Dunkin' Donuts 2011 Annual Report Download - page 55

• Baskin-Robbins International systemwide sales growth of 19.4% as a result of increased sales in South
Korea and Japan, which resulted from both strong sales growth and favorable foreign exchange, as well
as strong sales growth in the Middle East.
The increase in total revenues of $39.1 million, or 7.3%, for fiscal year 2010 primarily resulted from increased
franchise fees and royalty income of $15.9 million, driven primarily by the increase in Dunkin’ Donuts U.S.
systemwide sales, as well as a $16.0 million increase in other revenues resulting from additional company-owned
restaurants held during the year.
Operating income increased $9.0 million, or 4.9%, for fiscal year 2010 driven by the increase in franchise fees
and royalty income noted above, as well as a $3.5 million increase in equity in net income of joint ventures and a
$6.5 million reduction in depreciation, amortization and impairment charges. Increases in general and
administrative expenses, excluding cost of sales for company-owned restaurants, offset the additional revenues
and joint venture income.
Adjusted operating income increased $4.0 million, or 1.8%, for fiscal year 2010 driven by the increases in
franchise fees and royalty income and equity in net income of joint ventures, offset by increased general and
administrative expenses, excluding cost of sales for company-owned restaurants.
Net income decreased $8.1 million for fiscal year 2010 driven by a $62.0 million pre-tax loss on debt
extinguishment, offset by a $46.7 million decrease in tax expense due to reduced profit before tax, as well as a
$9.0 million increase in operating income.
Adjusted net income increased $28.3 million, or 47.5%, for fiscal year 2010 resulting primarily from a $22.4
million decrease in the provision for income taxes, a $4.0 million increase in adjusted operating income, and a
$2.6 million decrease in interest expense.
Earnings per share
Earnings and adjusted earnings per common share and pro forma common share were as follows:
Fiscal year
2009 2010 2011
Earnings (loss) per share – basic and diluted:
Class L .......................................... $4.57 4.87 6.14
Common ......................................... (1.69) (2.04) (1.41)
Diluted earnings per pro forma common share ............... 0.36 0.28 0.32
Diluted adjusted earnings per pro forma common share ........ 0.61 0.90 0.94
On August 1, 2011, the Company completed an initial public offering in which 22,250,000 shares of common
stock were sold at an initial public offering price of $19.00 per share. Immediately prior to the offering, each
share of the Company’s Class L common stock converted into 2.4338 shares of common stock. The number of
common shares used in the calculations of diluted earnings per pro forma common share and diluted adjusted
earnings per pro forma common share for fiscal years 2011, 2010, and 2009 give effect to the conversion of all
outstanding shares of Class L common stock at the conversion factor of 2.4338 common shares for each Class L
share, as if the conversion was completed at the beginning of the respective fiscal year. The calculations of
diluted earnings per pro forma common share and diluted adjusted earnings per pro forma common share also
include the dilutive effect of common restricted shares and stock options, using the treasury stock method. Shares
sold in the offering are included in the diluted earnings per pro forma common share and diluted adjusted
earnings per pro forma common share calculations beginning on the date that such shares were actually issued.
Diluted earnings per pro forma common share is calculated using net income in accordance with GAAP. Diluted
adjusted earnings per pro forma common share is calculated using adjusted net income, as defined above.
-45-