Baskin Robbins 2012 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ..., low capital expenditure requirements and strong cash flow generation. We have an intense focus on driving franchisee profitability, which drives strong returns for both franchisees and shareholders. We have two widely recognized global brands, Dunkin' Donuts and Baskin-Robbins, and, unlike most...

  • Page 3
    ... demand, while ensuring that we're choosing the right sites in the right markets at the right time, and maintaining the high financial return targets that we've set for new store economics. It's our confidence in this strategy that enabled us to begin selling franchises in Southern California...

  • Page 4
    ... to drive our growth today. The Dunkin' Donuts U.S. segment achieved 4.2 percent comp store sales growth over 2011 despite an intensely competitive marketplace and continued economic uncertainty. We believe this reflects the overall strength of our brand, and the great products and good value that...

  • Page 5
    ... had 7 Dunkin' Donuts restaurants at the end of 2012. Another market that we believe presents a great opportunity for both our brands is Vietnam. We opened 13 Baskin-Robbins restaurants in Vietnam last year with a new franchisee, and recently signed a franchise agreement to develop Dunkin' Donuts in...

  • Page 6
    ... our ability to leverage our asset-light business model, and we expect another year of 15 percent plus earnings per share growth. Thank you for your investment in Dunkin' Brands. We look forward to continuing to deliver on our long-term targets and driving value for you, our shareholders. Regards...

  • Page 7
    ...held by non-affiliates of Dunkin' Brands Group, Inc. computed by reference to the closing price of the registrant's common stock on the NASDAQ Global Select Market as of June 30, 2012, was approximately $2.88 billion. As of February 15, 2013, 106,273,454 shares of common stock of the registrant were...

  • Page 8

  • Page 9
    ... Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services Part IV. Exhibits, Financial Statement Schedules 96 1 9 21 21 22 23 23 25...

  • Page 10
    ...are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this report. In addition...

  • Page 11
    ... international markets; (iv) sales at our company-owned restaurants, and (v) other income including fees for the licensing of the Dunkin' Donuts brand for products sold in non-franchised outlets (such as retail packaged coffee) and the licensing of the rights to manufacture Baskin-Robbins ice cream...

  • Page 12
    ...fiscal year 2012, the Baskin-Robbins franchise system generated U.S. franchisee-reported sales of $509 million, which accounted for approximately 5.8% of our global franchisee-reported sales, and had 2,463 U.S. points of distribution at period end. International operations Our international business...

  • Page 13
    ... required to purchase ice cream from Baskin-Robbins or an approved supplier. In most countries, the master franchisee is also required to spend a certain percentage of gross sales on advertising in such foreign country in order to promote the brand. Generally, the master franchise agreement serves...

  • Page 14
    .... For the Baskin-Robbins brand in international markets, we do not generally receive royalty payments from our franchisees; instead we earn revenue from such franchisees as a result of our sale of ice cream products to them, and in 2012 our effective royalty rate in this segment was approximately...

  • Page 15
    ... operating restaurants located in South Korea with ice cream, donuts and coffee products. Japan Restaurants in Japan accounted for approximately 27% of total franchisee-reported sales from international operations for fiscal year 2012, 100% of which came from Baskin-Robbins. We conduct business in...

  • Page 16
    ... franchisee-reported sales for fiscal year 2012 generated from coffee and other beverages. We believe QSRs, including Dunkin' Donuts, are positioned to capture additional coffee market share through an increased focus on coffee offerings. Our Baskin-Robbins brand competes primarily in QSR segment...

  • Page 17
    ...just baked on demand" donut manufacturing platform enables the Dunkin' Donuts brand to more efficiently expand its restaurant base in newer markets where franchisees may not have access to a CML. Baskin-Robbins ice cream Prior to 2000, we manufactured and sold ice cream products to substantially all...

  • Page 18
    ... Foods to produce ice cream products which we purchase and distribute to many of our international markets. Certain international franchisees rely on third party-owned facilities to supply ice cream products to them, including facilities in Ireland and Canada. The Baskin-Robbins brand restaurants...

