Dunkin' Donuts 2013 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... net development growth rate. In July 2011, at the time of our IPO, we told investors that our goal was to have five percent net development in five years. We accomplished our goal in just two-and-a-half years, opening 371 net new Dunkin' Donuts restaurants in the U.S. in 2013, the highest number...

  • Page 3
    ...also signed multi-store agreements in more than 20 other domestic markets. Our strategy is to ensure we have the most compelling brand by offering differentiated food and beverage products at a great value, through both limited time offerings and permanent menu items. We introduced more than 40 new...

  • Page 4
    ... and our operations rations speed r teams. In addition to excelling in fast service, our overall customer nuts service also continues to improve. As a matter of fact, Dunkin' Donuts U.S. ended the year with an average guest satisfaction score that was five points higher than the previous year's. We...

  • Page 5
    ... that time, the business has not only stabilized, it's now growing. Baskin-Robbins U.S. had positive net development in 2013 for the first time since 2006. Additionally, 2013 was the third straight year of positive comps for the Baskin U.S. brand, and similar to Dunkin' Donuts U.S., Baskin-Robbins...

  • Page 6
    ...in 2013, we added 415 net new restaurants for both brands. We also made several important adjustments to our international business, including refocusing our development efforts on countries with high gross domestic product, and therefore with the potential for higher average weekly restaurant sales...

  • Page 7
    ...held by non-affiliates of Dunkin' Brands Group, Inc. computed by reference to the closing price of the registrant's common stock on the NASDAQ Global Select Market as of June 29, 2013, was approximately $4.55 billion. As of February 18, 2014, 106,423,121 shares of common stock of the registrant were...

  • Page 8

  • Page 9
    ... of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures about Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information Part III. Directors...

  • Page 10
    ... performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this report. In addition, even if our results of...

  • Page 11
    ...store revenue at our company-owned restaurants, and (v) other income including fees for the licensing of the Dunkin' Donuts brand for products sold in non-franchised outlets (such as retail packaged coffee), the licensing of the rights to manufacture Baskin-Robbins ice cream to a third party for ice...

  • Page 12
    ... store sales growth in each of the last three fiscal years. We believe we can capitalize on the brand's strengths and continue generating renewed excitement for the brand. Baskin-Robbins' "31 flavors," offering consumers a different flavor for each day of the month, is recognized by ice cream...

  • Page 13
    ...agreements may be put in place to develop restaurants. The master franchisee is required to pay an upfront initial franchise fee for each developed restaurant and, for the Dunkin' Donuts brand, royalties. For the Baskin-Robbins brand, the master franchisee is typically required to purchase ice cream...

  • Page 14
    ... this agreement, Dunkin' Brands receives a license fee based on total gallons of ice cream sold. For fiscal year 2013, we generated 1.0%, or $7.0 million, of our total revenue from license fees from Dean Foods. We distribute ice cream products to Baskin-Robbins franchisees who operate Baskin-Robbins...

  • Page 15
    ... supplies the franchisees operating restaurants located in South Korea with ice cream, donuts and coffee products. Japan Restaurants in Japan accounted for approximately 22% of total franchisee-reported sales from international operations for fiscal year 2013, 100% of which came from Baskin-Robbins...

  • Page 16
    ... 57% of Dunkin' Donuts' U.S. franchisee-reported sales for fiscal year 2013 generated from coffee and other beverages. We believe QSRs, including Dunkin' Donuts, are positioned to capture additional coffee market share through an increased focus on coffee offerings. Our Baskin-Robbins brand competes...

  • Page 17
    ...the Dunkin' Donuts brand is facilitated by National DCP, LLC (the "NDCP"), which is a Delaware limited liability company operated as a cooperative owned by its franchisee members. The NDCP is managed by a staff of supply chain professionals who report directly to the NDCP's executive management team...

  • Page 18
    ... on our internal culinary team, which uses consumer research, to develop and test new products. Operational support Substantially all of our executive management, finance, marketing, legal, technology, human resources, and operations support functions are conducted from our global headquarters in...

  • Page 19
    ... the international disclosure statements, franchise offering documents, and franchising procedures for our Baskin-Robbins brand and Dunkin' Donuts brand comply in all material respects with the laws of the applicable countries. Environmental Our operations, including the selection and development of...

