UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

________________

Form 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the quarterly period ended September 24, 2013

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission file number: 0-19253

Panera Bread Company

(Exact Name of Registrant as Specified in Its Charter)

Delaware	04-2723701
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

3630 South Geyer Road, Suite 100, St. Louis, MO	63127
(Address of Principal Executive Offices)	(Zip Code)

(314) 984-1000

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   x Yes   ¨ No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of October 22, 2013, the registrant had 26,783,295 shares of Class A common stock ($.0001 par value per share) and 1,383,020 shares of Class B common stock ($.0001 par value per share) outstanding.

PANERA BREAD COMPANY

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION	3
ITEM 1.	FINANCIAL STATEMENTS (unaudited)	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Comprehensive Income	4
	Consolidated Statements of Cash Flows	5
	Notes to Consolidated Financial Statements	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	25
ITEM 4.	CONTROLS AND PROCEDURES	25
PART II	OTHER INFORMATION	26
ITEM 1.	LEGAL PROCEEDINGS	26
ITEM 1A.	RISK FACTORS	26
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	27
ITEM 6.	EXHIBITS	27
	Signatures	28
	Exhibit Index	29

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PANERA BREAD COMPANY

CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except share and per share information)

	September 24, 2013			December 25, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	193,961		$	297,141
Trade accounts receivable, net	33,435			43,843
Other accounts receivable	50,581			42,419
Inventories	19,431			19,714
Prepaid expenses and other	37,303			42,223
Deferred income taxes	25,729			33,502
Total current assets	360,440			478,842
Property and equipment, net	635,889			571,754
Other assets:
Goodwill	123,101			121,903
Other intangible assets, net	82,375			88,073
Deposits and other	6,586			7,591
Total other assets	212,062			217,567
Total assets	$	1,208,391		$	1,268,163
LIABILITIES
Current liabilities:
Accounts payable	$	9,796		$	9,371
Accrued expenses	248,013			268,169
Total current liabilities	257,809			277,540
Deferred rent	63,397			59,822
Deferred income taxes	60,873			60,655
Other long-term liabilities	45,166			48,227
Total liabilities	427,245			446,244
Commitments and contingencies (Note 9)
STOCKHOLDERS’ EQUITY
Common stock, $.0001 par value per share:
Class A, 112,500,000 shares authorized; 30,563,721 issued and 27,129,263 outstanding at September 24, 2013; and 30,458,238 issued and 28,208,684 outstanding at December 25, 2012	3			3
Class B, 10,000,000 shares authorized; 1,383,020 issued and outstanding at September 24, 2013 and 1,383,687 issued and outstanding at December 25, 2012	—			—
Treasury stock, carried at cost; 3,434,458 shares at September 24, 2013 and 2,249,554 shares at December 25, 2012	(407,626		)	(207,161		)
Preferred stock, $.0001 par value per share; 2,000,000 shares authorized and no shares issued or outstanding at September 24, 2013 and December 25, 2012	—			—
Additional paid-in capital	192,983			174,690
Accumulated other comprehensive income	150			672
Retained earnings	995,636			853,715
Total stockholders’ equity	781,146			821,919
Total liabilities and stockholders’ equity	$	1,208,391		$	1,268,163

The accompanying notes are an integral part of the consolidated financial statements.

3

PANERA BREAD COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

(in thousands, except per share information)

	For the 13 Weeks Ended				For the 39 Weeks Ended
	September 24, 2013		September 25, 2012		September 24, 2013			September 25, 2012
Revenues:
Bakery-cafe sales, net	$	505,428	$	466,369	$	1,523,985		$	1,374,229
Franchise royalties and fees	27,189		25,321		81,219			74,900
Fresh dough and other product sales to franchisees	39,863		37,648		118,066			109,379
Total revenues	572,480		529,338		1,723,270			1,558,508
Costs and expenses:
Bakery-cafe expenses:
Cost of food and paper products	152,202		139,250		454,790			404,776
Labor	151,786		140,113		450,253			410,887
Occupancy	36,860		33,230		108,714			96,591
Other operating expenses	73,846		65,856		213,936			187,555
Total bakery-cafe expenses	414,694		378,449		1,227,693			1,099,809
Fresh dough and other product cost of sales to franchisees	35,886		34,041		103,083			97,232
Depreciation and amortization	26,329		23,828		75,961			67,290
General and administrative expenses	28,837		30,891		86,887			88,402
Pre-opening expenses	2,165		2,130		5,337			6,217
Total costs and expenses	507,911		469,339		1,498,961			1,358,950
Operating profit	64,569		59,999		224,309			199,558
Interest expense	75		263		555			675
Other (income) expense, net	324		692		(2,892		)	1,418
Income before income taxes	64,170		59,044		226,646			197,465
Income taxes	21,408		22,529		84,725			75,629
Net income	$	42,762	$	36,515	$	141,921		$	121,836
Earnings per common share:
Basic	$	1.49	$	1.25	$	4.89		$	4.17
Diluted	$	1.48	$	1.24	$	4.86		$	4.14
Weighted average shares of common and common equivalent shares outstanding:
Basic	28,744		29,242		28,995			29,209
Diluted	28,899		29,455		29,173			29,462
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment	$	206	$	551	$	(522	)	$	579
Other comprehensive income (loss)	$	206	$	551	$	(522	)	$	579
Comprehensive income	$	42,968	$	37,066	$	141,399		$	122,415

The accompanying notes are an integral part of the consolidated financial statements.

4

PANERA BREAD COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	For the 39 Weeks Ended
	September 24, 2013			September 25, 2012
Cash flows from operations:
Net income	$	141,921		$	121,836
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	75,961			67,290
Stock-based compensation expense	7,841			6,596
Tax benefit from exercise of stock options	(7,818		)	(7,251		)
Deferred income taxes	7,991			(2,984		)
Other	3,538			1,951
Changes in operating assets and liabilities, excluding the effect of acquisitions:
Trade and other accounts receivable, net	2,241			2,294
Inventories	299			(430		)
Prepaid expenses and other	4,920			(12,363		)
Deposits and other	1,005			90
Accounts payable	425			(8,059		)
Accrued expenses	(26,741		)	47,336
Deferred rent	3,464			4,096
Other long-term liabilities	(3,536		)	(916		)
Net cash provided by operating activities	211,511			219,486
Cash flows from investing activities:
Additions to property and equipment	(124,334		)	(105,285		)
Acquisitions, net of cash acquired	(2,446		)	(47,951		)
Proceeds from sale-leaseback transactions	2,085			—
Purchases of investments	(97,919		)	—
Proceeds from sales of investments	97,936			—
Net cash used in investing activities	(124,678		)	(153,236		)
Cash flows from financing activities:
Repurchase of common stock	(200,465		)	(11,326		)
Exercise of employee stock options	456			3,204
Tax benefit from exercise of stock options	7,818			7,251
Proceeds from issuance of common stock under employee benefit plans	2,178			1,865
Net cash (used in) provided by financing activities	(190,013		)	994
Net (decrease) increase in cash and cash equivalents	(103,180		)	67,244
Cash and cash equivalents at beginning of period	297,141			222,640
Cash and cash equivalents at end of period	$	193,961		$	289,884

The accompanying notes are an integral part of the consolidated financial statements.

5

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q, which consist of the accounts of Panera Bread Company and its wholly owned direct and indirect subsidiaries (collectively, the “Company”), have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), under the rules and regulations of the United States Securities and Exchange Commission (the “SEC”), and on a basis substantially consistent with the audited consolidated financial statements of the Company as of and for the fiscal year ended December 25, 2012 (“fiscal 2012”). These unaudited consolidated financial statements should be read in conjunction with such audited consolidated financial statements, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2012, as filed with the SEC on February 15, 2013. All intercompany balances and transactions have been eliminated in consolidation. The Consolidated Balance Sheet data as of December 25, 2012 was derived from audited financial statements, but does not include all disclosures required by GAAP contained herein.

The unaudited consolidated financial statements include all adjustments (consisting of normal recurring adjustments and accruals) that management considers necessary for a fair statement of the Company's financial position and comprehensive income for the interim periods presented. Interim results are not necessarily indicative of the results for any other interim period or for the entire fiscal year.