  • Page 19
    ... and laws regulating foreign investment. We believe that the international disclosure statements, franchise offering documents and franchising procedures for our Baskin-Robbins brand and Dunkin' Donuts brand comply in all material respects with the laws of the applicable countries. Environmental Our...

  • Page 20
    ... beverage and food products sold by our franchisees compete directly against products sold at other QSRs, local and regional beverage and food operations, specialty beverage and food retailers, supermarkets and wholesale suppliers, many bearing recognized brand names and having significant customer...

  • Page 21
    ...we incur also could be variable rate debt. If market interest rates increase, variable rate debt will create higher debt service requirements, which could adversely affect our cash flow. In September 2012, we entered into variable-to-fixed interest rate swap agreements to hedge the floating interest...

  • Page 22
    ...our intellectual property could harm our business. We regard our Dunkin' Donuts® and Baskin-Robbins® trademarks as having significant value and as being important factors in the marketing of our brands. We have also obtained trademark protection for several of our product offerings and advertising...

  • Page 23
    ... other products we offer in favor of foods that are perceived as more healthy, our franchisees' sales would suffer, resulting in lower royalty payments to us, and our business and operating results would be harmed. If we fail to successfully implement our growth strategy, which includes opening new...

  • Page 24
    ...India, manufacture ice cream products independently. Each of the International JVs owns a manufacturing facility in its country of operation. The revenues derived from the International JVs differ fundamentally from those of other types of franchise arrangements in the system because the income that...

  • Page 25
    ... to food and beverage products. We have little control over such suppliers. Disruptions in these relationships may reduce franchisee sales and, in turn, our royalty income. Overall difficulty of suppliers (those of the International JVs) meeting franchisee product demand, interruptions in the supply...

  • Page 26
    ...in the food processing, grocery and QSR segments and could in the future affect us as well. Any report linking us or our franchisees to the use of unclean water, food-borne illnesses or food tampering could damage our brands' value immediately, severely hurt sales of beverages and food products, and...

  • Page 27
    ... tax or regulate high-fat foods, to limit the serving size of beverages containing sugar, to ban the use of certain packaging materials (including polystyrene used in the iconic Dunkin' Donuts cup) or requiring the display of detailed nutrition information. Each of these regulations would be costly...

  • Page 28
    ... the United States and numerous foreign jurisdictions. The Internal Revenue Service ("IRS") concluded its examination of the federal income tax returns for the fiscal years 2006 through 2009 during fiscal year 2012 and agreed to a settlement regarding the recognition of revenue for gift cards and...

  • Page 29
    ...of the Dunkin' Donuts brand and the Baskin-Robbins brand. The councils are comprised of franchisees, brand employees and executives, and they meet to discuss the strengths, weaknesses, challenges and opportunities facing the brands as well as the rollout of new products and projects. Internationally...

  • Page 30
    ...resell your shares at or above the price you paid for them. Since our initial public offering in July 2011, the price of our common stock, as reported by NASDAQ, has ranged from a low of $23.24 on December 15, 2011 to a high of $40.00 on January 31, 2013. In addition, the stock market in general has...

  • Page 31
    ... management and employees who provide our primary corporate support functions: legal, marketing, technology, human resources, public relations, financial and research and development. As of December 29, 2012, we owned 96 properties and leased 941 locations across the U.S. and Canada, a majority...

  • Page 32
    ... Dunkin' Donuts also has other restaurants designed to fit anywhere, consisting of small full-service restaurants and/or self-serve kiosks in offices, hospitals, colleges, airports, grocery stores and drive-thru-only units on smaller pieces of property (collectively referred to as alternative points...

  • Page 33
    ...since July 27, 2011. Prior to that time, there was no public market for our common stock. The following table sets forth for the periods indicated the high and low sale prices of our common stock on the NASDAQ Global Select Market. Fiscal Quarter High Low 2012 First Quarter (13 weeks ended March 31...

  • Page 34
    ... of future price performance. 7/27/2011 12/31/2011 12/29/2012 Dunkin' Brands Group, Inc. (DNKN) S&P 500 S&P Consumer Discretionary Recent Sales of Unregistered Securities. $ $ $ 100.00 100.00 100.00 $ $ $ 99.92 94.42 95.65 $ $ $ 132.02 105.29 114.27 During the year ended December 31, 2011...