  • Page 20
    ...competitive position, we could experience lower demand for products, downward pressure on prices, the loss of market share, and the inability to attract, or loss of, qualified franchisees, which could result in lower franchise fees and royalty income, and materially and adversely affect our business...

  • Page 21
    ... our product mix, service offerings, and marketing and merchandising initiatives for products and services that address, and anticipate advances in, technology and market trends. If we are not able to successfully respond to these challenges, our business, financial condition, and operating results...

  • Page 22
    ... market interest rates increase, variable rate debt will create higher debt service requirements, which could adversely affect our cash flow. Although we have variable-to-fixed interest rate swap agreements to hedge the floating interest rate on $900.0 million notional amount of our outstanding term...

  • Page 23
    ... our business. We regard our Dunkin' Donuts® and Baskin-Robbins® trademarks as having significant value and as being important factors in the marketing of our brands. We have also obtained trademark protection for several of our product offerings and advertising slogans, including "America Runs...

  • Page 24
    ... from growth in comparable store sales. Our failure to add a significant number of new restaurants or grow comparable store sales would adversely affect our ability to increase our revenues and operating income and could materially and adversely harm our business and operating results. Increases in...

  • Page 25
    ...Distributor Commitment Program. We have a long-term agreement with the National DCP, LLC (the "NDCP") for the NDCP to provide substantially all of the goods needed to operate a Dunkin' Donuts restaurant in the U.S. The NDCP also supplies some international markets. The NDCP aggregates the franchisee...

  • Page 26
    ... tax laws; legal and regulatory changes and the burdens and costs of local operators' compliance with a variety of laws, including trade restrictions and tariffs; interruption of the supply of product; increases in anti-American sentiment and the identification of the Dunkin' Donuts brand and Baskin...

  • Page 27
    ... the opening date of such restaurant. In certain other limited instances, we may allow a franchisee in good standing to operate domestically pursuant to franchise arrangements which have expired in their normal course and have not yet been renewed. As of December 28, 2013, less than 1% of our stores...

  • Page 28
    ... Service ("IRS") concluded its examination of the federal income tax returns for the fiscal year 2010 during fiscal year 2013 and agreed to a settlement regarding the recognition of revenue for gift cards and other matters. The Company made a cash payment for the additional federal tax due totaling...

  • Page 29
    ... the Dunkin' Donuts brand and the Baskin-Robbins brand. The councils are comprised of franchisees, brand employees, and executives, and they meet to discuss the strengths, weaknesses, challenges, and opportunities facing the brands as well as the rollout of new products and projects. Internationally...

  • Page 30
    ...to resell your shares at or above the price you paid for them. Since our initial public offering in July 2011, the price of our common stock, as reported by NASDAQ, has ranged from a low of $23.24 on December 15, 2011 to a high of $50.80 on February 19, 2014. In addition, the stock market in general...

  • Page 31
    ... by brand and whether they are operated by the Company or our franchisees as of December 28, 2013. Franchiseeowned points of distribution Companyowned points of distribution Dunkin' Donuts-US* Dunkin' Donuts-International Total Dunkin' Donuts* Baskin-Robbins-US* Baskin-Robbins-International Total...

  • Page 32
    ... occurred 10 to 15 years ago, including but not limited to, alleging that the Company breached its franchise agreements and provided inadequate management and support to Dunkin' Donuts franchisees in Quebec ("Bertico litigation"). On June 22, 2012, the Quebec Superior Court found for the plaintiffs...

  • Page 33
    ... July 27, 2011. Prior to that time, there was no public market for our common stock. The following table sets forth for the periods indicated the high and low sale prices of our common stock on the NASDAQ Global Select Market. Fiscal Quarter High Low 2013 Fourth Quarter (13 weeks ended December 28...

  • Page 34
    ... may be made in the open market or in privately negotiated transactions from time to time subject to market conditions. This repurchase authorization expires two years from the date of approval. On February 4, 2014, our board of directors approved an additional share repurchase program of up to...

  • Page 35
    ... and the reinvestment of dividends paid since that date. The stock price performance shown in the graph is not necessarily indicative of future price performance. 7/27/2011 12/31/2011 12/29/2012 12/28/2013 Dunkin' Brands Group, Inc. (DNKN) S&P 500 S&P Consumer Discretionary $ 100.00 $ 100.00...