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. This guidance requires an unrecognized tax benefit related to a net operating loss carryforward, a similar tax loss or a tax credit carryforward to be presented as a reduction to a deferred tax asset, unless the tax benefit is not available at the reporting date to settle any additional income taxes under the tax law of the applicable tax jurisdiction. The guidance is effective for fiscal years and interim periods beginning after December 15, 2013, with early adoption permitted. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

Note 2. Business Combinations

Florida Bakery-cafe Acquisition

On April 9, 2013, the Company acquired substantially all the assets of one bakery-cafe from its Hallandale, Florida franchisee for a purchase price of $2.7 million. Approximately $2.4 million of the purchase price was paid on April 9, 2013, with $0.3 million retained by the Company for certain holdbacks. The holdbacks are primarily for certain indemnifications and expire on April 9, 2014, the one year anniversary of the transaction closing date, with any remaining holdback amounts reverting to the prior franchisee. The Consolidated Statements of Comprehensive Income include the results of operations for the bakery-cafe from the date of its acquisition. The pro-forma impact of the acquisition on prior periods is not presented, as the impact is not material to reported results.

The Company allocated the purchase price to the tangible and intangible assets acquired in the acquisition at their estimated fair values with the remainder allocated to tax deductible goodwill as follows: $0.4 million to property and equipment, $1.0 million to intangible assets, which represents the fair value of re-acquired territory rights and the favorable lease agreement that are expected to be amortized on average over approximately 12 years, and $1.3 million to goodwill. The fair value measurement of tangible and intangible assets as of the acquisition date was based on significant inputs not observable in the market and thus represents a Level 3 measurement.

Goodwill recorded in connection with this acquisition is attributable to the workforce of the acquired bakery-cafe and synergies expected to arise from cost savings opportunities. All of the recorded goodwill is tax deductible and is included in the Company Bakery-cafe Operations segment.

North Carolina Franchise Acquisition

On March 28, 2012, the Company acquired substantially all the assets and certain liabilities of 16 bakery-cafes and the related area development rights from its Raleigh-Durham, North Carolina franchisee for a purchase price of $48.0 million. Approximately

6

$44.4 million of the purchase price was paid on March 27, 2012, with $3.6 million retained by the Company for certain holdbacks. The holdbacks are primarily for certain indemnifications and expire on September 28, 2013, the 18 month anniversary of the transaction closing date, with any remaining holdback amounts reverting to the prior franchisee. The Consolidated Statements of Comprehensive Income include the results of operations from the operating bakery-cafes from the date of their acquisition.

The following supplemental pro forma information is presented for comparative purposes only and is not indicative of what would have occurred had this acquisition been made on December 28, 2011 or any future results (in thousands):

	Pro Forma for the 39 Weeks Ended
	September 25, 2012
Bakery-cafe sales, net	$	1,383,863
Net income	122,153

The pro forma amounts included in the table above reflect the application of the Company’s accounting policies and adjustment of the results of the Raleigh-Durham, North Carolina bakery-cafes to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment and intangible assets had been applied from December 28, 2011, together with the consequential tax impacts.    

The Company allocated the purchase price to the tangible and intangible assets acquired in the acquisition at their estimated fair values with the remainder allocated to tax deductible goodwill as follows: $0.1 million to accounts receivable, $0.3 million to inventories, $6.4 million to property and equipment, $29.1 million to intangible assets, which represents the fair value of re-acquired territory rights and favorable lease agreements that are expected to be amortized on average over approximately 12 years, $1.4 million to liabilities, and $13.5 million to goodwill. The fair value measurement of tangible and intangible assets and liabilities as of the acquisition date was based on significant inputs not observable in the market and thus represents a Level 3 measurement.

Goodwill recorded in connection with this acquisition is attributable to the workforce of the acquired bakery-cafes and synergies expected to arise from cost savings opportunities. All of the recorded goodwill is tax deductible and is included in the Company Bakery-cafe Operations segment.

Note 3. Fair Value Measurements

The Company’s $75.4 million and $99.4 million in cash equivalents at September 24, 2013 and December 25, 2012, respectively, were carried at fair value in the Consolidated Balance Sheets based on quoted market prices for identical securities (Level 1 inputs).

Note 4. Investments Held to Maturity

During the thirteen weeks ended September 24, 2013, the Company sold its entire portfolio of zero-coupon discount notes that were classified as held-to-maturity. The amortized cost of the investments sold was $97.9 million. The Company realized a loss on the sale of less than $0.1 million. The Company sold the investments prior to maturity during the thirteen weeks ended September 24, 2013 as a result of higher than anticipated liquidity needs.

The Company had no investments held to maturity during the thirty-nine weeks ended September 25, 2012.

7

Note 5. Inventories

Inventories consisted of the following (in thousands):

	September 24, 2013		December 25, 2012
Food:
Fresh dough facilities:
Raw materials	$	3,049	$	3,418
Finished goods	597		420
Bakery-cafes:
Raw materials	12,594		12,727
Paper goods	3,191		3,149
Total	$	19,431	$	19,714

Note 6. Goodwill

The following is a reconciliation of the beginning and ending balances of the Company’s goodwill by reportable segment at September 24, 2013 (in thousands):

	Company Bakery- Cafe Operations			Franchise Operations		Fresh Dough and Other Product Operations		Total
Balance as of December 25, 2012	$	118,274		$	1,934	$	1,695	$	121,903
Currency translation	(85		)	—		—		(85		)
Acquisition of Florida Bakery-cafe	1,278			—		—		1,278
Other	5			—		—		5
Balance as of September 24, 2013	$	119,472		$	1,934	$	1,695	$	123,101

The Company recorded a measurement period adjustment of less than $0.1 million involving the North Carolina franchise acquisition during the thirteen weeks ended March 26, 2013.

Note 7. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

	September 24, 2013		December 25, 2012
Compensation and related employment taxes	$	55,457	$	58,751
Unredeemed gift cards, net	53,824		78,587
Capital expenditures	39,268		25,135
Insurance	29,417		28,903
Taxes, other than income taxes	15,666		18,224
Advertising	9,904		8,526
Fresh dough and other product operations	8,163		8,175
Rent	5,874		5,986
Utilities	5,557		4,255
Deferred revenue	5,312		2,775
Deferred acquisition purchase price	3,872		4,111
Loyalty program	3,436		4,667
Litigation settlements (Note 9)	—		3,729
Other	12,263		16,345
Total	$	248,013	$	268,169

8

Note 8. Credit Facility

On November 30, 2012, the Company terminated the Amended and Restated Credit Agreement, or the Prior Credit Agreement, dated March 7, 2008, by and among the Company, Bank of America, N.A., and other lenders party thereto. As of the date of termination, the Company had no loans outstanding and was in compliance with all covenants under the Prior Credit Agreement.

On November 30, 2012, the Company entered into a new credit agreement, or the Credit Agreement, with Bank of America, N.A. and other lenders party thereto. The Credit Agreement provides for an unsecured revolving credit facility of $250.0 million to be used for general corporate purposes. The Credit Agreement, which is guaranteed by certain of the Company’s direct and indirect subsidiaries, will become due on November 30, 2017, subject to acceleration upon certain specified events of default, including breaches of representations or covenants, failure to pay other material indebtedness or a change of control of the Company, as defined in the Credit Agreement.

As of September 24, 2013 and December 25, 2012, the Company had no loans outstanding under the Credit Agreement. The Company incurred $0.1 million of commitment fees for each of the thirteen weeks ended September 24, 2013 and September 25, 2012, and $0.2 million and $0.3 million of commitment fees for the thirty-nine weeks ended September 24, 2013 and September 25, 2012, respectively. Accrued interest related to the commitment fees was $0.1 million at both September 24, 2013 and December 25, 2012. As of September 24, 2013 and December 25, 2012, the Company was in compliance with all covenants under the Credit Agreement.

Note 9. Commitments and Contingencies

Lease Obligations

As of September 24, 2013, the Company guaranteed the operating leases of 25 franchisee or affiliate locations, which the Company accounted for in accordance with the accounting requirements for guarantees. These guarantees are primarily a result of the sales of bakery-cafes to franchisees and affiliates, pursuant to which the Company exercised its right to assign the lease or sublease for the bakery-cafe but remains liable to the landlord for the remaining lease term in the event of a default by the assignee. These leases have terms expiring on various dates from October 31, 2013 to September 30, 2027 and a potential amount of future rental payments of approximately $21.0 million as of September 24, 2013. The obligations under these leases will decrease over time as these operating leases expire. The Company has not recorded a liability for certain of these guarantees as they arose prior to the implementation of the accounting requirements for guarantees and, unless modified, are exempt from its requirements. The Company has not recorded a liability for those guarantees issued after the effective date of the accounting requirements because the fair value of these lease guarantees was determined by the Company to be insignificant individually, and in the aggregate, based on an analysis of the facts and circumstances of each such lease and each such assignee's performance, and the Company did not believe it was probable that it would be required to perform under any guarantees at the time the guarantees were issued. The Company has not had to make any payments related to any of these guaranteed leases. Applicable assignees continue to have primary liability for these operating leases.

