a net 145, which is a bit misleading due to the 475 Seattle's Best Coffee locations that were closed as a result of the Borders bankruptcy. Excluding these, net unit growth was 620 new stores comprised of 131 in the U.S. and 489 new stores in the international markets. We are enthusiastic about the future contribution this age class will bring as the U.S. company-operated openings are setting records for verse your sales and cash flow. Internationally, our fiscal year 2011 age class is also exceeding expectations, giving us great momentum to further accelerate unit growth in fiscal 2012 and beyond. We are extremely proud of the record results we were able to deliver in fiscal 2011 despite external pressures coming from many different fronts. In the top line, we not only saw significant growth over 2010, but then improvement strengthened throughout the year, with fourth quarter global same-store sales growing at a rate not seen since 2006. During 2011 we reached 4,000 licensed stores in the U.S. and opened our 900th store in Japan. We launched personalized Frappuccino across the globe, expanded our popular loyalty program, became a leader in mobile payment, expanded VIA internationally, took back our packaged coffee business, and managed through the $0.20 EPS impact of commodities and the $0.02 impact of the Borders bankruptcy. Our ability to be up in front of our competition to leverage our growth to deliver new financial accretive offering continue to confirm our belief that many opportunities remain throughout our business with significant profitable growth potential. I will now give you an update to the initial fiscal 2012 outlook that was provided on last quarter's call. We continue to target revenue growth of approximately 10% for the year, driven by mid-single-digit comp growth and continued momentum of our CPG business. While we are optimistic about what the future holds for Starbucks, we also recognize that consumer environment is still fragile as our customers continue to face sustained economic pressure. We still expect full year consolidated operating margin to improve by 50 to 100 basis points over fiscal 2011 non-GAAP results. We are targeting earnings per share in the range of $1.75 to $1.82, consistent with our long-term growth target based on fiscal '11 EPS of $1.52, excluding the nonroutine gains. There are a few items embedded within this target that I would like to call out. First, we continue to expect to absorb approximately $0.21 in additional commodity cost in fiscal 2012 mostly related to higher coffee prices. As you know, we took the opportunity several months ago to lock in our expected requirements for fiscal 2012. The timing of the coffee cost pressures will be heavily weighted toward the first half of the year, with $0.18 of the full year of $0.21 impacting the first 6 months. As a result of that disproportionate timing of elevated coffee costs, EPS growth is expected to be approximately 5% in the first half of fiscal '12 and is expected to be approximately 25% in the second half of the year. Absent this commodity pressure we would expect strong earnings growth consistently throughout the year. Further, we have taken advantage of the recent declines in the "C" price to begin locking in our needs for fiscal 2013 and currently have 4 months of our 2013 requirements locked in at costs favorable to 2012. Do not be misled by the expected earnings growth in the first half of 2012. It is completely a function of the timing of coffee costs flowing through the P&L compared to the previous year. The coffee cost comparison eased significantly in the second half of 2012 when we expect to deliver 25% EPS growth and then enter 2013 with extremely strong earnings momentum. Also embedded in our fiscal '12 outlook is the impact of our launch this week of take K-Cups in CPG channels. We continue to believe this addition to our portfolio will contribute $0.03 to $0.05 of incremental earnings in the year net of marketing and startup costs. As we have previously stated we expect sales levels for K-Cups will be limited in fiscal '12 by production capacity constraints. However, as we gain additional supply next year, we expect meaningful upside to earnings in fiscal '13 and beyond. We are very pleased with retailers' response to sponsor Starbucks as the only super premium coffee on the Keurig K-Cup platform and we're excited at the market opportunity ahead. We expect global marketing spend near 3.5% of revenues in fiscal '12, an increase over 2011 that includes full year impact of the transition of our Packaged Coffee business in-house and the rollout of K-Cup. I will now give you a look at our initial segment target for 2012 based on the new organizational and reporting segment structure. In the Americas, which includes the U.S., Canada and Latin America, operating margin is expected to improve slightly over the current rate of approximately 20%. The Americas represent roughly 75% of the company's revenue. We also expect modest margin improvement in the Europe, Middle East and Africa region, which currently has a margin in the mid-single digits. EMEA represents approximately 10% of Starbucks revenues. The China and Asia Pacific region currently reflecting 5% of the revenue mix of the company is expected to continue to produce strong operating margin near the 30% level. Finally, we expect that Global Consumer Products Group representing approximately 10% of revenues will deliver operating margin near 25%, driven lower than historical levels due to