Domino’s Pizza Reporting Terms
The following descriptions and explanations
are provided as a helpful resource to
understand our Company and our financial
information.
ABS - Asset-Backed Securitization
In April 2007, Domino’s Pizza Master Issuer
LLC, a wholly-owned subsidiary of Domino’s
Pizza, Inc., entered into an Asset-Backed
Securitization debt facility, consisting of $1.6
billion in fixed-rate senior notes and $100
million of fixed-rate subordinated notes.
Currently, our blended interest rate is 5.9%
based on our current balance of $1.45
billion of existing debt. The ABS facility was
secured by the majority of Domino’s revenue
generating assets, including domestic
royalties, most international income and
supply chain EBITDA. As of March 1, 2011,
the Company has repurchased and retired
approximately $313.1 million in principal
amount of its fixed-rate notes.
Calendars
Our fiscal calendar is comprised of four fiscal
quarters. The first three quarters of the year
have twelve weeks and the final quarter of
the year has sixteen or seventeen weeks.
Our fiscal year end falls on the Sunday
closest to December 31. Consequently, we
have a fiscal year consisting of 53 weeks
every five or six years. Fiscal 2006, 2007,
2008 and 2010 each contained 52 weeks.
Fiscal 2009 had 53 weeks.
Cheese
Cheese is the commodity making up the
largest percent of the total cost of our pizza.
Our domestic supply chain distribution
business sells food, equipment and supplies
to our franchise and Company-owned stores,
one item of which is cheese. The price that
we charge stores for cheese is based on the
cheese block market price at the Chicago
Mercantile Exchange, plus a small mark-up.
The market price of cheese, therefore, does
not impact the supply chain dollar margin;
but revenues and margin percentages
are skewed either positively or negatively
depending on the cheese block price.
Diluted Earnings Per Share (as adjusted)
Our reported diluted earnings per share
for 2010 was $1.45. Our adjusted diluted
earnings per share was $1.35. The adjusted
number excluded gains and losses on debt
extinguishment, deferred financing fee
write-offs and changes in tax reserves.
DNAF - Domino’s National Advertising Fund
Domestic stores are currently required to
contribute 5.5% of their retail sales to the
Domino’s National Advertising Fund, Inc.,
which is a not-for-profit subsidiary that
administers the Company’s national and
market-level advertising activities. These
funds are reflected in our balance sheet in
two places – current assets (advertising
fund assets, restricted) with an equal and
offsetting amount in current liabilities
(advertising fund liabilities).
Global Retail Sales
Refers to total worldwide retail sales at
Company-owned and franchise stores.
Management believes global retail sales
information is useful in analyzing revenues,
because franchisees pay royalties that are
based on a percentage of franchise retail
sales. In addition, supply chain distribution
revenues are directly impacted by changes
in domestic franchise retail sales. Retail
sales for franchise stores are reported to
the Company by its franchisees and are not
included in Company revenues.
QSR - Quick Service Restaurant
According to The NPD Group, the QSR sector
had sales of $232.9 billion in the yearending November 2010. We operate in the
pizza category, which is the second largest
category in the QSR sector with sales of
$34.1 billion. The pizza category is comprised
of delivery, dine-in and carry-out. We operate
primarily in pizza delivery and carryout.
Same Store Sales Growth
A growth term calculation that includes
only sales from stores that also had sales
in the comparable period of the prior year,
but excludes sales from certain seasonal
locations such as stadiums and concert
arenas. International same store sales growth
is calculated similarly to domestic same
store sales growth. Changes in international
same store sales are reported on a constant
dollar basis, which reflects the change in
local currency sales, excluding any impact of
currency changes.
Segment Income
Segment income is earnings before interest,
taxes, depreciation, amortization (EBITDA),
but also excludes gains (losses) and other.
Historically, “other” included certain non-cash
compensation expense and certain items that
effect the comparability of the quarter or
the year.
Segments
Our Company is comprised of three business
segments: domestic stores (franchise
and Company-owned), supply chain and
international.
Domino’s Pizza Proverb:
“IN THE LAND OF DESSERT,
CHOCOLATE LAVA CRUNCH CAKES
ARE KING.”
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