Assignment 2 essay paper

ORDER A PLAGIARISM FREE PAPER NOWThis case considers the buyout of Panera Bread from the perspective of a private equity fund. In early 2017, KLG Managing Director Tom Denning is considering a leveraged buyout of Panera Bread, a rapidly growing fast-casual restaurant company. A surprising Bloomberg News story signals that the deal process is broadening and KLG will have to act quickly if it hopes to buy Panera Bread. Students assume the role of Tom Denning as he prepares an investment recommendation for KLG’s investment committee. In doing so, students are required to consider a very Assignment 2 large and expensive investment. Students are challenged to create an investment recommendation by performing due diligence, determining additional questions to ask, and pricing a buyout bid that incorporates an optimal capital structure and meets KLG’s return requirements. The Panera Bread case is designed to give students insight into the private equity investment process.

 

 

Resources

Exhibit 1: US Limited-Service Revenues ($ in Billions)

 

Long Description

	2011	2012	2013	2014	2015	2016
Fast food sales	$199	$206	$212	$218	$231	$244
YoY % growth		3.7%	2.6%	3.0%	5.9%	5.6%
Fast casual sales	$29	$32	$36	$40	$44	$47
YoY % growth		10.3%	12.5%	11.1%	10.0%	6.8%
as a % of fast-food sales	14.6%	15.5%	17.0%	18.4%	19.1%	19.3%

Source: Technomic State of the Fast Casual Industry, IBISWorld—Fast Food Report.Assignment 2

Exhibit 2: Fast-Casual 2016 US Sales by Menu Type ($ in Billions)

Source: Technomic State of the Fast Casual Industry.

Long Description

Exhibit 3: Fast-Casual Growth by Menu Type

Menu Type	2016 Growth (%)
Pizza	37%
Seafood	25%
Healthy	21%
BBQ	18%
Chicken	17%
Burger	13%
Asian/Noodle	12%
Sandwich	11%
Bakery-Café	4%
Mexican	−5%

Source: Technomic State of the Fast Casual Industry.

Exhibit 4: Panera Bakery-Cafés

	2012	2013	2014	2015	2016
Company-owned	809	867	925	901	902
Franchise-operated	843	910	995	1,071	1,134
System-wide	1,652	1,777	1,920	1,972	2,036

Source: Panera Bread FYE 2016 10 K SEC filing.

Exhibit 5: PE Dry Powder ($ in Billions)

Source: PitchBook 2017 PE & VC Fundraising Annual Report.Assignment 2

Long Description

Exhibit 6: Number of US PE Deals by Type and Year

	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	Q1 2017
Buyout/LBO	1,218	1,392	1,028	606	936	1,012	1,179	972	1,178	1,249	1,175	313
Add-on	1,058	1,491	1,132	792	1,192	1,404	1,587	1,528	1,999	2,086	2,163	573
Recap	12	14	8	6	13	19	28	56	48	39	24	8
PE growth/expansion	498	620	542	470	608	664	693	829	965	991	988	291
Platform creation	78	72	69	50	61	67	74	85	102	78	87	39

Source: PitchBook 3Q 2018 US PE Breakdown Summary.

Exhibit 7: US PE Buyout Multiples

Long Description

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

EV/EBITDA

10.0×

10.3×

12.6×

7.0×

8.2×

9.1×

8.4×

10.0×

12.4×

10.4×

10.8×

12.1×

Debt/EBITDA

6.1×

5.7×

7.5×

3.0×

4.7×

4.9×

4.2×

6.0×

7.2×

5.7×

5.3×

6.2×

Equity/EBITDA

3.9×

4.6×

5.1×

3.9×

3.5×

4.3×

4.2×

4.0×

5.2×

4.7×

5.5×

5.9×

Debt percent

61%

55%

59%

44%

57%

53%

50%

60%

58%

55%

50%

52%

Source: PitchBook 3Q 2018 US PE Breakdown Summary.

