Dunkin' Donuts 2015 Annual Report Download - page 51

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-41-
Baskin-Robbins U.S.
Fiscal year Increase (Decrease)
2015 2014 $ %
(In thousands, except percentages)
Royalty income $ 28,348 27,015 1,333 4.9 %
Franchise fees 871 935 (64) (6.8)%
Rental income 2,989 3,250 (261) (8.0)%
Sales of ice cream and other products 2,093 4,018 (1,925) (47.9)%
Other revenues 10,918 7,940 2,978 37.5 %
Total revenues $ 45,219 43,158 2,061 4.8 %
Segment profit $ 28,726 27,496 1,230 4.5 %
The increase in Baskin-Robbins U.S. revenues for fiscal year 2015 was due primarily to an increase in other revenues of $3.0
million, driven by an increase in licensing income, and an increase in royalty income of $1.3 million due to an increase in
systemwide sales, offset by a decrease in sales of ice cream and other products of $1.9 million. The fluctuations in licensing
income and sales of ice cream and other products can be attributed to a shift in certain franchisees now purchasing ice cream
directly from our third-party ice cream manufacturer.
Baskin-Robbins U.S. segment profit for fiscal year 2015 increased primarily as a result of the increases in other revenues and
royalty income, offset by increases in general and administrative expenses due primarily to expenses incurred related to brand-
building activities and increased personnel costs.
Baskin-Robbins International
Fiscal year Increase (Decrease)
2015 2014 $ %
(In thousands, except percentages)
Royalty income $ 6,261 7,850 (1,589) (20.2)%
Franchise fees 872 1,502 (630) (41.9)%
Rental income 475 516 (41) (7.9)%
Sales of ice cream and other products 110,968 112,155 (1,187) (1.1)%
Other revenues 421 433 (12) (2.8)%
Total revenues $ 118,997 122,456 (3,459) (2.8)%
Segment profit $ 39,797 42,792 (2,995) (7.0)%
The decrease in Baskin-Robbins International revenues for fiscal year 2015 was due to decreases of $1.6 million in royalty
income, which was driven by a decrease in royalty income earned on ice cream sales in Russia and the negative impact of
unfavorable foreign exchange rates, $1.2 million of sales of ice cream and other products, due primarily to a decline in sales to
Australia, and a decrease in franchise fees.
Baskin-Robbins International segment profit decreased $3.0 million for fiscal year 2015 due primarily to the decreases in
royalty income and franchise fees, and an increase in general and administrative expenses driven primarily by an increase in
bad debt expense. Also contributing to the decrease in segment profit were unfavorable results from our Japan JV compared to
the prior fiscal year and the impact of unfavorable foreign exchange rates on net income of our South Korea joint venture.
These decreases in segment profit were offset by an increase in net margin on ice cream. A decrease in commodity costs,
increase in pricing, and favorable foreign exchange rates more than offset the decrease in sales volume, resulting in an increase
in net ice cream margin.