Dunkin' Donuts 2012 Annual Report Download - page 40

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-30-
Our franchisees fund substantially all of the advertising that supports both brands. Those advertising funds also fund the cost of
our marketing, research and development, and innovation personnel. Royalty payments and advertising fund contributions
typically are made on a weekly basis for restaurants in the U.S., which limits our working capital needs. For fiscal year 2012,
franchisee contributions to the U.S. advertising funds were $332.3 million.
We operate and report financial information on a 52- or 53-week year on a 13-week quarter (or 14-week fourth quarter, when
applicable) basis with the fiscal year ending on the last Saturday in December and fiscal quarters ending on the 13th Saturday of
each quarter (or 14th Saturday of the fourth quarter, when applicable). The data periods contained within fiscal years 2012,
2011, and 2010 reflect the results of operations for the 52-week, 53-week, and 52-week periods ending on December 29, 2012,
December 31, 2011, and December 25, 2010, respectively. Certain financial measures and other metrics have been presented
with the impact of the additional week on the results for fiscal year 2011. The impact of the additional week in fiscal year 2011
reflects our estimate of the 53rd week on systemwide sales growth, revenues, and expenses.
Selected operating and financial highlights
Fiscal year
2012 2011 2010
Systemwide sales growth 5.2% 9.1% 6.7 %
Comparable store sales growth:
Dunkin’ Donuts U.S. 4.2% 5.1% 2.3 %
Dunkin' Donuts International(1) 2.0% n/a n/a
Baskin-Robbins U.S. 3.8% 0.5% (5.2)%
Baskin-Robbins International(1) 2.8% n/a n/a
Total revenues $ 658,181 628,198 577,135
Operating income 239,429 205,309 193,525
Adjusted operating income 307,157 270,740 233,067
Net income 108,308 34,442 26,861
Adjusted net income 149,700 101,744 87,759
(1) Comparable store sales growth data was not available for our international segments until fiscal year 2012.
Adjusted operating income and adjusted net income are non-GAAP measures reflecting operating income and net income
adjusted for amortization of intangible assets, impairment charges, and other non-recurring, infrequent, or unusual charges, net
of the tax impact of such adjustments in the case of adjusted net income. The Company uses adjusted operating income and
adjusted net income as key performance measures for the purpose of evaluating performance internally. We also believe
adjusted operating income and adjusted net income provide our investors with useful information regarding our historical
operating results. These non-GAAP measurements are not intended to replace the presentation of our financial results in
accordance with GAAP. Use of the terms adjusted operating income and adjusted net income may differ from similar measures
reported by other companies. See footnote 8 to "Selected Financial Data" for reconciliations of operating income and net
income determined under GAAP to adjusted operating income and adjusted net income, respectively.
Fiscal year 2012 compared to fiscal year 2011
Overall growth in systemwide sales of 5.2% for fiscal year 2012, or 7.0% on a 52-week basis, resulted from the following:
• Dunkin’ Donuts U.S. systemwide sales growth of 5.6%, which was the result of comparable store sales growth of
4.2% driven by both increased average ticket and transaction counts, as well as net development of 291 restaurants in
2012, offset by approximately 190 basis points of a decline attributable to the extra week in fiscal year 2011. Increases
in average ticket and transactions resulted from our continued focus on product and marketing innovation resulting in
strong beverage sales growth, especially in cold beverages, strong breakfast sandwich sales across both core and
limited-time offerings, continued growth in bakery sandwiches, and sales of Dunkin' Donuts K-Cup® portion packs
including successful limited-time offerings.
• Dunkin’ Donuts International systemwide sales growth of 4.2% as a result of sales increases in the Middle East and
Southeast Asia driven by net new restaurant development and comparable store sales growth of 2.0%, offset by an
unfavorable foreign currency impact.