Review the Income statement over the last three fiscal years.

What has changed?

To what can you attest the change?

PANERA BREAD COMPANY CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share information) Assets Current assets: Cash and cash equivalents Trade accounts receivable, net Other accounts receivable Inventories Prepaid expenses and other Assets held for sale Total current assets Property and equipment, net Other assets: Goodwill Other intangible assets, net Deposits and other Total other assets Total assets Liabilities, Redeemable Noncontrolling Interest, and Stockholders' Equity Current liabilities: Accounts payable Accrued expenses Current portion of long-term debt Liabilities associated with assets held for sale Total current liabilities Long-term debt Deferred rent Deferred income taxes Other long-term liabilities Total liabilities Commitments and contingencies (Note 13) Redeemable noncontrolling interest Stockholders' equity: Common stock, $.0001 par value per share: December 27, 2016 December 29, 2015 $ $ $ $ 105,529 53,519 59,404 23,775 69,194 311,421 802,759 122,377 54,819 10,235 187,431 1,301,611 22,455 408,637 17,229 448,321 410,594 63,369 32,301 54,636 1,009,221 3 3 (1,488,779) $ 19,805 359,464 17,229 2,945 399,443 388,971 62,610 35,968 52,566 939,558 3,981 Class B, 10,000,000 shares authorized; 1,381,730 shares issued and outstanding at December 27, 2016 and December 29, 2015, respectively 257,594 (4,124) 1,524,093 288,787 1,301,611 $ The accompanying notes are an integral part of the consolidated financial statements. 45 $ 121,791 63,877 10,613 196,281 1,440,839 3,603 Class A, 112,500,000 shares authorized; 30,910,395 shares issued and 21,577,004 shares outstanding at December 27, 2016 and 30,836,669 shares issued and 23,346,188 shares outstanding at December 29, 2015 Treasury stock, carried at cost; 9,333,391 shares at December 27, 2016 and 7,490,481 shares at December 29, 2015 Preferred stock, $.0001 par value per share; 2,000,000 shares authorized and no shares issued or outstanding at December 27, 2016 and December 29, 2015 Additional paid-in capital Accumulated other comprehensive income (loss) Retained earnings Total stockholders' equity Total liabilities, redeemable noncontrolling interest, and stockholders' equity $ 241,886 38,211 77,575 22,482 59,457 28,699 468,310 776,248 (1,111,586) 235,393 (5,029) 1,378,519 497,300 1,440,839 PANERA BREAD COMPANY CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share information) For the fiscal year ended December 27, December 29, December 30, 2016 2015 2014 Revenues: Bakery-cafe sales, net Franchise royalties and fees Fresh dough and other product sales to franchisees Total revenues Costs and expenses: Bakery-cafe expenses: Cost of food and paper products Labor Occupancy Other operating expenses Total bakery-cafe expenses Fresh dough and other product cost of sales to franchisees Depreciation and amortization General and administrative expenses Pre-opening expenses Refranchising loss Total costs and expenses Operating profit Interest expense Other (income) expense, net Income before income taxes Income taxes Net income Less: Net income (loss) attributable to noncontrolling interest Net income attributable to Panera Bread Company $ $ $ Weighted average shares of common and common equivalent shares outstanding: Basic Diluted $ $ 709,251 $ 790,238 167,717 359,609 2,026,815 178,585 154,355 179,876 6,899 9,072 2,555,602 239,763 8,884 1,380 229,499 84,258 145,241 $ (333) 2,358,794 138,563 184,223 2,681,580 $ 715,502 $ 754,646 169,998 334,635 1,974,781 160,706 135,398 142,904 9,089 17,108 2,439,986 241,594 3,830 1,192 236,572 87,247 149,325 $ (17) 2,230,370 123,686 175,139 2,529,195 669,860 685,576 159,794 314,879 1,830,109 152,267 124,109 138,060 8,707 2,253,252 275,943 1,824 (3,175) $ 145,574 $ 149,342 $ $ $ 6.21 6.18 $ $ 5.81 5.79 $ $ 6.67 6.64 23,444 23,565 25,685 25,788 The accompanying notes are an integral part of the consolidated financial statements. 46 $ 277,294 98,001 179,293 179,293 $ Earnings per common share: Basic Diluted 2,433,945 155,271 206,149 2,795,365 26,881 26,999 PANERA BREAD COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) For the fiscal year ended December 27, 2016 Net income Less: Net income (loss) attributable to noncontrolling interest Net income attributable to Panera Bread Company December 29, 2015 $ 145,241 $ (333) 149,325 $ (17) $ 145,574 149,342 Other comprehensive income (loss), net of tax: Unrealized gains (losses) on cash flow hedging instruments Tax (expense) benefit Reclassification adjustment for net (gains) losses realized in earnings on cash flow hedging instruments Tax expense (benefit) Foreign currency translation adjustment Other comprehensive income (loss) attributable to Panera Bread Company Comprehensive income attributable to Panera Bread Company $ $ (1,163) $ (2,552) 179,293 179,293 460 1,009 1,499 (593) (2,126) (1,027) (3,669) (1,027) 702 905 146,479 $ 145,673 The accompanying notes are an integral part of the consolidated financial statements. 47 December 30, 2014 $ 178,266 PANERA BREAD COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) For the fiscal year ended December 27, 2016 December 29, 2015 December 30, 2014 Cash flows from operating activities: Net income $ 145,241 $ 149,325 $ 179,293 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 154,355 135,398 124,109 Stock-based compensation expense 15,662 15,086 10,077 Tax benefit from stock-based compensation (2,456) (2,057) (3,089) Deferred income taxes (3,800) (10,991) 10,459 7,212 12,942 10,551 3,505 4,617 Refranchising loss Other Changes in operating assets and liabilities, excluding the effect of acquisitions and dispositions: Trade and other accounts receivable, net Inventories Prepaid expenses and other Deposits and other 66 (3,605) (22,139) (977) (1,698) (895) (9,923) (7,191) (8,524) 1,625 Accounts payable 2,650 Accrued expenses 63,531 Deferred rent (455) (183) 366 Other long-term liabilities 3,438 Net cash provided by operating activities 239 1,978 31,169 35,288 3,751 1,067 (6,951) 2,599 387,541 318,045 335,079 (200,063) (223,932) (224,217) Cash flows from investing activities: Additions to property and equipment Repayment of promissory note Proceeds from refranchising Proceeds from sale of property and equipment Proceeds from sale-leaseback transactions 216 15,649 46,869 742 1,553 8,940 Net cash used in investing activities 10,095 12,900 (174,516) (165,415) (211,317) (18,683) (6,301) Cash flows from financing activities: Repayments of long-term debt Proceeds from issuance of long-term debt Proceeds from borrowings under revolving credit facility 299,070 100,000 40,000 Capitalized debt issuance costs (363) (193) Payment of deferred acquisition holdback (270) Repurchase of common stock (377,193) Exercise of employee stock options (405,513) (159,503) 381 288 1,116 Tax benefit from stock-based compensation 2,456 2,057 3,089 Proceeds from issuance of common stock under employee benefit plans 3,702 3,525 3,247 Distribution to redeemable noncontrolling interest (45) Net cash used in financing activities (349,382) Net (decrease) increase in cash and cash equivalents (136,357) 45,393 71,248 241,886 196,493 125,245 Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period $ 105,529 (107,237) $ 241,886 The accompanying notes are an integral part of the consolidated financial statements. 48 (52,514) $ 196,493