the impact of higher coffee costs, investments in the launch of K-Cups and the ongoing buildout of the VIA platform. Our projections for global store growth remain unchanged at 800 net new stores. Based on our new structure about 400 of these will be in our Americas region, with licensed stores comprising approximately 1/2 of the new additions. Approximately 300 will be in our China and Asia Pacific region with licensed stores comprising approximately 2/3 of the new stores. Approximately 1/2 of the China and Asia Pacific openings will be in China. In the EMEA, we are planning on approximately 100 net new openings with licensed stores making up roughly 2/3 of the new stores. Capital expenditures are now expected to be the range of approximately $800 million to $900 million in fiscal year 2012. This is an increase to our initial target provided last quarter, reflecting additional investments in store renovations globally as well as the addition of manufacturing capacity to support our growing business. We expect to renovate a record number of stores in fiscal 2012 as we continue to prioritize our in-store experience. Renovations not only add to the aesthetic experience, they also allow us to reconfigure the store to improve efficiencies in our operations. We have seen solid returns on our renovation spend over the past few years and continue to view this as another key driver to the future success of our retail operations. And finally, the tax rate in fiscal 2012 is expected to be approximately 33%, modestly higher than in the previous year. In closing, our fourth quarter and full year results are a testament to the talent and dedication of our partners, the strength of our business model and the power of our brand. We are delivering solid results across the globe and will continue to grow to pursue the enormous opportunity generated by the strategic investments we've made over the past few years. Our U.S. business continues to be exceptionally strong with more growth to come. Internationally, we have laid the foundation for healthy profitable growth and are on the way towards operating margins in the targeted mid- to upper teens. And we're accelerating our expansion of CPG, where growth will get another boost with the launch of K-Cups this week. We'll continue to invest capital in long-term profitable growth opportunities and will prudently return excess cash to shareholders. All this will improve the diversification of our portfolio and will provide customers access through more formats and in more geographies to the super premium Starbucks coffee experience. With that I'd like to turn the call back to Howard for some closing comments. Howard? Howard D. Schultz: Troy, thank you, before moving to the Q&A I'd like to share a few final thoughts. As I said at the outset, 2011 was an extraordinary year for Starbucks at every level. The Starbucks Experience has never been better, or profits have never been higher, our balance sheet has never been stronger and our brand has never been healthier and our connection to customers and their trust in us has never been greater. This week approximately 60 million customers will visit us and that's just an unbelievable number when you consider where we have come from 1987, 11 stores, 100 employees and today, 17,000 stores in 55 countries. We have purchased coffee and hundreds of products from vendors around the globe. Over 200,000 people who wear a green apron or support someone who does everyday. Starbucks is in every sense a global company. Today the world is our community and Starbucks will always give back to the communities we serve. 40 years ago we set out to build a new kind of company one that strikes a delicate balance between profit and a social conscience. Striking that delicate balance remains the cornerstone of company today. Today, the world is facing one of the most challenging issues of our time, chronic high unemployment, a demoralizing and unacceptable condition, unless reversed will scar generations to come. We're doing what we can by having added approximately 3,700 net new jobs in fiscal 2011. And we plan to add approximately 12,500 net new jobs around the world in 2012. We're also accelerating design and development of a new manufacturing plant here at home. But we have more to do. I've made no secret of my belief that American business leaders need to step up and address the jobs crisis head on before an entire generation is lost to hopelessness and despair. The lifeblood and engine for employment in our country has always been small entrepreneurial small businesses. Yet while small businesses have the greatest need for credit, for many reasons, today they're having greatest difficulty obtaining them. On November 1, Starbucks launched a program in partnership with the Opportunity Finance Network, in which concerned citizens could donate as little as $5 to help restart the jobs engine. Americans helping Americans get back to work. The Starbucks Foundation seeded the program with a $5 million donation and we hope other like-minded companies will do what they can to create and sustain as many jobs as possible. It's right for our business, it's right for our communities and it's right for country. Starbucks today is executing across all channels and around the world and we have never been better-positioned to go hard and go fast after the tremendous global opportunity that lies ahead in 2012 and beyond. In 40 years there has never been a more exciting or exhilarating time to be at Starbucks. Thank you.

