EXHIBIT 99.1
In the following discussion, “Holdco” refers to Domino’s Pizza, Inc., “Master Issuer” refers to Domino’s Pizza Master Issuer LLC, “DPL or Manager” as Domino’s Pizza LLC, and, unless the context otherwise requires, “Domino’s” refers to Domino’s Pizza, Inc. and its subsidiaries on a consolidated basis prior to the consummation of the securitization transaction.
CAPITALIZATION OF HOLDCO
The following table sets forth the cash and cash equivalents and capitalization of Holdco as of January 1, 2012 (i) on an actual basis and (ii) on an as-adjusted basis to give effect to the transactions that occured on March 15, 2012 in connection with the issuance of the Series 2012-1 notes on March 15, 2012 (collectively, the“Refinancing Transaction”), including the repayment of the Series 2007-1 notes, as if such transactions occurred as of such date.
| | | | | | | | |
| | | As of January 1, 2012 | |
| (dollars in thousands) | | Actual | | | As Adjusted for
the Refinancing
Transaction | |
Cash and cash equivalents | | $ | 50,292 | | | $ | 168,769 | |
| | |
Debt: | | | | | | | | |
Series 2007-1 Class A-1 Notes (1) | | $ | 60,000 | | | $ | — | |
Series 2007-1 Class A-2 Notes (2) | | | 1,310,770 | | | | — | |
Series 2007-1 Class M-1 Notes (2) | | | 76,110 | | | | — | |
Series 2012-1 Class A-1 Notes (3) | | | — | | | | — | |
Offered Notes | | | — | | | | 1,575,000 | |
Capital leases | | | 4,393 | | | | 4,393 | |
| | | | | | | | |
Total debt | | | 1,451,273 | | | | 1,579,393 | |
Total stockholders’ deficit | | | (1,209,739 | ) | | | (1,215,083 | ) |
| | | | | | | | |
Total capitalization | | $ | 241,534 | | | $ | 364,310 | |
| | | | | | | | |
| (1) | Represents amounts outstanding with respect to the Series 2007-1 Class A-1 notes, which are variable funding notes that were issued by the Master Issuer on April 16, 2007. The Series 2007-1 Class A-1 notes have a maximum outstanding principal amount of $60 million and a final legal maturity of April 2037. Notwithstanding the Refinancing Transaction, the Series 2007-1 Class A-1 notes have an expected repayment date of April 2014, after considering two possible one-year extensions. All amounts outstanding under the Series 2007-1 Class A-1 notes will be repaid and the Series 2007-1 Class A-1 notes will be cancelled on or about March 23, 2012. |
| (2) | The Series 2007-1 Class A-2 notes and the Series 2007-1 Class M-1 notes were issued by the Master Issuer on April 16, 2007 and have a legal final maturity of April 2037. Notwithstanding the Refinancing Transaction, the Series 2007-1 Class A-2 notes and the Series 2007-1 Class M-1 notes have an expected repayment date of April 2014, after considering two possible one-year extensions. All amounts outstanding under the Series 2007-1 Class A-2 notes and the Series 2007-1 Class M-1 notes will be repaid and the Series 2007-1 Class A-2 notes and the Series 2007-1 Class M-1 notes will be cancelled. |
| (3) | Represents the Series 2012-1 Class A-1 notes, which are variable funding notes that were issued on March 15, 2012. The Series 2012-1 Class A-1 notes have a maximum outstanding principal amount of $100 million. The Master Issuer did not draw on the Series 2012-1 Class A-1 notes on March 15, 2012. The Master Issuer expects to have approximately $39.7 million in undrawn letters of credit issued under the Series 2012-1 Class A-1 notes on March 15, 2012. |
CAPITALIZATION OF THE MASTER ISSUER
The following table sets forth the cash and cash equivalents and capitalization of the Master Issuer as of January 1, 2012 (i) on an actual basis and (ii) on an as-adjusted basis to give effect to the Refinancing Transaction, including the repayment of the Series 2007-1 notes, as if such transactions occurred as of such date.