Exhibit 8: US PE Deals by Size ($ in Billions)

	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	Q1 2017
Under $25M	8.6	10.3	11.4	6.9	8.0	9.0	10.1	10.9	12.3	13.9	13.9	3.4
$25M–$100M	33.8	37.8	39.4	18.8	23.1	28.3	36.2	31.0	40.6	38.6	45.0	9.1
$100M–$500M	131.5	157.9	103.1	49.0	98.7	125.9	139.3	153.2	202.4	166.7	175.0	51.0
$500M–$1B	99.8	122.3	52.7	26.0	103.3	88.2	104.1	105.4	159.7	162.6	133.5	55.6
$1B–$2.5B	54.4	90.7	32.7	12.9	29.1	39.1	59.5	41.0	75.4	58.0	69.5	12.4
$2.5B+	136.2	395.3	90.7	29.8	37.0	55.4	32.7	106.5	46.4	123.6	176.7	11.6
Total	464.2	814.4	330.1	143.4	299.1	345.7	381.9	447.9	536.7	563.4	613.6	143.2

Source: PitchBook 3Q 2018 US PE Breakdown Summary.Assignment 2

Exhibit 9: Number of US PE Deals by Size

	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	Q1 2017
Under $25M	1,101	1,367	1,271	1,086	1,297	1,455	1,545	1,598	1,855	2,099	2,004	601
$25M–$100M	800	950	841	479	623	741	957	768	973	1,001	1,104	222
$100M–$500M	730	937	535	293	649	757	804	864	1,117	978	1,004	283
$500M–$1B	176	229	95	50	213	175	207	197	282	311	257	106
$1B–$2.5B	36	61	25	9	21	27	39	29	52	40	46	8
$2.5B+	21	44	12	7	8	12	8	13	12	14	22	3
Total	2,864	3,588	2,779	1,924	2,811	3,167	3,560	3,469	4,291	4,443	4,437	1,223

Source: PitchBook 3Q 2018 US PE Breakdown Summary.

Exhibit 10: Average Debt/EBITDA Multiples for Large LBO Transactions

Long Description

	2006	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016
First-lien	3.7×	4.0×	3.3×	3.2×	3.5×	3.8×	3.7×	4.0×	4.2×	4.2×	4.2×
Second-lien	0.7×	0.7×	0.2×	0.2×	0.1×	0.3×	0.7×	0.8×	1.2×	1.0×	0.9×
Other senior debt	0.3×	0.6×	0.6×	0.2×	0.7×	0.9×	0.6×	0.4×	0.4×	0.4×	0.2×
Subordinated debt	0.7×	0.8×	0.7×	0.3×	0.3×	0.2×	0.2×	0.3×	0.0×	0.0×	0.0×

Note: Large LBO transactions are defined as issuers with EBITDA greater than $50 million. Ratios are not calculated cumulatively, unlike in the given model.

Source: S&P CapIQ LCD and Bain & Company Global Private Equity Report 2018.Assignment 2

Exhibit 11: Percentage of US PE Exits by Type (Past Twelve Months)

	Strategic Buyer	Financial Buyer	IPO
Total	46%	42%	12%

Source: PitchBook 3Q 2018 US PE Breakdown Summary.

Exhibit 12: Panera Bread Annotated Stock Chart

Source: Mergent Online and Yahoo Finance.

Long Description

Exhibit 13: Analyst Quotes

“We believe Panera’s ongoing comp outperformance vs. the industry (500bps+ in ‘16) provides further validity that the strategic plan is working, with investor comfort in the turnaround on the rise.”  1

“Panera is at an inflection point, as 2.0 start-up and transition costs begin to ease and sales continue to gain momentum, and well positioned for outsized EPS growth starting 2017.”  2

“We believe 4Q validates our thesis that PNRA’s 2.0 investment cycle has positioned the company to outperform peers and set the stage for double-digit EPS growth over the coming years… the widening gap between the strength of PNRA’s business and that of the rest of the industry (+500 bps sales gap to industry in 4Q and LTM) argues for a premium to history and peers… The opportunity for margin recovery (2016 EBIT margin is ~400 bps below 2013 peak) offers further support Assignment 2 for a premium multiple, in our view.”  3

“Panera’s strategic approach has helped improve the brand’s image and drive top-line results, but its ongoing investments have not yet materialized in the form of sustained profit growth or improved returns. In our view, PNRA’s management is moving the company in the right direction by capitalizing on trends including better food, customization, digitalization, and greater guest insight (1:1 marketing, its loyalty program).”  4

“Better than expected 1Q SSS guidance suggests that trends remain strong in Jan and that the ‘digital flywheel’ continues to build on itself. Quarterly EPS will be lumpy due to Easter shifts (1Q to 2Q), start-up costs for delivery (2Q), and SBC tax benefit (3Q). Labor inflation remains a headwind.” 5

