Attached files
| file | filename |
|---|---|
| EX-4.1 - EX-4.1 - DOMINOS PIZZA INC | d538225dex41.htm |
| EX-1.1 - EX-1.1 - DOMINOS PIZZA INC | d538225dex11.htm |
| 8-K - FORM 8-K - DOMINOS PIZZA INC | d538225d8k.htm |
EXHIBIT 99.1
In the following discussion, “Holdco” refers to Domino’s Pizza, Inc., “Master Issuer” refers to Domino’s Pizza Master Issuer LLC and “Co-Issuers” refers to, collectively, Domino’s Pizza Master Issuer LLC, Domino’s IP Holder LLC, Domino’s Pizza Distribution LLC and Domino’s SPV Canadian Holding Company Inc.
CAPITALIZATION OF HOLDCO
The following table sets forth the cash and cash equivalents and capitalization of Holdco as of December 31, 2017 (i) on an actual basis and (ii) on an as-adjusted basis to give effect to the transactions contemplated to occur on or about April 24, 2018 (the “Closing Date”) in connection with the issuance of the Series 2018-1 Class A-2-I Notes and Series 2018-1 Class A-2-II Notes as described in the Current Report of Form 8-K to which this Exhibit is attached, including the repayment in full of the Series 2015-1 Class A-2-I Notes, as if such transactions occurred as of such date. This table should be read in conjunction with the consolidated financial statements and the accompanying notes included in Holdco’s annual report on Form 10-K for the fiscal year ended December 31, 2017.
| As of December 31, 2017 | ||||||||
| (dollars in thousands) | Actual | As-Adjusted | ||||||
| (Audited) | (Unaudited) | |||||||
| Cash and cash equivalents(1) |
$ | 35,768 | $ | 368,268 | ||||
| Debt and capital lease obligations: |
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| Series 2017-1 Class A-1 Notes(2) |
— | — | ||||||
| Series 2015-1 Class A-2-I Notes(3) |
492,500 | — | ||||||
| Series 2015-1 Class A-2-II Notes(3) |
788,000 | 788,000 | ||||||
| Series 2017-1 Class A-2-I(FL) Notes(4) |
299,250 | 299,250 | ||||||
| Series 2017-1 Class A-2-II(FX) Notes(4) |
598,500 | 598,500 | ||||||
| Series 2017-1 Class A-2-III(FX) Notes(4) |
997,500 | 997,500 | ||||||
| Series 2018-1 Class A-2-I Notes and Series 2018-1 Class A-2-II Notes(5) |
— | 825,000 | ||||||
| Capital lease obligations |
5,437 | 5,437 | ||||||
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| Total debt and capital lease obligations(6) |
$ | 3,181,187 | $ | 3,513,687 | ||||
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| (1) | Excludes restricted cash and cash equivalents of approximately $191.8 million. |
| (2) | Represents the Series 2017-1 Class A-1 Notes, which are variable funding notes that were issued by the Co-Issuers on July 24, 2017. The Series 2017-1 Class A-1 Notes, under which no amounts were drawn as of December 31, 2017, currently have a maximum outstanding principal amount of $175 million and a final legal maturity date of July 2047. The Series 2017-1 Class A-1 Notes have an expected repayment date of July 2022, with an option for up to two one-year renewals (subject to certain conditions, including a minimum debt service coverage ratio). Holdco expects the Master Issuer to have approximately $46.7 million in outstanding letters of credit, $80.0 million of outstanding principal and $48.3 million of available borrowing capacity under the Series 2017-1 Class A-1 Notes on or about the Closing Date. The Co-Issuers may use a portion of the proceeds from this offering to repay all or a portion of the amounts outstanding under the Series 2017-1 Class A-1 Notes. |
| (3) | The Series 2015-1 Class A-2 Notes were issued by the Co-Issuers on October 21, 2015 and have a final legal maturity of October 2045. The Series 2015-1 Class A-2-I Notes have an expected repayment date of October 2020 and the Series 2015-1 Class A-2-II Notes have an expected repayment date of October 2025. On January 25, 2018, the Co-Issuers made a payment of principal (i) with respect to the 2015-1 Class A-2-I Notes in an amount equal to approximately $1.3 million and (ii) with respect to the 2015-1 Class A-2-II Notes in an amount equal to approximately $2.0 million. The Co-Issuers are expected to use a portion of the proceeds from this offering to repay all amounts outstanding under the Series 2015-1 Class A-2-I Notes (consisting of approximately $491.3 million in aggregate principal amount as of the Closing Date and, following a scheduled prepayment of principal on April 25, 2018 in an amount of approximately $1.3 million, $490 million in aggregate principal amount on the anticipated repayment date of April 27, 2018). |
