#1PERSHING SQUARE Doppio October 9, 2018 Pershing Square Capital Management, L.P.#2Overview Ticker: "SBUX" Stock Price: $56 Div. Yield: 2.6% ► Leading global specialty coffee retailer and iconic brand ► 29,000 stores with over $32 billion in systemwide sales 50% U.S., 50% International ■ 53% Owned (U.S. 60%, China 100%, RoW 30%), 47% Licensed Americas (primarily U.S.) = 67% of EBIT, Asia Pacific = 22%(1) Market capitalization and enterprise valuation of ~$77bn(²) Pershing Square owns 15.2 million shares at an average cost of $51 per share(3) (1) Based on Pershing Square estimated 2019 EBIT including JV income. (2) Based on net cash of ~$0.4bn as of 6/30/18 pro forma for $5bn received from the closing of the recent Nestle transaction. (3) Shares owned by all core funds managed by Pershing Square through forward contracts. 1#3Long-Term Share Price Outperformance SBUX has generated an annualized TSR of 26% over the last ten years, twice the return of the S&P 500 over the same period Share Price From 10/5/2008 to 10/5/2018 $70 $60 $50 $40 $30 $20 $10 SBUX S&P 500 Source: Bloomberg Annualized TSR 10-Year 15-Year 26% 13% 15% 9% $0 10/5/08 10/5/09 10/5/10 10/5/11 20-Year 18% 8% wwwm 2 $56 10/5/12 10/5/13 10/5/14 10/5/15 10/5/16 10/5/17 10/5/18#4Share Price Down Over the Last 3 Years Starbucks shares are down 6% over the last three years. Including dividends, shareholders have earned a 0% total return, despite EPS growth of ~50% Share Price From 10/5/2015 to 10/5/2018 $70 $65 $60 $55 $50 $45 10/5/15 4/5/16 10/5/16 4/5/17 Berit. 10/5/17 U.S. corporate tax reform boosts earnings by ~11% before reinvestment(1) 4/5/18 Source: Bloomberg (1) SBUX announced plans to reinvest approximately 45% of the savings from corporate tax reform into higher wages and benefits for U.S. partners and digital initiatives. 3 $56 10/5/18#5Current P/E at a Discount to Recent History Starbucks is trading at 22x consensus P/E today, a substantial discount to recent historical averages of ~26x NTM Forward P/E From 10/5/2008 to 10/5/2018 35x 30x 25x 20x 15x 10x 5x Ox 10/5/08 Source: Capital IQ 10/5/09 10/5/10 10/5/11 10/5/12 10/5/13 10/5/14 4 10/5/15 Average P/E: 3-Yr 5-Yr 10-Yr 25.9x 26.7x 24.4x 22.1x 10/5/16 10/5/17 10/5/18#6Investment Highlights Category killer in away-from-home coffee with leading omnichannel presence Quality and innovation advantage over low-cost coffee and traditional QSR players Convenience, technological and cost advantage over high-end, boutique players Premium coffee is a secularly growing and attractive category Frequent consumption creates loyal customer base and trade-up potential Aligned with health and wellness and sustainability trends Attractive unit economics support owned business model in key markets ■ Frequency, price point and high gross margins support profitability Build costs are lower than traditional restaurants due to the absence of kitchens New units in the U.S. generate ~30% cash EBITDA margins and ~65% pretax ROIC; new unit economics in China are even higher China will become an increasingly greater percentage of the total company over time 5#7Investment Highlights (Cont.) Long runway for unit growth in the high-single-digits Robust international unit growth led by China as well as other underpenetrated countries ▪ Incremental penetration opportunity in the U.S. Track record of consistent growth in same-store sales and transactions Long-term average same-store sales ("SSS") growth of 5% both in the U.S. and globally SSS historically driven ~50% by transactions, ~30% by pricing, and ~20% by mix Recent acquisitions and divestitures suggest strong focus on core business Acquisition of East China JV and licensing of lower-performing or lower potential markets ▪ Sale of CPG business to Nestle for $7.2bn and ongoing royalties ■ Closing of Teavana stores and divestiture of Tazo