  • Page 36
    ...-week periods. Fiscal Year 2013 2012 2011 2010 2009 ($ in thousands, except per share data or as otherwise noted) Consolidated Statements of Operations Data: Franchise fees and royalty income Rental income Sales of ice cream products Sales at company-owned restaurants Other revenues Total revenues...

  • Page 37
    ...(4) Total assets Total debt(5) Total liabilities Common stock, Class L(6) Total stockholders' equity (deficit)(6) Other Financial Data: Capital expenditures Adjusted operating income Adjusted net income(7) Points of Distribution(8): Dunkin' Donuts U.S. Dunkin' Donuts International(9) Baskin-Robbins...

  • Page 38
    ... 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. Adjusted operating income and adjusted net income are reconciled from operating income and net income, respectively...

  • Page 39
    ... incurred related to the closure of the Baskin-Robbins ice cream manufacturing plant in Peterborough, Canada, such as information technology integration, project management, and transportation costs. For fiscal year 2012, the adjustment included $3.4 million of severance and other payroll-related...

  • Page 40
    ... ice cream products to Baskin-Robbins franchisees in certain international markets. The balance of our revenue for fiscal year 2013 consisted of revenue from our company-owned restaurants, license fees on products sold in non-franchised outlets, license fees on sales of ice cream products to Baskin...

  • Page 41
    ...operating and financial highlights Fiscal year 2013 2012 2011 Systemwide sales growth Comparable store sales growth (decline): Dunkin' Donuts U.S. Dunkin' Donuts International(1) Baskin-Robbins U.S. Baskin-Robbins International(1) Total revenues Operating income Adjusted operating income Net income...

  • Page 42
    ... comparable store sales growth of 0.8%. Baskin-Robbins U.S. comparable store sales growth was driven by new product news and signature Flavors of the Month, custom cake sales, and take-home ice cream quarts. Baskin-Robbins International systemwide sales growth of 0.4% resulting from increased sales...

  • Page 43
    ...to the extra week in fiscal year 2011, as well as 30 net restaurant closures during 2012. Baskin-Robbins U.S. comparable store sales growth was driven by new product news and signature Flavors of the Month, custom cake sales, and new beverages. Baskin-Robbins International systemwide sales growth of...

  • Page 44
    ... of our ice cream manufacturing plant in Peterborough, Ontario, Canada. Adjusted operating income increased $36.4 million, or 13.5%, for fiscal year 2012 driven by the $20.5 million increase in franchise fees and royalty income, a $7.1 million increase in income from equity method investments driven...

  • Page 45
    ...% Total revenues increased $55.7 million, or 8.5%, in fiscal year 2013, driven by an increase in franchise fees and royalty income of $35.0 million, or 8.4%, primarily as a result of Dunkin' Donuts U.S. systemwide sales growth and favorable development mix. Sales of ice cream products increased $17...

  • Page 46
    ... - franchised restaurants Cost of ice cream products Company-owned restaurant expenses General and administrative expenses, net Depreciation and amortization Long-lived asset impairment charges Total operating costs and expenses Net income of equity method investments Other operating income, net...

  • Page 47
    ... the year. Other operating income of $6.3 million in fiscal year 2013 represents the gain, net of transaction costs, recognized on the Baskin-Robbins Australia sale. Fiscal year 2013 2012 Increase (Decrease) $ % (In thousands, except percentages) Interest expense, net $ Loss on debt extinguishment...

  • Page 48
    ... online training programs for franchisees that are not allocated to a specific segment. Dunkin' Donuts U.S. Fiscal year 2013 2012 Increase (Decrease) $ % (In thousands, except percentages) Royalty income Franchise fees Rental income Sales at company-owned restaurants Other revenues Total revenues...

  • Page 49
    ... as increases in franchise fees and other revenues, offset by an increase in personnel costs. Baskin-Robbins International Fiscal year 2013 2012 Increase (Decrease) $ % (In thousands, except percentages) Royalty income Franchise fees Rental income Sales of ice cream products Other revenues Total...

