Panera hold at ~$130

D I S C U S S I O N  M A T E R I A L S

Panera (PNRA):

Andrew Boone

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2

2 year price history (SMA: simple moving average)2 year price history (SMA: simple moving average)

Market CharacteristicsMarket Characteristics

Market cap: $4.66bn

52 week high: $138.58

52 week low: $88.75

3 month avg vol.: .61mm shares

Next earnings date: Approximately 2/12/12

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2yr returns: Panera compared to S&P (Panera is blue)

2yr returns: Panera compared to S&P (Panera is blue)

Panera overview: 50bps with a PT of $135

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Who is Panera?Who is Panera?

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Panera operates under the brands Panera Bread, St. Louis Bread, & Paradise Bakery & Cafe

Bakery-cafes locations are principally in suburban, strip mall, and regional mall locations. Panera sells handcrafted, artisan bread along with specialty sandwiches and soups.

Panera’s day is broken into six segments: breakfast, AM “chill”, lunch, PM “chill”, dinner and take home. The menu is designed to incorporate the different tastes of each of these meal times

Panera overview

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Investment Merits

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Panera can cheaply and efficiently manufacture topline growth through the expansion of stores

Management has stated that they expect to add approximately 130 units over the next 15 months

Panera has experienced a 1.6% CAGR in store traffic over the past 2.75 years and has been able to pass through inflation costs with increased prices. This trend has led to strong Same Store Sales that will continue

Panera will continue to generate traffic by its unique menu and the tail wind of the MyPanera loyalty program

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Panera overview

Why do consumers shop with Panera?Why do consumers shop with Panera?

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Panera offers free Wi-Fi to customers

Panera offers a better assortment of snacks and day time meals than other hang out type restaurants – muffins at Starbucks or local coffee shops

Panera was named most popular for chain restaurant (with less than 5,000 units) by Zagat

Panera has high quality ingredients and creates a differentiated experience by offering fresh, artisan food items such as Chocolate Pecan Babka (pictured lower right)

Food items are attractive to the working professional who wants a high quality dining experience without expending the time to sit down at a restaurant (Low-Fat Chicken Soup & Orchard Harvest Salad are picture lower left)

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Panera’s artisan touch puts it in a unique place within consumer’s dining choices

Panera’s unique menu itemsPanera’s unique menu items

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Breakfast

Asiago bagel breakfast sandwich

Breakfast power sandwich

Spinach & artichoke soufflé

Lunch

Roasted turkey artichoke panini

Broccoli cheddar soup

Fuji apple chicken salad

Frozen Mango drink

Snacks

Pecan braid – twisted and braided with the simple flavors of butter and ground pecans coated with light sugar

Carrot-walnut muffin

Strawberry granola parfait

Competitors unique menu itemsCompetitors unique menu items

Breakfast - Starbucks

Bacon & gouda breakfast sandwich

Spinach, feta & egg white breakfast sandwich

100% whole grain oatmeal

Lunch - Jason’s Deli

California club

Soup of the day

Chicken club salad

Black currant tea

Snacks - Starbucks

Starberry & Blueberry parfait

Peanut butter mini cupcake

Peppermint mocha Frappuccino

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Panera overview

Continuous fresh menu itemsContinuous fresh menu items

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2008 Innovation Examples

Summer Corn Chowder Soup

Chicken Tortilla Soup

Irish Soda Bread

Hot Cross Buns

2009 Innovation Examples

BBQ Chicken Chopped Salad

Cinnamon Crunch Bagels

Macaroni & Cheese (kids’ menu)

2010 Innovation Examples

Tomato Mozzarella Salad

Cuban Chicken Panini

Steak Chili with Cornbread Crumbles

Strawberry and Cream Scone

Panera employs a Chief Concept Officer, Scott Davis. Mr. Davis has run R&D for Saint Louis Bread Co since 1995 and was named by Nation’s Restaurant News with the 2011 MenuMasters Innovator

Award

None of Panera’s competitors (Brinker, Darden, and Cheesecake Factory) have a similar position within their executive suite

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MyPanera loyalty program

MyPanera loyalty program overviewMyPanera loyalty program overview

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Management views the program as the best way to better understand the Panera consumer

Management estimated that half of the Q2 2.9% transactions growth was due to the MyPanera program

