Drudge Retort: The Other Side of the News
Monday, June 16, 2014

Starbucks will provide a free online college education to thousands of its workers, without requiring that they remain with the company, through an unusual arrangement with Arizona State University. The program is open to any of the company's 135,000 United States employees, provided they work at least 20 hours a week and have the grades and test scores to gain admission. "I believe it will lower attrition, it'll increase performance, it'll attract and retain better people," said the company's chief executive Howard D. Schultz.

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"I believe it will lower attrition, it'll increase performance, it'll attract and retain better people," said the company's chief executive Howard D. Schultz

I bet he's right.

#1 | Posted by BruceBanner at 2014-06-16 12:36 PM | Reply | Flag:

Damn liberals...trying to educate..er..I mean..ruin this country.

.

#2 | Posted by Dave at 2014-06-16 12:51 PM | Reply | Flag:

Another business wastes profits. Doesn't the CEO need a new yacht?

#3 | Posted by TFDNihilist at 2014-06-16 01:07 PM | Reply | Flag: | Funny: 2

I posed this at 9:29am it's on the back page. No butt hurt just facts.

#4 | Posted by gracieamazed at 2014-06-16 01:26 PM | Reply | Flag: | Funny: 1

The righties here in Arizona oppose this Starbucks College scholarship plan, because of ASU's well known Marxist-Socialist-Communist ideology

#5 | Posted by SammyAZ_RI at 2014-06-16 01:57 PM | Reply | Flag:

I remember seeing a 60 Minutes article on Starbucks once; at the time (about 10 years ago) they were one of the few employers offering full health insurance coverage even to their part-time employees. It was, according to the article, their single biggest expense; even more than coffee beans.

#6 | Posted by hawk at 2014-06-16 02:28 PM | Reply | Flag:

#2 | POSTED BY DAVE

By all means please explain how this is a "liberal" thing and not just good business. Did I miss the memo that liberals own everything dealing with coffee now?

#7 | Posted by paneocon at 2014-06-16 04:43 PM | Reply | Flag: | Funny: 2

#7 | Posted by paneocon

Your density is unparalleled.

.

#8 | Posted by Dave at 2014-06-16 05:29 PM | Reply | Flag: | Newsworthy 4

Starbuck's posted an 18% profit margin at the end of FY12. At the end of FY13, the profit margin was .01%. Looking at their financial statements, it would seem that there was some funky, $2.8B expense that occurred in that FY. Not sure what that was.

If all 135k employees took advantage of this benefit (they won't, admittedly), the cost to the company would be $1.35B. In FY13, SB didn't take that much in in revenue. In FY12, they barely pulled in that much, but during that FY a program like this would have reduced their profit margin from 18% down to .04%

So how do you make this work? Through reduced taxes. Education expenses are a write-off. They allow a firm to preserve their profit margin in a roundabout way, while at the same time earning goodwill by engaging in the process of tax loophole exploitation.

#9 | Posted by madbomber at 2014-06-16 09:33 PM | Reply | Flag:

Where are you getting your numbers MadBomber? They appear to be horse manure.

#10 | Posted by BruceBanner at 2014-06-16 09:41 PM | Reply | Flag:

Starbucks: 2013 best year in company history
Company caps year with same-store sales, traffic increases
Oct 30, 2013 Lisa Jennings

Starbucks Corp. on Wednesday reported a 34-percent increase in profit for the fourth quarter, saying traffic increased in all regions around the world. Same-store sales in the U.S. climbed 8 percent, including a 5-percent increase in transactions. Executives at the Seattle-based company said the quarter capped the best year in its 42-year history. Starbucks ended the fiscal year with 19,767 locations globally, including 13,493 in the Americas.

FULL FISCAL YEAR 2013

NET INCOME
Result: $1.7 billion, or $2.26 per share
% Increase: 24% (from $1.4 billion, or $1.79 per share)
REVENUE
Result: $14.9 billion
% Increase: 12% (from $13.3 billion)
SAME-STORE SALES
% Increase systemwide: 7%
% Increase Americas: 7%
% Increase Europe/Middle East/Africa: Flat
% Increase China/Asia Pacific: 9%

#11 | Posted by BruceBanner at 2014-06-16 09:42 PM | Reply | Flag:

"Where are you getting your numbers MadBomber? They appear to be horse manure."

Yahoo Financials, which showed Starbucks earning $8.3M in FY13. Very different than the numbers you posted.

"finance.yahoo.com"

But I'm inclined to believe yours. Going from NE of $1.3B in FY12 to $8.3M in FY13 doesn't make much sense.

I don't know. I also checked Bloomberg Business Week and their numbers were the same as Yahoo! The $14B in revs looks right ($14.82B), as does the FY12 NE of $1.4B ($1.383B). What I can't figure out is why the income statements are showing the much lower net income. It has to be the "Other Unusual Items, Total" expense of $2.784B, recorded as a legal settlement. But even then the numbers don't add up to $1.7B in net income.

What's your link?

#12 | Posted by madbomber at 2014-06-16 10:00 PM | Reply | Flag:

Found the problem. It looks like the author in your link wasn't taking into account this:

"Starbucks Corp. (SBUX) said it would pay Mondelez International Inc. (MDLZ) $2.79 billion to settle a dispute over distribution in the coffee-shop chain's bagged-coffee unit, as grocery-store sales become a growing part of the business."

"www.bloomberg.com"

#13 | Posted by madbomber at 2014-06-16 10:03 PM | Reply | Flag:

"So how do you make this work? Through reduced taxes. Education expenses are a write-off. They allow a firm to preserve their profit margin in a roundabout way, while at the same time earning goodwill by engaging in the process of tax loophole exploitation."

Thanks for posting the basic logic of high taxes with generous business exemptions, great things can happen. I want as many companies as possible to "exploit" our tax laws and do things like this.

#14 | Posted by danni at 2014-06-16 10:26 PM | Reply | Flag: | Newsworthy 1

If all 135k employees took advantage of this benefit (they won't, admittedly), the cost to the company would be $1.35B.

The offer is only available to employees with the grades and test scores to qualify for admission to Arizona State. That's going to be a significantly smaller chunk of the 135,000.

#15 | Posted by rcade at 2014-06-16 10:29 PM | Reply | Flag: | Newsworthy 1

Mad; I closed my tab. If Bloomberg and Yahoo have the same numbers I'll believe them.

#16 | Posted by BruceBanner at 2014-06-16 10:31 PM | Reply | Flag:

I think this is great as I see nothing wrong with online college courses [though many employers feel differently] Of course, unfortunately, many of the Starbucks baristas already have college degrees and this was the only place they could find a job.....

#17 | Posted by MSgt at 2014-06-17 12:58 AM | Reply | Flag:

"Thanks for posting the basic logic of high taxes with generous business exemptions, great things can happen. I want as many companies as possible to "exploit" our tax laws and do things like this."

Most companies are already doing things like this. Including the much-detested Wal-Mart and McDonalds. And I agre with you. It's great. But remember, programs like this only benefit those with ambitions and aspirations to move beyond the place they currently are. the do nothing to improve the standard of living for those without aspiration or ambition.

#18 | Posted by madbomber at 2014-06-17 09:01 AM | Reply | Flag:

This is horrible.

I might start liking Starbucks again.

Sneaky bastards.

#19 | Posted by donnerboy at 2014-06-17 02:38 PM | Reply | Flag: | Funny: 1

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