  • Page 50
    ... year 2012 compared to fiscal year 2011 Consolidated results of operations Fiscal year 2012 2011 Increase (Decrease) $ % (In thousands, except percentages) Franchise fees and royalty income Rental income Sales of ice cream products Sales at company-owned restaurants Other revenues Total revenues...

  • Page 51
    ... $2.3 million, or 1.1%, in fiscal year 2012. This increase was driven by a $10.3 million increase in personnel costs related to continued investments in our Dunkin' Donuts U.S. contiguous growth strategy and our international brands, additional stock compensation expense, and higher incentive...

  • Page 52
    ... deferred tax expense of approximately $1.9 million. Operating segments Dunkin' Donuts U.S. Fiscal year 2012 2011 Increase (Decrease) $ % (In thousands, except percentages) Royalty income Franchise fees Rental income Sales at company-owned restaurants Other revenues Total revenues Segment...

  • Page 53
    ..., as well as the increase in total revenues. Baskin-Robbins U.S. Fiscal year 2012 2011 Increase (Decrease) $ % (In thousands, except percentages) Royalty income Franchise fees Rental income Sales of ice cream products Sales at company-owned restaurants Other revenues Total revenues Segment profit...

  • Page 54
    ... financing costs and original issue discount. The $39.9 million of changes in operating assets and liabilities was primarily driven by cash paid for income taxes, increases in accounts receivable related to sales of ice cream products, and increases in receivables related to gift cards, offset...

  • Page 55
    ... investments and a deferred tax benefit, offset by share-based compensation expense and the amortization of deferred financing costs and original issue discount. The $0.6 million of changes in operating assets and liabilities was primarily driven by cash paid for income taxes, offset by the increase...

  • Page 56
    ...-related information technology and other investments, bank fees, the closure of the Company's Canadian ice cream manufacturing plant, as well as the net impact of other insignificant adjustments. Based upon our current level of operations and anticipated growth, we believe that the cash generated...

  • Page 57
    ... with terms of approximately three to ten years for various business purposes. We recognize a liability and offsetting asset for the fair value of such guarantees. The fair value of a guarantee is based on historical default rates of our total guaranteed loan pool. We monitor the financial condition...

  • Page 58
    ... note 17 (d) to our consolidated financial statements included herein, as the amount and timing of cash requirements, if any, are uncertain. Income tax liabilities for uncertain tax positions, gift card/certificate liabilities, and liabilities to various advertising funds are excluded from the table...

  • Page 59
    ...line basis over their estimated useful lives or terms of their related agreements. Other intangible assets consist primarily of franchise and international license rights ("franchise rights"), ice cream distribution and territorial franchise agreement license rights ("license rights"), and operating...

  • Page 60
    ... its estimated fair value, which is based on discounted cash flows. Income taxes Our major tax jurisdictions subject to income tax are the U.S. and Canada. The majority of our legal entities were converted to limited liability companies ("LLCs") on March 1, 2006 and a number of new LLCs were created...

  • Page 61
    ... carrying value of our investments in joint ventures. In the future, we may consider the use of derivative financial instruments, such as forward contracts, to manage foreign currency exchange rate risks. Interest rate risk We are subject to interest rate risk in connection with our long-term debt...

  • Page 62
    ... audited the accompanying consolidated balance sheets of Dunkin' Brands Group, Inc. and subsidiaries as of December 28, 2013 and December 29, 2012, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows for each of the years in the period...

  • Page 63
    DUNKIN' BRANDS GROUP, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands, except share data) December 28, 2013 December 29, 2012 Assets Current assets: Cash and cash equivalents Accounts receivable, net Notes and other receivables, net Assets held for sale Deferred income taxes, net ...

  • Page 64
    DUNKIN' BRANDS GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except per share data) Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Revenues: Franchise fees and royalty income Rental income Sales of ice cream products Sales at company-...

  • Page 65
    DUNKIN' BRANDS GROUP, INC. AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (In thousands) Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Net income including noncontrolling interests Other comprehensive income (loss), net: Effect of foreign currency ...

  • Page 66
    ... of common stock in connection with initial public offering Issuance of common stock Exercise of stock options Share-based compensation expense Repurchases of common stock Retirement of treasury stock Excess tax benefits from share-based compensation Balance at December 31, 2011 Additional paid...