Legal Proceedings

On December 9, 2009, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by Nick Sotoudeh, a former employee of a subsidiary of the Company. The lawsuit was filed in the California Superior Court, County of Contra Costa. On April 22, 2011, the complaint was amended to add another former employee, Gabriela Brizuela, as a plaintiff. The complaint alleged, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California’s Business and Professions Code. The complaint sought, among other relief, class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the Court determines to be appropriate. On November 17, 2011, the parties entered into a Memorandum of Agreement regarding settlement of this purported class action lawsuit and the purported class action lawsuit filed by David Carter, which is described in the subsequent paragraph. Under the terms of the Memorandum of Agreement, the parties agreed to settle this matter for a maximum aggregate amount of $5.0 million for settlement payments to purported class members, plaintiff's attorneys' fees, and costs of administering the settlement. The Memorandum of Agreement contains no admission of wrongdoing. The terms and conditions of the settlement were preliminarily approved by the Court on June 8, 2012. On December 21, 2012, the Court approved the terms and conditions of the settlement and the settlement payment amounts, and on February 5, 2013, the Court approved plaintiffs' attorneys' fees and costs. The Company maintained a reserve of $3.7 million in accrued expenses in the Company's Consolidated Balance Sheet as of December 25, 2012 and paid the settlement amount of $3.7 million during the thirteen weeks ended June 25, 2013.

9

On July 22, 2011, a purported class action lawsuit was filed against Panera Bread Company and one of its subsidiaries by David Carter, a former employee of a subsidiary of Panera Bread Company, and Nikole Benavides, a purported former employee of one of the Company's franchisees. The lawsuit was filed in the California Superior Court, County of San Bernardino. The complaint alleged, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California's Business and Professions Code. The complaint sought, among other relief, collective and class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys' fees, and such other relief as the Court determines to be appropriate. This matter, as it relates to the subsidiary, was consolidated with the lawsuit described in the immediately preceding paragraph and was resolved under the Memorandum of Agreement described above.

In addition to the legal matters described above, the Company is subject to other routine legal proceedings, claims, and litigation in the ordinary course of its business. Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation, including the matters described above, is inherently uncertain. The Company does not believe the ultimate resolution of these actions will have a material adverse effect on its consolidated financial statements. However, a significant increase in the number of these claims, or one or more successful claims under which the Company incurs greater liabilities than is currently anticipated, could materially and adversely affect its consolidated financial statements.

Other

The Company is subject to on-going federal and state income tax audits and sales and use tax audits. The Company does not believe the ultimate resolution of these actions will have a material adverse effect on its consolidated financial statements. However, a significant increase in the number of these audits, or one or more audits under which the Company incurs greater liabilities than is currently anticipated, could materially and adversely affect its consolidated financial statements.

Note 10. Business Segment Information

The Company operates three business segments. The Company Bakery-Cafe Operations segment is comprised of the operating activities of the bakery-cafes owned directly by the Company. The Company-owned bakery-cafes conduct business under the Panera Bread®, Saint Louis Bread Co.® or Paradise Bakery & Café® names. These bakery-cafes offer some or all of the following: fresh baked goods, made-to-order sandwiches on freshly baked breads, soups, salads, custom roasted coffees, and other complementary products through on-premise sales, as well as catering.

The Franchise Operations segment is comprised of the operating activities of the franchise business unit which licenses qualified operators to conduct business under the Panera Bread or Paradise Bakery & Café names and also monitors the operations of these bakery-cafes. Under the terms of most of the agreements, the licensed operators pay royalties and fees to the Company in return for the use of the Panera Bread or Paradise Bakery & Café names.

The Fresh Dough and Other Product Operations segment supplies fresh dough, produce, tuna, and cream cheese, and indirectly supplies proprietary sweet goods items through a contract manufacturing arrangement, to Company-owned and franchise-operated bakery-cafes. The fresh dough is sold to a number of Company-owned and franchise-operated bakery-cafes at a delivered cost generally not to exceed 27 percent of the retail value of the end product. The sales and related costs to the franchise-operated bakery-cafes are separately stated line items in the Consolidated Statements of Comprehensive Income. The operating profit related to the sales to Company-owned bakery-cafes is classified as a reduction of the costs in the cost of food and paper products in the Consolidated Statements of Comprehensive Income.

10

Segment information related to the Company’s three business segments is as follows (in thousands):

	For the 13 Weeks Ended						For the 39 Weeks Ended
	September 24, 2013			September 25, 2012			September 24, 2013			September 25, 2012
Revenues:
Company bakery-cafe operations	$	505,428		$	466,369		$	1,523,985		$	1,374,229
Franchise operations	27,189			25,321			81,219			74,900
Fresh dough and other product operations	85,095			79,338			251,779			229,170
Intercompany sales eliminations	(45,232		)	(41,690		)	(133,713		)	(119,791		)
Total revenues	$	572,480		$	529,338		$	1,723,270		$	1,558,508
Segment profit:
Company bakery-cafe operations	$	90,734		$	87,920		$	296,292		$	274,420
Franchise operations	25,732			23,687			76,738			69,700
Fresh dough and other product operations	3,977			3,607			14,983			12,147
Total segment profit	$	120,443		$	115,214		$	388,013		$	356,267
Depreciation and amortization	$	26,329		$	23,828		$	75,961		$	67,290
Unallocated general and administrative expenses	27,380			29,257			82,406			83,202
Pre-opening expenses	2,165			2,130			5,337			6,217
Interest expense	75			263			555			675
Other (income) expense, net	324			692			(2,892		)	1,418
Income before income taxes	$	64,170		$	59,044		$	226,646		$	197,465
Depreciation and amortization:
Company bakery-cafe operations	$	22,489		$	19,985		$	65,198		$	57,764
Fresh dough and other product operations	2,010			1,708			5,988			5,018
Corporate administration	1,830			2,135			4,775			4,508
Total depreciation and amortization	$	26,329		$	23,828		$	75,961		$	67,290
Capital expenditures:
Company bakery-cafe operations	$	31,799		$	29,906		$	97,813		$	84,797
Fresh dough and other product operations	3,668			4,270			7,448			8,246
Corporate administration	7,365			6,412			19,073			12,242
Total capital expenditures	$	42,832		$	40,588		$	124,334		$	105,285

	September 24, 2013		December 25, 2012
Segment assets:
Company bakery-cafe operations	$	820,461	$	807,681
Franchise operations	10,295		10,285
Fresh dough and other product operations	59,906		60,069
Total segment assets	$	890,662	$	878,035
Unallocated cash and cash equivalents	$	193,961	$	297,141
Unallocated trade and other accounts receivable	2,309		1,592
Unallocated property and equipment	48,628		30,161
Unallocated deposits and other	4,321		5,054
Other unallocated assets	68,510		56,180
Total assets	$	1,208,391	$	1,268,163

“Unallocated cash and cash equivalents” relates primarily to corporate cash and cash equivalents, “unallocated trade and other accounts receivable” relates primarily to rebates and interest receivable, “unallocated property and equipment” relates primarily to corporate fixed assets, “unallocated deposits and other” relates primarily to insurance deposits, and “other unallocated assets” relates primarily to deferred income taxes.

11

Note 11. Income Taxes

The effective tax rates applicable to the Company were 33.4% and 38.2% for the thirteen weeks ended September 24, 2013 and September 25, 2012, respectively, and 37.4% and 38.3% for the thirty-nine weeks ended September 24, 2013 and September 25, 2012, respectively. The Company records income taxes using an estimated annual effective tax rate for interim reporting. During the thirteen weeks ended September 24, 2013, the Company recorded $3.8 million of adjustments to previously recorded tax expense to reflect the refinement of estimates of certain state tax attributes to amounts in filed returns, and the settlement of tax audits as well as other normal tax adjustments.