  • Page 35
    ... share data or as otherwise noted) Consolidated Statements of Operations Data: Franchise fees and royalty income Rental income Sales of ice cream products Sales at company-owned restaurants Other revenues Total revenues Amortization of intangible assets Impairment charges(1) Other operating costs...

  • Page 36
    ... stock, Class L(7) Total stockholders' equity (deficit)(7) Other Financial Data: Capital expenditures Adjusted operating income Adjusted net income(8) Points of Distribution(9): Dunkin' Donuts U.S. Baskin-Robbins U.S. Baskin-Robbins International Total distribution points Comparable Store Sales...

  • Page 37
    ... against Dunkin' Brands in the amount of approximately $C16.4 million (approximately $15.9 million), plus costs and interest. Fiscal year 2011 includes an impairment of the investment in the Korea joint venture of $19.8 million. Amounts as of December 26, 2009 and December 27, 2008 include cash held...

  • Page 38
    ...in fiscal year 2012 related to the announced closure of the Baskin-Robbins ice cream manufacturing plant in Peterborough, Canada, including $3.4 million of severance and other payrollrelated costs, $4.2 million of accelerated depreciation, $2.7 million of incremental costs of ice cream products, and...

  • Page 39
    ... ice cream products to Baskin-Robbins franchisees in certain international markets. The balance of our revenue for fiscal year 2012 consisted of revenue from our company-owned restaurants, license fees on products sold in non-franchised outlets, license fees on sales of ice cream products to Baskin...

  • Page 40
    ...operating and financial highlights Fiscal year 2012 2011 2010 Systemwide sales growth Comparable store sales growth: Dunkin' Donuts U.S. Dunkin' Donuts International(1) Baskin-Robbins U.S. Baskin-Robbins International Total revenues Operating income Adjusted operating income Net income Adjusted net...

  • Page 41
    ... in fiscal year 2011, as well as 30 net restaurant closures during 2012. Baskin-Robbins U.S. comparable store sales growth was driven by new product news and signature Flavors of the Month, custom cake sales, and new beverages. Baskin-Robbins International systemwide sales growth of 5.5% resulting...

  • Page 42
    ... driven by a $14.7 million expense related to the termination of the Sponsor management agreement upon the Company's initial public offering in 2011, as well as a $21.3 million reduction in equity in net income of joint ventures driven by an impairment of the investment in the Korea joint venture...

  • Page 43
    ... income and sales of ice cream products. Additionally, total revenues for fiscal year 2012 were unfavorably impacted by approximately $5.8 million from a one-time delay in revenue recognition as a result of a change in shipping terms related to the shift in ice cream manufacturing to Dean Foods...

  • Page 44
    ... 2012. For fiscal year 2011, general and administrative expenses include $14.7 million related to the termination of the Sponsor management agreement upon completion of the Company's initial public offering ("IPO"), $1.8 million of Sponsor management fees prior to the IPO, and $2.6 million of share...

  • Page 45
    ... profit for the Dunkin' Donuts International and Baskin-Robbins International segments include equity in net income (loss) from joint ventures, except for the impairment charge, net of the related reduction in depreciation and amortization, net of tax, recorded in fiscal year 2011 on the investment...

  • Page 46
    ...the Dunkin' Donuts U.S. segment revenues. Prior to fiscal year 2012, retail sales for Dunkin' Donuts U.S. company-owned restaurants were excluded from segment revenues. Additionally, revenue and segment profit for Baskin-Robbins' sales to United States military locations located internationally were...

  • Page 47
    ... was the $1.4 million decline in total revenues. Baskin-Robbins International Fiscal year 2012 2011 Increase (Decrease) $ % (In thousands, except percentages) Royalty income Franchise fees Rental income Sales of ice cream products Other revenues Total revenues Segment profit $ 9,301 1,292 561 90...

  • Page 48
    ... in Baskin-Robbins International segment profit for fiscal year 2012 resulted primarily from an increase in general and administrative expenses of $2.0 million driven primarily by investments in personnel and advertising, as well as a $1.6 million decline in net margin on sales of ice cream products...