tea brand to Unilever Share buybacks of ~$14bn over the next two years (~18% of market cap) 6#8Best-in-Class Unit Economics Continued store growth in Starbucks' largest owned markets is supported by industry-leading unit economics New Units Economics: Starbucks vs. Other High-Return Concepts ($¹000s) U.S. - Pretax ROI Store Build Cost Average Unit Volume Store-Level EBITDA % Margin Payback Period (years) 66% TM $680 $1,500 $450 30% 1.5 38% TACO BELL $1,280 $1,765 $480 27% 2.7 China - Pretax ROI 86% TM $300 $700 $260 37% 1.2 59% KFC $380 $890 $225 25% 1.7 Source: SBUX US store build cost and AUV are as per December 2016 investor day, and store-level EBITDA margin is as per June 2018 investor conference. SBUX China data is as per May 2018 China investor day. Taco Bell store build cost is as per Bernstein research, while other assumptions are based on FY 2017 results for Taco Bell's company-operated stores assuming 80% of Taco Bell Division D&A relates to those stores. KFC China data is as per Yum China October 2017 investor day and excludes a 3% franchise fee paid to YUM in order to illustrate the economic returns of each store to the entire system. 7#9Exceptional Returns on New Unit Capex We estimate that every dollar Starbucks spends building a new store in the U.S. or China is worth $10 to $15 shortly after the store opens Illustrative Value of Each New Store at SBUX Base Case Valuation Multiple ($¹000s) U.S. China 10.9x Return $680 Store Build Cost $480 Run-Rate EBIT DA $7,440 Value of Store at 15.5x EBITDA 15.5x Return $300 Store Build Cost $300 Run-Rate EBITDA $4,650 Value of Store at 15.5x EBITDA Source: Store build costs as per prior page. Run-rate EBITDA for the U.S. store calculated as run-rate AUV of $1.6mm as per December 2016 investor day times a 30% assumed run-rate EBITDA margin. Run-rate EBITDA for the China store calculated as run-rate AUV of $0.8mm as per May 2018 China investor day times a 37.5% assumed run-rate EBITDA margin. SBUX base case valuation multiple of 15.5x EBITDA is as per Pershing Square assumptions. 8#10Value of Starbucks China Increasingly Important China will become increasingly important to the value of Starbucks over time as it represents Starbucks' single-largest unit growth opportunity with the best store-level unit economics Starbucks Earnings Mix by Geography: 13% 20% Source: Pershing Square estimates 67% 2018E Americas 15% CAGR 8% CAGR 6% CAGR Rest of World 17% 9 20% 63% 2022E We expect that China will grow nearly twice as fast as Starbucks' overall earnings and represent an increasingly larger percentage of the company's earnings China#11Accelerated Capital Return Plan Management has announced a share repurchase plan of ~$14bn over the next two years, nearly 20% of the current market cap Starbucks Annual Share Repurchases (FYE Sept. 30, $bn) $0.6 2013 $0.8 2014 $1.4 $5bn in after-tax proceeds from Nestle CPG sale (received 8/28/18) $2.0 2015 Share Buybacks ($bn) 2016 $2.0 2017 $5.1 10 $10.0 13% 18% $4.3 Source: 2013-2017 as per SBUX public filings; 2018E-2022E as per Pershing Square estimates based on SBUX management commentary. 20% $0.9 2018E 2019E 2020E 2021 E Cumulative % of Current Market Cap 21% $1.1 2022E#12Key Drivers of Recent Stock Price Weakness x Slowdown in U.S. same-store sales Reduction in long-term growth targets * Leadership transition and management turnover 11#13Industry Context#14Coffee is a Secularly Attractive Category Within total coffee, premium products are outgrowing traditional offerings and away-from-home is gaining share from at-home OCCASIONS ARE RAPIDLY EXPANDING OUTSIDE OF THE MORNING Past-week penetration of coffee at time of day BREAKFAST MORNING PO LUNCH 87% 80% -7pts 36% 41% 5 pts 15% 18% 3 pts DINNER ER 19%26% 7pts Source: Keurig Dr. Pepper investor day, March 20, 2018. COFFEE HAS BECOME A MAINSTREAM