Note 12. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except for per share data):

	For the 13 Weeks Ended				For the 39 Weeks Ended
	September 24, 2013		September 25, 2012		September 24, 2013		September 25, 2012
Amounts used for basic and diluted per share calculations:
Net income	$	42,762	$	36,515	$	141,921	$	121,836
Weighted average number of shares outstanding — basic	28,744		29,242		28,995		29,209
Effect of dilutive stock-based employee compensation awards	155		213		178		253
Weighted average number of shares outstanding — diluted	28,899		29,455		29,173		29,462
Earnings per common share:
Basic	$	1.49	$	1.25	$	4.89	$	4.17
Diluted	$	1.48	$	1.24	$	4.86	$	4.14

For the thirteen and thirty-nine weeks ended September 24, 2013 and September 25, 2012, weighted-average outstanding stock options, restricted stock, and stock-settled appreciation rights of less than 0.1 million shares, respectively, were excluded in calculating diluted earnings per share as the exercise price exceeded fair market value and the inclusion of such shares would have been antidilutive.

12

Item 2. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations

Matters discussed in this report and in our public disclosures, whether written or oral, relating to future events or our future performance, including any discussion, expressed or implied, of our anticipated growth, operating results, future earnings per share, plans, objectives, and the impact of our investments in sales-building initiatives and operational capabilities on future sales and earnings, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. These statements are often identified by the words “believe”, “positioned”, “estimate”, “project”, “plan”, “goal”, “target”, “assume”, “continue”, “intend”, “expect”, “future”, “anticipate”, and other similar expressions, whether in the negative or the affirmative, that are not statements of historical fact. These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict, and you should not place undue reliance on our forward-looking statements. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this report and in our other public filings with the Securities and Exchange Commission, or SEC, including our Form 10-K for the year ended December 25, 2012 and our quarterly reports on Form 10-Q. All forward-looking statements and the internal projections and beliefs upon which we base our expectations included in this report or other periodic reports represent our estimates as of the date made and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we expressly disclaim any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

General

Panera Bread Company and its subsidiaries are referred to as the “Company,” “Panera Bread,” or in the first person notation of “we,” “us,” and “our” in the following discussion.

Our revenues are derived from Company-owned net bakery-cafe sales, fresh dough and other product sales to franchisees, and franchise royalties and fees. Fresh dough and other product sales to franchisees are primarily comprised of sales of fresh dough, produce, tuna, and cream cheese to certain of our franchisees. Franchise royalties and fees include royalty income and franchise fees. The cost of food and paper products, labor, occupancy, and other operating expenses relate primarily to Company-owned net bakery-cafe sales. The cost of fresh dough and other product sales to franchisees relates primarily to the sale of fresh dough, produce, tuna, and cream cheese to certain of our franchisees. General and administrative, depreciation and amortization, and pre-opening expenses relate to all areas of revenue generation.

We include in this report information on Company-owned, franchise-operated, and system-wide comparable net bakery-cafe sales percentages. Company-owned comparable net bakery-cafe sales percentages are based on net sales from Company-owned bakery-cafes included in our base store bakery-cafes. Franchise-operated comparable net bakery-cafe sales percentages are based on net sales from franchised bakery-cafes, as reported by franchisees, that are included in our base store bakery-cafes. System-wide comparable net bakery-cafe sales percentages are based on net sales at Company-owned and franchise-operated bakery-cafes that are included in our base store bakery-cafes. Bakery-cafes and other restaurant or bakery-cafe concepts are included in the comparable net bakery-cafe sales percentages only if we or our franchisee previously held or acquired a 100 percent ownership interest prior to the first day of the prior fiscal year.  Comparable net bakery-cafe sales exclude closed locations.

We do not record franchise-operated net bakery-cafe sales as revenues. However, royalty revenues are calculated based on a percentage of franchise-operated net bakery-cafe sales, as reported by franchisees. We use franchise-operated and system-wide net sales information internally in connection with store development decisions, planning, and budgeting analyses. We believe franchise-operated and system-wide sales information is useful in assessing consumer acceptance of our brand, facilitates an understanding of our financial performance and the overall direction and trends of sales and operating income, helps us appreciate the effectiveness of our advertising and marketing initiatives, to which our franchisees also contribute based on a percentage of their net sales, and provides information that is relevant for comparison within the industry.

We also include in this report information on Company-owned, franchise-operated, and system-wide average weekly net sales. Average weekly net sales are calculated by dividing total net sales in the period by operating weeks in the period. Accordingly, year-over-year results reflect sales for all locations, whereas comparable net bakery-cafe sales exclude closed locations and are based on sales only from our base store bakery-cafes. New stores typically experience an opening “honeymoon” period during which they generate higher average weekly net sales in the first 12 to 16 weeks after opening, after which customers “settle-in” to normal usage patterns. On average, average weekly net sales during the “settle-in” period are 5 percent to 10 percent less than during the “honeymoon” period. As a result, year-over-year results of average weekly net sales are generally lower than the results in comparable net bakery-cafe sales. This results from the relationship of the number of bakery-cafes in the “honeymoon” period, the number of bakery-cafes in the “settle-in” period, and the number of bakery-cafes in the comparable bakery-cafe base.

13

Executive Summary of Results

For the thirteen weeks ended September 24, 2013, we earned $1.48 per diluted share with the following performance on key metrics compared to the thirteen weeks ended September 25, 2012: system-wide comparable net bakery-cafe sales grew 1.3 percent (growth of 1.7 percent for Company-owned bakery-cafes and growth of 0.9 percent for franchise-operated bakery-cafes); system-wide average weekly net sales increased0.5 percent to $45,999 ($46,239 for Company-owned bakery-cafes and $45,769 for franchise-operated bakery-cafes); 32 new bakery-cafes opened system-wide (17 Company-owned bakery-cafes and 15 franchise-operated bakery-cafes); and four bakery-cafes closed system-wide (two Company-owned bakery-cafes and two franchise-operated bakery-cafes). Additionally, included in diluted earnings per share for the thirteen weeks ended September 24, 2013 were favorable tax adjustments of $0.13 per diluted share, as described further in Note 11 in the accompanying consolidated financial statements.

For the thirteen weeks ended September 25, 2012, we earned $1.24 per diluted share with the following performance on key metrics compared to the thirteen weeks ended September 27, 2011: system-wide comparable net bakery-cafe sales grew 5.8 percent (growth of 6.2 percent for Company-owned bakery-cafes and growth of 5.5 percent for franchise-operated bakery-cafes); system-wide average weekly net sales increased5.7 percent to $45,790 ($45,894 for Company-owned bakery-cafes and $45,692 for franchise-operated bakery-cafes); 36 new bakery-cafes opened system-wide (17 Company-owned bakery-cafes and 19 franchise-operated bakery-cafes); and two bakery-cafes closed system-wide (one Company-owned bakery-cafe and one franchise-operated bakery-cafe).

For the thirty-nine weeks ended September 24, 2013, we earned $4.86 per diluted share with the following performance on key metrics compared to the thirty-nine weeks ended September 25, 2012: system-wide comparable net bakery-cafe sales grew 2.8 percent (growth of 3.0 percent for Company-owned bakery-cafes and growth of 2.6 percent for franchise-operated bakery-cafes); system-wide average weekly net sales increased2.2 percent to $47,053 ($47,354 for Company-owned bakery-cafes and $46,766 for franchise-operated bakery-cafes); 91 new bakery-cafes opened system-wide (45 Company-owned bakery-cafes and 46 franchise-operated bakery-cafes); and seven bakery-cafes closed system-wide (five Company-owned bakery-cafes and two franchise-operated bakery-cafes). Additionally, during the thirty-nine weeks ended September 24, 2013, we acquired one bakery-cafe in Hallandale, Florida from a franchisee, as described in Note 2 in the accompanying consolidated financial statements.

For the thirty-nine weeks ended September 25, 2012, we earned $4.14 per diluted share with the following performance on key metrics compared to the thirty-nine weeks ended September 27, 2011: system-wide comparable net bakery-cafe sales grew 6.0 percent (growth of 6.9 percent for Company-owned bakery-cafes and growth of 5.1 percent for franchise-operated bakery-cafes); system-wide average weekly net sales increased5.6 percent to $46,019 ($46,149 for Company-owned bakery-cafes and $45,897 for franchise-operated bakery-cafes); 91 new bakery-cafes opened system-wide (41 Company-owned bakery-cafes and 50 franchise-operated bakery-cafes); and seven bakery-cafes closed system-wide (five Company-owned bakery-cafes and two franchise-operated bakery-cafes). Additionally, during the thirty-nine weeks ended September 25, 2012, we acquired 16 bakery-cafes in the Raleigh Durham, North Carolina market from a franchisee, as described in Note 2 in the accompanying consolidated financial statements.

