Baskin Robbins 2013 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... net development growth rate. In July 2011, at the time of our IPO, we told investors that our goal was to have five percent net development in five years. We accomplished our goal in just two-and-a-half years, opening 371 net new Dunkin' Donuts restaurants in the U.S. in 2013, the highest number...

  • Page 3
    ... restaurant to open there in 2015. We also signed multi-store agreements in more than 20 other domestic markets. Our strategy is to ensure we have the most compelling brand by offering differentiated food and beverage products at a great value, through both limited time offerings and permanent...

  • Page 4
    ... operations rations speed r teams. In addition to excelling in fast service, our overall customer nuts service also continues to improve. As a matter of fact, Dunkin' Donuts U.S. ended the year with an average guest satisfaction score that was five points higher than the previous year's. We are also...

  • Page 5
    ... that time, the business has not only stabilized, it's now growing. Baskin-Robbins U.S. had positive net development in 2013 for the first time since 2006. Additionally, 2013 was the third straight year of positive comps for the Baskin U.S. brand, and similar to Dunkin' Donuts U.S., Baskin-Robbins...

  • Page 6
    ... higher average weekly restaurant sales. A key area for our future development is Europe. Of particular note are Germany, where we now have more than 40 Dunkin' Donuts restaurants, and the U.K., where in December we opened our first Dunkin' Donuts in the London area. In order to enable us to share...

  • Page 7
    ...the year ended December 28, 2013 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the transition period from to Commission file number 001-35258 _____ DUNKIN' BRANDS GROUP, INC. (Exact name of registrant as specified in its charter) Delaware (State or...

  • 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 100 1 9 21 21 22 23 23 26...

  • 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
    ... markets; (iv) retail store revenue 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), the licensing of the rights to manufacture Baskin-Robbins ice cream...

  • Page 12
    ... the United Kingdom, Germany, and China. Our international franchise system, predominantly located across Asia and the Middle East, generated franchisee-reported sales of $2.0 billion for fiscal year 2013, which represented 22.1% of Dunkin' Brands' global franchiseereported sales. Dunkin' Donuts had...

  • 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
    ... Dean Foods manufactures and distributes ice cream products to Baskin-Robbins franchisees in the U.S. In connection with this agreement, Dunkin' Brands receives a license fee based on total gallons of ice cream sold. For fiscal year 2013, we generated 1.0%, or $7.0 million, of our total revenue from...

  • Page 15
    ...the US for the twelve months ended December 2013. The U.S. restaurant industry is generally categorized into segments by price point ranges, the types of food and beverages offered, and service available to consumers. QSR is a restaurant format characterized by counter or drive-thru ordering and -5-

  • Page 16
    ... 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 categories and subcategories that include hard-serve ice cream as well as those that include soft serve ice cream...

  • 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
    ...competitive position, we could experience lower demand for products, downward pressure on prices, the loss of market share, and the inability to attract, or loss of, qualified franchisees, which could result in lower franchise fees and royalty income, and materially and adversely affect our business...

  • Page 21
    ... to develop, and we expect that new or enhanced technologies and consumer offerings will be available in the future. We may pursue certain of those technologies and consumer offerings if we believe they offer a sustainable customer proposition and can be successfully integrated into our business...

  • Page 22
    ... market interest rates increase, variable rate debt will create higher debt service requirements, which could adversely affect our cash flow. Although we have variable-to-fixed interest rate swap agreements to hedge the floating interest rate on $900.0 million notional amount of our outstanding term...

  • Page 23
    ...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 24
    ...invest in the development of new restaurants, and our future growth could be adversely affected. To the extent our franchisees are unable to open new stores as we anticipate, our revenue growth would come primarily from growth in comparable store sales. Our failure to add a significant number of new...

  • Page 25
    .... We have a long-term agreement with the National DCP, LLC (the "NDCP") for the NDCP to provide substantially all of the goods needed to operate a Dunkin' Donuts restaurant in the U.S. The NDCP also supplies some international markets. The NDCP aggregates the franchisee demand, sends requests for...