MyPanera loyalty program is unique in that there are no defined rewards for customers entering into the program – it is not buy 9 muffins, get the 10th for free

While customers can check their balance online, the redemption of loyalty points is at the discretion of Panera (corporate, not the individual bakery). This allows Panera to introduce customers to different flavors and tastes that may increase a customers buying habit

Customers may also receive invitations to special events as well as Panera cook books

Panera finished its loyalty card program roll out in Q4 2010

MyPanera loyalty card members (Source: Wall St. Research, Company filings)MyPanera loyalty card members (Source: Wall St. Research, Company filings)

Q3 2010 Q4 2010 Q1 2011 Q2 20110mm

2mm

4mm

6mm

8mm

2.0mm

4.5mm

6.0mm

7.5mm

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The Panera franchise

Franchise economicsFranchise economics

Area development agreementsArea development agreements

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52.4% of bakery-cafes were operated by franchinsees – 788 franchise-operated bakery-cafes

The franchises are owned by 48 separate groups

The group average 16 bakery-cafes per group

FranchiseesFranchisees

1.2% of net sales go to the national advertising fund (contractually can move up to 2.6%)

0.4% of net sales go to marketing administration fee

2.0% of net sales go to local marketing

$35,000 per bakery-café due to Panera at the opening

Panera takes 4-5% of net sales per bakery-café depending on the contract

Total franchise fees were $86.2mm for 2010 (5.6% of revenues)

Franchisees also buy bread and goods from corporate bakeries (8.8% of revenues in 2010)

At the close of 2010, Panera had 176 additional franchise-operated bakery-café commitments to open new cafes over the next 4 to 5 years

If bakeries aren’t opened quickly enough, Panera can pull the agreement and develop company owned stores in the franchise’s place

Source: company filings

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10A distinct menu and increased customer loyalty has led to strong same store sales that are poised to continue

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Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

PriceMixTxSSS

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The previous success can also be seen in average weekly sales per restaurant

S S

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Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

$34,000

$36,000

$38,000

$40,000

$42,000

$44,000

$46,000

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Panera’s national footprint

Store locations (close of 2010)Store locations (close of 2010)

Store countStore count

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Panera operates 26 bakeries (4 are franchisee owned)

Bread is delivered daily with a distribution range of up to 300 miles (max. is up to 500 miles)

Centralized bakeries distributing products allows continuity throughout Panera stores

Panera builds out bakery-cafés before dough facilities

Freshness assuredFreshness assured

West Region Midwest Region South Region North East Region

213 474 473 287

Top 3 States in the Region

California 105 Illinois 103 Florida 125 New York 74

Colorado 37 Ohio 101 Virginia 66 Pennsylvania 72

Arizona 34 Missouri 68 Texas 53 Massachusetts 51

2006 2007 2008 2009 2010 Q3 2011300

400

500

600

700

800

900

Franchise store countCompany owned store count

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Panera maintains a long runway for unit growth

US store countUS store count

Expansionary runway still existsExpansionary runway still exists

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FranchiseesFranchisees

Panera bakeries service a larger area Starbucks or McDonald’s because of their higher end dining experience but they still have extensive room for expansion, particularly in the north east and western regions of the United States

Panera can also push further into Canada – the company has 3 stores current there

Panera Starbucks Dunkin Donuts McDonald's Chipotle

Store Count 1,493 11,131 9,867 14,027 1,163

Panera stated that that the company will open 110-115 stores in 2011 and in 2012. Both numbers were raised due

to success of new units in 2011

West region

Midwest region

South region

North east region

2010 213 474 473 287

2009 193 466 437 271

2008 184 454 418 257

2007 166 438 376 241

2006 83 411 317 208

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Panera has maintained pricing power

Recessionary price increaseRecessionary price increase

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YoY price increasesYoY price increases

Panera has more pricing power because it is a morning, snack and lunch meal provider. This type of menu caters to the

working individual more than evening dining does because of the hurried nature of transactions. It also benefits from the

perception that it is a premium dining experience.Panera was able to increase prices during 2008 with minimal customer push back. For example, Panera experimented with

morning price increases and a parallel transaction decrease with their lunch time traffic, which maintained the same price points

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

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Panera returning cash to shareholders will boost future EPS growth

Q3 2011 share repurchaseQ3 2011 share repurchase

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Weighted shares outstandingWeighted shares outstanding