BEVERAGE OF CHOICE FOR TEENS Coffee and soft drink incidence among 13-18 year olds, past-day penetration COFFEE 21% 45% 2014 SOFT DRINKS 37% 42% 2017 13 HEALTH AND WELLNESS TAILWIND The New York Times Coffee May Protect Against Cancer, W.H.O. Concludes TIME 3 Reasons Why Coffee Is So Good For You#15Strategic Investment in Coffee is Accelerating Over $100bn in coffee-related acquisitions have been completed since 2012, at valuations that average ~20% more than where SBUX now trades TEV / EBITDA for Coffee-Related Transactions 2012 2013 17.4x Target 16.3x 2014 15.8x 16.5x 2015 2016 2017 13.8x Mondelez Tim KEURIG International GREEN MOUNTAIN coffee Hortons. 16.2x Krispy Kreme DOUGHNUTS JAB 3G/BKW JAB JAB $11.1 $13.4 $14.3 $1.3 17.2x 14 Coca Panera BREAD 16.7x DE Peet's MASTER COFFEE BLENDERS Acquirer JAB JAB TEV ($bn) $1.0 $9.9 Source: Public filings, broker research, Pershing Square estimates. Represents all coffee-related transactions with a TEV of at least $1bn completed since 2012. Note: SBUX trading multiple represents TEV excluding the capitalized value of JV income at 20x earnings divided by Pershing Square 2019E EBITDA. (1) Total TEV includes transactions with a TEV less than $1bn. JAB $7.5 DR PEPPER SNAPPLE GROUP 2018 YTD 15.0x 15.0x license JAB Nestle $26.6 $7.2 16.4x JAB $2.0 SIMILE Total ΚΟ $5.1 Avg. 16.0x $100+ (1) 13.3x#16Category Killer in Away-from-Home Coffee Starbucks' global market share in specialist coffee shops is 15x larger than the #2 player and over 3.5x larger than the other top 10 players combined Specialist Coffee Shop Global Market Share for Top 10 Players, 2017 46.2% U.S. share: ~67% China share: ~60% 3.1% McCafe 3.1% es COFFEE SINCE 1971 Source: Euromonitor data and Bernstein analysis. 1.6% 1.2% DOUTOR JAB 15 Memo: Systemwide Sales - Last FY, $bn $32 1.0% TULLY'S COFFEE= 1.0% & Tea Bean Leaf $9 DUNKIN' DONUTS 0.8% CAFFÈ NERO Tim Hortons. 0.7% EDIYA $7 ESPRESSO www COFFEE 0.5% BARNES &NOBLE#17Global Growth Opportunity in At-Home Coffee Starbucks is the leading packaged coffee brand in the U.S., with significant white space overseas unlocked by the recent Nestle deal Packaged Coffee Market Share in Top 20 Markets, 2017 % of global market Country USA Brazil Germany Japan France Russia Indonesia Italy United Kingdom South Korea Canada Mexico Spain Philippines Thailand Poland Algeria Netherlands China Australia Others Total World 16.7% 7.5% - 6.3% 5.3% 4.3% 4.0% 3.6% 2.6% 2.5% 2.0% 1.7% 1.7% 1.7% 1.5% 1.3% 1.3% 1.3% 1.3% 1.2% 1.2% 31.2% -100.0% Source: Euromonitor data and Bernstein analysis. Nestlé 4.7% 12:9%- 10.3% 33.4% 34.6% 22.8% 7.2% 24.5% 47.8% 8.6% 5.8% 55.8% 39.4% 37.3% 62.0% 16.7% 0.0% 19.6% 69.8% 51.2% 22.6% Starbucks 13.7% --0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.9% 1.3% 9.0% 0.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 2.5% Combined 18.4% 12.9% 10.3% 33.4% 34.6% 22.8% 7.2% 24.5% 48.7% 9.9% 14.8% 56.4% 39.4% 37.3% 62.0% 16.7% 0.0% 19.6% 69.8% 51.2% 25.1% 16 Consideration to SBUX from Nestle Upfront cash payment of $7.15bn ■ $5bn net of taxes Ongoing royalties Markup on products sold to Nestle # 1 = Top 3 =#18Business Overview#19Strong Historical SSS Growth: Total Over the last 13 years, Starbucks' same-store sales ("SSS") growth has averaged 5%, split evenly between transactions and ticket Total SSS Growth: FY 2005 to 2018 YTD 8% 7% 2005 2006 5% (3%) 2007 2008 Source: SBUX public filings. Note: SBUX fiscal year end is September 30. (6%) 2009 7% 8% 7% 18 7% 2010 2011 2012 2013 ■ Transaction ■Ticket 6% 7% 2014 2015 6% 2016 3% 2017 '05-'17 Avg.: 5% 2% 9M'18#20Strong Historical SSS Growth: Americas Since 2008, Starbucks' Americas segment (primarily U.S.) SSS growth has averaged 5%, split evenly between transactions and ticket Americas SSS Growth: FY 2009 to 2018 YTD (4%) (2%) (6%) 2009 7% 3% 3% 2010 Source: SBUX public filings. 