Dunkin' Donuts 2011 Annual Report Download - page 117

Baskin-Robbins SERP
In 1991, we established a supplemental executive retirement plan (“SERP”) for a select group of Baskin-Robbins
executives who constituted a “top hat” group as defined by ERISA. Assets of the SERP are held in a Rabbi Trust
(“Trust”). The SERP assets are invested primarily in money market funds and are included in our consolidated
balance sheets within other assets since the Trust permits our creditors to access our SERP assets in the event of
our insolvency. The SERP assets of $804 thousand and $909 thousand, and corresponding liabilities of
$1.7 million and $1.6 million, at December 31, 2011 and December 25, 2010, respectively, are included in other
assets, and other long-term liabilities, in the accompanying consolidated balance sheets.
(18) Related-party transactions
(a) Sponsors
Prior to the closing of the Company’s initial public offering on August 1, 2011, the Company was charged an
annual management fee by the Sponsors of $1.0 million per Sponsor, payable in quarterly installments. In
connection with the completion of the initial public offering in August 2011, the Company incurred an expense
of approximately $14.7 million related to the termination of the Sponsor management agreement. Including this
termination fee, the Company recognized $16.4 million, $3.0 million, and $3.0 million of expense during fiscal
years 2011, 2010, and 2009, respectively, related to Sponsor management fees, which is included in general and
administrative expenses, net in the consolidated statements of operations. At December 25, 2010, the Company
had $500 thousand of prepaid management fees to the Sponsors, which were recorded in prepaid expenses and
other current assets in the consolidated balance sheets.
At December 31, 2011 and December 25, 2010, certain affiliates of the Sponsors held $64.8 million and $70.6
million, respectively, of term loans, net of original issue discount, issued under the Company’s senior credit
facility. The terms of these loans are identical to all other term loans issued to lenders in the senior credit facility.
Our Sponsors have a controlling interest in our Company as well as several other entities. The existence of such
common ownership and management control could result in differences within our operating results or financial
position than if the entities were autonomous. The Company made payments to entities under common control
totaling approximately $979 thousand, $769 thousand, and $664 thousand during the fiscal years 2011, 2010, and
2009, respectively, primarily for the purchase of training services and leasing of restaurant space. At December 31,
2011 and December 25, 2010, the company owed these entities $127 thousand and $48 thousand, respectively,
which was recorded in accounts payable and other current liabilities in the consolidated balance sheets.
We have entered into an investor agreement with the Sponsors and also entered into a registration rights and
coordination agreement with certain shareholders, including the Sponsors. Pursuant to these agreements, subject to
certain exceptions and conditions, our Sponsors may require us to register their shares of common stock under the
Securities Act of 1933, and they will have the right to participate in certain future registrations of securities by us.
(b) Joint ventures
The Company received royalties from its joint ventures as follows (in thousands):
Fiscal year ended
December 31,
2011
December 25,
2010
December 26,
2009
BR Japan .............................. $2,473 2,110 1,786
BR Korea .............................. 3,371 2,990 2,637
$5,844 5,100 4,423
At December 31, 2011 and December 25, 2010, the Company had $1.0 million of royalties receivable from its
joint ventures which were recorded in accounts receivable, net of allowance for doubtful accounts, in the
consolidated balance sheets.
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