|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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Delaware
|
|
20-4145825
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
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Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, $0.001 par value per share
|
|
The NASDAQ Global Select Market
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
¨
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|
|
|
|
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Non-accelerated filer
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¨
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Smaller Reporting Company
|
¨
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Page
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Part I.
|
||
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
Part II.
|
||
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
||
Part III.
|
||
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
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||
|
||
Part IV.
|
||
Item 15.
|
||
Item 16.
|
Restaurant type
|
Initial franchise
fee*
|
||
Dunkin’ Donuts Single-Branded Restaurant
|
$ 40,000-90,000
|
|
|
Baskin-Robbins Single-Branded Restaurant
|
$
|
25,000
|
|
Dunkin’ Donuts/Baskin-Robbins Multi-Branded Restaurant
|
$ 50,000-100,000
|
|
*
|
Fees effective as of January 1, 2017 and excludes alternative points of distribution
|
Country/Region
|
|
Type
|
|
Franchised brand(s)
|
|
Number of restaurants
|
|
South Korea
|
|
Joint Venture
|
|
Dunkin’ Donuts
|
|
775
|
|
|
|
|
|
Baskin-Robbins
|
|
1,288
|
|
Japan
|
|
Joint Venture
|
|
Baskin-Robbins
|
|
1,179
|
|
Middle East
|
|
Master Franchise Agreements
|
|
Dunkin’ Donuts
|
|
501
|
|
|
|
|
|
Baskin-Robbins
|
|
855
|
|
Item 1A.
|
Risk Factors.
|
•
|
limiting our ability to obtain additional financing to fund capital expenditures, investments, acquisitions, or other general corporate requirements;
|
•
|
requiring a substantial portion of our cash flow to be dedicated to payments to service our indebtedness instead of other purposes, thereby reducing the amount of cash flow available for capital expenditures, investments, acquisitions, and other general corporate purposes;
|
•
|
increasing our vulnerability to and the potential impact of adverse changes in general economic, industry, and competitive conditions;
|
•
|
limiting our flexibility in planning for and reacting to changes in the industry in which we compete;
|
•
|
placing us at a disadvantage compared to other, less leveraged competitors or competitors with comparable debt at more favorable interest rates; and
|
•
|
increasing our costs of borrowing.
|
•
|
sell assets;
|
•
|
alter the business we conduct;
|
•
|
engage in mergers, acquisitions, and other business combinations;
|
•
|
declare dividends or redeem or repurchase capital stock;
|
•
|
incur, assume, or permit to exist additional indebtedness or guarantees;
|
•
|
make loans and investments;
|
•
|
incur liens; and
|
•
|
enter into transactions with affiliates.
|
•
|
availability of financing;
|
•
|
selection and availability of suitable restaurant locations;
|
•
|
competition for restaurant sites;
|
•
|
negotiation of acceptable lease and financing terms;
|
•
|
securing required domestic or foreign governmental permits and approvals;
|
•
|
consumer tastes in new geographic regions and acceptance of our products;
|
•
|
employment and training of qualified personnel;
|
•
|
impact of inclement weather, natural disasters, and other acts of nature; and
|
•
|
general economic and business conditions.
|
•
|
recessionary or expansive trends in international markets;
|
•
|
changes in foreign currency exchange rates and hyperinflation or deflation in the foreign countries in which we or our international joint ventures operate;
|
•
|
the imposition of restrictions on currency conversion or the transfer of funds;
|
•
|
availability of credit for our franchisees, licensees, and our international joint ventures to finance the development of new restaurants;
|
•
|
increases in the taxes paid and other changes in applicable 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-Robbins brand as American brands;
|
•
|
political and economic instability; and
|
•
|
natural disasters, terrorist threats and/or activities, and other calamities.
|
•
|
variations in our operating performance and the performance of our competitors;
|
•
|
actual or anticipated fluctuations in our quarterly or annual operating results;
|
•
|
publication of research reports by securities analysts about us, our competitors, or our industry;
|
•
|
our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;
|
•
|
additions and departures of key personnel;
|
•
|
strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments, or changes in business strategy;
|
•
|
the passage of legislation or other regulatory developments affecting us or our industry;
|
•
|
speculation in the press or investment community;
|
•
|
changes in accounting principles;
|
•
|
terrorist acts, acts of war, or periods of widespread civil unrest;
|
•
|
natural disasters and other calamities; and
|
•
|
changes in general market and economic conditions.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
|
Franchised points of distribution
|
|
Dunkin’ Donuts—US*
|
8,828
|
|
Dunkin’ Donuts—International
|
3,430
|
|
Total Dunkin’ Donuts*
|
12,258
|
|
Baskin-Robbins—US*
|
2,538
|
|
Baskin-Robbins—International
|
5,284
|
|
Total Baskin-Robbins*
|
7,822
|
|
Total US
|
11,366
|
|
Total International
|
8,714
|
|
*
|
Combination restaurants, as more fully described below, count as both a Dunkin’ Donuts and a Baskin-Robbins point of distribution.
|
Location
|
Type
|
|
Owned/Leased
|
|
Approximate Sq. Ft.
|
|
Canton, MA
|
Office
|
|
Leased
|
|
175,000
|
|
Braintree, MA (training facility)
|
Office
|
|
Owned
|
|
15,000
|
|
Burbank, CA (training facility)
|
Office
|
|
Leased
|
|
19,000
|
|
Dubai, United Arab Emirates (regional office space)
|
Office
|
|
Leased
|
|
3,200
|
|
Shanghai, China (regional office spaces)
|
Office
|
|
Leased
|
|
2,900
|
|
Various (regional sales offices)
|
Office
|
|
Leased
|
|
Range of 150 to 300
|
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
Fiscal Quarter
|
High
|
|
Low
|
||||
2016
|
|
|
|
||||
Fourth Quarter (14 weeks ended December 31, 2016)
|
$
|
56.13
|
|
|
$
|
46.55
|
|
Third Quarter (13 weeks ended September 24, 2016)
|
$
|
50.34
|
|
|
$
|
41.29
|
|
Second Quarter (13 weeks ended June 25, 2016)
|
$
|
49.59
|
|
|
$
|
42.00
|
|
First Quarter (13 weeks ended March 26, 2016)
|
$
|
48.29
|
|
|
$
|
36.44
|
|
|
|
|
|
||||
2015
|
|
|
|
||||
Fourth Quarter (13 weeks ended December 26, 2015)
|
$
|
50.17
|
|
|
$
|
39.29
|
|
Third Quarter (13 weeks ended September 26, 2015)
|
$
|
56.79
|
|
|
$
|
46.50
|
|
Second Quarter (13 weeks ended June 27, 2015)
|
$
|
55.60
|
|
|
$
|
46.89
|
|
First Quarter (13 weeks ended March 28, 2015)
|
$
|
48.69
|
|
|
$
|
41.72
|
|
|
Dividend per share
|
|
Total amount (in thousands)
|
|
Payment date
|
||||
Fiscal year 2016:
|
|
|
|
|
|
||||
First quarter
|
$
|
0.3000
|
|
|
$
|
27,395
|
|
|
March 16, 2016
|
Second quarter
|
$
|
0.3000
|
|
|
$
|
27,456
|
|
|
June 8, 2016
|
Third quarter
|
$
|
0.3000
|
|
|
$
|
27,475
|
|
|
August 31, 2016
|
Fourth quarter
|
$
|
0.3000
|
|
|
$
|
27,377
|
|
|
November 30, 2016
|
|
|
|
|
|
|
||||
Fiscal year 2015:
|
|
|
|
|
|
||||
First quarter
|
$
|
0.2650
|
|
|
$
|
25,688
|
|
|
March 18, 2015
|
Second quarter
|
$
|
0.2650
|
|
|
$
|
25,127
|
|
|
June 17, 2015
|
Third quarter
|
$
|
0.2650
|
|
|
$
|
25,197
|
|
|
September 2, 2015
|
Fourth quarter
|
$
|
0.2650
|
|
|
$
|
24,504
|
|
|
December 2, 2015
|
|
|
Issuer Purchases of Equity Securities
|
||||||||||||
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
|
||||||
09/25/16 - 10/22/16
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
170,000,000
|
|
10/23/16 - 11/26/16
|
|
520,631
|
|
|
48.01
|
|
|
520,631
|
|
|
145,002,654
|
|
||
11/27/16 - 12/31/16
|
|
—
|
|
|
—
|
|
|
—
|
|
|
145,002,654
|
|
||
Total
|
|
520,631
|
|
|
$
|
48.01
|
|
|
520,631
|
|
|
|
|
12/31/2011
|
12/29/2012
|
12/28/2013
|
12/27/2014
|
12/26/2015
|
12/31/2016
|
||||||||||||
Dunkin’ Brands Group, Inc. (DNKN)
|
$
|
100.00
|
|
$
|
131.49
|
|
$
|
197.64
|
|
$
|
178.79
|
|
$
|
182.76
|
|
$
|
231.90
|
|
S&P 500
|
$
|
100.00
|
|
$
|
111.06
|
|
$
|
145.82
|
|
$
|
165.41
|
|
$
|
163.21
|
|
$
|
177.29
|
|
S&P Consumer Discretionary
|
$
|
100.00
|
|
$
|
118.87
|
|
$
|
169.60
|
|
$
|
184.78
|
|
$
|
201.00
|
|
$
|
208.87
|
|
Item 6.
|
Selected Financial Data.
|
|
Fiscal Year
|
||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
($ in thousands, except per share data)
|
||||||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||
Franchise fees and royalty income
|
$
|
549,571
|
|
|
513,222
|
|
|
482,329
|
|
|
453,976
|
|
|
418,940
|
|
Rental income
|
101,020
|
|
|
100,422
|
|
|
97,663
|
|
|
96,082
|
|
|
96,816
|
|
|
Sales of ice cream and other products
|
114,857
|
|
|
115,252
|
|
|
117,484
|
|
|
112,276
|
|
|
94,659
|
|
|
Sales at company-operated restaurants
|
11,975
|
|
|
28,340
|
|
|
22,206
|
|
|
24,976
|
|
|
22,922
|
|
|
Other revenues
|
51,466
|
|
|
53,697
|
|
|
29,027
|
|
|
26,530
|
|
|
24,844
|
|
|
Total revenues
|
828,889
|
|
|
810,933
|
|
|
748,709
|
|
|
713,840
|
|
|
658,181
|
|
|
Amortization of intangible assets
|
22,079
|
|
|
24,688
|
|
|
25,760
|
|
|
26,943
|
|
|
26,943
|
|
|
Other operating costs and expenses
(1)
|
416,029
|
|
|
426,363
|
|
|
406,775
|
|
|
409,688
|
|
|
416,469
|
|
|
Total operating costs and expenses
|
438,108
|
|
|
451,051
|
|
|
432,535
|
|
|
436,631
|
|
|
443,412
|
|
|
Net income (loss) of equity method investments
(2)
|
14,552
|
|
|
(41,745
|
)
|
|
14,846
|
|
|
18,370
|
|
|
22,351
|
|
|
Other operating income, net
|
9,381
|
|
|
1,430
|
|
|
7,838
|
|
|
9,157
|
|
|
2,309
|
|
|
Operating income
|
414,714
|
|
|
319,567
|
|
|
338,858
|
|
|
304,736
|
|
|
239,429
|
|
|
Interest expense, net
|
(100,270
|
)
|
|
(96,341
|
)
|
|
(67,824
|
)
|
|
(79,831
|
)
|
|
(73,488
|
)
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
(20,554
|
)
|
|
(13,735
|
)
|
|
(5,018
|
)
|
|
(3,963
|
)
|
|
Other gains (losses), net
|
(1,195
|
)
|
|
(1,084
|
)
|
|
(1,566
|
)
|
|
(1,799
|
)
|
|
23
|
|
|
Income before income taxes
|
313,249
|
|
|
201,588
|
|
|
255,733
|
|
|
218,088
|
|
|
162,001
|
|
|
Net income attributable to Dunkin’ Brands
|
$
|
195,576
|
|
|
105,227
|
|
|
176,357
|
|
|
146,903
|
|
|
108,308
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||
Common—basic
|
$
|
2.14
|
|
|
1.10
|
|
|
1.67
|
|
|
1.38
|
|
|
0.94
|
|
Common—diluted
|
2.11
|
|
|
1.08
|
|
|
1.65
|
|
|
1.36
|
|
|
0.93
|
|
|
Fiscal Year
|
||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
($ in thousands, except per share data or as otherwise noted)
|
||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||
Total cash, cash equivalents, and restricted cash
|
$
|
431,831
|
|
|
333,115
|
|
|
208,358
|
|
|
257,238
|
|
|
252,985
|
|
Total assets
|
3,227,382
|
|
|
3,197,119
|
|
|
3,124,400
|
|
|
3,172,653
|
|
|
3,153,568
|
|
|
Total debt
(3)
|
2,435,137
|
|
|
2,453,643
|
|
|
1,807,556
|
|
|
1,811,798
|
|
|
1,832,581
|
|
|
Total liabilities
|
3,390,640
|
|
|
3,417,862
|
|
|
2,749,450
|
|
|
2,760,365
|
|
|
2,803,593
|
|
|
Total stockholders’ equity (deficit)
|
(163,258
|
)
|
|
(220,743
|
)
|
|
367,959
|
|
|
407,358
|
|
|
349,975
|
|
|
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
||||||
Capital expenditures
|
$
|
15,174
|
|
|
30,246
|
|
|
23,638
|
|
|
31,099
|
|
|
22,398
|
|
Adjusted operating income
(4)
|
436,578
|
|
|
400,477
|
|
|
365,956
|
|
|
340,396
|
|
|
307,157
|
|
|
Adjusted net income
(4)
|
208,694
|
|
|
187,893
|
|
|
186,113
|
|
|
165,761
|
|
|
149,700
|
|
|
Points of Distribution
(5)
:
|
|
|
|
|
|
|
|
|
|
||||||
Dunkin’ Donuts U.S.
|
8,828
|
|
|
8,431
|
|
|
8,082
|
|
|
7,695
|
|
|
7,324
|
|
|
Dunkin’ Donuts International
|
3,430
|
|
|
3,319
|
|
|
3,228
|
|
|
3,163
|
|
|
3,025
|
|
|
Baskin-Robbins U.S.
|
2,538
|
|
|
2,529
|
|
|
2,529
|
|
|
2,512
|
|
|
2,507
|
|
|
Baskin-Robbins International
|
5,284
|
|
|
5,078
|
|
|
5,023
|
|
|
4,788
|
|
|
4,512
|
|
|
Total points of distribution
|
20,080
|
|
|
19,357
|
|
|
18,862
|
|
|
18,158
|
|
|
17,368
|
|
|
Comparable Store Sales Growth (Decline):
|
|
|
|
|
|
|
|
|
|
||||||
Dunkin’ Donuts U.S.
(6)
|
1.6
|
%
|
|
1.4
|
%
|
|
1.7
|
%
|
|
3.3
|
%
|
|
4.1
|
%
|
|
Dunkin’ Donuts International
(7)
|
(1.9
|
)%
|
|
0.5
|
%
|
|
(2.0
|
)%
|
|
(0.4
|
)%
|
|
2.0
|
%
|
|
Baskin-Robbins U.S.