Panera returned over $88 million to shareholders in the form of share repurchases in the 3rd quarter. Panera’s board has $357.4

million remaining from the original repurchase authorization.The repurchase decreased share count by 2.8%

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

28.0mm

28.5mm

29.0mm

29.5mm

30.0mm

30.5mm

31.0mm

31.5mm

32.0mm

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Valuation – PT of $135

DCFDCF

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Cost of CapitalBeta 1.04RFR 2%Market Risk Premia 6%Implied cost of equity 8.2%

Capital StructureDebt 0Market cap 4,066.4

EV 3,836.9

Modeled WACC 10.0%

Diluted Shares 30.428

8.0% 8.5% 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0%

5.0% $291.61 $249.95 $218.72 $194.43 $175.01 $159.13 $145.90 $134.71 $125.13

4.5% $255.00 $223.08 $198.25 $178.41 $162.17 $148.65 $137.22 $127.42 $118.94

4.0% $227.55 $202.18 $181.89 $165.29 $151.48 $139.79 $129.78 $121.11 $113.52

3.5% $206.20 $185.45 $168.49 $154.37 $142.42 $132.19 $123.33 $115.58 $108.75

3.0% $189.11 $171.77 $157.33 $145.12 $134.66 $125.60 $117.68 $110.70 $104.50

2.5% $175.14 $160.37 $147.89 $137.20 $127.94 $119.84 $112.71 $106.37 $100.70

2.0% $163.49 $150.73 $139.79 $130.33 $122.05 $114.76 $108.28 $102.49 $97.28

Term

inal G

row

th

WACC

Store count2011E 2012E 2013E 2014E 2015E 2016E

Company Owned

728 768 808 864 944 944

Franchise 803 863 903 907 877 887Total 1,531 1,631 1,711 1,771 1,831 1,891

Model AssumptionsAnnualized SSS Growth 1.0%Bakery sales per store 82,000CapEx per new store 750,000Ongoing per store Capex 20,000Opening costs per store 15,000Acquisition Exp 80.0% of store revBakery COGS 60.0%Franchise COGS 5.0%Fresh Dough COGS 90.0%SG&A as percent of rev 6.3%Tax Rate 35.0%

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Multiples

NTM P/ENTM P/E

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N

Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Current0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

21.3x

23.9x25.5x

26.5x

24.0x22.3x

Panera just destroyed earnings – they will benefit from sell side revisions upward as well as an expansion of their multiple as the

market digests the new information

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Panera sandwiches (Big Mac: 540 calories, 29 grams of fat, 10 grams of saturated fat & 1040 grams of sodium)

Panera sandwiches (Big Mac: 540 calories, 29 grams of fat, 10 grams of saturated fat & 1040 grams of sodium)

Source: company filings

2010 US health care legislation2010 US health care legislation

The new federal law requires that restaurant chains with 20 or more stores to disclose the calorie counts on their food items and supply information on how many calories a healthy person should eat in a day. Daily specials and limited time offers will be exempt from this requirement.

The restaurant industry association petitioned for a federal law as individual states were enacting their own calorie posting requirements.

Panera is perceived as a healthier option by consumers. However, the actual nutritional facts are not in Panera’s favor.

Risks: nutrition labeling trends do not favor Panera

Serving Size Calories Fat (g)

Saturated Fat (g)

Trans Fat (g)

Cholesterol (mg)

Sodium (mg)

Protein (g) Carbs (g) Fiber (g)

Full Chipotle Chicken on Artisan French Sandwich 830 37 12 0.5 145 2180 53 72 3

Full Cuban Chicken Panini Sandwich 860 36 10 1 100 1720 47 87 4

Full Frontega Chicken® on Focaccia Sandwich 850 38 9 0.5 110 1910 49 79 4Full Smokehouse Turkey® on Three Cheese Sandwich 710 26 12 0.5 100 2500 53 68 5Full Steak & White Cheddar on French Baguette Sandwich 970 33 13 1 120 1820 52 112 4

Full Tomato & Mozzarella on Ciabatta Sandwich 770 29 10 0.5 35 1290 30 96 6Full Roasted Turkey Artichoke on Foccacia with Asiago Cheese Sandwich 780 33 11 0.5 95 1190 40 78 4

