Baskin Robbins 2015 Annual Report Download - page 52

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Fiscal year 2014 compared to fiscal year 2013
Consolidated results of operations
Fiscal year Increase (Decrease)
2014 2013 $ %
(In thousands, except percentages)
Franchise fees and royalty income $ 482,329 453,976 28,353 6.2 %
Rental income 97,663 96,082 1,581 1.6 %
Sales of ice cream and other products(1) 117,484 112,276 5,208 4.6 %
Sales at company-operated restaurants 22,206 24,976 (2,770) (11.1)%
Other revenues(1) 29,027 26,530 2,497 9.4 %
Total revenues $ 748,709 713,840 34,869 4.9 %
(1) Sales of Dunkin’ Donuts products in certain international markets that have historically been included in other revenues are now
included in sales of ice cream and other products. Sales from these transactions for the prior year have been reclassified to conform
to the current year presentation.
Total revenues increased $34.9 million, or 4.9%, in fiscal year 2014, driven by an increase in franchise fees and royalty income
of $28.4 million, or 6.2%, primarily as a result of Dunkin’ Donuts U.S. systemwide sales growth and additional franchise fees
due to favorable development mix and additional gross development. Sales of ice cream and other products increased $5.2
million due primarily to increases in sales of ice cream and other products in the Middle East and Europe, offset by a decline in
sales to our Australian joint venture, due primarily to the sale of all ice cream and other products inventory on hand in fiscal
year 2013 in conjunction with the sale of 80% of our Baskin-Robbins Australia business. Additionally, other revenues increased
$2.5 million as a result of increases in licensing income and refranchising gains. These increases were offset by a decline in
sales at company-operated restaurants of $2.8 million as a result of a net decrease in the number of company-operated
restaurants operating during the year, primarily in the Atlanta market.
Fiscal year Increase (Decrease)
2014 2013 $ %
(In thousands, except percentages)
Occupancy expenses – franchised restaurants $ 53,395 $ 52,097 1,298 2.5 %
Cost of ice cream and other products(1) 83,129 79,278 3,851 4.9 %
Company-operated restaurant expenses 22,687 24,480 (1,793) (7.3)%
General and administrative expenses, net(1) 226,301 230,847 (4,546) (2.0)%
Depreciation and amortization 45,539 49,366 (3,827) (7.8)%
Impairment charges 1,484 563 921 163.6 %
Total operating costs and expenses $ 432,535 436,631 (4,096) (0.9)%
Net income of equity method investments 14,846 18,370 (3,524) (19.2)%
Other operating income, net 7,838 9,157 (1,319) (14.4)%
Operating income $ 338,858 304,736 34,122 11.2 %
(1) Costs of Dunkin’ Donuts products sold in certain international markets that have historically been included in general and
administrative expenses, net and are now included in cost of ice cream and other products. Costs from these transactions for the
prior year have been reclassified to conform to the current year presentation.
Occupancy expenses for franchised restaurants for fiscal year 2014 increased $1.3 million from the prior year driven primarily
by an increase in average rent per lease and an increase in sales-based rental expense. The increase in occupancy expenses for
franchised restaurants was consistent with the increase in rental income.
Net margin on ice cream and other products increased slightly for fiscal year 2014 to $34.4 million driven by the favorable
impact of Australia inventory write-offs recorded in fiscal year 2013, as well as an increase in sales volume, offset by an
increase in commodity costs.
Company-operated restaurant expenses decreased $1.8 million, or 7.3%, from the prior year primarily as a result of a net
decrease in the number of company-operated restaurants operating during the year, primarily in the Atlanta market.