(6)
|
0.7
|
%
|
|
6.1
|
%
|
|
4.9
|
%
|
|
1.0
|
%
|
|
4.0
|
%
|
|
Baskin-Robbins International
(7)
|
(4.2
|
)%
|
|
(1.9
|
)%
|
|
(1.2
|
)%
|
|
1.9
|
%
|
|
2.8
|
%
|
|
Systemwide Sales ($ in millions)
(8)
:
|
|
|
|
|
|
|
|
|
|
||||||
Dunkin’ Donuts U.S.
|
$
|
8,226.1
|
|
|
7,622.9
|
|
|
7,179.1
|
|
|
6,747.1
|
|
|
6,270.2
|
|
Dunkin’ Donuts International
|
707.2
|
|
|
678.4
|
|
|
698.2
|
|
|
678.5
|
|
|
657.6
|
|
|
Baskin-Robbins U.S.
|
603.6
|
|
|
594.8
|
|
|
560.5
|
|
|
531.4
|
|
|
527.9
|
|
|
Baskin-Robbins International
|
1,307.7
|
|
|
1,273.5
|
|
|
1,335.6
|
|
|
1,344.3
|
|
|
1,338.9
|
|
|
Total systemwide sales
|
$
|
10,844.6
|
|
|
10,169.6
|
|
|
9,773.4
|
|
|
9,301.3
|
|
|
8,794.6
|
|
Systemwide Sales Growth (Decline)
(9)
:
|
|
|
|
|
|
|
|
|
|
||||||
Dunkin’ Donuts U.S.
|
7.9
|
%
|
|
6.2
|
%
|
|
6.4
|
%
|
|
7.6
|
%
|
|
5.6
|
%
|
|
Dunkin’ Donuts International
|
4.2
|
%
|
|
(2.8
|
)%
|
|
2.9
|
%
|
|
3.2
|
%
|
|
4.2
|
%
|
|
Baskin-Robbins U.S.
|
1.5
|
%
|
|
6.1
|
%
|
|
5.5
|
%
|
|
0.7
|
%
|
|
1.6
|
%
|
|
Baskin-Robbins International
|
2.7
|
%
|
|
(4.6
|
)%
|
|
(0.6
|
)%
|
|
0.4
|
%
|
|
5.5
|
%
|
|
Total systemwide sales growth
|
6.6
|
%
|
|
4.1
|
%
|
|
5.1
|
%
|
|
5.8
|
%
|
|
5.2
|
%
|
(1)
|
Fiscal year 2012 includes a $20.7 million incremental legal reserve recorded in the second quarter related to the Quebec Superior Court’s ruling in the Bertico litigation, in which the Court found for the Plaintiffs and issued a judgment against Dunkin’ Brands in the amount of approximately C$16.4 million, plus costs and interest. Fiscal year 2015 includes a net reduction to legal reserves for the Bertico litigation and related matters of $2.8 million, as a result of the Quebec Court of Appeals (Montreal) ruling to reduce the damages assessed against the Company in the Bertico litigation from approximately C$16.4 million to approximately C$10.9 million, plus costs and interest. Fiscal year 2016 includes a net reduction to legal reserves for the Bertico litigation and related matters of $428 thousand based upon final agreement of interest and related costs associated with the judgment.
|
(2)
|
Fiscal year 2015 includes an impairment of our equity method investment in the Japan joint venture of $54.3 million.
|
(3)
|
Includes capital lease obligations of
$8.1 million
,
$8.0 million
, $8.1 million, $7.4 million, and $7.6 million as of
December 31, 2016
,
December 26, 2015
,
December 27, 2014
,
December 28, 2013
, and
December 29, 2012
, respectively.
|
(4)
|
Adjusted operating income and adjusted net income are non-GAAP measures reflecting operating income and net income adjusted for amortization of intangible assets, long-lived asset impairments, impairment of joint ventures, and other non-recurring, infrequent, or unusual charges, net of the tax impact of such adjustments in the case of adjusted net income. The Company uses adjusted operating income and adjusted net income as key performance measures for the purpose of evaluating performance internally. We also believe adjusted operating income and adjusted net income provide our investors with useful information regarding our historical operating results. These non-GAAP measurements are not intended to replace the presentation 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, determined under GAAP as follows:
|
|
Fiscal Year
|
||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||
|
(Unaudited, $ in thousands)
|
||||||||||||||
Operating income
|
$
|
414,714
|
|
|
319,567
|
|
|
338,858
|
|
|
304,736
|
|
|
239,429
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of other intangible assets
|
22,079
|
|
|
24,688
|
|
|
25,760
|
|
|
26,943
|
|
|
26,943
|
|
|
Long-lived asset impairment charges
|
149
|
|
|
623
|
|
|
1,484
|
|
|
563
|
|
|
1,278
|
|
|
Third-party product volume guarantee
|
—
|
|
|
|
|
|
(300
|
)
|
|
7,500
|
|
|
—
|
|
|
Secondary offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,783
|
|
|
Peterborough plant closure
(a)
|
—
|
|
|
4,075
|
|
|
—
|
|
|
654
|
|
|
14,044
|
|
|
Transaction-related costs
(b)
|
64
|
|
|
424
|
|
|
154
|
|
|
—
|
|
|
—
|
|
|
Japan joint venture impairment, net
(c)
|
—
|
|
|
53,853
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Bertico litigation
(d)
|
(428
|
)
|
|
(2,753
|
)
|
|
—
|
|
|
—
|
|
|
20,680
|
|
|
Adjusted operating income
(e)
|
$
|
436,578
|
|
|
400,477
|
|
|
365,956
|
|
|
340,396
|
|
|
307,157
|
|
Net income attributable to Dunkin’ Brands
|
$
|
195,576
|
|
|
105,227
|
|
|
176,357
|
|
|
146,903
|
|
|
108,308
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
||||||
Amortization of other intangible assets
|
22,079
|
|
|
24,688
|
|
|
25,760
|
|
|
26,943
|
|
|
26,943
|
|
|
Long-lived asset impairment charges
|
149
|
|
|
623
|
|
|
1,484
|
|
|
563
|
|
|
1,278
|
|
|
Third-party product volume guarantee
|
—
|
|
|
|
|
|
(300
|
)
|
|
7,500
|
|
|
—
|
|
|
Secondary offering costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,783
|
|
|
Peterborough plant closure
(a)
|
—
|
|
|
4,075
|
|
|
—
|
|
|
654
|
|
|
14,044
|
|
|
Transaction-related costs
(b)
|
64
|
|
|
424
|
|
|
154
|
|
|
—
|
|
|
—
|
|
|
Japan joint venture impairment, net
(c)
|
—
|
|
|
53,853
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Bertico litigation
(d)
|
(428
|
)
|
|
(2,753
|
)
|
|
—
|
|
|
—
|
|
|
20,680
|
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
20,554
|
|
|
13,735
|
|
|
5,018
|
|
|
3,963
|
|
|
Tax impact of adjustments, excluding Bertico litigation
(f)
|
(8,917
|
)
|
|
(20,145
|
)
|
|
(16,333
|
)
|
|
(16,271
|
)
|
|
(20,404
|
)
|
|
Tax impact of Bertico adjustment
(g)
|
171
|
|
|
1,101
|
|
|
—
|
|
|
—
|
|
|
(3,980
|
)
|
|
Income tax audit settlements
(h)
|
—
|
|
|
—
|
|
|
(6,717
|
)
|
|
(8,417
|
)
|
|
(10,514
|
)
|
|
Tax impact of legal entity conversion
(i)
|
—
|
|
|
246
|
|
|
(8,541
|
)
|
|
—
|
|
|
—
|
|
|
State tax apportionment
(j)
|
—
|
|
|
—
|
|
|
514
|
|
|
2,868
|
|
|
4,599
|
|
|
Adjusted net income
|
$
|
208,694
|
|
|
187,893
|
|
|
186,113
|
|
|
165,761
|
|
|
149,700
|
|
(a)
|
For fiscal year 2012, the adjustment includes $3.4 million of severance and other payroll-related costs, $4.2 million of accelerated depreciation, $2.7 million of incremental costs of ice cream products, and $1.6 million of other transition-related costs incurred related to the closure of the Baskin-Robbins ice cream manufacturing plant in Peterborough, Canada. The amount for fiscal year 2012 also reflects the one-time delay in revenue recognition, net of related cost of ice cream and other products, related to the shift in manufacturing to Dean Foods of $2.1 million. For fiscal year 2013, the adjustment represents transition-related general and administrative costs incurred related to the plant closure, such as
|
(b)
|
Represents non-capitalizable costs incurred in connection with obtaining a new securitized financing facility, which was completed in January 2015.
|
(c)
|
Amount consists of an other-than-temporary impairment of the investment in the Japan joint venture of $54.3 million, less a reduction in depreciation and amortization of $0.4 million resulting from the allocation of the impairment charge to the underlying long-lived assets of the joint venture.
|
(d)
|
For fiscal year 2012, the adjustment represents the incremental legal reserve recorded in the second quarter of 2012 related to the Quebec Superior Court’s ruling in the Bertico litigation, in which the Court found for the Plaintiffs and issued a judgment against Dunkin’ Brands in the amount of approximately C$16.4 million (approximately $15.9 million), plus costs and interest. The adjustment for fiscal year 2015 represents the net reduction to legal reserves for the Bertico litigation and related matters of $2.8 million, as a result of the Quebec Court of Appeals (Montreal) ruling to reduce the damages assessed against the Company in the Bertico litigation from approximately C$16.4 million to approximately C$10.9 million, plus costs and interest. The adjustment for the fiscal year 2016 represents a net reduction to legal reserves for the Bertico litigation and related matters of $428 thousand based upon final agreement of interest and related costs associated with the judgment.
|
(e)
|
Adjusted operating income includes the impact of the 53rd week for fiscal year 2016. Based on our estimate of that extra week on certain revenues and expenses, the impact of the extra week in fiscal year 2016 on adjusted operating income was approximately $6.1 million. Excluding the impact of the extra week, adjusted operating income for fiscal year 2016 would have been approximately $430.5 million on a 52-week basis.
|
(f)
|
Tax impact of adjustments calculated at a 40% effective tax rate for each period presented, excluding the Japan joint venture impairment as there was no tax impact related to this charge and the Bertico litigation adjustment for which the tax impact is calculated separately.
|
(g)
|
Tax impact of Bertico litigation adjustments calculated as if the adjustments had not been recorded, considering deductibility and statutory tax rates in effect for the respective fiscal years.
|
(h)
|
Represents income tax benefits resulting from the settlement of historical tax positions settled during the prior period, primarily related to the accounting for the acquisition of the Company by private equity firms in 2006.
|
(i)
|
Represents the net tax impact of converting Dunkin
’
Brands Canada Ltd. to Dunkin
’
Brands Canada ULC.
|
(j)
|
Represents tax expense recognized due to an increase in our overall state tax rate for a shift in the apportionment of income to certain state jurisdictions.
|
(5)
|
Represents period end points of distribution. Beginning in fiscal year 2016, restaurants located in Puerto Rico were previously included in the Dunkin' Donuts International and Baskin-Robbins International segments, but are now included in the Dunkin' Donuts U.S. and Baskin-Robbins U.S. segments based on functional responsibility. Prior year amounts have been revised to reflect these changes for all years presented.
|
(6)
|
Represents the growth in average weekly sales for franchisee- and company-operated restaurants that have been open at least 78 weeks (approximately 18 months) that have reported sales in the current and comparable prior year week.
|
(7)
|
Generally represents the growth in local currency average monthly sales for franchisee-operated restaurants, including joint ventures, that have been open at least 13 months and that have reported sales in the current and comparable prior year month.
|
(8)
|
Systemwide sales include sales at franchisee- and company-operated restaurants, including joint ventures. While we do not record sales by franchisees, licensees, or joint ventures as revenue, and such sales are not included in our consolidated financial statements, we believe that this operating measure is important in obtaining an understanding of our financial performance. We believe systemwide sales information aids in understanding how we derive royalty revenue and in evaluating our performance relative to competitors. Beginning in the fiscal year 2016, we began presenting systemwide sales rather than franchisee-reported sales, which excluded sales of company-operated restaurants, as we believe the systemwide sales information is a more complete metric in obtaining an understanding of our financial performance. Additionally, systemwide sales related to restaurants located in Puerto Rico were previously included in the Dunkin' Donuts International and Baskin-Robbins International segments, but are now included in the Dunkin' Donuts U.S. and Baskin-Robbins U.S. segments based on functional responsibility for all years presented.
|
(9)
|
Systemwide sales growth represents the percentage change in systemwide sales from the comparable period of the prior year. Changes in systemwide sales are driven by changes in average comparable store sales and changes in the number of restaurants. Percentage change in systemwide sales for all prior years presented was revised for systemwide sales related to restaurants located in Puerto Rico that were previously included in the Dunkin' Donuts International and Baskin-Robbins International segments, but are now included in the Dunkin' Donuts U.S. and Baskin-Robbins U.S. segments based on functional responsibility.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Fiscal year
|
||||||||
|
2016
|
|
2015
|
|
2014
|
||||
Systemwide sales growth
|
6.6
|
%
|
|
4.1
|
%
|
|
5.1
|
%
|
|
Comparable store sales growth (decline):
|
|
|
|
|
|
||||
Dunkin’ Donuts U.S.
|
1.6
|
%
|
|
1.4
|
%
|
|
1.7
|
%
|
|
Dunkin’ Donuts International
|
(1.9
|
)%
|
|
0.5
|
%
|
|
(2.0
|
)%
|
|
Baskin-Robbins U.S.
|
0.7
|
%
|
|
6.1
|
%
|
|
4.9
|
%
|
|
Baskin-Robbins International
|
(4.2
|
)%
|
|
(1.9
|
)%
|
|
(1.2
|
)%
|
|
Total revenues
|
$
|
828,889
|
|
|
810,933
|
|
|
748,709
|
|
Operating income
|
414,714
|
|
|
319,567
|
|
|
338,858
|
|
|
Adjusted operating income
|
436,578
|
|
|
400,477
|
|
|
365,956
|
|
|
Net income attributable to Dunkin’ Brands
|
195,576
|
|
|
105,227
|
|
|
176,357
|
|
|
Adjusted net income
|
208,694
|
|
|
187,893
|
|
|
186,113
|
|
•
|
Dunkin’ Donuts U.S. systemwide sales growth of
7.9%
, which was the result of
397
net new restaurants opened in fiscal year
2016
and comparable store sales growth of
1.6%
. The increase in comparable store sales was driven by an increase in average ticket, which was favorably impacted by price and unfavorably impacted by units per transaction, offset by a decline in traffic. The growth in sales was driven by beverages, led by iced coffee, including Cold Brew, and hot and iced espresso-based beverages, as well as breakfast sandwiches, led by limited-time-offer products. Approximately 190 basis points of the increase in systemwide sales was attributable to the extra week in fiscal year 2016.
|
•
|
Dunkin’ Donuts International systemwide sales growth of
4.2%
as a result of sales increases in Europe, the Middle East, Asia, and South America, offset by a decline in sales in South Korea. Systemwide sales in all of these regions were negatively impacted by unfavorable foreign exchange rates. On a constant currency basis, systemwide sales for fiscal year 2016 increased by approximately 7%. Dunkin’ Donuts International comparable store sales decreased
1.9%
due primarily to declines in South Korea and Europe, offset by growth in South America.
|
•
|
Baskin-Robbins U.S. systemwide sales growth of
1.5%
resulting primarily from comparable store sales growth of
0.7%
. Comparable store sales growth was driven by an increase in average ticket offset by a decline in traffic. Sales growth was driven primarily by increased sales of cups and cones, which was a result of increased scoop sales and the new Warm Cookie Sandwich platform. Approximately 130 basis points of the increase in systemwide sales was attributable to the extra week in fiscal year 2016.
|
•
|
Baskin-Robbins International systemwide sales growth of
2.7%
, driven by a sales increase in Japan, offset by sales declines in South Korea and the Middle East. Sales in Japan were positively impacted by favorable foreign exchange rates, while sales in all other regions were negatively impacted by unfavorable foreign exchange rates, most notably
|
|
December 31, 2016
|
|
December 26, 2015
|
||
Points of distribution, at period end:
|
|
|
|
||
Dunkin’ Donuts U.S.
|
8,828
|
|
|
8,431
|
|
Dunkin’ Donuts International
|
3,430
|
|
|
3,319
|
|
Baskin-Robbins U.S.
|
2,538
|
|
|
2,529
|
|
Baskin-Robbins International
|
5,284
|
|
|
5,078
|
|
Consolidated global points of distribution
|
20,080
|
|
|
19,357
|
|
|
|
|
|
||
|
Fiscal year
|
||||
|
2016
|
|
2015
|
||
Net openings, during the period:
|
|
|
|
||
Dunkin’ Donuts U.S.