8% 2% 5% 2011 8% 2% 6% 2012 8% 2% 5% 2013 6% 19 3% 2% 2014 Transaction Ticket 7% 4% 3% 2015 6% 5% 2% 2016 4% 4% (1%) 2017 '09-'17 Avg.: 5% 2% 3% (1%) 9M'18#21Strong Historical Unit Growth: Total Since 2010, Starbucks has grown units at an 8% annual rate, with balanced growth between owned and licensed units Total Units (‘000s): FY 2010 to 2018E 16.3 2010 16.9 2011 18.0 2012 19.3 2013 8% CAGR 21.0 2014 Owned Source: 2010-2017 as per SBUX public filings, 2018E as per Pershing Square estimates. 20 22.6 2015 Licensed 24.7 2016 27.0 2017 29.3 2018E#22Strong Historical Unit Growth: Total (Cont.) Since 2010, Starbucks unit growth has been primarily driven by growth outside the U.S., which has averaged 12%, while the U.S. has averaged 4% U.S. & Rest of World Units (¹000s): FY 2010 to 2018E FY 2010 to 2018E CAGR: U.S. Rest of World Total 10.6 5.7 2010 10.7 6.2 2011 4% 12% 8% 11.0 6.9 2012 11.5 7.9 2013 12.0 9.0 Source: 2010-2017 as per SBUX public filings, 2018E as per Pershing Square estimates. 2014 U.S. Rest of World 12.5 21 10.1 2015 13.2 11.5 2016 13.9 13.1 2017 14.6 14.7 2018E#23Incremental Penetration Opportunity in the U.S. While Starbucks currently has more than 14,000 stores in the U.S., it is still relatively underpenetrated in the Midwest and South Population per Starbucks Company-Operated Stores Baja California lontana Sonora Baja Califómia Sur Source: SBUX investor presentation, June 19, 2018. Chihuahua Worth Pota South Dakota Unters State Kansas Coahuita Texas Nuovo Mitt 22 Missour AP Louis sippi inia Maryland District of Columbia New Jersey Delaware Population per Starbucks CO location <20k 20k-30k 30k-40k Mail 40k-50k 50k-75k 75k-100k 100k+ N Bruf New Hamp Massachus Rhode Island *Core Based Statistical Area#24Well-Insulated from Wage Pressures in the U.S. We believe that Starbucks is one of the most well-positioned retailers if minimum wages rise due to its “partner” compensation philosophy Entry-level pay above the minimum wage in all 50 states Superior benefits for part-time workers since the 1990s ■ Comprehensive health insurance Stock ownership through "Bean Stock" program 401k retirement benefit Starbucks College Achievement Plan introduced in June 2014 Full tuition coverage for a four-year degree at Arizona State University's online program Savings from corporate tax reform shared with partners Second wage increase in addition to the regular annual increase ▪ Special stock grant of $500 for retail partners and $2,000 for store managers ▪ New Partner and Family Sick Time Benefit Expanded parental leave to include all non-birth parents 23#25Strong International Unit Growth Led by China Robust international unit growth should continue, led by China and other significantly underpenetrated regions overseas China & Rest of World (Ex-China) Units ('000s): FY 2010 to 2018E FY 2010 to 2018E CAGR: China Rest of World (Ex-China) Total 0.4 5.3 2010 0.5 5.7 2011 0.7 6.2 2012 31% 10% 12% 1.0 ■China 6.9 1.4 7.6 Source: 2010-2017 as per SBUX public filings, 2018E as per Pershing Square estimates. 1.8 24 8.3 2013 2014 2015 ■ Rest of World (Excl. China and U.S.) 2.4 9.1 2016 2.9 10.1 2017 3.5 11.1 2018E#26Long Runway for Growth in China Starbucks plans to nearly double its units in China over the next four years, and estimates that China will ultimately surpass the size of the U.S. business Starbucks Store Count in China (¹000s) 3.5 2018E (Pershing Square Est.) 6.0 2022E (Management Target) 14.4 + Long-Term Potential (Current U.S. Size) (¹) Source: Pershing Square estimates for 2018E; Starbucks management commentary for 2022E and long-term potential. (1) Based on management commentary that the company expects the size of its China business to be bigger than its U.S. business over the long-term. 25#27Wide Competitive Moat in China While competition in China has recently intensified, we