  • Page 49
    ... until the sale or disposition of shares held by our Sponsors (performance condition). Finally, the Company incurred approximately $1.0 million of transaction costs related to the secondary offering in fiscal year 2011. Excluding the offering-related costs above, general and administrative expenses...

  • Page 50
    ... there is no corresponding tax benefit. Operating segments Dunkin' Donuts U.S. Fiscal year 2011 2010 Increase (Decrease) $ % (In thousands, except percentages) Royalty income Franchise fees Rental income Sales at company-owned restaurants Other revenues Total revenues Segment profit $ 317,203 29...

  • Page 51
    ... costs and travel of $0.9 million. These declines in segment profit were offset by the increase in total revenues. Baskin-Robbins U.S. Fiscal year 2011 2010 Increase (Decrease) $ % (In thousands, except percentages) Royalty income Franchise fees Rental income Sales of ice cream products Sales...

  • Page 52
    Baskin-Robbins International Fiscal year 2011 2010 Increase (Decrease) $ % (In thousands, except percentages) Royalty income Franchise fees Rental income Sales of ice cream products Other revenues Total revenues Segment profit $ 8,422 1,593 616 96,288 (32) 6,191 1,289 572 80,962 390 89,404 40,...

  • Page 53
    ... on fiscal year 2012 excess cash flow and leverage ratio requirements, considering all payments made, the excess cash flow payment required in the first quarter of 2013 will be $21.7 million, which may be applied to future minimum required principal payments. However, the Company intends on making...

  • Page 54
    ...one-time costs and fees associated with entry into new markets, costs associated with various franchiseerelated information technology investments and one-time market research programs, and the net impact of other nonrecurring and individually insignificant adjustments. Based upon our current level...

  • Page 55
    ...capital expenditures. Our future operating performance and our ability to service, extend or refinance the senior secured credit facility will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. Off balance sheet obligations In...

  • Page 56
    ..., and cash flow in future years. The following is a description of what we consider to be our most significant critical accounting policies. Revenue recognition Initial franchise fee revenue is recognized upon substantial completion of the services required of us as stated in the franchise agreement...

  • Page 57
    ... to the projected attrition and renewal rates on those existing franchise arrangements being valued. License rights recorded in the consolidated balance sheets were valued based on an estimate of future revenues and costs related to the ongoing management of the contracts over the remaining useful...

  • Page 58
    ... future taxable income, and tax planning strategies in making this assessment. Legal contingencies We are engaged in litigation that arises in the ordinary course of business as a franchisor. Such matters typically include disputes related to compliance with the terms of franchise and development...

  • Page 59
    ... Our principal interest rate exposure mainly relates to a portion of the term loans outstanding under our senior credit facility. We have a $1.90 billion term loan facility bearing interest at variable rates. In September 2012, we entered into variable-to-fixed interest rate swap agreements to hedge...

  • Page 60
    ... fiscal years in the period ended December 29, 2012, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Dunkin' Brands Group, Inc.'s internal control over financial...

  • Page 61
    DUNKIN' BRANDS GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share data) December 29, 2012 December 31, 2011 Assets Current assets: Cash and cash equivalents Accounts receivable, net Notes and other receivables, net Assets held for sale Deferred income taxes, net ...

  • Page 62
    ...In thousands, except per share data) Fiscal year ended December 29, 2012 December 31, 2011 December 25, 2010 Revenues: Franchise fees and royalty income Rental income Sales of ice cream products Sales at company-owned restaurants Other revenues Total revenues Operating costs and expenses: Occupancy...

  • Page 63
    DUNKIN' BRANDS GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (In thousands) Fiscal year ended December 29, 2012 December 31, 2011 December 25, 2010 Net income including noncontrolling interests Other comprehensive income (loss), net: Effect of foreign currency ...

  • Page 64
    ... in connection with initial public offering Issuance of common stock Exercise of stock options Share-based compensation expense Repurchases of common stock Retirement of treasury stock Excess tax benefits from share-based compensation Balance at December 31, 2011 Net income Other comprehensive loss...