(1)
|
397
|
|
|
349
|
|
Dunkin’ Donuts International
|
111
|
|
|
91
|
|
Baskin-Robbins U.S.
|
9
|
|
|
—
|
|
Baskin-Robbins International
|
206
|
|
|
55
|
|
Consolidated global net openings
|
723
|
|
|
495
|
|
(1)
|
Net openings for Dunkin' Donuts U.S. for fiscal years 2016 and 2015 reflect the previously-announced closing of 18 and 81 self-serve coffee stations within Speedway locations, respectively.
|
•
|
Dunkin’ Donuts U.S. systemwide sales growth of 6.2%, which was the result of 349 net new restaurants opened in fiscal year 2015 and comparable store sales growth of 1.4%. The increase in comparable store sales was driven by an increase in average ticket, which was favorably impacted by pricing and unfavorably impacted by product mix, offset by a decline in traffic. The growth in average ticket was led by sales of beverages, including iced coffee and espresso, and donuts. In-restaurant K-Cup® sales had a negative impact on comparable store sales.
|
•
|
Dunkin’ Donuts International systemwide sales decline of 2.8% as a result of sales decreases in South Korea and Colombia, offset by sales increases in the Middle East, Asia, and Europe. Sales in South Korea, Europe, South America, and Asia were negatively impacted by unfavorable foreign exchange rates. On a constant currency basis, systemwide sales for fiscal year 2015 increased by approximately 6%. Dunkin’ Donuts International comparable store sales increased 0.5% driven primarily by increases in Asia, South America, and the Middle East, offset by declines in Europe and South Korea.
|
•
|
Baskin-Robbins U.S. systemwide sales growth of 6.1% resulting primarily from comparable store sales growth of 6.1%. Baskin-Robbins U.S. comparable store sales growth was driven by increased sales of cups and cones, beverages, desserts, and sundaes, as well as increased sales of cakes stimulated by strong year-over-year growth of online cake ordering. Comparable store sales growth was driven by increases in both traffic and ticket.
|
•
|
Baskin-Robbins International systemwide sales decline of 4.6%, driven by sales declines in Japan, South Korea, and Europe, offset by sales growth in the Middle East and Asia. Sales in all regions were negatively impacted by unfavorable foreign exchange rates, most notably Japan and South Korea. On a constant currency basis, systemwide sales for fiscal year 2015 increased by approximately 5%. Baskin-Robbins International comparable store sales declined 1.9% driven primarily by declines in Japan and South Korea, offset by growth in the Middle East.
|
|
December 26, 2015
|
|
December 27, 2014
|
||
Points of distribution, at period end:
|
|
|
|
||
Dunkin’ Donuts U.S.
|
8,431
|
|
|
8,082
|
|
Dunkin’ Donuts International
|
3,319
|
|
|
3,228
|
|
Baskin-Robbins U.S.
|
2,529
|
|
|
2,529
|
|
Baskin-Robbins International
|
5,078
|
|
|
5,023
|
|
Consolidated global points of distribution
|
19,357
|
|
|
18,862
|
|
|
|
|
|
||
|
Fiscal year ended
|
||||
|
December 26, 2015
|
|
December 27, 2014
|
||
Net openings, during the period:
|
|
|
|
||
Dunkin’ Donuts U.S.
|
349
|
|
|
387
|
|
Dunkin’ Donuts International
|
91
|
|
|
65
|
|
Baskin-Robbins U.S.
|
—
|
|
|
17
|
|
Baskin-Robbins International
|
55
|
|
|
235
|
|
Consolidated global net openings
|
495
|
|
|
704
|
|
|
Fiscal year
|
||||||||
|
2016
|
|
2015
|
|
2014
|
||||
Earnings per share:
|
|
|
|
|
|
||||
Common – basic
|
$
|
2.14
|
|
|
1.10
|
|
|
1.67
|
|
Common – diluted
|
2.11
|
|
|
1.08
|
|
|
1.65
|
|
|
Diluted adjusted earnings per share
|
2.26
|
|
|
1.93
|
|
|
1.74
|
|
|
Fiscal year
|
||||||||
|
2016
|
|
2015
|
|
2014
|
||||
Adjusted net income
|
$
|
208,694
|
|
|
187,893
|
|
|
186,113
|
|
Weighted average number of common shares–diluted
|
92,538,282
|
|
|
97,131,674
|
|
|
106,705,778
|
|
|
Diluted adjusted earnings per share
|
$
|
2.26
|
|
|
1.93
|
|
|
1.74
|
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2016
|
|
2015
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Franchise fees and royalty income
|
$
|
549,571
|
|
|
513,222
|
|
|
36,349
|
|
|
7.1
|
%
|
Rental income
|
101,020
|
|
|
100,422
|
|
|
598
|
|
|
0.6
|
%
|
|
Sales of ice cream and other products
|
114,857
|
|
|
115,252
|
|
|
(395
|
)
|
|
(0.3
|
)%
|
|
Sales at company-operated restaurants
|
11,975
|
|
|
28,340
|
|
|
(16,365
|
)
|
|
(57.7
|
)%
|
|
Other revenues
|
51,466
|
|
|
53,697
|
|
|
(2,231
|
)
|
|
(4.2
|
)%
|
|
Total revenues
|
$
|
828,889
|
|
|
810,933
|
|
|
17,956
|
|
|
2.2
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2016
|
|
2015
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Occupancy expenses – franchised restaurants
|
$
|
57,409
|
|
|
54,611
|
|
|
2,798
|
|
|
5.1
|
%
|
Cost of ice cream and other products
|
77,608
|
|
|
76,877
|
|
|
731
|
|
|
1.0
|
%
|
|
Company-operated restaurant expenses
|
13,591
|
|
|
29,900
|
|
|
(16,309
|
)
|
|
(54.5
|
)%
|
|
General and administrative expenses, net
|
246,814
|
|
|
243,796
|
|
|
3,018
|
|
|
1.2
|
%
|
|
Depreciation and amortization
|
42,537
|
|
|
45,244
|
|
|
(2,707
|
)
|
|
(6.0
|
)%
|
|
Long-lived asset impairment charges
|
149
|
|
|
623
|
|
|
(474
|
)
|
|
(76.1
|
)%
|
|
Total operating costs and expenses
|
$
|
438,108
|
|
|
451,051
|
|
|
(12,943
|
)
|
|
(2.9
|
)%
|
Net income (loss) of equity method investments
|
14,552
|
|
|
(41,745
|
)
|
|
56,297
|
|
|
n/m
|
|
|
Other operating income, net
|
9,381
|
|
|
1,430
|
|
|
7,951
|
|
|
556.0
|
%
|
|
Operating income
|
$
|
414,714
|
|
|
319,567
|
|
|
95,147
|
|
|
29.8
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2016
|
|
2015
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Interest expense, net
|
$
|
100,270
|
|
|
96,341
|
|
|
3,929
|
|
|
4.1
|
%
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
20,554
|
|
|
(20,554
|
)
|
|
(100.0
|
)%
|
|
Other losses, net
|
1,195
|
|
|
1,084
|
|
|
111
|
|
|
10.2
|
%
|
|
Total other expense
|
$
|
101,465
|
|
|
117,979
|
|
|
(16,514
|
)
|
|
(14.0
|
)%
|
|
Fiscal year
|
|||||
|
2016
|
|
2015
|
|||
|
(In thousands, except percentages)
|
|||||
Income before income taxes
|
$
|
313,249
|
|
|
201,588
|
|
Provision for income taxes
|
117,673
|
|
|
96,359
|
|
|
Effective tax rate
|
37.6
|
%
|
|
47.8
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2016
|
|
2015
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
448,609
|
|
|
413,692
|
|
|
34,917
|
|
|
8.4
|
%
|
Franchise fees
|
40,973
|
|
|
42,503
|
|
|
(1,530
|
)
|
|
(3.6
|
)%
|
|
Rental income
|
97,540
|
|
|
96,827
|
|
|
713
|
|
|
0.7
|
%
|
|
Sales at company-operated restaurants
|
11,975
|
|
|
28,340
|
|
|
(16,365
|
)
|
|
(57.7
|
)%
|
|
Other revenues
|
8,867
|
|
|
9,700
|
|
|
(833
|
)
|
|
(8.6
|
)%
|
|
Total revenues
|
$
|
607,964
|
|
|
591,062
|
|
|
16,902
|
|
|
2.9
|
%
|
Segment profit
|
$
|
466,976
|
|
|
431,065
|
|
|
35,911
|
|
|
8.3
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2016
|
|
2015
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
16,791
|
|
|
15,658
|
|
|
1,133
|
|
|
7.2
|
%
|
Franchise fees
|
5,655
|
|
|
5,017
|
|
|
638
|
|
|
12.7
|
%
|
|
Rental income
|
—
|
|
|
13
|
|
|
(13
|
)
|
|
(100.0
|
)%
|
|
Other revenues
|
457
|
|
|
2,285
|
|
|
(1,828
|
)
|
|
(80.0
|
)%
|
|
Total revenues
|
$
|
22,903
|
|
|
22,973
|
|
|
(70
|
)
|
|
(0.3
|
)%
|
Segment profit
|
$
|
9,658
|
|
|
10,240
|
|
|
(582
|
)
|
|
(5.7
|
)%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2016
|
|
2015
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
28,909
|
|
|
28,348
|
|
|
561
|
|
|
2.0
|
%
|
Franchise fees
|
1,077
|
|
|
871
|
|
|
206
|
|
|
23.7
|
%
|
|
Rental income
|
2,994
|
|
|
2,989
|
|
|
5
|
|
|
0.2
|
%
|
|
Sales of ice cream and other products
|
2,632
|
|
|
4,014
|
|
|
(1,382
|
)
|
|
(34.4
|
)%
|
|
Other revenues
|
11,900
|
|
|
10,918
|
|
|
982
|
|
|
9.0
|
%
|
|
Total revenues
|
$
|
47,512
|
|
|
47,140
|
|
|
372
|
|
|
0.8
|
%
|
Segment profit
|
$
|
34,240
|
|
|
29,289
|
|
|
4,951
|
|
|
16.9
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2016
|
|
2015
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
6,618
|
|
|
6,261
|
|
|
357
|
|
|
5.7
|
%
|
Franchise fees
|
939
|
|
|
872
|
|
|
67
|
|
|
7.7
|
%
|
|
Rental income
|
458
|
|
|
475
|
|
|
(17
|
)
|
|
(3.6
|
)%
|
|
Sales of ice cream and other products
|
110,628
|
|
|
109,047
|
|
|
1,581
|
|
|
1.4
|
%
|
|
Other revenues
|
372
|
|
|
421
|
|
|
(49
|
)
|
|
(11.6
|
)%
|
|
Total revenues
|
$
|
119,015
|
|
|
117,076
|
|
|
1,939
|
|
|
1.7
|
%
|
Segment profit
|
$
|
38,967
|
|
|
36,218
|
|
|
2,749
|
|
|
7.6
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2015
|
|
2014
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Franchise fees and royalty income
|
$
|
513,222
|
|
|
482,329
|
|
|
30,893
|
|
|
6.4
|
%
|
Rental income
|
100,422
|
|
|
97,663
|
|
|
2,759
|
|
|
2.8
|
%
|
|
Sales of ice cream and other products
|
115,252
|
|
|
117,484
|
|
|
(2,232
|
)
|
|
(1.9
|
)%
|
|
Sales at company-operated restaurants
|
28,340
|
|
|
22,206
|
|
|
6,134
|
|
|
27.6
|
%
|
|
Other revenues
|
53,697
|
|
|
29,027
|
|
|
24,670
|
|
|
85.0
|
%
|
|
Total revenues
|
$
|
810,933
|
|
|
748,709
|
|
|
62,224
|
|
|
8.3
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2015
|
|
2014
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Occupancy expenses – franchised restaurants
|
$
|
54,611
|
|
|
53,395
|
|
|
1,216
|
|
|
2.3
|
%
|
Cost of ice cream and other products
|
76,877
|
|
|
83,129
|
|
|
(6,252
|
)
|
|
(7.5
|
)%
|
|
Company-operated restaurant expenses
|
29,900
|
|
|
22,687
|
|
|
7,213
|
|
|
31.8
|
%
|
|
General and administrative expenses, net
|
243,796
|
|
|
226,301
|
|
|
17,495
|
|
|
7.7
|
%
|
|
Depreciation and amortization
|
45,244
|
|
|
45,539
|
|
|
(295
|
)
|
|
(0.6
|
)%
|
|
Long-lived asset impairment charges
|
623
|
|
|
1,484
|
|
|
(861
|
)
|
|
(58.0
|
)%
|
|
Total operating costs and expenses
|
$
|
451,051
|
|
|
432,535
|
|
|
18,516
|
|
|
4.3
|
%
|
Net income (loss) of equity method investments
|
(41,745
|
)
|
|
14,846
|
|
|
(56,591
|
)
|
|
(381.2
|
)%
|
|
Other operating income, net
|
1,430
|
|
|
7,838
|
|
|
(6,408
|
)
|
|
(81.8
|
)%
|
|
Operating income
|
$
|
319,567
|
|
|
338,858
|
|
|
(19,291
|
)
|
|
(5.7
|
)%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2015
|
|
2014
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Interest expense, net
|
$
|
96,341
|
|
|
67,824
|
|
|
28,517
|
|
|
42.0
|
%
|
Loss on debt extinguishment and refinancing transactions
|
20,554
|
|
|
13,735
|
|
|
6,819
|
|
|
49.6
|
%
|
|
Other losses, net
|
1,084
|
|
|
1,566
|
|
|
(482
|
)
|
|
(30.8
|
)%
|
|
Total other expense
|
$
|
117,979
|
|
|
83,125
|
|
|
34,854
|
|
|
41.9
|
%
|
|
Fiscal year
|
|||||
|
2015
|
|
2014
|
|||
|
(In thousands, except percentages)
|
|||||
Income before income taxes
|
$
|
201,588
|
|
|
255,733
|
|
Provision for income taxes
|
96,359
|
|
|
80,170
|
|
|
Effective tax rate
|
47.8
|
%
|
|
31.3
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2015
|
|
2014
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
413,692
|
|
|
388,000
|
|
|
25,692
|
|
|
6.6
|
%
|
Franchise fees
|
42,503
|
|
|
37,388
|
|
|
5,115
|
|
|
13.7
|
%
|
|
Rental income
|
96,827
|
|
|
93,703
|
|
|
3,124
|
|
|
3.3
|
%
|
|
Sales at company-operated restaurants
|
28,340
|
|
|
22,206
|
|
|
6,134
|
|
|
27.6
|
%
|
|
Other revenues
|
9,700
|
|
|
7,574
|
|
|
2,126
|
|
|
28.1
|
%
|
|
Total revenues
|
$
|
591,062
|
|
|
548,871
|
|
|
42,191
|
|
|
7.7
|
%
|
Segment profit
|
$
|
431,065
|
|
|
404,657
|
|
|
26,408
|
|
|
6.5
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2015
|
|
2014
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
15,658
|
|
|
15,209
|
|
|
449
|
|
|
3.0
|
%
|
Franchise fees
|
5,017
|
|
|
4,430
|
|
|
587
|
|
|
13.3
|
%
|
|
Rental income
|
13
|
|
|
110
|
|
|
(97
|
)
|
|
(88.2
|
)%
|
|
Other revenues
|
2,285
|
|
|
(56
|
)
|
|
2,341
|
|
|
n/m
|
|
|
Total revenues
|
$
|
22,973
|
|
|
19,693
|
|
|
3,280
|
|
|
16.7
|
%
|
Segment profit
|
$
|
10,240
|
|
|
9,478
|
|
|
762
|
|
|
8.0
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2015
|
|
2014
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
28,348
|
|
|
27,015
|
|
|
1,333
|
|
|
4.9
|
%
|
Franchise fees
|
871
|
|
|
935
|
|
|
(64
|
)
|
|
(6.8
|
)%
|
|
Rental income
|
2,989
|
|
|
3,250
|
|
|
(261
|
)
|
|
(8.0
|
)%
|
|
Sales of ice cream and other products
|
4,014
|
|
|
6,725
|
|
|
(2,711
|
)
|
|
(40.3
|
)%
|
|
Other revenues
|
10,918
|
|
|
7,940
|
|
|
2,978
|
|
|
37.5
|
%
|
|
Total revenues
|
$
|
47,140
|
|
|
45,865
|
|
|
1,275
|
|
|
2.8
|
%
|
Segment profit
|
$
|
29,289
|
|
|
28,357
|
|
|
932
|
|
|
3.3
|
%
|
|
Fiscal year
|
|
Increase (Decrease)
|
|||||||||
2015
|
|
2014
|
$
|
|
%
|
|||||||
|
(In thousands, except percentages)
|
|||||||||||
Royalty income
|
$
|
6,261
|
|
|
7,850
|
|
|
(1,589
|
)
|
|
(20.2
|
)%
|
Franchise fees
|
872
|
|
|
1,502
|
|
|
(630
|
)
|
|
(41.9
|
)%
|
|
Rental income
|
475
|
|
|
516
|
|
|
(41
|
)
|
|
(7.9
|
)%
|
|
Sales of ice cream and other products
|
109,047
|
|
|
109,448
|
|
|
(401
|
)
|
|
(0.4
|
)%
|
|
Other revenues
|
421
|
|
|
433
|
|
|
(12
|
)
|
|
(2.8
|
)%
|
|
Total revenues
|
$
|
117,076
|
|
|
119,749
|
|
|
(2,673
|
)
|
|
(2.2
|
)%
|
Segment profit
|
$
|
36,218
|
|
|
38,968
|
|
|
(2,750
|
)
|
|
(7.1
|
)%
|
|
Fiscal year
|
|||||
|
2016
|
|
2015
|
|||
Net cash provided by operating activities
|
$
|
276,205
|
|
|
185,566
|
|
Less: Increase in cash held for advertising funds and gift card/certificate programs
|
(29,366
|
)
|
|
(12,335
|
)
|
|
Plus: Increase (decrease) in restricted cash
|
(2,113
|
)
|
|
65,673
|
|
|
Plus: Net cash provided by (used in) investing activities
|
1,343
|
|
|
(35,467
|
)
|
|
Free cash flow, excluding cash held for advertising funds and gift card/certificate programs
|
$
|
246,069
|
|
|
203,437
|
|
|
December 31, 2016
|
||
Principal outstanding under Class A-2 Notes
|
$
|
2,456,250
|
|
Total capital lease obligations
|
8,139
|
|
|
Less: cash and cash equivalents
|
(361,425
|
)
|
|
Less: restricted cash, current
|
(69,746
|
)
|
|
Plus: cash held for gift card/certificate programs
|
171,749
|
|
|
Net Debt
|
$
|
2,204,967
|
|
|
Fiscal year
2016
|
||
Net income
|
$
|
195,576
|
|
Interest expense
|
100,852
|
|
|
Income tax expense
|
117,673
|
|
|
Depreciation and amortization
|
42,537
|
|
|
Impairment charges
|
149
|
|
|
EBITDA
|
456,787
|
|
|
Adjustments:
|
|
||
Share based compensation expense
|
17,181
|
|
|
Other
(a)
|
1,538
|
|
|
Total adjustments
|
18,719
|
|
|
Adjusted EBITDA
|
$
|
475,506
|
|
(a)
|
Represents costs and fees associated with various franchisee-related investments, bank fees, legal reserves, the allocation of share-based compensation expense to the advertising funds, and other non-cash gains and losses.
