Additionally, consolidated revenues are recognized net of any discounts, returns, allowances and sales incentives, including coupon redemptions and rebates. Clean water is critical to the preparation of coffee and tea beverages and our ability to ensure a clean water supply to our stores can be limited, particularly in some international locations. Depending on the underlying asset that is impaired, these losses may be recorded in any one of the operating expense lines on the consolidated statements of earnings: for retail operations, the net impairment and disposition losses are recorded in store operating expenses and for all other operations, these losses are recorded in cost of sales including occupancy costs, other operating expenses, or general and administrative expenses. Gains and losses from these instruments are largely offset by the financial impact of diesel fuel fluctuations on our shipping costs which are included in operating expenses. The Other category comprised approximately 1% of total net revenues. During fiscal 2003, specialty revenues which include royalties and fees from licensees as well as product sales derived from Specialty Operations accounted for approximately 15% of total net revenues.
Our coffee and tea products sold through our Channel Development segment compete directly against specialty coffees and teas sold through supermarkets, club stores and specialty retailers and compete indirectly against all other coffees and teas on the market. Royalty revenues based upon a percentage of reported sales and other continuing fees, such as marketing and service fees, are recognized on a monthly basis when earned. In addition to the competition generated by supermarket sales of coffee, Starbucks competes for whole bean coffee sales with franchise operators and independent specialty coffee stores. A focused selection of beverage-making equipment and accessories are also sold in our stores. We started the year by putting in place a new leadership team that is focused on increasing the Starbucks brand presence, health and relevancy across the region, improving the profitability of the existing store base through a focus on revenue growth and operating costs, and identifying opportunities for new store growth through licensing arrangements. Company-operated Retail Stores The Companys retail goal is to become the leading retailer and brand of coffee in each of its target markets by selling the finest quality coffee and related products and by providing superior customer service, thereby building a high degree of customer loyalty. Besides, the long—term debt remained identical in the past year.
To ensure compliance with its rigorous coffee standards, Starbucks controls its coffee purchasing, roasting and packaging, and the distribution of coffee to its retail stores. These non-retail channels are collectively known as Specialty Operations. Store operating expenses as a percentage of total net revenues decreased 60 basis points. Starbucks have loyal employees who are valued, motivated, and hard-working and are provided a pleasant working environment. The intangible assets acquired as part of the transaction include the La Boulange trade name and proprietary recipes and processes. From June 1994 to June 2000, Mr. When evaluating goodwill for impairment, we first perform a qualitative assessment to determine if the fair value of the reporting unit is more likely than not greater than the carrying amount.
Based on the recent benchmarks over a 12 month period, Starbucks is still in line with the industry. Prior to June 1994, Mr. Some factors critical to the success of the Companys international stores and licensees are different than those affecting the United States stores and licensees. From 1994 to 1996, he served as president and manager of Safeways 130-store Eastern Division. The cards are also accepted at a number of international locations. We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. In fiscal 2012, we recognized additional income associated with unredeemed gift cards due to a recent court ruling relating to state unclaimed property laws.
Employees working in licensed retail locations are required to follow our detailed store operating procedures and attend training classes similar to those given to employees in company-operated stores. Category Management from May 2004 to August 2007. We may use our available cash resources to make proportionate capital contributions to our equity method and cost method investees. Cash flow hedges related to anticipated transactions are designated and documented at the inception of each hedge by matching the terms of the contract to the underlying transaction. The Company faces intense competition from both restaurants and other specialty retailers for suitable sites for new stores and qualified personnel to operate both new and existing stores.
We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the respective tax bases of our assets and liabilities. There can be no assurance that Starbucks will be able to continue to secure adequate sites at acceptable rent levels or that the Company will be able to attract a sufficient number of qualified personnel. Financial Statements are the core of financial accounting and allows shareholders to view all the income and expenses going in and out of the business. We routinely evaluate the likelihood of realizing the benefit of our deferred tax assets and may record a valuation allowance if, based on all available evidence, we determine that some portion of the tax benefit will not be realized. Additionally, Kraft distributes Starbucks products to warehouse club stores, for which the Company pays a distribution fee.
Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. During fiscal 2003, the Companys retail sales mix by product type was comprised of approximately 78% beverages, 12% food items, 5% whole bean coffees and 5% coffee-making equipment and accessories. You should carefully consider the risks described below. Starbucks have willed many opportunities to become the most valuable gourmet coffee leader in the world. In addition to fixed-price and price-to-be-fixed contracts for coffee purchases, we have entered into commodity hedges to manage commodity price risk using financial derivative instruments. Management expects total net revenue growth of approximately 20% and earnings per share growth of approximately 20-25% per year for the next 3-5 years.
Intraday data delayed 15 minutes for Nasdaq, and other exchanges. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, is dependent on circumstances existing if and when remittance occurs. Certain leases provide for contingent rents, which are determined as a percentage of gross sales in excess of specified levels. To provide a greater degree of access and convenience for non-pedestrian customers, we continue to selectively expand development of drive-thru stores. Short-term liquidity includes items that are to be received or paid in cash within a year. The supply and price of coffee we purchase can also be affected by multiple factors in the producing countries, including weather, natural disasters, crop disease, general increase in farm inputs and costs of production, inventory levels and political and economic conditions, as well as the actions of certain organizations and associations that have historically attempted to influence prices of green coffee through agreements establishing export quotas or by restricting coffee supplies.
The Company purchases green coffee beans from coffee-producing regions around the world and custom roasts them to its exacting standards for its many blends and single origin coffees. So, now they have the opportunity to continue to expand in their development overseas, continue their innovation and commitment to product development, and possibly co-brand with other manufacturers of food and drinks to help expand their product line. The internal weakness is also obvious, which is the price. Under the licensed model, Starbucks receives a reduced share of the total store revenues, but this is more than offset by the reduction in its share of costs as these are primarily incurred by the licensee. Maintaining the financial portion of the organization is vital to the success and well-being of the company. Yes x No ¨ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T § 232.