  • Page 65
    ... rate changes on cash and cash equivalents Increase in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year Supplemental cash flow information: Cash paid for income taxes Cash paid for interest Noncash investing activities: Property and...

  • Page 66
    ... ice cream, frozen beverages, and related products. Additionally, we distribute Baskin-Robbins ice cream products to Baskin-Robbins franchisees and licensees in certain international markets. Throughout these financial statements, "Dunkin' Brands," "the Company," "we," "us," "our," and "management...

  • Page 67
    ... rather than to fund operations. Total cash balances related to the advertising funds and gift card/certificate programs as of December 29, 2012 and December 31, 2011 were $125.4 million and $123.1 million, respectively. (e) Fair value of financial instruments The carrying amounts of accounts...

  • Page 68
    ... relate to the Dunkin' Brands, Inc. Non-Qualified Deferred Compensation Plan ("NQDC Plan"), which allows for pre-tax salary deferrals for certain qualifying employees (see note 18). Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets...

  • Page 69
    ... the property, (b) the stores are available for immediate sale, (c) we have begun an active program to locate a buyer, (d) significant changes to the plan of sale are not likely, and (e) the sale is probable within one year. (h) Property and equipment Property and equipment are stated at cost less...

  • Page 70
    ... to the projected attrition and renewal rates on those existing franchise arrangements being valued. License rights recorded in the consolidated balance sheets were valued based on an estimate of future revenues and costs related to the ongoing management of the contracts over the remaining useful...

  • Page 71
    ...recorded as deferred income in current liabilities in the consolidated balance sheets. Sales of ice cream products We distribute Baskin-Robbins ice cream products to Baskin-Robbins franchisees and licensees in certain international locations. Revenue from the sale of ice cream products is recognized...

  • Page 72
    ...instruments on our consolidated balance sheets at fair value. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instruments is reported as a component of other comprehensive income (loss) and reclassified into...

  • Page 73
    ..., net. Breakage income for fiscal year 2012 includes $3.5 million related to historical Baskin-Robbins gift certificates as a result of shifting to gift cards, and represents the balance of gift certificates for which the Company believes the likelihood of redemption by the customer is remote based...

  • Page 74
    ...Dunkin' Donuts and Baskin-Robbins advertising funds, the Company collects a percentage, which is generally 5%, of gross retail sales from Dunkin' Donuts and Baskin-Robbins franchisees to be used for various forms of advertising for each brand. In most of our international markets, franchisees manage...

  • Page 75
    ....3% 33.3% Summary financial information for the joint venture operations on an aggregated basis was as follows (in thousands): December 29, 2012 December 31, 2011 Current assets Current liabilities Working capital Property, plant, and equipment, net Other assets Long-term liabilities Joint venture...

  • Page 76
    ...cost relative to the underlying equity in net assets of BR Korea is primarily comprised of an impairment of long-lived assets, net of tax, recorded in fiscal year 2011. The aggregate value of the Company's investment in BR Japan, based on its quoted market price on the last business day of the year...

  • Page 77
    ... at December 29, 2012 Accumulated impairment charges Net Balance Dunkin' Donuts International Goodwill Accumulated impairment charges Net Balance Baskin-Robbins International Goodwill Accumulated impairment charges Net Balance Goodwill Total Accumulated impairment charges Net Balance $1,148,796...

  • Page 78
    ... made in the first week of fiscal year 2013, within the current portion of long-term debt as of December 29, 2012 in the consolidated balance sheets. Based on all payments made, including the required excess cash flow payment in the first quarter of 2013, no additional principal payments would be...

  • Page 79
    ... and debt issuance costs related to the senior credit facility was $5.7 million, $5.3 million, and $323 thousand for fiscal years 2012, 2011 and 2010, respectively, which is included in interest expense in the consolidated statements of operations. In February 2013, the Company amended its senior...

  • Page 80
    ... to other comprehensive income (loss) and/or current earnings. The fair values of derivatives instruments consisted of the following (in thousands): December 29, 2012 December 31, 2011 Consolidated balance sheet classification Interest rate swaps - liability Total fair values of derivative...