believe that Starbucks has a defensible moat underpinned by several key advantages Global brand operating in China for nearly 20 years ▪ Synonymous with the highest-quality coffee and a premium "third-place" experience ▪ Local upstart Luckin only began operations in January, while Costa entered China in 2006 and is not well-known outside the UK Scale and industry leadership position ~3,400 stores in China today, more than 3x as many as Luckin and 7x as many as Costa Leading loyalty program with 7 million, 90-day active My Starbucks Rewards members ■ Partnership with Alibaba-owned Ele.me to roll out delivery across China in 2019 Vertical integration ensures quality control and supplier availability First-mover advantage in most desirable real estate locations Profitable operating model with no need for venture funding to fund growth Excellent operational and management skills Learnings from other Western brands that have succeeded in China, most notably KFC Can quickly hire, train, and develop best-in-class talent 26#28Situation Overview#29Recent Same Store Sales Growth: Americas Americas SSS growth has steadily decelerated since the beginning of FY 2016 and transactions have been roughly flat since the end of FY 2016 Americas SSS Growth: FQ1 2016 to FQ3 2018 9% 5% 4% 7% 5% 3% 4% 4% Source: SBUX public filings. 5% 6% (1%) 3% 5% (2%) Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 3% 4% (1%) Q2 '17 Transaction 5% 28 5% 3% 2% 1% Q3 '17 Q4 '17 Ticket 2% 2% 2% 3% Q1 '18 Q2 '18 1% 4% (2%) Transaction declines and ticket growth from Q3'16 to Q2'17 are somewhat overstated due to change in loyalty program in Q3'16, which reduced incentive for transaction splitting Q3 '18#30Recent Same Store Sales Growth: Americas (Cont.) The deceleration in SSS growth since FY 2016 has been primarily driven by weakness in Frappuccino and some softness in core beverage platforms U.S. Company-Operated SSS Growth Contribution by Product: FY 2015 to 2018 YTD Core Beverage (Implied) Food Teavana & Refreshment Frappuccino Price (Estimated) Same-Store Sales % of Rev. 56% 22% 12% 11% 2015 1% 2% 1% 2% 2% 7% Source: Pershing Square estimates based on Starbucks public filings and management commentary. 29 2016 2% 1% 1% (0%) 2% 6% 2017 9M'18 (0%) (0%) 1% 1% 1% (0%) 2% 3% 1% (1%) 2% 2%#31Reduced Long-Term Growth Targets The recent slowdown in same-store sales was the driving force for the reduction in Starbucks' long-term financial growth targets at the end of FY 2017 Long-Term Financial Targets Same-Store Sales Growth Revenue Growth EPS Growth ROIC Previous Mid-Single-Digits >10% 15% to 20% >= 25% Revised (Q4 '17) 3% to 5% High-Single-Digits >= 12% >= 25% Starbucks is unlikely to achieve even the low end of its long-term SSS target in 2018 (9M'18 SSS were 2%; guidance for Q4'18 is 3%), causing concern the company will reduce targets further 30#32Potential Causes of U.S. SSS Weakness Increased competition at the high and low-end Boutique coffee shops offer more premium options than Starbucks McDonald's $2 small espresso-based drinks appeal to cost-conscious customers Rapid acceptance of mobile order & pay ("MO&P") caused traffic congestion at peak times, resulting in lost sales ▪ Organizational focus on fixing MO&P issues may have caused management to "take its eye off the ball" with regard to product innovation, marketing, and operations Weakness in the afternoon daypart due to recent consumer shift away from Frappuccino and lack of food innovations Afternoon has highest consumption of cold beverages and food, as well as the highest concentration of infrequent customers Change from transaction-based to spend-based loyalty program has negatively impacted sales from frequent, lower-ticket customers Sales cannibalization from increased licensed unit growth 31#33Actions to Address U.S. SSS Weakness Management has