Dunkin' Donuts 2013 Annual Report Download - page 95

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(15) Earnings per Share
The computation 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 $ 146,903 108,308 34,442
Allocation of net income (loss) to common stockholders(1):
Class L—basic and diluted n/a n/a 140,212
Common—basic(2) $ 146,903 108,176 (105,770)
Common—diluted(2) 146,903 108,197 (105,770)
Weighted average number of common shares—basic and diluted:
Class L—basic and diluted(3) n/a n/a 22,845,378
Common—basic 106,501,733 114,584,063 74,835,697
Common—diluted(4) 108,217,011 116,573,344 74,835,697
Earnings (loss) per common share:
Class L—basic n/a n/a $ 6.14
Common—basic $ 1.38 0.94 (1.41)
Common—diluted 1.36 0.93 (1.41)
(1) As the Company had both Class L and common stock outstanding during fiscal year 2011, and Class L had preference with
respect to all distributions, earnings per share was calculated using the two-class method, which requires the allocation of
earnings to each class of common stock. The numerator in calculating Class L basic and diluted earnings per share is the
Class L preference amount accrued at 9% per annum during fiscal year 2011 plus, if positive, a pro rata share of an amount
equal to consolidated net income less the Class L preference amount. The Class L preferential distribution amount accrued
was $45.1 million during fiscal year 2011. The Class L shares converted into common stock immediately prior to the
Company’s initial public offering that was completed on August 1, 2011. The numerator in calculating the Class L basic
and diluted earnings per share for fiscal year 2011 includes an amount representing the excess of the fair value of the
consideration transferred to the Class L shareholders upon conversion to common stock over the carrying amount of the
Class L shares at the date of conversion, which occurred immediately prior to the Company’s initial public offering. As the
carrying amount of the Class L shares was equal to the Class L preference amount, the excess fair value of the
consideration transferred to the Class L shareholders was equal to the fair value of the additional 0.2189 of a share of
common stock into which each Class L share converted (“Class L base share”), which totaled $95.1 million, calculated as
follows:
Class L shares outstanding immediately prior to the initial public offering 22,866,379
Number of common shares received for each Class L share 0.2189
Common stock received by Class L shareholders, excluding preferential distribution 5,005,775
Common stock fair value per share (initial public offering price per share) $ 19.00
Fair value of Class L base shares (in thousands) $ 95,110
(2) Net income allocated to common shareholders for the fiscal year 2012 excludes $132 thousand and $111 thousand for
basic and diluted earnings per share, respectively, that is allocated to participating securities. Participating securities consist
of unvested (restricted) shares that contain a nonforfeitable right to participate in dividends. No net income was allocated to
participating securities for fiscal year 2013 as all restricted shares were fully vested as of December 28, 2013, and no net
loss was allocated to participating securities for fiscal year 2011 as the participating securities do not participate in losses.
(3) The weighted average number of Class L shares in the Class L earnings per share calculation in fiscal year 2011 represents
the weighted average from the beginning of the period up through the date of conversion of the Class L shares into
common shares. There were no Class L common stock equivalents outstanding during fiscal year 2011.