Dunkin' Donuts 2015 Annual Report Download - page 55

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Baskin-Robbins U.S.
Fiscal year Increase (Decrease)
2014 2013 $ %
(In thousands, except percentages)
Royalty income $ 27,015 25,728 1,287 5.0 %
Franchise fees 935 1,160 (225) (19.4)%
Rental income 3,250 3,420 (170) (5.0)%
Sales of ice cream and other products 4,018 3,808 210 5.5 %
Other revenues 7,940 8,036 (96) (1.2)%
Total revenues $ 43,158 42,152 1,006 2.4 %
Segment profit $ 27,496 26,608 888 3.3 %
The increase in Baskin-Robbins U.S. revenues for fiscal year 2014 was driven primarily by an increase in royalty income of
$1.3 million due to an increase in systemwide sales, as well as an increase in sales of ice cream and other products of $0.2
million. The increases in revenues were offset by decreases in franchise fees of $0.2 million and rental income of $0.2 million.
Baskin-Robbins U.S. segment profit for fiscal year 2014 increased primarily as a result of the increase in royalty income, offset
by the decrease in franchise fees and additional breakage income of $0.5 million recorded in fiscal year 2013 related to
unredeemed gift certificate balances.
Baskin-Robbins International
Fiscal year Increase (Decrease)
2014 2013 $ %
(In thousands, except percentages)
Royalty income $ 7,850 9,109 (1,259) (13.8)%
Franchise fees 1,502 1,665 (163) (9.8)%
Rental income 516 535 (19) (3.6)%
Sales of ice cream and other products 112,155 108,435 3,720 3.4 %
Other revenues 433 589 (156) (26.5)%
Total revenues $ 122,456 120,333 2,123 1.8 %
Segment profit $ 42,792 54,237 (11,445) (21.1)%
The increase in Baskin-Robbins International revenues for fiscal year 2014 was driven by a $3.7 million increase in sales of ice
cream and other products, due primarily to increases in sales of ice cream and other products in the Middle East and Europe,
offset by a decline in sales to our Australian joint venture, due primarily to the sale of all ice cream and other products
inventory on hand in fiscal year 2013 in conjunction with the sale of 80% of our Baskin-Robbins Australia business. Offsetting
the increase in sales of ice cream and other products was a decrease in royalty income of $1.3 million due primarily to a
decline in Australia, where following the sale of 80% of our Baskin-Robbins Australia business, the Company no longer earns
royalties.
Baskin-Robbins International segment profit decreased $11.4 million for fiscal year 2014 due primarily to a $6.3 million gain
recognized on the sale of the Baskin-Robbins Australia business in fiscal year 2013 and the decrease in royalty income.
Additionally contributing to the decline in segment profit was a decrease in income from our Japan JV, as well as increases in
advertising and personnel costs, partially offset by an increase in ice cream margin. The ice cream margin for fiscal year 2014
as compared to fiscal year 2013 was favorably impacted by Australia inventory write-offs recorded in fiscal year 2013, as well
as an increase in sales volume, offset by an increase in commodity costs.
Liquidity and capital resources
As of December 26, 2015, we held $260.4 million of cash and cash equivalents and $71.9 million of short-term restricted cash
under our securitized financing facility. Included in cash and cash equivalents is $148.6 million of cash held for advertising
funds and reserved for gift card/certificate programs. Cash reserved for gift card/certificate programs also includes cash that
will be used to fund initiatives from the gift card breakage liability (see note 10 to the consolidated financial statements