Full Asiago Roast Beef on Asiago Cheese Sandwich 700 27 14 1 100 1330 49 64 4Full Bacon Turkey Bravo® on XL Tomato Basil Sandwich 800 29 10 0 85 2800 52 83 4

Full Chicken Caesar on Three Cheese Sandwich 720 32 10 1 130 1270 43 69 4Full Napa Almond Chicken Salad on Sesame Semolina Sandwich 690 26 4.5 0 60 1200 29 90 5

Full Italian Combo on Ciabatta Sandwich 980 41 15 1 145 2620 58 95 5

R I S

K S

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Company-owned average weekly sales by year openedCompany-owned average weekly sales by year opened

*excludes acquisitions

New stores may not have the same revenue potential as previous storesNew stores may not have the same revenue potential as previous stores

Panera’s nearly 50% expansion over the last 5 years from 1,027 at the close of 2006 to 1,493 bakery-cafés has spread Panera across the United States. While there is still

growth on the West Coast as well as the North East, the low hanging fruit across the heart land of the United States may have already been picked. Stores opened in the

last two years have lower AWS than stores opened in 2008 or before.

Panera’s strong customer following has consistently supported new stores (see $56K for the Q1 2010 AWS), however as stores mature they lose the opening pop. Management has stated that revenue for a newly opened store is expected to be 10-12% higher for

the first 10-12 weeks

Risks: low hanging fruit may have already been picked

Average weekly sales YoY Change

2010 opens* 2009 opens*2008 & prior

opens*2010

acquisitions Total 2010 opens* 2009 opens*2008 & prior

opens*Bakery-Cafes

42 30 550 40 662

Q1 10 $56,113 $37,384 $41,193 N/A $41,040 -10.8% 10.2% 9.8%

Q2 10 $39,523 $36,343 $42,326 $32,542 $41,940 2.1% 10.0% 9.0%

Q3 10 $39,990 $34,841 $40,871 $29,144 $40,487 -5.7% 4.2% 3.3%

Q4 10 $40,686 $38,902 $44,078 $49,641 $44,034 2.2% 5.6% 5.8%

2010 YTD

$40,808 $36,864 $42,103 $46,413 $41,899-2.0% 7.7% 7.3%

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K S

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A P P E N D I X

Panera (PNRA)

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Model

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In Millions of the reported currency, except per share items. 2008A 2009A 2010A 2011E 2012E 2013E 2014E 2015E 2016E TVRevenues

Bakery-Cafe $1,106.3 $1,153.3 $1,321.2 $1,590.7 $1,795.1 $1,967.0 $2,149.9 $2,436.4 $2,759.0Franchise Operations 74.8 78.4 86.2 79.1 73.0 80.2 84.8 86.0 87.4Fresh Dough and Other Product Operations 213.6 269.0 252.0 267.7 292.8 322.4 346.5 354.9 361.0Corporate (95.9) (147.1) (116.9) (141.1) (162.1) (177.7) (193.6) (215.8) (240.6)

Total Revenues 1,298.8 1,353.5 1,542.5 1,796.4 1,998.9 2,191.9 2,387.6 2,661.4 2,966.9 3,055.9Revenue Growth 4.2% 14.0% 16.5% 11.3% 9.7% 8.9% 11.5% 11.5%

COGSBakery-Cafe 0.0 0.0 0.0 498.3 1,077.1 1,180.2 1,289.9 1,461.8 1,655.4Franchise Operations 0.0 0.0 0.0 1.7 3.7 4.0 4.2 4.3 4.4Fresh Dough and Other Product Operations 0.0 0.0 0.0 120.6 263.5 290.2 311.8 319.4 324.9

Total Cogs 884.1 904.4 1,005.9 1,188.6 1,344.3 1,474.4 1,606.0 1,785.5 1,984.7 2,044.2

Gross Margin $414.7 $449.1 $536.6 $607.8 $654.6 $717.5 $781.6 $875.9 $982.2 $1,011.7Gross Margin 31.9% 33.2% 34.8% 33.8% 32.7% 32.7% 32.7% 32.9% 33.1% 33.1%

SG&A 81.1 83.2 101.5 109.4 124.9 137.0 149.2 166.3 185.4 205.8Pre-Opening Costs 3.4 2.5 4.3 6.0 6.0 3.0 5.1 9.0 9.0 9.0Depreciation & Amortization 67.2 67.2 68.7 88.2 97.9 97.1 96.7 93.4 88.4 82.2Other 146.6 153.6 177.0 212.8 239.9 263.0 286.5 319.4 356.0 395.1