14

The following table sets forth the percentage relationship to total revenues, except where otherwise indicated, of certain items included in the Consolidated Statements of Comprehensive Income for the periods indicated. Percentages may not add due to rounding:

	For the 13 Weeks Ended				For the 39 Weeks Ended
	September 24, 2013		September 25, 2012		September 24, 2013		September 25, 2012
Revenues:
Bakery-cafe sales, net	88.3	%	88.1	%	88.4	%	88.2	%
Franchise royalties and fees	4.7		4.8		4.7		4.8
Fresh dough and other product sales to franchisees	7.0		7.1		6.9		7.0
Total revenues	100.0	%	100.0	%	100.0	%	100.0	%
Costs and expenses:
Bakery-cafe expenses (1):
Cost of food and paper products	30.1	%	29.9	%	29.8	%	29.5	%
Labor	30.0		30.0		29.5		29.9
Occupancy	7.3		7.1		7.1		7.0
Other operating expenses	14.6		14.1		14.0		13.6
Total bakery-cafe expenses	82.0		81.1		80.6		80.0
Fresh dough and other product cost of sales to franchisees (2)	90.0		90.4		87.3		88.9
Depreciation and amortization	4.6		4.5		4.4		4.3
General and administrative expenses	5.0		5.8		5.0		5.7
Pre-opening expenses	0.4		0.4		0.3		0.4
Total costs and expenses	88.7		88.7		87.0		87.2
Operating profit	11.3		11.3		13.0		12.8
Interest expense	—		—		—		—
Other (income) expense, net	0.1		0.1		(0.2	)	0.1
Income before income taxes	11.2		11.2		13.2		12.7
Income taxes	3.7		4.3		4.9		4.9
Net income	7.5		6.9		8.2		7.8
Other comprehensive income	—		0.1		—		—
Comprehensive income	7.5	%	7.0	%	8.2	%	7.8	%

(1) As a percentage of net bakery-cafe sales.

(2) As a percentage of fresh dough and other product sales to franchisees.

15

The following table sets forth certain information relating to the number of Company-owned and franchise-operated bakery-cafes for the periods indicated:

	For the 13 Weeks Ended				For the 39 Weeks Ended
	September 24, 2013		September 25, 2012		September 24, 2013		September 25, 2012
Number of bakery-cafes:
Company-owned:
Beginning of period	835		776		809		740
Bakery-cafes opened	17		17		45		41
Bakery-cafes closed	(2	)	(1	)	(5	)	(5	)
Bakery-cafes acquired from franchisees	—		—		1		16
End of period	850		792		850		792
Franchise-operated:
Beginning of period	873		815		843		801
Bakery-cafes opened	15		19		46		50
Bakery-cafes closed	(2	)	(1	)	(2	)	(2	)
Bakery-cafes sold to Company	—		—		(1	)	(16	)
End of period	886		833		886		833
System-wide:
Beginning of period	1,708		1,591		1,652		1,541
Bakery-cafes opened	32		36		91		91
Bakery-cafes closed	(4	)	(2	)	(7	)	(7	)
End of period	1,736		1,625		1,736		1,625

Comparable Net Bakery-cafe Sales

The following table sets forth certain information relating to comparable net bakery-cafe sales growth for the periods indicated:

	For the 13 Weeks Ended				For the 39 Weeks Ended
	September 24, 2013		September 25, 2012		September 24, 2013		September 25, 2012
Company-owned	1.7	%	6.2	%	3.0	%	6.9	%
Franchise-operated	0.9	%	5.5	%	2.6	%	5.1	%
System-wide	1.3	%	5.8	%	2.8	%	6.0	%

The following table sets forth the composition of Company-owned comparable net bakery-cafe sales growth for the periods indicated:

	For the 13 Weeks Ended				For the 39 Weeks Ended
	September 24, 2013		September 25, 2012		September 24, 2013		September 25, 2012
Price	1.7	%	3.0	%	1.9	%	3.2	%
Mix	1.0	%	2.6	%	2.4	%	2.5	%
Average check	2.7	%	5.6	%	4.3	%	5.7	%
Transactions	(1.0	)%	0.6	%	(1.3	)%	1.2	%
Company-owned comparable net bakery-cafe sales growth	1.7	%	6.2	%	3.0	%	6.9	%

16

Results of Operations

Revenues

The following tables set forth revenues for the periods indicated (dollars in thousands, except for average weekly net sales information):

	For the 13 Weeks Ended				Percentage
	September 24, 2013		September 25, 2012		Change
Bakery-cafe sales, net	$	505,428	$	466,369	8.4	%
Franchise royalties and fees	27,189		25,321		7.4	%
Fresh dough and other product sales to franchisees	39,863		37,648		5.9	%
Total revenues	$	572,480	$	529,338	8.2	%
System-wide average weekly net sales	$	45,999	$	45,790	0.5	%

	For the 39 Weeks Ended				Percentage
	September 24, 2013		September 25, 2012		Change
Bakery-cafe sales, net	$	1,523,985	$	1,374,229	10.9	%
Franchise royalties and fees	81,219		74,900		8.4	%
Fresh dough and other product sales to franchisees	118,066		109,379		7.9	%
Total revenues	$	1,723,270	$	1,558,508	10.6	%
System-wide average weekly net sales	$	47,053	$	46,019	2.2	%

The growth in total revenues for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 was primarily due to the opening of 123 new bakery-cafes system-wide since September 25, 2012 and the 1.3 percent and 2.8 percent increase in system-wide comparable net bakery-cafe sales for the thirteen and thirty-nine weeks ended September 24, 2013, respectively.

Bakery-cafe sales, net

The following tables set forth net bakery-cafe sales for the periods indicated (dollars in thousands, except for average weekly net sales information):

	For the 13 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Bakery-cafe sales, net	$	505,428		$	466,369		8.4	%
As a percentage of total revenues	88.3		%	88.1		%
Company-owned average weekly net sales	$	46,239		$	45,894		0.8	%
Company-owned number of operating weeks	10,931			10,162			7.6	%

	For the 39 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Bakery-cafe sales, net	$	1,523,985		$	1,374,229		10.9	%
As a percentage of total revenues	88.4		%	88.2		%
Company-owned average weekly net sales	$	47,354		$	46,149		2.6	%
Company-owned number of operating weeks	32,182			29,778			8.1	%

17

The increase in net bakery-cafe sales for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 was primarily due to the opening of 63 new Company-owned bakery-cafes since September 25, 2012 and the 1.7 percent and 3.0 percent increase in Company-owned comparable net bakery-cafe sales for the thirteen and thirty-nine weeks ended September 24, 2013, respectively, partially offset by the closure of six Company-owned bakery-cafes since September 25, 2012. The increase in average weekly net sales for Company-owned bakery-cafes for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 was primarily due to average check growth that resulted from retail price increases and our category management initiatives, partially offset by a decline in transactions.

Franchise royalties and fees

The following tables set forth franchise royalties and fees for the periods indicated (dollars in thousands, except for average weekly net sales information):

	For the 13 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Franchise royalties	$	26,774		$	24,732		8.3	%
Franchise fees	415			589			(29.5	)%
Total	$	27,189		$	25,321		7.4	%
As a percentage of total revenues	4.7		%	4.8		%
Franchise-operated average weekly net sales	$	45,769		$	45,692		0.2	%
Franchise-operated number of operating weeks	11,439			10,719			6.7	%

	For the 39 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Franchise royalties	$	79,849		$	73,337		8.9	%
Franchise fees	1,370			1,563			(12.3	)%
Total	$	81,219		$	74,900		8.4	%
As a percentage of total revenues	4.7		%	4.8		%
Franchise-operated average weekly net sales	$	46,766		$	45,897		1.9	%
Franchise-operated number of operating weeks	33,656			31,705			6.2	%

The increase in franchise royalty and fee revenues for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 were primarily due to the opening of 60 franchise-operated bakery-cafes since September 25, 2012 and the 0.9 percent and 2.6 percent increases in franchise-operated comparable net bakery-cafe sales for the thirteen and thirty-nine weeks ended September 24, 2013, respectively, partially offset by the closure of six franchise-operated bakery-cafes since September 25, 2012.

