Global retail sales growth (excluding foreign currency impact and 53rd week impact) of 9.0% for the fourth quarter; 11.7% for fiscal 2021
U.S. same store sales growth of 1.0% for the fourth quarter; 3.5% for fiscal 2021
International same store sales growth of 1.8% for the fourth quarter; 8.0% for fiscal 2021
Global net store growth of 468 for the fourth quarter; 1,204 for fiscal 2021
Diluted EPS up 10.4% to $4.25 for the fourth quarter; up 9.3% to $13.54 for fiscal 2021
Domino's Pizza, Inc. (NYSE: DPZ) announced results for the fourth quarter and fiscal 2021. Global retail sales were benefited in the fourth quarter and fiscal 2020 by the inclusion of an extra, or 53rd week. Global retail sales increased 9.0% in the fourth quarter of 2021, excluding the negative impact of foreign currency and the 53rd week impact. Global retail sales increased 11.7% in fiscal 2021, excluding the positive impact of foreign currency and the 53rd week impact. Global retail sales increased 1.0% in the fourth quarter of 2021, excluding the negative impact of foreign currency. Global retail sales increased 8.9% in fiscal 2021, excluding the positive impact of foreign currency. Without adjusting for the impacts of foreign currency and the 53rd week, global retail sales declined 0.2% in the fourth quarter and increased 10.4% in fiscal 2021.
U.S. same store sales increased 1.0% during the quarter and 3.5% for the full year. International same store sales increased 1.8% during the quarter and 8.0% for the full year. The fourth quarter marked the 112th consecutive quarter of international same store sales growth. The Company had fourth quarter global net store growth of 468 stores, comprised of 89 net U.S. store openings and 379 net international store openings. In fiscal 2021, the Company had global net store growth of 1,204 stores, comprised of 205 net U.S. store openings and 999 net international store openings.
Diluted EPS for the fourth quarter of 2021 was $4.25, an increase of 10.4% over the prior year quarter. Diluted EPS for fiscal 2021 was $13.54, an increase of 9.3% over the prior year. Diluted EPS for both the fourth quarter and fiscal 2020 was positively impacted by the inclusion of the 53rd week. Diluted EPS for fiscal 2021 was negatively impacted by expenses associated with the Company's April 2021 recapitalization transaction (the "2021 Recapitalization"). Diluted EPS for the fourth quarter of 2021 was $4.25, an increase of 22.8% over diluted EPS, as adjusted, of $3.46 in the fourth quarter of 2020. Diluted EPS, as adjusted, for fiscal 2021 was $13.60, an increase of 13.2% over diluted EPS, as adjusted, of $12.01 in fiscal 2020. Refer to the Financial Results Comparability and the Comments on Regulation G sections below for additional information.
Subsequent to the end of the fourth quarter of 2021, on February 24, 2022, the Company's Board of Directors declared a $1.10 per share quarterly dividend on its outstanding common stock for shareholders of record as of March 15, 2022, to be paid on March 30, 2022.
"Throughout 2021, the strength of our franchisees and our excellent unit economics continued to deliver outstanding store and retail sales growth for the Domino's brand," said Ritch Allison, Domino's Chief Executive Officer. "When we compare our 2021 results back to pre-pandemic 2019, the Domino's brand grew by nearly $3.5 billion in global retail sales over the last two years. Looking forward, we remain focused on leading with innovation and leveraging our global scale to drive outstanding returns for our franchisees and shareholders."