“Delivery roll out is still expected to be 35–40% system-wide by end of 2017 (not a decrease to 30–40% that was published in the release), with ~30% franchised units targeted implying ~40–50% of company conversions. PNRA is now citing a ~$5k/store lift within 6-9 M (vs 6 M prior).”  6

“Key Value Drivers 2.0 SSS Lift: Panera 2.0 supports comps lift of ~1.5% in ‘17 and ‘18. Delivery: Delivery could add an additional 1–3% comp lift on top of 2.0 lift. Operating margins will be less constrained by labor investments, IT spend, P2.0 and other investments aimed at throughput and operational capability as 2.0 rollout is complete, and margins should start to lever in ‘17 and ‘18. New store volumes – still strong at both franchise & company stores.”  7

“We believe PNRA’s mix of food value proposition, service model, and flexibility in customer access/asset format, combined with clear solutions to prior year headwinds can sustain years of high-teens EPS growth beginning in 2017, and a ~20% CAGR over the next few years. We are optimistic that benefits from rapid pick-up, 2.0 and delivery will drive traffic and sales over time, with leverage and cost efficiencies supportive of improved margins. With upside to consensus and optionality from several promising growth adjacencies and strategic initiatives, risk/reward remains attractive.”  8

“Q: Against soft industry trends, are PNRA’s initiatives enough to support ~MSD?

Yes, multiple sales initiatives and greater awareness and rollout of 2.0 cafes, rapid pick-up, catering and delivery, and more drive our estimated ~4% system CAGRs over the next several years.

Q: Can margins return to prior peak levels, and if not, how much margin can be recovered?

We think by 2020 PNRA can recover ~120 bps (from 2015) of the 400 bps of restaurant margin lost since prior peak. Some structural cost increases will limit full recovery anytime soon, but gains will come from: sales leverage, technology driven savings, supply chain efficiencies, & reduced investment.”  9

“We are raising our valuation range to better reflect a higher scarcity premium for stocks within the restaurant sector related to companies with visibility into same store sales, margin improvement and EPS growth in the years ahead.” 10

Exhibit 14: Mean Wall Street Consensus Estimates ($ in Millions)

	2017E	2018E	2019E	2020E	2021E
Income Statement
Revenue	$2,846.1	$3,083.1	$3,374.4	$3,886.9	$4,220.0
Growth	1.8%	8.3%	9.4%	15.2%	8.6%
EBITDA	$440.9	$489.4	$561.1	$631.6	$692.1
Growth		11.0%	14.7%	12.6%	9.6%
Margin	15.5%	15.9%	16.6%	16.3%	16.4%
EBIT	$278.5	$322.0	$380.8	$425.3	$471.7
Growth		15.6%	18.3%	11.7%	10.9%
Margin	9.8%	10.4%	11.3%	10.9%	11.2%
Net income	$170.0	$192.3	$231.7	$256.1	$285.3
Margin	6.0%	6.2%	6.9%	6.6%	6.8%
Cash Flow
Capital expenditures	$210.9	$199.8	$195.9	$196.4	$192.7
Margin	7.4%	6.5%	5.8%	5.1%	4.6%

Source: Barclays, Credit Suisse, Morgan Stanley, UBS, Wells Fargo, Piper Jaffrey, and Guggenheim equity research reports retrieved from Thomson Reuters database.

Exhibit 15: Management Estimates ($ in Millions)

	2017E	2018E	2019E	2020E	2021E
Income Statement
Revenue	$2,987.0	$3,296.0	$3,667.0	$4,062.0	$4,504.0
Growth	6.9%	10.3%	11.3%	10.8%	10.9%
EBITDA	$458.0	$533.0	$624.0	$722.0	$821.0
Growth		16.4%	17.1%	15.7%	13.7%
Margin	15.3%	16.2%	17.0%	17.8%	18.2%
EBIT	$287.0	$346.0	$412.0	$486.0	$562.0
Growth		20.6%	19.1%	18.0%	15.6%
Margin	9.6%	10.5%	11.2%	12.0%	12.5%
Net income	$175.0	$214.0	$256.0	$306.0	$360.0
Margin	5.9%	6.5%	7.0%	7.5%	8.0%
Cash Flow
Capital expenditures	$187.0	$200.0	$240.0	$255.0	$258.0
Margin	6.3%	6.1%	6.5%	6.3%	5.7%

Source: Company Schedule 14A SEC filings.

