filings.toolsItem 16. Form 10-K Summary.
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Item 16. Form 10-K Summary.
Not applicable**.**
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SCHEDULE I – CONDENSED FINANCIAL INFORMATION OF THE REGISTRANT
Domino’s Pizza, Inc.
PARENT COMPANY CONDENSED BALANCE SHEETS
(In thousands, except share and per share amounts)
| December 30, 2018 | December 31, 2017 | |||||||
| ASSETS | ||||||||
| ASSETS: | ||||||||
| Cash | $ | 6 | $ | 6 | ||||
| Total assets | $ | 6 | $ | 6 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| LIABILITIES: | ||||||||
| Equity in net deficit of subsidiaries | $ | 3,039,921 | $ | 2,735,384 | ||||
| Due to subsidiary | 6 | 6 | ||||||
| Total liabilities | 3,039,927 | 2,735,390 | ||||||
| STOCKHOLDERS’ DEFICIT: | ||||||||
| Common stock, par value $0.01 per share; 170,000,000 shares authorized; 40,977,561 in 2018 and 42,898,329 in 2017 issued and outstanding | 410 | 429 | ||||||
| Preferred stock, par value $0.01 per share; 5,000,000 shares authorized, none issued | — | — | ||||||
| Additional paid-in capital | 569 | 5,654 | ||||||
| Retained deficit | (3,036,471 | ) | (2,739,437 | ) | ||||
| Accumulated other comprehensive loss | (4,429 | ) | (2,030 | ) | ||||
| Total stockholders’ deficit | (3,039,921 | ) | (2,735,384 | ) | ||||
| Total liabilities and stockholders’ deficit | $ | 6 | $ | 6 | ||||
See accompanying notes to the Schedule I.
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Domino’s Pizza, Inc.
PARENT COMPANY CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(In thousands, except share and per share amounts)
| For the Years Ended | ||||||||||||
| December 30, 2018 | December 31, 2017 | January 1, 2017 | ||||||||||
| REVENUES | $ | — | $ | — | $ | — | ||||||
| Total revenues | — | — | — | |||||||||
| OPERATING EXPENSES | — | — | — | |||||||||
| Total operating expenses | — | — | — | |||||||||
| INCOME FROM OPERATIONS | — | — | — | |||||||||
| Equity earnings in subsidiaries | 361,972 | 277,905 | 214,678 | |||||||||
| INCOME BEFORE PROVISION FOR INCOME TAXES | 361,972 | 277,905 | 214,678 | |||||||||
| PROVISION FOR INCOME TAXES | — | — | — | |||||||||
| NET INCOME | $ | 361,972 | $ | 277,905 | $ | 214,678 | ||||||
| COMPREHENSIVE INCOME | $ | 359,924 | $ | 278,985 | $ | 215,116 | ||||||
| EARNINGS PER SHARE: | ||||||||||||
| Common Stock – basic | $ | 8.65 | $ | 6.05 | $ | 4.41 | ||||||
| Common Stock – diluted | $ | 8.35 | $ | 5.83 | $ | 4.30 |
See accompanying notes to the Schedule I.
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Domino’s Pizza, Inc.
PARENT COMPANY CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
| For the Years Ended | ||||||||||||
| December 30, 2018 | December 31, 2017 | January 1, 2017 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net cash provided by operating activities | $ | 382,716 | $ | 299,576 | $ | 281,731 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Dividends from subsidiaries | 297,792 | 852,325 | 82,856 | |||||||||
| Net cash provided by investing activities | 297,792 | 852,325 | 82,856 | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Payments of common stock dividends | (92,166 | ) | (84,298 | ) | (73,925 | ) | ||||||
| Purchase of common stock | (591,212 | ) | (1,064,253 | ) | (300,250 | ) | ||||||
| Other | 2,870 | (3,350 | ) | 9,588 | ||||||||
| Net cash used in financing activities | (680,508 | ) | (1,151,901 | ) | (364,587 | ) | ||||||
| CHANGE IN CASH AND CASH EQUIVALENTS | — | — | — | |||||||||
| CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD | 6 | 6 | 6 | |||||||||
| CASH AND CASH EQUIVALENTS, AT END OF PERIOD | $ | 6 | $ | 6 | $ | 6 | ||||||
See accompanying notes to the Schedule I.