Operator, we are ready to begin the Q&A please.

[Operator Instructions] Our first question comes from John Ivankoe with JP Morgan. John W. Ivankoe - JP Morgan Chase & Co, Research Division: One question and maybe we can try it in a few different parts. Obviously the U.S. stores are doing a great job of meeting the demand that's out there, perhaps even creating demand for themselves based on what's being offered and how the stores are being run. So I just want to get a sense of things like the new point-of-sale and the labor scheduling, how much that might be driving comps and how much that might be adding to capacity in 2012, for example. And if I could, just as an extension of that, whether it's possible to start to apply some of those principles to Europe, especially given what I think I heard was a mid-single-digit margins in those regions, perhaps increasing your peak hour productivity or you're just throughput and when customers most want to the stores might be a possibility in the near term. Howard D. Schultz: What I would say is, first of all, in terms of the technology in our U.S. stores, we have, as you mentioned, made significant investments into the stores: Point of sale; inventory management for the first time in our history; we are working on a new labor scheduling tool, which will come later this year; all of which are about improving the aspects of our partners lives and our stores, making the customer experience better. And ultimately, we believe all will contribute to financial results. Now there is a period of time in which we learn to really optimize all of that technology. And I would suggest that even the aggressive targets we've established for 2012 don't yet really begin to reflect the upside we think will ultimately come from those tools. I think the improvement that we would expect to see meaningfully across the system perhaps begins in 2012, but I would suggest becomes more visible really as we move into 2013 and beyond. Now what I would comment on in terms of Europe is, yes, there are a number of things that we have brought to bear in the U.S. over the past 2 years that are right now being brought to bear in whatever relative forms they are across Europe. Some of that will be technology, much of it will be operational procedures and stores, much of it will be consumer-facing kinds of activities that we think across-the-board will help us drive improvement in our EMEA business. And I would just point out that we believe we're seeing that improvement now the strongest margin improvement of any of our regions in 2012 is projected to be in EMEA and granted that's coming from a low place. But we're doing what we need to do to drive that forward. 2 or 3 years ago we had a total international business that sat with operating margins in the mid-single digits and we targeted at that point that we had a path to get to mid-upper teens. We're well on that path now and almost there, in fact. We now have the same plan in place for EMEA as a specific region, where we fully intend to do what we need to do in that region, giving opportunities we see there to move from the mid-single digits now, following to double-digit and into the mid-teens in the years ahead. So we're well on that path and we're comfortable that we have a plan to get there.

Our next question comes from Keith Siegner with Crédit Suisse. Keith Siegner - Crédit Suisse AG, Research Division: The update on how VIA was doing that last 4 weeks I thought was really interesting and maybe you can talk about this a little bit more broadly. The shelf resets that are happening in consumer products over the next couple of months, if you could give us an idea, say, how many more SKUs might you have now having taken that business back in and introducing some new products, including K-Cups and including Blonde. If you think about '12 versus '11, how many more SKUs might you have? How much more shelf space might you have? If you could put some rough parameters around, say, some of those metrics would be really helpful. Howard D. Schultz: I'm going to ask Jeff Hansberry, the President of our Consumer Products Group, also called our Channel Development team, to answer that question for you. Jeffery J. Hansberry: Keith as we look at the premium single cup space as both Troy and Howard mentioned, it's growing significantly. And so as we enter the K-Cups space and as we continue to expand the VIA space, we will, in rough terms, triple or more the number of SKUs that we have in that space. So in rough terms, in 2011, toward mid-2011 I want to say we have roughly 5 VIA SKUs. We've added several new VIA SKUs to include House Blend and Breakfast Blend. We've also launched as of November 1, 7 K-Cup SKUs, 5 in the Starbucks brand, 2 in the Tazo Tea brand. So we have seen a significant increase in our number of SKUs. But importantly, we have seen a significant increase in our space on the shelf as the retailer is dedicating more and more space towards premium single cup. And importantly, they see the trend and we're seeing premium single cup represent 2/3 of the growth in the total premium coffee space and we're seeing the space allocation begin to reflect that. Also importantly, we see tremendous upside in premium single cup. Today about 8% of households have premium single cup machine in their homes. We expect that to increase significantly over the next, call it, 5 years doubling maybe even tripling. So we think there's a tremendous amount of run rate and a tremendous amount of room for us to grow through road VIA and K-Cups and other platforms that we will add over time.

