The Seattle-based company said Wednesday the litigation charge of $1.71 billion after taxes pushed the fourth quarter to a $1.23 billion loss. Late last month, it reported a $481.1 million profit.
For the year ended Sept. 29, earnings were slashed to $8.3 million, or one cent a share, compared to a profit of $1.72 billion, or $2.26 a share.
Adjusted earnings that exclude the litigation charges remained the same.
Starbucks and Mondelez announced the arbitration settlement on Tuesday afternoon, bringing an end to a dispute that began when Starbucks took over distribution of its bagged coffee from the former Kraft in 2010.
Kraft split itself up last year, spinning off Kraft Foods (KRFT) and changing its name to Mondelez.
Kraft unsuccessfully sued to keep Starbucks from taking over the distribution business, which Kraft started in 1998 under a licensing deal. An arbitration firm held hearings starting in July to determine if Starbucks owed Mondelez a termination fee.
Starbucks claimed damages of just $62.9 million, while Kraft was looking for $2.9 billion in addition to attorneys’ fees.
Starbucks was down 1.7% at $79.22 in pre-market trading. Mondelez shares rallied 2% to $33.10.