Orin Smith

COMPANY VIEW

A statement by Howard Schultz, Chairman and Chief Global Strategist of Starbucks

Corporation and Orin C. Smith, President and Chief Executive Officer of Starbucks

Corporation, follows. This has been taken from the company’s 2003 Annual Report.

From the early days of Starbucks history, we have eagerly embraced possibilities and

let our imagination propel us to create new experiences instead of accepting the

status quo. That spirit, combined with our belief that a company can indeed achieve

the delicate balance between social and fiscal responsibility, and, frankly, our genuine

love for a great cup of coffee, has guided Starbucks on an amazing journey from a

single store in Seattle to a global presence with more than 7,000 locations worldwide.

That journey, which has yielded some wonderful rewards, is still in its early stages.

In a challenging economic environment where enduring success is extremely difficult

to achieve, Starbucks continues to thrive. The overwhelming global acceptance of the

Starbucks brand has resulted in the strongest performance in our history. Fiscal 2003

was marked by consolidated net revenues of $4.1 billion (up 24 percent from $3.3

billion in fiscal 2002), annual comparable store sales growth of 8 percent, and

increased market capitalization from approximately $300 million in 1992 to

approximately $12 billion in 2003. In addition, we opened 1,201 retail store locations

worldwide, including the 1,000th store in our Asia Pacific region. We also celebrated

our 12th consecutive year of positive comparable store sales growth of 5 percent or

greater and at fiscal year-end, we had 141 consecutive months of positive

comparable