Our next question comes from Jason West with Deutsche Bank. Jason West - Deutsche Bank AG, Research Division: I just wonder if you could provide a little more color on the comp outlook by region. You mentioned Europe a little bit soft in this summer. If you could talk about sort of your outlook there. Are you seeing things come back a bit now and within the mid-single digit guidance, do you expect certain regions to be above that? Obviously China may be above, but sort of how you see that guidance for the regional breakdown.

I won't provide specific regional comp targets just yet. It's a bit early in the year for us to do that. But let me give you a little more texture on what we saw in Q4 because there's no question that'll help shape the thinking I think about how we enter 2012. So in the fourth quarter, obviously 10% same-store sales growth in the U.S. very, very strong. Asia Pacific growth was in the mid-20s, extremely strong. And growth in China, mainland China, same-store sales growth continues to be above that, in the 30s. So we clearly continue to have a business in China and Asia Pacific that is the tops in the world in terms of same-store sales growth. And we would expect that to some degree to continue. Now there's no question that 30-plus percent comp growth can't continue forever. I believe we firmly see very, very strong trends as we come through 2011 and enter 2012. I would make a comment about Canada specifically right now in the Americas. And that's because earlier in the year, we've spoken about Canada and U.K. together being a bit softer and averaging down our international same-store sales number. Canada in the fourth quarter really began to see an uptick for us. In fact, the fourth quarter comp growth for Canada was the strongest of the entire year for Canada. That's encouraging. We think that is a good sign of the efforts our Canadian team is making and what's ahead for us in 2012 there. But again, Europe continues to be a bit soft. I think that's reflective of the broader environment. We have a number of initiatives underway in terms of things that we brought to bear in other regions and markets in the world that are in progress of being put in place in Europe, new innovations. And that all gives us confidence that we have an opportunity to drive increased strength on both the top line and the bottom line in EMEA in the year ahead but no specific targets for you at this stage.

Our next question comes from John Glass, Morgan Stanley. John S. Glass - Morgan Stanley, Research Division: What's the price point you plan to sell the K-Cups at? How quickly do you think you can reach full ACV penetration given what you said were some bottlenecks? And is any of your CapEx going toward K-Cup production or rather single-serve production, or is it left for the Bag business?

John, first on that CapEx, I'll answer that question. The answer is no, there's no CapEx that we need to dedicate towards K-Cups. We produce the coffee but that leverages significantly off of our current coffee roasting manufacturing plant. So no incremental capital for us to spend. And now I'll turn it to Jeff to answer the first part of your question. Jeffery J. Hansberry: In terms of the price point, our frontline on K-Cups will be $1 per cup in grocery and mass outlets. With regard to going distribution, we expect to achieve 80% ACV distribution on K-Cups over time.

Our next question comes from Greg Badishkanian with Citigroup. Gregory R. Badishkanian - Citigroup Inc, Research Division: Obviously outstanding same-store sales in the U.S. and that business is doing great. What do you think drove that just given the tough macro environment? And any type of color around how that quarter progressed particularly with the backdrop of the macro will be helpful too.

