Baskin Robbins 2011 Annual Report Download - page 51

(i) Amount consists of an impairment of the investment in the Korea joint venture of $19.8 million, less a
reduction in depreciation and amortization, net of tax, of $976,000 resulting from the allocation of the
impairment charge to the underlying intangible and long-lived assets of the joint venture.
(ii) Tax impact of adjustments calculated at a 40% effective tax rate for each period presented, excluding
the goodwill impairment charge in fiscal year 2008, as the goodwill is not deductible for tax purposes,
and the Korea joint venture impairment in fiscal year 2011 as there was no tax impact related to that
charge.
(9) Represents period end points of distribution.
(10) Represents the growth in average weekly sales for franchisee- and company-owned restaurants that
have been open at least 54 weeks that have reported sales in the current and comparable prior year
week.
(11) Franchisee-reported sales include sales at franchisee restaurants, including joint ventures.
(12) Company-owned store sales include sales at restaurants owned and operated by Dunkin’ Brands.
(13) Systemwide sales growth represents the percentage change in sales at both franchisee- and company-
owned restaurants from the comparable period of the prior year. Changes in systemwide sales are
driven by changes in average comparable store sales and changes in the number of restaurants.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion of our financial condition and results of operations should be read in conjunction with
the selected financial data and the audited financial statements and related notes appearing elsewhere in this
Annual Report on Form 10-K. This discussion contains forward-looking statements about our markets, the
demand for our products and services and our future results and involves numerous risks and uncertainties.
Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current
facts and generally contain words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,”
“approximately,” “intends,” “plans,” “estimates,” or “anticipates” or similar expressions. Our forward-
looking statements are subject to risks and uncertainties, which may cause actual results to differ materially from
those projected or implied by the forward-looking statement. Forward-looking statements are based on current
expectations and assumptions and currently available data and are neither predictions nor guarantees of future
events or performance. You should not place undue reliance on forward-looking statements, which speak only as
of the date hereof. See “Risk factors” for a discussion of factors that could cause our actual results to differ from
those expressed or implied by forward-looking statements.
Introduction and overview
We are one of the world’s leading franchisors of quick service restaurants (“QSRs”) serving hot and cold coffee
and baked goods, as well as hard serve ice cream. We franchise restaurants under our Dunkin’ Donuts and
Baskin-Robbins brands. With 16,794 points of distribution in 58 countries, we believe that our portfolio has
strong brand awareness in our key markets. QSR is a restaurant format characterized by counter or drive-thru
ordering and limited or no table service. As of December 31, 2011, Dunkin’ Donuts had 10,083 global points of
distribution with restaurants in 36 U.S. states and the District of Columbia and in 31 foreign countries. Baskin-
Robbins had 6,711 global points of distribution as of the same date, with restaurants in 44 U.S. states and the
District of Columbia and in 48 foreign countries.
We are organized into four reporting segments: Dunkin’ Donuts U.S., Dunkin’ Donuts International, Baskin-
Robbins U.S., and Baskin-Robbins International. We generate revenue from four primary sources: (i) royalty
income and franchise fees associated with franchised restaurants, (ii) rental income from restaurant properties
that we lease or sublease to franchisees, (iii) sales of ice cream products to franchisees in certain international
markets, and (iv) other income including fees for the licensing of our brands for products sold in non-franchised
outlets, the licensing of the right to manufacture Baskin-Robbins ice cream sold to U.S. franchisees,
refranchising gains, transfer fees from franchisees, revenue from our company-owned restaurants, and online
training fees.
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