| (4) | The Series 2017-1 Class A-2 Notes were issued by the Co-Issuers on July 24, 2017 and have a final legal maturity of July 2047. The Series 2017-1 Class A-2-I(FL) Notes and Series 2017 Class A-2-II(FX) Notes have an expected repayment date of July 2022 and the Series 2017-1 Class A-2-III(FX) Notes have an expected repayment date of July 2027. On January 25, 2018, the Co-Issuers made a payment of principal (i) with respect to the 2017-1 Class A-2-I(FL) Notes in an amount equal to approximately $0.8 million, (ii) with respect to the Series 2017-1 Class A-2-II(FX) Notes in an amount equal to approximately $1.5 million and (iii) with respect to the 2017-1 Class A-2-III(FX) Notes in an amount equal to approximately $2.5 million. |
| (5) | The Series 2018-1 Class A-2 Notes will be issued on the Closing Date and will have a final legal maturity of July 2048. The Series 2018-1 Class A-2-I Notes have an expected repayment date of October 2025 and the Series 2018-1 Class A-2-II Notes have an expected repayment date of July 2027. |
| (6) | Represents gross debt and capital lease obligation amounts and is not inclusive of debt issuance costs. |
CAPITALIZATION OF THE MASTER ISSUER
The following table sets forth the cash and cash equivalents and capitalization of the Master Issuer as of December 31, 2017 (i) on an actual basis and (ii) on an as-adjusted basis to give effect to the transactions contemplated to occur on or about the Closing Date in connection with the issuance of the Series 2018-1 Class A-2-I Notes and Series 2018-1 Class A-2-II Notes on the Closing Date, including the repayment in full of the Series 2015-1 Class A-2-I Notes, as if such transactions occurred as of such date.
| As of December 31, 2017 | ||||||||
| (dollars in thousands) | Actual | As-Adjusted | ||||||
| (Audited) | (Unaudited) | |||||||
| Cash and cash equivalents(1) |
$ | — | $ | — | ||||
| Debt and capital lease obligations: |
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| Series 2017-1 Class A-1 Notes(2) |
— | — | ||||||
| Series 2015-1 Class A-2-I Notes(3) |
492,500 | — | ||||||
| Series 2015-1 Class A-2-II Notes(3) |
788,000 | 788,000 | ||||||
| Series 2017-1 Class A-2-I(FL) Notes(4) |
299,250 | 299,250 | ||||||
| Series 2017-1 Class A-2-II(FX) Notes(4) |
598,500 | 598,500 | ||||||
| Series 2017-1 Class A-2-III(FX) Notes(4) |
997,500 | 997,500 | ||||||
| Series 2018-1 Class A-2-I Notes and Series 2018-1 Class A-2-II Notes(5) |
— | 825,000 | ||||||
| Capital lease obligations |
4,899 | 4,899 | ||||||
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| Total debt and capital lease obligations(6) |
$ | 3,180,649 | $ | 3,513,149 | ||||
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| (1) | Excludes restricted cash and cash equivalents of approximately $191.8 million. |
| (2) | Represents the Series 2017-1 Class A-1 Notes, which are variable funding notes that were issued by the Co-Issuers on July 24, 2017. The Series 2017-1 Class A-1 Notes, under which no amounts were drawn as of December 31, 2017, currently have a maximum outstanding principal amount of $175 million and a final legal maturity date of July 2047. The Series 2017-1 Class A-1 Notes have an expected repayment date of July 2022, with an option for up to two one-year renewals (subject to certain conditions, including a minimum debt service coverage ratio). The Master Issuer expects to have approximately $46.7 million in outstanding letters of credit, $80.0 million of outstanding principal and $48.3 million of available borrowing capacity under the Series 2017-1 Class A-1 Notes on or about the Closing Date. The Co-Issuers may use a portion of the proceeds from this offering to repay all or a portion of the amounts outstanding under the Series 2017-1 Class A-1 Notes. |