Total Other Expenses 298.3 306.4 351.4 416.4 468.7 500.1 537.6 588.1 638.9 692.1

Operating Income 116.4 142.7 185.2 191.4 185.9 217.4 244.0 287.8 343.3 319.6Operating margin 9.0% 10.5% 12.0% 10.7% 9.3% 9.9% 10.2% 10.8% 11.6% 10.5%

Unusual items (5.1) (0.5) 1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0Tax 41.3 53.1 68.6 13.7 (65.1) (76.1) (85.4) (100.7) (120.2) (141.2)

NOPAT 67.4 86.0 111.9 121.3 120.9 141.3 158.6 187.0 223.2 262.3

Capital Expenditures (63.2) (54.6) (82.2) (102.4) (109.6) (102.7) (105.8) (137.8) (144.3) (150.9)Depreciation 67.2 67.2 68.7 88.2 97.9 97.1 96.7 93.4 88.4 150.9

Change in Working Capital (3.6) (0.1) (4.2) 7.0 (2.1) (2.1) (2.3) (3.2) (3.4) 0.0

Free Cash Flow 102.4 153.1 176.4 216.5 216.7 236.3 253.0 277.3 308.2 340.9

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Historical income statement

A P

P E

N D

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In Millions of the reported currency, except per share items. 2006A 2007A 2008A 2009A 2010A LTMRevenue 829.0 1,066.7 1,298.9 1,353.5 1,542.5 1,673.3

Cost Of Goods Sold 536.4 720.9 884.1 904.4 1,005.9 1,087.5 Gross Profit 292.6 345.8 414.7 449.1 536.6 585.8

Gross profit margin 35.3% 32.4% 31.9% 33.2% 34.8% 35.0%

Selling General & Admin Exp. 59.3 69.0 81.0 83.2 101.5 104.0 Pre-Opening Costs 6.2 8.3 3.4 2.5 4.3 5.7 Depreciation & Amort. 44.2 57.9 67.2 67.2 68.7 73.6 Other Operating Expense/(Income) 92.2 121.2 147.0 153.6 177.0 195.6 Other Operating Exp., Total 201.8 256.4 298.6 306.4 351.4 378.8

Operating Income 90.8 89.4 116.1 142.7 185.2 207.0

Net Interest Exp. 1.7 (0.3) (1.6) (0.7) (0.7) (0.8)

Other Non-Operating Inc. (Exp.) 1.7 1.2 1.0 (1.6) (4.8) (0.5) EBT Excl. Unusual Items 94.2 90.3 115.5 140.4 179.7 205.7

Restructuring Charges - - (2.8) - - -Merger & Related Restruct. Charges (1.5) (0.2) - - - -Impairment of Goodw ill - - - - - -Gain (Loss) On Sale Of Invest. - (1.0) (1.9) 1.3 - -Gain (Loss) On Sale Of Assets - 0.5 - - 0.6 0.6 Asset Writedow n - (0.1) - (1.8) (0.1) (0.1) Legal Settlements - - (0.6) - - -Other Unusual Items - (1.1) - - - - EBT Incl. Unusual Items 92.7 88.5 110.2 139.9 180.2 206.2

Income Tax Expense 33.8 31.4 41.3 53.1 68.6 78.6 Earnings from Cont. Ops. 58.8 57.0 68.9 86.9 111.6 127.6

Minority Int. in Earnings - 0.4 (1.5) (0.8) 0.3 0.2 Net Income 58.8 57.5 67.4 86.1 111.9 127.8

Basic EPS $1.88 $1.81 $2.24 $2.81 $3.65 $4.27Diluted EPS $1.84 $1.79 $2.22 $2.78 $3.62 $4.23

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Historical balance sheet

A P

P E

N D

I X

In Millions of the reported currency, except per share items. 2006A 2007A 2008A 2009A 2010A Q2 2011AASSETSTotal Cash & ST Investments 72.1 91.4 77.1 246.4 229.3 229.6

Accounts Receivable 19.0 25.2 15.2 17.3 20.4 23.0 Other Receivables 11.9 11.6 9.9 11.2 18.0 25.5 Total Receivables 30.9 36.8 25.1 28.5 38.3 48.5