  • Page 81
    ... statements of operations related to the swaps in fiscal year 2012, which is included in interest expense. The interest expense had not been paid in cash as of December 29, 2012 and is accrued in other current liabilities in the consolidated balance sheets. During the next twelve months, the Company...

  • Page 82
    ...Included in the Company's consolidated balance sheets are the following amounts related to assets leased to others under operating leases, where the Company is the lessor (in thousands): December 29, 2012 December 31, 2011 Land Buildings Leasehold improvements Store, production, and other equipment...

  • Page 83
    ... in rental income Total increase in operating income Fiscal year: 2013 2014 2015 2016 2017 (12) Segment information $ 1,119 1,063 958 902 902 936 851 794 723 686 2,055 1,914 1,752 1,625 1,588 The Company is strategically aligned into two global brands, Dunkin' Donuts and Baskin-Robbins, which...

  • Page 84
    ...the Dunkin' Donuts U.S. segment revenues. Prior to fiscal year 2012, retail sales for Dunkin' Donuts U.S. company-owned restaurants were excluded from segment revenues. Additionally, revenue and segment profit for Baskin-Robbins' sales to United States military locations located internationally were...

  • Page 85
    ... method investments by reportable segment was as follows (in thousands): Net income (loss) of equity method investments Fiscal year ended December 29, 2012 December 31, 2011 December 25, 2010 Dunkin' Donuts International Baskin-Robbins International Total reportable segments Other Total net income...

  • Page 86
    ... balance sheets include vested and unvested restricted shares. Common stock in the consolidated statement of stockholders' equity (deficit) excludes unvested restricted shares. (c) Treasury stock During fiscal years 2011 and 2010, the Company repurchased a total of 23,624 shares and 193,800 shares...

  • Page 87
    ...Dunkin' Brands Group, Inc. 2011 Omnibus Long-Term Incentive Plan (the "2011 Plan") was adopted in July 2011, and is the only plan under which the Company currently grants awards. A maximum of 7,000,000 shares of common stock may be delivered in satisfaction of awards under the 2011 Plan. Total share...

  • Page 88
    ... Tranche 2 shares generally vest in five annual installments beginning on the last day of the fiscal year of grant based on a service condition and performance conditions linked to annual EBITDA targets, which were not achieved for fiscal years 2010, 2011, and 2012. Total compensation cost for the...

  • Page 89
    ... by the Company's stock price and certain assumptions related to the Company's stock and employees' exercise behavior. Additionally, the value of the Tranche 5 options is impacted by the probability of achievement of the market condition. The following weighted average assumptions were utilized...

  • Page 90
    ...impacted by the Company's stock price and certain assumptions related to the Company's stock and employees' exercise behavior. The following weighted average assumptions were utilized in determining the fair value of nonexecutive and 2011 Plan options granted during fiscal years 2012, 2011, and 2010...

  • Page 91
    ...of the Company's nonexecutive and 2011 Plan options as of December 29, 2012 and changes during fiscal year 2012 is presented below: Weighted average exercise price Weighted average remaining contractual term (years) Aggregate intrinsic value (in millions) Number of shares Share options outstanding...

  • Page 92
    ... preferential distribution Common stock fair value per share (initial public offering price per share) Fair value of Class L base shares (in thousands) $ $ 22,866,379 0.2189 5,005,775 19.00 95,110 (2) Net income allocated to common shareholders for the fiscal year 2012 excludes $132 thousand...

  • Page 93
    ... tax rate of 35% due to the following: Fiscal year ended December 29, 2012 December 31, 2011 December 25, 2010 Computed federal income tax expense, at statutory rate Permanent differences: Impairment of investment in BR Korea Other permanent differences State income taxes Benefits and taxes related...

  • Page 94
    ..., net of foreign tax credits, relating to our foreign joint ventures that arose in fiscal year 2012 and prior years because the Company currently does not expect those unremitted earnings to reverse and become taxable to the Company in the foreseeable future. A deferred tax liability will be...

  • Page 95
    ... the annual effective tax rate. The Company's major tax jurisdictions are the United States and Canada. For Canada, the Company has open tax years dating back to tax years ended August 2003 and is currently under audit for the tax periods 2009, 2010, and 2011. In the United States, the Company is...