Exhibit 16: Panera Bread Same-Store Sales Growth

	2012	2013	2014	2015	2016
Company-owned	6.5%	2.6%	1.4%	3.0%	4.2%
Franchise-operated	5.0%	2.0%	0.9%	1.0%	0.7%
System-wide	5.7%	2.3%	1.1%	1.9%	2.4%

Note: Panera Bread does not record franchise-operated net bakery-cafe sales as revenues.

Source: Panera Bread FYE 2016 10 K SEC filing.

Exhibit 17: Excerpts From Panera Bread’s Q4 2016 Earnings Call Transcript

Ronald M. Shaich

Great. Good morning, everybody, and I do hope you got a better sleep. Thank you, Steve, and let’s let it rock. For the last several years, you’ve heard us talk about our strategy to evolve Panera, and you’ve heard us talk about the themes that we believe will define success in our business in the future. Let’s start by discussing our multiyear strategic plan. That strategic plan has four objectives and a number of initiatives.

Our first objective is to make Panera bakery-cafés a better competitive alternative, so that customers choose us over competitors. Our intent is to better compete by intensifying desire and reducing friction at Panera. Initiatives to deliver against this objective include Panera 2.0, which is inclusive of both digital access and operational integrity, and it includes innovation in food, innovation in operations, innovation in marketing, and innovation in store design, consistent with our North Star, which we call Concept Essence.

Our second objective is to build expanded runways for growth by pursuing an omni-channel strategy that leverages our brand credibility into new sales channels. To that end, we are focused on initiatives that generate growth through traditional and new formats and in several multimillion- dollar adjacent businesses including catering, delivery, and consumer packaged goods, which we call Panera at Home.

Our third objective is to build capabilities to execute our strategy. These capabilities include both human capabilities and technological capabilities. And our fourth objective is to execute value-enhancing initiatives to fund our strategic plan. To that end, we’ve undertaken initiatives including an intensive margin improvement effort and returning cash to shareholders. The expected byproduct of this multiyear strategic plan, indeed what we are aiming for, is sustained double-digit EPS growth.

Underlying this strategic plan are themes we’ve been working on the past half-decade. We believe these themes will shape our industry long into the future. These themes include: first, using digital to create a frictionless and joyful eat-in, to-go, and delivery guest experience, and thereby driving frequency; second, to build on our two-decade-long commitment to food that can be trusted by offering 100% clean food, genuine transparency, and real options, and thus truly being recognized by our guests as their ally in wellness; third, creating the largest and most successful loyalty program in the industry and using that program to drive more relevant one-to- one marketing; fourth, utilizing rapid pickup, catering, delivery, and Panera at Home to offer an omni-channel experience; and fifth, developing new formats that allow us to shift our paradigm from attempting to maximize the number of cookie-cutter cafés we can open, to maximizing the amount of high ROI sales we can extract from a given ZIP code through diverse format.

Brian Bittner

It’s not easy following those thoughtful words, Ron. On just delivery, big-picture question here, you’re targeting 35% to 40% of the system. It’s a very ambitious target to go from 15% just in one year. I’m actually wondering, do you have any initial thoughts on where we go from there? Have you identified yet what amount of the system you think can ultimately support delivery over the long-term?

Ronald M. Shaich

Brian, first on your first comment, ambitious, I think it was ambitious getting to 15% in one year, and that was tough because we had to start the machine up. I think Blaine and the team have built an extraordinary capability now. There’s tremendous enthusiasm as results are coming in. This is probably as powerful an initiative as we’ve seen in Panera in a long, long time, maybe the initiative of the decade in Panera. It’s really the big deal.

So, there’s tremendous capability, tremendous traction, and tremendous enthusiasm behind getting this done, and most importantly, getting it done right. I think our mission now is set on getting to the 35% to 40% goal; doing it well, that’s more important than anything else, instead of hitting the number; and continuing to reap the kinds of data that Blaine shared with you since that we are the best performing delivery experience among all 25 delivery companies. That’s what’s going to drive the future. That’s the leading indicator.

And so, I think we’ll take that step into 2017. We’ll make the commitment we’re going to get there to 35% to 40%. We’ll make the commitment we’re going to get there with high sales volumes and build this into a mass market opportunity by doing it well. And as we complete that, we’ll reappraise, we’ll learn, and we’ll give you an assessment of where we’re going in 2018.