  • Page 67
    ... Other current assets Accounts payable Other current liabilities Liabilities of advertising funds, net Income taxes payable, net Deferred income Other, net Net cash provided by operating activities Cash flows from investing activities: Additions to property and equipment Proceeds from sale of joint...

  • Page 68
    ... restaurants featuring ice cream, frozen beverages, and related products. Additionally, we distribute Baskin-Robbins ice cream products to Baskin-Robbins franchisees and licensees in certain international markets. Throughout these consolidated financial statements, "Dunkin' Brands," "the Company...

  • Page 69
    ... cash The Company continually monitors its positions with, and the credit quality of, the financial institutions in which it maintains its deposits and investments. As of December 28, 2013 and December 29, 2012, we maintained balances in various cash accounts in excess of federally insured limits...

  • Page 70
    ... primarily of ice cream products sold to certain international markets that are in-transit from our third-party manufacturer to our international licensees, during which time we hold title to such products. Inventories are valued at the lower of cost or estimated net realizable value, and cost is...

  • Page 71
    ...other assets and liabilities. An impairment loss is the amount by which the carrying amount of a long-lived asset or asset group exceeds its estimated fair value. Fair value is generally estimated by internal specialists based on the present value of anticipated future cash flows or, if required, by...

  • Page 72
    ... that the fair value of such indefinite-lived intangibles has been impaired. Other intangible assets consist primarily of franchise and international license rights ("franchise rights"), ice cream distribution and territorial franchise agreement license rights ("license rights"), and operating lease...

  • Page 73
    ...recorded as deferred income in current liabilities in the consolidated balance sheets. Sales of ice cream products We distribute Baskin-Robbins ice cream products to Baskin-Robbins franchisees and licensees in certain international locations. Revenue from the sale of ice cream products is recognized...

  • Page 74
    ... for product in our Dunkin' Donuts and Baskin-Robbins restaurants. The Company manages the gift card program, and therefore collects all funds from the activation of gift cards and reimburses franchisees for the redemption of gift cards in their restaurants. A liability for unredeemed gift cards, as...

  • Page 75
    ... Dunkin' Donuts gift card program costs incurred prior to fiscal year 2013. Breakage income for fiscal year 2012 includes $3.5 million related to historical Baskin-Robbins gift certificates as a result of shifting to gift cards, and represents the balance of gift certificates for which the Company...

  • Page 76
    ... points of distribution in operation-end of year were reduced by 91 and 198 for fiscal years 2012 and 2011, respectively. (4) Advertising funds On behalf of certain Dunkin' Donuts and Baskin-Robbins advertising funds, the Company collects a percentage, which is generally 5%, of gross retail sales...

  • Page 77
    ... 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...

  • Page 78
    ... method. Summary financial information for the equity method investments on an aggregated basis was as follows (in thousands): December 28, 2013 December 29, 2012 Current assets Current liabilities Working capital Property, plant, and equipment, net Other assets Long-term liabilities Equity of...

  • Page 79
    ... of the Korea Dunkin' Donuts business. Accordingly, the Company engaged an independent third-party valuation specialist to assist the Company in determining the fair value of our investment in BR Korea. The valuation was completed using a combination of discounted cash flow and income approaches to...

  • Page 80
    ...): Fiscal year: 2014 2015 2016 2017 2018 (8) Debt Debt at December 28, 2013 and December 29, 2012 consisted of the following (in thousands): December 28, 2013 December 29, 2012 $ 25,357 25,069 22,180 21,673 21,258 Term loans Less current portion of long-term debt Total long-term debt $ $ 1,823...

  • Page 81
    ...of excess cash flow. The excess cash flow payments may be applied to required principal payments. During fiscal year 2013, the Company made total principal payments of $24.2 million, including an excess cash flow payment in the first quarter of 2013 of $4.2 million based on 2012 excess cash flow and...

  • Page 82
    ... at December 28, 2013. The Company's risk management objective and strategy with respect to the interest rate swaps is to limit the Company's exposure to increased interest rates on its variable rate debt by reducing the potential variability in cash flow requirements relating to interest payments...

  • Page 83
    ... Interest rate swaps - liability Total fair values of derivative instruments - liability $ $ - - 2,809 2,809 Other long-term liabilities The tables below summarizes the effects of derivative instruments on the consolidated statements of operations and comprehensive income for fiscal year 2013...