As of September 24, 2013, we had 886 franchise-operated bakery-cafes open and we had received commitments to open 121 additional franchise-operated bakery-cafes. The timetables for opening these bakery-cafes are established in the respective Area Development Agreements, or ADAs, with franchisees, which provide for the majority of such bakery-cafes to open in the next four to five years. An ADA requires a franchisee to develop a specified number of bakery-cafes on or before specific dates. If a franchisee fails to develop bakery-cafes on the schedule set forth in the ADA, we have the right to terminate the ADA and develop Company-owned bakery-cafes or develop locations through new franchisees in that market. We may exercise alternative remedies to address defaults by franchisees, including those with respect to franchisee development obligations, compliance with our operating and brand standards and other covenants included in the ADAs and franchise agreements. We may waive compliance with certain requirements included in our ADAs and franchise agreements if we determine such action is warranted under the particular circumstances.

18

Fresh dough and other product sales to franchisees

The following tables set forth fresh dough and other product sales to franchisees for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Fresh dough and other product sales to franchisees	$	39,863		$	37,648		5.9	%
As a percentage of total revenues	7.0		%	7.1		%

	For the 39 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Fresh dough and other product sales to franchisees	$	118,066		$	109,379		7.9	%
As a percentage of total revenues	6.9		%	7.0		%

The increase in fresh dough and other product sales to franchisees for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 was primarily due to the 0.9 percent and 2.6 percent increase in franchise-operated comparable net bakery-cafe sales for the thirteen and thirty-nine weeks ended September 24, 2013, respectively, and the opening of 60 franchise-operated bakery-cafes since September 25, 2012, partially offset by the closure of six franchise-operated bakery-cafes since September 25, 2012.

Costs and Expenses

The cost of food and paper products includes the costs associated with our fresh dough and other product operations that sell fresh dough and other products to Company-owned bakery-cafes, as well as the cost of food and paper products supplied by third-party vendors and distributors. The costs associated with our fresh dough and other product operations that sell fresh dough and other products to the franchise-operated bakery-cafes are excluded from the cost of food and paper products and are shown separately as fresh dough and other product cost of sales to franchisees in the Consolidated Statements of Comprehensive Income.

The following tables set forth cost of food and paper products for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Cost of food and paper products	$	152,202		$	139,250		9.3	%
As a percentage of bakery-cafe sales, net	30.1		%	29.9		%

	For the 39 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Cost of food and paper products	$	454,790		$	404,776		12.4	%
As a percentage of bakery-cafe sales, net	29.8		%	29.5		%

The increase in the cost of food and paper products as a percentage of net bakery-cafe sales for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 was primarily due to a shift in product mix towards higher ingredient cost products.

In addition, for the thirteen and thirty-nine weeks ended September 24, 2013, there was an average of 75 and 73 bakery-cafes per fresh dough facility, respectively, compared to an average of 70 and 69 for the thirteen and thirty-nine weeks ended September 25, 2012, respectively.

19

The following tables set forth labor expense for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Labor expense	$	151,786		$	140,113		8.3	%
As a percentage of bakery-cafe sales, net	30.0		%	30.0		%

	For the 39 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Labor expense	$	450,253		$	410,887		9.6	%
As a percentage of bakery-cafe sales, net	29.5		%	29.9		%

The decrease in labor expense as a percentage of net bakery-cafe sales for the thirty-nine weeks ended September 24, 2013 compared to the same period in fiscal 2012 was primarily a result of lower incentive compensation.

The following tables set forth occupancy cost for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Occupancy cost	$	36,860		$	33,230		10.9	%
As a percentage of bakery-cafe sales, net	7.3		%	7.1		%

	For the 39 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Occupancy cost	$	108,714		$	96,591		12.6	%
As a percentage of bakery-cafe sales, net	7.1		%	7.0		%

The increase in occupancy cost as a percentage of net bakery-cafe sales for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 was primarily a result of modestly higher average occupancy costs in new bakery-cafes and higher real estate taxes.

The following tables set forth other operating expenses for the periods presented (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Other operating expenses	$	73,846		$	65,856		12.1	%
As a percentage of bakery-cafe sales, net	14.6		%	14.1		%

	For the 39 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Other operating expenses	$	213,936		$	187,555		14.1	%
As a percentage of bakery-cafe sales, net	14.0		%	13.6		%

The increase in other operating expenses as a percentage of net bakery-cafe sales for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 was primarily a result of increased marketing expense and certain other controllable expenses, partially offset by improved leverage from higher comparable net bakery-cafe sales.

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The following tables set forth fresh dough and other product cost of sales to franchisees for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Fresh dough and other product cost of sales to franchisees	$	35,886		$	34,041		5.4	%
As a percentage of fresh dough and other product sales to franchisees	90.0		%	90.4		%

	For the 39 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Fresh dough and other product cost of sales to franchisees	$	103,083		$	97,232		6.0	%
As a percentage of fresh dough and other product sales to franchisees	87.3		%	88.9		%

The decrease in fresh dough and other product costs of sales to franchisees as a percentage of fresh dough and other product sales to franchisees for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 was primarily the result of the year-over-year decrease in ingredient costs and improved leverage from higher comparable net bakery-cafe sales.

The following tables set forth general and administrative expenses for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
General and administrative expenses	$	28,837		$	30,891		(6.6	)%
As a percentage of total revenues	5.0		%	5.8		%

	For the 39 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
General and administrative expenses	$	86,887		$	88,402		(1.7	)%
As a percentage of total revenues	5.0		%	5.7		%

The decrease in general and administrative expenses as a percent of total revenues for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 was primarily due to lower incentive compensation and improved leverage from higher comparable net bakery-cafe sales.

Other (income) expense, net

Other (income) expense, net was $0.3 million of expense, or 0.1 percent of total revenues, for the thirteen weeks ended September 24, 2013 compared to $0.7 million of expense, or 0.1 percent of total revenues, for the thirteen weeks ended September 25, 2012. Other (income) expense, net for the thirteen weeks ended September 24, 2013 and September 25, 2012 was comprised of immaterial items.

Other (income) expense, net was $2.9 million of income, or 0.2 percent of total revenues, for the thirty-nine weeks ended September 24, 2013 compared to $1.4 million of expense, or 0.1 percent of total revenues, for the thirty-nine weeks ended September 25, 2012. Other (income) expense, net for the thirty-nine weeks ended September 24, 2013 was primarily comprised of a $2.2 million benefit from favorable resolution of legal and sales and use tax matters. Other (income) expense, net for the thirty-nine weeks ended September 25, 2012 was comprised of immaterial items.

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Income Taxes

The following tables set forth income taxes for the periods indicated (dollars in thousands):

	For the 13 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Income taxes	$	21,408		$	22,529		(5.0	)%
Effective tax rate	33.4		%	38.2		%

	For the 39 Weeks Ended						Percentage
	September 24, 2013			September 25, 2012			Change
Income taxes	$	84,725		$	75,629		12.0	%
Effective tax rate	37.4		%	38.3		%

The decrease in the effective tax rate for both the thirteen and thirty-nine weeks ended September 24, 2013 compared to the same periods in fiscal 2012 was primarily driven by adjustments to previously recorded tax expense to reflect the refinement of estimates of certain state tax attributes to amounts in filed returns, and the settlement of tax audits as well as other normal tax adjustments.

Liquidity and Capital Resources

Cash and cash equivalents were $194.0 million at September 24, 2013 compared with $297.1 million at December 25, 2012. This decrease was primarily a result of $200.5 million of cash used for the repurchase of shares of our Class A common stock and $124.3 million of cash used for capital expenditures, partially offset by $211.5 million of cash generated from operations and $7.8 million from tax benefits from exercise of stock options during the thirty-nine weeks ended September 24, 2013. Our primary source of liquidity is cash provided by operations, although we have the ability to borrow under a credit facility, as described below. Historically, our principal requirements for cash have primarily related to the cost of food and paper products, employee labor, and our capital expenditures for the development of new Company-owned bakery-cafes, for maintaining or remodeling existing Company-owned bakery-cafes, for purchasing existing franchise-operated bakery-cafes or ownership interests in other restaurant or bakery-cafe concepts, for developing, maintaining, or remodeling fresh dough facilities, and for other capital needs such as enhancements to information systems and other infrastructure.

We had working capital of $102.6 million at September 24, 2013 compared to $201.3 million at December 25, 2012. This decrease resulted primarily from a decrease in cash of $103.2 million, a decrease in deferred income taxes of $7.8 million, a decrease in prepaid expenses and other of $4.9 million, and a decrease in trade and other accounts receivable of $2.2 million, partially offset by a decrease of $20.2 million in accrued expenses, and other immaterial items. We believe that cash provided by our operations and available borrowings under our existing credit facility will be sufficient to fund our cash requirements for the foreseeable future.