| | | | | | | | |
| | | As of January 1, 2012 | |
| (dollars in thousands) | | Actual | | | As Adjusted for
the Refinancing
Transaction | |
Cash and cash equivalents | | $ | — | | | $ | — | |
| | |
Debt: | | | | | | | | |
Series 2007-1 Class A-1 Notes (1) | | $ | 60,000 | | | $ | — | |
Series 2007-1 Class A-2 Notes (2) | | | 1,310,770 | | | | — | |
Series 2007-1 Class M-1 Notes (2) | | | 76,110 | | | | — | |
Series 2012-1 Class A-1 Notes (3) | | | — | | | | — | |
Offered Notes | | | — | | | | 1,575,000 | |
Capital leases | | | — | | | | — | |
| | | | | | | | |
Total debt | | | 1,446,880 | | | | 1,575,000 | |
Total member’s deficit | | | (1,419,282 | ) | | | (1,501,772 | ) |
| | | | | | | | |
Total capitalization | | $ | 27,598 | | | $ | 73,228 | |
| | | | | | | | |
| (1) | Represents amounts outstanding with respect to the Series 2007-1 Class A-1 notes, which are variable funding notes that were issued by the Master Issuer on April 16, 2007. The Series 2007-1 Class A-1 notes have a maximum outstanding principal amount of $60 million and a final legal maturity of April 2037. Notwithstanding the Refinancing Transaction, the Series 2007-1 Class A-1 notes have an expected repayment date of April 2014, after considering two possible one-year extensions. All amounts outstanding under the Series 2007-1 Class A-1 notes will be repaid and the Series 2007-1 Class A-1 notes will be cancelled on or about March 23, 2012. |
| (2) | The Series 2007-1 Class A-2 notes and the Series 2007-1 Class M-1 notes were issued by the Master Issuer on April 16, 2007 and have a legal final maturity of April 2037. Notwithstanding the Refinancing Transaction, the Series 2007-1 Class A-2 notes and the Series 2007-1 Class M-1 notes have an expected repayment date of April 2014, after considering two possible one-year extensions. All amounts outstanding under the Series 2007-1 Class A-2 notes and the Series 2007-1 Class M-1 notes will be repaid and the Series 2007-1 Class A-2 notes and the Series 2007-1 Class M-1 notes will be cancelled. |
| (3) | Represents the Series 2012-1 Class A-1 notes, which are variable funding notes that were issued on March 15, 2012. The Series 2012-1 Class A-1 notes have a maximum outstanding principal amount of $100 million. The Master Issuer did not draw on the Series 2012-1 Class A-1 notes on March 15, 2012. The Master Issuer expects to have approximately $39.7 million in undrawn letters of credit issued under the Series 2012-1 Class A-1 notes on March 15, 2012. |
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
AND OTHER DATA OF HOLDCO
The following tables present certain summary historical consolidated financial information 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 of and for the fiscal years ended December 30, 2007 and December 28, 2008 has been derived from Holdco’s audited financial statements. The selected historical financial information and other data as of and for the fiscal years ended January 3, 2010, January 2, 2011 and January 1, 2012, has been derived from Holdco’s audited consolidated financial statements.
The selected historical consolidated financial information and other data should be read in conjunction 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 January 1, 2012, which is incorporated by reference herein.
| | | | | | | | | | | | | | | | | | | | |
| | | Fiscal Years Ended | |
| (dollars in thousands) | | December 30,
2007 | | | December 28,
2008 | | | January 3,
2010 | | | January 2,
2011 | | | January 1,
2012 | |
Income Statement Data: | | | | | | | | | | | | | | | | | | | | |
Revenues | | | | | | | | | | | | | | | | | | | | |
Domestic Company-Owned Stores | | $ | 394,585 | | | $ | 357,703 | | | $ | 335,779 | | | $ | 345,636 | | | $ | 336,349 | |
Domestic Franchise | | | 158,050 | | | | 153,858 | | | | 157,780 | | | | 173,345 | | | | 187,007 | |
| | | | | | | | | | | | | | | | | | | | |
Domestic Stores | | | 552,635 | | | | 511,561 | | | | 493,559 | | | | 518,981 | | | | 523,356 | |
Domestic Supply Chain | | | 783,330 | | | | 771,106 | | | | 763,733 | | | | 875,517 | | | | 927,904 | |
International | | | 126,905 | | | | 142,447 | | | | 146,765 | | | | 176,396 | | | | 200,933 | |
| | | | | | | | | | | | | | | | | | | | |
Total Revenues | | | 1,462,870 | | | | 1,425,114 | | | | 1,404,057 | | | | 1,570,894 | | | | 1,652,193 | |
| | | | | | | | | | | | | | | | | | | | |
