Baskin Robbins 2011 Annual Report Download - page 60

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Dunkin’ Donuts U.S.
Fiscal year
2010
Fiscal year
2011
Increase (Decrease)
$ %
(In thousands, except percentages)
Royalty income .................................. $290,187 317,203 27,016 9.3%
Franchise fees ................................... 21,721 29,905 8,184 37.7%
Rental income ................................... 85,311 86,590 1,279 1.5%
Other revenues ................................... 3,118 4,030 912 29.2%
Total revenues ............................... $400,337 437,728 37,391 9.3%
Segment profit ................................... $293,132 334,308 41,176 14.0%
The increase in Dunkin’ Donuts U.S. revenues for fiscal year 2011 was primarily driven by an increase in royalty
income of $27.0 million as a result of an increase in systemwide sales, as well as increases in franchise fees of
$8.2 million as a result of increased franchise renewal income. Approximately $6.4 million of the increase in
total revenues was attributable to the extra week in fiscal year 2011.
The increase in Dunkin’ Donuts U.S. segment profit for fiscal year 2011 was primarily driven by the increase in
total revenues of $37.4 million and a decrease in professional fees, legal costs, and other general and
administrative expenses of $6.2 million due to reduced legal settlement costs and reduced bad debt expenses.
Also contributing to the increase in segment profit was a $2.2 million decline in occupancy expenses driven by
additional lease reserves recorded in the prior year and a decline in the number of leased locations. Offsetting
these increases in segment profit was an increase in personnel costs of $5.4 million, of which approximately $0.9
million was attributable to the extra week in fiscal year 2011, with the remaining increase related to investment
in our Dunkin’ Donuts U.S. contiguous growth strategy and higher projected incentive compensation payouts.
Dunkin’ Donuts International
Fiscal year
2010
Fiscal year
2011
Increase (Decrease)
$ %
(In thousands, except percentages)
Royalty income .................................. $11,353 12,657 1,304 11.5%
Franchise fees ................................... 2,438 2,294 (144) (5.9)%
Rental income ................................... 303 258 (45) (14.9)%
Other revenues .................................. 34 44 10 29.4%
Total revenues ............................... $14,128 15,253 1,125 8.0%
Segment profit ................................... $14,573 11,528 (3,045) (20.9)%
The increase in Dunkin’ Donuts International revenue for fiscal year 2011 resulted primarily from an increase in
royalty income of $1.3 million driven by the increase in systemwide sales, slightly offset by a decrease of $0.1
million in franchise fees driven by fewer store openings.
The decrease in Dunkin’ Donuts International segment profit for fiscal year 2011 was primarily driven by a
decline in income from the South Korea joint venture of $3.1 million, as well as increases in personnel costs and
travel of $0.9 million. These declines in segment profit were offset by the increase in total revenues.
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