|
(In millions)
|
Total
|
|
Less than
1 year
|
|
1-3
years
|
|
3-5
years
|
|
More than
5 years
|
||||||
Long-term debt
(1)
|
$
|
2,863.5
|
|
|
118.3
|
|
|
930.5
|
|
|
166.6
|
|
|
1,648.1
|
|
Capital lease obligations
|
18.7
|
|
|
1.6
|
|
|
3.0
|
|
|
2.5
|
|
|
11.6
|
|
|
Operating lease obligations
|
668.0
|
|
|
57.7
|
|
|
114.0
|
|
|
101.8
|
|
|
394.5
|
|
|
Short and long-term obligations
(2)
|
0.8
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
(3)(4)(5)
|
$
|
3,551.0
|
|
|
178.4
|
|
|
1,047.5
|
|
|
270.9
|
|
|
2,054.2
|
|
(1)
|
Amounts include scheduled principal payments on long-term debt, as well as estimated interest of $93.3 million, $166.1 million, $131.6 million, and $16.2 million for less than 1 year, 1-3 years, 3-5 years, and more than 5 years, respectively. Amounts due under the Indenture are reflected through the anticipated repayment dates as described further above in “Liquidity and capital resources.”
|
(2)
|
Amounts include obligations to former employees under severance agreements. Excluded from these amounts are any payments that may be required related to pending litigation, as more fully described in note 17(d) to our consolidated financial statements included herein, as the amount and timing of cash requirements, if any, are uncertain. Additionally, liabilities to employees and former employees under deferred compensation arrangements totaling $11.1 million are excluded from the table above, as timing of payment is uncertain.
|
(3)
|
We have various supply chain contracts that provide for purchase commitments or exclusivity, the majority of which result in our being contingently liable upon early termination of the agreement or engaging with another supplier. As of
December 31, 2016
, we were contingently liable under such supply chain agreements for approximately
$136.2 million
, and considering various factors including internal forecasts, prior history, and ability to extend contract terms, no material accrual was required related to these supply chain commitments. Such amounts are not included in the table above as timing of payment, if any, is uncertain.
|
(4)
|
We are guarantors of and are contingently liable for certain lease arrangements primarily as the result of our assigning our interest. As of
December 31, 2016
, we were contingently liable for
$4.0 million
under these guarantees, which are discussed further above in “Off balance sheet obligations.” Additionally, in certain cases, we issue guarantees to financial institutions so that franchisees can obtain financing. If all outstanding guarantees came due as of
December 31, 2016
, we would be liable for approximately
$1.5 million
. Such amounts are not included in the table above as timing of payment, if any, is uncertain.
|
(5)
|
Income tax liabilities for uncertain tax positions, gift card/certificate liabilities, and liabilities to various advertising funds are excluded from the table above as we are not able to make a reasonably reliable estimate of the amount and period of related future payments. As of
December 31, 2016
, we had a liability for uncertain tax positions, including accrued interest and penalties thereon, of
$3.4 million
. As of
December 31, 2016
, we had a gift card/certificate liability of
$207.6 million
and a gift card breakage liability of
$13.3 million
(see note 2(u) to our consolidated financial statements included herein). As of
December 31, 2016
, we had a net payable of
$11.9 million
to various advertising funds.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
December 31,
2016 |
|
December 26,
2015 |
|||
Assets
|
|
|
|
|||
Current assets:
|
|
|
|
|||
Cash and cash equivalents
|
$
|
361,425
|
|
|
260,430
|
|
Restricted cash
|
69,746
|
|
|
71,917
|
|
|
Accounts receivable, net
|
44,512
|
|
|
53,142
|
|
|
Notes and other receivables, net
|
40,672
|
|
|
75,218
|
|
|
Restricted assets of advertising funds
|
40,338
|
|
|
38,554
|
|
|
Prepaid income taxes
|
20,926
|
|
|
23,899
|
|
|
Prepaid expenses and other current assets
|
28,739
|
|
|
34,664
|
|
|
Total current assets
|
606,358
|
|
|
557,824
|
|
|
Property and equipment, net
|
176,662
|
|
|
182,614
|
|
|
Equity method investments
|
114,738
|
|
|
106,878
|
|
|
Goodwill
|
888,272
|
|
|
889,588
|
|
|
Other intangible assets, net
|
1,378,720
|
|
|
1,401,208
|
|
|
Other assets
|
62,632
|
|
|
59,007
|
|
|
Total assets
|
$
|
3,227,382
|
|
|
3,197,119
|
|
Liabilities and Stockholders’ Deficit
|
|
|
|
|||
Current liabilities:
|
|
|
|
|||
Current portion of long-term debt
|
$
|
25,000
|
|
|
25,000
|
|
Capital lease obligations
|
589
|
|
|
546
|
|
|
Accounts payable
|
12,682
|
|
|
18,663
|
|
|
Liabilities of advertising funds
|
52,271
|
|
|
50,189
|
|
|
Deferred income
|
35,393
|
|
|
31,535
|
|
|
Other current liabilities
|
298,266
|
|
|
292,859
|
|
|
Total current liabilities
|
424,201
|
|
|
418,792
|
|
|
Long-term debt, net
|
2,401,998
|
|
|
2,420,600
|
|
|
Capital lease obligations
|
7,550
|
|
|
7,497
|
|
|
Unfavorable operating leases acquired
|
11,378
|
|
|
12,975
|
|
|
Deferred income
|
12,154
|
|
|
15,619
|
|
|
Deferred income taxes, net
|
461,810
|
|
|
476,510
|
|
|
Other long-term liabilities
|
71,549
|
|
|
65,869
|
|
|
Total long-term liabilities
|
2,966,439
|
|
|
2,999,070
|
|
|
Commitments and contingencies (note 17)
|
|
|
|
|||
Stockholders’ deficit:
|
|
|
|
|||
Preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
|
Common stock, $0.001 par value; 475,000,000 shares authorized; 91,464,229 shares issued and 91,437,452 shares outstanding at December 31, 2016; 92,668,211 shares issued and 92,641,044 shares outstanding at December 26, 2015
|
91
|
|
|
92
|
|
|
Additional paid-in capital
|
807,492
|
|
|
876,557
|
|
|
Treasury stock, at cost; 26,777 shares and 27,167 shares at December 31, 2016 and December 26, 2015, respectively
|
(1,060
|
)
|
|
(1,075
|
)
|
|
Accumulated deficit
|
(945,797
|
)
|
|
(1,076,479
|
)
|
|
Accumulated other comprehensive loss
|
(23,984
|
)
|
|
(20,046
|
)
|
|
Total stockholders’ deficit of Dunkin’ Brands
|
(163,258
|
)
|
|
(220,951
|
)
|
|
Noncontrolling interests
|
—
|
|
|
208
|
|
|
Total stockholders’ deficit
|
(163,258
|
)
|
|
(220,743
|
)
|
|
Total liabilities and stockholders’ deficit
|
$
|
3,227,382
|
|
|
3,197,119
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Revenues:
|
|
|
|
|
|
||||
Franchise fees and royalty income
|
$
|
549,571
|
|
|
513,222
|
|
|
482,329
|
|
Rental income
|
101,020
|
|
|
100,422
|
|
|
97,663
|
|
|
Sales of ice cream and other products
|
114,857
|
|
|
115,252
|
|
|
117,484
|
|
|
Sales at company-operated restaurants
|
11,975
|
|
|
28,340
|
|
|
22,206
|
|
|
Other revenues
|
51,466
|
|
|
53,697
|
|
|
29,027
|
|
|
Total revenues
|
828,889
|
|
|
810,933
|
|
|
748,709
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
||||
Occupancy expenses—franchised restaurants
|
57,409
|
|
|
54,611
|
|
|
53,395
|
|
|
Cost of ice cream and other products
|
77,608
|
|
|
76,877
|
|
|
83,129
|
|
|
Company-operated restaurant expenses
|
13,591
|
|
|
29,900
|
|
|
22,687
|
|
|
General and administrative expenses, net
|
246,814
|
|
|
243,796
|
|
|
226,301
|
|
|
Depreciation
|
20,458
|
|
|
20,556
|
|
|
19,779
|
|
|
Amortization of other intangible assets
|
22,079
|
|
|
24,688
|
|
|
25,760
|
|
|
Long-lived asset impairment charges
|
149
|
|
|
623
|
|
|
1,484
|
|
|
Total operating costs and expenses
|
438,108
|
|
|
451,051
|
|
|
432,535
|
|
|
Net income (loss) of equity method investments:
|
|
|
|
|
|
||||
Net income, excluding impairment
|
14,552
|
|
|
12,555
|
|
|
14,846
|
|
|
Impairment charge
|
—
|
|
|
(54,300
|
)
|
|
—
|
|
|
Net income (loss) of equity method investments
|
14,552
|
|
|
(41,745
|
)
|
|
14,846
|
|
|
Other operating income, net
|
9,381
|
|
|
1,430
|
|
|
7,838
|
|
|
Operating income
|
414,714
|
|
|
319,567
|
|
|
338,858
|
|
|
Other income (expense), net:
|
|
|
|
|
|
||||
Interest income
|
582
|
|
|
424
|
|
|
274
|
|
|
Interest expense
|
(100,852
|
)
|
|
(96,765
|
)
|
|
(68,098
|
)
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
(20,554
|
)
|
|
(13,735
|
)
|
|
Other losses, net
|
(1,195
|
)
|
|
(1,084
|
)
|
|
(1,566
|
)
|
|
Total other expense, net
|
(101,465
|
)
|
|
(117,979
|
)
|
|
(83,125
|
)
|
|
Income before income taxes
|
313,249
|
|
|
201,588
|
|
|
255,733
|
|
|
Provision for income taxes
|
117,673
|
|
|
96,359
|
|
|
80,170
|
|
|
Net income including noncontrolling interests
|
195,576
|
|
|
105,229
|
|
|
175,563
|
|
|
Net income (loss) attributable to noncontrolling interests
|
—
|
|
|
2
|
|
|
(794
|
)
|
|
Net income attributable to Dunkin’ Brands
|
$
|
195,576
|
|
|
105,227
|
|
|
176,357
|
|
Earnings per share:
|
|
|
|
|
|
||||
Common—basic
|
$
|
2.14
|
|
|
1.10
|
|
|
1.67
|
|
Common—diluted
|
2.11
|
|
|
1.08
|
|
|
1.65
|
|
|
Cash dividends declared per common share
|
1.20
|
|
|
1.06
|
|
|
0.92
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Net income including noncontrolling interests
|
$
|
195,576
|
|
|
105,229
|
|
|
175,563
|
|
Other comprehensive income (loss), net:
|
|
|
|
|
|
||||
Effect of foreign currency translation, net of deferred tax expense (benefit) of $(638), $524, and $358 for the fiscal years ended December 31, 2016, December 26, 2015, and December 27, 2014, respectively
|
(2,560
|
)
|
|
(6,721
|
)
|
|
(13,743
|
)
|
|
Effect of interest rate swaps, net of deferred tax benefit of $882, $867, and $1,608 for the fiscal years ended December 31, 2016, December 26, 2015, and December 27, 2014, respectively
|
(1,299
|
)
|
|
(1,273
|
)
|
|
(2,369
|
)
|
|
Effect of pension plan, net of deferred tax expense of $866 and $80 for the fiscal years ended December 26, 2015 and December 27, 2014, respectively
|
—
|
|
|
2,874
|
|
|
224
|
|
|
Other
|
(79
|
)
|
|
(949
|
)
|
|
572
|
|
|
Total other comprehensive loss, net
|
(3,938
|
)
|
|
(6,069
|
)
|
|
(15,316
|
)
|
|
Comprehensive income including noncontrolling interests
|
191,638
|
|
|
99,160
|
|
|
160,247
|
|
|
Comprehensive income (loss) attributable to noncontrolling interests
|
—
|
|
|
2
|
|
|
(794
|
)
|
|
Comprehensive income attributable to Dunkin’ Brands
|
$
|
191,638
|
|
|
99,158
|
|
|
161,041
|
|
|
Stockholders
’
equity (deficit)
|
|
Redeemable noncontrolling interests
|
||||||||||||||||||||||||
|
Common stock
|
|
Additional
paid-in
capital
|
|
Treasury
stock, at cost
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Noncontrolling interests
|
|
Total
|
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|||||||||||||||||||||||
Balance at December 28, 2013
|
106,877
|
|
|
$
|
107
|
|
|
1,196,426
|
|
|
(10,773
|
)
|
|
(779,741
|
)
|
|
1,339
|
|
|
—
|
|
|
407,358
|
|
|
4,930
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
176,357
|
|
|
—
|
|
|
—
|
|
|
176,357
|
|
|
(794
|
)
|
|
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,316
|
)
|
|
—
|
|
|
(15,316
|
)
|
|
—
|
|
|
Exercise of stock options
|
693
|
|
|
1
|
|
|
5,119
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,120
|
|
|
—
|
|
|
Contributions from redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,855
|
|
|
Dividends paid on common stock
|
—
|
|
|
—
|
|
|
(96,775
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(96,775
|
)
|
|
—
|
|
|
Share-based compensation expense
|
26
|
|
|
—
|
|
|
11,287
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,287
|
|
|
—
|
|
|
Repurchases of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(130,171