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Domino’s Pizza, Inc.
NOTES TO PARENT COMPANY FINANCIAL STATEMENTS
| (1) | Introduction and Basis of Presentation |
|---|
Domino’s Pizza, Inc., on a stand-alone basis, (the “Parent Company”) has accounted for majority-owned subsidiaries using the equity method of accounting. The accompanying condensed financial statements of the Parent Company should be read in conjunction with the consolidated financial statements of Domino’s Pizza, Inc. and its subsidiaries (the “Company”) and the notes thereto included in Item 8 of this Form 10-K. These financial statements have been provided to comply with Rule 4-08(e) of Regulation S-X.
Use of Estimates
The use of estimates is inherent in the preparation of financial statements in accordance with generally accepted accounting principles. Actual results could differ from those estimates.
New Accounting Pronouncements
During 2018, the Company adopted the below new accounting pronouncements that impacted the Parent Company financial statements.
Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606)
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606) and has since issued various amendments which provide additional clarification and implementation guidance. This standard has been codified as ASC 606. This guidance outlines a single, comprehensive model for entities to use in accounting for revenue arising from contracts with customers and superseded most revenue recognition guidance issued by the FASB, including industry specific guidance. On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method.
The Parent Company recorded a $6.7 million adjustment to equity in net deficit of subsidiaries and recorded a $6.7 million adjustment to retained deficit related to this new accounting standard in 2018. See Note 1 to the Company’s consolidated financial statements as filed in this Form 10-K for additional information related to the adoption of this new accounting standard.
ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220)
In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this updated standard allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The Parent Company adopted this standard in 2018 and, as a result, recorded a $0.4 million reclassification from accumulated other comprehensive loss to the beginning balance of retained deficit in 2018.
| (2) | Supplemental Disclosures of Cash Flow Information |
|---|
During 2018, 2017 and 2016, the Parent Company received dividends from its subsidiaries primarily consisting of amounts received to repurchase common stock in connection with the Company’s 2018 and 2017 recapitalization transactions. See Note 4 to the Company’s consolidated financial statements as filed in this Form 10-K for a description of the recapitalization transactions that occurred in 2018 and 2017.
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SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
Domino’s Pizza, Inc. and Subsidiaries
| (in thousands) | Balance Beginning of Year | Provision (Benefit) | Additions/ Deductions from Reserves* | Balance End of Year | ||||||||||||
| Allowance for doubtful accounts receivable: | ||||||||||||||||
| 2018 | $ | 1,424 | $ | 903 | $ | (448 | ) | 1,879 | ||||||||
| 2017 | 2,342 | (88 | ) | (830 | ) | 1,424 | ||||||||||
| 2016 | 2,662 | (51 | ) | (269 | ) | 2,342 |
| * | Consists primarily of write-offs, recoveries of bad debt and certain reclassifications. |
|---|
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrants have duly caused this annual report to be signed on their behalf by the undersigned, thereunto duly authorized.
| DOMINO’S PIZZA, INC. |
| /s/ Jeffrey D. Lawrence |
| Jeffrey D. Lawrence |
| Chief Financial Officer |
| February 21, 2019 |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrants and in the capacities and on the dates indicated.
| /s/ Richard E. Allison, Jr. Richard E. Allison, Jr. February 21, 2019 | Chief Executive Officer and Director (Principal Executive Officer) | |
| /s/ Jeffrey D. Lawrence Jeffrey D. Lawrence February 21, 2019 | Chief Financial Officer (Principal Financial and Accounting Officer) | |
| /s/ David A. Brandon David A. Brandon February 21, 2019 | Chairman of the Board of Directors | |
| /s/ C. Andrew Ballard C. Andrew Ballard February 21, 2019 | Director | |
| /s/ Andrew B. Balson Andrew B. Balson February 21, 2019 | Director | |
| /s/ Corie S. Barry Corie S. Barry February 21, 2019 | Director | |
| /s/ Diana F. Cantor Diana F. Cantor February 21, 2019 | Director | |
| /s/ Richard L. Federico Richard L. Federico February 21, 2019 | Director | |
| /s/ James A. Goldman James A. Goldman February 21, 2019 | Director | |
| /s/ Patricia E. Lopez Patricia E. Lopez February 21, 2019 | Director |
Previous: Item 15. Exhibits, Financial Statement Schedules.