Howard you want to make any comments about your thoughts about the quarter? Howard D. Schultz: Yes, I never think there's one thing that drives this kind of revenue and obviously comp store sales. When you look at the backdrop of the economy against our numbers or the other retailers that did not perform as well the last few months, it's really a stunning result. I think we demonstrated a number of things not the least of which is just operational excellence, speed of service. I wouldn't dismiss the loyalty program as well as mobile because it's attracted lots more customers. I think the value proposition of us being able to integrate value into our premium pricing with Starbucks rewards program is another example. And I think we've extended day parts in a number of areas, not the least of which is what's happened with food and lunch. And I think what was said about Health & Wellness with regard to the Bistro Box is just the beginning of I think the trust that people have in the Starbucks brand and our ability to extend Starbucks products beyond coffee. And I think what really surprised us during the quarter, was Pumpkin Spice Latte, which is a product we've had many years before, to have a 40% increase is just an unbelievable number. And I think all of the questions and perhaps the cynics of a couple of years ago that believed that when McDonald's and Dunkin' Donuts entered the space, they were going to have a destructive effect on Starbucks has proven to be not only not the case, but I think the more money that's been spent against the category has helped Starbucks create awareness, new customers and obviously distance between them and us. So it's not one thing. I give a lot of credit to Cliff and his field team. And I think it gives us great momentum going into the year and I think what we're most proud of is being able to put these numbers up against unbelievable significant headwinds not only about the economy but commodity costs.

It's Cliff Burrows here, President of the Americas. I think one of the other things that should be noted is we've had great results across the U.S., which is a testament to the quality and stability of our leadership teams. And we are really going about our work every day of delivering a great beverage to the customer, friendly service and speed. And those 3 attributes are really important to customers really across the globe for Starbucks. And we couldn't do that without our partners putting on a green apron and showing up each day and really being welcoming and being incredibly professional and proficient around what they do. So it is really 200,000 people either serving customers with their green apron on or supporting someone who does. And that's -- in one level, it's very simple. And it's hard work and we keep doing it every day and we'll continue to focus on that.

Our next question comes from Matthew DiFrisco with Lazard Capital Markets. Matthew J. DiFrisco - Lazard Capital Markets LLC, Research Division: Troy, I think you mentioned in the remarks in the International segment that you characterize China, despite the inflation, as still being strong. Could we infer at least that we're -- could you be a little bit more specific? Is it improving and expanding given the strong comp trends? And then just looking at international, the margin also there, I think you made a remark that commodities are about 120 basis points and looking at the relative cog year-over-year change was a couple of hundred basis points. I'm curious, can you give us some of the other headwinds that maybe were being dealt with in that line item. Was it rates of occupancy or something of that nature of the newer stores causing a little pressure on that?

Matt, first of all, with respect to China what you can infer is that our margins continue very strong, we're holding them at the high levels that they are at previously despite what is inflationary pressures on our P&L just as everybody else in China is facing. And the fact that we're able to overcome that very high labor inflation and other input cost inflation on that P&L and still deliver very high store-level margins and country-level margins even after G&A, which are also extremely strong. And I would expect that someday in the future, with a bit more scale, will be among the strongest we have in the world. So yes, China continues to be very healthy for us, the expansion of our top line same-store sales as well as bringing the various efficiencies and the supply chain and operations of our stores are helping us really overcome those inflationary pressures, and I'd expect that trend to continue for some time. Howard D. Schultz: Let me add one more thing about China that I think is important that is not really seen in the numbers. It's 2 things. One, the success we're having in secondary and tertiary cities is equaling or surpassing the success we've had in Shanghai and Beijing. So that gives us great optimism. The second thing is that the customer base in China today is very different than it was 12 or 5 years ago when we first opened. And that is, the customers we have today are primarily Chinese nationals. It's no longer ex-pats or American tourists, which bodes so well for the future and opportunity we have in terms of how the brand is recognized and how the brand is trusted.

And it's important to add to that point, Matt, that our very, very strong same-store sales growth in China is driven by transactions. These are increased frequency new customers coming in to our stores. It's not driven by pricing and that gives us extreme confidence in our ability to keep driving more volumes to those stores and continue to drive what is a great return on capital in this expanding business in the years ahead. Now overall, international far and away, the commodity cost impact is the most meaningful part which you see happening in cost of goods. There's modest pressures in a few other places that we invest in, supply chain and some occupancy cost. But not extremely meaningful nor any trends that concern us there. Clearly, commodity cost across all of our businesses the pressure we're seeing is in cost of goods.

Our next question comes from Joe Buckley with Bank of America. Joseph T. Buckley - BofA Merrill Lynch, Research Division: A question on the remodel program. The 1,700 stores, is that a number for the Americas or is that a number globally? And if it is globally, could you just talk geographically, where that will be split? And besides the look of the stores, the main functional focus of the remodels? Howard D. Schultz: It is U.S. stores, but Cliff you want to take that?