  • Page 26
    ... of our brands in a particular market or markets. Any such delay or interruption would result in a delay in, or loss of, royalty income to us whether by way of delayed royalty income or delayed revenues from the sale of ice cream products by us to franchisees internationally, or reduced sales. Any...

  • Page 27
    ... 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 28
    ... States and numerous foreign jurisdictions. The Internal Revenue Service ("IRS") concluded its examination of the federal income tax returns for the fiscal year 2010 during fiscal year 2013 and agreed to a settlement regarding the recognition of revenue for gift cards and other matters. The Company...

  • Page 29
    ... 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
    ... our business and operating results. Risks related to our common stock Our stock price could be extremely volatile and, as a result, you may not be able to 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...

  • Page 31
    ..., public relations, financial and research and development. As of December 28, 2013, we owned 98 properties and leased 911 locations across the U.S. and Canada, a majority of which we leased or subleased to franchisees. For fiscal year 2013, we generated 13.5%, or $96.1 million, of our total revenue...

  • Page 32
    ... in value of the franchises and lost profits. During the second quarter of 2012, the Company increased its estimated liability related to the Bertico litigation by $20.7 million to reflect the judgment amount and estimated plaintiff legal costs and interest. During fiscal years 2013 and 2012, the...

  • Page 33
    ... 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 2013 Fourth Quarter (13 weeks ended December 28...

  • Page 34
    ... ended December 28, 2013 by or on behalf of Dunkin' Brands Group, Inc. or any "affiliated purchaser," as defined by Rule 10b-18(a)(3) of the Securities Exchange Act of 1934: Issuer Purchases of Equity Securities Total Number of Shares Purchased as Part of Publicly Average Price Paid Announced Plans...

  • Page 35
    ... and the reinvestment of dividends paid since that date. The stock price performance shown in the graph is not necessarily indicative of future price performance. 7/27/2011 12/31/2011 12/29/2012 12/28/2013 Dunkin' Brands Group, Inc. (DNKN) S&P 500 S&P Consumer Discretionary $ 100.00 $ 100.00...

  • Page 36
    .... Fiscal Year 2013 2012 2011 2010 2009 ($ in thousands, except per 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...

  • Page 37
    ... income(7) Points of Distribution(8): Dunkin' Donuts U.S. Dunkin' Donuts International(9) Baskin-Robbins U.S. Baskin-Robbins International(9) Total distribution points Comparable Store Sales Growth (Decline)(10): Dunkin' Donuts U.S. Dunkin' Donuts International(11) Baskin-Robbins U.S. Baskin-Robbins...

  • Page 38
    ... $5.4 million as of December 28, 2013, December 29, 2012, December 31, 2011, December 25, 2010, and December 26, 2009, respectively. Prior to our IPO in fiscal year 2011, the Company had two classes of common stock, Class L and common. Class L common stock was classified outside of permanent equity...

  • Page 39
    ... represents transition-related general and administrative costs incurred related to the closure of the Baskin-Robbins ice cream manufacturing plant in Peterborough, Canada, such as information technology integration, project management, and transportation costs. For fiscal year 2012, the adjustment...

  • Page 40
    ... in certain international markets, (iv) retail store revenue at our company-owned restaurants, and (v) 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...

  • Page 41
    ... financial highlights Fiscal year 2013 2012 2011 Systemwide sales growth Comparable store sales growth (decline): Dunkin' Donuts U.S. Dunkin' Donuts International(1) Baskin-Robbins U.S. Baskin-Robbins International(1) Total revenues Operating income Adjusted operating income Net income attributable...

  • Page 42
    ... signature Flavors of the Month, custom cake sales, and take-home ice cream quarts. Baskin-Robbins International systemwide sales growth of 0.4% resulting from increased sales in South Korea and the Middle East, which resulted from both comparable store sales growth and net development. Offsetting...

  • Page 43
    ... 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 44
    ... of our ice cream manufacturing plant in Peterborough, Ontario, Canada. Adjusted operating income increased $36.4 million, or 13.5%, for fiscal year 2012 driven by the $20.5 million increase in franchise fees and royalty income, a $7.1 million increase in income from equity method investments driven...