The following table sets forth our cash flows for the periods indicated (in thousands):

	For the 39 Weeks Ended
	September 24, 2013			September 25, 2012
Cash provided by (used in):
Operating activities	$	211,511		$	219,486
Investing activities	(124,678		)	(153,236		)
Financing activities	(190,013		)	994
Net (decrease) increase in cash and cash equivalents	$	(103,180	)	$	67,244

Operating Activities

Cash flows provided by operating activities for the thirty-nine weeks ended September 24, 2013 resulted primarily from net income, adjusted for items such as depreciation and amortization, stock-based compensation expense, the tax benefit from exercise of stock options, and an increase in the net deferred income tax liability, and decreases in prepaid expenses, trade and other accounts

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receivable, and deposits and other, and an increase in deferred rent, partially offset by decreases in accrued expenses, other long-term liabilities, and other immaterial items. Cash flows provided by operating activities for the thirty-nine weeks ended September 25, 2012 primarily resulted from net income, adjusted for items such as depreciation and amortization, stock-based compensation expense, tax benefit from exercise of stock options, and a decrease in net deferred income tax liability, and increases in accrued expenses and deferred rent, and a decrease in trade and other accounts receivable, partially offset by an increase in prepaid expenses, a decrease in accounts payable, and other immaterial items.

Investing Activities

Investing activities for the thirty-nine weeks ended September 24, 2013 included additions to property and equipment of $124.3 million and acquisitions net of cash acquired of $2.4 million, partially offset by sale-leaseback transactions of $2.1 million. Investing activities for the thirty-nine weeks ended September 25, 2012 included additions to property and equipment of $105.3 million and acquisitions, net of cash acquired of $48.0 million.

Capital Expenditures

Capital expenditures are the largest ongoing component of our investing activities and include expenditures for new bakery-cafes and fresh dough facilities, improvements to existing bakery-cafes and fresh dough facilities, and other capital needs, which include investments in technology infrastructure. Capital expenditures for the periods indicated consisted of the following (in thousands):

	For the 39 Weeks Ended
	September 24, 2013		September 25, 2012
New bakery-cafe and fresh dough facilities	$	69,262	$	55,622
Bakery-cafe and fresh dough facility improvements	35,162		30,169
Other capital needs	19,910		19,494
Total	$	124,334	$	105,285

Our capital requirements, including development costs related to the opening or acquisition of additional bakery-cafes and fresh dough facilities and maintenance and remodel expenditures, have been and will continue to be significant. Our future capital requirements and the adequacy of available funds will depend on many factors, including the pace of expansion, real estate markets, site locations, and the nature of arrangements negotiated with landlords. We believe that cash provided by our operations and available borrowings under our existing credit facility will be sufficient to fund our capital requirements in both our short-term and long-term future. We continue to anticipate $175 million to $200 million of capital expenditures in fiscal 2013.

Financing Activities

Financing activities for the thirty-nine weeks ended September 24, 2013 included $200.5 million used to repurchase shares of our Class A common stock, partially offset by $7.8 million received from the tax benefit from exercise of stock options, $2.2 million received from the issuance of common stock, and $0.5 million received from the exercise of employee stock options. Financing activities for the thirty-nine weeks ended September 25, 2012 included $7.3 million received from the tax benefit from exercise of stock options, $3.2 million received from the exercise of employee stock options, and $1.9 million received from the issuance of common stock, partially offset by $11.3 million used to repurchase shares of our Class A common stock.

Share Repurchases

On August 23, 2012, our Board of Directors, or Board, approved a three year share repurchase authorization of up to $600 million of our Class A common stock, which we refer to as the 2012 repurchase authorization, pursuant to which share repurchases may be effected from time to time on the open market or in privately negotiated transactions and which may be made under a Rule 10b5-1 plan. Repurchased shares may be retired immediately and resume the status of authorized but unissued shares or may be held by us as treasury stock. During the thirty-nine weeks ended September 24, 2013, we repurchased 1,144,886 shares of our Class A common stock under the 2012 share repurchase authorization, at an average price of $169.02 per share, for an aggregate purchase price of approximately $193.5 million. During the thirty-nine weeks ended September 25, 2012, we repurchased 34,600 shares under the share repurchase authorization approved by our Board on November 17, 2009, at an average price of $144.24 per share, for an aggregate purchase price of approximately $5.0 million. The November 17, 2009 share repurchase authorization was terminated on August 23, 2012.

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As of September 24, 2013, under the 2012 repurchase authorization, we had repurchased a total of 1,268,986 shares of our Class A common stock, at a weighted-average price of $168.24 per share, for an aggregate purchase price of approximately $213.5 million. We have approximately $386.5 million available under the existing $600.0 million 2012 repurchase authorization as of September 24, 2013. Subsequent to the repurchases during the thirty-nine weeks ended September 24, 2013, we repurchased an additional 432,300 shares of our Class A common stock, at a weighted-average price of $160.55 per share, for an aggregate purchase price of approximately $69.4 million as of October 22, 2013.

In addition, we have historically repurchased shares of our Class A common stock through a share repurchase authorization approved by our Board from participants of the Panera Bread 1992 Stock Incentive Plan and the Panera Bread 2006 Stock Incentive Plan, or collectively, the Plans. Repurchased shares are netted and surrendered as payment for applicable tax withholding on the vesting of participants’ restricted stock. During the thirty-nine weeks ended September 24, 2013, we repurchased 40,018 shares of Class A common stock surrendered by participants of the Plans at a weighted-average price of $172.94 per share for an aggregate purchase price of $6.9 million. During the thirty-nine weeks ended September 25, 2012, we repurchased 40,557 shares of Class A common stock surrendered by participants of the Plans at a weighted-average price of $156.17 per share for an aggregate purchase price of $6.3 million. These share repurchases were made pursuant to the terms of the Plans and the applicable award agreements and were not made pursuant to publicly announced share repurchase authorizations.

Credit Facility

On November 30, 2012, we terminated our Amended and Restated Credit Agreement, or the Prior Credit Agreement, dated March 7, 2008, by and among us, Bank of America, N.A., and other lenders party thereto. As of the date of termination, we had no loans outstanding and we were in compliance with all covenants under the Prior Credit Agreement.

On November 30, 2012, we entered into a new credit agreement, which we refer to as the Credit Agreement, with Bank of America, N.A. and the other lenders party thereto. The Credit Agreement provides for an unsecured revolving credit facility of $250.0 million and provides that we may select interest rates under the credit facility equal to (1) LIBOR plus the Applicable Rate for LIBOR loans (which is an amount ranging from 1.00 percent to 2.00 percent depending on our consolidated leverage ratio) or (2) the Base Rate (which is defined as the higher of Bank of America prime rate, the Federal funds rate plus 0.50 percent, or LIBOR plus 1.00 percent) plus the Applicable Rate for Base Rate loans (which is an amount ranging from 0.00 percent to 1.00 percent depending on our consolidated leverage ratio). Our obligations under the credit facility are guaranteed by certain of our direct and indirect subsidiaries. The Credit Agreement allows us from time to time to request that the credit facility be further increased by an amount not to exceed, in the aggregate, $150.0 million, subject to the arrangement of additional commitments with financial institutions acceptable to us and Bank of America. The Credit Agreement contains various financial covenants that, among other things, require us to maintain certain leverage and fixed charge coverage ratios. The credit facility will become due on November 30, 2017, subject to acceleration upon certain specified events of defaults, including breaches of representations or covenants, failure to pay other material indebtedness or a change of control of the Company, as defined in the Credit Agreement. The proceeds from the credit facility will be used for general corporate purposes. As of September 24, 2013 and December 25, 2012, we had no balance outstanding under the Credit Agreement. As of September 24, 2013, we were in compliance with all covenants under the Credit Agreement.

Critical Accounting Policies and Estimates

Our discussion and analysis of our consolidated financial condition and results of operations is based upon the consolidated financial statements and notes to the consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of the consolidated financial statements requires us to make estimates, judgments and assumptions, which we believe to be reasonable, based on the information available. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. Variances in the estimates or assumptions used to actual experience could yield materially different accounting results. On an ongoing basis, we evaluate the continued appropriateness of our accounting policies and resulting estimates to make adjustments we consider appropriate under the facts and circumstances.