Joe, we have 1,700 stores. That is a mix of what we would call minor refreshes usually at the 5-year mark and then mostly about 500 of these are major refurbs which are at the 10-year mark. Each time we take a look at the flow, the assets of the store and say, "How can we improve the customer experience, the partner experience and increase capacity?" Now that can be improving the flow, it can be putting in new equipment, whether that's the clover machine, whether that's repositioning warming ovens, whether it's putting in an extra brewer. At the same time, we also look at the third place and say, "Can we increase seating so that we can get more people in there at peak times?" Drive-through lanes, the length of the stack, the equipment around effectiveness and efficiency of the order and just improved flow there. Sometimes it's outside the store and it can be visibility, it can be at the patio space. And it's really a holistic view and we try and do that to bring it up to the latest view. We also obviously are looking carefully at the sustainability of the materials and lead certify on new stores we both are bringing in a local relevance to the community where the store is present. So it's all of those, Joe, that are contributing to it.

And to be clear, Joe, that 1,700 stores, as I think Howard mentioned, is in the U.S. We continue to put together our plan for how our learnings out of this U.S. renovation program and all the great things we've established from that in the past year or 2 as we accelerate the program, how that's applicable and how to more substantially apply some of that outside of the U.S. And so you'll see us develop those plans more meaningfully in the quarters ahead. Joseph T. Buckley - BofA Merrill Lynch, Research Division: Can you talk about the relative sales which you get from the minor versus the major remodels?

Well, the minor remodels are generally about maintaining a stream of excellence to the consumer. And so generally, when we initially justify the capital to invest in a store, we include life cycle capital over 10 years, including the minor refreshes that may happen. So we don't go into a minor refresh expecting an uplift. Now sometimes we see that, but that's not exactly what we aim for. The major remodels, particularly more recently where we've been more substantial in what we've done and some of the sites, Joe, that I think you've seen, do contribute. I'm not ready to extrapolate over a big portfolio of stores about what that could mean. We've seen very solid top line lift from some of these major remodels and renovations, and very good return on the incremental capital that we're spending to do that. So we're encouraged by it but I wouldn't yet say there's something there you can extrapolate across the whole system.

Our next question comes from Sara Senatore with Sanford Bernstein. Sara H. Senatore - Sanford C. Bernstein & Co., LLC., Research Division: Looking through CPG and China sort of think through, you have all these great growth opportunities in single-serve, what are the implications for the core bagged coffee? I actually would have thought your CPG business might have been up a little bit more given bringing packaged coffee in house, what the annualized revenue number might have been. So how do you think about and how should I think about cannibalization or the trade-off between the new business you're doing and the existing very good core business?

Sara, we'll have Jeff answer that. Jeffery J. Hansberry: Sara, so in terms of the base Packaged Coffee, we think the future is very bright for Packaged Coffee. We continue to see revenue growth on Packaged Coffee in the last quarter up 7%. As we move toward, the new Starbucks Blonde Roast, we are going to be serving a significant unmet segment where 40% of premium coffee consumers prefer a lighter roast and we're going to deliver a great product in a unique Starbucks way. In addition to that, we've got a fantastic package graphic upgrade that lands in January as well that will make it easier than ever for our customers to choose their preferred roast and blend of Starbucks coffee. As we go forward, we do expect some cannibalization as our K-Cup business continues to grow. But we expect that to be modest and we expect to continue to grow our Packaged Coffee business.