| (dollars in millions, except share and per share data) | Fourth Quarter of 2021 | FourthQuarter of 2020 | Fiscal 2021 | Fiscal 2020 | ||||||||||||
| Net income | $ | 155.7 | $ | 151.9 | $ | 510.5 | $ | 491.3 | ||||||||
| Weighted average diluted shares | 36,668,295 | 39,463,552 | 37,691,351 | 39,640,791 | ||||||||||||
| Diluted EPS | $ | 4.25 | $ | 3.85 | $ | 13.54 | $ | 12.39 | ||||||||
| Items affecting comparability (1) | — | (0.39) | 0.06 | (0.38) | ||||||||||||
| Diluted EPS, as adjusted (1) | $ | 4.25 | $ | 3.46 | $ | 13.60 | $ | 12.01 | ||||||||
| (1) | Refer to the Financial Results Comparability and the Comments on Regulation G sections below for additional information. |
- Revenues decreased $13.4 million, or 1.0%, in the fourth quarter of 2021 as compared to the fourth quarter of 2020, primarily due to the inclusion of the 53rd week in the fourth quarter of 2020. The 53rd week contributed an estimated $88.4 million to revenues in the fourth quarter of 2020. Advertising incentives of $6.5 million related to the Domino's Surprise FreesTM promotion and the negative impact of changes in foreign currency exchange rates of approximately $2.5 million also contributed to the decrease in revenues. These decreases in revenues were partially offset by global same store sales growth and an increase in global store counts during the trailing four quarters, which resulted in higher supply chain and global royalty revenues.
- Net Income increased $3.8 million, or 2.5%, in the fourth quarter of 2021 as compared to the fourth quarter of 2020. This increase was primarily driven by a $34.3 million pre-tax unrealized gain on the Company's investment in DPC Dash Ltd ("DPC Dash"), the Company's master franchisee that owns and operates Domino's Pizza stores in China, resulting from the observable change in price from the valuation of the Company's additional $9.1 million investment in DPC Dash made in the fourth quarter of 2021. This increase was partially offset by an estimated $15.2 million of net income attributable to the 53rd week in 2020.
- Diluted EPS was $4.25 for the fourth quarter of 2021 versus $3.85 in the fourth quarter of 2020. This represents a $0.40, or 10.4%, increase over the prior year quarter. Diluted EPS was $4.25 for the fourth quarter of 2021 versus diluted EPS, as adjusted, of $3.46 in the fourth quarter of 2020. This represents a $0.79, or 22.8%, increase over the prior year quarter. The increase in diluted EPS was driven by higher net income, including the unrealized gain on the Company's investment in DPC Dash, which contributed an incremental $0.68 to the Company's diluted EPS in the fourth quarter of 2021 as compared to the prior year quarter. A lower weighted average diluted share count resulting from the Company's share repurchases during the trailing four quarters also contributed to the increase in diluted EPS in the fourth quarter of 2021. Refer to the Financial Results Comparability and the Comments on Regulation G sections below for additional information.
The tables below outline certain statistical measures utilized by the Company to analyze its performance (unaudited). Refer to Comments on Regulation G below for additional details.
| Fourth Quarter of 2021 | Fourth Quarter of 2020 | Fiscal 2021 | Fiscal 2020 | |||||
| Same store sales growth: (versus prior year period) | ||||||||
| U.S. Company-owned stores | (7.3)% | + 8.1% | (3.6)% | + 11.0% | ||||
| U.S. franchise stores | + 1.5% | + 11.4% | + 3.9% | + 11.5% | ||||
| U.S. stores | + 1.0% | + 11.2% | + 3.5% | + 11.5% | ||||
| International stores (excluding foreign currency impact) | + 1.8% | + 7.3% | + 8.0% | + 4.4% | ||||
| Global retail sales growth: (versus prior year period) | ||||||||
| U.S. stores | (2.6)% | + 22.8% | + 4.3% | +17.6% | ||||
| International stores | + 2.2% | + 20.7% | + 16.9% | + 7.5% | ||||
| Total | (0.2)% | + 21.7% | + 10.4% | + 12.5% | ||||
| Global retail sales growth: (versus prior year period, excluding foreign currency impact) | ||||||||
| U.S. stores | (2.6)% | + 22.8% | + 4.3% | + 17.6% | ||||
| International stores | + 4.5% | + 19.0% | + 13.9% | + 8.8% | ||||
| Total | + 1.0% | + 20.9% | + 8.9% | +13.2% | ||||
| Global retail sales growth: (versus prior year period, excluding foreign currency impact and 53rd week impact) | ||||||||