Brett Levy

Would you be able to talk a little bit more about the macro landscape? And I know you’ve spoken in the past that 2.0 seems to be the differentiator between your company and your franchise comps, but it seemed that the gap widened this quarter. Would you be willing to share a little bit more on your internal and your external thoughts? Thank you.

Ronald M. Shaich

I would start and say, we as a rule don’t spend a lot of time studying or thinking about the external environment. And I say that to you straight up because we don’t control it and don’t have much ability to influence it, and simply are at the effect of it. So, what we spend our time thinking about is how we take market share in whatever environment is going to come, and that’s the gut split for us.

I think clearly we see the same data you do. I think the fourth quarter was weak for this industry, December was particularly weak for this industry, and we’re gratified to see that our gap through the industry as measured in Black Box has continued to grow and I think hit a record in December. You can look at the data, but I think we were pushing nearly 900 basis points. And I wouldn’t say that’s going to continue, but it’s reflective of what Panera is doing.

Relative to the question of franchise versus company comps, as Blaine had said, we were with our franchisees two weeks ago, and I think everybody completely understands and gets the power of these initiatives, and I think that there’s tremendous excitement in it. Again, one of the things about us have been that we’re trying to do it in a very disciplined way, to rationalize both ops integrity and the necessary capabilities and capacity, to rationalize the right markets to put delivery into versus 2.0 and vice versa. But I think in its core, we take that variation or the gap between company and franchise as a statement about the power of these initiatives. What I can tell you is, when things work, people get them done.

Operator

Okay. Our last question comes from Greg Francfort with Bank of America Merrill Lynch.

Please go ahead.

Gregory Francfort

Just can you talk a little bit about who you are taking share from on delivery? Is this people who would be otherwise you get home, is it food otherwise ordering delivery from another concept, just what customer are you sort of drawing over and where are they coming from?

Ronald M. Shaich

I don’t think we fully know yet. I would tell you this. I think generally most of these food markets are highly fragmented. So when you take share, you don’t necessarily take it out of somebody specifically tied, I think it’s in a general sense. I will say that there was an analyst report that said Panera is building up momentum in delivery and will take share down the road from people like Domino’s.

My own view, and I’ll be restrained, we don’t think that’s the way it’s going to play at all. We think that folks like Domino’s and Papa John’s, the pizza guys, they serve one need state. It’s Friday night for the kids, it’s Sunday during the Super Bowl game. We think Panera serves a very different need state; it completes a different job for guests.

Panera serves the need for lunch Monday through Friday generally, not only, but serves that job in that role for those folks that are sitting in their office, two or three people, are hungry for lunch, don’t have an executive assistant to go get them lunch or he isn’t getting them lunch, and they call Panera. It’s the place and its quality and it’s real, and we think that it’s that need thing that we’re there. And therefore, we think of our friends at Domino’s and elsewhere as non-competitive for using the skills of delivery to serve a different need state, just to clarify. If you want to add anything…

Source: Transcripts, SA. “Panera Bread’s (PNRA) CEO Ronald Shaich on Q4 2016 Results – Earnings Call Transcript.” Seeking Alpha, February 8, 2017, seekingalpha.com/article/4044012-panera-breads-pnra-ceo-ronald-shaich-q4-2016-results-earnings-call-transcript.

Exhibit 18: Comparable Public Companies

	EV/EBITDA	P/E
Company	2017E	2018E	2017E	2018E
FAST CASUAL
Chipotle	25.9×	18.8×	54.8×	37.1×
Shake Shack	14.8×	11.7×	66.8×	53.0×
Wingstop Inc.	24.7×	21.2×	44.2×	36.3×
Potbelly	7.7×	7.0×	30.2×	26.2×
Zoe’s Kitchen	16.0×	12.8×	NM	NM
Habit Restaurants	10.2×	8.6×	60.0×	54.5×
Freshii	26.5×	18.5×	42.0×	28.8×
Noodles & Company	8.1×	7.2×	NM	NM
MULTINATIONAL QSR
Domino’s	20.2×	17.7×	35.4×	29.7×
McDonald’s	13.6×	13.3×	21.0×	19.6×
Starbucks	14.8×	13.0×	26.4×	23.3×
Yum! Brands	15.5×	15.0×	23.4×	20.3×
Restaurant Brandsa	13.5×	12.5×	29.7×	22.9×
DOMESTIC QSR
Dunkin’ Brands	15.0×	14.1×	23.1×	20.5×
Wendy’s	14.4×	13.3×	29.6×	24.3×
Jack in the Box	11.4×	10.9×	21.5×	18.4×
Papa John’s	15.9×	14.9×	28.6×	25.4×
Sonic	11.4×	11.0×	19.7×	17.6×
Bojangles’	12.1×	11.3×	22.0×	20.5×
Fiesta Restaurant Group	8.1×	7.5×	21.4×	19.1×
El Pollo Loco	8.7×	7.7×	18.1×	16.7×
Del Taco	9.4×	8.7×	24.3×	22.1×