Our next question comes from Michael Kelter with Goldman Sachs. Michael Kelter - Goldman Sachs Group Inc., Research Division: I have the same kind of sentiment where I hate to ask a hard question, a negative question, given how the strong quarter is. I guess what strikes me is you have so many balls in the air at once now. You've got taking back the CPG business and launching K-Cups and rejiggering the divisions and reaccelerating the unit growth and launching new products like Blonde and others. I guess my question is, where are the organizational pressure points? How are you addressing it and ensuring that with all these balls in the air, one doesn't drop? And why not take maybe a more measured approach versus all these great ideas at once? Howard D. Schultz: Let me try and answer that. I think it's an appropriate question and one that I think we've asked ourselves. But I think in order to answer it I want to bring some texture. In 2008, 2009, when we were dealing with the cataclysmic financial crisis and navigating through our own self-induced mistakes that we had to own up to, I think the transformation of the company was twofold: One, it was consumer-facing in developing new ways to provide operational excellence and innovation. But I think we also developed significant new disciplines and muscle memory into the company in order to create not only a new organizational structure but a new way to operate the business. And when I say in my remarks that the company is healthier from a financial perspective, that's one thing. We're also healthier in terms of the talent that has come into the company and the organizational proficiency that we've created over the last 2, 3 years in order to navigate through both the downturn in the economy. Most importantly, I think great companies build and take market share during downturns in the economy. I think right now, our approach is to leverage the unique assets that Starbucks has that we think is quite unique and maybe something that no other company has, and that is the ability to create multiple channels of distribution leveraging the equity of the brand and our ability to introduce products and sub-brands into our stores. So we don't view it as something new to us or more than any other time before. What we look at is opportunities that we have that we think are well within our reach in terms of the organizational talent and capabilities and market opportunities to do things that haven't been done before. If you look at VIA, you look at Blonde, you look at K-Cups, all 3 of those categories are within our core business and that's coffee. All we're doing is bringing innovation and new channels of distribution. If you look at International, we've been in the International business since 1996 and the core expansion for the company, the core target and prize is China. We've been there 12 years and we've got a super team that is Chinese nationals that we believe that are in place in order to really grow that business. And when you look at the retail business, this is something we've been doing for 40 years. We've just gotten better at it and we've learned through the innovation of new stores, new designs and new formats that we can create incremental revenue, incremental profit. And we also think this is a time that we are deeply committed to creating separation and distance between ourselves and everyone else in our space. And then you couple that with the innovation in terms of technology that we're bringing both to the Card program and mobility. If you look at just the last 6 months, we have done more revenue and more transactions on smartphones than any other brand in America. And we're going to take full advantage of the connectivity through the channels distribution in the technology and the opportunity that we have overseas. I will say and just in closing because it's a little long-winded, that we were humbled by what happened in the past. And I personally and I speak for everyone on the team, we're not going to allow ever again at Starbucks for growth to cover up mistakes. We're not going to have unbridled growth that is turned into a strategy as opposed to a purpose. And the kind of growth we're talking about is 10% growth but it's a new kind of growth. It's a new blueprint for growth leveraging new channels of distribution and we have at our fingertips multiple billion-dollar businesses: K-Cups, Starbucks VIA, Starbucks Blonde Roast and obviously we're in the early nascent stages of International and specifically China.

Our next question comes from Jeffrey Bernstein with Barclays Capital. Jeffrey Andrew Bernstein - Barclays Capital, Research Division: Just I guess a 2-part question on International. I think we're still sticking with kind of mid to high teens long-term margin goal. Just to clarify, I believe in that mid-single digit right now in EMEA and 30% in Asia, so I'm just wondering obviously with that disparity, what you'd see to be the pace of growth in both those segments perhaps in 2012 within that I guess 50 to 100 basis points worldwide, and what the longer-term target is that's going to get you to that -- longer term by region, I should say, that was going to get you to mid- to high teens. And whether or not you're going to touch on the U.K. In the last time you mentioned, I guess the comps were still tracking positive although disappointing. I'm just wondering if you could give us some directional trends on the U.K. and the issues that are perhaps out of your control.