| U.S. stores | + 4.6% | + 14.3% | + 6.7% | +15.0% | ||||
| International stores | + 13.2% | + 9.9% | + 17.1% | + 5.9% | ||||
| Total | + 9.0% | + 12.0% | + 11.7% | +10.4% |
| U.S. Company- owned Stores | U.S. Franchise Stores | Total U.S. Stores | International Stores | Total | ||||||
| Store counts: | ||||||||||
| Store count at September 12, 2021 | 367 | 6,104 | 6,471 | 11,909 | 18,380 | |||||
| Openings | 8 | 84 | 92 | 430 | 522 | |||||
| Closings | — | (3) | (3) | (51) | (54) | |||||
| Store count at January 2, 2022 | 375 | 6,185 | 6,560 | 12,288 | 18,848 | |||||
| Fourth quarter 2021 net store growth | 8 | 81 | 89 | 379 | 468 | |||||
| Fiscal 2021 net store growth | 12 | 193 | 205 | 999 | 1,204 | |||||
Two- to Three-Year Outlook
The Company does not provide quarterly or annual earnings guidance or estimates. The following two- to three-year outlook does not constitute specific earnings guidance. In January 2022, the Company reaffirmed its two- to three-year outlook as follows:
| Two- to Three- Year Outlook | ||
| Global retail sales growth, excluding foreign currency impact | 6% − 10% | |
| Global net unit growth | 6% − 8% |
Financial Results Comparability
Financial results for the Company can be significantly affected by changes in its capital structure, its effective tax rate, adoption of new accounting pronouncements, store portfolio changes, calendar timing and other factors. The Company's recapitalization transactions have historically resulted in higher net interest expense due primarily to higher net debt levels, as well as the amortization of debt issuance costs associated with the repayment of certain of the Company's notes. Additionally, repurchases and retirements of shares of the Company's common stock pursuant to its share repurchase programs have historically reduced its weighted average diluted shares outstanding.
In addition to the above factors impacting comparability, the tables below present certain other items that affect comparability between the Company's 2021 and 2020 financial results (unaudited). Management believes that including such information is critical to an understanding of the Company's financial results for the fourth quarter of 2021 and fiscal year 2021 as compared to the same periods in 2020. Refer to the Comments on Regulation G section below for additional details.
| Fiscal Quarter Ended January 2, 2022 | Fiscal Year Ended January 2, 2022 | |||||||||||||||||||||||
| (in thousands, except per share data) | Pre-tax | After-tax | Diluted EPS Impact | Pre-tax | After-tax | Diluted EPS Impact | ||||||||||||||||||
| 2021 items affecting comparability: | ||||||||||||||||||||||||
| Recapitalization expenses: | ||||||||||||||||||||||||
| General and administrative expenses (1) | $ | — | $ | — | $ | — | $ | (509) | $ | (397) | $ | (0.01) | ||||||||||||
| Interest expense (2) | — | — | — | (309) | (241) | (0.01) | ||||||||||||||||||
| Debt issuance cost write-off (3) | — | — | — | (2,024) | (1,581) | (0.04) | ||||||||||||||||||
| Total of 2021 items | $ | — | $ | — | $ | — | $ | (2,842) | $ | (2,219) | $ | (0.06) | ||||||||||||
| Fiscal Quarter Ended January 3, 2021 | Fiscal Year Ended January 3, 2021 | |||||||||||||||||||||||
| (in thousands, except per share data) | Pre-tax | After-tax | Diluted EPS Impact | Pre-tax | After-tax | Diluted EPS Impact | ||||||||||||||||||
| 2020 items affecting comparability: | ||||||||||||||||||||||||
| Estimated 53rd week impact (4) | $ | 19,161 | $ | 15,201 | $ | 0.39 | $ | 19,161 | $ | 15,201 | $ | 0.38 | ||||||||||||
| Total of 2020 items | $ | 19,161 | $ | 15,201 | $ | 0.39 | $ | 19,161 | $ | 15,201 | $ | 0.38 | ||||||||||||
| (1) | Represents legal, professional and administrative fees incurred in connection with the Company's 2021 Recapitalization. |
| (2) | Represents interest expense the Company incurred on its 2017 five-year fixed rate notes and 2017 five-year floating rate notes subsequent to the closing of the Company's 2021 Recapitalization, but prior to the repayment of the 2017 five-year fixed rate notes and 2017 five-year floating rate notes, resulting in the payment of interest on both the 2017 five-year fixed rate notes and 2017 five-year floating rate notes and the 2021 fixed-rate notes for a short period of time. |