| (3) | The Series 2015-1 Class A-2 Notes were issued by the Co-Issuers on October 21, 2015 and have a final legal maturity of October 2045. The Series 2015-1 Class A-2-I Notes have an expected repayment date of October 2020 and the Series 2015-1 Class A-2-II Notes have an expected repayment date of October 2025. On January 25, 2018, the Co-Issuers made a payment of principal (i) with respect to the 2015-1 Class A-2-I Notes in an amount equal to approximately $1.3 million and (ii) with respect to the 2015-1 Class A-2-II Notes in an amount equal to approximately $2.0 million. The Co-Issuers are expected to use a portion of the proceeds from this offering to repay all amounts outstanding under the Series 2015-1 Class A-2-I Notes (consisting of approximately $491.3 million in aggregate principal amount as of the Closing Date and, following a scheduled prepayment of principal on April 25, 2018 in an amount of approximately $1.3 million, $490 million in aggregate principal amount on the anticipated repayment date of April 27, 2018). |
| (4) | The Series 2017-1 Class A-2 Notes were issued by the Co-Issuers on July 24, 2017 and have a final legal maturity of July 2047. The Series 2017-1 Class A-2-I(FL) Notes and Series 2017 Class A-2-II(FX) Notes have an expected repayment date of July 2022 and the Series 2017-1 Class A-2-III(FX) Notes have an expected repayment date of July 2027. On January 25, 2018, the Co-Issuers made a payment of principal (i) with respect to the 2017-1 Class A-2-I(FL) Notes in an amount equal to approximately $0.8 million, (ii) with respect to the Series 2017-1 Class A-2-II(FX) Notes in an amount equal to approximately $1.5 million and (iii) with respect to the 2017-1 Class A-2-III(FX) Notes in an amount equal to approximately $2.5 million. |
| (5) | The Series 2018-1 Class A-2 Notes will be issued on the Closing Date and will have a final legal maturity of July 2048. The Series 2018-1 Class A-2-I Notes have an expected repayment date of October 2025 and the Series 2018-1 Class A-2-II Notes have an expected repayment date of July 2027. |
| (6) | Represents gross debt and capital lease obligation amounts and is not inclusive of debt issuance costs. |
2
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
AND OTHER DATA OF HOLDCO
Set forth below is selected historical consolidated financial information and other data of Holdco at the dates and for the periods indicated. The selected historical financial information and other data as December 29, 2013, December 28, 2014, January 3, 2016, January 1, 2017 and December 31, 2017 and for the fiscal years ended December 29, 2013, December 28, 2014, January 3, 2016, January 1, 2017 and December 31, 2017 have been derived from Holdco’s audited consolidated financial statements. The audited consolidated financial statements for each of the fiscal years ended December 29, 2013, December 28, 2014, January 3, 2016, January 1, 2017 and December 31, 2017 have been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm.
The selected historical consolidated financial information and other data should be read in conjunction with Capitalization of Holdco” and with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the accompanying notes included in Holdco’s annual report on Form 10-K for the fiscal year ended December 31, 2017.
| Fiscal Years Ended | ||||||||||||||||||||
| (dollars in thousands) | December 29, 2013 |
December 28, 2014 |
January 3, 2016 |
January 1, 2017 |
December 31, 2017 |
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| Income Statement Data: |
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| Revenues |
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| Domestic Company-Owned Stores |
$ | 337,414 | $ | 348,497 | $ | 396,916 | $ | 439,024 | $ | 490,846 | ||||||||||
| Domestic Franchise |
212,369 | 230,192 | 272,808 | 312,260 | 351,387 | |||||||||||||||
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| Domestic Stores |
549,783 | 578,689 | 669,724 | 751,284 | 842,233 | |||||||||||||||
| Supply Chain |
1,118,873 | 1,262,523 | 1,383,161 | 1,544,345 | 1,739,038 | |||||||||||||||
| International Franchise |
133,567 | 152,621 | 163,643 | 176,999 | 206,708 | |||||||||||||||
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| Total Revenues |
1,802,223 | 1,993,833 | 2,216,528 | 2,472,628 | 2,787,979 | |||||||||||||||
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| Cost of Sales |
1,253,249 | 1,399,067 | 1,533,397 | 1,704,937 | 1,921,988 | |||||||||||||||
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| Operating Margin |
$ | 548,974 | $ | 594,766 | $ | 683,131 | $ | 767,691 | $ | 865,991 | ||||||||||
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| General and Administrative Expense |
235,163 | 249,405 | 277,692 | 313,649 | 344,759 | |||||||||||||||
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| Income from Operations |