aPro forma for announced acquisition of Popeyes Louisiana Kitchen by Restaurant Brands.

Source: Company Schedule 14A SEC filings.

Exhibit 19: Precedent Transactions

Acquirer	Target	EV/LTM EBITDA	Premium to Trailing 30-Trading-Day VWAP
JAB	Peet’s Coffee & Tea	22.3×	26%
Restaurant Brands Int’l	Popeyes Louisiana Kitchen	20.5×	27%
JAB	Krispy Kreme Doughnuts	18.3×	25%
Starbucks	Teavana	17.4×	34%
Darden Restaurants	Yard House	15.0×	N/A
Burger King Worldwide	Tim Hortons	14.8×	40%
JAB	Caribou Coffee	11.3×	36%
JAB	Einstein Noah Restaurant Group	10.1×	47%
Golden Gate Capital	Red Lobster	9.2×	N/A
Angelo, Gordon & Co.	Benihana	9.1×	47%
Levy Acquisition Corp.	Del Taco Restaurants	8.7×	N/A
Centerbridge Partners	P.F. Chang’s China Bistro	8.3×	29%

Source: Company Schedule 14A SEC filings.

Exhibit 20: Mean Wall Street Consensus Stock Price Targets

Source: Mergent Online and Barclays, Credit Suisse, Morgan Stanley, UBS, Wells Fargo, Piper Jaffrey, and Guggenheim. Barclays, Credit Suisse, Deutsche Bank, Morgan Stanley, Piper Jaffray, UBS, and Wells Fargo equity research reports retrieved from Thomson Reuters databases.

Long Description

Exhibit 21: Earnings Predictability

Year	EPS	% Difference
	Actual	Estimate
2013	$6.68	$6.66	0.3%
2014	$6.53	$6.51	0.3%
2015	$6.21	$6.12	1.5%
2016	$6.74	$6.70	0.6%
2017	N/A	$7.67	N/A
2018	N/A	$9.14	N/A

Source: Thompson Reuters Consensus Estimates (via Morgan Stanley equity research reports).

Exhibit 22: Panera Bread’s Historical EBITDA Multiples ($ in Millions)

	2011	2012	2013	2014	2015	2016
Enterprise value	$4,834.6	$4,432.6	$4,676.4	$4,639.4	$5,065.6	$5,596.4
EBITDA	$300.2	$373.8	$416.3	$400.1	$394.1	$403.2
EV/EBITDA	16.1×	11.9×	11.2×	11.6×	12.9×	13.9×

Source: Company 14A and 10K SEC filings.

Exhibit 23: Available Debt-Financing Terms

	Maximum Amount ($)	Origination Fee	Interest Rate	Loan Term	Maximum Total Debt × FYE 2016 EV/EBITDA
Bank revolver	$1,500,000,000	2.25%	3.7%	5 years	7.44×
Bank term loan	$2,250,000,000	2.25%	6.3%	15 years	7.44×
Subordinated debentures	$120,000,000	3.00%	9.5%	15 years	7.44×

Source: Created by the authors.

Notes

1.  Ibid.

2.  Barclays Panera Bread 4Q16 Equity Research Report.

3.  Credit Suisse Panera Bread 4Q17 Equity Research Report.

4.  Deutsche Bank Panera Bread 4Q17 Equity Research Report.

5.  Morgan Stanley Panera Bread 4Q17 Equity Research Report.

6.  Wells Fargo Panera Bread 4Q17 Equity Research Report.

7.  Ibid.

8.  UBS Panera Bread 4Q17 Equity Research Report.

9.  Wells Fargo Panera Bread 4Q17 Equity Research Report.

10.  Ibid.