| (3) | Represents the write-off of debt issuance costs related to the extinguishment of the 2017 five-year fixed rate notes and 2017 five-year floating rate notes in connection with the Company's 2021 Recapitalization. |
| (4) | Represents the estimated impact of the 53rd week in the fourth quarter and fiscal year 2020. |
Share Repurchases
During the fourth quarter of 2021, the Company repurchased and retired 443,085 shares of its common stock under its Board of Directors-approved share repurchase program for a total of $216.2 million. During fiscal 2021, the Company repurchased and retired 2,912,558 shares of its common stock under its Board of Directors-approved share repurchase program (including 2,250,786 shares of its common stock under its previously announced accelerated share repurchase transaction completed in the third quarter of 2021) for a total of $1.32 billion. As of January 2, 2022, the Company had a total remaining authorized amount for share repurchases of $704.1 million. Subsequent to the end of the fourth quarter of 2021, the Company repurchased and retired an additional 100,810 shares of common stock for a total of $47.7 million.
Liquidity
As of January 2, 2022, the Company had approximately:
- $148.2 million of unrestricted cash and cash equivalents;
- $5.07 billion in total debt; and
- $155.8 million of available borrowing capacity under its 2021 variable funding notes, net of letters of credit issued of $44.2 million.
Net cash provided by operating activities was $654.2 million during fiscal 2021. The Company invested $94.2 million in capital expenditures during fiscal 2021. Free cash flow, as reconciled below to net cash provided by operating activities, as determined under accounting principles generally accepted in the United States of America ("GAAP"), was approximately $560.0 million during fiscal 2021 (refer to Comments on Regulation G below for additional details).
| (in thousands) | Fiscal year ended January 2, 2022 | |||
| Net cash provided by operating activities | $ | 654,206 | ||
| Capital expenditures | (94,172) | |||
| Free cash flow | $ | 560,034 | ||
Comments on Regulation G
In addition to the GAAP financial measures set forth in this press release, the Company has included non-GAAP financial measures within the meaning of Regulation G, including free cash flow metrics and measures related to items affecting comparability between fiscal quarters and other fiscal periods such as diluted EPS, as adjusted. The Company has also included metrics such as global retail sales, global retail sales growth, global retail sales growth, excluding foreign currency impact, global retail sales growth, excluding foreign currency impact and 53rd week impact and same store sales growth, which are commonly used statistical measures in the quick-service restaurant industry that are important to understanding Company performance.
The Company uses "Global retail sales" to refer to total worldwide retail sales at Company-owned and franchise stores. The Company believes global retail sales information is useful in analyzing revenues because franchisees pay royalties and advertising fees that are based on a percentage of franchise retail sales. The Company reviews comparable industry global retail sales information to assess business trends and to track the growth of the Domino's Pizza brand. In addition, supply chain revenues are directly impacted by changes in franchise retail sales. Retail sales for franchise stores are reported to the Company by its franchisees and are not included in Company revenues. "Global retail sales growth" is calculated as the change of U.S. Dollar global retail sales against the comparable period of the prior year. "Global retail sales growth, excluding foreign currency impact" is calculated as the change of international local currency global retail sales against the comparable period of the prior year. "Global retail sales growth, excluding foreign currency impact and 53rd week impact" is calculated as the change of international local currency global retail sales against the comparable period of the prior year and excluding the global retail sales attributable to the Company's 53rd week in 2020.