There's a lot there so I'll try to go through it and remember it as I can. In terms of how we expect International to progress towards a mid- to upper teens. As I mentioned earlier in my comments, China and Asia Pacific is already very, very strong as a region. And we expect over time, as we grow rapidly, to be able to maintain the current margin structure of that region largely somewhere in the 20s. It's got very strong store-level profitability. We don't have yet scale in China, so we know over time the country level margins in China should grow further for us. I would just point out also that there's an important contributor right now to our margin structure in the China and Asia Pacific region. We haven't said much it, and that's Japan. And much of that has to do with how we operate in Japan, which is a joint venture that we own 40% of. We do not consolidate the top line revenue of that business but it is our largest market in China and Asia Pacific, produces very significant profitability that we pick up 40% of that JV income. And also growth out of that license business, which comes with it. As a result, a very, very strong licensed margin that adds into the China and Asia Pacific margin structure. So the margins for in Asia is both about strength in China as we grow and it's also about the very, very strong healthy business in Japan, that's a license market for us today. In EMEA, that is the place in the world where we would expect the biggest increase over time from where we are today and that's given that, that market, that region is not where it should be today. And we have plans in place to move it north from the mid-single-digit that it's at now. Sometime in our future, and I've said this before, we would expect EMEA, given what we can see in terms of the opportunity, the plans we have in place to drive margin improvement over time, to progress, again this is over time, toward the mid-teens. And we think we have a very healthy path to get there and we have some countries already operating at that place that gives us confidence that we can do that. Again China and Asia Pacific, I would expect to be north of that well into the 20s, higher than what we see in the Americas. And then in the Americas, largely about the U.S. but importantly, in the future increasing contributions out of Canada, places like Brazil as we grow rapidly. I would also expect very, very strong healthy margin contribution there. So that contribution over time across those regions is how I would still be confident in us progressing towards that mid- to upper teens. Jeffrey Andrew Bernstein - Barclays Capital, Research Division: [indiscernible] in U.K. specifically or...

Yes, I think what I'd tell you about the U.K. is that, and we've said this throughout this year, that the U.K. has been relatively softer for us, consistent with other parts of Europe to some extent, than say what we've seen in the Americas in China Asia Pacific. In the fourth quarter that continued. U.K. is positive, it is growing, we have positive same-store sales growth. But it is somewhat lower than what we see, for example, now in Canada and clearly lower than what we have in the U.S. And again I think that is reflective to a large degree of the environment there. We expect, as we move into 2012 given the number of innovations we have lined up for the U.K. and we're confident in our ability to capitalize on the prominence of the Olympics in London this coming summer that all those pieces together will help us drive a stronger same-store sales growth in the U.K. and continue to drive margin improvement in that region.

Our final question comes from the line of David Palmer with UBS. David Palmer - UBS Investment Bank, Research Division: You mentioned the lower earnings growth in the first half due to cost in the Green Coffee cost side I think specifically. Between your CPG division and your retail stores, your own stores, where are you accepting more margin impact as defined by inflation that is not being offset by pricing? And really related to that, I really wonder why Starbucks should ever accept dollar impact to profit from Green Coffee inflation when you have such a strong brand and relatively higher-income consumers? I sure see a lot of pricing going on out there.

Let me speak, David, to the first part of it. And then I'll probably ask Jeff to speak a little bit to our pricing strategy and what we're doing there because I think that addresses the back part of your question. In terms of margin, the biggest margin hit, cost of goods hit from commodity cost, particularly coffee cost, is in our CPG segment. And that's largely because coffee cost are a bigger component of the cost structure in CPG than of course they are in our retail stores. And so our retail stores have more levers in the rest of the P&L to pull to help overcome that coffee cost and we've been able to do that as we -- despite the pressures we have faced over the past year, have improved margins in our stores. In the CPG channel however, we did see margin deterioration in the fourth quarter, very consistent with kind of margin deterioration we saw the third quarter, and that was completely due to coffee cost. Absent the coffee cost impact, we would have margins very consistent with previous year and very much on the pace of coffee costs [ph]. Now I would also just point out, even with the coffee costs that we're absorbing in CPG, it's an extremely healthy margin business, at plus 30% in the quarter we just ended and 25% or better in the year ahead that we see. So it's a very healthy margin business even with coffee costs where they are. I'll ask Jeff to speak a bit to pricing and your point about why we would accept any deterioration as a result of that. Jeffery J. Hansberry: We continually look at price and we have taken price of about 12% in 2011. At the same time however, we see tremendous upside and potential to grow the Starbucks brand. So we are working to maintain a price point that will continue to drive growth on the Starbucks brand. And again importantly, we're constantly looking at pricing. And we think we're in a very good spot right now.

That concludes today's call. Thank you for joining us. We'll talk to you again when we report first quarter earnings in January 2012. Thank you, and have a good day.

Ladies and gentlemen, this does conclude today's Starbucks Coffee Company's Fourth Quarter and Fiscal Year End 2011 Earnings Conference Call. You may now disconnect.