Inventory 8.7 11.4 12.0 12.3 14.3 14.3 Prepaid Exp. 12.0 5.3 14.3 16.2 23.9 34.6 Deferred Tax Assets, Curr. 3.8 7.2 9.9 18.7 24.8 20.2 Total Current Assets 127.6 152.1 138.4 322.1 330.7 347.2

Net Property, Plant & Equipment 346.0 430.0 417.0 403.8 444.1 460.4 Long-term Investments - - 1.7 - 1.4 -Goodw ill 57.2 87.1 87.3 87.5 94.4 105.1 Other Intangibles 6.6 21.8 20.5 19.2 48.4 69.2 Other Long-Term Assets 5.2 7.7 9.0 4.6 5.6 7.3 Total Assets 542.6 698.8 673.9 837.2 924.6 989.2

LIABILITIESAccounts Payable 5.8 6.3 4.0 6.4 7.3 11.9 Accrued Exp. 50.1 58.8 67.2 88.7 129.1 117.1 Curr. Port. of Cap. Leases - - - - 0.2 -Curr. Income Taxes Payable - - 1.3 - - -Unearned Revenue, Current 21.9 31.5 35.1 38.8 49.7 44.3 Other Current Liabilities 31.9 31.2 6.4 8.4 25.2 23.1 Total Current Liabilities 109.6 127.8 114.0 142.3 211.5 196.5

Long-Term Debt - 75.0 - - - -Capital Leases - - - - 1.4 -Def. Tax Liability, Non-Curr. - - - 28.8 30.3 32.1 Other Non-Current Liabilities 35.3 47.8 61.2 69.1 85.8 89.4 Total Liabilities 144.9 250.6 175.2 240.1 329.0 317.9

Common Stock 0.0 0.0 0.0 0.0 0.0 0.0 Additional Paid In Capital 176.2 168.4 151.4 168.3 130.0 138.1 Retained Earnings 222.3 279.0 346.4 432.4 544.3 612.8 Treasury Stock (0.9) (1.2) (2.2) (3.9) (79.0) (79.9) Comprehensive Inc. and Other - - (0.4) 0.2 0.3 0.3 Total Common Equity 397.7 446.2 495.2 597.0 595.6 671.3

Minority Interest - 2.0 3.5 - - -Total Equity 397.7 448.2 498.7 597.0 595.6 671.3

Total Liabilities And Equity 542.6 698.8 673.9 837.2 924.6 989.2

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Units by state (end of 2010)

A P

P E

N D

I X

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Fresh dough facilities & Same store sales

Year 2006 2007 2008 2009 2010Fresh dough facilities 18 23 23 23 26

Bakery-cafes 1027 1167 1325 1380 1453Dough facilities per

bakery-café57.1 50.7 57.6 60.0 55.9

A P

P E

N D

I X

Q1 2008

Q2 2008

Q3 2008

Q4 2008

Q1 2009

Q2 2009

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Price 3.0% 5.5% 6.5% 6.1% 4.0% 3.0% 2.3% 2.0% 2.0% 2.5% 2.0% 2.0% 2.0% 2.5% 2.5%

Mix -0.3% 1.0% -2.1% -2.3% -0.8% 2.2% 4.5% 5.2% 3.3% 0.3% -0.4% -1.0% 0.9%

Tx 0.5% 1.0% -3.2% -3.2% -1.6% -1.4% 1.5% 3.2% 3.5% 1.9% 0.2% 2.9% 1.7% 2.9% 2.6%

SSS 3.3% 6.5% 3.0% 1.9% 0.3% -0.7% 3.0% 7.4%10.0% 9.6% 5.5% 5.2% 3.3% 4.4% 6.0%

Expansionary requirements – dough capacityExpansionary requirements – dough capacity

Same store sales breakoutSame store sales breakout

S E C T O R R E P O R T 2 0 1 1

Wheat estimates (cents/bushel)

Increasing wheat prices will hurt margins

A P

P E

N D

I X

S E C T O R R E P O R T 2 0 1 1

27

Multiples

A P

P E

N D

I X

2005 2006 2007 2008 2009 2010 Most Recent

15.0x

20.0x

25.0x

30.0x

35.0x

40.0x

45.0x

P/LTM EPSP/NTM EPS