We have chosen accounting policies we believe are appropriate to report accurately and fairly our consolidated operating results and financial position, and we apply those accounting policies in a consistent manner. As described in Item 7., “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 25, 2012, we consider our policies on accounting for revenue recognition, valuation of goodwill, self-insurance, income taxes, lease obligations, and the impairment of long-lived assets to be the most critical in the preparation of the consolidated financial statements because they involve the most difficult, subjective, or complex judgments about the effect of matters that are inherently uncertain. There have been no material changes to our application of critical accounting policies and significant judgments and estimates since December 25, 2012.

Contractual Obligations and Other Commitments

We continue to anticipate $175 million to $200 million of capital expenditures in fiscal 2013. We expect to fund our capital expenditures principally through internally generated cash flow and available borrowings under our existing credit facility, if needed.

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In addition to our planned capital expenditure requirements, we have certain other contractual and committed cash obligations. Our contractual cash obligations consist of non-cancelable operating leases for our bakery-cafes, fresh dough facilities and trucks, and support centers; purchase obligations primarily for certain commodities; and uncertain tax positions. Lease terms for our trucks are generally for five to seven years. The reasonably assured lease term for most bakery-cafe and support center leases is the initial non-cancelable lease term plus one renewal option period, which generally equates to 15 years. The reasonably assured lease term for most fresh dough facilities is the initial non-cancelable lease term plus one to two renewal option periods, which generally equates to 20 years. Lease terms generally require us to pay a proportionate share of real estate taxes, insurance, common area maintenance, and other operating costs. Certain bakery-cafe leases provide for contingent rental (i.e. percentage rent) payments based on sales in excess of specified amounts or changes in external indices, scheduled rent increases during the lease terms, and / or rental payments commencing at a date other than the date of initial occupancy.

Off-Balance Sheet Arrangements

As of September 24, 2013, we guaranteed the operating leases of 25 franchisee or affiliate locations, which we account for in accordance with the accounting standard for guarantees. These guarantees are primarily a result of the sales of bakery-cafes to franchisees and affiliates, pursuant to which we exercised our right to assign the lease or sublease for the bakery-cafe but remains liable to the landlord for the remaining lease term in the event of a default by the assignee. These leases have terms expiring on various dates from October 31, 2013 to September 30, 2027 and a potential amount of future rental payments of approximately $21.0 million as of September 24, 2013. Our obligation under these leases will generally continue to decrease over time as these operating leases expire. We have not recorded a liability for certain of these guarantees as they arose prior to the implementation of the accounting standard for guarantees and, unless modified, are exempt from its requirements. We have not recorded a liability for those guarantees issued after the effective date of the accounting requirements because the fair value of these lease guarantees was determined by us to be insignificant individually, and in the aggregate, based on analysis of the facts and circumstances of each such lease and each such assignee's performance, and we did not believe it was probable that we would be required to perform under any guarantees at the time the guarantees were issued. We have not had to make any payments related to any of these guaranteed leases. Applicable assignees continue to have primary liability for these operating leases.

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. This guidance requires an unrecognized tax benefit related to a net operating loss carryforward, a similar tax loss or a tax credit carryforward to be presented as a reduction to a deferred tax asset, unless the tax benefit is not available at the reporting date to settle any additional income taxes under the tax law of the applicable tax jurisdiction. The guidance is effective for fiscal years and interim periods beginning after December 15, 2013, with early adoption permitted. The adoption of this guidance is not expected to have a material effect on our consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There were no material changes in the quantitative and qualitative information about market risk since the end of our most recent fiscal year. For further information, see Item 7A. of our Annual Report on Form 10-K for the fiscal year ended December 25, 2012.

Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 24, 2013. The term “disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 24, 2013, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

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No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the third fiscal quarter ended September 24, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On December 9, 2009, a purported class action lawsuit was filed against Panera Bread Company and one of our subsidiaries by Nick Sotoudeh, a former employee of a subsidiary of Panera Bread Company. The lawsuit was filed in the California Superior Court, County of Contra Costa. On April 22, 2011, the complaint was amended to add another former employee, Gabriela Brizuela, as a plaintiff. The complaint alleged, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California’s Business and Professions Code. The complaint sought, among other relief, class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys’ fees, and such other relief as the Court determines to be appropriate. On November 17, 2011, the parties entered into a Memorandum of Agreement regarding settlement of this purported class action lawsuit and the purported class action lawsuit filed by David Carter, which is described in the subsequent paragraph. Under the terms of the Memorandum of Agreement, the parties agreed to settle this matter for a maximum aggregate amount of $5.0 million for settlement payments to purported class members, plaintiff's attorneys' fees, and costs of administering the settlement. The Memorandum of Agreement contains no admission of wrongdoing. The terms and conditions of the settlement were preliminarily approved by the Court on June 8, 2012. On December 21, 2012, the Court approved the terms and conditions of the settlement and the settlement payment amounts and on February 5, 2013, the Court approved plaintiffs' attorneys' fees and costs. We maintained a reserve of $3.7 million in accrued expenses in our Consolidated Balance Sheet as of December 25, 2012 and paid the settlement amount of $3.7 million during the thirteen weeks ended June 25, 2013.

On July 22, 2011, a purported class action lawsuit was filed against Panera Bread Company and one of our subsidiaries by David Carter, a former employee of a subsidiary of Panera Bread Company, and Nikole Benavides, a purported former employee of one of our franchisees. The lawsuit was filed in the California Superior Court, County of San Bernardino. The complaint alleged, among other things, violations of the California Labor Code, failure to pay overtime, failure to provide meal and rest periods and termination compensation and violations of California's Business and Professions Code. The complaint sought, among other relief, collective and class certification of the lawsuit, unspecified damages, costs and expenses, including attorneys' fees, and such other relief as the Court determines to be appropriate. This matter, as it relates to the subsidiary, was consolidated with the lawsuit described in the immediately preceding paragraph and was resolved under the Memorandum of Agreement described above.

In addition to the legal matters described above, we are subject to other routine legal proceedings, claims and litigation in the ordinary course of business. Defending lawsuits requires significant management attention and financial resources and the outcome of any litigation, including the matters described above, is inherently uncertain. We do not believe the ultimate resolution of these actions will have a material adverse effect on our consolidated financial statements. However, a significant increase in the number of these claims, or one or more successful claims under which we incur greater liabilities than is currently anticipated, could materially and adversely affect our consolidated financial statements.

Item 1A. Risk Factors

Our business is subject to a number of risks, some of which are beyond our control. In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A. - “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 25, 2012, as filed with the SEC on February 15, 2013, that could have a material adverse effect on our business, results of operations, financial condition and/or liquidity and that could cause our operating results to vary significantly from period to period. As of September 24, 2013, there have been no material changes to the risk factors disclosed in our most recent Annual Report on Form 10-K, although we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or operating results.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the thirteen weeks ended September 24, 2013, we repurchased Class A common stock as follows:

Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (2)	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program
June 26, 2013 - July 23, 2013	364	$	191.12	—	$	560,039,310
July 24, 2013 - August 27, 2013	734,769	172.02		697,600	440,078,663
August 28, 2013 - September 24, 2013	324,800	165.04		324,586	386,509,867
Total	1,059,933	$	169.89	1,022,186	$	386,509,867

(1) Includes Class A common stock surrendered by participants under the Panera Bread 1992 Stock Incentive Plan and the Panera Bread 2006 Stock Incentive Plan, as amended, as payment of applicable tax withholding on the vesting of restricted stock. Shares so surrendered by the participants are repurchased by us pursuant to the terms of those plans and the applicable award agreements and not pursuant to publicly announced share repurchase authorizations.

(2) Number of Class A common stock shares that were repurchased under a Rule 10b5-1 Plan. See Part 1, Item 2. for further information regarding the share repurchase authorization.

Item 6. Exhibits

See the Exhibit Index immediately following the signature page of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PANERA BREAD COMPANY
Dated:	October 23, 2013	By:	/s/ RONALD M. SHAICH
			Ronald M. Shaich
			Chairman and Chief Executive Officer
			(principal executive officer)
Dated:	October 23, 2013	By:	/s/ ROGER C. MATTHEWS, JR.
			Roger C. Matthews, Jr.
			Executive Vice President, Chief Financial Officer
			(principal financial officer)
Dated:	October 23, 2013	By:	/s/ MARK D. WOOLDRIDGE
			Mark D. Wooldridge
			Vice President of Accounting, Associate Controller, and Chief Accounting Officer

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EXHIBIT INDEX

Exhibit Number	Description
31.1	Principal Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Principal Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Principal Executive Officer and Principal Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

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