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(130,171
|
)
|
|
—
|
|
|
Retirement of treasury stock
|
(3,142
|
)
|
|
(3
|
)
|
|
(33,170
|
)
|
|
140,944
|
|
|
(107,771
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Excess tax benefits from share-based compensation
|
—
|
|
|
—
|
|
|
10,758
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,758
|
|
|
—
|
|
|
Other
|
—
|
|
|
(1
|
)
|
|
(282
|
)
|
|
—
|
|
|
(376
|
)
|
|
—
|
|
|
—
|
|
|
(659
|
)
|
|
—
|
|
|
Balance at December 27, 2014
|
104,454
|
|
|
104
|
|
|
1,093,363
|
|
|
—
|
|
|
(711,531
|
)
|
|
(13,977
|
)
|
|
—
|
|
|
367,959
|
|
|
6,991
|
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
105,227
|
|
|
—
|
|
|
208
|
|
|
105,435
|
|
|
(206
|
)
|
|
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,069
|
)
|
|
—
|
|
|
(6,069
|
)
|
|
—
|
|
|
Exercise of stock options
|
816
|
|
|
1
|
|
|
10,352
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,353
|
|
|
—
|
|
|
Purchase of redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
566
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
566
|
|
|
(6,785
|
)
|
|
Dividends paid on common stock
|
—
|
|
|
—
|
|
|
(100,516
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(100,516
|
)
|
|
—
|
|
|
Share-based compensation expense
|
33
|
|
|
—
|
|
|
16,092
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,092
|
|
|
—
|
|
|
Repurchases of common stock
|
—
|
|
|
—
|
|
|
(25,000
|
)
|
|
(600,041
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(625,041
|
)
|
|
—
|
|
|
Retirement of treasury stock
|
(12,833
|
)
|
|
(13
|
)
|
|
(129,405
|
)
|
|
598,966
|
|
|
(469,548
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Excess tax benefits from share-based compensation
|
—
|
|
|
—
|
|
|
11,503
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,503
|
|
|
—
|
|
|
Other
|
—
|
|
|
—
|
|
|
(398
|
)
|
|
—
|
|
|
(627
|
)
|
|
—
|
|
|
—
|
|
|
(1,025
|
)
|
|
—
|
|
|
Balance at December 26, 2015
|
92,470
|
|
|
92
|
|
|
876,557
|
|
|
(1,075
|
)
|
|
(1,076,479
|
)
|
|
(20,046
|
)
|
|
208
|
|
|
(220,743
|
)
|
|
—
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195,576
|
|
|
—
|
|
|
—
|
|
|
195,576
|
|
|
—
|
|
|
Other comprehensive loss, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,938
|
)
|
|
—
|
|
|
(3,938
|
)
|
|
—
|
|
|
Exercise of stock options
|
433
|
|
|
1
|
|
|
10,646
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,647
|
|
|
—
|
|
|
Deconsolidation of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(208
|
)
|
|
(208
|
)
|
|
—
|
|
|
Dividends paid on common stock
|
—
|
|
|
—
|
|
|
(109,703
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109,703
|
)
|
|
—
|
|
|
Share-based compensation expense
|
68
|
|
|
—
|
|
|
17,181
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,181
|
|
|
—
|
|
|
Repurchases of common stock
|
—
|
|
|
—
|
|
|
25,000
|
|
|
(80,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,000
|
)
|
|
—
|
|
|
Retirement of treasury stock
|
(1,707
|
)
|
|
(2
|
)
|
|
(15,874
|
)
|
|
80,000
|
|
|
(64,124
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Excess tax benefits from share-based compensation
|
—
|
|
|
—
|
|
|
2,735
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,735
|
|
|
—
|
|
|
Other
|
29
|
|
|
—
|
|
|
950
|
|
|
15
|
|
|
(770
|
)
|
|
—
|
|
|
—
|
|
|
195
|
|
|
—
|
|
|
Balance at December 31, 2016
|
91,293
|
|
|
$
|
91
|
|
|
807,492
|
|
|
(1,060
|
)
|
|
(945,797
|
)
|
|
(23,984
|
)
|
|
—
|
|
|
(163,258
|
)
|
|
—
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Cash flows from operating activities:
|
|
|
|
|
|
||||
Net income including noncontrolling interests
|
$
|
195,576
|
|
|
105,229
|
|
|
175,563
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||
Depreciation and amortization
|
42,537
|
|
|
45,244
|
|
|
45,539
|
|
|
Amortization of debt issuance costs and original issue discount
|
6,398
|
|
|
5,969
|
|
|
3,968
|
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
20,554
|
|
|
13,735
|
|
|
Deferred income taxes
|
(12,537
|
)
|
|
(21,107
|
)
|
|
(24,639
|
)
|
|
Provision for bad debt
|
53
|
|
|
3,343
|
|
|
2,821
|
|
|
Share-based compensation expense
|
17,181
|
|
|
16,092
|
|
|
11,287
|
|
|
Net loss (income) of equity method investments
|
(14,552
|
)
|
|
41,745
|
|
|
(14,846
|
)
|
|
Dividends received from equity method investments
|
5,247
|
|
|
6,671
|
|
|
7,427
|
|
|
Gain on sale of real estate and company-operated restaurants
|
(9,373
|
)
|
|
(1,402
|
)
|
|
(7,458
|
)
|
|
Other, net
|
(2,172
|
)
|
|
1,083
|
|
|
570
|
|
|
Change in operating assets and liabilities:
|
|
|
|
|
|
||||
Restricted cash
|
2,113
|
|
|
(65,673
|
)
|
|
—
|
|
|
Accounts, notes, and other receivables, net
|
40,535
|
|
|
(26,316
|
)
|
|
(27,224
|
)
|
|
Prepaid income taxes, net
|
2,289
|
|
|
591
|
|
|
(4,300
|
)
|
|
Other current assets
|
(3,742
|
)
|
|
(6,185
|
)
|
|
552
|
|
|
Accounts payable
|
(6,308
|
)
|
|
6,514
|
|
|
397
|
|
|
Other current liabilities
|
5,377
|
|
|
40,258
|
|
|
11,876
|
|
|
Liabilities of advertising funds, net
|
1,233
|
|
|
(1,124
|
)
|
|
(2,785
|
)
|
|
Deferred income
|
393
|
|
|
1,866
|
|
|
5,770
|
|
|
Other, net
|
5,957
|
|
|
12,214
|
|
|
1,070
|
|
|
Net cash provided by operating activities
|
276,205
|
|
|
185,566
|
|
|
199,323
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
||||
Additions to property and equipment
|
(15,174
|
)
|
|
(30,246
|
)
|
|
(23,638
|
)
|
|
Proceeds from sale of real estate and company-operated restaurants
|
20,523
|
|
|
2,693
|
|
|
14,361
|
|
|
Other, net
|
(4,006
|
)
|
|
(7,914
|
)
|
|
(4,827
|
)
|
|
Net cash provided by (used in) investing activities
|
1,343
|
|
|
(35,467
|
)
|
|
(14,104
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
—
|
|
|
2,500,000
|
|
|
—
|
|
|
Repayment of long-term debt
|
(25,000
|
)
|
|
(1,837,824
|
)
|
|
(15,000
|
)
|
|
Payment of debt issuance and other debt-related costs
|
—
|
|
|
(41,350
|
)
|
|
(9,213
|
)
|
|
Repurchases of common stock, including accelerated share repurchases
|
(55,000
|
)
|
|
(625,041
|
)
|
|
(130,171
|
)
|
|
Dividends paid on common stock
|
(109,703
|
)
|
|
(100,516
|
)
|
|
(96,775
|
)
|
|
Change in restricted cash
|
106
|
|
|
(6,770
|
)
|
|
—
|
|
|
Exercise of stock options
|
10,647
|
|
|
10,353
|
|
|
5,120
|
|
|
Excess tax benefits from share-based compensation
|
2,735
|
|
|
11,503
|
|
|
10,758
|
|
|
Other, net
|
(122
|
)
|
|
(7,211
|
)
|
|
1,924
|
|
|
Net cash used in financing activities
|
(176,337
|
)
|
|
(96,856
|
)
|
|
(233,357
|
)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
(216
|
)
|
|
(893
|
)
|
|
(715
|
)
|
|
Increase (decrease) in cash and cash equivalents
|
100,995
|
|
|
52,350
|
|
|
(48,853
|
)
|
|
Cash and cash equivalents, beginning of year
|
260,430
|
|
|
208,080
|
|
|
256,933
|
|
|
Cash and cash equivalents, end of year
|
$
|
361,425
|
|
|
260,430
|
|
|
208,080
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||||
Cash paid for income taxes
|
$
|
125,681
|
|
|
106,924
|
|
|
99,410
|
|
Cash paid for interest
|
94,212
|
|
|
90,564
|
|
|
64,485
|
|
|
Noncash investing activities:
|
|
|
|
|
|
||||
Property and equipment included in accounts payable and other current liabilities
|
920
|
|
|
579
|
|
|
2,383
|
|
|
Purchase of leaseholds in exchange for capital lease obligations
|
624
|
|
|
475
|
|
|
1,094
|
|
|
|
December 31, 2016
|
|
December 26, 2015
|
|||||||||
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Total
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Total
|
|||||
Assets:
|
|
|
|
|
|
|
|
|
|||||
Company-owned life insurance
|
|
$
|
9,271
|
|
|
9,271
|
|
|
5,802
|
|
|
5,802
|
|
Total assets
|
|
$
|
9,271
|
|
|
9,271
|
|
|
5,802
|
|
|
5,802
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|||||
Deferred compensation liabilities
|
|
$
|
11,126
|
|
|
11,126
|
|
|
9,068
|
|
|
9,068
|
|
Total liabilities
|
|
$
|
11,126
|
|
|
11,126
|
|
|
9,068
|
|
|
9,068
|
|
|
December 31, 2016
|
|
December 26, 2015
|
|||||||||
Financial liabilities
|
Carrying
value
|
|
Estimated
fair value
|
|
Carrying
value
|
|
Estimated
fair value
|
|||||
Long-term debt
|
$
|
2,426,998
|
|
|
2,460,544
|
|
|
2,445,600
|
|
|
2,443,687
|
|
|
Years
|
Buildings
|
20 – 35
|
Leasehold improvements
|
5 – 20
|
Store, production, and other equipment
|
3 – 10
|
Software
|
3 – 7
|
|
Fiscal year ended
|
||||||||
|
December 31, 2016
|
|
December 26, 2015
|
|
December 27, 2014
|
||||
Royalty income
|
$
|
500,927
|
|
|
463,960
|
|
|
438,074
|
|
Initial franchise fees and renewal income
|
48,644
|
|
|
49,262
|
|
|
44,255
|
|
|
Total franchise fees and royalty income
|
$
|
549,571
|
|
|
513,222
|
|
|
482,329
|
|
|
Fiscal year ended
|
|||||||
|
December 31, 2016
|
|
December 26, 2015
|
|
December 27, 2014
|
|||
Systemwide points of distribution:
|
|
|
|
|
|
|||
Franchised points of distribution in operation—beginning of year
|
19,308
|
|
|
18,821
|
|
|
18,122
|
|
Franchised points of distribution—opened
|
1,540
|
|
|
1,536
|
|
|
1,442
|
|
Franchised points of distribution—closed
|
(819
|
)
|
|
(1,051
|
)
|
|
(744
|
)
|
Net transfers from company-operated points of distribution
|
51
|
|
|
2
|
|
|
1
|
|
Franchised points of distribution in operation—end of year
|
20,080
|
|
|
19,308
|
|
|
18,821
|
|
Company-operated points of distribution—end of year
|
—
|
|
|
49
|
|
|
41
|
|
Total systemwide points of distribution—end of year
|
20,080
|
|
|
19,357
|
|
|
18,862
|
|
|
December 31, 2016
|
|
December 26, 2015
|
|||
Land
|
$
|
34,889
|
|
|
33,346
|
|
Buildings
|
50,571
|
|
|
49,304
|
|
|
Leasehold improvements
|
157,752
|
|
|
154,479
|
|
|
Software, store, production, and other equipment
|
52,922
|
|
|
53,273
|
|
|
Construction in progress
|
5,203
|
|
|
3,837
|
|
|
Property and equipment, gross
|
301,337
|
|
|
294,239
|
|
|
Accumulated depreciation
|
(124,675
|
)
|
|
(111,625
|
)
|
|
Property and equipment, net
|
$
|
176,662
|
|
|
182,614
|
|
Entity
|
|
Ownership
|
Japan JV
|
|
43.3%
|
South Korea JV
|
|
33.3%
|
Australia JV
|
|
20.0%
|
|
December 31,
2016 |
|
December 26,
2015 |
|||
Current assets
|
$
|
300,999
|
|
|
288,106
|
|
Current liabilities
|
120,611
|
|
|
123,576
|
|
|
Working capital
|
180,388
|
|
|
164,530
|
|
|
Property, plant, and equipment, net
|
153,038
|
|
|
142,844
|
|
|
Other assets
|
124,676
|
|
|
125,000
|
|
|
Long-term liabilities
|
48,460
|
|
|
40,728
|
|
|
Equity of equity method investments
|
$
|
409,642
|
|
|
391,646
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Revenues
|
$
|
629,717
|
|
|
622,982
|
|
|
669,416
|
|
Gross profit
|
329,206
|
|
|
327,684
|
|
|
363,536
|
|
|
Net income
|
32,529
|
|
|
33,650
|
|
|
39,835
|
|
|
Japan JV
|
|
South Korea JV
|
|||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 31,
2016 |
|
December 26,
2015 |
|||||
Carrying value of investment
|
$
|
10,789
|
|
|
8,666
|
|
|
104,253
|
|
|
98,386
|
|
Underlying equity in net assets of investment
|
34,312
|
|
|
34,271
|
|
|
109,992
|
|
|
103,899
|
|
|
Carrying value less than the underlying equity in net assets
(a)
|
$
|
(23,523
|
)
|
|
(25,605
|
)
|
|
(5,739
|
)
|
|
(5,513
|
)
|
(a)
|
The deficits of cost relative to the underlying equity in net assets of the Japan JV and the South Korea JV as of December 31, 2016 and December 26, 2015 are primarily comprised of impairments of long-lived assets, net of tax, recorded in fiscal years 2015 and 2011, respectively.
|
|
Dunkin’ Donuts U.S.
