Baskin Robbins 2011 Annual Report Download - page 66

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Liquidity and capital resources
As of December 31, 2011, we held $246.7 million of cash and cash equivalents, which included $123.1 million
of cash held for advertising funds and reserved for gift card/certificate programs. In addition, as of December 31,
2011, we had a borrowing capacity of $88.8 million under our $100.0 million revolving credit facility. During
fiscal year 2011, net cash provided by operating activities was $162.7 million, as compared to $229.0 million for
fiscal year 2010. Net cash provided by operating activities for fiscal year 2010 included a cash inflow of $101.7
million resulting from fluctuations in restricted cash balances related to our securitization indebtedness.
Following the redemption and discharge of the securitization indebtedness in the fourth quarter of 2010, such
amounts are no longer restricted, and therefore, there was no operating cash flow impact from restricted cash for
fiscal year 2011. Net cash provided by operating activities for fiscal year 2011 includes an increase of $40.9
million in cash held for advertising funds and reserved for gift card/certificate programs. Excluding cash held for
advertising funds and reserved for gift card/certificate programs, we generated $103.3 million of free cash flow
in fiscal year 2011, calculated as follows:
Fiscal year
2011
Net cash provided by operating activities ............... $162,703
Less: Increase in cash held for advertising funds and
reserved for gift card/certificate programs ............. (40,856)
Less: Additions to property and equipment .............. (18,596)
Free cash flow .................................... $103,251
Net cash provided by operating activities of $162.7 million during fiscal year 2011 was primarily driven by net
income of $34.4 million, increased by depreciation and amortization of $52.5 million and $35.5 million of other
net non-cash reconciling adjustments, $32.9 million of changes in operating assets and liabilities, and dividends
received from joint ventures of $7.4 million. During fiscal year 2011, we invested $18.6 million in capital
additions to property and equipment. Net cash used in financing activities was $30.1 million during fiscal year
2011, driven primarily by the repayment of long-term debt, net of proceeds from additional borrowings under the
term loans, totaling $404.6 million and costs associated with the term loan re-pricing and upsize transactions of
$20.1 million, offset by proceeds from our initial public offering, net of offering costs paid, of $390.0 million and
proceeds from other issuances of common stock of $3.2 million.
Net cash provided by operating activities of $229.0 million during fiscal 2010 was primarily driven by net
income of $26.9 million (increased by depreciation and amortization of $57.8 million and $26.7 million of other
net non-cash reconciling adjustments), $6.6 million of dividends received from international joint ventures, and
$111.0 million of changes in operating assets and liabilities, including the release of approximately
$101.7 million of restricted cash as a result of the November 2010 debt refinancing. During fiscal 2010, we
invested $15.4 million in capital additions to property and equipment. Net cash used in financing activities was
$132.6 million during fiscal 2010, which includes dividends paid on common stock of approximately $500.0
million, offset by proceeds from the issuance of long-term debt, net of repayment and voluntary retirement of
debt and debt issuance costs, of $353.4 million and a $16.1 million decrease in debt-related restricted cash
balances.
On November 23, 2010, we consummated a refinancing transaction whereby Dunkin’ Brands, Inc. (i) issued and
sold $625.0 million aggregate principal amount of 9 5/8% senior notes due 2018 and (ii) borrowed $1.25 billion
in term loans and secured a $100.0 million revolving credit facility from a consortium of banks. The senior
secured credit facility was amended on February 18, 2011, primarily to obtain more favorable interest rate
margins and to increase the term loan borrowings under the senior secured credit facility to $1.40 billion. The full
$150.0 million increase in term loan borrowings under the senior secured credit facility was used to redeem an
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