$ | 313,811 | $ | 345,361 | $ | 405,439 | $ | 454,042 | $ | 521,232 | ||||||||||
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| Other Financial Data: |
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| Holdco EBITDA(1) |
$ | 339,594 | $ | 381,149 | $ | 437,873 | $ | 492,182 | $ | 565,601 | ||||||||||
| Holdco Adjusted EBITDA(1) |
$ | 361,948 | $ | 397,629 | $ | 456,672 | $ | 511,609 | $ | 583,788 | ||||||||||
| Holdco Adjusted EBITDAR(1) |
$ | 402,153 | $ | 440,610 | $ | 502,767 | $ | 561,556 | $ | 641,715 | ||||||||||
| Depreciation and Amortization |
$ | 25,783 | $ | 35,788 | $ | 32,434 | $ | 38,140 | $ | 44,369 | ||||||||||
| Cash Flow Data: |
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| Net Cash Provided by Operating Activities |
$ | 193,989 | $ | 192,339 | $ | 291,786 | $ | 287,273 | $ | 339,036 | ||||||||||
| Capital Expenditures |
40,387 | 70,093 | 63,282 | 58,555 | 90,011 | |||||||||||||||
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| Holdco Free Cash Flow(2) |
$ | 153,602 | $ | 122,246 | $ | 228,504 | $ | 228,718 | $ | 249,025 | ||||||||||
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3
| (dollars in thousands) | As of December 29, 2013 |
As of December 28, 2014 |
As of January 3, 2016 |
As of January 1, 2017 |
As of December 31, 2017 |
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| Balance Sheets Data: |
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| Cash and Cash Equivalents(3) |
$ | 14,383 | $ | 30,855 | $ | 133,449 | $ | 42,815 | $ | 35,768 | ||||||||||
| Restricted Cash and Cash Equivalents |
$ | 125,453 | $ | 120,954 | $ | 180,940 | $ | 126,496 | $ | 191,762 | ||||||||||
| Working Capital(3) |
$ | (28,524 | ) | $ | 41,799 | $ | 45,714 | $ | (34,321 | ) | $ | (10,267 | ) | |||||||
| Property, Plant and Equipment, Net |
$ | 97,584 | $ | 114,046 | $ | 131,890 | $ | 138,534 | $ | 169,586 | ||||||||||
| Total Assets |
$ | 496,562 | $ | 596,333 | $ | 799,845 | $ | 716,295 | $ | 836,753 | ||||||||||
| Total Debt Net of Debt Issuance Cost(4) |
$ | 1,507,750 | $ | 1,501,164 | $ | 2,240,793 | $ | 2,187,877 | $ | 3,153,814 | ||||||||||
| Total Liabilities |
$ | 1,786,764 | $ | 1,815,798 | $ | 2,600,096 | $ | 2,599,438 | $ | 3,572,137 | ||||||||||
| (1) | Holdco EBITDA, Holdco Adjusted EBITDA and Holdco Adjusted EBITDAR are non-GAAP financial measures. The following table sets forth a reconciliation of Holdco EBITDA, Holdco Adjusted EBITDA and Holdco Adjusted EBITDAR to net income. |
| (2) | Holdco Free Cash Flow is a non-GAAP financial measure. |
| (3) | Excludes restricted cash and cash equivalents. |
| (4) | Includes current portion. |
| Fiscal Years Ended | ||||||||||||||||||||
| (dollars in thousands) | December 29, 2013 |
December 28, 2014 |
January 3, 2016 |
January 1, 2017 |
December 31, 2017 |
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| Reconciliations: |
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| Net income |
$ | 142,985 | $ | 162,587 | $ | 192,789 | $ | 214,678 | $ | 277,905 | ||||||||||
| Interest expense, net |
88,712 | 86,738 | 99,224 | 109,384 | 121,079 | |||||||||||||||
| Provision for income taxes |
82,114 | 96,036 | 113,426 | 129,980 | 122,248 | |||||||||||||||
| Depreciation and amortization |
25,783 | 35,788 | 32,434 | 38,140 | 44,369 | |||||||||||||||
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| Holdco EBITDA |
$ | 339,594 | $ | 381,149 | $ | 437,873 | $ | 492,182 | $ | 565,601 | ||||||||||
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| Adjustments (less) plus: |
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| Non-cash compensation expense |
21,987 | 17,587 | 17,623 | 18,564 | 20,713 | |||||||||||||||
| Loss (gain) on disposal of assets |
367 | (1,107 | ) | 316 | 863 | (3,148 | ) | |||||||||||||
| Other adjustments |
— | — | 860 | — | 622 | |||||||||||||||
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| Holdco Adjusted EBITDA |
$ | 361,948 | $ | 397,629 | $ | 456,672 | $ | 511,609 | $ | 583,788 | ||||||||||
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| Rent Expense |
40,205 | 42,981 | 46,095 | 49,947 | 57,927 | |||||||||||||||
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| Holdco Adjusted EBITDAR |
$ | 402,153 | $ | 440,610 | $ | 502,767 | $ | 561,556 | $ | 641,715 | ||||||||||
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4