|
|
Dunkin’ Donuts International
|
|
Baskin-Robbins International
|
|
Total
|
|||||||||||||||||||||||||||||
|
Goodwill
|
|
Accumulated impairment charges
|
|
Net Balance
|
|
Goodwill
|
|
Accumulated impairment charges
|
|
Net Balance
|
|
Goodwill
|
|
Accumulated impairment charges
|
|
Net Balance
|
|
Goodwill
|
|
Accumulated impairment charges
|
|
Net Balance
|
|||||||||||||
Balances at December 27, 2014
|
$
|
1,151,599
|
|
|
(270,441
|
)
|
|
881,158
|
|
|
10,212
|
|
|
—
|
|
|
10,212
|
|
|
24,037
|
|
|
(24,037
|
)
|
|
—
|
|
|
1,185,848
|
|
|
(294,478
|
)
|
|
891,370
|
|
Goodwill acquired
|
724
|
|
|
—
|
|
|
724
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
724
|
|
|
—
|
|
|
724
|
|
|
Goodwill disposed or held for sale
|
(2,413
|
)
|
|
—
|
|
|
(2,413
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,413
|
)
|
|
—
|
|
|
(2,413
|
)
|
|
Effects of foreign currency adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
—
|
|
|
(93
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
—
|
|
|
(93
|
)
|
|
Balances at December 26, 2015
|
1,149,910
|
|
|
(270,441
|
)
|
|
879,469
|
|
|
10,119
|
|
|
—
|
|
|
10,119
|
|
|
24,037
|
|
|
(24,037
|
)
|
|
—
|
|
|
1,184,066
|
|
|
(294,478
|
)
|
|
889,588
|
|
|
Goodwill disposed
|
(1,331
|
)
|
|
—
|
|
|
(1,331
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,331
|
)
|
|
—
|
|
|
(1,331
|
)
|
|
Effects of foreign currency adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|
Balances at December 31, 2016
|
$
|
1,148,579
|
|
|
(270,441
|
)
|
|
878,138
|
|
|
10,134
|
|
|
—
|
|
|
10,134
|
|
|
24,037
|
|
|
(24,037
|
)
|
|
—
|
|
|
1,182,750
|
|
|
(294,478
|
)
|
|
888,272
|
|
|
Weighted
average
amortization
period
(years)
|
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Net
carrying
amount
|
||||
Definite-lived intangibles:
|
|
|
|
|
|
|
|
||||
Franchise rights
|
20
|
|
$
|
358,166
|
|
|
(193,940
|
)
|
|
164,226
|
|
Favorable operating leases acquired
|
18
|
|
59,948
|
|
|
(36,424
|
)
|
|
23,524
|
|
|
Indefinite-lived intangible:
|
|
|
|
|
|
|
|
||||
Trade names
|
N/A
|
|
1,190,970
|
|
|
—
|
|
|
1,190,970
|
|
|
|
|
|
$
|
1,609,084
|
|
|
(230,364
|
)
|
|
1,378,720
|
|
|
Weighted
average
amortization
period
(years)
|
|
Gross
carrying
amount
|
|
Accumulated
amortization
|
|
Net
carrying
amount
|
||||
Definite-lived intangibles:
|
|
|
|
|
|
|
|
||||
Franchise rights
|
20
|
|
$
|
382,335
|
|
|
(199,374
|
)
|
|
182,961
|
|
Favorable operating leases acquired
|
17
|
|
64,397
|
|
|
(37,173
|
)
|
|
27,224
|
|
|
License rights
|
10
|
|
3,221
|
|
|
(3,168
|
)
|
|
53
|
|
|
Indefinite-lived intangible:
|
|
|
|
|
|
|
|
||||
Trade names
|
N/A
|
|
1,190,970
|
|
|
—
|
|
|
1,190,970
|
|
|
|
|
|
$
|
1,640,923
|
|
|
(239,715
|
)
|
|
1,401,208
|
|
|
December 31,
2016 |
|
December 26,
2015 |
|||
Class A-2 Notes
|
$
|
2,456,250
|
|
|
2,481,250
|
|
Debt issuance costs, net of amortization
|
(29,252
|
)
|
|
(35,650
|
)
|
|
Total debt
|
2,426,998
|
|
|
2,445,600
|
|
|
Less current portion of long-term debt
|
25,000
|
|
|
25,000
|
|
|
Total long-term debt
|
$
|
2,401,998
|
|
|
2,420,600
|
|
|
Class A-2-I Notes
|
|
Class A-2-II Notes
|
|
Total
|
||||
2017
|
$
|
7,500
|
|
|
17,500
|
|
|
25,000
|
|
2018
|
7,500
|
|
|
17,500
|
|
|
25,000
|
|
|
2019
|
721,875
|
|
|
17,500
|
|
|
739,375
|
|
|
2020
|
—
|
|
|
17,500
|
|
|
17,500
|
|
|
2021
|
—
|
|
|
17,500
|
|
|
17,500
|
|
Derivatives designated as cash flow hedging instruments
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of net gain (loss) reclassified into earnings
|
|
Consolidated statement of operations classification
|
|
Total effect on other comprehensive income (loss)
|
||||
Interest rate swaps
|
|
$
|
—
|
|
|
2,181
|
|
|
Interest expense
|
|
(2,181
|
)
|
Income tax effect
|
|
—
|
|
|
(882
|
)
|
|
Provision for income taxes
|
|
882
|
|
|
Net of income taxes
|
|
$
|
—
|
|
|
1,299
|
|
|
|
|
(1,299
|
)
|
Derivatives designated as cash flow hedging instruments
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of net gain (loss) reclassified into earnings
|
|
Consolidated statement of operations classification
|
|
Total effect on other comprehensive income (loss)
|
||||
Interest rate swaps
|
|
$
|
—
|
|
|
2,140
|
|
|
Interest expense
|
|
(2,140
|
)
|
Income tax effect
|
|
—
|
|
|
(867
|
)
|
|
Provision for income taxes
|
|
867
|
|
|
Net of income taxes
|
|
$
|
—
|
|
|
1,273
|
|
|
|
|
(1,273
|
)
|
Derivatives designated as cash flow hedging instruments
|
|
Amount of gain (loss) recognized in other comprehensive income (loss)
|
|
Amount of net gain (loss) reclassified into earnings
|
|
Consolidated statement of operations classification
|
|
Total effect on other comprehensive income (loss)
|
||||
Interest rate swaps
|
|
$
|
(8,085
|
)
|
|
(4,108
|
)
|
|
Interest expense
|
|
(3,977
|
)
|
Income tax effect
|
|
3,269
|
|
|
1,661
|
|
|
Provision for income taxes
|
|
1,608
|
|
|
Net of income taxes
|
|
$
|
(4,816
|
)
|
|
(2,447
|
)
|
|
|
|
(2,369
|
)
|
|
December 31,
2016 |
|
December 26,
2015 |
|||
Gift card/certificate liability
|
$
|
207,628
|
|
|
176,080
|
|
Gift card breakage liabilities
|
13,301
|
|
|
23,955
|
|
|
Accrued salary and benefits
|
25,071
|
|
|
29,540
|
|
|
Accrued legal liabilities (see note 17(d))
|
5,555
|
|
|
18,267
|
|
|
Accrued interest
|
10,702
|
|
|
9,522
|
|
|
Accrued professional costs
|
2,170
|
|
|
4,814
|
|
|
Franchisee profit-sharing liability
|
11,083
|
|
|
8,406
|
|
|
Other
|
22,756
|
|
|
22,275
|
|
|
Total other current liabilities
|
$
|
298,266
|
|
|
292,859
|
|
|
December 31,
2016 |
|
December 26,
2015 |
|||
Leased property under capital leases (included in property and equipment)
|
$
|
10,081
|
|
|
9,457
|
|
Accumulated depreciation
|
(4,055
|
)
|
|
(3,437
|
)
|
|
Net leased property under capital leases
|
$
|
6,026
|
|
|
6,020
|
|
Capital lease obligations:
|
|
|
|
|||
Current
|
$
|
589
|
|
|
546
|
|
Long-term
|
7,550
|
|
|
7,497
|
|
|
Total capital lease obligations
|
$
|
8,139
|
|
|
8,043
|
|
|
December 31,
2016 |
|
December 26,
2015 |
|||
Land
|
$
|
32,646
|
|
|
27,654
|
|
Buildings
|
47,723
|
|
|
43,196
|
|
|
Leasehold improvements
|
149,027
|
|
|
139,409
|
|
|
Store, production, and other equipment
|
150
|
|
|
221
|
|
|
Construction in progress
|
567
|
|
|
783
|
|
|
Assets leased to others, gross
|
230,113
|
|
|
211,263
|
|
|
Accumulated depreciation
|
(86,957
|
)
|
|
(78,453
|
)
|
|
Assets leased to others, net
|
$
|
143,156
|
|
|
132,810
|
|
|
Payments
|
|
Receipts
|
|
Net
leases
|
||||||||
|
Capital
leases
|
|
Operating
leases
|
|
Subleases
|
||||||||
Fiscal year:
|
|
|
|
|
|
|
|
||||||
2017
|
$
|
1,567
|
|
|
57,749
|
|
|
(71,627
|
)
|
|
(12,311
|
)
|
|
2018
|
1,602
|
|
|
57,679
|
|
|
(70,861
|
)
|
|
(11,580
|
)
|
||
2019
|
1,431
|
|
|
56,273
|
|
|
(68,948
|
)
|
|
(11,244
|
)
|
||
2020
|
1,223
|
|
|
53,389
|
|
|
(64,965
|
)
|
|
(10,353
|
)
|
||
2021
|
1,257
|
|
|
48,446
|
|
|
(60,904
|
)
|
|
(11,201
|
)
|
||
Thereafter
|
11,593
|
|
|
394,431
|
|
|
(372,093
|
)
|
|
33,931
|
|
||
Total minimum rental commitments
|
18,673
|
|
|
$
|
667,967
|
|
|
(709,398
|
)
|
|
(22,758
|
)
|
|
Less amount representing interest
|
10,534
|
|
|
|
|
|
|
|
|||||
Present value of minimum capital lease obligations
|
$
|
8,139
|
|
|
|
|
|
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Base rentals
|
$
|
54,517
|
|
|
54,290
|
|
|
53,130
|
|
Contingent rentals
|
6,182
|
|
|
6,348
|
|
|
6,071
|
|
|
Total rental expense
|
$
|
60,699
|
|
|
60,638
|
|
|
59,201
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Base rentals
|
$
|
70,962
|
|
|
70,033
|
|
|
67,945
|
|
Contingent rentals
|
30,058
|
|
|
30,389
|
|
|
29,718
|
|
|
Total rental income
|
$
|
101,020
|
|
|
100,422
|
|
|
97,663
|
|
|
Revenues
|
||||||||
|
Fiscal year ended
|
||||||||
|
December 31, 2016
|
|
December 26, 2015
|
|
December 27, 2014
|
||||
Dunkin’ Donuts U.S.
|
$
|
607,964
|
|
|
591,062
|
|
|
548,871
|
|
Dunkin’ Donuts International
|
22,903
|
|
|
22,973
|
|
|
19,693
|
|
|
Baskin-Robbins U.S.
|
47,512
|
|
|
47,140
|
|
|
45,865
|
|
|
Baskin-Robbins International
|
119,015
|
|
|
117,076
|
|
|
119,749
|
|
|
Total reportable segment revenues
|
797,394
|
|
|
778,251
|
|
|
734,178
|
|
|
Other
|
31,495
|
|
|
32,682
|
|
|
14,531
|
|
|
Total revenues
|
$
|
828,889
|
|
|
810,933
|
|
|
748,709
|
|
|
Segment profit
|
||||||||
|
Fiscal year ended
|
||||||||
|
December 31, 2016
|
|
December 26, 2015
|
|
December 27, 2014
|
||||
Dunkin’ Donuts U.S.
|
$
|
466,976
|
|
|
431,065
|
|
|
404,657
|
|
Dunkin’ Donuts International
|
9,658
|
|
|
10,240
|
|
|
9,478
|
|
|
Baskin-Robbins U.S.
|
34,240
|
|
|
29,289
|
|
|
28,357
|
|
|
Baskin-Robbins International
|
38,967
|
|
|
36,218
|
|
|
38,968
|
|
|
Total reportable segments
|
549,841
|
|
|
506,812
|
|
|
481,460
|
|
|
Corporate
|
(112,899
|
)
|
|
(161,934
|
)
|
|
(115,658
|
)
|
|
Interest expense, net
|
(100,270
|
)
|
|
(96,341
|
)
|
|
(67,824
|
)
|
|
Amortization of other intangible assets
|
(22,079
|
)
|
|
(24,688
|
)
|
|
(25,760
|
)
|
|
Long-lived asset impairment charges
|
(149
|
)
|
|
(623
|
)
|
|
(1,484
|
)
|
|
Loss on debt extinguishment and refinancing transactions
|
—
|
|
|
(20,554
|
)
|
|
(13,735
|
)
|
|
Other losses, net
|
(1,195
|
)
|
|
(1,084
|
)
|
|
(1,566
|
)
|
|
Operating income adjustments excluded from reportable segments
|
—
|
|
|
—
|
|
|
300
|
|
|
Income before income taxes
|
$
|
313,249
|
|
|
201,588
|
|
|
255,733
|
|
|
Net income (loss) of equity method investments
|
||||||||
|
Fiscal year ended
|
||||||||
|
December 31, 2016
|
|
December 26, 2015
|
|
December 27, 2014
|
||||
Dunkin’ Donuts International
|
$
|
622
|
|
|
1,295
|
|
|
1,794
|
|
Baskin-Robbins International
|
9,803
|
|
|
10,535
|
|
|
11,912
|
|
|
Total reportable segments
|
10,425
|
|
|
11,830
|
|
|
13,706
|
|
|
Other
|
4,127
|
|
|
(53,575
|
)
|
|
1,140
|
|
|
Total net income (loss) of equity method investments
|
$
|
14,552
|
|
|
(41,745
|
)
|
|
14,846
|
|
|
Depreciation
|
||||||||
|
Fiscal year ended
|
||||||||
|
December 31, 2016
|
|
December 26, 2015
|
|
December 27, 2014
|
||||
Dunkin’ Donuts U.S.
|
$
|
11,378
|
|
|
12,229
|
|
|
12,207
|
|
Dunkin’ Donuts International
|
27
|
|
|
7
|
|
|
11
|
|
|
Baskin-Robbins U.S.