announced a series of actions to reinvigorate U.S. SSS growth over the next several years Focus on premium product innovation and new boutique store concepts ▪ New store concepts (Roastery and Reserve) provide Starbucks with a brand halo and pipeline of premium product innovation to compete with high-end, independent boutiques New product innovation further differentiates Starbucks from low-cost coffee players Increased store labor and rollout of improved mobile order & pay app should reduce traffic congestion at peak times ■ Improved labor scheduling model to increase store labor at peak times Mobile order & pay app will more accurately reflect estimated wait times and provide text message notification Innovation in healthier cold beverages and food New rollout of all-natural Teavana shaken iced teas Focus on cold coffee platforms (cold foam, cold espresso, cold brew, nitro) Rollout of freshly-prepared Mercato food platform 32#34Actions to Address U.S. SSS Weakness (Cont.) Management has announced a series of actions to reinvigorate U.S. SSS growth over the next several years Upcoming loyalty program improvements will provide more benefit to low-ticket, high-frequency customers and focus on customized offers ▪ Lower redemption thresholds for lower-cost items improves utility of program ▪ Customized offers based on past history to incentivize additional purchases New digital relationships with less frequent customers Slowdown in U.S. licensed growth to focus on owned growth in key markets ▪ Reduces potential cannibalization Improves operational control Improved management focus on core business through divestitures of non-core businesses New leader of U.S. business with extensive operational experience appointed in February 2018 33#35Thoughts on Current Leadership Team ► Recent actions by new CEO Kevin Johnson are encouraging ■ Portfolio restructuring: Nestle CPG and Tazo transactions, closure of Teavana stores, improved mix of owned and licensed businesses ■ Significant cost reduction initiative: SG&A target of 3.5% of systemwide sales from 4.5% ■ Sizeable share repurchase program: ~$19bn three-year target from FY 2018-2020 Deep internal bench of long-tenured, talented executives ■ Cliff Burrows (head of Siren Retail) and John Culver (head of International) played leading roles in the 2008 turnaround ► New external hires can provide fresh perspectives ■ Former Sam's Club CEO Roz Brewer joined as COO in October 2017 ■ Former Hyatt Hotels and Yum! Brands CFO Pat Grismer replacing retiring Starbucks CFO Scott Maw in November We believe Starbucks' recent challenges are fixable with appropriate management execution 34#36Financials & Valuation#37Recent Financial Performance SBUX has grown EPS in the mid to high-teens driven by revenue growth from SSS and new units, as well as operating leverage and buybacks ($ in millions | FYE Sept. 30) Revenue Growth EBIT Organic SSS Units & Other Margin Growth JV Income Interest Income / (Expense) Pre-Tax Profit Growth Taxes Tax Rate Net Income Growth Diluted Shares Growth EPS Growth Source: SBUX public filings, Pershing Square estimates. 2013 $2,207 14.8% 251 16 $2,474 $14,867 $16,448 $19,163 $21,316 11% 17% 11% 11% 12% 10% 6% 7% 6% 5% 5% 4% (805) 32.5% $1,669 1,525 2014 $1.09 $2,795 17.0% 27% 268 8 $3,072 24% (1,035) 33.7% $2,037 22% 1,526 0% $1.33 22% 2015 36 $3,406 17.8% 22% 250 (28) $3,628 18% (1,230) 33.9% $2,396 18% 1,513 53rd Wk 2016 (1%) $1.58 19% $3,914 18.4% 15% 318 27 $4,259 17% (1,425) 33.5% $2,832 18% 1,487 (2%) $1.91 20% 2017 $22,387 $24,566 10% 6% 2% 5% 5% 8% 3% 5% $4,021 18.0% 3% 391 89 2018E $2.06 8% $4,169 17.0% 4% 300 33 $4,502 $4,502 6% 0% (1,490) (1,127) 33.1% 25.0% $3,012 $3,375 6% 12% 1,462 1,402 (2%) (4%) $2.41 17% CAGR '13-'18E 1 " 11% 9% 5% 5% 14% 4% 13% 15% 1 (2%) 17%#38Projected SSS Growth We conservatively estimate that