The Company uses "Same store sales growth," which is calculated by including only sales from stores that also had sales in the comparable weeks of both years. International same store sales growth is calculated similarly to U.S. same store sales growth. Changes in international same store sales are reported excluding foreign currency impacts, which reflect changes in international local currency sales. The 53rd week in fiscal 2020 had no impact on reported same store sales growth amounts.
The Company uses "Diluted EPS, as adjusted," which is calculated as reported diluted EPS, adjusted for the items that affect comparability to the prior year periods. The most directly comparable financial measure calculated and presented in accordance with GAAP is diluted EPS. The Company believes that the diluted EPS, as adjusted, measure is important and useful to investors and other interested persons and that such persons benefit from having a consistent basis for comparison between reporting periods. The Company uses diluted EPS, as adjusted, internally to evaluate operating performance, to evaluate itself against its peers and in long-range planning. Additionally, the Company believes that analysts covering the Company's stock performance generally eliminate these items affecting comparability when preparing their financial models, when determining their published EPS estimates and when benchmarking the Company against its competitors.
The Company uses "Free cash flow," which is calculated as net cash provided by operating activities, less capital expenditures, both as reported under GAAP. The Company believes that the free cash flow measure is important to investors and other interested persons, and that such persons benefit from having a measure which communicates how much cash flow is available for working capital needs or to be used for repurchasing debt, making acquisitions, repurchasing common stock or paying dividends.
About Domino's Pizza
Founded in 1960, Domino's Pizza is the largest pizza company in the world, with a significant business in both delivery and carryout pizza. It ranks among the world's top public restaurant brands with a global enterprise of more than 18,800 stores in over 90 markets. Domino's had global retail sales of nearly $17.8 billion in 2021, with over $8.6 billion in the U.S. and over $9.1 billion internationally. In the fourth quarter of 2021, Domino's had global retail sales of over $5.5 billion, with over $2.6 billion in the U.S. and nearly $2.9 billion internationally. Its system is comprised of independent franchise owners who accounted for 98% of Domino's stores as of the end of the fourth quarter of 2021. Emphasis on technology innovation helped Domino's achieve more than half of all global retail sales in 2021 from digital channels. In the U.S., Domino's generated more than 75% of U.S. retail sales in 2021 via digital channels and has developed several innovative ordering platforms, including those for Google Home, Facebook Messenger, Apple Watch, Amazon Echo, Twitter and more. In 2019, Domino's announced a partnership with Nuro to further its exploration and testing of autonomous pizza delivery.
TABLES TO FOLLOW
| Domino's Pizza, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) | ||||||||||||||||
| Fiscal Quarter Ended | ||||||||||||||||
| January 2, 2022 | % of TotalRevenues | January 3, 2021 | % of TotalRevenues | |||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| U.S. Company-owned stores | $ | 141,227 | $ | 155,749 | ||||||||||||
| U.S. franchise royalties and fees | 166,937 | 167,298 | ||||||||||||||
| Supply chain | 800,858 | 791,149 | ||||||||||||||
| International franchise royalties and fees | 90,968 | 89,555 | ||||||||||||||
| U.S. franchise advertising | 143,223 | 152,816 | ||||||||||||||