  • Page 84
    ...agreements. The Company also leases certain office equipment and a fleet of automobiles under noncancelable operating leases. Included in the Company's consolidated balance sheets are the following amounts related to capital leases (in thousands): December 28, 2013 December 29, 2012 Leased property...

  • Page 85
    ... Company's consolidated balance sheets are the following amounts related to assets leased to others under operating leases, where the Company is the lessor (in thousands): December 28, 2013 December 29, 2012 Land Buildings Leasehold improvements Store, production, and other equipment Construction...

  • Page 86
    ... by segment were as follows (in thousands): Revenues Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Dunkin' Donuts U.S. Dunkin' Donuts International Baskin-Robbins U.S. Baskin-Robbins International Total reportable segments Other Total revenues $ $ 521,179 18,316 42,152...

  • Page 87
    ... Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Dunkin' Donuts U.S. Dunkin' Donuts International Baskin-Robbins U.S. Baskin-Robbins International Total reportable segments Corporate and other Interest expense, net Depreciation and amortization Long-lived asset impairment...

  • Page 88
    ... Company's senior management. Depreciation and amortization by reportable segments was as follows (in thousands): Depreciation and amortization Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Dunkin' Donuts U.S. Dunkin' Donuts International Baskin-Robbins U.S. Baskin-Robbins...

  • Page 89
    ... were originally sold and granted to former employees of the Company. The Company accounts for treasury stock under the cost method, and as such recorded increases in common treasury stock of $173 thousand during fiscal year 2011, based on the fair market value of the shares on the respective dates...

  • Page 90
    ...301 February 20, 2013 June 6, 2013 September 4, 2013 November 26, 2013 During fiscal year 2012, the Company paid dividends on common stock as follows: Dividend per share Total amount (in thousands) Payment date Fiscal year 2012: First quarter Second quarter Third quarter Fourth quarter $ 0.15 0.15...

  • Page 91
    ... compensation cost remains related to restricted shares. The total grant-date fair value of shares vested during fiscal years 2013, 2012, and 2011, was $6 thousand, $1.2 million, and $484 thousand, respectively. 2006 Plan stock options-executive During fiscal year 2011, the Company granted...

  • Page 92
    ... service periods of the service, performance, and market conditions. Based on dividends received in 2012 and 2011, and the sale of shares by the Sponsors in connection with public offerings completed in 2012 and 2011, the cumulative Performance Percentage as of December 28, 2013, December 29, 2012...

  • Page 93
    ... during fiscal years 2013, 2012, and 2011: Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Weighted average grant-date fair value of share options granted Weighted average assumptions: Risk-free interest rate Expected volatility Dividend yield Expected term (years) 9.92...

  • Page 94
    ... our closing stock price. As of December 28, 2013, there was $2.4 million of total unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted average period of approximately 1.9 years. The total grant-date fair value of restricted stock units...

  • Page 95
    ...of basic and diluted earnings per common share is as follows (in thousands, except share and per share amounts): Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Net income attributable to Dunkin' Brands-basic and diluted Allocation of net income (loss) to common stockholders...

  • Page 96
    ... 2013 and 2012, respectively, as they would be antidilutive. The weighted average number of common shares in the common diluted earnings per share calculation for fiscal year 2011 excludes all restricted stock and stock options outstanding, as they would be antidilutive. (16) Income taxes Income...

  • Page 97
    ... 31, 2011 Computed federal income tax expense, at statutory rate Permanent differences: Impairment of investment in BR Korea Other permanent differences State income taxes Benefits and taxes related to foreign operations Changes in enacted tax rates and apportionment Uncertain tax positions Other...

  • Page 98
    ... tax assets Deferred tax liabilities December 29, 2012 Deferred tax assets Deferred tax liabilities Current: Allowance for doubtful accounts Deferred gift cards and certificates Rent Deferred income Other current liabilities Other Total current Noncurrent: Capital leases Rent Property and equipment...

  • Page 99
    ...U.S. federal taxes, the Internal Revenue Service ("IRS") concluded its examination of fiscal year 2010 during fiscal year 2013 and agreed to a settlement regarding the recognition of revenue for gift cards and other matters. The Company made a cash payment for the additional federal tax due totaling...