  • Page 45
    ... year 2013 compared to fiscal year 2012 Consolidated results of operations Fiscal year 2013 2012 Increase (Decrease) $ % (In thousands, except percentages) Franchise fees and royalty income Rental income Sales of ice cream products Sales at company-owned restaurants Other revenues Total revenues...

  • Page 46
    ...ice cream manufacturing plant in Canada. Excluding the items noted above, general and administrative expenses increased $10.8 million, or 5.1%, in fiscal year 2013. This increase was driven primarily by a $6.5 million increase in personnel costs related to continued investments in our Dunkin' Donuts...

  • Page 47
    ... tax rate for a shift in the apportionment of income to state jurisdictions, as a result of the closure of the Peterborough manufacturing plant and transition to Dean Foods. Operating segments We operate four reportable operating segments: Dunkin' Donuts U.S., Dunkin' Donuts International, Baskin...

  • Page 48
    ... of continued investments in our Dunkin' Donuts U.S. contiguous growth strategy. Dunkin' Donuts International Fiscal year 2013 2012 Increase (Decrease) $ % (In thousands, except percentages) Royalty income Franchise fees Rental income Other revenues Total revenues Segment profit $ $ $ 14,249...

  • Page 49
    ... restaurants and sales of ice cream products. Baskin-Robbins U.S. segment profit for fiscal year 2013 increased primarily as a result of additional breakage income of $0.5 million related to unredeemed gift certificate balances, as well as increases in franchise fees and other revenues, offset by...

  • Page 50
    ... 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 51
    ...in fiscal year 2012, including $5.0 million of general and administrative costs related to severance and other transition-related costs, $4.2 million of accelerated depreciation on property, plant, and equipment, $2.7 million of incremental ice cream production costs, and a one-time delay in revenue...

  • Page 52
    ... deferred tax expense of approximately $1.9 million. Operating segments Dunkin' Donuts U.S. Fiscal year 2012 2011 Increase (Decrease) $ % (In thousands, except percentages) Royalty income Franchise fees Rental income Sales at company-owned restaurants Other revenues Total revenues Segment profit...

  • Page 53
    ...the $1.4 million decline in total revenues. 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 $ $ $ 9,301 1,292 561 90...

  • Page 54
    ... income taxes, increases in accounts receivable related to sales of ice cream products, and increases in receivables related to gift cards, offset by the reserve related to the third-party product volume guarantee. During fiscal year 2013, we invested $31.1 million in capital additions to property...

  • Page 55
    ... primarily driven by cash paid for income taxes, offset by the increase in the legal reserve for the Bertico litigation and an increase in accrued interest based on the timing of interest payments. During fiscal year 2012, we invested $22.4 million in capital additions to property and equipment. Net...

  • Page 56
    ...discount. Represents severance and related benefits costs associated with reorganizations. Represents costs and fees associated with various franchisee-related information technology and other investments, bank fees, the closure of the Company's Canadian ice cream manufacturing plant, as well as the...

  • Page 57
    .... Off balance sheet obligations In limited instances, we issue guarantees to financial institutions so that our franchisees can obtain financing with terms of approximately three to ten years for various business purposes. We recognize a liability and offsetting asset for the fair value of such...

  • Page 58
    ... may be required related to pending litigation, such as the Bertico matter more fully described in note 17 (d) to our consolidated financial statements included herein, as the amount and timing of cash requirements, if any, are uncertain. Income tax liabilities for uncertain tax positions, gift card...

  • Page 59
    ... revenue is recognized upon substantial completion of the services required of us as stated in the franchise agreement, which is generally upon opening of the respective restaurant. Fees collected in advance are deferred until earned. Royalty income is based on a percentage of franchisee gross sales...

  • Page 60
    ... its estimated fair value, which is based on discounted cash flows. Income taxes Our major tax jurisdictions subject to income tax are the U.S. and Canada. The majority of our legal entities were converted to limited liability companies ("LLCs") on March 1, 2006 and a number of new LLCs were created...