|
272
|
|
|
358
|
|
|
288
|
|
|
Baskin-Robbins International
|
74
|
|
|
60
|
|
|
62
|
|
|
Total reportable segments
|
11,751
|
|
|
12,654
|
|
|
12,568
|
|
|
Corporate
|
8,707
|
|
|
7,902
|
|
|
7,211
|
|
|
Total depreciation
|
$
|
20,458
|
|
|
20,556
|
|
|
19,779
|
|
|
December 31, 2016
|
|
December 26, 2015
|
|||
United States
|
$
|
176,524
|
|
|
182,456
|
|
International
|
138
|
|
|
158
|
|
|
Total property and equipment, net
|
$
|
176,662
|
|
|
182,614
|
|
|
Effect of
foreign
currency
translation
|
|
Unrealized gains (losses) on interest rate swaps
|
|
Other
|
|
Accumulated
other
comprehensive
loss
|
|||||
Balances at December 26, 2015
|
$
|
(20,459
|
)
|
|
2,443
|
|
|
(2,030
|
)
|
|
(20,046
|
)
|
Other comprehensive loss
|
(2,560
|
)
|
|
(1,299
|
)
|
|
(79
|
)
|
|
(3,938
|
)
|
|
Balances at December 31, 2016
|
$
|
(23,019
|
)
|
|
1,144
|
|
|
(2,109
|
)
|
|
(23,984
|
)
|
|
Dividend per share
|
|
Total amount (in thousands)
|
|
Payment date
|
||||
Fiscal year 2016:
|
|
|
|
|
|
||||
First quarter
|
$
|
0.3000
|
|
|
$
|
27,395
|
|
|
March 16, 2016
|
Second quarter
|
0.3000
|
|
|
27,456
|
|
|
June 8, 2016
|
||
Third quarter
|
0.3000
|
|
|
27,475
|
|
|
August 31, 2016
|
||
Fourth quarter
|
0.3000
|
|
|
27,377
|
|
|
November 30, 2016
|
|
Dividend per share
|
|
Total amount (in thousands)
|
|
Payment date
|
||||
Fiscal year 2015:
|
|
|
|
|
|
||||
First quarter
|
$
|
0.2650
|
|
|
$
|
25,688
|
|
|
March 18, 2015
|
Second quarter
|
0.2650
|
|
|
25,127
|
|
|
June 17, 2015
|
||
Third quarter
|
0.2650
|
|
|
25,197
|
|
|
September 2, 2015
|
||
Fourth quarter
|
0.2650
|
|
|
24,504
|
|
|
December 2, 2015
|
|
Fiscal year ended
|
||||||||
|
December 31, 2016
|
|
December 26, 2015
|
|
December 27, 2014
|
||||
Time-vested stock options
|
$
|
10,654
|
|
|
10,519
|
|
|
6,978
|
|
Restricted stock units
|
3,608
|
|
|
3,408
|
|
|
2,419
|
|
|
2011 Plan restricted shares
|
1,793
|
|
|
1,967
|
|
|
1,456
|
|
|
Performance stock units
|
1,086
|
|
|
—
|
|
|
—
|
|
|
Other
|
40
|
|
|
198
|
|
|
434
|
|
|
Total share-based compensation
|
$
|
17,181
|
|
|
16,092
|
|
|
11,287
|
|
Total related tax benefit
|
$
|
6,955
|
|
|
6,512
|
|
|
4,567
|
|
|
Fiscal year ended
|
||||||||||
|
December 31, 2016
|
|
December 26, 2015
|
|
December 27, 2014
|
||||||
Weighted average grant-date fair value of share options granted
|
$
|
7.41
|
|
|
$
|
8.66
|
|
|
$
|
10.65
|
|
Weighted average assumptions:
|
|
|
|
|
|
||||||
Risk-free interest rate
|
1.2
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|||
Expected volatility
|
25.0
|
%
|
|
25.0
|
%
|
|
26.3
|
%
|
|||
Dividend yield
|
2.7
|
%
|
|
2.2
|
%
|
|
1.8
|
%
|
|||
Expected term (years)
|
4.90
|
|
|
4.91
|
|
|
4.96
|
|
|
Number of
shares
|
|
Weighted
average
exercise
price
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic
value
(in millions)
|
|||||
Share options outstanding at December 26, 2015
|
4,249,758
|
|
|
$
|
44.18
|
|
|
6.0
|
|
|
||
Granted
|
1,384,294
|
|
|
44.35
|
|
|
|
|
|
|||
Exercised
|
(320,836
|
)
|
|
31.27
|
|
|
|
|
|
|||
Forfeited or expired
|
(423,631
|
)
|
|
47.04
|
|
|
|
|
|
|||
Share options outstanding at December 31, 2016
|
4,889,585
|
|
|
44.82
|
|
|
5.3
|
|
$
|
37.2
|
|
|
Share options exercisable at December 31, 2016
|
1,756,886
|
|
|
42.22
|
|
|
5.1
|
|
18.0
|
|
|
Number of
shares
|
|
Weighted average grant-date fair value
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic
value
(in millions)
|
|||||
Nonvested restricted stock units at December 26, 2015
|
138,347
|
|
|
$
|
45.42
|
|
|
1.4
|
|
|
||
Granted
|
134,723
|
|
|
44.34
|
|
|
|
|
|
|||
Vested
|
(77,571
|
)
|
|
44.97
|
|
|
|
|
|
|||
Forfeited
|
(11,823
|
)
|
|
44.07
|
|
|
|
|
|
|||
Nonvested restricted stock units at December 31, 2016
|
183,676
|
|
|
44.91
|
|
|
1.7
|
|
$
|
9.6
|
|
|
Number of
shares
|
|
Weighted average grant-date fair value
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic
value
(in millions)
|
|||||
Granted
|
121,030
|
|
|
$
|
47.87
|
|
|
|
|
|
||
Forfeited
|
(7,989)
|
|
|
47.51
|
|
|
|
|
|
|||
Nonvested performance stock units at December 31, 2016
|
113,041
|
|
|
47.90
|
|
|
2.3
|
|
$
|
5.9
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Net income attributable to Dunkin’ Brands—basic and diluted
|
$
|
195,576
|
|
|
105,227
|
|
|
176,357
|
|
Weighted average number of common shares:
|
|
|
|
|
|
||||
Common—basic
|
91,568,942
|
|
|
96,045,232
|
|
|
105,398,899
|
|
|
Common—diluted
|
92,538,282
|
|
|
97,131,674
|
|
|
106,705,778
|
|
|
Earnings per common share:
|
|
|
|
|
|
||||
Common—basic
|
$
|
2.14
|
|
|
1.10
|
|
|
1.67
|
|
Common—diluted
|
2.11
|
|
|
1.08
|
|
|
1.65
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Domestic operations
|
$
|
286,927
|
|
|
234,410
|
|
|
231,549
|
|
Foreign operations
|
26,322
|
|
|
(32,822
|
)
|
|
24,184
|
|
|
Income before income taxes
|
$
|
313,249
|
|
|
201,588
|
|
|
255,733
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Current:
|
|
|
|
|
|
||||
Federal
|
$
|
97,972
|
|
|
90,586
|
|
|
82,925
|
|
State
|
28,430
|
|
|
23,694
|
|
|
23,146
|
|
|
Foreign
|
3,808
|
|
|
3,186
|
|
|
(1,262
|
)
|
|
Current tax provision
|
$
|
130,210
|
|
|
117,466
|
|
|
104,809
|
|
Deferred:
|
|
|
|
|
|
||||
Federal
|
$
|
(9,983
|
)
|
|
(19,034
|
)
|
|
(22,644
|
)
|
State
|
(3,152
|
)
|
|
(3,060
|
)
|
|
(1,861
|
)
|
|
Foreign
|
598
|
|
|
987
|
|
|
(134
|
)
|
|
Deferred tax benefit
|
(12,537
|
)
|
|
(21,107
|
)
|
|
(24,639
|
)
|
|
Provision for income taxes
|
$
|
117,673
|
|
|
96,359
|
|
|
80,170
|
|
|
Fiscal year ended
|
|||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
|||
Computed federal income tax expense, at statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Impairment of investment in Japan JV
|
—
|
|
|
9.4
|
|
|
—
|
|
State income taxes
|
5.1
|
|
|
6.6
|
|
|
5.7
|
|
Benefits and taxes related to foreign operations
|
(2.7
|
)
|
|
(4.4
|
)
|
|
(3.5
|
)
|
Conversion of foreign subsidiary
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
Other permanent differences
|
0.1
|
|
|
0.6
|
|
|
0.1
|
|
Changes in enacted tax rates and apportionment
|
—
|
|
|
—
|
|
|
0.1
|
|
Uncertain tax positions
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
Other, net
|
0.1
|
|
|
0.6
|
|
|
(0.3
|
)
|
Effective tax rate
|
37.6
|
%
|
|
47.8
|
%
|
|
31.3
|
%
|
|
December 31, 2016
|
|
December 26, 2015
|
|||||||||
|
Deferred tax
assets
|
|
Deferred tax
liabilities
|
|
Deferred tax
assets
|
|
Deferred tax
liabilities
|
|||||
Allowance for doubtful accounts
|
$
|
2,685
|
|
|
—
|
|
|
4,484
|
|
|
—
|
|
Capital leases
|
3,295
|
|
|
—
|
|
|
3,256
|
|
|
—
|
|
|
Rent
|
11,905
|
|
|
—
|
|
|
10,132
|
|
|
—
|
|
|
Property and equipment
|
—
|
|
|
1,977
|
|
|
419
|
|
|
—
|
|
|
Deferred compensation liabilities
|
19,900
|
|
|
—
|
|
|
15,155
|
|
|
—
|
|
|
Deferred gift cards and certificates
|
27,874
|
|
|
—
|
|
|
20,909
|
|
|
—
|
|
|
Deferred income
|
12,609
|
|
|
—
|
|
|
12,064
|
|
|
—
|
|
|
Real estate reserves
|
1,264
|
|
|
—
|
|
|
1,060
|
|
|
—
|
|
|
Franchise rights and other intangibles
|
—
|
|
|
551,679
|
|
|
—
|
|
|
559,332
|
|
|
Unused net operating losses and foreign tax credits
|
11,457
|
|
|
—
|
|
|
14,233
|
|
|
—
|
|
|
Other current liabilities
|
5,368
|
|
|
—
|
|
|
7,708
|
|
|
—
|
|
|
Capital loss
|
336
|
|
|
—
|
|
|
162
|
|
|
—
|
|
|
Other
|
1,422
|
|
|
—
|
|
|
—
|
|
|
337
|
|
|
|
98,115
|
|
|
553,656
|
|
|
89,582
|
|
|
559,669
|
|
|
Valuation allowance
|
(1,131
|
)
|
|
—
|
|
|
(793
|
)
|
|
—
|
|
|
Total
|
$
|
96,984
|
|
|
553,656
|
|
|
88,789
|
|
|
559,669
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Balance at beginning of year
|
$
|
2,653
|
|
|
3,672
|
|
|
8,213
|
|
Increases related to prior year tax positions
|
267
|
|
|
—
|
|
|
488
|
|
|
Increases related to current year tax positions
|
161
|
|
|
111
|
|
|
96
|
|
|
Decreases related to prior year tax positions
|
(33
|
)
|
|
(301
|
)
|
|
(4,567
|
)
|
|
Decreases related to settlements
|
(191
|
)
|
|
(636
|
)
|
|
(296
|
)
|
|
Lapses of statutes of limitations
|
(597
|
)
|
|
—
|
|
|
—
|
|
|
Effect of foreign currency adjustments
|
30
|
|
|
(193
|
)
|
|
(262
|
)
|
|
Balance at end of year
|
$
|
2,290
|
|
|
2,653
|
|
|
3,672
|
|
|
Fiscal year ended
|
||||||||
|
December 31,
2016 |
|
December 26,
2015 |
|
December 27,
2014 |
||||
Japan JV
|
$
|
1,873
|
|
|
1,378
|
|
|
1,790
|
|
South Korea JV
|
4,030
|
|
|
4,288
|
|
|
4,602
|
|
|
Spain JV
|
—
|
|
|
68
|
|
|
123
|
|
|
|
$
|
5,903
|
|
|
5,734
|
|
|
6,515
|
|
|
Accounts
receivable
|
|
Short-term notes and other
receivables
|
|
Long-term notes and other
receivables |
||||
Balance at December 28, 2013
|
$
|
2,599
|
|
|
659
|
|
|
2,808
|
|
Provision for (recovery of) doubtful accounts, net
|
1,796
|
|
|
(14
|
)
|
|
1,039
|
|
|
Write-offs and other
|
(513
|
)
|
|
633
|
|
|
100
|
|
|
Balance at December 27, 2014
|
3,882
|
|
|
1,278
|
|
|
3,947
|
|
|
Provision for (recovery of) doubtful accounts, net
|
3,705
|
|
|
(117
|
)
|
|
(245
|
)
|
|
Write-offs and other
|
(1,960
|
)
|
|
(154
|
)
|
|
373
|
|
|
Balance at December 26, 2015
|
5,627
|
|
|
1,007
|
|
|
4,075
|
|
|
Provision for (recovery of) doubtful accounts, net
|
1,202
|
|
|
(189
|
)
|
|
(960
|
)
|
|
Write-offs and other
|
(2,051
|
)
|
|
(479
|
)
|
|
(1,027
|
)
|
|
Balance at December 31, 2016
|
$
|
4,778
|
|
|
339
|
|
|
2,088
|
|
|
Three months ended
|
|||||||||||
|
March 26,
2016 |
|
June 25,
2016 |
|
September 24,
2016 |
|
December 31,
2016 |
|||||
|
(In thousands, except per share data)
|
|||||||||||
Total revenues
|
$
|
189,776
|
|
|
216,309
|
|
|
207,099
|
|
|
215,705
|
|
Operating income
|
85,333
|
|
|
106,141
|
|
|
109,360
|
|
|
113,880
|
|
|
Net income attributable to Dunkin’ Brands
|
37,154
|
|
|
49,590
|
|
|
52,712
|
|
|
56,120
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
0.41
|
|
|
0.54
|
|
|
0.58
|
|
|
0.61
|
|
|
Common—diluted
|
0.40
|
|
|
0.54
|
|
|
0.57
|
|
|
0.61
|
|
|
Three months ended
|
|||||||||||
|
March 28,
2015 |
|
June 27,
2015 |
|
September 26,
2015 |
|
December 26,
2015 |
|||||
|
(In thousands, except per share data)
|
|||||||||||
Total revenues
|
$
|
185,905
|
|
|
211,424
|
|
|
209,807
|
|
|
203,797
|
|
Operating income
|
83,740
|
|
|
92,588
|
|
|
99,763
|
|
|
43,476
|
|
|
Net income (loss) attributable to Dunkin’ Brands
|
25,631
|
|
|
42,318
|
|
|
46,216
|
|
|
(8,938
|
)
|
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|||||
Common—basic
|
0.26
|
|
|
0.44
|
|
|
0.49
|
|
|
(0.10
|
)
|
|
Common—diluted
|
0.25
|
|
|
0.44
|
|
|
0.48
|
|
|
(0.10
|
)
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
(a)
|
The following documents are filed as part of this report:
|
1.
|
Financial statements: All financial statements are included in Part II, Item 8 of this report.
|
2.
|
Financial statement schedules: All financial statement schedules are omitted because they are not required or are not applicable, or the required information is provided in the consolidated financial statements or notes described in Item 15(a)(1) above.
|
3.
|
Exhibits:
|
Exhibit
Number
|
|
Exhibit Title
|
|
|
|
3.1
|
|
Form of Second Restated Certificate of Incorporation of Dunkin’ Brands Group, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, File No. 333-173898, as amended on July 11, 2011)
|
|
|
|
3.2
|
|
Form of Second Amended and Restated Bylaws of Dunkin’ Brands Group, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1, File No. 333-173898, as amended on July 11, 2011)
|
|
|
|
4.2
|
|
Specimen Common Stock certificate of Dunkin’ Brands Group, Inc. (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-1, File No. 333-173898, as amended on July 11, 2011)
|
|
|
|
10.1*
|
|
Dunkin’ Brands Group, Inc. (f/k/a Dunkin’ Brands Group Holdings, Inc.) Amended and Restated 2006 Executive Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1, File No. 333-173898, filed with the SEC on May 4, 2011)
|
|
|
|
10.2*
|
|
Form of Option Award under 2006 Executive Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Registration Statement on Form S-1, File No. 333-173898, filed with the SEC on May 4, 2011)
|
|
|
|
10.3*
|
|
Form of Restricted Stock Award under 2006 Executive Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Registration Statement on Form S-1, File No. 333-173898, filed with the SEC on May 4, 2011)
|
|
|
|
10.4*
|
|
Dunkin’ Brands Group, Inc. Amended & Restated 2011 Omnibus Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10-K, File No. 001-35258, filed the with SEC on February 22, 2013)
|
|
|
|
10.5*
|
|
Form of Amended Option Award under 2011 Omnibus Long-Term Incentive Plan (incorporated by reference to Exhibit 10.5 to the Company’s Annual Report on Form 10-K, File No. 001-35258, filed the with SEC on February 20, 2014)
|
|
|
|
10.6*
|
|
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)
|
|
|
|
10.7*
|
|
Dunkin’ Brands Group, Inc. 2015 Omnibus Long-Term Incentive Plan (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8, File No. 333-204454)
|
|
|
|
10.8*
|
|
Form of Non-Statutory Stock Option Agreement under the 2015 Omnibus Long-Term Incentive Plan
|
|
|
|
10.9*
|
|
Form of Restricted Stock Unit Agreement under the 2015 Omnibus Long-Term Incentive Plan
|
|
|
|
10.10*
|
|
Form of Performance Stock Unit Agreement under the the 2015 Long-Term Incentive Plan
|
|
|
|
10.11*
|
|
Dunkin’ Brands Group, Inc. Employee Stock Purchase Plan (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8, File No. 333-204456)
|
|
|
|
10.12*
|
|
Dunkin’ Brands Group, Inc. Annual Management Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, File No. 001-35258, filed the with SEC on August 6, 2014)
|
|
|
|
10.13*
|
|
Amended and Restated Dunkin’ Brands, Inc. Non-Qualified Deferred Compensation Plan (incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K, File No. 001-35258, filed the with SEC on February 19, 2015)
|
|
|
|
10.14*
|
|
First Amended and Restated Executive Employment Agreement between Dunkin’ Brands, Inc., Dunkin’ Brands Group, Inc. and Nigel Travis (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1, File No. 333-173898, filed with the SEC on May 4, 2011)
|
|
|
|
10.15*
|
|
Amendment No. 1 to First Amended and Restated Executive Employment Agreement between Dunkin’ Brands, Inc., Dunkin’ Brands Group, Inc. and Nigel Travis (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, File No. 001-35258, filed with the SEC on December 3, 2012)
|
|
|
|
10.16*
|
|
Amendment No. 2 to First Amended and Restated Executive Employment Agreement between Dunkin’ Brands, Inc., Dunkin’ Brands Group, Inc. and Nigel Travis (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, File No. 001-35258, filed with the SEC on March 5, 2014)
|
|
|
|
10.17*
|
|
Offer Letter to David Hoffmann dated September 19, 2016 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, File No. 001-35258, filed with the SEC on November 2, 2016)
|
|
|
|
10.18*
|
|
Offer Letter to Paul Twohig dated September 10, 2009 (incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1, File No. 333-173898, filed with the SEC on May 4, 2011)
|
|
|
|
10.19*
|
|
Offer Letter to William Mitchell dated August 2, 2010 (incorporated by reference to Exhibit 10.36 to Amendment No. 1 to the Company’s Annual Report on Form 10K/A for the fiscal year ended December 31, 2011, File No. 001-35258, filed with the SEC on March 16, 2012)
|
|
|
|
10.20*
|
|
Offer Letter to Paul Carbone dated June 4, 2012 (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K, File No. 001-35258, filed the with SEC on February 22, 2013)
|
|
|
|
10.21*
|
|
Form of amendment to Offer Letters (incorporated by reference to Exhibit 10.16(a) to the Company’s Registration Statement on Form S-1, File No. 333-173898, as amended on July 11, 2011)
|
|
|
|
10.22*
|
|
Restricted Stock Award Agreement of Nigel Travis, dated February 28, 2014 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, File No. 001-35258, filed with the SEC on March 5, 2014)
|
|
|
|
10.23*
|
|
Executive Stock Option Award of Paul Twohig, dated February 28, 2014 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, File No. 001-35258, filed with the SEC on May 7, 2014)
|
|
|
|
10.24
|
|
Form of Non-Competition/Non-Solicitation/Confidentiality Agreement (incorporated by reference to Exhibit 10.17 to the Company’s Registration Statement on Form S-1, File No. 333-173898, filed with the SEC on May 4, 2011)
|
|
|
|
10.25
|
|
Form of Base Indenture dated January 26, 2015 between DB Master Finance LLC, as Master Issuer, and Citibank, N.A., as Trustee and Securities Intermediary (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, File No. 001-35258, filed with the SEC on January 26, 2015)
|
|
|
|
10.26
|
|
Form of Series 2015-1 Supplement to Base Indenture dated January 26, 2015 between DB Master Finance LLC, as Master Issuer of the Series 2015-1 fixed rate senior secured notes, Class A-2, and Series 2015-1 variable funding senior notes, Class A-1, and Citibank, N.A., as Trustee and Series 2015-1 Securities Intermediary (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, File No. 001-35258, filed with the SEC on January 26, 2015)
|
|
|
|
10.27
|
|
Form of Guarantee and Collateral Agreement dated January 26, 2015 among DB Master Finance Parent LLC, DB Franchising Holding Company LLC, DB Mexican Franchising LLC, DD IP Holder LLC, BR IP Holder, BR UK Franchising LLC, Dunkin’ Donuts Franchising LLC, Baskin-Robbins Franchising LLC, DB Real Estate Assets I LLC, DB Real Estate Assets II LLC, each as a Guarantor, in favor of Citibank, N.A., as trustee (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, File No. 001-35258, filed with the SEC on January 26, 2015)
|
|
|
|
10.28
|
|
Form of Management Agreement dated January 26, 2015 among DB Master Finance, DB Master Finance Parent LLC, certain subsidiaries of DB Master Finance LLC party thereto, Dunkin’ Brands, Inc., as manager, DB AdFund Administrator LLC, Dunkin’ Brands (UK) Limited, as Sub-Managers, and Citibank, N.A., as Trustee (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, File No. 001-35258, filed with the SEC on January 26, 2015)
|
|
|
|
10.29
|
|
Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.24 to the Company’s Registration Statement on Form S-1, File No. 333-173898, as amended on June 7, 2011)
|
|
|
|
10.30
|
|
Lease between 130 Royall, LLC and Dunkin’ Brands, Inc., dated as of December 20, 2013 (incorporated by reference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K, File No. 001-35258, filed the with SEC on February 20, 2014)
|
|
|
|
10.31
|
|
Form of Baskin-Robbins Franchise Agreement (incorporated by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S-1, File No. 333-173898, as amended on June 23, 2011)
|
|
|
|
10.32
|
|
Form of Dunkin’ Donuts Franchise Agreement (incorporated by reference to Exhibit 10.33 to the Company’s Annual Report on Form 10-K, File No. 001-35258, filed the with SEC on February 22, 2013)
|
|
|
|
10.33
|
|
Form of Combined Baskin-Robbins and Dunkin’ Donuts Franchise Agreement (incorporated by reference to Exhibit 10.34 to the Company’s Annual Report on Form 10-K, File No. 001-35258, filed the with SEC on February 22, 2013)
|
|
|
|
10.34
|
|
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)
|
|
|
|
10.35
|
|
Form of Baskin-Robbins Store Development Agreement (incorporated by reference to Exhibit 10.35 to the Company’s Annual Report on Form 10-K, File No. 001—35258, filed with the SEC on February 24, 2012)
|
|
|
|
10.36*
|
|
Executive Restricted Stock Award - Paul Carbone (incorporated by reference to Exhibit 10.24 to the Company's Quarterly Report on Form 10-Q, File No. 001-35258, filed with the SEC on May 6, 2015)
|
|
|
|
10.37*
|
|
Form of Restricted Stock Unit Award Agreement for David Hoffmann (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, File No. 001-35258, filed with the SEC on November 2, 2016)
|
|
|
|
10.38*
|
|
Form of Performance Stock Unit Award Agreement for David Hoffmann (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q, File No. 001-35258, filed with the SEC on November 2, 2016)
|
|
|
|
21.1
|
|
Subsidiaries of Dunkin’ Brands Group, Inc.