  • Page 100
    ... occurred 10 to 15 years ago, including but not limited to, alleging that the Company breached its franchise agreements and provided inadequate management and support to Dunkin' Donuts franchisees in Quebec ("Bertico litigation"). On June 22, 2012, the Quebec Superior Court found for the plaintiffs...

  • Page 101
    ... performance targets. No such discretionary contributions were made during fiscal years 2013, 2012, and 2011. NQDC Plan The Company, excluding employees of certain international subsidiaries, also offers to a limited group of management and highly compensated employees, as defined by the Employee...

  • Page 102
    ... income during the respective fiscal year. The table below summarizes other balances for fiscal years 2013, 2012, and 2011 (in thousands): Fiscal year ended December 28, 2013 December 29, 2012 December 31, 2011 Change in benefit obligation: Benefit obligation, beginning of year Service cost...

  • Page 103
    ... related repurchase of shares by the Company (see notes 13(a) and 13(c)). One representative of each Sponsor continues to serve on the board of directors. 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...

  • Page 104
    ... plant During the second quarter of 2012, the Company's board of directors approved a plan to close our Peterborough, Ontario, Canada manufacturing plant, which supplied ice cream to certain of Baskin-Robbins' international markets. Manufacturing of ice cream products that had been produced...

  • Page 105
    ...(206) 659 $ 2,599 2,808 - 2,808 Three months ended March 30, 2013 June 29, 2013 September 28, 2013 December 28, 2013 (In thousands, except per share data) Total revenues Operating income Net income attributable to Dunkin' Brands Earnings per share: Common - basic Common - diluted $ 161,858...

  • Page 106
    Three months ended March 31, 2012 June 30, 2012 September 29, 2012 December 29, 2012 (In thousands, except per share data) Total revenues Operating income(1) Net income attributable to Dunkin' Brands Earnings per share(1): Common - basic Common - diluted (1) (1) $ 152,372 55,195 25,950 0.22 0.21...

  • Page 107
    ... and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure...

  • Page 108
    ... Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Dunkin' Brands Group, Inc. and subsidiaries as of December 28, 2013 and December 29, 2012, and the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows...

  • Page 109
    ...of Dunkin' Brands since January 2009 and assumed the additional role of Chairman of the Board in May 2013. From 2005 through 2008, Mr. Travis served as President and Chief Executive Officer, and on the board of directors of Papa John's International, Inc., a publicly-traded international pizza chain...

  • Page 110
    ... and Managing Director, International, Baskin-Robbins and Dunkin' Donuts. The remaining information required by this item will be contained in our definitive Proxy Statement for our 2014 Annual Meeting of Stockholders, which will be filed not later than 120 days after the close of our fiscal year...

  • Page 111
    ... 2011 Omnibus Long-Term Incentive Plan Form of Amended Restricted Stock Unit Award under 2011 Omnibus Long-Term Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K, File No. 001-35258, filed the with SEC on February 22, 2013) Dunkin' Brands Group...

  • Page 112
    ...on February 22, 2013) Form of Dunkin' Donuts Store Development Agreement (incorporated by reference to Exhibit 10.34 to the Company's Annual Report on Form 10-K, File No. 001-35258, filed with the SEC on February 24, 2012) Form of Baskin-Robbins Store Development Agreement (incorporated by reference...

  • Page 113
    ... information from the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2013, formatted in Extensible Business Reporting Language, (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income...

  • Page 114
    ... duly authorized. Date: February 20, 2014 DUNKIN' BRANDS GROUP, INC. By: Name: Title: /s/ Nigel Travis Nigel Travis Chairman and Chief Executive Officer Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following persons on behalf of...

  • Page 115
    ... again in our second full year as a public company. Thank you for your investment in Dunkin' Brands. We look forward to continuing to deliver on our long-term targets and driving value for you, our shareholders. Regards, Nigel Travis Chairman & Chief Executive Officer Dunkin' Brands Group, Inc.

  • Page 116
    ... and Chief Communications Officer Paul Twohig President, Dunkin' Donuts U.S. and Canada, and Dunkin' Donuts & Baskin-Robbins Europe and Latin America John Varughese Vice President, Dunkin' Donuts & Baskin-Robbins India, Middle East and Southeast Asia dunkinbrands.com Dunkin' Brands Group, Inc...