| Total revenues | 1,343,213 | 100.0 | % | 1,356,567 | 100.0 | % | ||||||||||
| Cost of sales: | ||||||||||||||||
| U.S. Company-owned stores | 113,411 | 121,591 | ||||||||||||||
| Supply chain | 723,601 | 699,712 | ||||||||||||||
| Total cost of sales | 837,012 | 62.3 | % | 821,303 | 60.5 | % | ||||||||||
| Operating margin | 506,201 | 37.7 | % | 535,264 | 39.5 | % | ||||||||||
| General and administrative | 140,290 | 10.4 | % | 138,404 | 10.2 | % | ||||||||||
| U.S. franchise advertising | 143,223 | 10.7 | % | 152,816 | 11.3 | % | ||||||||||
| Income from operations | 222,688 | 16.6 | % | 244,044 | 18.0 | % | ||||||||||
| Other income | 34,258 | 2.5 | % | — | 0.0 | % | ||||||||||
| Interest expense, net | (60,777) | (4.5) | % | (54,479) | (4.0) | % | ||||||||||
| Income before provision for income taxes | 196,169 | 14.6 | % | 189,565 | 14.0 | % | ||||||||||
| Provision for income taxes | 40,484 | 3.0 | % | 37,668 | 2.8 | % | ||||||||||
| Net income | $ | 155,685 | 11.6 | % | $ | 151,897 | 11.2 | % | ||||||||
| Earnings per share: | ||||||||||||||||
| Common stock – diluted | $ | 4.25 | $ | 3.85 | ||||||||||||
| Domino's Pizza, Inc. and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) | ||||||||||||||||
| Fiscal Year Ended | ||||||||||||||||
| January 2, 2022 | % of TotalRevenues | January 3, 2021 | % of TotalRevenues | |||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| Revenues: | ||||||||||||||||
| U.S. Company-owned stores | $ | 478,976 | $ | 485,569 | ||||||||||||
| U.S. franchise royalties and fees | 539,883 | 503,196 | ||||||||||||||
| Supply chain | 2,560,977 | 2,416,651 | ||||||||||||||
| International franchise royalties and fees | 298,036 | 249,757 | ||||||||||||||
| U.S. franchise advertising | 479,501 | 462,238 | ||||||||||||||
| Total revenues | 4,357,373 | 100.0 | % | 4,117,411 | 100.0 | % | ||||||||||
| Cost of sales: | ||||||||||||||||
| U.S. Company-owned stores | 374,104 | 379,598 | ||||||||||||||
| Supply chain | 2,295,027 | 2,143,320 | ||||||||||||||
| Total cost of sales | 2,669,131 | 61.3 | % | 2,522,918 | 61.3 | % | ||||||||||
| Operating margin | 1,688,242 | 38.7 | % | 1,594,493 | 38.7 | % | ||||||||||
| General and administrative | 428,333 | 9.8 | % | 406,613 | 9.9 | % | ||||||||||
| U.S. franchise advertising | 479,501 | 11.0 | % | 462,238 | 11.2 | % | ||||||||||
| Income from operations | 780,408 | 17.9 | % | 725,642 | 17.6 | % | ||||||||||
| Other income | 36,758 | 0.8 | % | — | 0.0 | % | ||||||||||
| Interest expense, net | (191,461) | (4.3) | % | (170,512) | (4.1) | % | ||||||||||
| Income before provision for income taxes | 625,705 | 14.4 | % | 555,130 | 13.5 | % | ||||||||||
| Provision for income taxes | 115,238 | 2.7 | % | 63,834 | 1.6 | % | ||||||||||
| Net income | $ | 510,467 | 11.7 | % | $ | 491,296 | 11.9 | % | ||||||||
| Earnings per share: | ||||||||||||||||
| Common stock – diluted | $ | 13.54 | $ | 12.39 | ||||||||||||
| Domino's Pizza, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
| January 2, 2022 | January 3, 2021 | |||||||
| (In thousands) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 148,160 | $ | 168,821 | ||||
| Restricted cash and cash equivalents | 180,579 | 217,453 | ||||||
| Accounts receivable, net | 255,327 | 244,560 | ||||||
| Inventories | 68,328 | 66,683 | ||||||
| Prepaid expenses and other | 27,242 | 24,169 | ||||||
| Advertising fund assets, restricted | 180,904 | 147,698 | ||||||
| Total current assets | 860,540 | 869,384 | ||||||
| Property, plant and equipment, net | 324,065 | 297,364 | ||||||
| Operating lease right-of-use assets | 210,702 | 228,268 | ||||||
| Investments | 125,840 | 40,000 | ||||||
| Other assets | 150,669 | 132,152 | ||||||
| Total assets | $ | 1,671,816 | $ | 1,567,168 | ||||