SBUX should be able to generate SSS growth of at least 3% in the U.S., with 5% achievable even if Frappuccino continues to decline U.S. Same-Store Sales Growth Framework Core Beverage Food Teavana & Refreshment Frappuccino SSS from Transactions & Mix Pricing Same-Store Sales % of Revenue 56% 22% 12% 11% Source: Pershing Square estimates. Est. YoY Growth Base Upside 2% 0.5% 7% 1.0% 13% 1.0% (5%) (1.0%) 4% 1.5% 2% 1.5% 5% 3.0% 1% 5% 8% (9%) 2% 2% 3% 37 Contribution to SSS Upside Base The U.S. will remain the company's largest business for the foreseeable future and will drive over 70% of consolidated SSS growth over the next several years 1.0% 1.5% 1.5% (0.5%) 3.5% 1.5% 5.0%#39Projected Net Unit Growth We forecast high-single-digit revenue growth underpinned by ~7% annual net unit growth led by China as well as other underpenetrated regions Projected Unit Count at Year-End 29.3 11.1 3.5 14.6 2018E Source: Pershing Square estimates. 31.1 12.1 4.0 15.0 2019E U.S. 33.2 13.1 4.6 15.5 2020E China 38 '18E-'22E Net Unit CAGR U.S. China Rest of World Consolidated Rest of World 35.4 14.2 5.3 16.0 2021E 3% 14% 8% 7% 37.8 15.4 6.0 16.4 2022E#40Projected EPS Growth We believe that SBUX's robust unit growth pipeline combined with management's sizeable capital return plan will drive EPS growth including dividends in the mid-teens or higher over the next four years Projected EPS Growth Bridge: 2018E to 2022E CAGR 3% 5% SSS Growth Net Unit Impact to Revenue Source: Pershing Square estimates. 8% Revenue Growth = EBIT Growth 3% 6% 11% Higher Share Base Case Interest Buybacks EPS Growth Expense 39 3% Dividend Yield I 14% 1 I I I I I I I Base Case EPS Growth incl. Dividends I 2% Additional SSS Growth 1% 2% I 19% Additional Operating Upside Case Unit Growth Leverage, EPS Growth I I incl. I Dividends I#41Valuation Range If SSS and valuation revert closer to historical average levels, we believe that SBUX shares can more than double over the next three years 2022E EPS Summary Valuation '18E-'22E CAGR '22E YOY Growth P/E Multiple Implied Share Price at 9/30/21 Plus: 3 Years of Dividends Impl. Value Per Share at 9/30/21 Premium To Current 3-Year IRR Base $3.70 11% 12% 25.0x $93 5 $97 75% 20% Upside $4.35 16% 17% 27.0x $117 5 $122 119% 30% We estimate that SBUX will generate a three-year IRR of at least 20% at current prices, with limited downside risk Source: Pershing Square estimates. Note: Projections exclude $179mm of annual pretax non-cash revenue related to the amortization of the upfront payment received in the Nestle transaction ($0.12 per share in 2022). 40#42Valuation Range: Downside Sensitivity We estimate that SBUX will generate a three-year IRR of at least 12% if annual EPS growth is ≥ 9% and its P/E multiple is ≥ 21x Net Unit CAGR '18E-'22E EPS CAGR Sensitivity '18E-'22E EPS CAGR Same-Store Sales CAGR: '18E-'22E 1% 2% 6% 7% 7% 8% 8% 9% 10% 4% 5% 6% 7% 8% 10% 11% 12% Source: Pershing Square estimates. 3% 9% 10% 11% 12% 13% 4% 10% 11% 12% 13% 14% 6% EPS 8% CAGR 10% '18-22E 12% 14% 3-Year IRR Sensitivity 3-Year IRR P/E Multiple 22.0x 23.0x 9% 10% 11% 13% 15% 18% 21% 41 21.0x 7% 10% 12% 15% 17% 14% 16% 19% 24.0x 12% 14% 17% 20% 22% 25.0x 13% 16% Over the last five years, EPS growth has averaged 17% and SBUX's P/E multiple has averaged 26x 19% 21% 24%#43Starbucks: Summary Investment Thesis Dominant brand in the secularly growing and attractive coffee category Strong unit economics and customer value proposition proven over decades Long-term HSD revenue growth is underpinned by international unit growth Recent slowdown in U.S. SSS is fixable with remedial actions underway Early days for a new leadership team, but encouraging actions taken to date Rare opportunity to own one of the world's best businesses at a discount Potential for SBUX shares to more than double in value over the next three years 42