  • Page 61
    ... carrying value of our investments in joint ventures. In the future, we may consider the use of derivative financial instruments, such as forward contracts, to manage foreign currency exchange rate risks. Interest rate risk We are subject to interest rate risk in connection with our long-term debt...

  • Page 62
    ... of the years in the period ended December 28, 2013, 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 63
    DUNKIN' BRANDS GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share data) December 28, 2013 December 29, 2012 Assets Current assets: Cash and cash equivalents Accounts receivable, net Notes and other receivables, net Assets held for sale Deferred income taxes, net ...

  • Page 64
    DUNKIN' BRANDS GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except per share data) Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Revenues: Franchise fees and royalty income Rental income Sales of ice cream products Sales at company-...

  • Page 65
    DUNKIN' BRANDS GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (In thousands) Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Net income including noncontrolling interests Other comprehensive income (loss), net: Effect of foreign currency ...

  • Page 66
    ... of common stock 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 Additional paid...

  • Page 67
    DUNKIN' BRANDS GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) December 28, 2013 Fiscal year ended December 29, 2012 December 31, 2011 Cash flows from operating activities: Net income including noncontrolling interests Adjustments to reconcile net income to net ...

  • Page 68
    ... 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 consolidated financial statements, "Dunkin' Brands," "the Company," "we," "us," "our," and "management...

  • Page 69
    ... rather than to fund operations. Total cash balances related to the advertising funds and gift card/certificate programs as of December 28, 2013 and December 29, 2012 were $134.5 million and $125.4 million, respectively. (e) Fair value of financial instruments The carrying amounts of accounts...

  • Page 70
    ... primarily of ice cream products sold to certain international markets that are in-transit from our third-party manufacturer to our international licensees, during which time we hold title to such products. Inventories are valued at the lower of cost or estimated net realizable value, and cost is...

  • Page 71
    ...rates, when costs expected to be incurred under an operating prime lease exceed the anticipated future revenue stream of the operating sublease. Furthermore, for properties where we do not currently have an operational franchise or other third-party sublessee and are under long-term lease agreements...

  • Page 72
    .... The franchise rights and related tax liabilities are amortized in a manner that reflects the estimated benefits from the use of the intangible asset over a period of 14 years. The franchise rights were valued based on an estimate of future cash flows to be generated from the ongoing management of...

  • Page 73
    ...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 74
    ... in derivative instruments, and fair value information. (v) Gift card/certificate breakage The Company and our franchisees sell gift cards that are redeemable for product in our Dunkin' Donuts and Baskin-Robbins restaurants. The Company manages the gift card program, and therefore collects all...

  • Page 75
    ... for more than 10% of total revenues for the fiscal years ended 2013, 2012, or 2011. (x) Recent accounting pronouncements In July 2013, the Financial Accounting Standards Board ("FASB") issued new guidance which requires presentation of an unrecognized tax benefit as a reduction of a deferred...

  • Page 76
    ... fiscal year 2013, the Company performed an internal review of international franchised points of distribution, and determined that certain franchises opened and closed had not been accurately reported in prior years. As such, the points of distribution information for fiscal years 2012 and 2011...

  • Page 77
    ... 33.3% n/a In June 2013, the Company sold 80% of the Baskin-Robbins Australia franchising business, resulting in a gain of $6.3 million, net of transaction costs, which is included in other operating income in the consolidated statements of operations for the fiscal year 2013. The gain consisted of...

  • Page 78
    ... price on the last business day of the year, is approximately $163.9 million. No quoted market prices are available for the Company's other equity method investments. Net income (loss) of equity method investments in the consolidated statements of operations for fiscal years 2013, 2012, and 2011...

  • Page 79
    ... statements of operations. During the fourth quarter of 2011, management concluded that indicators of potential impairment were present related to our investment in BR Korea based on continued declines in the operating performance and future projections of the Korea Dunkin' Donuts business...

  • Page 80
    ...thousand, and $624 thousand, for fiscal years 2013, 2012, and 2011, respectively, and is included within long-lived asset impairment charges in the consolidated statements of operations. Total estimated amortization expense for other intangible assets for fiscal years 2014 through 2018 is as follows...

