Good afternoon. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Starbucks Conference Call to provide a brief overview of the company's new reporting segments.

JoAnn DeGrande

Previously, we informed you that we would be providing financial results for our new reporting segments, which were effective at the beginning of fiscal 2012. Yesterday, we filed an 8-K with those financial statements, and we're hosting this call today to provide some additional background information, as well as to give you an opportunity to ask questions to help you model these new segments.

Troy Alstead

Thanks, JoAnn, and good afternoon to many of you. Good morning to others. In July, we announced a new leadership structure that will enable us to accelerate our global growth strategy, highlighted by a new 3-region organizational structure for our retail business. Those 3 regions include the Americas; Europe, Middle East, Africa; and China, Asia Pacific.

Today, I'm going to spend a few minutes walking you through each region to provide additional color on historical performance of each. I'll also take you to a change to our G&A reporting, which includes shifting certain indirect costs from their inclusion in business segment results to unallocated corporate expenses.

China and Asia Pacific, or CAP, is our third retail reporting segment and comprises 5% of Starbucks consolidated revenue. It is our fastest-growing segment, with revenues increasing 36% in fiscal 2011. Operating margin is very strong at 35%, contributing 8% of Starbucks operating income, excluding the operating loss from other. Fueled by the recent strength in China, Japan, Korea and others, CAP is a key focus area for our future growth. We have already disclosed that we plan to open up approximately 300 net new stores in this region in fiscal 2012, representing a unit growth rate of more than 10%. Demand for Starbucks has never been higher in this part of the world, and we're just scratching the surface.

Now it is very important to understand the role that ownership mix plays with respect to the strong margins in this region. As our company operated presence expands as a portion of our business, we'll naturally see some margin compression due solely to business mix as we shift moderately away from that license and JV income over time, particularly given our company operated growth strategy in China. We target margin improvement on a market-by-market basis. But as a whole, due to a higher mix of company-operated stores, CAP margins will moderate to an extremely healthy 30% or so in 2012.

We're excited that John Culver, who led our former International business the past 2 years, will now be solely focused on this fast-growing and important region. He will also lead the integration of the India market into the portfolio later this year.