Cost of Sales | | | 1,084,016 | | | | 1,061,853 | | | | 1,017,081 | | | | 1,132,305 | | | | 1,181,677 | |
| | | | | | | | | | | | | | | | | | | | |
Operating Margin | | $ | 378,854 | | | $ | 363,261 | | | $ | 386,976 | | | $ | 438,589 | | | $ | 470,516 | |
| | | | | | | | | | | | | | | | | | | | |
Other Financial Data: | | | | | | | | | | | | | | | | | | | | |
Holdco EBITDA (1) | | $ | 211,792 | | | $ | 223,407 | | | $ | 269,848 | | | $ | 259,563 | | | $ | 283,187 | |
Holdco Adjusted EBITDA (1) | | $ | 239,326 | | | $ | 220,159 | | | $ | 233,517 | | | $ | 265,527 | | | $ | 295,020 | |
Holdco Adjusted EBITDAR (1) | | $ | 281,730 | | | $ | 261,697 | | | $ | 275,565 | | | $ | 306,612 | | | $ | 334,675 | |
Depreciation and Amortization | | $ | 31,176 | | | $ | 28,377 | | | $ | 24,064 | | | $ | 24,052 | | | $ | 24,042 | |
| | | | | |
Cash Flow Data: | | | | | | | | | | | | | | | | | | | | |
Net Cash Provided by Operating Activities | | $ | 84,188 | | | $ | 75,257 | | | $ | 101,274 | | | $ | 128,325 | | | $ | 153,073 | |
Capital Expenditures | | | 42,415 | | | | 19,411 | | | | 22,870 | | | | 25,421 | | | | 24,349 | |
| | | | | | | | | | | | | | | | | | | | |
Holdco Free Cash Flow (2) | | $ | 41,773 | | | $ | 55,846 | | | $ | 78,404 | | | $ | 102,904 | | | $ | 128,724 | |
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| | | | | | | | | | | | | | | | | | | | |
| | | Fiscal Years Ended | |
| (dollars in thousands) | | December 30,
2007 | | | December 28,
2008 | | | January 3,
2010 | | | January 2,
2011 | | | January 1,
2012 | |
Balance Sheets Data: | | | | | | | | | | | | | | | | | | | | |
Cash and Cash Equivalents (3) | | $ | 11,344 | | | $ | 45,372 | | | $ | 42,392 | | | $ | 47,945 | | | $ | 50,292 | |
Working Capital (3) | | $ | (29,577 | ) | | $ | 25,826 | | | $ | (31,896 | ) | | $ | 33,382 | | | $ | 37,056 | |
Property, Plant and Equipment, Net | | $ | 122,890 | | | $ | 108,430 | | | $ | 102,776 | | | $ | 97,384 | | | $ | 92,400 | |
Total Assets | | $ | 473,164 | | | $ | 463,794 | | | $ | 453,761 | | | $ | 460,837 | | | $ | 480,543 | |
Long-term Debt (4) | | $ | 1,720,083 | | | $ | 1,704,784 | | | $ | 1,572,833 | | | $ | 1,452,156 | | | $ | 1,451,273 | |
Total Liabilities | | $ | 1,923,303 | | | $ | 1,888,417 | | | $ | 1,774,755 | | | $ | 1,671,488 | | | $ | 1,690,282 | |
| (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. |
| (4) | Includes current portion. |
| | | | | | | | | | | | | | | | | | | | |
| | | Fiscal Years Ended | |
| (dollars in thousands) | | December 30,
2007 | | | December 28,
2008 | | | January 3, 2010 | | | January 2, 2011 | | | January 1, 2012 | |
Reconciliations: | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 37,882 | | | $ | 53,971 | | | $ | 79,744 | | | $ | 87,917 | | | $ | 105,361 | |
Interest expense, net | | | 125,057 | | | | 112,160 | | | | 110,262 | | | | 96,566 | | | | 91,339 | |
Provision for income taxes | | | 17,677 | | | | 28,899 | | | | 55,778 | | | | 51,028 | | | | 62,445 | |
Depreciation and amortization | | | 31,176 | | | | 28,377 | | | | 24,064 | | | | 24,052 | | | | 24,042 | |
| | | | | | | | | | | | | | | | | | | | |
Holdco EBITDA | | $ | 211,792 | | | $ | 223,407 | | | $ | 269,848 | | | $ | 259,563 | | | $ | 283,187 | |
| | | | | | | | | | | | | | | | | | | | |
Adjustments: | | | | | | | | | | | | | | | | | | | | |
Non-cash compensation expense | | | 8,405 | | | | 9,059 | | | | 12,533 | | | | 13,370 | | | | 13,954 | |
Loss (gain) on disposal of assets | | | (766 | ) | | | (13,752 | ) | | | 1,843 | | | | 403 | | | | (2,436 | ) |
Loss (gain) on debt retirement | | | 13,294 | | | | — | | | | (56,275 | ) | | | (7,809 | ) | | | — | |
Other adjustments (1) | | | 6,601 | | | | 1,445 | | | | 5,568 | | | | — | | | | 315 | |
| | | | | | | | | | | | | | | | | | | | |
Holdco Adjusted EBITDA | | $ | 239,326 | | | $ | 220,159 | | | $ | 233,517 | | | $ | 265,527 | | | $ | 295,020 | |
| | | | | | | | | | | | | | | | | | | | |
Rent Expense | | | 42,404 | | | | 41,538 | | | | 42,048 | | | | 41,085 | | | | 39,655 | |
| | | | | | | | | | | | | | | | | | | | |
Holdco Adjusted EBITDAR | | $ | 281,730 | | | $ | 261,697 | | | $ | 275,565 | | | $ | 306,612 | | | $ | 334,675 | |
| | | | | | | | | | | | | | | | | | | | |
| (1) | Amount includes expenses incurred related to the 2007 recapitalization, legal reserves, separation and related expenses, expenses related to the sale of company-owned operations and expenses incurred related to stock option plan changes. |