  • Page 81
    ... following the end of each fiscal year, the Company is required to prepay an amount equal to 25% of excess cash flow (as defined in the senior credit facility) for such fiscal year. If DBI's leverage ratio, which is a measure of DBI's outstanding debt to earnings before interest, taxes, depreciation...

  • Page 82
    ... and debt issuance costs related to the senior credit facility was $4.7 million, $5.7 million, and $5.3 million for fiscal years 2013, 2012, and 2011, respectively, which is included in interest expense in the consolidated statements of operations. In February 2014, the Company amended its senior...

  • Page 83
    ... to other comprehensive income (loss) and/or current earnings. The fair values of derivatives instruments consisted of the following (in thousands): December 28, 2013 December 29, 2012 Consolidated balance sheet classification Interest rate swaps - asset Total fair values of derivative instruments...

  • Page 84
    ... rentals, determined as a percentage of annual sales by our franchisees, are stipulated in certain prime lease and sublease agreements. The Company is generally obligated for the cost of property taxes, insurance, and maintenance relating to these leases. Such costs are typically charged to the...

  • Page 85
    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 28, 2013 December 29, 2012 Land Buildings Leasehold improvements Store, production, and other equipment...

  • Page 86
    ...party license agreement. Baskin-Robbins International primarily derives its revenues from sales of ice cream products, as well as royalty income, franchise fees, and license fees. The operating results of each segment are regularly reviewed and evaluated separately by the Company's senior management...

  • Page 87
    ...related to our investment in BR Korea (see note 6). Segment profit by segment was as follows (in thousands): Segment profit Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Dunkin' Donuts U.S. Dunkin' Donuts International Baskin-Robbins U.S. Baskin-Robbins International Total...

  • Page 88
    ... 28, 2013 December 29, 2012 United States International Total property and equipment, net (13) Stockholders' equity (a) Public offerings $ $ 182,544 314 182,858 180,525 647 181,172 On August 1, 2011, the Company completed an initial public offering in which the Company sold 22,250,000 shares of...

  • Page 89
    ... 3,266 shares of Class L shares that were originally sold and granted to former employees of the Company. The Company accounts for treasury stock under the cost method, and as such recorded increases in common treasury stock of $173 thousand during fiscal year 2011, based on the fair market value of...

  • Page 90
    ...(in thousands): Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Restricted shares 2006 Plan stock options-executive 2006 Plan stock options-nonexecutive 2011 Plan stock options Restricted stock units Total share-based compensation Total related tax benefit $ $ $ 3 977 162...

  • Page 91
    ... compensation cost remains related to restricted shares. The total grant-date fair value of shares vested during fiscal years 2013, 2012, and 2011, was $6 thousand, $1.2 million, and $484 thousand, respectively. 2006 Plan stock options-executive During fiscal year 2011, the Company granted...

  • Page 92
    ... service periods of the service, performance, and market conditions. Based on dividends received in 2012 and 2011, and the sale of shares by the Sponsors in connection with public offerings completed in 2012 and 2011, the cumulative Performance Percentage as of December 28, 2013, December 29, 2012...

  • Page 93
    ...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 2013, 2012, and 2011: Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011...

  • Page 94
    ... million of total unrecognized compensation cost related to nonexecutive and 2011 Plan options. Unrecognized compensation cost is expected to be recognized over a weighted average period of approximately 2.8 years. Restricted stock units During fiscal years 2013, 2012, and 2011, the Company granted...

  • Page 95
    ...of basic and diluted earnings per common share is as follows (in thousands, except share and per share amounts): Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Net income attributable to Dunkin' Brands-basic and diluted Allocation of net income (loss) to common stockholders...

  • Page 96
    ... 2013 and 2012, respectively, as they would be antidilutive. The weighted average number of common shares in the common diluted earnings per share calculation for fiscal year 2011 excludes all restricted stock and stock options outstanding, as they would be antidilutive. (16) Income taxes Income...

  • Page 97
    ... enacted changes in future state income tax rates. During fiscal year 2012, the Company recorded a net tax benefit of $10.2 million primarily related to the reversal of reserves for uncertain tax positions, including interest and penalty, net of federal and state tax benefit as applicable, for which...