  • Page 96
    ... its business as a franchisor. Such matters include disputes related to compliance with the terms of franchise and development agreements, including claims or threats of claims of breach of contract, negligence, and other alleged violations by the Company. At December 29, 2012 and December 31, 2011...

  • Page 97
    ..., 2011, total investments held for the NQDC Plan were $3.1 million and $3.2 million, respectively, and have been recorded in other assets in the consolidated balance sheets. Canadian Pension Plan The Company sponsors a contributory defined benefit pension plan in Canada, The Baskin-Robbins Employees...

  • Page 98
    ... 29, 2012 and December 31, 2011. The pooled fund is comprised of numerous underlying investments and is valued at the unit fair values supplied by the fund's administrator, which represents the fund's proportionate share of underlying net assets at market value determined using closing market prices...

  • Page 99
    ... offering and related repurchase of shares by the Company (see notes 13(a) and 13(c)). One representative of each Sponsor continues to serve on the board of directors. Prior to the closing of the Company's initial public offering on August 1, 2011, the Company was charged an annual management fee...

  • Page 100
    ...During the second quarter of 2012, the Company's board of directors approved a plan to close our Peterborough, Ontario, Canada manufacturing plant, which supplied ice cream to certain of Baskin-Robbins' international markets. Manufacturing of ice cream products that had been produced in Peterborough...

  • Page 101
    ...The changes in reserves related to the plant closure during fiscal year 2012 were as follows (in thousands): Fiscal year ended December 29, 2012 Ongoing Termination One-Time Termination Benefits Benefits Total Balance at December 31, 2011 Costs incurred and charged to expense Costs paid or settled...

  • Page 102
    ... of approximately $14.7 million related to the termination of the Sponsor management agreement incurred in connection with the completion of the initial public offering in August 2011 (see note 19(a)). The fourth quarter of fiscal year 2011 includes an impairment of the investment in the Korea joint...

  • Page 103
    ...board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal...

  • Page 104
    ... (United States), the consolidated balance sheets of Dunkin' Brands Group, Inc. and subsidiaries as of December 29, 2012 and December 31, 2011, and the related consolidated statements of operations, comprehensive income, stockholders' equity (deficit), and cash flows for each of the fiscal years in...

  • Page 105
    ..., age 48, joined Dunkin' Brands in August 2010 and currently serves as President, Baskin-Robbins U.S. and Canada. Mr. Mitchell joined Dunkin' Brands from Papa John's International, where he had served in a variety of roles since 2000, including President of Global Operations, President of Domestic...

  • Page 106
    ... year end. Accordingly, the financial statements of these joint ventures will be filed via an amendment to this Annual Report on Form 10-K on or before June 29, 2013. All other financial statement schedules are omitted because they are not required or are not applicable, or the required information...

  • Page 107
    ... Restricted Stock Unit Award under 2011 Omnibus Long-Term Incentive Plan Dunkin' Brands Group, Inc. Annual Incentive Plan Amended and Restated Dunkin' Brands, Inc. Non-Qualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form...

  • Page 108
    ...-Robbins and Dunkin' Donuts Franchise Agreement Form of Dunkin' Donuts Store Development Agreement (incorporated by reference to Exhibit 10.34 to the Company's Annual Report on Form 10-K, File No. 001-35258, filed with the SEC on February 24, 2012) Form of Baskin-Robbins Store Development Agreement...

  • Page 109
    ... Act of 2002 The following financial information from the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011, formatted in Extensible Business Reporting Language, (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated...

  • Page 110
    ... duly authorized. Date: February 22, 2013 DUNKIN' BRANDS GROUP, INC. By: Name: Title: /s/ Nigel Travis Nigel Travis Chief Executive Officer Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant...

  • Page 111

  • Page 112
    ..., Dunkin' Brands International Scott Murphy Senior Vice President & Chief Supply Officer Bill Mitchell President, Baskin-Robbins U.S. & Canada Karen Raskopf Senior Vice President & Chief Communications Officer Paul Twohig President, Dunkin' Donuts U.S. & Canada Dunkin' Brands Group, Inc...