Baskin Robbins 2013 Annual Report Download - page 77

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-67-
development, public relations, merchandising, and administrative expenses and programs to increase sales and further enhance
the public reputation of each of the brands.
At December 28, 2013 and December 29, 2012, the Company had a net payable of $17.6 million and $13.7 million,
respectively, to the various advertising funds.
To cover administrative expenses of the advertising funds, the Company charges each advertising fund a management fee for
items such as rent, accounting services, information technology, data processing, product development, legal, administrative
support services, and other operating expenses, which amounted to $5.5 million, $5.6 million, and $5.7 million for fiscal years
2013, 2012, and 2011, respectively. Such management fees are included in the consolidated statements of operations as a
reduction in general and administrative expenses, net.
The Company made discretionary contributions to certain advertising funds for the purpose of supplementing national and
regional advertising in certain markets of $2.4 million, $863 thousand, and $2.0 million for fiscal years 2013, 2012, and 2011,
respectively, which are included in general and administrative expenses, net in the consolidated statements of operations.
Additionally, the Company made net contributions to the advertising funds based on retail sales as owner and operator of
company-owned restaurants of $1.0 million, $808 thousand, and $289 thousand for fiscal years 2013, 2012, and 2011,
respectively, which are included in company-owned restaurant expenses in the consolidated statements of operations. During
fiscal year 2013, the Company also made $5.9 million of contributions to fund future initiatives that will benefit the gift card
program, which was contributed from the gift card breakage liability included within other current liabilities in the consolidated
balance sheets (see note 2(v) and note 10); no such contributions were made in fiscal years 2012 or 2011.
(5) Property and equipment
Property and equipment at December 28, 2013 and December 29, 2012 consisted of the following (in thousands):
December 28,
2013
December 29,
2012
Land $ 34,052 31,080
Buildings 47,946 45,447
Leasehold improvements 154,491 158,797
Store, production, and other equipment 43,124 50,046
Construction in progress 9,079 5,549
Property and equipment, gross 288,692 290,919
Accumulated depreciation and amortization (105,834)(109,747)
Property and equipment, net $ 182,858 181,172
The Company recognized impairment charges on leasehold improvements, typically due to termination of the underlying lease
agreement, and other corporately-held assets of $119 thousand, $319 thousand, and $1.4 million during fiscal years 2013, 2012,
and 2011, respectively, which are included in long-lived asset impairment charges in the consolidated statements of operations.
(6) Equity method investments
The Company’s ownership interests in its equity method investments as of December 28, 2013 and December 29, 2012 were as
follows:
Ownership
Entity
December 28,
2013
December 29,
2012
BR Japan 43.3% 43.3%
BR Korea 33.3% 33.3%
Spain JV 33.3% 33.3%
Australia JV 20.0% 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 net proceeds of $6.5 million, offset by the carrying value of the business included in the sale,
which totaled $216 thousand. As of December 28, 2013, unpaid transaction-related costs totaling $146 thousand are included in