  • Page 98
    ... 2013 Deferred tax assets Deferred tax liabilities December 29, 2012 Deferred tax assets Deferred tax liabilities Current: Allowance for doubtful accounts Deferred gift cards and certificates Rent Deferred income Other current liabilities Other Total current Noncurrent: Capital leases Rent Property...

  • Page 99
    ... the annual effective tax rate. The Company's major tax jurisdictions subject to income tax 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 through 2012. In the United States...

  • Page 100
    ... in value of the franchises and lost profits. During the second quarter of 2012, the Company increased its estimated liability related to the Bertico litigation by $20.7 million to reflect the judgment amount and estimated plaintiff legal costs and interest. During fiscal years 2013 and 2012, the...

  • Page 101
    ... contributions were made during fiscal years 2013, 2012, and 2011. NQDC Plan The Company, excluding employees of certain international subsidiaries, also offers to a limited group of management and highly compensated employees, as defined by the Employee Retirement Income Security Act ("ERISA"), the...

  • Page 102
    ... fiscal year. The table below summarizes other balances for fiscal years 2013, 2012, and 2011 (in thousands): Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Change in benefit obligation: Benefit obligation, beginning of year Service cost Interest cost Employee contributions...

  • Page 103
    ... 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 104
    ...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 105
    ... year 2012 included $4.2 million of accelerated depreciation on property, plant, and equipment, $2.7 million of incremental ice cream production costs, $2.0 million of ongoing termination benefits, $1.1 million of one-time termination benefits, and $1.9 million of other costs related to the closing...

  • Page 106
    Three months ended March 31, 2012 June 30, 2012 September 29, 2012 December 29, 2012 (In thousands, except per share data) Total revenues Operating income(1) Net income attributable to Dunkin' Brands Earnings per share(1): Common - basic Common - diluted (1) (1) $ 152,372 55,195 25,950 0.22 0.21...

  • Page 107
    ...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 108
    ... Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Dunkin' Brands Group, Inc. and subsidiaries as of December 28, 2013 and December 29, 2012, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows...

  • Page 109
    ...Senior Director of Franchise Operations. Scott Murphy, age 41, was named Senior Vice President and Chief Supply Officer in February 2013. Mr. Murphy joined Dunkin' Brands in 2004 and prior to his current position, served as Vice President, Global Supply Chain for Dunkin' Donuts. Mr. Murphy serves on...

  • Page 110
    ... Managing Director, International, Baskin-Robbins and Dunkin' Donuts. The remaining information required by this item will be contained in our definitive Proxy Statement for our 2014 Annual Meeting of Stockholders, which will be filed not later than 120 days after the close of our fiscal year ended...

  • Page 111
    ... of Amended Restricted Stock Unit Award under 2011 Omnibus Long-Term Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K, File No. 001-35258, filed the with SEC on February 22, 2013) Dunkin' Brands Group, Inc. Annual Incentive Plan (incorporated by...

  • Page 112
    ... with the SEC on February 24, 2012) Form of Baskin-Robbins Store Development Agreement (incorporated by reference to Exhibit 10.35 to the Company's Annual Report on Form 10-K, File No. 001-35258, filed with the SEC on February 24, 2012) Subsidiaries of Dunkin' Brands Group, Inc. Consent of KPMG LLP...

  • Page 113
    ... Act of 2002 The following financial information from the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2013, formatted in Extensible Business Reporting Language, (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated...

  • Page 114
    .... Date: February 20, 2014 DUNKIN' BRANDS GROUP, INC. By: Name: Title: /s/ Nigel Travis Nigel Travis Chairman and 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 115
    ... again in our second full year as a public company. 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, Nigel Travis Chairman & Chief Executive Officer Dunkin' Brands Group, Inc.

  • Page 116
    ... Paul Carbone Chief Financial Officer Jack Clare Chief Information Officer John Costello President, Global Marketing and Innovation Richard Emmett Chief Legal and Human Resources Officer Bill Mitchell President, Baskin-Robbins U.S. and Canada, and Dunkin' Donuts & Baskin-Robbins China, Japan...