| Liabilities and stockholders' deficit | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 55,588 | $ | 2,855 | ||||
| Accounts payable | 91,547 | 94,499 | ||||||
| Operating lease liabilities | 37,155 | 35,861 | ||||||
| Advertising fund liabilities | 173,737 | 141,175 | ||||||
| Other accrued liabilities | 232,714 | 196,429 | ||||||
| Total current liabilities | 590,741 | 470,819 | ||||||
| Long-term liabilities: | ||||||||
| Long-term debt, less current portion | 5,014,638 | 4,116,018 | ||||||
| Operating lease liabilities | 184,471 | 202,268 | ||||||
| Other accrued liabilities | 91,502 | 78,468 | ||||||
| Total long-term liabilities | 5,290,611 | 4,396,754 | ||||||
| Total stockholders' deficit | (4,209,536) | (3,300,405) | ||||||
| Total liabilities and stockholders' deficit | $ | 1,671,816 | $ | 1,567,168 | ||||
| Domino's Pizza, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| Fiscal Year Ended | ||||||||
| January 2, 2022 | January 3, 2021 | |||||||
| (In thousands) | ||||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 510,467 | $ | 491,296 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 72,923 | 65,038 | ||||||
| Loss on sale/disposal of assets | 1,189 | 2,922 | ||||||
| Amortization of debt issuance costs | 7,509 | 5,526 | ||||||
| Provision for deferred income taxes | 1,988 | 14,424 | ||||||
| Non-cash compensation expense | 28,670 | 24,244 | ||||||
| Excess tax benefits from equity-based compensation | (18,911) | (60,364) | ||||||
| Provision for losses on accounts and notes receivable | 659 | 2,134 | ||||||
| Unrealized gain on investments | (36,758) | — | ||||||
| Changes in operating assets and liabilities | 41,245 | 18,797 | ||||||
| Changes in advertising fund assets and liabilities, restricted | 45,225 | 28,777 | ||||||
| Net cash provided by operating activities | 654,206 | 592,794 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (94,172) | (88,768) | ||||||
| Purchase of investments | (49,082) | (40,000) | ||||||
| Other | 531 | (159) | ||||||
| Net cash used in investing activities | (142,723) | (128,927) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of long-term debt | 1,850,000 | 158,000 | ||||||
| Repayments of long-term debt and finance lease obligations | (910,212) | (202,058) | ||||||
| Proceeds from exercise of stock options | 19,682 | 30,970 | ||||||
| Purchases of common stock | (1,320,902) | (304,590) | ||||||
| Tax payments for restricted stock upon vesting | (6,820) | (6,803) | ||||||
| Payments of common stock dividends and equivalents | (139,399) | (121,925) | ||||||
| Cash paid for financing costs | (14,938) | — | ||||||
| Other | (244) | — | ||||||
| Net cash used in financing activities | (522,833) | (446,406) | ||||||
| Effect of exchange rate changes on cash | (316) | 761 | ||||||
| Change in cash and cash equivalents, restricted cash and cash equivalents | (11,666) | 18,222 | ||||||
| Cash and cash equivalents, beginning of period | 168,821 | 190,615 | ||||||
| Restricted cash and cash equivalents, beginning of period | 217,453 | 209,269 | ||||||
| Cash and cash equivalents included in advertising fund assets, restricted, beginning of period | 115,872 | 84,040 | ||||||
| Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, beginning of period | 502,146 | 483,924 | ||||||
| Cash and cash equivalents, end of period | 148,160 | 168,821 | ||||||
| Restricted cash and cash equivalents, end of period | 180,579 | 217,453 | ||||||
| Cash and cash equivalents included in advertising fund assets, restricted, end of period | 161,741 | 115,872 | ||||||
| Cash and cash equivalents, restricted cash and cash equivalents and cash and cash equivalents included in advertising fund assets, restricted, end of period | $ | 490,480 | $ | 502,146 | ||||
SOURCE Domino's Pizza, Inc.