|
|
|
|
23.1
|
|
Consent of KPMG LLP
|
|
|
|
31.1
|
|
Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002 by Chief Executive Officer
|
|
|
|
31.2
|
|
Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002 by Chief Financial Officer
|
|
|
|
32.1
|
|
Certification of periodic financial report pursuant to Section 906 of Sarbanes Oxley Act of 2002
|
|
|
|
32.2
|
|
Certification of periodic financial report pursuant to Section 906 of Sarbanes Oxley Act of 2002
|
|
|
|
101
|
|
The following financial information from the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, formatted in Extensible Business Reporting Language, (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Stockholders’ Equity (Deficit), (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to the Consolidated Financial Statements
|
*
|
Management contract or compensatory plan or arrangement
|
|
DUNKIN’ BRANDS GROUP, INC.
|
|
|
|
|
|
By:
|
/s/ Nigel Travis
|
|
Name:
|
Nigel Travis
|
|
Title:
|
Chairman and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Nigel Travis
|
|
Chairman and Chief Executive Officer (Principal Executive Officer)
|
|
February 21, 2017
|
Nigel Travis
|
|
|
|
|
|
|
|
|
|
/s/ Paul Carbone
|
|
Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
February 21, 2017
|
Paul Carbone
|
|
|
|
|
|
|
|
|
|
/s/ Raul Alvarez
|
|
Director
|
|
February 21, 2017
|
Raul Alvarez
|
|
|
|
|
|
|
|
|
|
/s/ Irene Chang Britt
|
|
Director
|
|
February 21, 2017
|
Irene Chang Britt
|
|
|
|
|
|
|
|
|
|
/s/ Anthony DiNovi
|
|
Director
|
|
February 21, 2017
|
Anthony DiNovi
|
|
|
|
|
|
|
|
|
|
/s/ Michael Hines
|
|
Director
|
|
February 21, 2017
|
Michael Hines
|
|
|
|
|
|
|
|
|
|
/s/ Sandra Horbach
|
|
Director
|
|
February 21, 2017
|
Sandra Horbach
|
|
|
|
|
|
|
|
|
|
/s/ Mark Nunnelly
|
|
Director
|
|
February 21, 2017
|
Mark Nunnelly
|
|
|
|
|
|
|
|
|
|
/s/ Carl Sparks
|
|
Director
|
|
February 21, 2017
|
Carl Sparks
|
|
|
|
|
Name:
|
[●]
|
Number of Shares of Stock subject to Option:
|
[●]
|
Price Per Share of Stock:
|
$[●]
|
Grant Date:
|
[●]
|
(a)
|
“
Beneficiary
” means, in the event of the Participant’s death, the beneficiary named in the written designation (in form acceptable to the Administrator) most recently filed with the Administrator by the Participant prior to the Participant’s death and not subsequently revoked, or, if there is no such designated beneficiary, the executor or administrator of the Participant’s estate. An effective beneficiary designation will be treated as having been revoked only upon receipt by the Administrator, prior to the Participant’s death, of an instrument of revocation in form acceptable to the Administrator.
|
(b)
|
“
Option Holder
” means the Participant or, if as of the relevant time the Stock Option has passed to a Beneficiary, the Beneficiary.
|
(a)
|
Vesting
. As used herein with respect to the Stock Option or any portion thereof, the term “vest” means to become exercisable and the term “vested” as applied to any outstanding Stock Option means that the Stock Option is then exercisable, subject in each case to the terms of the Plan. Unless earlier terminated, forfeited, relinquished or expired, and subject to subsection (b) below, the Stock Option shall become vested as to 25% of the total number of shares of Stock subject to the Stock Option on each of the first four anniversaries of the Grant Date, with the number of shares of Stock that vest on any such date being rounded down to the nearest whole share and the Award becoming fully vested on the fourth anniversary of the Grant Date. Notwithstanding the foregoing, shares of Stock subject to the Stock Option shall not vest on any vesting date unless the Participant has remained in continuous Employment from the Grant Date through such vesting date.
|
(b)
|
Change in Control
. If (i) in connection with a Change in Control the Stock Option, to the extent outstanding immediately prior to such Change in Control, is assumed or continued, or a new award is substituted for the Stock Option by the acquiror or survivor (or an affiliate of the acquiror or survivor) in accordance with the provisions of Section 7 of the Plan, and (ii) at any time within the 18-month period following the Change in Control, the Participant’s Employment is terminated by the Company (or its successor) without Cause, the Stock Option (or the award substituted for the Stock Option), to the extent then outstanding but not then vested, will automatically vest in full at the time of such termination.
|
(c)
|
Exercise of the Stock Option
. No portion of the Stock Option may be exercised until such portion vests. Each election to exercise any vested portion of the Stock Option will be subject to the terms and conditions of the Plan and shall be in writing, signed by the Option Holder (or in such other form as is acceptable to the Administrator). Each such written exercise election must be received by the Company at its principal office or by such other party as the Administrator may prescribe and be accompanied by payment in full as provided in the Plan. The exercise price may be paid (i) by cash or check acceptable to the Administrator, (ii) to the extent permitted by the Administrator, through a broker-assisted
|
(d)
|
Treatment of the Stock Option Upon Cessation of Employment
. If the Participant’s Employment ceases, the Stock Option, to the extent not already vested will be immediately forfeited, and any vested portion of the Stock Option that is then outstanding will be treated as follows:
|
(a)
|
The Administrator may cancel, rescind, withhold or otherwise limit or restrict the Stock Option at any time if the Participant is not in compliance with all applicable provisions of this Agreement and the Plan.
|
(b)
|
The Stock Option is subject to Section 6(a)(5) of the Plan. The Stock Option (whether or not vested or exercisable) is subject to forfeiture, termination and rescission, and the Participant will be obligated to return to the Company the value received with respect to the Stock Option (including shares of Stock delivered under the Stock Option, and any gain realized on a subsequent sale or disposition of shares), (i) in accordance with any Company clawback or other policy relating to the recovery of incentive compensation, as such policy may be amended and in effect from time to time, or (ii) as otherwise required by law or applicable stock exchange listing standards, including, without limitation, Section 10D of the Securities Exchange Act of 1934, as amended. Nothing in the preceding sentence shall be construed as limiting the general application of Section 9 of this Agreement.
|
Company:
|
DUNKIN’ BRANDS GROUP, INC.
|
Participant:
|
__________________________________
|
Name:
|
[●]
|
Number of Restricted Stock Units:
|
[●]
|
Grant Date:
|
[●]
|
Company:
|
DUNKIN’ BRANDS GROUP, INC.
|
Participant:
|
__________________________________
|
Name:
|
[●]
|
Number of AOI Performance Stock Units:
|
[●]
|
Number of TSR Performance Stock Units:
|
[●]
|
Grant Date:
|
[●]
|
Vesting Date:
|
[●]
|
Company:
|
DUNKIN’ BRANDS GROUP, INC.
|
Participant:
|
____________________________________
|
Entity
|
|
Jurisdiction of Organization
|
Baskin-Robbins Australia Pty. Limited
|
|
Australia
|
Baskin-Robbins Flavors LLC
|
|
Delaware
|
Baskin-Robbins Franchising LLC
|
|
Delaware
|
Baskin-Robbins International LLC
|
|
Delaware
|
Baskin-Robbins LLC
|
|
Delaware
|
Baskin-Robbins USA LLC
|
|
California
|
B-R 31 Ice Cream Co. Ltd. (1)
|
|
Japan
|
BR IP Holder LLC
|
|
Delaware
|
B-R Korea Co. Ltd. (2)
|
|
Korea
|
BR UK Franchising LLC
|
|
Delaware
|
BSP Realty LLC
|
|
Delaware
|
BSP Holdings LLC
|
|
Delaware
|
DB AdFund Administrator LLC
|
|
Delaware
|
DB Canadian Franchising ULC
|
|
Nova Scotia
|
DB Canadian Holding Company Inc.
|
|
Delaware
|
DB Franchising Holding Company LLC
|
|
Delaware
|
DB Holdings Brazil LLC
|
|
Delaware
|
DB International Franchising LLC
|
|
Delaware
|
DB Master Finance LLC
|
|
Delaware
|
DB Master Finance Parent LLC
|
|
Delaware
|
DB Mexican Franchising LLC
|
|
Delaware
|
DB Real Estate Assets I LLC
|
|
Delaware
|
DB Real Estate Assets II LLC
|
|
Delaware
|
DB Texas Stores, Inc.
|
|
Delaware
|
DBCI Corp.
|
|
Florida
|
DBCL Holding Company LLC
|
|
Delaware
|
DBI Australia Holdings Pty. Ltd.
|
|
Australia
|
DBI Stores LLC
|
|
Delaware
|
DBI Stores Texas LLC
|
|
Delaware
|
DD Brasil Franchising Ltda.
|
|
Brazil
|
DDBR International LLC
|
|
Delaware
|
DD IP Holder LLC
|
|
Delaware
|
Dunkin Brands International DMCC
|
|
Dubai
|
Dunkin Brands International Holdings Ltd.
|
|
United Kingdom
|
Dunkin Espanola S.A.
|
|
Spain
|
Dunkin’ (Shanghai) Enterprise Management Consulting Co., Ltd.
|
|
China
|
Dunkin Brands (UK) Limited
|
|
United Kingdom
|
Dunkin’ Brands Australia Pty. Ltd.
|
|
Australia
|
Dunkin’ Brands Canada ULC
|
|
British Columbia, Canada
|
Dunkin’ Brands Deutschland GmbH
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Germany
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Dunkin’ Brands Holdings, Inc.
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Delaware
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Dunkin’ Brands, Inc.
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Delaware
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Dunkin’ Delicious Limited
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New Zealand
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Dunkin’ Donuts Franchising LLC
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Delaware
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Dunkin’ Donuts Limited
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New Zealand
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Dunkin’ Donuts LLC
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Delaware
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Dunkin’ Donuts Realty Investment LLC
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Delaware
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Dunkin’ Donuts USA LLC
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Delaware
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Dunkin’ Ventures LLC
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Delaware
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Massachusetts Refreshment Corp. (3)
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Massachusetts
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Mister Donut of America, LLC
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Delaware
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Palm Oasis Ventures Pty. Ltd. (4)
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Australia
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Star Dunkin’ Real Estate, LP
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Delaware
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Star Dunkin’, LP
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Delaware
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SVC Service II Inc.
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Colorado
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SVC Service LLC
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Colorado
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Third Dunkin’ Donuts Realty Investment LLC
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Delaware
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______________
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1
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Represents a joint venture company of which registrant indirectly owns 43.3% of the voting equity.
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2
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Represents a joint venture company of which registrant indirectly owns 33.3% of the voting equity.
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3
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Represents a joint venture company of which registrant indirectly owns 50% of the voting equity.
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4
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Represents a joint venture company of which registrant indirectly owns 20% of the voting equity.
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1.
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I have reviewed this annual report on Form 10-K of Dunkin’ Brands Group, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and the other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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February 21, 2017
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/s/ Nigel Travis
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Date
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Nigel Travis
Chairman and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of Dunkin’ Brands Group, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and the other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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February 21, 2017
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/s/ Paul Carbone
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Date
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Paul Carbone
Chief Financial Officer
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Nigel Travis
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Nigel Travis*
Chairman and Chief Executive Officer
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*
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A signed original of this written statement required by Section 906 has been provided to Dunkin’ Brands Group, Inc. and will be retained by Dunkin’ Brands Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
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(1)
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
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/s/ Paul Carbone
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Paul Carbone*
Chief Financial Officer
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*
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A signed original of this written statement required by Section 906 has been provided to Dunkin’ Brands Group, Inc. and will be retained by Dunkin’ Brands Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
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