Baskin Robbins 2013 Annual Report Download - page 41

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-31-
Franchisees fund the vast majority of the cost of new restaurant development. As a result, we are able to grow our system with
lower capital requirements than many of our competitors. With only 36 company-owned points of distribution as of
December 28, 2013, we are less affected by store-level costs, profitability, and fluctuations in commodity costs than other QSR
operators.
Our franchisees fund substantially all of the advertising that supports both brands. Those advertising funds also fund the cost of
our marketing, research and development, and innovation personnel. Royalty payments and advertising fund contributions
typically are made on a weekly basis for restaurants in the U.S., which limits our working capital needs. For fiscal year 2013,
franchisee contributions to the U.S. advertising funds were $356.1 million.
We operate and report financial information on a 52- or 53-week year on a 13-week quarter basis with the fiscal year ending on
the last Saturday in December and fiscal quarters ending on the 13th Saturday of each quarter (or 14th Saturday when
applicable with respect to the fourth fiscal quarter). The data periods contained within fiscal years 2013, 2012, and 2011 reflect
the results of operations for the 52-week, 52-week, and 53-week periods ending on December 28, 2013, December 29, 2012,
and December 31, 2011, respectively. Certain financial measures and other metrics have been presented with the impact of the
additional week on the results for fiscal year 2011. The impact of the additional week in fiscal year 2011 reflects our estimate of
the 53rd week on systemwide sales growth, revenues, and expenses.
Selected operating and financial highlights
Fiscal year
2013 2012 2011
Systemwide sales growth 5.8 % 5.2% 9.1%
Comparable store sales growth (decline):
Dunkin’ Donuts U.S. 3.4 % 4.2% 5.1%
Dunkin' Donuts International(1) (0.4)% 2.0% n/a
Baskin-Robbins U.S. 0.8 % 3.8% 0.5%
Baskin-Robbins International(1) 1.9 % 2.8% n/a
Total revenues $ 713,840 658,181 628,198
Operating income 304,736 239,429 205,309
Adjusted operating income 340,396 307,157 270,740
Net income attributable to Dunkin’ Brands 146,903 108,308 34,442
Adjusted net income 165,761 149,700 101,744
(1) Comparable store sales growth data was not available for our international segments until fiscal year 2012.
Adjusted operating income and adjusted net income are non-GAAP measures reflecting operating income and net income
adjusted for amortization of intangible assets, long-lived asset impairments, and other non-recurring, infrequent, or unusual
charges, net of the tax impact of such adjustments in the case of adjusted net income. The Company uses adjusted operating
income and adjusted net income as key performance measures for the purpose of evaluating performance internally. We also
believe adjusted operating income and adjusted net income provide our investors with useful information regarding our
historical operating results. These non-GAAP measurements are not intended to replace the presentation of our financial results
in accordance with GAAP. Use of the terms adjusted operating income and adjusted net income may differ from similar
measures reported by other companies. See note 7 to "Selected Financial Data" for reconciliations of operating income and net
income determined under GAAP to adjusted operating income and adjusted net income, respectively.
Fiscal year 2013 compared to fiscal year 2012
Overall growth in systemwide sales of 5.8% for fiscal year 2013, resulted from the following:
• Dunkin’ Donuts U.S. systemwide sales growth of 7.6%, which was the result of comparable store sales growth of
3.4% driven by both increased average ticket and transaction counts, as well as net development of 371 restaurants in
2013. The increase in average ticket resulted primarily from guests purchasing more units per transaction, including
add-on items, and positive mix as guests purchased more premium-priced cold beverages and differentiated
sandwiches. Increased traffic was driven by our focus on operational excellence and product and marketing
innovation, resulting in strong growth in beverages, breakfast sandwiches, donuts, and our afternoon platform.